Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Aug. 24, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ATEN | ||
Entity Registrant Name | A10 Networks, Inc. | ||
Entity Central Index Key | 1,580,808 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 72,707,302 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Public Float | $ 359.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | |||
Cash and cash equivalents | $ 46,567 | $ 28,975 | $ 98,117 |
Marketable securities | 84,567 | 85,372 | 0 |
Accounts receivable, net of allowances of $983, $1,920 and $2,660 respectively | 48,266 | 61,287 | 54,753 |
Inventory | 17,577 | 15,849 | 18,657 |
Prepaid expenses and other current assets | 6,825 | 5,221 | 5,064 |
Total current assets | 203,802 | 196,704 | 176,591 |
Property and equipment, net | 9,913 | 8,219 | 8,903 |
Goodwill | 1,307 | 1,307 | 72 |
Intangible assets | 5,190 | 6,633 | 795 |
Other non-current assets | 4,646 | 3,870 | 3,531 |
Total Assets | 224,858 | 216,733 | 189,892 |
Current Liabilities: | |||
Accounts payable | 9,033 | 9,851 | 10,508 |
Accrued liabilities | 21,835 | 31,525 | 27,757 |
Deferred revenue, current | 61,858 | 60,043 | 48,776 |
Total current liabilities | 92,726 | 101,419 | 87,041 |
Deferred revenue, non-current | 32,779 | 31,574 | 23,232 |
Other non-current liabilities | 967 | 988 | 1,414 |
Total Liabilities | 126,472 | 133,981 | 111,687 |
Commitments and contingencies (Note 6) | |||
Stockholders’ equity: | |||
Common stock, par value $0.00001 - 500,000 shares authorized; 71,692, 67,873 and 64,172 shares issued and outstanding, respectively | 1 | 1 | 1 |
Additional paid-in capital | 355,533 | 328,869 | 301,886 |
Accumulated other comprehensive loss | (123) | (45) | 0 |
Accumulated deficit | (257,025) | (246,073) | (223,682) |
Total Stockholders’ Equity | 98,386 | 82,752 | 78,205 |
Total Liabilities and Stockholders’ Equity | $ 224,858 | $ 216,733 | $ 189,892 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts receivable | $ 983 | $ 1,920 | $ 2,660 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 |
Common stock, shares issued | 71,692,000 | 67,873,000 | 64,172,000 |
Common stock, shares outstanding | 71,692,000 | 67,873,000 | 64,172,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Products | $ 149,903 | $ 152,308 | $ 134,931 |
Services | 85,526 | 74,989 | 61,354 |
Total revenue | 235,429 | 227,297 | 196,285 |
Cost of revenue: | |||
Products | 36,269 | 37,520 | 32,763 |
Services | 17,049 | 16,893 | 15,639 |
Total cost of revenue | 53,318 | 54,413 | 48,402 |
Gross profit | 182,111 | 172,884 | 147,883 |
Operating expenses: | |||
Sales and marketing | 101,360 | 104,360 | 104,531 |
Research and development | 62,991 | 60,700 | 54,843 |
General and administrative | 28,132 | 26,305 | 26,614 |
Litigation and settlement expense | 0 | 2,089 | 2,204 |
Total operating expenses | 192,483 | 193,454 | 188,192 |
Loss from operations | (10,372) | (20,570) | (40,309) |
Non-operating income (expense): | |||
Interest expense | (162) | (424) | (509) |
Interest and other income (expense), net | 989 | (640) | (332) |
Total non-operating income (expense), net | 827 | (1,064) | (841) |
Loss before income taxes | (9,545) | (21,634) | (41,150) |
Provision for income taxes | 1,206 | 757 | 747 |
Net loss | $ (10,751) | $ (22,391) | $ (41,897) |
Net loss per share: | |||
Basic and diluted (in dollars per share) | $ (0.15) | $ (0.34) | $ (0.67) |
Weighted-average shares used in computing net loss per share: | |||
Basic and diluted (in shares) | 70,053 | 65,701 | 62,428 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (10,751) | $ (22,391) | $ (41,897) |
Other comprehensive loss, net of tax: | |||
Unrealized loss on marketable securities | (78) | (45) | 0 |
Comprehensive loss | $ (10,829) | $ (22,436) | $ (41,897) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at beginning of period (shares) at Dec. 31, 2014 | 61,377 | ||||
Balance at beginning of period at Dec. 31, 2014 | $ 96,565 | $ 1 | $ 278,349 | $ (181,785) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock based compensation expense | 16,861 | 16,861 | |||
Common stock issued under employee equity incentive plans (shares) | 2,700 | ||||
Common stock issued under employee equity incentive plans | 6,232 | 6,232 | |||
Vesting of early exercise stock options (shares) | (95) | ||||
Vesting of early exercise stock options | 444 | 444 | |||
Unrealized loss on marketable securities, net of tax | 0 | ||||
Net loss | (41,897) | (41,897) | |||
Balance at end of period (shares) at Dec. 31, 2015 | 64,172 | ||||
Balance at end of period at Dec. 31, 2015 | 78,205 | $ 1 | 301,886 | (223,682) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock based compensation expense | 16,922 | 16,922 | |||
Common stock issued under employee equity incentive plans (shares) | 3,664 | ||||
Common stock issued under employee equity incentive plans | 10,336 | 10,336 | |||
Common stock issued under asset purchase agreement (shares) | 227 | ||||
Common stock issued under asset purchase agreement | 1,313 | 1,313 | |||
Vesting of early exercise stock options (shares) | 37 | ||||
Vesting of early exercise stock options | 211 | 211 | |||
Repurchase and retirement of common stock (shares) | (227) | ||||
Repurchase and retirement of common stock | (1,799) | (1,799) | |||
Unrealized loss on marketable securities, net of tax | (45) | (45) | |||
Net loss | (22,391) | (22,391) | |||
Balance at end of period (shares) at Dec. 31, 2016 | 67,873 | ||||
Balance at end of period at Dec. 31, 2016 | 82,752 | $ 1 | 328,869 | (246,073) | (45) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment from adoption of ASU 2016-09 | 201 | (201) | |||
Stock based compensation expense | 17,203 | 17,203 | |||
Common stock issued under employee equity incentive plans (shares) | 4,256 | ||||
Common stock issued under employee equity incentive plans | 12,244 | 12,244 | |||
Vesting of early exercise stock options (shares) | 14 | ||||
Vesting of early exercise stock options | 87 | 87 | |||
Repurchase and retirement of common stock (shares) | (451) | ||||
Repurchase and retirement of common stock | (3,071) | (3,071) | |||
Unrealized loss on marketable securities, net of tax | (78) | (78) | |||
Net loss | (10,751) | (10,751) | |||
Balance at end of period (shares) at Dec. 31, 2017 | 71,692 | ||||
Balance at end of period at Dec. 31, 2017 | $ 98,386 | $ 1 | $ 355,533 | $ (257,025) | $ (123) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (10,751) | $ (22,391) | $ (41,897) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 8,511 | 8,267 | 8,716 |
Stock-based compensation | 17,203 | 16,922 | 16,861 |
Provision for doubtful accounts and sales returns | 1,147 | 1,579 | 2,531 |
Other non-cash items | (422) | 875 | (82) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 12,362 | (8,724) | (2,952) |
Inventory | (4,669) | 479 | (796) |
Prepaid expenses and other assets | (2,399) | (180) | (405) |
Accounts payable | (942) | (334) | 1,109 |
Accrued liabilities | (8,868) | 3,140 | 5,345 |
Accrued litigation expenses | (3) | (151) | 6 |
Deferred revenue | 3,018 | 19,609 | 14,788 |
Other | 127 | (313) | 167 |
Net cash provided by operating activities | 14,314 | 18,778 | 3,391 |
Cash flows from investing activities: | |||
Proceeds from sales of marketable securities | 27,901 | 9,878 | 0 |
Maturities of marketable securities | 60,138 | 30,750 | 0 |
Purchases of marketable securities | (87,447) | (126,231) | 0 |
Purchases of property and equipment | (5,734) | (4,872) | (3,477) |
Purchase of intangible asset | 0 | (1,500) | 0 |
Payment for acquisition | 0 | (4,380) | 0 |
Net cash used in investing activities | (5,142) | (96,355) | (3,477) |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock under employee equity incentive plans | 12,244 | 10,336 | 6,019 |
Repurchase and retirement of common stock | (3,071) | (1,799) | 0 |
Payment of contingent consideration | (650) | 0 | 0 |
Other | (103) | (102) | 279 |
Net cash provided by financing activities | 8,420 | 8,435 | 6,298 |
Net increase (decrease) in cash and cash equivalents | 17,592 | (69,142) | 6,212 |
Cash and cash equivalents - beginning of period | 28,975 | 98,117 | 91,905 |
Cash and cash equivalents - end of period | 46,567 | 28,975 | 98,117 |
Supplemental Disclosures: | |||
Cash paid for income taxes, net of refunds | 1,108 | 581 | 980 |
Cash paid for interest | 111 | 194 | 170 |
Non-Cash Investing and Financing Activities: | |||
Inventory transfers to property and equipment | 2,946 | 2,360 | 2,840 |
Vesting of early exercised stock options | 87 | 211 | 444 |
Purchases of property and equipment included in accounts payable | 286 | 162 | 486 |
Common stock issued under asset purchase agreement | $ 0 | $ 1,313 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business A10 Networks, Inc. (together with our subsidiaries, the “Company”, “we”, “our” or “us”) was incorporated in California in 2004 and reincorporated in Delaware in March 2014. We are headquartered in San Jose, California and have wholly-owned subsidiaries throughout the world including Asia and Europe. We are a leading provider of secure application solutions and services that enable a new generation of intelligently connected companies with the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology (“IT”) and network infrastructures. Our product portfolio seeks to address many of the aforementioned challenges and solution requirements. The portfolio consists of six secure application solutions; Thunder Application Delivery Controllers (“ADC”), Lightning Application Delivery Controller (“Lightning ADC”), Thunder Carrier Grade Network Address Translation (“CGN”), Thunder Threat Protection System (“TPS”), Thunder SSL Insight (“SSLi”) and Thunder Convergent Firewall (“CFW”), and two intelligent management and automation tools; Harmony Controller and aGalaxy. Our solutions are available in a variety of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software. Basis of Presentation The accompanying consolidated financial statements include those of A10 Networks, Inc. and its subsidiaries, after elimination of all intercompany accounts and transactions. We have prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation in the consolidated balance sheets and the consolidated statements of cash flows. We have presented goodwill as a separate line item from intangible assets in the consolidated balance sheet as of December 31, 2016 and goodwill and intangible assets as separate line items from other non-current assets as of December 31, 2015. We have separately presented the line items “Proceeds from sales of marketable securities” and “Maturities of marketable securities” as opposed to our historical consolidated presentation of “Proceeds from sales and maturities of marketable securities” in the consolidated statement of cash flows for the fiscal year ended December 31, 2016. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Those estimates and assumptions affect revenue recognition and deferred revenue, the allowance for doubtful accounts, the sales return reserve, the valuation of inventory, the fair value of marketable securities, contingencies and litigation, acquisition related purchase price allocations, accrued liabilities, and the determination of fair value of stock-based compensation. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates. Significant Accounting Policies Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Our cash equivalents consist of money market funds. Marketable securities We classify our investments in debt and equity securities as available-for-sale and record these investments at fair value. These investments are classified as current assets and included in marketable securities on the consolidated balance sheets. Unrealized gains and losses are reported in accumulated other comprehensive loss, net of taxes, in stockholders’ equity. Realized gains and losses are determined based on the specific identification method and are reflected in our consolidated statements of operations. Realized gains and losses and other-than-temporary impairment charges, if any, on marketable securities are reported in interest and other income (expense), net as incurred. We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis in the investment. Fair Value Measurement Our financial instruments consist of cash, cash equivalents, marketable securities, accounts receivable and accounts payable. Accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. Our cash equivalents, which include money market funds, are measured and recorded at fair value on a recurring basis. Marketable securities are comprised of certificates of deposit, corporate securities, U.S. Treasury and agency securities, commercial paper and asset-backed securities and are measured at fair value using the three-level valuation hierarchy as described below. Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs are observable, quoted prices for identical assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 - Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at invoice amounts, net of allowances for doubtful accounts. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we record reserves for bad debts based on the length of time the receivables are past due and our historical experience of collections and write-offs. Inventory Inventory consists primarily of finished goods and related component parts and is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market value (estimated net realizable value). We evaluate inventory for excess and obsolete products, based on management’s assessment of future demand and market conditions. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Inventory write downs are included as a component of cost of products revenue in the accompanying consolidated statements of operations. Property and Equipment, Net Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Depreciation on property and equipment, excluding leasehold improvements, ranges from 1 to 3 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Amortization on leasehold improvements ranges from 2 to 8 years. Goodwill Goodwill represents the excess of purchase consideration over the fair values of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized but is reviewed for possible impairment annually in the fourth quarter or more frequently if impairment indicators arise. We have one reporting unit for goodwill impairment tests, and the fair value of our reporting unit has been determined by our enterprise value. When assessing goodwill for impairment, we first perform a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of our reporting unit is less than its carrying amount, the quantitative impairment test will be required. Examples of events and circumstances that might indicate that a reporting unit’s fair value is less than the carrying amount include macro-economic conditions such as (i) a significant adverse change in customer demand or a severe deterioration in the entity’s operating environment and market conditions; (ii) entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or (iii) other events such as an expectation that a reporting unit will be sold or there will be a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of our reporting unit is less than its carrying amount, we perform a two-step impairment test on goodwill. The first step requires the identification of the reporting units and a comparison of the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit, and the second step of the impairment test is performed to compute the amount of the impairment. Under the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. There was no impairment of goodwill during the fiscal years ended December 31, 2017 , 2016 and 2015. Intangible Assets Intangible assets consist of developed technology and patents resulting from acquisitions. Intangible assets are recorded at fair value and amortized on a straight-line basis over their estimated useful lives, which range from 5 to 10 years. There was no impairment of intangible assets during the fiscal years ended December 31, 2017 , 2016 and 2015. Impairment of Long-Lived Assets We evaluate our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of our long-lived asset may not be recoverable. Recoverability of an asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds its fair value. Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and product-based subscription; and (ii) services revenue, which includes post contract support (“PCS”), professional services, and training. A substantial portion of our revenue is from sales of our products and services through distribution channel partners, such as resellers and distributors. Revenue is recognized, net of applicable taxes, when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery or performance has occurred, the sales price is fixed or determinable, and collection is reasonably assured. We define each of the four criteria above as follows: • Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a purchase order issued pursuant to the terms and conditions of a master sales agreement. • Delivery or performance has occurred. We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We do not have significant obligations for future performance, such as customer rights of return or pricing credits associated with our sales. • The sales price is fixed or determinable. We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. Standard payment terms to customers range from 30 to 90 days. • Collection is reasonably assured. We assess probability of collection on a customer-by-customer basis. Our customers are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services. For sales made through distribution channel partners, collectability is assessed independent of the end customer’s ability to pay. PCS revenue includes arrangements for software support and technical support for our products. PCS is offered under renewable, fee-based contracts, which include technical support, hardware repair and replacement parts, bug fixes, patches, and unspecified upgrades on a when-and-if available basis. Revenue for PCS services is recognized on a straight-line basis over the service contract term, which is typically one year, but can be up to five years. Unearned PCS revenue is included in deferred revenue. Professional service revenue primarily consists of the fees we earn related to installation and consulting services. We recognize revenue from professional services upon delivery or completion of performance. Professional service arrangements are typically short term in nature and are largely completed within 30 to 90 days from the start of service. Multiple-Element Arrangements Our hardware with the embedded software solutions (which is a proprietary operating system that together with the hardware delivers the functionality desired by our customers), is considered a separate unit of accounting from PCS because it has value to the customer on a standalone basis and our sales arrangements do not include a right of return for delivered products. For multiple-element arrangements, we allocate revenue to each unit of accounting based on an estimated selling price at the inception of the arrangement. The total arrangement consideration is allocated to each separate unit of accounting using the relative selling price method. We limit the amount of revenue recognized for delivered elements to an amount that is not contingent upon future delivery of additional products or service. When applying the relative selling price method, we determine the selling price for each element using (i) vendor-specific objective evidence, or VSOE, of selling price, if available; (ii) third-party evidence, or TPE, of selling price, if VSOE is not available; and (iii) best estimate of selling price, or BESP, if neither VSOE nor TPE is available. • VSOE. We determine VSOE based on our historical pricing and discounting practices for the specific products and services when sold separately. In determining VSOE, we require that a substantial majority of the stand-alone selling prices fall within a reasonably narrow pricing range. • TPE. When VSOE cannot be established for deliverables in multiple-element arrangements, we apply judgment with respect to whether we can establish a selling price based on TPE. TPE is determined based on competitor prices for interchangeable products or services when sold separately to similarly situated customers. However, as our products contain a significant element of proprietary technology and our solutions offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as we are unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, we are not typically able to determine TPE. • BESP. When we are unable to establish selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service was sold regularly on a standalone basis. As we have not been able to establish VSOE or TPE for our products and some of our services, we determine BESP for the purposes of allocating the arrangement, primarily based on historical transaction pricing. Historical transactions are segregated based on our pricing model and go-to-market strategy, which include factors such as the geographies in which our products and services were sold (domestic or international), offering type (product series, and level of support for PCS) and type of sales channel. The determination of BESP is made through consultation with and approval by management. We may occasionally accept returns to address customer satisfaction issues or solution-fit issues even though there is no contractual provision for such returns. We estimate returns for sales to customers based on historical returns rates applied against current-period gross revenues. Specific customer returns and allowances are considered within this estimate. Management also analyzes changes in customer demand and acceptance of products when evaluating the adequacy of returns and sales allowances. Deferred Revenue Deferred product revenue relates to arrangements where not all revenue recognition criteria have been met. Deferred services revenue primarily represents PCS contracts billed in advance and revenue is recognized ratably over the service contract term, typically 1 to 5 years. Shipping and Handling Shipping and handling charges billed to customers are included in revenue in the period shipped and the related costs are included in cost of revenue. Research and Development Costs Research and development efforts are focused on new product development and on developing additional functionality for our existing products. These expenses consist of personnel costs, and to a lesser extent, prototype materials, depreciation and certain allocated facilities and information technology costs. We expense research and development costs as incurred. Stock-Based Compensation Stock-based compensation expense is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of restricted stock units (“RSUs”) is estimated using our stock price on the grant date. The fair value of options and employee stock purchase rights is estimated using the Black-Scholes model on the grant date. The Black-Scholes model determines the fair value of share-based payment awards based on assumptions including expected term, stock price volatility, and risk-free interest rate. The fair value of market-performance based restricted stock units (“MSUs”) is valued using the Monte Carlo simulation model, which uses the stock price, expected volatility and risk-free interest rate to determine the fair value. Warranty Costs Our appliance hardware and software generally carry a warranty period of 90 days . Estimates of future warranty costs are based on historical returns and the application of the historical return rates to our in-warranty installed base. Warranty costs to repair or replace items sold to customers have been insignificant for the years ended December 31, 2017 , 2016 and 2015 . Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Transactions denominated in non-functional currencies are remeasured to the functional currency at the average exchange rate for the period. Non-functional currency monetary assets and liabilities are remeasured to the functional currency using the exchange rate in effect at the balance sheet date, and non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to remeasurement are recorded in interest and other income (expense), net in the consolidated statements of operations. Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or in our tax returns. Estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax expense. The factors used to assess the likelihood of realization of our deferred tax assets include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Assumptions represent our best estimates and involve inherent uncertainties and the application of our judgment. We account for uncertainty in income taxes recognized in our consolidated financial statements by regularly reviewing our tax positions and benefits to be realized. We recognize tax liabilities based upon our estimate of whether, and the extent to which, additional taxes will be due when such estimates are more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained upon examination by taxing authorities. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Segment Information An operating segment is a component of an enterprise for which its discrete financial information is available and its operating results are regularly reviewed by chief operating decision maker for resource allocation decisions and performance assessment. Our chief operating decision maker is our Chief Executive Officer. Our Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and assessing performance of the Company. Accordingly, we have one reportable segment and one operating segment. Vendor Business Concentration We rely on third parties to manufacture our hardware appliances and we purchase raw materials from third-party vendors. We outsourced substantially all of our manufacturing services to three independent manufacturers. In addition, we purchase certain strategic component inventory which is consigned to our third-party manufacturers. Other hardware components included in our products are sourced from various suppliers by our manufacturers and are principally industry standard parts and components that are available from multiple vendors. Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash, cash equivalents and marketable securities are held and invested in high-credit quality financial instruments by recognized financial institutions and therefore subject to minimum credit risk. Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations based on a number of factors, including past transaction experience, evaluation of credit history and review of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support accounts receivable. Significant customers, including distribution channel partners and direct customers, are those which represent more than 10% of our total revenue for each period presented, or our gross accounts receivable balance as of each respective balance sheet date. Revenue from our significant customers as a percentage of our total revenue are as follows: Years Ended December 31, 2017 2016 2015 Customer A * 14% * * represents less than 10% of total revenue No customer accounted for 10% of our total gross accounts receivable as of December 31, 2017 . Three customers accounted for 16% , 13% and 12% of our total gross accounts receivable as of December 31, 2016 . Two customers account for 26% and 11% of our total gross accounts receivable as of December 31, 2015. Recently Adopted Accounting Guidance In the first quarter 2017, we adopted ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share -Based Payment Accounting. The primary tax impact of the adoption was the recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. The recognition of previously unrecognized excess tax benefits was adopted on a modified retrospective basis. The unrecognized excess tax benefits of $3.4 million as of January 1, 2017 had no impact on our accumulated deficit balance as we carried a full valuation allowance on the related deferred tax assets. The new guidance also requires companies to record, subsequent to the adoption, excess tax benefits and tax deficiencies in the period they arise. In addition, cash flows related to excess tax benefits will no longer be classified as a financing activity apart from other income tax cash flows. We adopted this change in presentation of excess tax benefits as an operating activity on the statements of cash flows on a prospective basis. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We elected to account for forfeitures as they occur rather than estimate expected forfeiture. The adoption of this standard did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most of the existing revenue recognition guidance under U.S. GAAP. The core principle of the standard is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services and requires the capitalization of incremental customer acquisition costs and amortization of these costs over the contract period or estimated customer life which will result in the recognition of a contract asset on our consolidated balance sheet. It also requires increased disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. We will adopt Topic 606 effective January 1, 2018, applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. We expect to record a net reduction to opening accumulated deficit of $ 12.4 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606 as follows: • A decrease in total deferred revenue of $4.0 million primarily due to the removal of the current limitation on contingent revenue that would have accelerated revenue recognition for certain of our historical revenue contracts; and • Recognition of a deferred commissions asset of $8.4 million due to the requirement to recognize incremental customer acquisition costs in our consolidated statement of operations as the related performance obligations are met as compared to the current recognition to expense as incurred. In addition, the adoption of the standard does not have a significant impact to the provision for income taxes on our consolidated statements of operations, nor does it impact net cash provided by or used in operating, investing, or financing activities on our consolidated statements of cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This new accounting standard primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In July 2018, FASB issued ASU No. 2018-11, Topic 842 - Targeted Improvements. The update requires modified retrospective transition, with the option to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment and elect various practical expedients. This standard is effective for annual periods beginning after December 15, 2018 with early adoption permitted. We will adopt this standard effective January 1, 2019. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard is effective prospectively for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We do not believe this standard will have a material impact on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted, including adoption in any interim period. The amendments will be applied prospectively to an award modified on or after the adoption date. We do not believe this standard will have a material impact on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”).” These amendments provide financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recorded. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted |
Restatement of Previously Issue
Restatement of Previously Issued Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Consolidated Financial Statements | Restatement of Previously Issued Consolidated Financial Statements Restatement Background Subsequent to the issuance of the condensed consolidated financial statements as of September 30, 2017, the Audit Committee of our Board of Directors (the “Audit Committee”) commenced an investigation (the “Investigation”) with the assistance of outside counsel relating to certain accounting and internal control matters at the Company, principally focused on certain revenue recognition matters from the fourth quarter of 2015 through the fourth quarter of 2017 inclusive. The investigation was conducted with the assistance of outside counsel and independent counsel. Counsel retained forensic accountants to assist with their work. The investigation commenced following the identification of violations of the Company's Insider Trading Policy and Code of Conduct by a mid-level employee within the finance department, and as a result it was determined that further review and procedures relating to certain accounting and internal control matters should be undertaken. During the course of this Investigation, code of conduct breaches and accounting and financial reporting errors were identified. The matters primarily resulted in modification to the timing of the recognition of revenue in a limited number of sale transactions between the Company and its resellers and distributors. The Company determined the need to restate the consolidated financial statements as of and for the year ended December 31, 2016. The Company is also adjusting the consolidated financial statements as of and for the year ended December 31, 2015 to correct identified immaterial errors. Revenue Recognition Adjustments During the year ended December 31, 2016, revenue was recognized prematurely at the time, as it was determined that there was an oversight or misuse of facts which indicated that the reseller’s or distributor’s price was not fixed or determinable, or that collectability was not reasonably assured, because the reseller’s or distributor’s payment to the Company was contingent on resale of the product or the transaction included extended payment terms beyond the Company’s customary terms. During the year ended December 31, 2015, revenue on certain sale transactions was recognized prematurely, as it was determined that there was an oversight of facts that indicated collectability was not reasonably assured, because the reseller’s or distributor’s payment to the Company was contingent on resale of the product or the transaction included extended payment terms beyond the Company’s customary terms. To correct these errors, the related revenue and cost of revenue were reversed in the period in which the accounting errors took place and, except for one 2016 transaction, have been recognized in subsequent periods when all of the revenue recognition criteria were met. Additionally, certain adjustments to reverse accounts receivable, net of allowances, recognize inventory, and adjust deferred revenue, current, were made to the consolidated balance sheet at the end of the period in which the accounting errors occurred. Other Adjustments In addition to the restatement adjustments described above, we have identified other revenue and expense classification errors that are not material, individually or in the aggregate that have been corrected in connection with the restatement. Tax effect of restatement adjustments The Company recorded adjustments to its deferred taxes as a result of the restatement. The overall impact of the restatement is an increase to deferred taxes with the corresponding increase to the valuation allowance with no impact to the effective tax rate or income tax expense. Impact of the Restatement The following table presents the consolidated balance sheet as previously reported, restatement adjustments and the consolidated balance sheet as restated at December 31, 2016 and 2015 (in thousands): December 31, 2016 As Previously Reported Revenue Recognition Adjustments As Restated Current Assets: Accounts receivable $ 66,755 $ (5,468 ) $ 61,287 Inventory $ 15,070 $ 779 $ 15,849 Prepaid expenses and other current assets $ 5,137 $ 84 $ 5,221 Total current assets $ 201,309 $ (4,605 ) $ 196,704 Total Assets $ 221,338 $ (4,605 ) $ 216,733 Current Liabilities: Deferred revenue, current $ 61,334 $ (1,291 ) $ 60,043 Total current liabilities $ 102,710 $ (1,291 ) $ 101,419 Total Liabilities $ 135,272 $ (1,291 ) $ 133,981 Accumulated deficit $ (242,759 ) $ (3,314 ) $ (246,073 ) Total Stockholders ’ Equity $ 86,066 $ (3,314 ) $ 82,752 Total Liabilities and Stockholders’ Equity $ 221,338 $ (4,605 ) $ 216,733 December 31, 2015 As Previously Reported Revenue Recognition Adjustments As Restated Current Assets: Accounts receivable $ 57,778 $ (3,025 ) $ 54,753 Inventory $ 18,291 $ 366 $ 18,657 Total current assets $ 179,250 $ (2,659 ) $ 176,591 Total Assets $ 192,551 $ (2,659 ) $ 189,892 Current Liabilities: Deferred revenue, current $ 49,572 $ (796 ) $ 48,776 Total current liabilities $ 87,837 $ (796 ) $ 87,041 Total Liabilities $ 112,483 $ (796 ) $ 111,687 Accumulated deficit $ (221,819 ) $ (1,863 ) $ (223,682 ) Total Stockholders ’ Equity $ 80,068 $ (1,863 ) $ 78,205 Total Liabilities and Stockholders’ Equity $ 192,551 $ (2,659 ) $ 189,892 The following tables present the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the years ended December 31, 2016 and 2015 (in thousands, except per share amounts): Year Ended December 31, 2016 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 153,920 $ (2,858 ) $ 1,246 $ 152,308 Services 76,083 152 (1,246 ) 74,989 Total revenue 230,003 (2,706 ) — 227,297 Cost of revenue: Products 37,680 (497 ) 337 37,520 Services 17,230 — (337 ) 16,893 Total cost of revenue 54,910 (497 ) — 54,413 Gross profit $ 175,093 $ (2,209 ) $ — $ 172,884 Operating expenses: General and administrative $ 27,063 $ (758 ) $ — $ 26,305 Total operating expenses $ 194,212 $ (758 ) $ — $ 193,454 Loss from operations $ (19,119 ) $ (1,451 ) $ — $ (20,570 ) Loss before income taxes $ (20,183 ) $ (1,451 ) $ — $ (21,634 ) Net loss $ (20,940 ) $ (1,451 ) $ — $ (22,391 ) Net loss per share: Basic and diluted $ (0.32 ) $ (0.34 ) Weighted-average shares used in computing net loss per share: Basic and diluted 65,701 65,701 Year Ended December 31, 2015 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 138,301 $ (2,193 ) $ (1,177 ) $ 134,931 Services 60,654 (264 ) 964 61,354 Total revenue 198,955 (2,457 ) (213 ) 196,285 Cost of revenue: Products 33,096 (366 ) 33 32,763 Services 15,672 — (33 ) 15,639 Total cost of revenue 48,768 (366 ) — 48,402 Gross profit $ 150,187 $ (2,091 ) $ (213 ) $ 147,883 Operating expenses: General and administrative $ 27,055 $ (228 ) $ (213 ) $ 26,614 Total operating expenses $ 188,633 $ (228 ) $ (213 ) $ 188,192 Loss from operations $ (38,446 ) $ (1,863 ) $ — $ (40,309 ) Loss before income taxes $ (39,287 ) $ (1,863 ) $ — $ (41,150 ) Net loss $ (40,034 ) $ (1,863 ) $ — $ (41,897 ) Net loss per share: Basic and diluted $ (0.64 ) $ (0.67 ) Weighted-average shares used in computing net loss per share: Basic and diluted 62,428 62,428 The following tables present the consolidated statement of cash flows as previously reported, restatement adjustments, and the consolidated statement of cash flows as restated for the years ended December 31, 2016 and 2015 (in thousands): Year Ended December 31, 2016 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (20,940 ) $ (1,451 ) $ (22,391 ) Adjustments to reconcile net loss to net cash provided by operating activities: Provision for doubtful accounts and sales returns $ 1,731 $ (152 ) $ 1,579 Changes in operating assets and liabilities: Accounts receivable, net $ (11,319 ) $ 2,595 $ (8,724 ) Inventory $ 892 $ (413 ) $ 479 Prepaid expenses and other assets $ (96 ) $ (84 ) $ (180 ) Deferred revenue $ 20,104 $ (495 ) $ 19,609 Net cash provided by operating activities $ 18,778 $ — $ 18,778 Year Ended December 31, 2015 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (40,034 ) $ (1,863 ) $ (41,897 ) Changes in operating assets and liabilities: Accounts receivable, net $ (5,977 ) $ 3,025 $ (2,952 ) Inventory $ (430 ) $ (366 ) $ (796 ) Deferred revenue $ 15,584 $ (796 ) $ 14,788 Net cash provided by operating activities $ 3,391 $ — $ 3,391 The only change to the consolidated statement of comprehensive loss and the consolidated statement of stockholders’ equity for the years ended December 31, 2016 and 2015 as a result of the restatements is due to the changes in net loss. There was no cumulative effect of the errors as of January 1, 2015, the beginning of the earliest period presented. As such, no tables are presented relating to the restatement adjustments. Refer to the consolidated statement of comprehensive loss and the consolidated statement of stockholders’ equity as restated. |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value Measurements | Marketable Securities and Fair Value Measurements Marketable Securities Marketable securities, classified as available-for-sale, consisted of the following (in thousands): December 31, 2017 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 17,000 $ 6 $ (1 ) $ 17,005 $ 12,499 $ 9 $ — $ 12,508 Corporate securities 39,154 1 (76 ) 39,079 42,765 9 (42 ) 42,732 U.S. Treasury and agency securities 5,744 — (19 ) 5,725 5,190 — (14 ) 5,176 Commercial paper 9,225 1 (2 ) 9,224 11,470 1 (2 ) 11,469 Asset-backed securities 13,567 — (33 ) 13,534 13,493 — (6 ) 13,487 $ 84,690 $ 8 $ (131 ) $ 84,567 $ 85,417 $ 19 $ (64 ) $ 85,372 During the years ended December 31, 2017 and 2016 , we did not reclassify any amount to earnings from accumulated other comprehensive loss related to unrealized gains or losses. The following table summarizes the cost and estimated fair value of marketable securities based on stated effective maturities as of December 31, 2017 (in thousands): Amortized Cost Fair Value Less than 1 year $ 63,219 $ 63,159 Mature in 1 - 3 years 21,471 21,408 $ 84,690 $ 84,567 All available-for-sale securities have been classified as current because they are available for use in current operations. Marketable securities in an unrealized loss position consisted of the following (in thousands): As of December 31, 2017 Less Than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 2,999 $ (1 ) $ — $ — $ 2,999 $ (1 ) Corporate securities 36,079 (74 ) 1,499 (2 ) 37,578 (76 ) U.S. Treasury and agency securities 2,246 (2 ) 3,479 (17 ) 5,725 (19 ) Commercial paper 4,232 (2 ) — — 4,232 (2 ) Asset-backed securities 11,415 (32 ) 728 (1 ) 12,143 (33 ) $ 56,971 $ (111 ) $ 5,706 $ (20 ) $ 62,677 $ (131 ) Less Than 12 Months 12 Months or More Total As of December 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate securities $ 28,537 $ (42 ) $ — $ — $ 28,537 $ (42 ) U.S. Treasury and agency securities 5,176 (14 ) — — 5,176 (14 ) Commercial paper 8,974 (2 ) — — 8,974 (2 ) Asset-backed securities 10,664 (6 ) — — 10,664 (6 ) $ 53,351 $ (64 ) $ — $ — $ 53,351 $ (64 ) Based on evaluation of securities that have been in a continuous loss position, we did not recognize any other-than-temporary impairment charges during the years ended December 31, 2017 and 2016 . Fair Value Measurements The following is a summary of our cash, cash equivalents and marketable securities measured at fair value on a recurring basis (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash $ 34,453 $ — $ — $ 34,453 $ 18,672 $ — $ — $ 18,672 $ 27,036 $ — $ — $ 27,036 Cash equivalents 12,114 — — 12,114 10,303 — — 10,303 71,081 — — 71,081 Certificates of deposit — 17,005 — 17,005 — 12,508 — 12,508 — — — — Corporate securities — 39,079 — 39,079 — 42,732 — 42,732 — — — — U.S. Treasury and agency securities — 5,725 — 5,725 — 5,176 — 5,176 — — — — Commercial paper — 9,224 — 9,224 — 11,469 — 11,469 — — — — Asset-backed securities — 13,534 — 13,534 — 13,487 — 13,487 — — — — $ 46,567 $ 84,567 $ — $ 131,134 $ 28,975 $ 85,372 $ — $ 114,347 $ 98,117 $ — $ — $ 98,117 |
Consolidated Financial Statemen
Consolidated Financial Statement Details | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Financial Statement Details | Consolidated Financial Statement Details Allowance for Doubtful Accounts December 31, 2017 December 31, 2016 December 31, 2015 (in thousands) Allowance for doubtful accounts, beginning balance $ 1,920 $ 2,660 $ 1,904 Charged to expenses 364 407 1,363 Write-offs (1,301 ) (1,147 ) (607 ) Allowance for doubtful accounts, ending balance $ 983 $ 1,920 $ 2,660 Inventory December 31, December 31, December 31, (in thousands) Raw materials $ 6,643 $ 6,669 $ 9,417 Finished goods 10,934 9,180 9,240 Total inventory $ 17,577 $ 15,849 $ 18,657 Property and Equipment, Net Useful Life December 31, December 31, December 31, (in years) (in thousands) Equipment 1-3 $ 47,817 $ 41,815 $ 35,836 Software 1-3 3,988 3,801 3,548 Furniture and fixtures 1-3 950 865 864 Leasehold improvements 2-8 3,824 2,724 2,492 Construction in progress — 258 83 Property and equipment, gross 56,579 49,463 42,823 Less: accumulated depreciation (46,666 ) (41,244 ) (33,920 ) Property and equipment, net $ 9,913 $ 8,219 $ 8,903 Depreciation expense on property and equipment was $7.1 million , $7.6 million and $8.6 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Intangible Assets Purchased intangible assets, net, consisted of the following (in thousands): December 31, 2017 Cost Accumulated Amortization Net Developed technology $ 5,050 $ (1,515 ) $ 3,535 Patents 2,936 (1,281 ) 1,655 Total $ 7,986 $ (2,796 ) $ 5,190 December 31, 2016 Cost Accumulated Amortization Net Developed technology $ 5,050 $ (505 ) $ 4,545 Patents 2,936 (848 ) 2,088 Total $ 7,986 $ (1,353 ) $ 6,633 December 31, 2015 Cost Accumulated Amortization Net Patents $ 1,436 $ (641 ) $ 795 Amortization expense related to purchased intangible assets was $1.4 million , $0.7 million and $0.1 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Purchased intangible assets will be amortized over a remaining weighted average useful life of 3.6 years. Future amortization expense for purchased intangible assets as of December 31, 2017 is as follows (in thousands): Fiscal Years Ending December 31, 2018 $ 1,442 2019 1,442 2020 1,442 2021 864 $ 5,190 Accrued Liabilities December 31, December 31, December 31, (in thousands) Accrued compensation and benefits $ 13,828 $ 22,326 $ 18,134 Accrued tax liabilities 2,985 3,340 4,520 Other 5,022 5,859 5,103 Total accrued liabilities $ 21,835 $ 31,525 $ 27,757 Deferred Revenue December 31, December 31, December 31, (in thousands) Deferred revenue: Products $ 6,161 $ 5,054 $ 3,568 Services 88,476 86,563 68,440 Total deferred revenue 94,637 91,617 72,008 Less: current portion (61,858 ) (60,043 ) (48,776 ) Non-current portion $ 32,779 $ 31,574 $ 23,232 |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2016 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility In November 2016, we entered into a loan and security agreement (the “2016 Credit Facility”) with Silicon Valley Bank (“SVB”) as the lender. The 2016 Credit Facility provides a three -year, $25.0 million revolving credit facility, which includes a maximum of $25.0 million letter of credit subfacility. When the balance of our cash, cash equivalents and marketable securities minus outstanding revolving loans and letters of credit equals or exceeds $50.0 million , loans may be advanced under the 2016 Credit Facility up to the full $25.0 million . When our net cash falls below $50.0 million , loans may be advanced under the 2016 Credit Facility based on a borrowing base equal to a specified percentage of the value of our eligible accounts receivable. The loans bear interest, at our option, at (i) the prime rate reported in The Wall Street Journal, minus 0.50% or (ii) a LIBOR rate determined in accordance with the 2016 Credit Facility, plus 2.50% . We are required to pay customary closing fees, commitment fees and letter of credit fees for a facility of this size and type. Our obligations under the 2016 Credit Facility are secured by substantially all of our assets, excluding our intellectual property. The 2016 Credit Facility contains customary affirmative and negative covenants. In addition, the 2016 Credit Facility requires us to maintain compliance with an adjusted quick ratio of not less than 1:50:1.00, as determined in accordance with the 2016 Credit Facility. We had no outstanding balance under the 2016 Credit Facility and were in compliance with all financial statement covenants as of December 31, 2017 except for the annual audited financial statement with an unqualified opinion no later than 180 days after the last day of the fiscal year. However, SVB has granted a forbearance on this requirement through August 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Litigation From time to time, we may be party or subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Some of these proceedings involve claims that are subject to substantial uncertainties and unascertainable damages. We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Unless otherwise specifically disclosed in this note, we have determined that no provision for liability nor disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. On June 24, 2015, our directors and certain of our officers were named as defendants in a putative derivative lawsuit filed in the Superior Court of the State of California, County of Santa Clara, captioned Hornung v. Chen, et al., 1-15-CV-282286 (the “Derivative Action”). We were also named as a nominal defendant. The complaint sought to allege breaches of fiduciary duties and other related claims, arising out of allegations that our officers and directors caused us to infringe patents and intellectual property, improperly approved the settlement of prior litigation, failed to adopt and implement effective internal controls, and caused us to issue false and misleading statements in connection with our IPO. Plaintiff sought unspecified compensatory damages and other equitable relief. On May 24, 2016, all parties entered into a memorandum of understanding reflecting an agreement in principle to settle all claims against all defendants asserted in the action, which provides that we implement certain corporate governance measures following final settlement approval. The parties subsequently executed a stipulation of settlement, dated August 26, 2016, and filed a motion with the Court seeking preliminary approval of the settlement. On November 22, 2016, the Court issued an order preliminarily approving the settlement. Following a February 24, 2017 hearing, the Court on March 1, 2017 issued an order granting final approval of the parties’ settlement, as well as plaintiff’s counsel’s motion for an award of attorneys’ fees. The settlement released all claims asserted against all defendants and included the dismissal of all claims against all defendants without any liability or wrongdoing attributed to them. On March 22, 2018, the Company, our Chief Executive Officer, our Chief Financial Officer, and certain former officers, were named as defendants in a putative class action lawsuit filed in the United States District Court for the Northern District of California, captioned Shah v. A10 Networks, Inc. et al., 3:18-cv-01772-VC (the “Securities Action”). The complaint in the Securities Action alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks unspecified damages and other relief. A lead plaintiff remains to be appointed and a consolidated complaint remains to be filed. On May 30, 2018, certain of our current and former directors and officers were named as defendants in a putative shareholder derivative lawsuit filed in the United States District Court for the Northern District of California, captioned Moulton v. Chen et al., 3:18-cv-03223-VC (the “Derivative Action”). We were also named as a nominal defendant. The complaint in the Derivative Action alleges breaches of fiduciary duties and other related claims in connection with purported misrepresentations related to internal controls and revenues and failures to ensure that financial statements were made in accordance with generally accepted accounting principles. Plaintiff seeks unspecified damages allegedly sustained by the Company, restitution, and other relief. Investigations The U.S. Securities and Exchange Commission (“SEC”) is conducting a private investigation into possible violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14, 13a-15, and 13b2-1 thereunder. The Company is cooperating with the SEC regarding this investigation. The Company is unable to predict the duration, scope or outcome of the investigation, but an adverse outcome is reasonably possible. In such an event, the Company could be required to pay fines and sanctions and/or implement additional remedial measures. However, the Company is not able to estimate the likelihood or a reasonable range of possible loss. Leases and Other Commitments We lease various operating spaces in the United States, Asia, and Europe under non-cancellable operating lease arrangements that expire on various dates through April 2022 . These arrangements require us to pay certain operating expenses, such as taxes, repairs, and insurance and contain renewal and escalation clauses. We recognize rent expense under these arrangements on a straight-line basis over the term of the lease. We have open purchase commitments with third-party contract manufacturers with facilities in Taiwan to supply nearly all of our finished goods inventories, spare parts, and accessories. These purchase orders are expected to be paid within one year of the issuance date. The following table summarizes our non-cancellable operating leases and unconditional purchase obligations as of December 31, 2017 (in thousands): Years Ending December 31, Leases and Other Contractual Obligations Purchase Commitments Total 2018 $ 4,001 $ 10,368 $ 14,369 2019 3,701 — 3,701 2020 1,698 — 1,698 2021 1,193 — 1,193 2022 307 — 307 $ 10,900 $ 10,368 $ 21,268 Rent expense was $4.1 million , $3.5 million and $3.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Guarantees and Indemnifications In the normal course of business, we provide indemnifications to customers against claims of intellectual property infringement made by third parties arising from the use of our products. Other guarantees or indemnification arrangements include guarantees of product and service performance, and standby letters of credit for lease facilities and corporate credit cards. We have not recorded a liability related to these indemnifications and guarantee provisions and our guarantees and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. |
Equity Award Plans
Equity Award Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Award Plans | Equity Award Plans Equity Incentive Plans 2014 Equity Incentive Plan Our 2014 Equity Incentive Plan (the “2014 Plan”) provides for the granting of stock options, restricted stock awards, restricted stock units (“RSUs”), performance-based RSUs (“PSUs”), stock appreciation rights, performance units and performance shares to our employees, consultants and members of our board of directors. In June 2015, our board of directors adopted, and our stockholders approved an amendment and restatement of the 2014 Plan, which increased the number of shares available for issuance under the 2014 Plan by the number of shares granted under the 2008 Stock Plan (the “2008 Plan”) that were or may in the future be canceled or otherwise forfeited or repurchased after March 20, 2014. A maximum of 8,310,566 shares may become available from such awards granted under the 2008 Plan for issuance under the 2014 Plan. As of December 31, 2015, we had 3,364,304 shares available for future grant. Annually, the shares authorized for the 2014 Plan will increase by the least of (i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding fiscal year, or (iii) such other amount as determined by our board of directors. On January 1, 2016, the number of shares in the 2014 Plan was increased by 3,211,211 shares, representing 5% of the prior year end’s common stock outstanding. In addition, 1,640,324 shares that had been subject to awards granted under the 2008 Plan that had been canceled, forfeited or repurchased during the year ended December 31, 2015 became available for issuance under the 2014 Plan. As of December 31, 2016 , we had 4,241,980 shares available for future grant. On January 1, 2017 , the number of shares in the 2014 Plan was increased by 3,394,376 shares, representing 5% of the prior year end’s common stock outstanding. In addition, 266,799 shares that had been subject to awards granted under the 2008 Plan that had been canceled, forfeited or repurchased during the year ended December 31, 2016 became available for issuance under the 2014 Plan. As of December 31, 2017 , we had 6,777,353 shares available for future grant. On January 1, 2018 , the number of shares in the 2014 Plan was increased by 3,584,623 shares, representing 5% of the prior year end’s common stock outstanding. In addition 149,332 shares that had been subject to awards granted under the 2008 Plan that had been canceled, forfeited or repurchased during the year ended December 31, 2017 became available for issuance under the 2014 Plan. Vesting periods of awards granted under the 2014 Plan are determined by our board of directors or other committees responsible for administering the 2014 Plan (the “Plan Administrator”). The Plan Administrator determines the contractual terms of awards granted under the 2014 Plan, provided that incentive stock options and stock appreciation rights granted expire no more than ten years from the grant date. In the case of an incentive stock option granted to an employee, who at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock, the per share exercise price shall be no less than 110% of the fair market value per share on the date of grant, and the incentive stock option shall expire no later than five years from the date of grant. For incentive stock options granted to any other employee, and nonstatutory stock options and stock appreciation rights granted to employees, consultants, or members of our board of directors, the per share exercise price shall be no less than 100% of the fair market value per share on the date of grant. 2014 Employee Stock Purchase Plan The 2014 Employee Stock Purchase Plan (the “2014 Purchase Plan”) provides for twenty-four month offering periods with four six-month purchase periods in each offering period. Employees purchase shares in each purchase period at 85% of the market value of our common stock at the beginning of the offering period or the end of the purchase period, whichever is lower. If the market value of our common stock at the end of the purchase period is less than the market value at the beginning of the offering period, participants will be withdrawn from the then current offering period following their purchase of shares, and automatically will be enrolled in the immediately following offering period. Participants may contribute up to 15% of their eligible compensation, subject to certain limits. Employees purchased 1,038,878 shares at an average price of $6.32 , 1,080,142 shares at an average price of $3.93 and 1,105,015 shares at an average price of $3.56 during the years ended December 31, 2017 , 2016 and 2015, respectively. The intrinsic value of shares purchased during the years ended December 31, 2017 , 2016 and 2015 was $1.6 million and $3.5 million and $3.7 million , respectively. The intrinsic value is calculated as the difference between the market value on the date of purchase and the purchase price of the shares. As of December 31, 2017 , 3,065,182 shares were available for future issuance under the 2014 Purchase Plan. Early Exercise of Stock Options We have allowed certain employees and directors to exercise options granted prior to vesting. The unvested shares were subject to our repurchase right at the original purchase price. The proceeds from the early exercise of stock options initially were recorded in other non-current liabilities and reclassified to common stock as our repurchase right lapses. As of December 31, 2016 and 2015, 14,307 and 51,884 shares were subject to repurchase at an aggregate price of $0.1 million and $0.3 million , respectively. As of December 31, 2017, there were no unvested shares subject to repurchase. Option Exchange Program On November 19, 2015, we commenced an option exchange which permitted certain employees and service providers to surrender certain outstanding stock options in exchange for replacement RSUs with a lesser number of shares, subject to a different vesting schedule. This option exchange was completed on December 17, 2015. A total of 344,248 options to purchase shares of common stock with a weighted-average exercise price of $13.58 per share were canceled and replaced with 109,743 RSUs with per share market value of $6.76 , on December 17, 2015. The replacement RSUs started to vest on the one-year anniversary of the grant date. We accounted for this option exchange as a stock option modification in accordance with the provisions of ASC 718 Share-Based Compensation . We are recording the incremental expense of $56,000 in addition to the remaining expense attributable to the exchanged stock options over the vesting period of the new awards. Stock-based Compensation A summary of our stock-based compensation expense is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Stock-based compensation by type of award: Stock options $ 2,705 $ 4,153 $ 5,565 Stock awards 11,421 12,567 8,871 Employee stock purchase rights 3,077 202 2,425 $ 17,203 $ 16,922 $ 16,861 Stock-based compensation by category of expense: Cost of revenue $ 1,362 $ 1,105 $ 1,533 Sales and marketing 6,075 7,006 7,735 Research and development 6,343 5,732 5,437 General and administrative 3,423 3,079 2,156 $ 17,203 $ 16,922 $ 16,861 As of December 31, 2017 , we had $37.0 million of unrecognized stock-based compensation expense related to unvested stock-based awards which will be recognized over a weighted-average period of 2.3 years . Included within unrecognized stock-based compensation expense as of December 31, 2017 was $5.2 million related to our ESPP. In March 2018, as a result of a suspension of the 2014 Purchase Plan due to our non-timely filing status, all unrecognized stock-based compensation expense related to ESPP was accelerated and recognized within the consolidated statement of operations. The fair values of the options and employee stock purchase rights were estimated as of the grant date using the Black-Scholes option-pricing model with the following assumptions: Options Employee Stock Purchase Rights Years Ended December 31, Years Ended December 31, 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.7 4.9 4.8 1.3 1.3 1.3 Risk-free interest rate 2.0% 1.4% 1.6% 1.4% 0.8% 0.5% Expected volatility 43% 49% 50% 39% 42% 41% Dividend rate —% —% —% —% —% —% • Expected Term . We estimate the expected life of options based on an analysis of our historical experience of employee exercise and post-vesting termination behavior considered in relation to the contractual life of the option. The expected term for the employee stock purchase rights is based on the term of the purchase period. • Risk-Free Interest Rate . The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected terms of stock options and the employee stock purchase rights. • Expected Volatility . Due to the limited trading history of our own common stock, we determined the share price volatility factor based on a combination of the historical volatility of our own common stock and the historical volatility of our peer group for the stock options. For the employee stock purchase rights, we used the historical volatility of our own common stock. • Dividend Rate . The expected dividend was assumed to be zero as we have never paid dividends and do not anticipate paying any dividends in the foreseeable future. Stock Options The following table summarizes our stock option activities and related information: Number of Shares (thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2016 7,868 $ 4.82 Granted 310 $ 8.11 Exercised (1,587 ) $ 3.58 Canceled (2) (573 ) $ 6.35 Outstanding as of December 31, 2017 6,018 $ 5.18 4.9 $ 17,169 Vested and exercisable as of December 31, 2017 4,974 $ 5.03 4.2 $ 15,102 _____________________________________ (1) Includes 266,799 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. (2) Includes 149,332 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. As of December 31, 2017 , the aggregate intrinsic value represents the excess of the closing price of our common stock of $7.72 over the exercise price of the outstanding in-the-money options. The following table provides information pertaining to our stock options (in thousands, except weighted-average fair values): Years Ended December 31, 2017 2016 2015 Fair value of options granted $ 974 $ 1,603 $ 869 Weighted-average fair value of options granted $ 3.14 $ 2.38 $ 2.13 Intrinsic value of options exercised $ 8,013 $ 5,990 $ 2,299 Stock Awards We have granted RSUs to our employees, consultants and members of our board of directors, and PSUs and market performance-based stock restricted stock unit awards (“MSUs”) to certain executives. In 2014 and 2015, we granted 540,000 MSUs and 40,000 MSUs, respectively, to certain executives. These MSUs will vest if the closing price of our common stock remains above certain predetermined target prices for 20 consecutive trading days within a 4 -year period following the grant date, subject to continued service by the award holder. No MSUs were vested as of December 31, 2017 . In February 2016, we granted 547,000 PSUs with certain financial and operational targets. Actual performance, as m easured at the time and prior to the restatement of the 2016 financial statements, resulted in participants achieving 80% of target. Given the PSUs did not contain explicit or implicit claw back rights, there was no change to stock-based compensation expense for the impact of the restatement. As of December 31, 2017 , 103,601 shares had vested, 162,900 shares were forfeited, and the remaining shares will vest in annual tranches through February 2020 subject to continued service vesting requirements. In October 2016, we granted 60,641 PSUs with certain financial and operational targets. To the extent they become eligible to vest upon achievement of the performance targets, these PSUs additionally are subject to service condition vesting requirements with scheduled vesting dates of March 2017 through June 2018. As of December 31, 2017 , 12,128 shares had vested, 30,321 shares were forfeited, and the remaining shares were unvested and are eligible to vest based on achievement of performance targets. In March 2017, we granted 395,383 PSUs with certain financial targets. The targets were not attained and no stock-based compensation expense was recognized in the consolidated financial statements for the year ended December 31, 2017 . The following table summarizes our stock award activities and related information: Number of Shares (thousands) Weighted- Average Grant Date Fair Value Weighted-Average Remaining Vesting Term (Years) Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2016 5,959 $ 5.81 Granted 3,221 $ 8.55 Released (1,631 ) $ 6.36 Canceled (1,981 ) $ 6.80 Outstanding as of December 31, 2017 5,568 $ 6.88 1.5 $ 42,984 The aggregate intrinsic value of outstanding awards is calculated based on the closing price of our common stock of $7.72 on December 31, 2017 . The aggregate fair value of stock awards released as of the respective vesting dates was approximately $14.0 million , $9.7 million and $5.6 million for the years ended December 31, 2017 , 2016 and 2015, respectively. Stock Repurchase Program On October 27, 2016, our board of directors authorized a share repurchase program for up to $20.0 million of our common stock over 12 months. Under the repurchase authorization, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. During the years ended December 31, 2017 and 2016 , we repurchased 451,259 shares at an average price of $6.81 and 226,676 shares at an average price of $7.92 , respectively, as part of this publicly announced program which expired on October 23, 2017. The repurchased shares were retired upon delivery to us. On October 23, 2017, our board of directors authorized another share repurchase program for up to $20.0 million of our common stock over 12 months. Under the repurchase authorization, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The repurchase authorization may be commenced, suspended or discontinued at any time at our discretion. No shares were repurchased under this repurchase program as of December 31, 2017 . |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding for the period plus potential dilutive common shares, including stock options, RSUs and employee stock purchase rights, unless the potential common shares are anti-dilutive. Since we had net losses in the years ended December 31, 2017 , 2016 and 2015 , none of the potential dilutive common shares were included in the computation of diluted shares for these periods, as inclusion of such shares would have been anti-dilutive. The following table presents common shares related to potentially dilutive shares excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Years Ended December 31, 2017 2016 2015 Stock options, RSUs and employee stock purchase rights 12,184 13,631 10,124 Common stock subject to repurchase — 14 52 12,184 13,645 10,176 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The geographical breakdown of loss before provision for income taxes is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Domestic loss $ (13,752 ) $ (24,429 ) $ (43,540 ) Foreign income 4,207 2,795 2,390 Loss before provision for income taxes $ (9,545 ) $ (21,634 ) $ (41,150 ) The provision for income taxes consists of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current provision for income taxes: State $ 48 $ 41 $ 55 Foreign 1,023 1,009 675 Total current 1,071 1,050 730 Deferred tax expense (benefit): Federal 26 17 — Foreign 109 (310 ) 17 Total deferred 135 (293 ) 17 Provision for income taxes $ 1,206 $ 757 $ 747 The reconciliation of the statutory federal income tax and our effective income tax is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Amount Percentage Amount Percentage Amount Percentage Tax at statutory rate $ (3,245 ) 34.0 % $ (7,356 ) 34.0 % $ (13,991 ) 34.0 % State tax - net of federal benefits 32 (0.3 ) 27 (0.1 ) 36 (0.1 ) Foreign rate differential (655 ) 6.9 (666 ) 3.1 (422 ) 1.0 Changes in federal valuation allowance (22,672 ) 237.5 7,626 (35.3 ) 12,559 (30.5 ) Tax rate change 28,185 (295.3 ) — — — — Stock-based compensation (1,169 ) 12.2 88 (0.4 ) 1,845 (4.5 ) Other permanent items 347 (3.6 ) 583 (2.7 ) 415 (0.9 ) Expenses for uncertain tax positions 311 (3.3 ) 358 (1.7 ) 227 (0.6 ) Other 72 (0.7 ) 97 (0.4 ) 78 (0.2 ) Provision for income taxes $ 1,206 (12.6 )% $ 757 (3.5 )% $ 747 (1.8 )% The tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands): December 31, December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 37,326 $ 48,731 $ 47,034 Research and development credits, net of uncertain tax positions 17,119 12,953 9,517 Accruals, reserves, and other 13,992 20,914 17,835 Stock-based compensation 2,994 4,055 2,700 Depreciation and amortization 1,954 2,892 2,735 Gross deferred tax assets 73,385 89,545 79,821 Valuation allowance (72,458 ) (88,095 ) (78,291 ) Total deferred tax assets 927 1,450 1,530 Deferred tax liabilities: Other (28 ) (431 ) (805 ) Total deferred tax liabilities (28 ) (431 ) (805 ) Net deferred tax assets $ 899 $ 1,019 $ 725 Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Based upon the weight of available evidence, which includes our historical operating performance and the recorded cumulative net losses in prior fiscal periods, we recorded a full valuation allowance of $72.5 million , $88.1 million and $78.3 million against the U.S. net deferred tax assets as of December 31, 2017 , 2016 and 2015, respectively. For the years ended December 31, 2017 , 2016 and 2015, the valuation allowance decreased by $15.6 million , increased by $9.8 million and increased by $14.7 million , respectively. In the first quarter 2017, we adopted ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share -Based Payment Accounting. The primary tax impact of the adoption was the recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. The recognition of previously unrecognized excess tax benefits was adopted on a modified retrospective basis. The unrecognized excess tax benefits of $3.4 million as of January 1, 2017 had no impact on our accumulated deficit balance as we carried a full valuation allowance on the related deferred tax assets. The new guidance also requires companies to record, subsequent to the adoption, excess tax benefits and tax deficiencies in the period they arise. In addition, cash flows related to excess tax benefits will no longer be classified as a financing activity apart from other income tax cash flows. We adopted this change in presentation of excess tax benefits as an operating activity on the statements of cash flows on a prospective basis. As of December 31, 2017 , 2016 and 2015, we had U.S. federal net operating loss carryforwards of $152.3 million , $143.3 million and $134.7 million , and state net operating loss carryforwards of $73.6 million , $70.1 million and $69.1 million , respectively. The federal net operating loss carryforwards will expire at various dates beginning in the year ending December 31, 2027 , if not utilized. The state net operating losses expire in various years ending between 2018 and 2037 , if not utilized. Additionally, as of December 31, 2017 , 2016 and 2015, we had U.S. federal research and development credit carryforwards of $10.3 million , $8.5 million and $6.4 million , and state research and development credit carryforwards of $10.9 million , $8.8 million and $6.4 million , respectively. The federal credit carryforwards will begin to expire at various dates beginning in 2025 while the state credit carryforwards can be carried over indefinitely. Utilization of the net operating losses and credit carryforwards may be subject to an annual limitation provided for in the Internal Revenue Code Section 382 and similar state codes. Any annual limitation could result in the expiration of net operating loss and credit carryforwards before utilization. With respect to our undistributed foreign subsidiaries’ earnings we consider those earnings to be indefinitely reinvested and, accordingly, no related provision for U.S. federal and state income taxes has been provided. Upon distribution of those earnings’ in the form of dividends or otherwise, we may be subject to both U.S. income taxes subject to an adjustment for foreign tax credits and withholding taxes in the various countries. As of December 31, 2017 , 2016 and 2015, the undistributed earnings approximated $8.4 million , $5.1 million and $3.9 million , respectively. The determination of the future tax consequence of the remittance of these earnings is not practicable. Uncertain Tax Positions As of December 31, 2017 , 2016 and 2015, we had gross unrecognized tax benefits of $3.8 million , $3.4 million and $2.6 million , respectively. We have accrued net interest expense of $14,000 (i.e., there was $30,000 of gross accrued interest expense offset by $16,000 of interest released due to a lapse of statute of limitations) related to unrecognized tax benefits reflected in the consolidated financial statements for the year ended December 31, 2017 . Our policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in income tax expense. The activity related to the unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Gross unrecognized tax benefits—beginning balance $ 3,360 $ 2,552 $ 2,195 Increases (decrease) related to tax positions from prior years (151 ) 66 (4 ) Increases related to tax positions taken during current year 573 742 361 Decreases related to tax positions taken during the current year — — — Gross unrecognized tax benefits—ending balance $ 3,782 $ 3,360 $ 2,552 These amounts are related to certain deferred tax assets with a corresponding valuation allowance. As of December 31, 2017 , the total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $1.3 million . We believe that there will not be any significant changes in our unrecognized tax benefits in the next 12 months. The Tax Cuts and Jobs Act (“the Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21% , requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code including, but not limited to: (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; (6) creating the base erosion anti-abuse tax (“BEAT”), a new minimum tax; (7) creating a new limitation on deductible interest expense; and (8) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Our accounting for all effects of the Tax Act is incomplete. However, we were able to make reasonable estimates of certain effects and, therefore, have recorded provisional amounts to the consolidated financial statements for the year ended December 31, 2017. Within the Tax Act, the Transition Act imposes a tax (“Transition Tax”) on the untaxed foreign earnings of foreign subsidiaries of U.S. companies by deeming those earnings to be repatriated. The Company is currently evaluating the effect of the Transition Tax on our non-U.S. earnings. Foreign earnings held in the form of cash and cash equivalents are taxed at a 15.5% rate and the remaining earnings are taxed at an 8.0% rate. In calculating the Transition Tax, the Company must calculate the cumulative earnings and profits of each of the non-U.S. subsidiaries back to 1987. The Company expects to complete this calculation and record any tax due by the end of fiscal 2018. Based on a preliminary analysis, and as a result of the Company’s significant tax attributes, the Company’s provisional estimate has no impact on the income tax provision. The Company will continue to analyze the effects of the Tax Act on its financial statements and operations. Any additional impacts of the Tax Act will be recorded as they are identified during the measurement period in accordance with SAB 118. Our accounting for the following elements of the Tax Act is complete. We remeasured certain deferred tax assets and liabilities based on rates at which they are expected to reverse in the future, which is generally 21% . The rate reduction would generally take effect on January 1, 2018. Consequently, any changes in the U.S. corporate income tax rate will impact the carrying value of our deferred tax assets. Under the new corporate income tax rate of 21% , U.S. federal and state deferred tax assets decreased by approximately $28.2 million and the valuation allowance has decreased by the same amount. Our accounting for the following elements of the Tax Act is incomplete, and we were not yet able to make reasonable estimates of the effects. Therefore, no provisional adjustments were recorded. The one-time transition tax is based on our total post-1986 earnings and profits (“E&P”) for which we have previously deferred from U.S. income taxes. This had no impact on the liability for our foreign subsidiaries or income tax expense. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any additional outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Global intangible low taxed income (“GILTI”): The Tax Act creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10% of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. Because of the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether we expect to have future U.S. inclusions in taxable income related to GILTI depends on not only our current structure and estimated future results of global operations but also our intent and ability to modify our structure and/or our business, we are not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, we have not made any adjustments related to potential GILTI tax in our financial statements and have not made a policy decision regarding whether to record deferred taxes on GILTI. We are subject to taxation in the United States, various states, and several foreign jurisdictions. In November 2017, the Internal Revenue Service completed its examination for our 2015 and 2014 tax returns with no changes to the reported tax. Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state and foreign taxing authorities may examine our tax returns for all years from 2004 through the current period. |
Geographic Information
Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information The following table is a summary of revenue by geographic regions based on ship to location (in thousands): Years Ended December 31, 2017 2016 2015 United States $ 115,536 $ 115,706 $ 105,340 Japan 51,488 52,951 35,636 Asia Pacific, excluding Japan 33,189 29,829 23,847 EMEA 27,859 23,669 26,025 Other 7,357 5,142 5,437 $ 235,429 $ 227,297 $ 196,285 The following table is a summary of our long-lived assets which include property and equipment, net based on the physical location of the assets (in thousands): December 31, December 31, December 31, United States $ 7,733 $ 7,190 $ 7,988 Japan 1,510 34 52 Other 670 995 863 Total $ 9,913 $ 8,219 $ 8,903 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan We adopted a profit sharing plan qualified under Section 401(k) of the Internal Revenue Code which is offered to all of our United States employees. Participants in the plan may elect to contribute up to $18,000 of their annual compensation to the plan for the 2017 calendar year. Individuals who are 50 or older may contribute an additional $6,000 of their annual income. In 2017 , we matched 50% of the first 6% of the employee’s eligible compensation. We contributed $1.0 million , $0.9 million and $0.8 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Appcito Acquisition
Appcito Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Appcito Acquisition | Appcito Acquisition On June 23, 2016, we entered into an asset purchase agreement with Appcito, Inc. (“Appcito”), a privately held company engaged in providing a unified set of services for applications deployed on cloud infrastructure with facilities located in Santa Clara, California and Bangalore, India. Under the terms of the purchase agreement, we acquired substantially all of the assets of Appcito. This acquisition enhances our position as a comprehensive secure application services leader, and it represents a strategic step in our vision to help our customers become more secure and agile as they bridge traditional and cloud application environments. The total purchase consideration was $6.5 million . The fair value of the total purchase consideration was $6.3 million , which consisted of $5.0 million in cash consideration, less a holdback of $0.7 million , which was fully paid during the second quarter of 2017, and 227,404 unregistered shares of our common stock with an aggregated fair value of $1.3 million . The total purchase consideration was allocated to Appcito’s net tangible and intangible assets based on their estimated fair values at the acquisition date as follows (in thousands): Developed technology $ 5,050 Goodwill 1,235 Other tangible assets 58 Total assets acquired $ 6,343 |
Description of Business and S20
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business A10 Networks, Inc. (together with our subsidiaries, the “Company”, “we”, “our” or “us”) was incorporated in California in 2004 and reincorporated in Delaware in March 2014. We are headquartered in San Jose, California and have wholly-owned subsidiaries throughout the world including Asia and Europe. We are a leading provider of secure application solutions and services that enable a new generation of intelligently connected companies with the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology (“IT”) and network infrastructures. Our product portfolio seeks to address many of the aforementioned challenges and solution requirements. The portfolio consists of six secure application solutions; Thunder Application Delivery Controllers (“ADC”), Lightning Application Delivery Controller (“Lightning ADC”), Thunder Carrier Grade Network Address Translation (“CGN”), Thunder Threat Protection System (“TPS”), Thunder SSL Insight (“SSLi”) and Thunder Convergent Firewall (“CFW”), and two intelligent management and automation tools; Harmony Controller and aGalaxy. Our solutions are available in a variety of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include those of A10 Networks, Inc. and its subsidiaries, after elimination of all intercompany accounts and transactions. We have prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation in the consolidated balance sheets and the consolidated statements of cash flows. We have presented goodwill as a separate line item from intangible assets in the consolidated balance sheet as of December 31, 2016 and goodwill and intangible assets as separate line items from other non-current assets as of December 31, 2015. We have separately presented the line items “Proceeds from sales of marketable securities” and “Maturities of marketable securities” as opposed to our historical consolidated presentation of “Proceeds from sales and maturities of marketable securities” in the consolidated statement of cash flows for the fiscal year ended December 31, 2016. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Those estimates and assumptions affect revenue recognition and deferred revenue, the allowance for doubtful accounts, the sales return reserve, the valuation of inventory, the fair value of marketable securities, contingencies and litigation, acquisition related purchase price allocations, accrued liabilities, and the determination of fair value of stock-based compensation. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents. Our cash equivalents consist of money market funds. |
Marketable securities | Marketable securities We classify our investments in debt and equity securities as available-for-sale and record these investments at fair value. These investments are classified as current assets and included in marketable securities on the consolidated balance sheets. Unrealized gains and losses are reported in accumulated other comprehensive loss, net of taxes, in stockholders’ equity. Realized gains and losses are determined based on the specific identification method and are reflected in our consolidated statements of operations. Realized gains and losses and other-than-temporary impairment charges, if any, on marketable securities are reported in interest and other income (expense), net as incurred. We regularly review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Investments are considered impaired when a decline in fair value is judged to be other-than-temporary. If the cost of an individual investment exceeds its fair value, we evaluate, among other factors, general market conditions, the duration and extent to which the fair value is less than cost, and our intent and ability to hold the investment. Once a decline in fair value is determined to be other-than-temporary, we will record an impairment charge and establish a new cost basis in the investment. |
Fair Value Measurement | Fair Value Measurement Our financial instruments consist of cash, cash equivalents, marketable securities, accounts receivable and accounts payable. Accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. Our cash equivalents, which include money market funds, are measured and recorded at fair value on a recurring basis. Marketable securities are comprised of certificates of deposit, corporate securities, U.S. Treasury and agency securities, commercial paper and asset-backed securities and are measured at fair value using the three-level valuation hierarchy as described below. Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs are observable, quoted prices for identical assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 - Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at invoice amounts, net of allowances for doubtful accounts. We evaluate the collectability of our accounts receivable based on known collection risks and historical experience. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us (e.g., bankruptcy filings or substantial downgrading of credit ratings), we record a specific reserve for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we record reserves for bad debts based on the length of time the receivables are past due and our historical experience of collections and write-offs. |
Inventory | Inventory Inventory consists primarily of finished goods and related component parts and is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market value (estimated net realizable value). We evaluate inventory for excess and obsolete products, based on management’s assessment of future demand and market conditions. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Inventory write downs are included as a component of cost of products revenue in the accompanying consolidated statements of operations. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, including leasehold improvements, are stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Depreciation on property and equipment, excluding leasehold improvements, ranges from 1 to 3 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful lives of the assets or the remaining lease term. Amortization on leasehold improvements ranges from 2 to 8 years. |
Goodwill | Goodwill Goodwill represents the excess of purchase consideration over the fair values of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized but is reviewed for possible impairment annually in the fourth quarter or more frequently if impairment indicators arise. We have one reporting unit for goodwill impairment tests, and the fair value of our reporting unit has been determined by our enterprise value. When assessing goodwill for impairment, we first perform a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of our reporting unit is less than its carrying amount, the quantitative impairment test will be required. Examples of events and circumstances that might indicate that a reporting unit’s fair value is less than the carrying amount include macro-economic conditions such as (i) a significant adverse change in customer demand or a severe deterioration in the entity’s operating environment and market conditions; (ii) entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or (iii) other events such as an expectation that a reporting unit will be sold or there will be a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of our reporting unit is less than its carrying amount, we perform a two-step impairment test on goodwill. The first step requires the identification of the reporting units and a comparison of the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit, and the second step of the impairment test is performed to compute the amount of the impairment. Under the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. |
Intangible Assets | Intangible Assets Intangible assets consist of developed technology and patents resulting from acquisitions. Intangible assets are recorded at fair value and amortized on a straight-line basis over their estimated useful lives, which range from 5 to 10 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of our long-lived asset may not be recoverable. Recoverability of an asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset group is expected to generate. If it is determined that an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset group exceeds its fair value. |
Revenue Recognition | Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and product-based subscription; and (ii) services revenue, which includes post contract support (“PCS”), professional services, and training. A substantial portion of our revenue is from sales of our products and services through distribution channel partners, such as resellers and distributors. Revenue is recognized, net of applicable taxes, when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery or performance has occurred, the sales price is fixed or determinable, and collection is reasonably assured. We define each of the four criteria above as follows: • Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a purchase order issued pursuant to the terms and conditions of a master sales agreement. • Delivery or performance has occurred. We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We do not have significant obligations for future performance, such as customer rights of return or pricing credits associated with our sales. • The sales price is fixed or determinable. We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. Standard payment terms to customers range from 30 to 90 days. • Collection is reasonably assured. We assess probability of collection on a customer-by-customer basis. Our customers are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services. For sales made through distribution channel partners, collectability is assessed independent of the end customer’s ability to pay. PCS revenue includes arrangements for software support and technical support for our products. PCS is offered under renewable, fee-based contracts, which include technical support, hardware repair and replacement parts, bug fixes, patches, and unspecified upgrades on a when-and-if available basis. Revenue for PCS services is recognized on a straight-line basis over the service contract term, which is typically one year, but can be up to five years. Unearned PCS revenue is included in deferred revenue. Professional service revenue primarily consists of the fees we earn related to installation and consulting services. We recognize revenue from professional services upon delivery or completion of performance. Professional service arrangements are typically short term in nature and are largely completed within 30 to 90 days from the start of service. Multiple-Element Arrangements Our hardware with the embedded software solutions (which is a proprietary operating system that together with the hardware delivers the functionality desired by our customers), is considered a separate unit of accounting from PCS because it has value to the customer on a standalone basis and our sales arrangements do not include a right of return for delivered products. For multiple-element arrangements, we allocate revenue to each unit of accounting based on an estimated selling price at the inception of the arrangement. The total arrangement consideration is allocated to each separate unit of accounting using the relative selling price method. We limit the amount of revenue recognized for delivered elements to an amount that is not contingent upon future delivery of additional products or service. When applying the relative selling price method, we determine the selling price for each element using (i) vendor-specific objective evidence, or VSOE, of selling price, if available; (ii) third-party evidence, or TPE, of selling price, if VSOE is not available; and (iii) best estimate of selling price, or BESP, if neither VSOE nor TPE is available. • VSOE. We determine VSOE based on our historical pricing and discounting practices for the specific products and services when sold separately. In determining VSOE, we require that a substantial majority of the stand-alone selling prices fall within a reasonably narrow pricing range. • TPE. When VSOE cannot be established for deliverables in multiple-element arrangements, we apply judgment with respect to whether we can establish a selling price based on TPE. TPE is determined based on competitor prices for interchangeable products or services when sold separately to similarly situated customers. However, as our products contain a significant element of proprietary technology and our solutions offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as we are unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, we are not typically able to determine TPE. • BESP. When we are unable to establish selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service was sold regularly on a standalone basis. As we have not been able to establish VSOE or TPE for our products and some of our services, we determine BESP for the purposes of allocating the arrangement, primarily based on historical transaction pricing. Historical transactions are segregated based on our pricing model and go-to-market strategy, which include factors such as the geographies in which our products and services were sold (domestic or international), offering type (product series, and level of support for PCS) and type of sales channel. The determination of BESP is made through consultation with and approval by management. We may occasionally accept returns to address customer satisfaction issues or solution-fit issues even though there is no contractual provision for such returns. We estimate returns for sales to customers based on historical returns rates applied against current-period gross revenues. Specific customer returns and allowances are considered within this estimate. Management also analyzes changes in customer demand and acceptance of products when evaluating the adequacy of returns and sales allowances. |
Deferred Revenue | Deferred Revenue Deferred product revenue relates to arrangements where not all revenue recognition criteria have been met. Deferred services revenue primarily represents PCS contracts billed in advance and revenue is recognized ratably over the service contract term, typically 1 to 5 years. |
Shipping and Handling | Shipping and Handling Shipping and handling charges billed to customers are included in revenue in the period shipped and the related costs are included in cost of revenue. |
Research and Development Costs | Research and Development Costs Research and development efforts are focused on new product development and on developing additional functionality for our existing products. These expenses consist of personnel costs, and to a lesser extent, prototype materials, depreciation and certain allocated facilities and information technology costs. We expense research and development costs as incurred. |
Stock-based Compensation | Stock-Based Compensation Stock-based compensation expense is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of restricted stock units (“RSUs”) is estimated using our stock price on the grant date. The fair value of options and employee stock purchase rights is estimated using the Black-Scholes model on the grant date. The Black-Scholes model determines the fair value of share-based payment awards based on assumptions including expected term, stock price volatility, and risk-free interest rate. The fair value of market-performance based restricted stock units (“MSUs”) is valued using the Monte Carlo simulation model, which uses the stock price, expected volatility and risk-free interest rate to determine the fair value. |
Warranty Costs | Warranty Costs Our appliance hardware and software generally carry a warranty period of 90 days . Estimates of future warranty costs are based on historical returns and the application of the historical return rates to our in-warranty installed base. Warranty costs to repair or replace items sold to customers have been insignificant for the years ended December 31, 2017 , 2016 and 2015 . |
Foreign Currency | Foreign Currency The functional currency of our foreign subsidiaries is the U.S. dollar. Transactions denominated in non-functional currencies are remeasured to the functional currency at the average exchange rate for the period. Non-functional currency monetary assets and liabilities are remeasured to the functional currency using the exchange rate in effect at the balance sheet date, and non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses related to remeasurement are recorded in interest and other income (expense), net in the consolidated statements of operations. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or in our tax returns. Estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred income tax assets, which arise from temporary differences and carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through an adjustment to income tax expense. The factors used to assess the likelihood of realization of our deferred tax assets include our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Assumptions represent our best estimates and involve inherent uncertainties and the application of our judgment. We account for uncertainty in income taxes recognized in our consolidated financial statements by regularly reviewing our tax positions and benefits to be realized. We recognize tax liabilities based upon our estimate of whether, and the extent to which, additional taxes will be due when such estimates are more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained upon examination by taxing authorities. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Segment Information | Segment Information An operating segment is a component of an enterprise for which its discrete financial information is available and its operating results are regularly reviewed by chief operating decision maker for resource allocation decisions and performance assessment. Our chief operating decision maker is our Chief Executive Officer. Our Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and assessing performance of the Company. Accordingly, we have one reportable segment and one operating segment. |
Vendor Business Concentration | Vendor Business Concentration We rely on third parties to manufacture our hardware appliances and we purchase raw materials from third-party vendors. We outsourced substantially all of our manufacturing services to three independent manufacturers. In addition, we purchase certain strategic component inventory which is consigned to our third-party manufacturers. Other hardware components included in our products are sourced from various suppliers by our manufacturers and are principally industry standard parts and components that are available from multiple vendors. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash, cash equivalents and marketable securities are held and invested in high-credit quality financial instruments by recognized financial institutions and therefore subject to minimum credit risk. Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations based on a number of factors, including past transaction experience, evaluation of credit history and review of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support accounts receivable. Significant customers, including distribution channel partners and direct customers, are those which represent more than 10% of our total revenue for each period presented, or our gross accounts receivable balance as of each respective balance sheet date. |
Recently Adopted Accounting Guidance/Recent Accounting Pronouncements | Recently Adopted Accounting Guidance In the first quarter 2017, we adopted ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share -Based Payment Accounting. The primary tax impact of the adoption was the recognition of excess tax benefits in the provision for income taxes rather than additional paid-in capital. The new guidance eliminates the requirement to delay the recognition of excess tax benefits until it reduces current taxes payable. The recognition of previously unrecognized excess tax benefits was adopted on a modified retrospective basis. The unrecognized excess tax benefits of $3.4 million as of January 1, 2017 had no impact on our accumulated deficit balance as we carried a full valuation allowance on the related deferred tax assets. The new guidance also requires companies to record, subsequent to the adoption, excess tax benefits and tax deficiencies in the period they arise. In addition, cash flows related to excess tax benefits will no longer be classified as a financing activity apart from other income tax cash flows. We adopted this change in presentation of excess tax benefits as an operating activity on the statements of cash flows on a prospective basis. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We elected to account for forfeitures as they occur rather than estimate expected forfeiture. The adoption of this standard did not have a material impact on our consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most of the existing revenue recognition guidance under U.S. GAAP. The core principle of the standard is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services and requires the capitalization of incremental customer acquisition costs and amortization of these costs over the contract period or estimated customer life which will result in the recognition of a contract asset on our consolidated balance sheet. It also requires increased disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. We will adopt Topic 606 effective January 1, 2018, applying the modified retrospective method to all contracts that were not completed as of January 1, 2018. We expect to record a net reduction to opening accumulated deficit of $ 12.4 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606 as follows: • A decrease in total deferred revenue of $4.0 million primarily due to the removal of the current limitation on contingent revenue that would have accelerated revenue recognition for certain of our historical revenue contracts; and • Recognition of a deferred commissions asset of $8.4 million due to the requirement to recognize incremental customer acquisition costs in our consolidated statement of operations as the related performance obligations are met as compared to the current recognition to expense as incurred. In addition, the adoption of the standard does not have a significant impact to the provision for income taxes on our consolidated statements of operations, nor does it impact net cash provided by or used in operating, investing, or financing activities on our consolidated statements of cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This new accounting standard primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In July 2018, FASB issued ASU No. 2018-11, Topic 842 - Targeted Improvements. The update requires modified retrospective transition, with the option to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment and elect various practical expedients. This standard is effective for annual periods beginning after December 15, 2018 with early adoption permitted. We will adopt this standard effective January 1, 2019. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. As a result, under this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the impairment loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This standard is effective prospectively for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. We do not believe this standard will have a material impact on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. Early adoption is permitted, including adoption in any interim period. The amendments will be applied prospectively to an award modified on or after the adoption date. We do not believe this standard will have a material impact on our consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”).” These amendments provide financial statement preparers with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recorded. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim period. We are evaluating the impact of adopting this new accounting guidance on our consolidated financial statements. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118. These amendments add SEC guidance to the FASB Accounting Standards Codification regarding the Tax Cuts and Jobs Act pursuant to the issuance of SAB 118. The amendments are effective upon addition to the FASB Codification. Disclosures related to the effect of the Tax Cuts and Jobs Act and our utilization of SAB 118 appear in Note 9 Income Taxes. There have been no other recent accounting pronouncements or changes in accounting pronouncements that are of significance or potential significance to us. |
Description of Business and S21
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue as Percentage of Total Revenue | Revenue from our significant customers as a percentage of our total revenue are as follows: Years Ended December 31, 2017 2016 2015 Customer A * 14% * * represents less than 10% of total revenue |
Restatement of Previously Iss22
Restatement of Previously Issued Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table presents the consolidated balance sheet as previously reported, restatement adjustments and the consolidated balance sheet as restated at December 31, 2016 and 2015 (in thousands): December 31, 2016 As Previously Reported Revenue Recognition Adjustments As Restated Current Assets: Accounts receivable $ 66,755 $ (5,468 ) $ 61,287 Inventory $ 15,070 $ 779 $ 15,849 Prepaid expenses and other current assets $ 5,137 $ 84 $ 5,221 Total current assets $ 201,309 $ (4,605 ) $ 196,704 Total Assets $ 221,338 $ (4,605 ) $ 216,733 Current Liabilities: Deferred revenue, current $ 61,334 $ (1,291 ) $ 60,043 Total current liabilities $ 102,710 $ (1,291 ) $ 101,419 Total Liabilities $ 135,272 $ (1,291 ) $ 133,981 Accumulated deficit $ (242,759 ) $ (3,314 ) $ (246,073 ) Total Stockholders ’ Equity $ 86,066 $ (3,314 ) $ 82,752 Total Liabilities and Stockholders’ Equity $ 221,338 $ (4,605 ) $ 216,733 December 31, 2015 As Previously Reported Revenue Recognition Adjustments As Restated Current Assets: Accounts receivable $ 57,778 $ (3,025 ) $ 54,753 Inventory $ 18,291 $ 366 $ 18,657 Total current assets $ 179,250 $ (2,659 ) $ 176,591 Total Assets $ 192,551 $ (2,659 ) $ 189,892 Current Liabilities: Deferred revenue, current $ 49,572 $ (796 ) $ 48,776 Total current liabilities $ 87,837 $ (796 ) $ 87,041 Total Liabilities $ 112,483 $ (796 ) $ 111,687 Accumulated deficit $ (221,819 ) $ (1,863 ) $ (223,682 ) Total Stockholders ’ Equity $ 80,068 $ (1,863 ) $ 78,205 Total Liabilities and Stockholders’ Equity $ 192,551 $ (2,659 ) $ 189,892 The following tables present the consolidated statement of operations as previously reported, restatement adjustments and the consolidated statement of operations as restated for the years ended December 31, 2016 and 2015 (in thousands, except per share amounts): Year Ended December 31, 2016 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 153,920 $ (2,858 ) $ 1,246 $ 152,308 Services 76,083 152 (1,246 ) 74,989 Total revenue 230,003 (2,706 ) — 227,297 Cost of revenue: Products 37,680 (497 ) 337 37,520 Services 17,230 — (337 ) 16,893 Total cost of revenue 54,910 (497 ) — 54,413 Gross profit $ 175,093 $ (2,209 ) $ — $ 172,884 Operating expenses: General and administrative $ 27,063 $ (758 ) $ — $ 26,305 Total operating expenses $ 194,212 $ (758 ) $ — $ 193,454 Loss from operations $ (19,119 ) $ (1,451 ) $ — $ (20,570 ) Loss before income taxes $ (20,183 ) $ (1,451 ) $ — $ (21,634 ) Net loss $ (20,940 ) $ (1,451 ) $ — $ (22,391 ) Net loss per share: Basic and diluted $ (0.32 ) $ (0.34 ) Weighted-average shares used in computing net loss per share: Basic and diluted 65,701 65,701 Year Ended December 31, 2015 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 138,301 $ (2,193 ) $ (1,177 ) $ 134,931 Services 60,654 (264 ) 964 61,354 Total revenue 198,955 (2,457 ) (213 ) 196,285 Cost of revenue: Products 33,096 (366 ) 33 32,763 Services 15,672 — (33 ) 15,639 Total cost of revenue 48,768 (366 ) — 48,402 Gross profit $ 150,187 $ (2,091 ) $ (213 ) $ 147,883 Operating expenses: General and administrative $ 27,055 $ (228 ) $ (213 ) $ 26,614 Total operating expenses $ 188,633 $ (228 ) $ (213 ) $ 188,192 Loss from operations $ (38,446 ) $ (1,863 ) $ — $ (40,309 ) Loss before income taxes $ (39,287 ) $ (1,863 ) $ — $ (41,150 ) Net loss $ (40,034 ) $ (1,863 ) $ — $ (41,897 ) Net loss per share: Basic and diluted $ (0.64 ) $ (0.67 ) Weighted-average shares used in computing net loss per share: Basic and diluted 62,428 62,428 The following tables present the consolidated statement of cash flows as previously reported, restatement adjustments, and the consolidated statement of cash flows as restated for the years ended December 31, 2016 and 2015 (in thousands): Year Ended December 31, 2016 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (20,940 ) $ (1,451 ) $ (22,391 ) Adjustments to reconcile net loss to net cash provided by operating activities: Provision for doubtful accounts and sales returns $ 1,731 $ (152 ) $ 1,579 Changes in operating assets and liabilities: Accounts receivable, net $ (11,319 ) $ 2,595 $ (8,724 ) Inventory $ 892 $ (413 ) $ 479 Prepaid expenses and other assets $ (96 ) $ (84 ) $ (180 ) Deferred revenue $ 20,104 $ (495 ) $ 19,609 Net cash provided by operating activities $ 18,778 $ — $ 18,778 Year Ended December 31, 2015 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (40,034 ) $ (1,863 ) $ (41,897 ) Changes in operating assets and liabilities: Accounts receivable, net $ (5,977 ) $ 3,025 $ (2,952 ) Inventory $ (430 ) $ (366 ) $ (796 ) Deferred revenue $ 15,584 $ (796 ) $ 14,788 Net cash provided by operating activities $ 3,391 $ — $ 3,391 |
Marketable Securities and Fai23
Marketable Securities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Available-for-sale Securities | Marketable securities, classified as available-for-sale, consisted of the following (in thousands): December 31, 2017 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 17,000 $ 6 $ (1 ) $ 17,005 $ 12,499 $ 9 $ — $ 12,508 Corporate securities 39,154 1 (76 ) 39,079 42,765 9 (42 ) 42,732 U.S. Treasury and agency securities 5,744 — (19 ) 5,725 5,190 — (14 ) 5,176 Commercial paper 9,225 1 (2 ) 9,224 11,470 1 (2 ) 11,469 Asset-backed securities 13,567 — (33 ) 13,534 13,493 — (6 ) 13,487 $ 84,690 $ 8 $ (131 ) $ 84,567 $ 85,417 $ 19 $ (64 ) $ 85,372 |
Schedule of Cost and Estimated Fair Values of Available-for-sale Securities by Contractual Maturities | The following table summarizes the cost and estimated fair value of marketable securities based on stated effective maturities as of December 31, 2017 (in thousands): Amortized Cost Fair Value Less than 1 year $ 63,219 $ 63,159 Mature in 1 - 3 years 21,471 21,408 $ 84,690 $ 84,567 |
Schedule of gross unrealized losses | Marketable securities in an unrealized loss position consisted of the following (in thousands): As of December 31, 2017 Less Than 12 Months 12 Months or More Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 2,999 $ (1 ) $ — $ — $ 2,999 $ (1 ) Corporate securities 36,079 (74 ) 1,499 (2 ) 37,578 (76 ) U.S. Treasury and agency securities 2,246 (2 ) 3,479 (17 ) 5,725 (19 ) Commercial paper 4,232 (2 ) — — 4,232 (2 ) Asset-backed securities 11,415 (32 ) 728 (1 ) 12,143 (33 ) $ 56,971 $ (111 ) $ 5,706 $ (20 ) $ 62,677 $ (131 ) Less Than 12 Months 12 Months or More Total As of December 31, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate securities $ 28,537 $ (42 ) $ — $ — $ 28,537 $ (42 ) U.S. Treasury and agency securities 5,176 (14 ) — — 5,176 (14 ) Commercial paper 8,974 (2 ) — — 8,974 (2 ) Asset-backed securities 10,664 (6 ) — — 10,664 (6 ) $ 53,351 $ (64 ) $ — $ — $ 53,351 $ (64 ) |
Schedule of Cash, Cash Equivalents and Available-for-sale Investments Measured at Fair Value on Recurring Basis | The following is a summary of our cash, cash equivalents and marketable securities measured at fair value on a recurring basis (in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash $ 34,453 $ — $ — $ 34,453 $ 18,672 $ — $ — $ 18,672 $ 27,036 $ — $ — $ 27,036 Cash equivalents 12,114 — — 12,114 10,303 — — 10,303 71,081 — — 71,081 Certificates of deposit — 17,005 — 17,005 — 12,508 — 12,508 — — — — Corporate securities — 39,079 — 39,079 — 42,732 — 42,732 — — — — U.S. Treasury and agency securities — 5,725 — 5,725 — 5,176 — 5,176 — — — — Commercial paper — 9,224 — 9,224 — 11,469 — 11,469 — — — — Asset-backed securities — 13,534 — 13,534 — 13,487 — 13,487 — — — — $ 46,567 $ 84,567 $ — $ 131,134 $ 28,975 $ 85,372 $ — $ 114,347 $ 98,117 $ — $ — $ 98,117 |
Consolidated Financial Statem24
Consolidated Financial Statement Details (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts December 31, 2017 December 31, 2016 December 31, 2015 (in thousands) Allowance for doubtful accounts, beginning balance $ 1,920 $ 2,660 $ 1,904 Charged to expenses 364 407 1,363 Write-offs (1,301 ) (1,147 ) (607 ) Allowance for doubtful accounts, ending balance $ 983 $ 1,920 $ 2,660 |
Schedule of Inventory | Inventory December 31, December 31, December 31, (in thousands) Raw materials $ 6,643 $ 6,669 $ 9,417 Finished goods 10,934 9,180 9,240 Total inventory $ 17,577 $ 15,849 $ 18,657 |
Schedule of Property and Equipment, Net | Property and Equipment, Net Useful Life December 31, December 31, December 31, (in years) (in thousands) Equipment 1-3 $ 47,817 $ 41,815 $ 35,836 Software 1-3 3,988 3,801 3,548 Furniture and fixtures 1-3 950 865 864 Leasehold improvements 2-8 3,824 2,724 2,492 Construction in progress — 258 83 Property and equipment, gross 56,579 49,463 42,823 Less: accumulated depreciation (46,666 ) (41,244 ) (33,920 ) Property and equipment, net $ 9,913 $ 8,219 $ 8,903 |
Schedule of Intangible Assets | Purchased intangible assets, net, consisted of the following (in thousands): December 31, 2017 Cost Accumulated Amortization Net Developed technology $ 5,050 $ (1,515 ) $ 3,535 Patents 2,936 (1,281 ) 1,655 Total $ 7,986 $ (2,796 ) $ 5,190 December 31, 2016 Cost Accumulated Amortization Net Developed technology $ 5,050 $ (505 ) $ 4,545 Patents 2,936 (848 ) 2,088 Total $ 7,986 $ (1,353 ) $ 6,633 December 31, 2015 Cost Accumulated Amortization Net Patents $ 1,436 $ (641 ) $ 795 |
Schedule of Amortization Expense | Future amortization expense for purchased intangible assets as of December 31, 2017 is as follows (in thousands): Fiscal Years Ending December 31, 2018 $ 1,442 2019 1,442 2020 1,442 2021 864 $ 5,190 |
Schedule of Accrued Liabilities | Accrued Liabilities December 31, December 31, December 31, (in thousands) Accrued compensation and benefits $ 13,828 $ 22,326 $ 18,134 Accrued tax liabilities 2,985 3,340 4,520 Other 5,022 5,859 5,103 Total accrued liabilities $ 21,835 $ 31,525 $ 27,757 |
Schedule of Deferred Revenue | Deferred Revenue December 31, December 31, December 31, (in thousands) Deferred revenue: Products $ 6,161 $ 5,054 $ 3,568 Services 88,476 86,563 68,440 Total deferred revenue 94,637 91,617 72,008 Less: current portion (61,858 ) (60,043 ) (48,776 ) Non-current portion $ 32,779 $ 31,574 $ 23,232 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Leases and Purchase Commitments | The following table summarizes our non-cancellable operating leases and unconditional purchase obligations as of December 31, 2017 (in thousands): Years Ending December 31, Leases and Other Contractual Obligations Purchase Commitments Total 2018 $ 4,001 $ 10,368 $ 14,369 2019 3,701 — 3,701 2020 1,698 — 1,698 2021 1,193 — 1,193 2022 307 — 307 $ 10,900 $ 10,368 $ 21,268 |
Equity Award Plans (Tables)
Equity Award Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-based Compensation | A summary of our stock-based compensation expense is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Stock-based compensation by type of award: Stock options $ 2,705 $ 4,153 $ 5,565 Stock awards 11,421 12,567 8,871 Employee stock purchase rights 3,077 202 2,425 $ 17,203 $ 16,922 $ 16,861 Stock-based compensation by category of expense: Cost of revenue $ 1,362 $ 1,105 $ 1,533 Sales and marketing 6,075 7,006 7,735 Research and development 6,343 5,732 5,437 General and administrative 3,423 3,079 2,156 $ 17,203 $ 16,922 $ 16,861 |
ESPP Valuation Assumptions | The fair values of the options and employee stock purchase rights were estimated as of the grant date using the Black-Scholes option-pricing model with the following assumptions: Options Employee Stock Purchase Rights Years Ended December 31, Years Ended December 31, 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.7 4.9 4.8 1.3 1.3 1.3 Risk-free interest rate 2.0% 1.4% 1.6% 1.4% 0.8% 0.5% Expected volatility 43% 49% 50% 39% 42% 41% Dividend rate —% —% —% —% —% —% |
Stock Options Valuation Assumptions | The fair values of the options and employee stock purchase rights were estimated as of the grant date using the Black-Scholes option-pricing model with the following assumptions: Options Employee Stock Purchase Rights Years Ended December 31, Years Ended December 31, 2017 2016 2015 2017 2016 2015 Expected term (in years) 4.7 4.9 4.8 1.3 1.3 1.3 Risk-free interest rate 2.0% 1.4% 1.6% 1.4% 0.8% 0.5% Expected volatility 43% 49% 50% 39% 42% 41% Dividend rate —% —% —% —% —% —% |
Summary of Activity under Stock Option Plans | The following table summarizes our stock option activities and related information: Number of Shares (thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2016 7,868 $ 4.82 Granted 310 $ 8.11 Exercised (1,587 ) $ 3.58 Canceled (2) (573 ) $ 6.35 Outstanding as of December 31, 2017 6,018 $ 5.18 4.9 $ 17,169 Vested and exercisable as of December 31, 2017 4,974 $ 5.03 4.2 $ 15,102 _____________________________________ (1) Includes 266,799 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. (2) Includes 149,332 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. |
Stock Option Information | The following table provides information pertaining to our stock options (in thousands, except weighted-average fair values): Years Ended December 31, 2017 2016 2015 Fair value of options granted $ 974 $ 1,603 $ 869 Weighted-average fair value of options granted $ 3.14 $ 2.38 $ 2.13 Intrinsic value of options exercised $ 8,013 $ 5,990 $ 2,299 |
Summary of Restricted Stock Units Activity | The following table summarizes our stock award activities and related information: Number of Shares (thousands) Weighted- Average Grant Date Fair Value Weighted-Average Remaining Vesting Term (Years) Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2016 5,959 $ 5.81 Granted 3,221 $ 8.55 Released (1,631 ) $ 6.36 Canceled (1,981 ) $ 6.80 Outstanding as of December 31, 2017 5,568 $ 6.88 1.5 $ 42,984 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Anti-Dilutive Shares | The following table presents common shares related to potentially dilutive shares excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Years Ended December 31, 2017 2016 2015 Stock options, RSUs and employee stock purchase rights 12,184 13,631 10,124 Common stock subject to repurchase — 14 52 12,184 13,645 10,176 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The geographical breakdown of loss before provision for income taxes is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Domestic loss $ (13,752 ) $ (24,429 ) $ (43,540 ) Foreign income 4,207 2,795 2,390 Loss before provision for income taxes $ (9,545 ) $ (21,634 ) $ (41,150 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes consists of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current provision for income taxes: State $ 48 $ 41 $ 55 Foreign 1,023 1,009 675 Total current 1,071 1,050 730 Deferred tax expense (benefit): Federal 26 17 — Foreign 109 (310 ) 17 Total deferred 135 (293 ) 17 Provision for income taxes $ 1,206 $ 757 $ 747 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory federal income tax and our effective income tax is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Amount Percentage Amount Percentage Amount Percentage Tax at statutory rate $ (3,245 ) 34.0 % $ (7,356 ) 34.0 % $ (13,991 ) 34.0 % State tax - net of federal benefits 32 (0.3 ) 27 (0.1 ) 36 (0.1 ) Foreign rate differential (655 ) 6.9 (666 ) 3.1 (422 ) 1.0 Changes in federal valuation allowance (22,672 ) 237.5 7,626 (35.3 ) 12,559 (30.5 ) Tax rate change 28,185 (295.3 ) — — — — Stock-based compensation (1,169 ) 12.2 88 (0.4 ) 1,845 (4.5 ) Other permanent items 347 (3.6 ) 583 (2.7 ) 415 (0.9 ) Expenses for uncertain tax positions 311 (3.3 ) 358 (1.7 ) 227 (0.6 ) Other 72 (0.7 ) 97 (0.4 ) 78 (0.2 ) Provision for income taxes $ 1,206 (12.6 )% $ 757 (3.5 )% $ 747 (1.8 )% |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of deferred tax assets (liabilities) are as follows (in thousands): December 31, December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 37,326 $ 48,731 $ 47,034 Research and development credits, net of uncertain tax positions 17,119 12,953 9,517 Accruals, reserves, and other 13,992 20,914 17,835 Stock-based compensation 2,994 4,055 2,700 Depreciation and amortization 1,954 2,892 2,735 Gross deferred tax assets 73,385 89,545 79,821 Valuation allowance (72,458 ) (88,095 ) (78,291 ) Total deferred tax assets 927 1,450 1,530 Deferred tax liabilities: Other (28 ) (431 ) (805 ) Total deferred tax liabilities (28 ) (431 ) (805 ) Net deferred tax assets $ 899 $ 1,019 $ 725 |
Summary of Income Tax Contingencies | The activity related to the unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Gross unrecognized tax benefits—beginning balance $ 3,360 $ 2,552 $ 2,195 Increases (decrease) related to tax positions from prior years (151 ) 66 (4 ) Increases related to tax positions taken during current year 573 742 361 Decreases related to tax positions taken during the current year — — — Gross unrecognized tax benefits—ending balance $ 3,782 $ 3,360 $ 2,552 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Total Revenue Based on Customer's Location | The following table is a summary of revenue by geographic regions based on ship to location (in thousands): Years Ended December 31, 2017 2016 2015 United States $ 115,536 $ 115,706 $ 105,340 Japan 51,488 52,951 35,636 Asia Pacific, excluding Japan 33,189 29,829 23,847 EMEA 27,859 23,669 26,025 Other 7,357 5,142 5,437 $ 235,429 $ 227,297 $ 196,285 |
Long-lived Assets by Geographic Areas | The following table is a summary of our long-lived assets which include property and equipment, net based on the physical location of the assets (in thousands): December 31, December 31, December 31, United States $ 7,733 $ 7,190 $ 7,988 Japan 1,510 34 52 Other 670 995 863 Total $ 9,913 $ 8,219 $ 8,903 |
Appcito Acquisition (Tables)
Appcito Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The total purchase consideration was allocated to Appcito’s net tangible and intangible assets based on their estimated fair values at the acquisition date as follows (in thousands): Developed technology $ 5,050 Goodwill 1,235 Other tangible assets 58 Total assets acquired $ 6,343 |
Description of Business and S31
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Jan. 01, 2017USD ($) | Dec. 31, 2017USD ($)toolsegmentsolution | Jan. 01, 2018USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Property, Plant and Equipment [Line Items] | |||||
Number of software based advanced application networking and network security solutions | solution | 6 | ||||
Number of intelligent management and automation tools | tool | 2 | ||||
Warranty period (in days) | 90 days | ||||
Number of reportable segments | segment | 1 | ||||
Number of operating segments | segment | 1 | ||||
Reduction in accumulated deficit | $ (257,025) | $ (246,073) | $ (223,682) | ||
Decrease in deferred revenue | $ (94,637) | $ (91,617) | $ (72,008) | ||
Unrecognized excess tax benefits | $ 3,400 | ||||
Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated Useful Life (in Years) | 1 year | ||||
Estimated useful life, finite-lived assets (in years) | 5 years | ||||
Period of recognition of deferred revenue (in years) | 1 year | ||||
Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated Useful Life (in Years) | 3 years | ||||
Estimated useful life, finite-lived assets (in years) | 10 years | ||||
Period of recognition of deferred revenue (in years) | 5 years | ||||
Leasehold improvements | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated Useful Life (in Years) | 2 years | ||||
Leasehold improvements | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Estimated Useful Life (in Years) | 8 years | ||||
ASU 2014-09 | |||||
Property, Plant and Equipment [Line Items] | |||||
Reduction in accumulated deficit | $ 12,400 | ||||
Decrease in deferred revenue | $ 4,000 | ||||
Deferred commission asset | $ 8,400 |
Description of Business and S32
Description of Business and Summary of Significant Accounting Policies - Schedule of Revenue as Percentage of Total Revenue (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable, Net | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Percentage representation of significant customers | 0.00% | ||
Customer A | Revenue | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Percentage representation of significant customers | 14.00% | ||
Customer A | Accounts Receivable, Net | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Percentage representation of significant customers | 16.00% | 26.00% | |
Customer B | Accounts Receivable, Net | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Percentage representation of significant customers | 13.00% | 11.00% | |
Customer C | Accounts Receivable, Net | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Percentage representation of significant customers | 12.00% |
Restatement of Previously Iss33
Restatement of Previously Issued Consolidated Financial Statements - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||||
Accounts receivable | $ 48,266 | $ 61,287 | $ 54,753 | |
Inventory | 17,577 | 15,849 | 18,657 | |
Prepaid expenses and other current assets | 6,825 | 5,221 | 5,064 | |
Total current assets | 203,802 | 196,704 | 176,591 | |
Total Assets | 224,858 | 216,733 | 189,892 | |
Current Liabilities: | ||||
Deferred revenue, current | 61,858 | 60,043 | 48,776 | |
Total current liabilities | 92,726 | 101,419 | 87,041 | |
Total Liabilities | 126,472 | 133,981 | 111,687 | |
Accumulated deficit | (257,025) | (246,073) | (223,682) | |
Total Stockholders’ Equity | 98,386 | 82,752 | 78,205 | $ 96,565 |
Total Liabilities and Stockholders' Equity | $ 224,858 | 216,733 | 189,892 | |
As Previously Reported | ||||
Current Assets: | ||||
Accounts receivable | 66,755 | 57,778 | ||
Inventory | 15,070 | 18,291 | ||
Prepaid expenses and other current assets | 5,137 | |||
Total current assets | 201,309 | 179,250 | ||
Total Assets | 221,338 | 192,551 | ||
Current Liabilities: | ||||
Deferred revenue, current | 61,334 | 49,572 | ||
Total current liabilities | 102,710 | 87,837 | ||
Total Liabilities | 135,272 | 112,483 | ||
Accumulated deficit | (242,759) | (221,819) | ||
Total Stockholders’ Equity | 86,066 | 80,068 | ||
Total Liabilities and Stockholders' Equity | 221,338 | 192,551 | ||
Revenue Recognition Adjustments | ||||
Current Assets: | ||||
Accounts receivable | (5,468) | (3,025) | ||
Inventory | 779 | 366 | ||
Prepaid expenses and other current assets | 84 | |||
Total current assets | (4,605) | (2,659) | ||
Total Assets | (4,605) | (2,659) | ||
Current Liabilities: | ||||
Deferred revenue, current | (1,291) | (796) | ||
Total current liabilities | (1,291) | (796) | ||
Total Liabilities | (1,291) | (796) | ||
Accumulated deficit | (3,314) | (1,863) | ||
Total Stockholders’ Equity | (3,314) | (1,863) | ||
Total Liabilities and Stockholders' Equity | $ (4,605) | $ (2,659) |
Restatement of Previously Iss34
Restatement of Previously Issued Consolidated Financial Statements - Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Products | $ 149,903 | $ 152,308 | $ 134,931 |
Services | 85,526 | 74,989 | 61,354 |
Total revenue | 235,429 | 227,297 | 196,285 |
Cost of revenue: | |||
Products | 36,269 | 37,520 | 32,763 |
Services | 17,049 | 16,893 | 15,639 |
Total cost of revenue | 53,318 | 54,413 | 48,402 |
Gross profit | 182,111 | 172,884 | 147,883 |
Operating expenses: | |||
General and administrative | 28,132 | 26,305 | 26,614 |
Total operating expenses | 192,483 | 193,454 | 188,192 |
Loss from operations | (10,372) | (20,570) | (40,309) |
Loss before income taxes | (9,545) | (21,634) | (41,150) |
Net loss | $ (10,751) | $ (22,391) | $ (41,897) |
Net loss per share: | |||
Basic and diluted (in dollars per share) | $ (0.15) | $ (0.34) | $ (0.67) |
Weighted-average shares used in computing net loss per share: | |||
Basic and diluted (in shares) | 70,053 | 65,701 | 62,428 |
As Previously Reported | |||
Revenue: | |||
Products | $ 153,920 | $ 138,301 | |
Services | 76,083 | 60,654 | |
Total revenue | 230,003 | 198,955 | |
Cost of revenue: | |||
Products | 37,680 | 33,096 | |
Services | 17,230 | 15,672 | |
Total cost of revenue | 54,910 | 48,768 | |
Gross profit | 175,093 | 150,187 | |
Operating expenses: | |||
General and administrative | 27,063 | 27,055 | |
Total operating expenses | 194,212 | 188,633 | |
Loss from operations | (19,119) | (38,446) | |
Loss before income taxes | (20,183) | (39,287) | |
Net loss | $ (20,940) | $ (40,034) | |
Net loss per share: | |||
Basic and diluted (in dollars per share) | $ (0.32) | $ (0.64) | |
Weighted-average shares used in computing net loss per share: | |||
Basic and diluted (in shares) | 65,701 | 62,428 | |
Revenue Recognition Adjustments | |||
Revenue: | |||
Products | $ (2,858) | $ (2,193) | |
Services | 152 | (264) | |
Total revenue | (2,706) | (2,457) | |
Cost of revenue: | |||
Products | (497) | (366) | |
Services | 0 | 0 | |
Total cost of revenue | (497) | (366) | |
Gross profit | (2,209) | (2,091) | |
Operating expenses: | |||
General and administrative | (758) | (228) | |
Total operating expenses | (758) | (228) | |
Loss from operations | (1,451) | (1,863) | |
Loss before income taxes | (1,451) | (1,863) | |
Net loss | (1,451) | (1,863) | |
Other Adjustments | |||
Revenue: | |||
Products | 1,246 | (1,177) | |
Services | (1,246) | 964 | |
Total revenue | 0 | (213) | |
Cost of revenue: | |||
Products | 337 | 33 | |
Services | (337) | (33) | |
Total cost of revenue | 0 | 0 | |
Gross profit | 0 | (213) | |
Operating expenses: | |||
General and administrative | 0 | (213) | |
Total operating expenses | 0 | (213) | |
Loss from operations | 0 | 0 | |
Loss before income taxes | 0 | 0 | |
Net loss | $ 0 | $ 0 |
Restatement of Previously Iss35
Restatement of Previously Issued Consolidated Financial Statements - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (10,751) | $ (22,391) | $ (41,897) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for doubtful accounts and sales returns | 1,147 | 1,579 | 2,531 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 12,362 | (8,724) | (2,952) |
Inventory | (4,669) | 479 | (796) |
Prepaid expenses and other assets | (2,399) | (180) | (405) |
Deferred revenue | 3,018 | 19,609 | 14,788 |
Net cash provided by operating activities | $ 14,314 | 18,778 | 3,391 |
As Previously Reported | |||
Cash flows from operating activities: | |||
Net loss | (20,940) | (40,034) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for doubtful accounts and sales returns | 1,731 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (11,319) | (5,977) | |
Inventory | 892 | (430) | |
Prepaid expenses and other assets | (96) | ||
Deferred revenue | 20,104 | 15,584 | |
Net cash provided by operating activities | 18,778 | 3,391 | |
Revenue Recognition Adjustments | |||
Cash flows from operating activities: | |||
Net loss | (1,451) | (1,863) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for doubtful accounts and sales returns | (152) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 2,595 | 3,025 | |
Inventory | (413) | (366) | |
Prepaid expenses and other assets | (84) | ||
Deferred revenue | (495) | (796) | |
Net cash provided by operating activities | $ 0 | $ 0 |
Marketable Securities and Fai36
Marketable Securities and Fair Value Measurements - Estimate of Fair Value of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 84,690 | $ 85,417 | |
Gross Unrealized Gains | 8 | 19 | |
Gross Unrealized Losses | (131) | (64) | |
Fair Value | 84,567 | 85,372 | |
Certificates of deposit | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 17,000 | 12,499 | |
Gross Unrealized Gains | 6 | 9 | |
Gross Unrealized Losses | (1) | 0 | |
Fair Value | 17,005 | 12,508 | $ 0 |
Corporate securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 39,154 | 42,765 | |
Gross Unrealized Gains | 1 | 9 | |
Gross Unrealized Losses | (76) | (42) | |
Fair Value | 39,079 | 42,732 | 0 |
U.S. Treasury and agency securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 5,744 | 5,190 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (19) | (14) | |
Fair Value | 5,725 | 5,176 | 0 |
Commercial paper | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 9,225 | 11,470 | |
Gross Unrealized Gains | 1 | 1 | |
Gross Unrealized Losses | (2) | (2) | |
Fair Value | 9,224 | 11,469 | 0 |
Asset-backed securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 13,567 | 13,493 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (33) | (6) | |
Fair Value | $ 13,534 | $ 13,487 | $ 0 |
Marketable Securities and Fai37
Marketable Securities and Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Less than 1 year | $ 63,219 | |
Mature in 1 - 3 years | 21,471 | |
Amortized Cost | 84,690 | $ 85,417 |
Fair Value | ||
Less than 1 year | 63,159 | |
Mature in 1 - 3 years | 21,408 | |
Fair Value | $ 84,567 | $ 85,372 |
Marketable Securities and Fai38
Marketable Securities and Fair Value Measurements - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | $ 56,971 | $ 53,351 |
Less Than 12 Months, Gross Unrealized Losses | (111) | (64) |
12 Months or More, Fair Value | 5,706 | 0 |
12 Months or More, Gross Unrealized Losses | (20) | 0 |
Total, Fair value | 62,677 | 53,351 |
Total, Gross Unrealized Losses | (131) | (64) |
Certificates of deposit | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 2,999 | |
Less Than 12 Months, Gross Unrealized Losses | (1) | |
12 Months or More, Fair Value | 0 | |
12 Months or More, Gross Unrealized Losses | 0 | |
Total, Fair value | 2,999 | |
Total, Gross Unrealized Losses | (1) | |
Corporate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 36,079 | 28,537 |
Less Than 12 Months, Gross Unrealized Losses | (74) | (42) |
12 Months or More, Fair Value | 1,499 | 0 |
12 Months or More, Gross Unrealized Losses | (2) | 0 |
Total, Fair value | 37,578 | 28,537 |
Total, Gross Unrealized Losses | (76) | (42) |
U.S. Treasury and agency securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 2,246 | 5,176 |
Less Than 12 Months, Gross Unrealized Losses | (2) | (14) |
12 Months or More, Fair Value | 3,479 | 0 |
12 Months or More, Gross Unrealized Losses | (17) | 0 |
Total, Fair value | 5,725 | 5,176 |
Total, Gross Unrealized Losses | (19) | (14) |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 4,232 | 8,974 |
Less Than 12 Months, Gross Unrealized Losses | (2) | (2) |
12 Months or More, Fair Value | 0 | 0 |
12 Months or More, Gross Unrealized Losses | 0 | 0 |
Total, Fair value | 4,232 | 8,974 |
Total, Gross Unrealized Losses | (2) | (2) |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less Than 12 Months, Fair Value | 11,415 | 10,664 |
Less Than 12 Months, Gross Unrealized Losses | (32) | (6) |
12 Months or More, Fair Value | 728 | 0 |
12 Months or More, Gross Unrealized Losses | (1) | 0 |
Total, Fair value | 12,143 | 10,664 |
Total, Gross Unrealized Losses | $ (33) | $ (6) |
Marketable Securities and Fai39
Marketable Securities and Fair Value Measurements - Schedule of Fair Value of Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial Assets | |||
Marketable Securities | $ 84,567 | $ 85,372 | |
Total | 131,134 | 114,347 | $ 98,117 |
Level I | |||
Financial Assets | |||
Total | 46,567 | 28,975 | 98,117 |
Level II | |||
Financial Assets | |||
Total | 84,567 | 85,372 | 0 |
Level III | |||
Financial Assets | |||
Total | 0 | 0 | 0 |
Cash | |||
Financial Assets | |||
Cash and Cash Equivalents | 34,453 | 18,672 | 27,036 |
Cash | Level I | |||
Financial Assets | |||
Cash and Cash Equivalents | 34,453 | 18,672 | 27,036 |
Cash | Level II | |||
Financial Assets | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Cash | Level III | |||
Financial Assets | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Cash equivalents | |||
Financial Assets | |||
Cash and Cash Equivalents | 12,114 | 10,303 | 71,081 |
Cash equivalents | Level I | |||
Financial Assets | |||
Cash and Cash Equivalents | 12,114 | 10,303 | 71,081 |
Cash equivalents | Level II | |||
Financial Assets | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Cash equivalents | Level III | |||
Financial Assets | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Certificates of deposit | |||
Financial Assets | |||
Marketable Securities | 17,005 | 12,508 | 0 |
Certificates of deposit | Level I | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Certificates of deposit | Level II | |||
Financial Assets | |||
Marketable Securities | 17,005 | 12,508 | 0 |
Certificates of deposit | Level III | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Corporate securities | |||
Financial Assets | |||
Marketable Securities | 39,079 | 42,732 | 0 |
Corporate securities | Level I | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Corporate securities | Level II | |||
Financial Assets | |||
Marketable Securities | 39,079 | 42,732 | 0 |
Corporate securities | Level III | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
U.S. Treasury and agency securities | |||
Financial Assets | |||
Marketable Securities | 5,725 | 5,176 | 0 |
U.S. Treasury and agency securities | Level I | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
U.S. Treasury and agency securities | Level II | |||
Financial Assets | |||
Marketable Securities | 5,725 | 5,176 | 0 |
U.S. Treasury and agency securities | Level III | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Commercial paper | |||
Financial Assets | |||
Marketable Securities | 9,224 | 11,469 | 0 |
Commercial paper | Level I | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Commercial paper | Level II | |||
Financial Assets | |||
Marketable Securities | 9,224 | 11,469 | 0 |
Commercial paper | Level III | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Asset-backed securities | |||
Financial Assets | |||
Marketable Securities | 13,534 | 13,487 | 0 |
Asset-backed securities | Level I | |||
Financial Assets | |||
Marketable Securities | 0 | 0 | 0 |
Asset-backed securities | Level II | |||
Financial Assets | |||
Marketable Securities | 13,534 | 13,487 | 0 |
Asset-backed securities | Level III | |||
Financial Assets | |||
Marketable Securities | $ 0 | $ 0 | $ 0 |
Credit Facility (Details)
Credit Facility (Details) | 1 Months Ended | |
Nov. 30, 2016USD ($) | Dec. 31, 2017USD ($) | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Debt instrument term | 3 years | |
Maximum borrowing capacity | $ 25,000,000 | |
Debt covenant, net cash equals or exceeds, amount | 50,000,000 | |
Debt covenant, net cash falls below, amount | $ 50,000,000 | |
Minimum adjusted quick ratio under debt compliance | 1.50 | |
Amount outstanding | $ 0 | |
Revolving Credit Facility | Prime Rate | ||
Line of Credit Facility [Line Items] | ||
Variable interest rate | 0.50% | |
Revolving Credit Facility | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Variable interest rate | 2.50% | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 25,000,000 |
Consolidated Financial Statem41
Consolidated Financial Statement Details - Schedule of Allowance for Doubtful Accounts and Sales Return Reserve (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation Allowance [Line Items] | |||
Beginning Balance | $ 1,920 | $ 2,660 | $ 1,904 |
Charged to expenses | 364 | 407 | 1,363 |
Write-offs/Utilization | (1,301) | (1,147) | (607) |
Ending Balance | $ 983 | $ 1,920 | $ 2,660 |
Consolidated Financial Statem42
Consolidated Financial Statement Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Inventory, Raw Materials, Net of Reserves | $ 6,643 | $ 6,669 | $ 9,417 |
Inventory, Finished Goods, Net of Reserves | 10,934 | 9,180 | 9,240 |
Total inventory | $ 17,577 | $ 15,849 | $ 18,657 |
Consolidated Financial Statem43
Consolidated Financial Statement Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 56,579 | $ 49,463 | $ 42,823 |
Less: accumulated depreciation | (46,666) | (41,244) | (33,920) |
Property and equipment, net | 9,913 | 8,219 | 8,903 |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 47,817 | 41,815 | 35,836 |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3,988 | 3,801 | 3,548 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 950 | 865 | 864 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3,824 | 2,724 | 2,492 |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 0 | $ 258 | $ 83 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 1 year | ||
Minimum | Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 1 year | ||
Minimum | Software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 1 year | ||
Minimum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 1 year | ||
Minimum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 2 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Maximum | Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Maximum | Software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Maximum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 3 years | ||
Maximum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life (in Years) | 8 years |
Consolidated Financial Statem44
Consolidated Financial Statement Details - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Depreciation expense | $ 7.1 | $ 7.6 | $ 8.6 |
Amortization of assets | $ 1.4 | $ 0.7 | $ 0.1 |
Weighted average useful life (in years) | 3 years 7 months |
Consolidated Financial Statem45
Consolidated Financial Statement Details - Purchased Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 7,986 | $ 7,986 | |
Accumulated Amortization | (2,796) | (1,353) | |
Net | 5,190 | 6,633 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 5,050 | 5,050 | |
Accumulated Amortization | (1,515) | (505) | |
Net | 3,535 | 4,545 | |
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 2,936 | 2,936 | $ 1,436 |
Accumulated Amortization | (1,281) | (848) | (641) |
Net | $ 1,655 | $ 2,088 | $ 795 |
Consolidated Financial Statem46
Consolidated Financial Statement Details - Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2,018 | $ 1,442 | |
2,019 | 1,442 | |
2,020 | 1,442 | |
2,021 | 864 | |
Net | $ 5,190 | $ 6,633 |
Consolidated Financial Statem47
Consolidated Financial Statement Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities [Abstract] | |||
Accrued compensation and benefits | $ 13,828 | $ 22,326 | $ 18,134 |
Accrued tax liabilities | 2,985 | 3,340 | 4,520 |
Other | 5,022 | 5,859 | 5,103 |
Total accrued liabilities | $ 21,835 | $ 31,525 | $ 27,757 |
Consolidated Financial Statem48
Consolidated Financial Statement Details - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | |||
Total deferred revenue | $ 94,637 | $ 91,617 | $ 72,008 |
Less: current portion | (61,858) | (60,043) | (48,776) |
Non-current portion | 32,779 | 31,574 | 23,232 |
Products | |||
Deferred Revenue Arrangement [Line Items] | |||
Total deferred revenue | 6,161 | 5,054 | 3,568 |
Services | |||
Deferred Revenue Arrangement [Line Items] | |||
Total deferred revenue | $ 88,476 | $ 86,563 | $ 68,440 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 4.1 | $ 3.5 | $ 3.5 |
Commitments and Contingencies50
Commitments and Contingencies - Operating Leases and Purchase Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leased Assets [Line Items] | |
2,018 | $ 14,369 |
2,019 | 3,701 |
2,020 | 1,698 |
2,021 | 1,193 |
2,022 | 307 |
Total | 21,268 |
Leases and Other Contractual Obligations | |
Operating Leased Assets [Line Items] | |
2,018 | 4,001 |
2,019 | 3,701 |
2,020 | 1,698 |
2,021 | 1,193 |
2,022 | 307 |
Total | 10,900 |
Purchase Commitments | |
Operating Leased Assets [Line Items] | |
2,018 | 10,368 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Total | $ 10,368 |
Equity Award Plans - 2014 Equit
Equity Award Plans - 2014 Equity Incentive Plan/ESPP (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2018 | Jan. 01, 2017 | Jan. 01, 2016 | Dec. 17, 2015 | Jun. 10, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for future grant | 149,332 | |||||||
Canceled (in shares) | 573,000 | |||||||
Canceled (in dollars per share) | $ 6.35 | |||||||
2014 Stock Incentive Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for future grant | 6,777,353 | 4,241,980 | 3,364,304 | |||||
Percentage of outstanding shares of common stock | 5.00% | 5.00% | ||||||
Options granted, exercisable term (in years) | 5 years | |||||||
2014 Stock Incentive Plan | Prior Common Stock Outstanding | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Additional shares authorized for future issuance | 3,584,623 | 3,394,376 | 3,211,211 | |||||
2014 Stock Incentive Plan | Reallocated 2008 Equity Plan Shares | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Additional shares authorized for future issuance | 149,332 | 266,799 | 1,640,324 | |||||
2014 Stock Incentive Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares available for reallocation | 8,310,566 | |||||||
Additional shares reserved for future issuance | 8,000,000 | |||||||
Percentage of outstanding shares of common stock | 5.00% | |||||||
Options granted, exercisable term (in years) | 10 years | |||||||
Total combined voting power of all classes of stock | 10.00% | |||||||
2014 Stock Incentive Plan | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of exercise price of fair value per share on grant date | 110.00% | |||||||
2014 Stock Incentive Plan | Minimum | Non Statutory Stock Option Award | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of exercise price of fair value per share on grant date | 100.00% | |||||||
2014 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage of exercise price of fair value per share on grant date | 85.00% | |||||||
Percentage of eligible compensation through payroll deductions | 15.00% | |||||||
2014 Employee Stock Purchase Plan | ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares purchased during period | 1,038,878 | 1,080,142 | 1,105,015 | |||||
Average share price of shares purchased (in dollars per share) | $ 6.32 | $ 3.93 | $ 3.56 | |||||
Aggregate intrinsic value of shares purchased | $ 1,600 | $ 3,500 | $ 3,700 | |||||
Number of shares authorized to be repurchased (in shares) | 3,065,182 | |||||||
Early Exercise of Stock Options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized to be repurchased (in shares) | 0 | 14,307 | 51,884 | |||||
Aggregate price of shares authorized to be repurchased | $ 100 | $ 300 | ||||||
Option Exchange Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Canceled (in shares) | 344,248 | |||||||
Canceled (in dollars per share) | $ 13.58 | |||||||
Other than options granted (in shares) | 109,743 | |||||||
Granted (in dollars per share) | $ 6.76 | |||||||
Incremental share based compensation expense | $ 56 |
Equity Award Plans - Schedule o
Equity Award Plans - Schedule of Stock-based Compensation Awards Granted under Stock Option Plan in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 17,203 | $ 16,922 | $ 16,861 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 1,362 | 1,105 | 1,533 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 6,075 | 7,006 | 7,735 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 6,343 | 5,732 | 5,437 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 3,423 | 3,079 | 2,156 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 2,705 | 4,153 | 5,565 |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 11,421 | 12,567 | 8,871 |
Employee stock purchase rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 3,077 | $ 202 | $ 2,425 |
Equity Award Plans - Stock Awar
Equity Award Plans - Stock Awards (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2017 | Oct. 31, 2016 | Feb. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 23, 2017 | Oct. 27, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total compensation expense related to unvested awards granted, not yet recognized | $ 37,000,000 | |||||||
Total compensation expense related to unvested awards granted, not yet recognized weighted-average period for recognition | 2 years 3 months 12 days | |||||||
Share price (in dollars per share) | $ 7.72 | |||||||
ESPP | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total compensation expense related to unvested awards granted, not yet recognized | $ 5,200,000 | |||||||
MSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 40,000 | 540,000 | ||||||
Consecutive trading days | 20 days | |||||||
Target price measurement period | 4 years | |||||||
PSU, February 2016 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 547,000 | |||||||
Actual performance vesting percentage | 80.00% | |||||||
Vested (in shares) | 103,601 | |||||||
Forfeited (in shares) | 162,900 | |||||||
PSU, October 2016 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 60,641 | |||||||
Vested (in shares) | 12,128 | |||||||
Forfeited (in shares) | 30,321 | |||||||
PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 395,383 | |||||||
RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 3,221,000 | |||||||
Vested (in shares) | 1,631,000 | |||||||
Forfeited (in shares) | 1,981,000 | |||||||
Fair value of vested shares | $ 14,000,000 | $ 9,700,000 | $ 5,600,000 | |||||
Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Amount authorized to be repurchased | $ 20,000,000 | $ 20,000,000 | ||||||
Number of shares repurchased during period | 451,259 | 226,676 | ||||||
Average price per share of shares repurchased (in dollars per share) | $ 6.81 | $ 7.92 |
Equity Award Plans - Summary of
Equity Award Plans - Summary of Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 4 years 8 months 25 days | 4 years 10 months 25 days | 4 years 9 months 18 days |
Risk-free interest rate | 2.00% | 1.40% | 1.60% |
Volatility | 43.00% | 49.00% | 50.00% |
Dividend rate | 0.00% | 0.00% | 0.00% |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (in years) | 1 year 3 months 20 days | 1 year 3 months 20 days | 1 year 3 months 20 days |
Risk-free interest rate | 1.40% | 0.80% | 0.50% |
Volatility | 39.00% | 42.00% | 41.00% |
Dividend rate | 0.00% | 0.00% | 0.00% |
Equity Award Plans - Summary 55
Equity Award Plans - Summary of Activity under Stock Option Plans (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Number of Shares Underlying Outstanding Options | |
Outstanding options, Beginning balance (in shares) | 7,868,000 |
Granted (in shares) | 310,000 |
Exercised (in shares) | (1,587,000) |
Canceled (in shares) | (573,000) |
Outstanding options, Ending balance (in shares) | 6,018,000 |
Vested and exercisable (in shares) | 4,974,000 |
Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 4.82 |
Granted (in dollars per share) | $ / shares | 8.11 |
Exercised (in dollars per share) | $ / shares | 3.58 |
Canceled (in dollars per share) | $ / shares | 6.35 |
Ending balance (in dollars per share) | $ / shares | 5.18 |
Vested and exercisable at end of period (in dollars per share) | $ / shares | $ 5.03 |
Weighted-average remaining contractual term (in years) | 4 years 10 months 24 days |
Weighted average remaining contractual term, Vested and exercisable at end of period (in years) | 4 years 2 months 12 days |
Aggregate Intrinsic Value | $ | $ 17,169 |
Aggregate Intrinsic Value, Vested and exercisable at end of period | $ | $ 15,102 |
Number of shares available for future grant | 149,332 |
Equity Award Plans - Informatio
Equity Award Plans - Information About Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Fair value of options granted | $ 974 | $ 1,603 | $ 869 |
Weighted-average fair value of options granted (in dollars per share) | $ 3.14 | $ 2.38 | $ 2.13 |
Intrinsic value of options exercised | $ 8,013 | $ 5,990 | $ 2,299 |
Equity Award Plans - Summary 57
Equity Award Plans - Summary of RSU activity (Details) - RSUs $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 5,959 |
Granted (in shares) | shares | 3,221 |
Released (in shares) | shares | (1,631) |
Canceled (in shares) | shares | (1,981) |
Outstanding at end of period (in shares) | shares | 5,568 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 5.81 |
Granted (in dollars per share) | $ / shares | 8.55 |
Released (in dollars per share) | $ / shares | 6.36 |
Canceled (in dollars per share) | $ / shares | 6.80 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 6.88 |
Weighted-Average Remaining Vesting Term (Years) | 1 year 6 months |
Aggregate Intrinsic Value (thousands) | $ | $ 42,984 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Outstanding Shares of Common Stock Equivalents (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share Diluted [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net income per share | 12,184 | 13,645 | 10,176 |
Stock options, RSUs and employee stock purchase rights | |||
Earnings Per Share Diluted [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net income per share | 12,184 | 13,631 | 10,124 |
Common stock subject to repurchase | |||
Earnings Per Share Diluted [Line Items] | |||
Anti-dilutive securities excluded from computation of diluted net income per share | 0 | 14 | 52 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income before Income Tax, by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic loss | $ (13,752) | $ (24,429) | $ (43,540) |
Foreign income | 4,207 | 2,795 | 2,390 |
Loss before income taxes | $ (9,545) | $ (21,634) | $ (41,150) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision for income taxes: | |||
State | $ 48 | $ 41 | $ 55 |
Foreign | 1,023 | 1,009 | 675 |
Total current | 1,071 | 1,050 | 730 |
Deferred tax expense (benefit): | |||
Federal | 26 | 17 | 0 |
Foreign | 109 | (310) | 17 |
Total deferred | 135 | (293) | 17 |
Provision for income taxes | $ 1,206 | $ 757 | $ 747 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate | $ (3,245) | $ (7,356) | $ (13,991) |
Tax at statutory rate (percent) | 34.00% | 34.00% | 34.00% |
State tax - net of federal benefits | $ 32 | $ 27 | $ 36 |
State tax - net of federal benefits (percent) | (0.30%) | (0.10%) | (0.10%) |
Foreign rate differential | $ (655) | $ (666) | $ (422) |
Foreign rate differential (percent) | 6.90% | 3.10% | 1.00% |
Changes in federal valuation allowance | $ (22,672) | $ 7,626 | $ 12,559 |
Changes in valuation allowance (percent) | 237.50% | (35.30%) | (30.50%) |
Tax rate change | $ 28,185 | $ 0 | $ 0 |
Tax rate change (percent) | (295.30%) | 0.00% | 0.00% |
Stock-based compensation | $ (1,169) | $ 88 | $ 1,845 |
Stock-based compensation (percent) | 12.20% | (0.40%) | (4.50%) |
Other permanent items | $ 347 | $ 583 | $ 415 |
Other permanent items (percent) | (3.60%) | (2.70%) | (0.90%) |
Expenses for uncertain tax positions | $ 311 | $ 358 | $ 227 |
Expenses for uncertain tax positions (percent) | (3.30%) | (1.70%) | (0.60%) |
Other | $ 72 | $ 97 | $ 78 |
Other (percent) | (0.70%) | (0.40%) | (0.20%) |
Provision for income taxes | $ 1,206 | $ 757 | $ 747 |
Provision for income taxes (percent) | (12.60%) | (3.50%) | (1.80%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 37,326 | $ 48,731 | $ 47,034 |
Research and development credits, net of uncertain tax positions | 17,119 | 12,953 | 9,517 |
Accruals, reserves, and other | 13,992 | 20,914 | 17,835 |
Stock-based compensation | 2,994 | 4,055 | 2,700 |
Depreciation and amortization | 1,954 | 2,892 | 2,735 |
Gross deferred tax assets | 73,385 | 89,545 | 79,821 |
Valuation allowance | (72,458) | (88,095) | (78,291) |
Total deferred tax assets | 927 | 1,450 | 1,530 |
Deferred tax liabilities: | |||
Other | (28) | (431) | (805) |
Total deferred tax liabilities | (28) | (431) | (805) |
Net deferred tax assets | $ 899 | $ 1,019 | $ 725 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss Carryforwards [Line Items] | |||||
Valuation allowance | $ 72,458 | $ 88,095 | $ 78,291 | ||
Increase (decrease) in valuation allowance | (15,600) | 9,800 | 14,700 | ||
Unrecognized excess tax benefits | $ 3,400 | ||||
Undistributed earnings of foreign subsidiaries | 8,400 | 5,100 | 3,900 | ||
Unrecognized tax benefits | 3,782 | 3,360 | 2,552 | $ 2,195 | |
Accrued interest related to unrecognized tax benefits | 14 | ||||
Unrecognized tax benefits that would affect the effective tax rate | 1,300 | ||||
Reduction in deferred tax assets | 28,200 | ||||
U.S. Federal | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 152,300 | 143,300 | 134,700 | ||
State | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 73,600 | 70,100 | 69,100 | ||
Research and Development Credit Carryforward | U.S. Federal | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward | 10,300 | 8,500 | 6,400 | ||
Research and Development Credit Carryforward | State | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward | 10,900 | $ 8,800 | $ 6,400 | ||
Interest Expense [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Gross accrued interest expense | 30 | ||||
Interest released due to lapse of statue of limitations | $ 16 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits—beginning balance | $ 3,360 | $ 2,552 | $ 2,195 |
Increases (decrease) related to tax positions from prior years | (151) | 66 | (4) |
Increases related to tax positions taken during current year | 573 | 742 | 361 |
Decreases related to tax positions taken during the current year | 0 | 0 | 0 |
Gross unrecognized tax benefits—ending balance | $ 3,782 | $ 3,360 | $ 2,552 |
Geographic Information - Schedu
Geographic Information - Schedule of Total Revenue Based on Customer's Location (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Total revenue | $ 235,429 | $ 227,297 | $ 196,285 |
Long-lived assets | 9,913 | 8,219 | 8,903 |
United States | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 115,536 | 115,706 | 105,340 |
Long-lived assets | 7,733 | 7,190 | 7,988 |
Japan | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 51,488 | 52,951 | 35,636 |
Long-lived assets | 1,510 | 34 | 52 |
Asia Pacific, excluding Japan | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 33,189 | 29,829 | 23,847 |
EMEA | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 27,859 | 23,669 | 26,025 |
Other | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 7,357 | 5,142 | 5,437 |
Long-lived assets | $ 670 | $ 995 | $ 863 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Maximum contribution | $ 18,000 | ||
Additional contribution, Age 50 and above | $ 6,000 | ||
Percent match | 50.00% | ||
Percent of employee's compensation | 6.00% | ||
Contribution amount | $ 1,000,000 | $ 900,000 | $ 800,000 |
Appcito Acquisition (Details)
Appcito Acquisition (Details) - USD ($) $ in Thousands | Jun. 23, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Cash consideration | $ 0 | $ 4,380 | $ 0 | |
Appcito, Inc. | ||||
Business Acquisition [Line Items] | ||||
Total purchase price consideration | $ 6,500 | |||
Fair value of the purchase price consideration | 6,300 | |||
Cash consideration | 5,000 | |||
Holdback held to cover indemnification claims | $ 700 | |||
Unregistered shares of common stock issued (shares) | 227,404 | |||
Fair value of common stock issued | $ 1,300 |
Appcito Acquisition - Purchase
Appcito Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 23, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,307 | $ 1,307 | $ 72 | |
Appcito, Inc. | ||||
Business Acquisition [Line Items] | ||||
Developed technology | $ 5,050 | |||
Goodwill | 1,235 | |||
Other tangible assets | 58 | |||
Total assets acquired | $ 6,343 |