Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 29, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Arista Networks, Inc. | |
Entity Central Index Key | 1,596,532 | |
Trading Symbol | ANET | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 69,243,826 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 531,058 | $ 687,326 |
Marketable securities | 292,760 | 0 |
Accounts receivable, net of allowances of $1,348 and $1,529, respectively | 146,659 | 144,263 |
Inventories | 118,130 | 92,129 |
Prepaid expenses and other current assets | 53,447 | 50,610 |
Total current assets | 1,142,054 | 974,328 |
Property and equipment, net | 79,681 | 79,706 |
Investments | 39,136 | 36,636 |
Deferred tax assets | 55,305 | 48,429 |
Other assets | 18,812 | 20,791 |
TOTAL ASSETS | 1,334,988 | 1,159,890 |
CURRENT LIABILITIES: | ||
Accounts payable | 60,097 | 43,966 |
Accrued liabilities | 55,110 | 60,971 |
Deferred revenue | 138,885 | 122,049 |
Other current liabilities | 9,347 | 8,025 |
Total current liabilities | 263,439 | 235,011 |
Income taxes payable | 16,086 | 14,060 |
Lease financing obligations, non-current | 40,438 | 41,210 |
Deferred revenue, non-current | 91,439 | 74,759 |
Other long-term liabilities | 6,754 | 6,698 |
TOTAL LIABILITIES | 418,156 | 371,738 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.0001 par value—100,000 shares authorized, no shares issued and outstanding as of June 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.0001 par value—1,000,000 shares authorized as of June 30, 2016 and December 31, 2015; 69,195 and 68,132 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 7 | 7 |
Additional paid-in capital | 592,465 | 537,904 |
Retained earnings | 325,065 | 250,916 |
Accumulated other comprehensive loss | (705) | (675) |
TOTAL STOCKHOLDERS’ EQUITY | 916,832 | 788,152 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,334,988 | $ 1,159,890 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowances | $ 1,348 | $ 1,529 |
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 69,195,000 | 68,132,000 |
Common stock, shares outstanding (in shares) | 69,195,000 | 68,132,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenue: | ||||
Product | $ 235,616 | $ 174,072 | $ 448,091 | $ 334,213 |
Service | 33,125 | 21,480 | 62,846 | 40,384 |
Total revenue | 268,741 | 195,552 | 510,937 | 374,597 |
Cost of revenue: | ||||
Product | 88,021 | 60,014 | 166,934 | 114,453 |
Service | 9,269 | 7,648 | 17,462 | 14,500 |
Total cost of revenue | 97,290 | 67,662 | 184,396 | 128,953 |
Total gross profit | 171,451 | 127,890 | 326,541 | 245,644 |
Operating expenses: | ||||
Research and development | 69,020 | 49,947 | 131,535 | 93,287 |
Sales and marketing | 31,744 | 26,681 | 59,350 | 51,268 |
General and administrative | 17,529 | 18,403 | 32,763 | 32,475 |
Total operating expenses | 118,293 | 95,031 | 223,648 | 177,030 |
Income from operations | 53,158 | 32,859 | 102,893 | 68,614 |
Other income (expense), net: | ||||
Interest expense | (732) | (832) | (1,483) | (1,653) |
Other income (expense), net | 416 | 417 | 753 | (51) |
Total other income (expense), net | (316) | (415) | (730) | (1,704) |
Income before provision for income taxes | 52,842 | 32,444 | 102,163 | 66,910 |
Provision for income taxes | 13,938 | 8,448 | 28,014 | 18,422 |
Net income | 38,904 | 23,996 | 74,149 | 48,488 |
Net income attributable to common stockholders: | ||||
Basic | 38,617 | 23,607 | 73,535 | 47,594 |
Diluted | $ 38,635 | $ 23,638 | $ 73,573 | $ 47,667 |
Net income per share attributable to common stockholders: | ||||
Basic (usd per share) | $ 0.57 | $ 0.36 | $ 1.08 | $ 0.73 |
Diluted (usd per share) | $ 0.53 | $ 0.33 | $ 1.01 | $ 0.67 |
Weighted-average shares used in computing net income per share attributable to common stockholders: | ||||
Basic (in shares) | 68,275 | 65,524 | 68,006 | 65,018 |
Diluted (in shares) | 72,817 | 71,215 | 72,523 | 70,919 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 38,904 | $ 23,996 | $ 74,149 | $ 48,488 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (308) | 113 | (236) | (71) |
Net change in unrealized gains (losses) on available-for sale securities | 255 | 96 | 206 | 262 |
Other comprehensive income (loss) | (53) | 209 | (30) | 191 |
Comprehensive income | $ 38,851 | $ 24,205 | $ 74,119 | $ 48,679 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 74,149 | $ 48,488 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 9,662 | 6,246 |
Stock-based compensation | 27,592 | 20,047 |
Deferred income taxes | (6,876) | (2,266) |
Excess tax benefit on stock-based compensation | (15,967) | (22,975) |
Amortization of investment premiums | 385 | 883 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,396) | (25,360) |
Inventories | (26,001) | (22,297) |
Prepaid expenses and other current assets | (2,838) | (20,747) |
Other assets | 1,866 | (3,257) |
Accounts payable | 18,501 | 11,822 |
Accrued liabilities | (5,196) | 3,082 |
Deferred revenue | 33,516 | 57,975 |
Income taxes payable | 17,853 | 21,846 |
Other liabilities | 1,779 | (114) |
Net cash provided by operating activities | 126,029 | 73,373 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (292,938) | 0 |
Purchases of property and equipment | (12,042) | (8,768) |
Purchases of intangible assets | (697) | (705) |
Investment in privately-held companies | (2,500) | 0 |
Net cash used in investing activities | (308,177) | (9,473) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments of lease financing obligations | (634) | (514) |
Proceeds from issuance of common stock upon exercising options, net of repurchases | 6,317 | 11,991 |
Minimum tax withholding paid on behalf of employees for net share settlement | (599) | 0 |
Proceeds from issuance of common stock under employee stock purchase plan | 4,888 | 4,856 |
Excess tax benefit on stock-based compensation | 15,967 | 22,975 |
Issuance costs from initial public offering | 0 | (261) |
Net cash provided by financing activities | 25,939 | 39,047 |
Effect of exchange rate changes | (59) | (20) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (156,268) | 102,927 |
CASH AND CASH EQUIVALENTS—Beginning of period | 687,326 | 240,031 |
CASH AND CASH EQUIVALENTS—End of period | 531,058 | 342,958 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes, net of refunds | 18,584 | 3,501 |
Cash paid for interest—lease financing obligation | 1,469 | 1,509 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | ||
Property and equipment included in accounts payable and accrued liabilities | $ 1,408 | $ 619 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Organization Arista Networks, Inc. (together with our subsidiaries, “we,” “our” or “us”) is a supplier of cloud networking solutions that use software innovations to address the needs of large-scale Internet companies, cloud service providers and next-generation enterprises. Our cloud networking solutions consist of our Extensible Operating System, a set of network applications and our 10/25/40/50/100 Gigabit Ethernet switches. We were incorporated in October 2004 and reincorporated in the state of Delaware in March 2014. Our corporate headquarters are located in Santa Clara, California, and we have wholly-owned subsidiaries throughout the world, including North America, Europe, Asia and Australia. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial information. The results for the three and six months ended June 30, 2016 , are not necessarily indicative of the results expected for the full fiscal year. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements include the accounts of Arista Networks, Inc. and its wholly-owned subsidiaries and are prepared in accordance with GAAP. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 , filed with the SEC on February 25, 2016. Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts and sales return reserve; determination of fair value for stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; valuation of inventory; valuation of warranty accruals; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the unaudited condensed consolidated financial statements. Significant Accounting Policies There have been no material changes to our significant accounting policies as of and for the six months ended June 30, 2016 , as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers (Topic 606) , (as amended in June 2016, by ASU No. 2016-12- Revenue-Narrow-Scope Improvements and Practical Expedients), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires significantly expanded disclosures about revenue recognition. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of the new revenue standard by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue From Contracts With Customers-Principal versus Agent Considerations (Reporting Revenue Gross versus Net), and ASU No. 2016-10, Revenue From Contracts With Customers-Identifying Performance Obligations and Licensing. ASU No. 2016-08 clarifies the implementation guidance regarding principal versus agent identification and related considerations. Specifically, the guidance provides clarification around performance obligations for goods or services provided by another entity, assisting in determining whether the entity is the provider of the goods or services, the principal, or whether the entity is providing for the arrangement of the goods or services, the agent. ASU No. 2016-10 provides guidance around identifying whether promised goods or services are distinct and separately identifiable, whether promised goods or services are material or immaterial to the contract, and whether shipping and handling is considered an activity to fulfill a promise or an additional promised service. ASU No. 2016-10 also provides guidance around an entity's promise to grant a license providing a customer with either a right to use or a right to access the license, which then determines whether the obligation is satisfied at a point in time or over time, respectively. In May 2016, the FASB issued ASU No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)") ("ASU 2016-11") , which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition including accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. The above standards are effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017. The guidance is effective for us beginning in our first quarter of fiscal 2018. Early adoption would be permitted for all entities but not until the fiscal year beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. The retrospective method requires a retrospective approach to each prior reporting period presented with the option to elect certain practical expedients as defined within the guidance. The cumulative approach requires a retrospective approach with the cumulative effect of initially applying the guidance recognized at the date. of initial application and providing certain additional disclosures as defined per the guidance. We are currently reviewing the provisions of the standard and have not yet selected a transition method nor have we determined the effect of the standard on our consolidated financial statements. In July 2015, the FASB issued ASU No, 2015-11, Inventory: Simplifying the Measurement of Inventory, which simplifies the measurement of inventory to be measured at the lower of cost or net realizable value. The guidance applies to inventory measured using First in First Out ("FIFO") or average cost. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2017. The guidance can be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In January 2016, the FASB issued ASU No, 2016-01, Financial Instruments-Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance will address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2018. The guidance may be early adopted under early application guidance. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In February 2016, the FASB issued ASU No, 2016-02, Leases, which addresses the classification and recognition of lease assets and liabilities formerly classified as operating leases under GAAP. The guidance will address certain aspects of recognition and measurement, and quantitative and qualitative aspects of presentation and disclosure. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2019. The guidance will be applied to the earliest period presented using a modified retrospective approach. The guidance includes practical expedients that relate to identification, classification, and initial direct costs associated with leases commencing prior to the effective date, and the ability to apply hindsight in evaluating lease options related to extensions, terminations or asset purchases. A practical expedient also exists to treat leases entered into prior effective date under existing GAAP unless the lease has been modified. The guidance may be early adopted. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2017. The guidance may be early adopted under early application guidance. If early adoption is elected, all amendments must be adopted in the same period. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our assets and liabilities which require fair value measurement consist of cash and cash equivalents, marketable securities, accounts receivable, investments, accounts payable, and accrued liabilities. Cash equivalents, accounts receivable, accounts payable and accrued liabilities are stated at carrying amounts as reported in the condensed consolidated financial statements, which approximates fair value due to their short-term nature. Assets and liabilities recorded at fair value on a recurring basis in the accompanying consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. We use a fair value hierarchy to measure fair value, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The three-tiers of the fair value hierarchy are as follows: Level I -Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level II -Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, 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; and Level III -Unobservable inputs that are supported by little or no market data for the related assets or liabilities and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. We measure and report our cash equivalents and available-for-sale marketable securities at fair value. The following table sets forth the fair value of our financial assets by level within the fair value hierarchy (in thousands): June 30, 2016 Level I Level II Level III Total Financial Assets: Money market funds $ 311,311 $ — $ — $ 311,311 Money market funds-restricted 4,041 — — 4,041 Commercial Paper 17,975 — — 17,975 U.S. government notes 125,424 — — 125,424 Corporate bonds — 149,361 — 149,361 Total financial assets $ 458,751 $ 149,361 $ — $ 608,112 December 31, 2015 Level I Level II Level III Total Financial Assets: Money market funds $ 104,156 $ — $ — $ 104,156 Money market funds-restricted 4,041 — — 4,041 Total financial assets $ 108,197 $ — $ — $ 108,197 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2016 | |
Balance Sheet Components [Abstract] | |
Balance Sheet Components | Balance Sheet Components Marketable Securities The following table summarizes the unrealized gains and losses and fair value of our short term available-for-sale securities (in thousands): June 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 17,924 $ 51 $ — $ 17,975 U.S. government notes 125,398 37 (11 ) 125,424 Corporate bonds 149,231 235 (105 ) 149,361 Total marketable securities $ 292,553 $ 323 $ (116 ) $ 292,760 As of June 30, 2016 , there have been no other-than-temporary losses on our marketable securities. None of our marketable securities have been in continuous unrealized loss positions for greater than twelve months as of June 30, 2016 . We had no marketable securities as of December 31, 2015 . We invest in marketable securities that have maximum maturities of up to two years and are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these marketable securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those marketable securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of these investments upon maturity or sale. As of June 30, 2016 , the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands): June 30, 2016 Due in 1 year or less $ 201,798 Due in 1 year through 2 years 90,962 Total marketable securities $ 292,760 The weighted average remaining duration of our current marketable securities is approximately 0.8 years as of June 30, 2016 . As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying consolidated balance sheets. Accounts Receivable, net Accounts receivable, net consists of the following (in thousands): June 30, December 31, Accounts receivable $ 148,007 $ 145,792 Allowance for doubtful accounts (306 ) (963 ) Sales return reserve (1,042 ) (566 ) Accounts receivable, net $ 146,659 $ 144,263 Inventories Inventories consist of the following (in thousands): June 30, December 31, Raw materials $ 41,730 $ 29,831 Finished goods 76,400 62,298 Total inventories $ 118,130 $ 92,129 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): June 30, December 31, Prepaid income taxes $ 16,131 $ 14,150 Other current assets 27,513 29,270 Other prepaid expenses and deposits 9,803 7,190 Total prepaid expenses and other current assets $ 53,447 $ 50,610 Property and Equipment, net Property and equipment, net consists of the following (in thousands): June 30, December 31, Equipment and machinery $ 36,062 $ 29,101 Computer hardware and software 15,600 12,630 Furniture and fixtures 2,853 2,380 Leasehold improvements 29,466 24,372 Building 35,154 35,154 Construction-in-process 343 6,408 Property and equipment, gross 119,478 110,045 Less: accumulated depreciation (39,797 ) (30,339 ) Property and equipment, net $ 79,681 $ 79,706 Building consists of capitalized construction costs of our leased building in Santa Clara, California. Based on the terms of the lease agreement and due to our involvement in certain aspects of the construction, such as our financial involvement in structural elements of asset construction, making decisions related to tenant improvement costs and purchasing insurance not reimbursable by the buyer-lessor (the Landlord), we were deemed the owner of the building (for accounting purposes only) during the construction period. We continue to maintain involvement in the property post construction completion, and lack transferability of the risks and rewards of ownership, due to our required maintenance of a $4.0 million letter of credit, in addition to our ability and option to sublease our portion of the leased building for fees substantially higher than our base rate. Due to our continuing involvement in the property post construction and lack of transferability of related risks and rewards of ownership to the Landlord after construction completion, we account for the building as a financing obligation. See “Note 5 - Commitments and Contingencies" . Accordingly, as of June 30, 2016 and December 31, 2015 , we have recorded assets of $53.4 million , representing the total costs of the building and improvements incurred, including the costs paid by the Landlord. The building was completed in 2014 . Depreciation and amortization expense was $4.8 million , $3.3 million , $9.7 million , and $6.2 million for the three and six months ended June 30, 2016 and 2015 , respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, December 31, Accrued payroll related costs $ 30,878 $ 39,479 Accrued warranty costs 4,841 4,718 Accrued manufacturing costs 6,920 6,397 Accrued professional fees 5,718 4,875 Accrued taxes 1,257 1,347 Other 5,496 4,155 Total accrued liabilities $ 55,110 $ 60,971 Warranty Accrual We offer a one -year warranty on all of our hardware products and a 90 -day warranty against defects in the software embedded in the products. The accrued warranty liability is recorded in accrued liabilities in the accompanying consolidated balance sheets. The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands): Six Months Ended 2016 2015 Warranty accrual, beginning of period $ 4,718 $ 3,204 Liabilities accrued for warranties issued during the period 1,438 1,602 Warranty costs incurred during the period (1,018 ) (834 ) Adjustments related to change in estimate (297 ) — Warranty accrual, end of period $ 4,841 $ 3,972 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments, All Other Investments [Abstract] | |
Investments | Investments Investments in Privately-held Companies As of June 30, 2016 and December 31, 2015 , we held non-marketable equity investments of approximately $36.1 million and $33.6 million , respectively, in privately-held companies which are accounted for under the cost method. During the quarter ended June 30, 2016 we made an additional investment of $2.5 million in one of these companies, which was accounted for under the cost method. There were no impairments recognized on our investments for the six months ended June 30, 2016 . Notes Receivable As of June 30, 2016 and December 31, 2015 , we have a $3.0 million promissory note with a privately-held company, which was recorded at cost. The interest rate on the promissory note is 8.0% per annum and is payable quarterly. All unpaid principal and accrued interest on the promissory note is due and payable on the earlier of August 26, 2017 or upon a default. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases We lease various operating spaces in North America, Europe, Asia and Australia under non-cancelable operating lease arrangements that expire on various dates through 2024. There have been no material changes in our operating lease commitments under contractual obligation, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 . We recognize rent expense under these arrangements on a straight-line basis over the term of the lease. Rent expense for all operating leases amounted to $2.4 million , $1.2 million , $4.7 million , and $2.0 million for the three and six months ended June 30, 2016 and 2015 , respectively. Financing Obligation—Build-to-Suit Lease In August 2012, we executed a lease for a building then under construction in Santa Clara, California to serve as our headquarters. The lease term is 120 months and commenced in August 2013. The underlying building asset is depreciated over the building’s estimated useful life of 30 years . At the conclusion of the initial lease term, we will de-recognize both the net book values of the asset and the remaining financing obligation. There have been no material changes in our financing obligation commitments under contractual obligation, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015 . As of June 30, 2016 and December 31, 2015 , we have recorded assets of $53.4 million , representing the total costs of the building and improvements incurred, including the costs paid by the lessor (the legal owner of the building) and additional improvement costs paid by us, and a corresponding financing obligation of $41.9 million and $42.5 million , respectively. As of June 30, 2016 , $1.5 million and $40.4 million were recorded as short-term and long-term financing obligations, respectively. Land lease expense under our lease financing obligation included in rent expense above, amounted to $0.3 million and $0.6 million for both the three and six months ended June 30, 2016 and 2015 , respectively. Purchase Commitments We outsource most of our manufacturing and supply chain management operations to third-party contract manufacturers, who procure components and assemble products on our behalf based on our forecasts in order to reduce manufacturing lead times and ensure adequate component supply. We issue purchase orders to our contract manufacturers for finished product and a significant portion of these orders consist of firm non-cancelable commitments. In addition, we purchase strategic component inventory from certain suppliers under purchase commitments that in some cases are non-cancelable, including integrated circuits, which are consigned to our contract manufacturers. As of June 30, 2016 , we had non-cancelable purchase commitments of $253.4 million up from $43.9 million as of December 31, 2015 . This increase is primarily related to supply chain and production activities associated with our new U.S. operations and a planned increase in inventory levels in the third quarter of 2016. We have provided restricted deposits to our third-party contract manufacturers and vendors to secure our obligations to purchase inventory. We had $2.3 million in restricted deposits as of June 30, 2016 and December 31, 2015 . Restricted deposits are classified in other assets in our accompanying unaudited condensed consolidated balance sheets. Guarantees We have entered into agreements with some of our direct customers and channel partners that contain indemnification provisions relating to potential situations where claims could be alleged that our products infringe the intellectual property rights of a third party. We have at our option and expense the ability to repair any infringement, replace product with a non-infringing equivalent-in-function product or refund our customers all or a portion of the value of the product. Other guarantees or indemnification agreements 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 indemnification and guarantee provisions and our guarantee and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. Legal Proceedings OptumSoft, Inc. Matters On April 4, 2014, OptumSoft filed a lawsuit against us in the Superior Court of California, Santa Clara County titled OptumSoft, Inc. v. Arista Networks, Inc., in which it asserts (i) ownership of certain components of our EOS network operating system pursuant to the terms of a 2004 agreement between the companies and (ii) breaches of certain confidentiality and use restrictions in that agreement. Under the terms of the 2004 agreement, OptumSoft provided us with a non-exclusive, irrevocable, royalty-free license to software delivered by OptumSoft comprising a software tool used to develop certain components of EOS and a runtime library that is incorporated into EOS. The 2004 agreement places certain restrictions on our use and disclosure of the OptumSoft software and gives OptumSoft ownership of improvements, modifications and corrections to, and derivative works of, the OptumSoft software that we develop. In its lawsuit, OptumSoft has asked the Court to order us to (i) give OptumSoft copies of certain components of our software for evaluation by OptumSoft, (ii) cease all conduct constituting the alleged confidentiality and use restriction breaches, (iii) secure the return or deletion of OptumSoft’s alleged intellectual property provided to third parties, including our customers, (iv) assign ownership to OptumSoft of OptumSoft’s alleged intellectual property currently owned by us, and (v) pay OptumSoft’s alleged damages, attorney’s fees, and costs of the lawsuit. David Cheriton, one of our founders and a former member of our board of directors who resigned from our board of directors on March 1, 2014 and has no continuing role with us, is a founder and, we believe, the largest stockholder and director of OptumSoft. The 2010 David R. Cheriton Irrevocable Trust dtd July 27, 2010, a trust for the benefit of the minor children of Mr. Cheriton, is one of our largest stockholders. OptumSoft has identified certain software components it claims to own, which are generally applicable tools and utility subroutines and not networking specific code. We cannot assure which software components OptumSoft may ultimately claim to own in the litigation or whether such claimed components are material. On April 14, 2014, we filed a cross-complaint against OptumSoft, in which we assert our ownership of the software components at issue and our interpretation of the 2004 agreement. Among other things, we assert that the language of the 2004 agreement and the parties’ long course of conduct support our ownership of the disputed software components. We ask the Court to declare our ownership of those software components, all similarly-situated software components developed in the future and all related intellectual property. We also assert that, even if we are found not to own any particular components at issue, such components are licensed to us under the terms of the 2004 agreement. However, there can be no assurance that our assertions will ultimately prevail in litigation. On the same day, we also filed an answer to OptumSoft’s claims, as well as affirmative defenses based in part on OptumSoft’s failure to maintain the confidentiality of its claimed trade secrets, its authorization of the disclosures it asserts and its delay in claiming ownership of the software components at issue. We have also taken additional steps to respond to OptumSoft’s allegations that we improperly used and/or disclosed OptumSoft confidential information. While we believe we have meritorious defenses to these allegations, we believe we have (i) revised our software to remove the elements we understand to be the subject of the claims relating to improper use and disclosure of OptumSoft confidential information and made the revised software available to our customers and (ii) removed information from our website that OptumSoft asserted disclosed OptumSoft confidential information. The parties tried the case for Phase I of the proceedings, relating to contract interpretation and application of the contract to certain claimed source code, in September 2015. On December 16, 2015, the Court issued a Proposed Statement of Decision Following Phase 1 Trial, and on January 8, 2016, OptumSoft filed objections to that Proposed Statement of Decision. On March 23, 2016, the Court issued a Final Statement of Decision Following Phase I Trial, in which it agreed with and adopted our interpretation of the 2004 agreement and held that we, and not OptumSoft, own all of the software put at issue in Phase I. The remaining issues that were not addressed in the Phase I trial are set to be tried in Phase II. Phase II was previously scheduled to be tried in April 2016; that trial date has been vacated, however, and a new trial date has not yet been set. We intend to vigorously defend against any action brought against us by OptumSoft. However, we cannot be certain that, if litigated, any claims by OptumSoft would be resolved in our favor. For example, if it were determined that OptumSoft owned components of our EOS network operating system, we would be required to transfer ownership of those components and any related intellectual property to OptumSoft. If OptumSoft were the owner of those components, it could make them available to our competitors, such as through a sale or license. An adverse litigation ruling could result in a significant damages award against us and injunctive relief. In addition, OptumSoft could assert additional or different claims against us, including claims that our license from OptumSoft is invalid. With respect to the legal proceedings described above, it is our belief that while a loss is not probable, it may be reasonably possible. Further, at this stage in the litigation, any possible loss or range of loss cannot be estimated at this time. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us in a reporting period for a material amount, our consolidated financial statements for that reporting period could be materially adversely affected. Cisco Systems, Inc. (“Cisco”) Matters On December 5, 2014, Cisco filed two complaints against us in District Court for the Northern District of California, which are proceeding as Case No. 4:14-cv-05343 (“’43 Case”) and Case No. 5:14-cv-05344 (“’44 Case”). In the ’43 Case, Cisco alleges that we infringe U.S. Patent Nos. 6,377,577; 6,741,592; 7,023,853; 7,061,875; 7,162,537; 7,200,145; 7,224,668; 7,290,164; 7,340,597; 7,460,492; 8,051,211; and 8,356,296 (respectively, “the ’577 patent,” “the ’592 patent,” “the ’853 patent,” “the 875 patent,” “the ’537 patent,” “the ’145 patent,” “the ’668 patent,” “the ’164 patent,” “the ’597 patent,” “the ’492 patent,” “the ’211 patent,” and “the ’296 patent”). Cisco seeks, as relief for our alleged infringement in the ’43 Case, lost profits and/or reasonable royalty damages in an unspecified amount, including treble damages, attorney’s fees, and associated costs. Cisco also seeks injunctive relief in the ’43 Case. On February 10, 2015, the court granted our unopposed motion to stay the ’43 Case until the proceedings before the United States International Trade Commission (“USITC”) pertaining to the same patents (as discussed below) become final. Trial has not been scheduled in the ’43 case. In the ’44 Case, Cisco’s complaint alleges that we infringe U.S. Patent Nos. 7,047,526 and 7,953,886 (respectively, “the ’526 patent” and “the ’886 patent”), and further alleges that we infringe numerous copyrights pertaining to Cisco’s “Command Line Interface” or “CLI.” As relief for our alleged patent infringement in the ’44 Case, Cisco seeks lost profits and/or reasonable royalty damages in an unspecified amount including treble damages, attorney’s fees, and associated costs as well as injunctive relief. As relief for our alleged copyright infringement, Cisco seeks monetary damages for alleged lost profits, profits from our alleged infringement, statutory damages, attorney's fees and associated costs. On February 13, 2015, we answered the complaint in the ’44 Case, denying the patent and copyright infringement allegations and also raising numerous affirmative defenses. On March 6, 2015, Cisco filed an amended complaint against us the ’44 Case. In response, we moved to dismiss Cisco’s allegations of willful patent infringement and pre-suit indirect patent infringement. The Court granted the motion with leave to amend on July 2, 2015. On July 23, 2015, Cisco filed an amended complaint. On January 25, 2016, we sought leave to file counterclaims against Cisco in the ’44 case for antitrust and unfair competition. That motion was denied by order dated February 18, 2016, which also granted Arista leave to file those claims as a separate action. On February 24, 2016, we filed a complaint containing our antitrust and unfair competition claims against Cisco in the District Court for the Northern District of California, which is proceeding as Case No. 5:16-cv-00923 (“’23 Case”). In the ’23 Case, Cisco filed a motion to stay the litigation, or in the alternative, to dismiss the complaint on April 13, 2016, and a hearing on Cisco’s motion has been set for August 18, 2016. Trial has not been scheduled in the ’23 case. On May 17, 2016, the Patent and Trademark Appeals Board issued an order denying inter partes review on the ‘526 patent. On May 25, 2016, the Patent and Trademark Appeals Board issued an order initiating inter partes review on the ‘886 patent. In light of that order, in the ’44 case Cisco agreed to dismiss its claims as to the ‘886 patent with prejudice, and we dismissed our counterclaims as to the ‘886 patent without prejudice. Summary judgment cross-motions in the ’44 case will be heard on August 4, 2016 and trial has been set for November 21, 2016. On December 19, 2014, Cisco filed two complaints against us in the USITC, alleging that Arista has violated Section 337 of the Tariff Act of 1930, as amended. The complaints have been instituted as ITC Inv. Nos. 337-TA-944 (“944 Investigation”) and 337-TA-945 (“945 Investigation”). In the 944 Investigation, Cisco initially alleged that certain Arista switching products infringe the ’592, ’537, ’145, ’164, ’597, and ’296 patents. Cisco has subsequently dropped the ’296 patent from the 944 Investigation. In the 945 Investigation, Cisco alleges that certain Arista switching products infringe the ’577, ’853, ’875, ’668, ’492, and ’211 patents. In both the 944 and 945 Investigations, Cisco seeks, among other things, a Limited Exclusion Order barring entry into the United States of accused switch products (including 7000 Series of switches) and components and software therein and a Cease and Desist Order against us restricting our activities with respect to our imported accused switch products and components and software therein. On February 11, 2015, we responded to the notices of investigation and complaints in the 944 and 945 Investigations by, among other things, denying the patent infringement allegations and raising numerous affirmative defenses. The Administrative Law Judge assigned to the 944 Investigation issued a procedural schedule calling for, among other events: an evidentiary hearing on September 9-11 and 15-17, 2015; issuance of an initial determination regarding our alleged violations on January 27, 2016; and the Target Date for completion on May 27, 2016. On January 27, 2016 the Administrative Law Judge issued a revised procedural schedule extending the date for issuance of an initial determination to February 2, 2016 and the Target Date to June 2, 2016. On February 26, 2016, the Commission issued a notice resetting the deadline for determining whether to review the initial determination to April 11, 2016 and the Target Date to June 9, 2016. The hearing has been completed and all post trial briefs have been submitted to the USITC. On February 2, 2016, the Administrative Law Judge issued his initial determination finding a violation of section 337 of the Tariff Act. More specifically, it was found that a violation has occurred in the importation into the United States, the sale for importation, or the sale within the United States after importation, of certain network devices, related software, and components thereof that the ALJ found infringe asserted claims 1, 2, 8-11, and 17-19 of the ’537 patent; asserted claims 6, 7, 20, and 21 of the ’592 patent; and asserted claims 5, 7, 45, and 46 of the ’145 patent. A violation of section 337 was not found with respect to any asserted claims of the ’597 and ’164 patents. On April 11, 2016, the Commission decided to review certain findings contained in the 944 initial determination. On June 23, 2016, the Commission issued its Final Determination, which found a violation with respect to the ’537, ’592, and ’145 patents, and found no violation with respect to the ’597 and ’164 patents. The Commission also issued a Limited Exclusion Order and a Cease and Desist Order pertaining to network devices, related software and components thereof that infringe one or more of claims 1, 2, 8-11, and 17-19 of the ’537 patent, claims 6, 7, 20, and 21 of the ’592 patent, and claims 5, 7, 45, and 46 of the ’145 patent. The Final Determination in the 944 Investigation is subject to Presidential review, which will be completed no later than August 22, 2016. The Administrative Law Judge assigned to the 945 Investigation issued a procedural schedule calling for, among other events: an evidentiary hearing on November 9-20, 2015; issuance of an initial determination regarding our alleged violations on April 26, 2016; and the Target Date for completion on August 26, 2016. The evidentiary hearing was conducted in November 2015 and all post-hearing briefing has been completed. On March 29, 2016, the ALJ issued a revised procedural schedule extending the deadline for issuance of an initial determination to August 26, 2016, and the Target Date to December 26, 2016. On April 19, 2016, the Commission determined not to review this decision. We are awaiting the initial determination from the Administrative Law Judge. The initial determination will be subject to review by the Commission, which will then issue a Final Determination and any remedial orders on December 26, 2016. If the Final Determination finds a violation, it will be subject to Presidential review. On April 1, 2015, we filed petitions for Inter Partes Review with the United States Patent Trial and Appeal Board (“PTAB”) seeking to invalidate Cisco’s ’597, ’211, and ’668 patents. On April 10, 2015, we filed petitions for Inter Partes Review with the PTAB seeking to invalidate Cisco’s ’853 and ’577 patents. On April 16, 2015, we filed additional petitions for Inter Partes Review with the PTAB seeking to invalidate Cisco’s ’853 and ’577 patents. On August 11, 2015, we filed a second petition for Inter Partes Review of Cisco’s ’668 patent. On October 6, 2015 we filed a second petition for Inter Partes Review of Cisco’s ’211 patent, which was denied on April 12, 2016. On October 6, 2015, the PTAB granted our petition for Inter Partes Review of Cisco’s ’597 patent and our first petition for Inter Partes review of Cisco’s ’211 patents, but denied one of our petitions for Inter Partes Review of Cisco’s ’668 patent. On October 19, 2015 and October 22, 2015, the PTAB denied four petitions relating to the ’853 and ’577 patents. On November 18, 2015, we filed a request for rehearing on one of the denied petitions related to the ’577 patent, which was denied on February 29, 2016. On December 9, 2015, we filed a petition for Inter Partes Review with the PTAB seeking to invalidate Cisco’s ’537 patent, and additional petitions for Inter Partes Review with the PTAB seeking to invalidate Cisco’s ’853, ’577, and ’668 patents. On February 16, 2016, the PTAB denied our second petition for Inter Partes review of the ’668 patent. On March 17, 2016, we filed a request for rehearing on this decision, which was denied on March 29, 2016. On June 6, 2016, the PTAB instituted an Inter Partes Review proceeding for the ’853 patent. On June 11, 2016, the PTAB instituted Inter Partes Review proceedings for the ’577, ’668, and ’537 patents. On June 27, 2016, we filed a request for rehearing with respect to certain claims of the ’537 patent which the PTAB did not include in the instituted Inter Partes Review proceeding and are awaiting a ruling on that request. The PTAB must issue its final written decision on validity of the ’853 patent by June 6, 2017, and, for the ’577, ’668, and ’537 patents, by June 11, 2017. We intend to vigorously defend against Cisco’s lawsuits, as summarized in the preceding paragraphs. However, we cannot be certain that any claims by Cisco would be resolved in our favor regardless of the merit of the claims. For example, an adverse litigation ruling could result in a significant damages award against us, could further result in the above described injunctive relief, could result in a requirement that we make substantial royalty payments to Cisco, and/or could require that we modify our products to the extent that we are found to infringe any valid claims asserted against us by Cisco. Any such adverse ruling could materially adversely affect our business, prospects, reputation, results of operation and financial condition. In particular, with respect to the 944 Investigation, the USITC has issued a Limited Exclusion Order barring entry into the United States of our network devices (including 7000 Series of switches), related software and components thereof that infringe one or more of the claims of the ‘537, ‘592 and ‘145 patents specified above and a Cease and Desist Order restricting our activities with respect to such imported products. In the 945 Investigation, if our products are found to infringe any patents that are the subject of that investigation, such orders would likely be issued as well. If the Limited Exclusion Order and Cease and Desist Order are not disapproved by the US Trade Representative, we will need to remove features or develop technical design-arounds in order to take the products outside of the scope of any patent found to have been infringed and the subject of a violation. We may not be successful in developing technical design-arounds that do not infringe the patents or that are acceptable to our customers. Our development efforts could be extremely costly and time consuming as well as disruptive to our other development activities and distracting to management. Moreover, we may seek to obtain clearance for any such technical design-arounds from U.S. Customs and Border Patrol (“CBP”), and we may be unable to do so in a timely manner, if at all. In the case that we attempt to change our manufacturing, importation processes and shipping workflows to comply with the Limited Exclusion Order or Cease and Desist Order, such changes may be extremely costly, time consuming and we may not be able to implement such changes successfully. Any failure to develop effective technical design-arounds, obtain timely clearance of such technical design-arounds or successfully change our manufacturing, importation processes or shipping workflows in a manner that is compliant with the Limited Exclusion Order or Cease and Desist Order may cause a disruption in our shipments and materially and adversely affect our business, prospects, reputation, results of operations and financial condition. Cisco may also seek to enforce the Limited Exclusion Order and/or Cease and Desist Order issued in the 944 Investigation by filing for an enforcement action at the USITC. The same would be true if such orders are issued in the 945 Investigation. In such a proceeding, we would need to demonstrate that our technical design-arounds render our products non-infringing or otherwise outside the scope of the Limited Exclusion Order or Cease and Desist Order. If we are unable to do so then any product shipments after the effective date of the Limited Exclusion Order or Cease and Desist Order (whether from existing imported inventory or from products assembled from foreign sourced components) could be subject to significant civil penalties, potential seizure of that inventory which was found to have an ineffective technical design-around, and an order prohibiting the importation of further products until we implement additional technical design-arounds. Additionally, the existence of this lawsuit could cause concern among our customers and partners and could adversely affect our business and results of operations. Whether or not we prevail in the lawsuit, we expect that the litigation will be expensive, time-consuming and a distraction to management in operating our business. With respect to the various legal proceedings described above, it is our belief that while a loss is not probable, it may be reasonably possible. Further, at this stage in the litigation, any possible loss or range of loss cannot be estimated at this time. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us in a reporting period for a material amount, our consolidated financial statements for that reporting period could be materially adversely affected. Other Matters In the ordinary course of business, we are a party to other claims and legal proceedings including matters relating to commercial, employee relations, business practices and intellectual property. We record a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on currently available information, management does not believe that liability relating to these other unresolved matters is probable or that the amount of any resulting loss is estimable, and believes these other matters are not likely, individually and in the aggregate, to have a material adverse effect on our financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on our financial position, results of operations or cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods. |
Equity Award Plan Activities
Equity Award Plan Activities | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Award Plan Activities | Equity Award Plan Activities Total stock-based compensation expense related to options, restricted stock awards, employee stock purchases, restricted stock units and stock purchase rights granted were allocated as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenue $ 868 $ 784 $ 1,661 $ 1,420 Research and development 7,595 6,379 15,052 11,307 Sales and marketing 3,780 2,865 7,427 5,274 General and administrative 1,989 1,180 3,452 2,046 Total stock-based compensation $ 14,232 $ 11,208 $ 27,592 $ 20,047 Stock Option Activities The following table summarizes the option and RSA (Restricted Stock Award) activity under our equity stock plans and related information: Options and RSAs Outstanding Number of Outstanding Options and RSAs (in thousands) Weighted- Weighted- Aggregate (in thousands) Outstanding—December 31, 2015 11,630 $ 24.49 7.6 $ 620,802 Options granted 440 56.88 Options exercised (825 ) 7.71 Options canceled (232 ) 29.16 Outstanding—June 30, 2016 11,013 $ 26.94 7.3 $ 420,519 Vested and exercisable—June 30, 2016 4,021 $ 13.25 6.4 $ 207,297 Vested and expected to vest—June 30, 2016 10,449 $ 26.29 7.3 $ 405,623 As of June 30, 2016 , the total unrecognized stock-based compensation expense related to unvested stock options, net of expected forfeitures, was $103.6 million , which is expected to be recognized over a weighted-average period of 4.0 years . Restricted Stock Unit (RSU) Activities A summary of the RSU activity under our stock plans during the reporting period and a summary of information related to RSUs expected to vest are presented below (in thousands, except per share and year amounts): Number of Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Unvested balance—December 31, 2015 893 $ 70.14 1.9 $ 69,509 RSUs granted 369 61.81 RSUs vested (130 ) 69.02 RSUs forfeited (56 ) 67.29 Unvested balance—June 30, 2016 1,076 $ 67.57 1.9 $ 69,302 Vested and expected to vest—June 30, 2016 1,006 $ 67.60 1.8 $ 64,766 As of June 30, 2016 , there was $61.9 million of unrecognized stock-based compensation cost related to unvested RSUs, net of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 3.5 years. Employee Stock Purchase Plan Activities During the six months ended June 30, 2016 , we issued 122,937 shares at an average purchase price of $39.76 under the 2014 Employee Stock Purchase Plan ("ESPP"). On February 17, 2015, the board authorized an increase to shares available for future issuance under the ESPP. Per the ESPP, the increase is determined based on the lesser of 1% of total shares outstanding as of the first day of each fiscal year, or January 1, 2016, 2,500,000 shares or such amount as determined by our board of directors. The approved increase amounted to 681,315 shares. As of June 30, 2016 , there remain 1,617,132 shares available for issuance under the ESPP. As of June 30, 2016 , the total unrecognized stock-based compensation expense related to unvested ESPP options, net of expected forfeitures, was $ 2.1 million , which is expected to be recognized over a weighted-average period of 1.5 years . Shares Available for Grant The following table presents the stock activity and the total number of shares available for grant as of June 30, 2016 (in thousands): Number of Shares Balance—December 31, 2015 10,495 Authorized 2,044 Options granted (440 ) RSUs granted (369 ) Options canceled 232 Options repurchased 5 RSUs forfeited 56 Shares traded for taxes 9 Balance—June 30, 2016 12,032 |
Net Income Per Share Available
Net Income Per Share Available to Common Stock | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Available to Common Stock | Net Income Per Share Available to Common Stock The following table sets forth the computation of our basic and diluted net income per share available to common stock (in thousands, except per share amounts): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Basic: Net income $ 38,904 $ 23,996 $ 74,149 $ 48,488 Less: undistributed earnings allocated to participating securities (287 ) (389 ) (614 ) (894 ) Net income available to common stockholders, basic $ 38,617 $ 23,607 $ 73,535 $ 47,594 Diluted: Net income attributable to common stockholders, basic $ 38,617 $ 23,607 $ 73,535 $ 47,594 Add: undistributed earnings allocated to participating securities 18 31 38 73 Net income attributable to common stockholders, diluted $ 38,635 $ 23,638 $ 73,573 $ 47,667 Denominator: Basic: Weighted-average shares used in computing net income per share available to common stockholders, basic 68,275 65,524 68,006 65,018 Diluted: Weighted-average shares used in computing net income per share available to common stockholders, basic 68,275 65,524 68,006 65,018 Add weighted-average effect of dilutive securities: Stock options and RSUs 4,488 5,497 4,466 5,708 Employee stock purchase plan 54 194 51 193 Weighted-average shares used in computing net income per share available to common stockholders, diluted 72,817 71,215 72,523 70,919 Net income per share attributable to common stockholders: Basic $ 0.57 $ 0.36 $ 1.08 $ 0.73 Diluted $ 0.53 $ 0.33 $ 1.01 $ 0.67 The following outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share available to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options and RSUs to purchase common stock 3,211 2,370 3,487 2,138 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Provision for income taxes was approximately $13.9 million and $8.4 million for the three months ended June 30, 2016 and 2015, and $28.0 million and $18.4 million for the six months ended June 30, 2016 and 2015, respectively. The change in the provision was a result of an increase in profit before income taxes and the change in effective tax rate based on current geographical distribution of the earnings. We operate in a number of tax jurisdictions and are subject to taxes in each country or jurisdiction in which we conduct business. As we expand internationally, our marginal tax rate may decrease; however, there can be no certainty that our marginal tax rate will decrease, and we may experience changes in tax rates that are not reflective of actual changes in our business or operations. Earnings from our non-U.S. activities are subject to local country income tax and may be subject to U.S. income tax. Generally, the U.S. tax obligation is reduced by a credit for foreign income taxes paid on these earnings avoiding double taxation. We have been selected for examination by the Internal Revenue Service ("IRS") for our 2013 and 2014 tax years. It is difficult to determine when the examinations will be settled or their final outcomes in the foreseeable future. We believe that we have adequately provided reserves for any reasonably foreseeable adjustment to our tax returns and we do not anticipate a significant impact to our gross unrecognized benefits within the next 12 months related to these years. Our gross unrecognized tax benefits as of June 30, 2016 were $23.5 million . If the gross unrecognized tax benefits as of June 30, 2016 were realized in future periods, this could result in a tax benefit of $14.7 million within our provision of income taxes. Because of the net operating loss and tax credit carryforwards, substantially all of our tax years remain open to tax examinations and we are unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have determined that we operate as one reportable segment. The following table represents revenue based on the customer’s location, as determined by the customer’s shipping address (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 United States $ 198,958 $ 148,303 $ 379,834 $ 271,456 Other Americas 2,359 2,560 4,124 6,164 Europe, Middle East and Africa 42,644 24,782 86,383 64,872 Asia-Pacific 24,780 19,907 40,596 32,105 Total revenue $ 268,741 $ 195,552 $ 510,937 $ 374,597 The following table presents our property, plant and equipment, net by geographic region for the periods presented (in thousands): June 30, December 31, United States $ 70,646 $ 70,719 International 9,035 8,987 Total $ 79,681 $ 79,706 |
Overview and Basis of Present16
Overview and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial information. The results for the three and six months ended June 30, 2016 , are not necessarily indicative of the results expected for the full fiscal year. The condensed consolidated balance sheet as of December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited condensed consolidated financial statements include the accounts of Arista Networks, Inc. and its wholly-owned subsidiaries and are prepared in accordance with GAAP. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 , filed with the SEC on February 25, 2016. There have been no material changes to our significant accounting policies as of and for the six months ended June 30, 2016 , as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . |
Use of Estimates | The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts and sales return reserve; determination of fair value for stock-based awards; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; valuation of inventory; valuation of warranty accruals; and the recognition and measurement of contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the unaudited condensed consolidated financial statements. |
Recent Accounting Pronouncements | In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers (Topic 606) , (as amended in June 2016, by ASU No. 2016-12- Revenue-Narrow-Scope Improvements and Practical Expedients), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new standard provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires significantly expanded disclosures about revenue recognition. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , deferring the effective date of the new revenue standard by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue From Contracts With Customers-Principal versus Agent Considerations (Reporting Revenue Gross versus Net), and ASU No. 2016-10, Revenue From Contracts With Customers-Identifying Performance Obligations and Licensing. ASU No. 2016-08 clarifies the implementation guidance regarding principal versus agent identification and related considerations. Specifically, the guidance provides clarification around performance obligations for goods or services provided by another entity, assisting in determining whether the entity is the provider of the goods or services, the principal, or whether the entity is providing for the arrangement of the goods or services, the agent. ASU No. 2016-10 provides guidance around identifying whether promised goods or services are distinct and separately identifiable, whether promised goods or services are material or immaterial to the contract, and whether shipping and handling is considered an activity to fulfill a promise or an additional promised service. ASU No. 2016-10 also provides guidance around an entity's promise to grant a license providing a customer with either a right to use or a right to access the license, which then determines whether the obligation is satisfied at a point in time or over time, respectively. In May 2016, the FASB issued ASU No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update)") ("ASU 2016-11") , which rescinds various standards codified as part of Topic 605, Revenue Recognition in relation to the future adoption of Topic 606. These rescissions include changes to topics pertaining to revenue and expense recognition including accounting for shipping and handling fees and costs and accounting for consideration given by a vendor to a customer. The above standards are effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2017. The guidance is effective for us beginning in our first quarter of fiscal 2018. Early adoption would be permitted for all entities but not until the fiscal year beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. The retrospective method requires a retrospective approach to each prior reporting period presented with the option to elect certain practical expedients as defined within the guidance. The cumulative approach requires a retrospective approach with the cumulative effect of initially applying the guidance recognized at the date. of initial application and providing certain additional disclosures as defined per the guidance. We are currently reviewing the provisions of the standard and have not yet selected a transition method nor have we determined the effect of the standard on our consolidated financial statements. In July 2015, the FASB issued ASU No, 2015-11, Inventory: Simplifying the Measurement of Inventory, which simplifies the measurement of inventory to be measured at the lower of cost or net realizable value. The guidance applies to inventory measured using First in First Out ("FIFO") or average cost. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2017. The guidance can be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In January 2016, the FASB issued ASU No, 2016-01, Financial Instruments-Recognition and Measurement of Financial Assets and Financial Liabilities, which enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance will address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2018. The guidance may be early adopted under early application guidance. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In February 2016, the FASB issued ASU No, 2016-02, Leases, which addresses the classification and recognition of lease assets and liabilities formerly classified as operating leases under GAAP. The guidance will address certain aspects of recognition and measurement, and quantitative and qualitative aspects of presentation and disclosure. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2019. The guidance will be applied to the earliest period presented using a modified retrospective approach. The guidance includes practical expedients that relate to identification, classification, and initial direct costs associated with leases commencing prior to the effective date, and the ability to apply hindsight in evaluating lease options related to extensions, terminations or asset purchases. A practical expedient also exists to treat leases entered into prior effective date under existing GAAP unless the lease has been modified. The guidance may be early adopted. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The standard is effective for us for our first quarter of fiscal 2017. The guidance may be early adopted under early application guidance. If early adoption is elected, all amendments must be adopted in the same period. The manner of application varies by the various provisions of the guidance, with certain provisions applied on a retrospective or modified retrospective approach, while others are applied prospectively. We are currently assessing the impact this guidance may have on our consolidated financial statements as well as the transition method that we will use to adopt the guidance. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial assets by level | The following table sets forth the fair value of our financial assets by level within the fair value hierarchy (in thousands): June 30, 2016 Level I Level II Level III Total Financial Assets: Money market funds $ 311,311 $ — $ — $ 311,311 Money market funds-restricted 4,041 — — 4,041 Commercial Paper 17,975 — — 17,975 U.S. government notes 125,424 — — 125,424 Corporate bonds — 149,361 — 149,361 Total financial assets $ 458,751 $ 149,361 $ — $ 608,112 December 31, 2015 Level I Level II Level III Total Financial Assets: Money market funds $ 104,156 $ — $ — $ 104,156 Money market funds-restricted 4,041 — — 4,041 Total financial assets $ 108,197 $ — $ — $ 108,197 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Balance Sheet Components [Abstract] | |
Schedule of Gains and Losses on Available for Sale Securities | The following table summarizes the unrealized gains and losses and fair value of our short term available-for-sale securities (in thousands): June 30, 2016 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Commercial paper $ 17,924 $ 51 $ — $ 17,975 U.S. government notes 125,398 37 (11 ) 125,424 Corporate bonds 149,231 235 (105 ) 149,361 Total marketable securities $ 292,553 $ 323 $ (116 ) $ 292,760 |
Schedule of Available-For-Sale Securities by Remaining Contractual Maturity | As of June 30, 2016 , the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands): June 30, 2016 Due in 1 year or less $ 201,798 Due in 1 year through 2 years 90,962 Total marketable securities $ 292,760 |
Schedule of Accounts Receivable | Accounts receivable, net consists of the following (in thousands): June 30, December 31, Accounts receivable $ 148,007 $ 145,792 Allowance for doubtful accounts (306 ) (963 ) Sales return reserve (1,042 ) (566 ) Accounts receivable, net $ 146,659 $ 144,263 |
Schedule of Inventories | Inventories consist of the following (in thousands): June 30, December 31, Raw materials $ 41,730 $ 29,831 Finished goods 76,400 62,298 Total inventories $ 118,130 $ 92,129 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): June 30, December 31, Prepaid income taxes $ 16,131 $ 14,150 Other current assets 27,513 29,270 Other prepaid expenses and deposits 9,803 7,190 Total prepaid expenses and other current assets $ 53,447 $ 50,610 |
Schedule of Property and Equipment, net | Property and equipment, net consists of the following (in thousands): June 30, December 31, Equipment and machinery $ 36,062 $ 29,101 Computer hardware and software 15,600 12,630 Furniture and fixtures 2,853 2,380 Leasehold improvements 29,466 24,372 Building 35,154 35,154 Construction-in-process 343 6,408 Property and equipment, gross 119,478 110,045 Less: accumulated depreciation (39,797 ) (30,339 ) Property and equipment, net $ 79,681 $ 79,706 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): June 30, December 31, Accrued payroll related costs $ 30,878 $ 39,479 Accrued warranty costs 4,841 4,718 Accrued manufacturing costs 6,920 6,397 Accrued professional fees 5,718 4,875 Accrued taxes 1,257 1,347 Other 5,496 4,155 Total accrued liabilities $ 55,110 $ 60,971 |
Schedule of Warranty Accrual | The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands): Six Months Ended 2016 2015 Warranty accrual, beginning of period $ 4,718 $ 3,204 Liabilities accrued for warranties issued during the period 1,438 1,602 Warranty costs incurred during the period (1,018 ) (834 ) Adjustments related to change in estimate (297 ) — Warranty accrual, end of period $ 4,841 $ 3,972 |
Equity Award Plan Activities (T
Equity Award Plan Activities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-based Compensation Expense | Total stock-based compensation expense related to options, restricted stock awards, employee stock purchases, restricted stock units and stock purchase rights granted were allocated as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of revenue $ 868 $ 784 $ 1,661 $ 1,420 Research and development 7,595 6,379 15,052 11,307 Sales and marketing 3,780 2,865 7,427 5,274 General and administrative 1,989 1,180 3,452 2,046 Total stock-based compensation $ 14,232 $ 11,208 $ 27,592 $ 20,047 |
Schedule of Option and RSA Activity | The following table summarizes the option and RSA (Restricted Stock Award) activity under our equity stock plans and related information: Options and RSAs Outstanding Number of Outstanding Options and RSAs (in thousands) Weighted- Weighted- Aggregate (in thousands) Outstanding—December 31, 2015 11,630 $ 24.49 7.6 $ 620,802 Options granted 440 56.88 Options exercised (825 ) 7.71 Options canceled (232 ) 29.16 Outstanding—June 30, 2016 11,013 $ 26.94 7.3 $ 420,519 Vested and exercisable—June 30, 2016 4,021 $ 13.25 6.4 $ 207,297 Vested and expected to vest—June 30, 2016 10,449 $ 26.29 7.3 $ 405,623 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the RSU activity under our stock plans during the reporting period and a summary of information related to RSUs expected to vest are presented below (in thousands, except per share and year amounts): Number of Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Unvested balance—December 31, 2015 893 $ 70.14 1.9 $ 69,509 RSUs granted 369 61.81 RSUs vested (130 ) 69.02 RSUs forfeited (56 ) 67.29 Unvested balance—June 30, 2016 1,076 $ 67.57 1.9 $ 69,302 Vested and expected to vest—June 30, 2016 1,006 $ 67.60 1.8 $ 64,766 |
Schedule of Shares Available For Grant | The following table presents the stock activity and the total number of shares available for grant as of June 30, 2016 (in thousands): Number of Shares Balance—December 31, 2015 10,495 Authorized 2,044 Options granted (440 ) RSUs granted (369 ) Options canceled 232 Options repurchased 5 RSUs forfeited 56 Shares traded for taxes 9 Balance—June 30, 2016 12,032 |
Net Income Per Share Availabl20
Net Income Per Share Available to Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share Available to Common Stock | The following table sets forth the computation of our basic and diluted net income per share available to common stock (in thousands, except per share amounts): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Basic: Net income $ 38,904 $ 23,996 $ 74,149 $ 48,488 Less: undistributed earnings allocated to participating securities (287 ) (389 ) (614 ) (894 ) Net income available to common stockholders, basic $ 38,617 $ 23,607 $ 73,535 $ 47,594 Diluted: Net income attributable to common stockholders, basic $ 38,617 $ 23,607 $ 73,535 $ 47,594 Add: undistributed earnings allocated to participating securities 18 31 38 73 Net income attributable to common stockholders, diluted $ 38,635 $ 23,638 $ 73,573 $ 47,667 Denominator: Basic: Weighted-average shares used in computing net income per share available to common stockholders, basic 68,275 65,524 68,006 65,018 Diluted: Weighted-average shares used in computing net income per share available to common stockholders, basic 68,275 65,524 68,006 65,018 Add weighted-average effect of dilutive securities: Stock options and RSUs 4,488 5,497 4,466 5,708 Employee stock purchase plan 54 194 51 193 Weighted-average shares used in computing net income per share available to common stockholders, diluted 72,817 71,215 72,523 70,919 Net income per share attributable to common stockholders: Basic $ 0.57 $ 0.36 $ 1.08 $ 0.73 Diluted $ 0.53 $ 0.33 $ 1.01 $ 0.67 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net income per share available to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Stock options and RSUs to purchase common stock 3,211 2,370 3,487 2,138 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Net Revenue and Long Lived Assets, by Location | The following table represents revenue based on the customer’s location, as determined by the customer’s shipping address (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 United States $ 198,958 $ 148,303 $ 379,834 $ 271,456 Other Americas 2,359 2,560 4,124 6,164 Europe, Middle East and Africa 42,644 24,782 86,383 64,872 Asia-Pacific 24,780 19,907 40,596 32,105 Total revenue $ 268,741 $ 195,552 $ 510,937 $ 374,597 The following table presents our property, plant and equipment, net by geographic region for the periods presented (in thousands): June 30, December 31, United States $ 70,646 $ 70,719 International 9,035 8,987 Total $ 79,681 $ 79,706 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 608,112 | $ 108,197 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 311,311 | 104,156 |
Money market funds-restricted | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 4,041 | 4,041 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 17,975 | |
U.S. government notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 125,424 | |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 149,361 | |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 458,751 | 108,197 |
Level I | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 311,311 | 104,156 |
Level I | Money market funds-restricted | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 4,041 | 4,041 |
Level I | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 17,975 | |
Level I | U.S. government notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 125,424 | |
Level I | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 149,361 | 0 |
Level II | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level II | Money market funds-restricted | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level II | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | |
Level II | U.S. government notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | |
Level II | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 149,361 | |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level III | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | 0 |
Level III | Money market funds-restricted | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | $ 0 |
Level III | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | |
Level III | U.S. government notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 0 | |
Level III | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 0 |
Balance Sheet Components - Mark
Balance Sheet Components - Marketable Securities (Details) | 6 Months Ended | |
Jun. 30, 2016USD ($)security | Dec. 31, 2015USD ($) | |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 292,553,000 | |
Unrealized Gains | 323,000 | |
Unrealized Losses | (116,000) | |
Fair Value | 292,760,000 | $ 0 |
Other-than-temporary losses | $ 0 | |
Securities in an unrealized loss position, greater than or equal to one year | security | 0 | |
Maximum maturity of marketable securities | 2 years | |
Commercial Paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 17,924,000 | |
Unrealized Gains | 51,000 | |
Unrealized Losses | 0 | |
Fair Value | 17,975,000 | |
U.S. government notes | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 125,398,000 | |
Unrealized Gains | 37,000 | |
Unrealized Losses | (11,000) | |
Fair Value | 125,424,000 | |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 149,231,000 | |
Unrealized Gains | 235,000 | |
Unrealized Losses | (105,000) | |
Fair Value | $ 149,361,000 |
Balance Sheet Components - Avai
Balance Sheet Components - Available-For-Sale Security Fair Value Maturity (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Due in 1 year or less | $ 201,798,000 | |
Due in 1 year through 2 years | 90,962,000 | |
Total marketable securities | $ 292,760,000 | $ 0 |
Weighted-average remaining duration | 9 months 5 days |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Balance Sheet Components [Abstract] | ||
Accounts receivable | $ 148,007 | $ 145,792 |
Allowance for doubtful accounts | (306) | (963) |
Sales return reserve | (1,042) | (566) |
Accounts receivable, net | $ 146,659 | $ 144,263 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials | $ 41,730 | $ 29,831 |
Finished goods | 76,400 | 62,298 |
Total inventories | $ 118,130 | $ 92,129 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Balance Sheet Components [Abstract] | ||
Prepaid income taxes | $ 16,131 | $ 14,150 |
Other current assets | 27,513 | 29,270 |
Other prepaid expenses and deposits | 9,803 | 7,190 |
Total prepaid expenses and other current assets | $ 53,447 | $ 50,610 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 119,478,000 | $ 119,478,000 | $ 110,045,000 | ||
Less: accumulated depreciation | (39,797,000) | (39,797,000) | (30,339,000) | ||
Property and equipment, net | 79,681,000 | 79,681,000 | 79,706,000 | ||
Depreciation | 4,800,000 | $ 3,300,000 | 9,700,000 | $ 6,200,000 | |
Line of Credit | Letter of Credit | |||||
Property, Plant and Equipment [Line Items] | |||||
Letter of credit | 4,000,000 | 4,000,000 | |||
Equipment and machinery | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 36,062,000 | 36,062,000 | 29,101,000 | ||
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 15,600,000 | 15,600,000 | 12,630,000 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 2,853,000 | 2,853,000 | 2,380,000 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 29,466,000 | 29,466,000 | 24,372,000 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 35,154,000 | 35,154,000 | 35,154,000 | ||
Construction-in-process | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 343,000 | 343,000 | 6,408,000 | ||
Building and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 53,400,000 | $ 53,400,000 | $ 53,400,000 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Balance Sheet Components [Abstract] | ||||
Accrued payroll related costs | $ 30,878 | $ 39,479 | ||
Accrued warranty costs | 4,841 | 4,718 | $ 3,972 | $ 3,204 |
Accrued manufacturing costs | 6,920 | 6,397 | ||
Accrued professional fees | 5,718 | 4,875 | ||
Accrued taxes | 1,257 | 1,347 | ||
Other | 5,496 | 4,155 | ||
Total accrued liabilities | $ 55,110 | $ 60,971 |
Balance Sheet Components - Warr
Balance Sheet Components - Warranty Accrual (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Warranty [Roll Forward] | ||
Warranty accrual, beginning of period | $ 4,718 | $ 3,204 |
Liabilities accrued for warranties issued during the period | 1,438 | 1,602 |
Warranty costs incurred during the period | (1,018) | (834) |
Adjustments related to change in estimate | (297) | 0 |
Warranty accrual, end of period | $ 4,841 | $ 3,972 |
Hardware | ||
Guarantor Obligations [Line Items] | ||
Warranty period | 1 year | |
Software embedded in products | ||
Guarantor Obligations [Line Items] | ||
Warranty period | 90 days |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Investments | $ 36,100,000 | $ 36,100,000 | $ 33,600,000 |
Additional investments | 2,500,000 | ||
Impairments recognized on investments | 0 | ||
8% Promissory Note Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Promissory note with privately held company | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 |
Interest rate on notes receivable | 8.00% | 8.00% | 8.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Nov. 18, 2015petition | Oct. 22, 2015petition | Oct. 06, 2015petition | Aug. 30, 2013 | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 19, 2014complaint | Dec. 05, 2014complaint |
Long-term Purchase Commitment [Line Items] | |||||||||||
Rent expense | $ 2,400 | $ 1,200 | $ 4,700 | $ 2,000 | |||||||
Lease term | 120 months | ||||||||||
Recorded assets | 119,478 | 119,478 | $ 110,045 | ||||||||
Lease financing obligation | 41,900 | 41,900 | 42,500 | ||||||||
Lease financing obligations, current | 1,500 | 1,500 | |||||||||
Lease financing obligations, non-current | 40,438 | 40,438 | 41,210 | ||||||||
Contract manufacturer liability | 253,400 | 253,400 | 43,900 | ||||||||
Cisco Systems, Inc. | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Number of pending claims | complaint | 2 | 2 | |||||||||
Number of petitions denied | petition | 1 | 4 | 1 | ||||||||
Deposits and other assets | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Restricted deposits | 2,300 | 2,300 | 2,300 | ||||||||
Building and improvements | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Useful life | 30 years | ||||||||||
Recorded assets | 53,400 | 53,400 | $ 53,400 | ||||||||
Land | |||||||||||
Long-term Purchase Commitment [Line Items] | |||||||||||
Land lease expense | $ 300 | $ 600 | $ 300 | $ 600 |
Equity Award Plan Activities -
Equity Award Plan Activities - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 14,232 | $ 11,208 | $ 27,592 | $ 20,047 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 868 | 784 | 1,661 | 1,420 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 7,595 | 6,379 | 15,052 | 11,307 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | 3,780 | 2,865 | 7,427 | 5,274 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 1,989 | $ 1,180 | $ 3,452 | $ 2,046 |
Equity Award Plan Activities 34
Equity Award Plan Activities - Option and RSA Activity Rollforward (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Number of Shares Underlying Outstanding Options and RSAs (in thousands) | ||
Options granted (in shares) | 440 | |
Options canceled (in shares) | (232) | |
Employee Stock Option and Restricted Stock | ||
Number of Shares Underlying Outstanding Options and RSAs (in thousands) | ||
Beginning balance, options (in shares) | 11,630 | |
Options granted (in shares) | 440 | |
Options exercised (in shares) | (825) | |
Options canceled (in shares) | (232) | |
Ending balance, options (in shares) | 11,013 | 11,630 |
Vested and exercisable (in shares) | 4,021 | |
Vested and expected to vest (in shares) | 10,449 | |
Weighted- Average Exercise Price per Share | ||
Outstanding beginning balance (usd per share) | $ 24.49 | |
Options granted (usd per share) | 56.88 | |
Options exercised (usd per share) | 7.71 | |
Options canceled (usd per share) | 29.16 | |
Outstanding ending balance (usd per share) | 26.94 | $ 24.49 |
Vested and exercisable (usd per share) | 13.25 | |
Vested and expected to vest (usd per share) | $ 26.29 | |
Weighted- Average Remaining Contractual Term and Aggregate Intrinsic Value of Stock Options Outstanding | ||
Weighted-average remaining contractual term of stock options outstanding | 7 years 4 months | 7 years 7 months 6 days |
Weighted-average remaining contractual term of stock options vested and exercisable | 6 years 5 months | |
Weighted-average remaining contractual term of stock options vested and expected to vest | 7 years 4 months | |
Aggregate intrinsic value of stock options outstanding | $ 420,519 | $ 620,802 |
Aggregate intrinsic value of stock options outstanding vested and exercisable | 207,297 | |
Aggregate intrinsic value of stock options outstanding vested and expected to vest | $ 405,623 |
Equity Award Plan Activities 35
Equity Award Plan Activities - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 17, 2015 | Jun. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation expense | $ 103.6 | |
Approved increase of shares available (in shares) | 2,044,000 | |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average amortization period | 4 years | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average amortization period | 3 years 6 months | |
Unrecognized stock-based compensation expense for unvested options, net of expected forfeitures | $ 61.9 | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average amortization period | 1 year 6 months | |
Unrecognized stock-based compensation expense for unvested options, net of expected forfeitures | $ 2.1 | |
ESPP shares purchased (in shares) | 122,937 | |
Weighted-average price of ESPP shares purchased (in dollars per share) | $ 39.76 | |
Increase of shares available for issuance as a percent | 1.00% | |
Maximum number of additional shares for authorization | 2,500,000 | |
Approved increase of shares available (in shares) | 681,315 | |
2014 Employee Stock Purchase Plan | Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for grant beginning balance (in shares) | 1,617,132 |
Equity Award Plan Activities 36
Equity Award Plan Activities - Restricted Stock Unit Awards (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Number of Shares (in shares) | ||
Unvested beginning balance (in shares) | 893 | |
RSUs granted (in shares) | 369 | |
RSUs vested (in shares) | (130) | |
RSUs forfeited (in shares) | (56) | |
Unvested ending balance (in shares) | 1,076 | 893 |
Vested and expected to vest (in shares) | 1,006 | |
Restricted Stock Awards, Weighted Average Grant Date Fair Value | ||
Unvested beginning balance (usd per share) | $ 70.14 | |
RSUs granted (usd per share) | 61.81 | |
RSUs vested (usd per share) | 69.02 | |
RSUs forfeited (usd per share) | 67.29 | |
Unvested ending balance (usd per share) | 67.57 | $ 70.14 |
Vested and expected to vest (usd per share) | $ 67.60 | |
Weighted- Average Remaining Contractual Term and Aggregate Intrinsic Value of Stock Options Outstanding | ||
Unvested balance, weighted-average remaining contractual term (in years) | 1 year 10 months 24 days | 1 year 10 months 24 days |
Vested and expected to vest, weighted-average contractual term (in years) | 1 year 9 months 18 days | |
Unvested balance, aggregate intrinsic value | $ 69,302 | $ 69,509 |
Vested and expected to vest, aggregate intrinsic value | $ 64,766 |
Equity Award Plan Activities 37
Equity Award Plan Activities - Shares Available for Grant (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2016shares | |
Shares Available for Grant [Roll Forward] | |
Shares available for grant beginning balance (in shares) | 10,495 |
Authorized (in shares) | 2,044 |
Options granted (in shares) | (440) |
Options canceled (in shares) | 232 |
Options repurchased (in shares) | 5 |
Shares traded for taxes | 9 |
Shares available for grant ending balance (in shares) | 12,032 |
Restricted Stock Units (RSUs) | |
Shares Available for Grant [Roll Forward] | |
RSUs granted (in shares) | (369) |
RSUs forfeited (in shares) | 56 |
Net Income Per Share Availabl38
Net Income Per Share Available to Common Stock - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator: | ||||
Net income | $ 38,904 | $ 23,996 | $ 74,149 | $ 48,488 |
Less: undistributed earnings allocated to participating securities | (287) | (389) | (614) | (894) |
Net income attributable to common stockholders, basic | 38,617 | 23,607 | 73,535 | 47,594 |
Add: undistributed earnings allocated to participating securities | 18 | 31 | 38 | 73 |
Net income attributable to common stockholders, diluted | $ 38,635 | $ 23,638 | $ 73,573 | $ 47,667 |
Denominator: | ||||
Weighted-average shares used in computing net income per share available to common stockholders, basic (in shares) | 68,275 | 65,524 | 68,006 | 65,018 |
Add weighted-average effect of dilutive securities: | ||||
Stock options and RSAs (in shares) | 4,488 | 5,497 | 4,466 | 5,708 |
Employee stock purchase plan (in shares) | 54 | 194 | 51 | 193 |
Weighted-average shares used in computing net income per share available to common stockholders, diluted (in shares) | 72,817 | 71,215 | 72,523 | 70,919 |
Net income per share attributable to common stockholders: | ||||
Basic (usd per share) | $ 0.57 | $ 0.36 | $ 1.08 | $ 0.73 |
Diluted (usd per share) | $ 0.53 | $ 0.33 | $ 1.01 | $ 0.67 |
Net Income Per Share Availabl39
Net Income Per Share Available to Common Stock - Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock options and RSUs to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share (in shares) | 3,211 | 2,370 | 3,487 | 2,138 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 13,938 | $ 8,448 | $ 28,014 | $ 18,422 |
Gross unrecognized tax benefits | $ 23,500 | 23,500 | ||
Income tax expense (benefit) resulting from unrecognized tax benefits recognized in future periods | $ (14,700) |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Revenue | $ 268,741 | $ 195,552 | $ 510,937 | $ 374,597 | |
Long lived assets | 79,681 | 79,681 | $ 79,706 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 198,958 | 148,303 | 379,834 | 271,456 | |
Long lived assets | 70,646 | 70,646 | 70,719 | ||
Other Americas | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 2,359 | 2,560 | 4,124 | 6,164 | |
Europe, Middle East and Africa | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 42,644 | 24,782 | 86,383 | 64,872 | |
Asia-Pacific | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 24,780 | $ 19,907 | 40,596 | $ 32,105 | |
International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long lived assets | $ 9,035 | $ 9,035 | $ 8,987 |