Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 28, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38618 | ||
Entity Registrant Name | ARLO TECHNOLOGIES, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 38-4061754 | ||
Entity Address, Address Line One | 3030 Orchard Parkway | ||
Entity Address, City or Town | San Jose, | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95134 | ||
City Area Code | 408 | ||
Local Phone Number | 890-3900 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | ARLO | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 161.7 | ||
Entity Common Stock, Shares Outstanding | 80,503,730 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2021 annual meeting of stockholders, which will be filed within 120 days of the registrant’s fiscal year end, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001736946 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 186,127 | $ 236,680 |
Short-term investments (amortized cost of $19,996 and $19,967) | 19,997 | 19,990 |
Accounts receivable, net (net of allowance for credit losses of $519 and $609) | 77,643 | 127,317 |
Inventories | 64,705 | 68,624 |
Prepaid expenses and other current assets | 8,076 | 16,958 |
Total current assets | 356,548 | 469,569 |
Property and equipment, net | 15,821 | 21,352 |
Operating lease right-of-use assets, net | 23,998 | 31,300 |
Intangibles, net | 0 | 1,306 |
Goodwill | 11,038 | 11,038 |
Restricted cash | 4,164 | 4,139 |
Other non-current assets | 2,399 | 4,008 |
Total assets | 413,968 | 542,712 |
Current liabilities: | ||
Accounts payable | 62,171 | 111,650 |
Deferred revenue | 53,142 | 50,362 |
Accrued liabilities | 121,766 | 127,400 |
Income tax payable | 267 | 4,489 |
Total current liabilities | 237,346 | 293,901 |
Non-current deferred revenue | 16,563 | 15,736 |
Non-current operating lease liabilities | 25,029 | 29,001 |
Non-current income taxes payable | 104 | 92 |
Other non-current liabilities | 1,159 | 606 |
Total liabilities | 280,201 | 339,336 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Preferred stock: $0.001 par value; 50,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock: $0.001 par value; 500,000,000 shares authorized; shares issued and outstanding: 79,336,242 at December 31, 2020 and 75,785,952 at December 31, 2019 | 79 | 76 |
Additional paid-in capital | 366,455 | 334,821 |
Accumulated other comprehensive income (loss) | 3 | (2) |
Accumulated deficit | (232,770) | (131,519) |
Total stockholders’ equity | 133,767 | 203,376 |
Total liabilities and stockholders’ equity | $ 413,968 | $ 542,712 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, allowance for credit losses | $ 519 | $ 609 |
Preferred stock (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares, issued (in shares) | 79,336,242 | 75,785,952 |
Common stock, shares, outstanding (in shares) | 79,336,242 | 75,785,952 |
U.S. treasuries | ||
Short-term investments, amortized cost | $ 19,996 | $ 19,967 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenue | $ 357,154 | $ 370,007 | $ 464,918 |
Total cost of revenue | 301,765 | 334,203 | 372,843 |
Gross profit | 55,389 | 35,804 | 92,075 |
Operating expenses: | |||
Research and development | 60,137 | 69,384 | 58,794 |
Sales and marketing | 49,064 | 56,985 | 52,593 |
General and administrative | 51,096 | 47,624 | 28,209 |
Separation expense | 248 | 1,913 | 27,252 |
Gain on sale of business | (292) | (54,881) | 0 |
Total operating expenses | 160,253 | 121,025 | 166,848 |
Loss from operations | (104,864) | (85,221) | (74,773) |
Interest income | 802 | 2,737 | 1,239 |
Other income (expense), net | 3,436 | 913 | (1,177) |
Loss before income taxes | (100,626) | (81,571) | (74,711) |
Provision for income taxes | 625 | 4,380 | 772 |
Net loss | $ (101,251) | $ (85,951) | $ (75,483) |
Net loss per share: | |||
Basic (in dollars per share) | $ (1.30) | $ (1.14) | $ (1.12) |
Diluted (in dollars per share) | $ (1.30) | $ (1.14) | $ (1.12) |
Weighted average shares used to compute net loss per share: | |||
Basic (in shares) | 78,084 | 75,074 | 67,231 |
Diluted (in shares) | 78,084 | 75,074 | 67,231 |
Products | |||
Total revenue | $ 284,868 | $ 323,242 | $ 427,113 |
Total cost of revenue | 263,905 | 307,348 | 354,023 |
Services | |||
Total revenue | 72,286 | 46,765 | 37,805 |
Total cost of revenue | $ 37,860 | $ 26,855 | $ 18,820 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (101,251) | $ (85,951) | $ (75,483) |
Other comprehensive income (loss), before and after tax: | |||
Unrealized gain (loss) on derivative instruments | 27 | (27) | 2 |
Unrealized gain (loss) on available-for-sale securities | (22) | 25 | (2) |
Total other comprehensive income (loss), before tax | 5 | (2) | 0 |
Tax benefit (provision) related to derivative instruments | 0 | 0 | 0 |
Tax benefit (provision) related to available-for-sale securities | 0 | 0 | 0 |
Total other comprehensive income (loss), net of tax | 5 | (2) | 0 |
Comprehensive loss | $ (101,246) | $ (85,953) | $ (75,483) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative-effect adjustment from adoption | Common Stock | Additional Paid-In Capital | Net Parent Investment | Net Parent InvestmentCumulative-effect adjustment from adoption | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated DeficitCumulative-effect adjustment from adoption | NETGEAR | NETGEARAdditional Paid-In Capital | NETGEARNet Parent Investment |
Beginning balance (in shares) at Dec. 31, 2017 | 0 | |||||||||||
Beginning balance at Dec. 31, 2017 | $ 125,419 | $ (3,061) | $ 0 | $ 0 | $ 125,419 | $ (3,061) | $ 0 | $ 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (75,483) | |||||||||||
Issuance of common stock (in shares) | 11,747,000 | |||||||||||
Issuance of common stock | 174,737 | $ 12 | 174,725 | |||||||||
Initial public offering costs paid | (1,404) | (1,404) | $ (3,148) | $ (3,148) | ||||||||
Net transfer from Parent | 43,549 | 43,549 | ||||||||||
Conversion of Net parent investment into common stock (in shares) | 62,500,000 | |||||||||||
Conversion of Net parent investment into common stock | 62 | $ 62 | 139,030 | (139,030) | ||||||||
Stock-based compensation expense | 6,074 | 6,074 | $ 2,757 | $ 2,757 | ||||||||
Change in unrealized gains and losses on available-for-sale securities, net of tax | (2) | (2) | ||||||||||
Change in unrealized gains and losses on derivatives, net of tax | 2 | 2 | ||||||||||
Ending balance (in shares) at Dec. 31, 2018 | 74,247,000 | |||||||||||
Ending balance at Dec. 31, 2018 | $ 269,502 | $ 281 | $ 74 | 315,277 | 0 | 0 | (45,849) | $ 281 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accounting standards update | us-gaap:AccountingStandardsUpdate201602Member | |||||||||||
Net loss | $ (85,951) | (85,951) | ||||||||||
Issuance of common stock (in shares) | 1,152,000 | |||||||||||
Issuance of common stock | 13 | $ 1 | 12 | |||||||||
Stock-based compensation expense | 19,582 | 19,582 | ||||||||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 767,000 | |||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 1,826 | $ 1 | 1,825 | |||||||||
Restricted stock unit withholdings (in shares) | (380,000) | |||||||||||
Restricted stock unit withholdings | (1,875) | (1,875) | ||||||||||
Change in unrealized gains and losses on available-for-sale securities, net of tax | 25 | 25 | ||||||||||
Change in unrealized gains and losses on derivatives, net of tax | $ (27) | (27) | ||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 75,785,952 | 75,786,000 | ||||||||||
Ending balance at Dec. 31, 2019 | $ 203,376 | $ 76 | 334,821 | 0 | (2) | (131,519) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (101,251) | (101,251) | ||||||||||
Settlement of liability classified RSUs | 4,242 | 4,242 | ||||||||||
Issuance of common stock (in shares) | 3,720,000 | |||||||||||
Issuance of common stock | 1,730 | $ 3 | 1,727 | |||||||||
Stock-based compensation expense | 27,418 | 27,418 | ||||||||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 1,110,000 | |||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 3,025 | $ 1 | 3,024 | |||||||||
Restricted stock unit withholdings (in shares) | (1,280,000) | |||||||||||
Restricted stock unit withholdings | (4,778) | $ (1) | (4,777) | |||||||||
Change in unrealized gains and losses on available-for-sale securities, net of tax | (22) | (22) | ||||||||||
Change in unrealized gains and losses on derivatives, net of tax | $ 27 | 27 | ||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 79,336,242 | 79,336,000 | ||||||||||
Ending balance at Dec. 31, 2020 | $ 133,767 | $ 79 | $ 366,455 | $ 0 | $ 3 | $ (232,770) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (101,251) | $ (85,951) | $ (75,483) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 10,206 | 10,681 | 5,307 |
Stock-based compensation expense | 35,247 | 22,894 | 8,831 |
Allowance for (release of) credit losses and inventory reserves | 964 | (2,921) | 6,739 |
Gain on sale of business | (292) | (54,881) | 0 |
Deferred income taxes | 50 | (210) | (1,108) |
Premium amortization (discount accretion) on investments, net | 54 | (461) | (120) |
Changes in assets and liabilities: | |||
Accounts receivable, net | 49,765 | 38,247 | (118,778) |
Inventories | 2,862 | 53,604 | (48,934) |
Prepaid expenses and other assets | 10,441 | 11,525 | (16,592) |
Accounts payable | (49,282) | 28,791 | 87,307 |
Deferred revenue | 3,607 | 22,567 | 11,253 |
Accrued liabilities | (8,901) | (34,714) | 123,892 |
Net cash provided by (used in) operating activities | (46,530) | 9,171 | (17,686) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (3,892) | (6,664) | (21,666) |
Proceeds from sale of business | 0 | 52,694 | 0 |
Purchases of short-term investments | (50,083) | (29,768) | (54,619) |
Proceeds from maturities of short-term investments | 50,000 | 60,000 | 5,000 |
Net cash provided by (used in) investing activities | (3,975) | 76,262 | (71,285) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of offering costs | 0 | 0 | 173,395 |
Restricted stock unit withholdings | (4,778) | (1,875) | 0 |
Proceeds related to employee benefit plans | 4,755 | 1,837 | 0 |
Net investment from NETGEAR | 0 | 0 | 70,892 |
Net cash provided by (used in) financing activities | (23) | (38) | 244,287 |
Net increase (decrease) in cash and cash equivalents and restricted cash | (50,528) | 85,395 | 155,316 |
Cash and cash equivalents and restricted cash, at beginning of period | 240,819 | 155,424 | 108 |
Cash and cash equivalents and restricted cash, at end of period | 190,291 | 240,819 | 155,424 |
Non-cash investing and financing activities: | |||
Purchases of property and equipment included in accounts payable and accrued liabilities | 564 | 1,086 | 16,003 |
De-recognized fair value of build-to-suit lease | 0 | (21,610) | 0 |
Estimated fair value of a facility under build-to-suit lease including tenant improvements | 0 | 0 | 28,357 |
Supplemental cash flow information: | |||
Cash paid for income taxes, net | $ 5,614 | $ 960 | $ 89 |
The Company and Basis of Presen
The Company and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation The Company Arlo Technologies, Inc. ("Arlo" or "the Company") combines an intelligent cloud infrastructure and mobile app with a variety of smart connected devices that transform the way people experience the connected lifestyle. The Company's deep expertise in product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focuses on delivering a seamless, smart home experience for Arlo users that is easy to setup and interact with every day. The Company's cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. The Company conducts business across three geographic regions - Americas; Europe, Middle-East and Africa (“EMEA”); and Asia Pacific (“APAC”), and primarily generates revenue by selling devices through retail channels, wholesale distribution, wireless carrier channels, security solution providers, and Arlo's direct to consumer store and paid subscription services. The Company has dual corporate headquarters located in San Jose, California and Carlsbad, California and also maintains offices to provide sales and customer support at various global locations. On February 6, 2018, NETGEAR Inc. (“NETGEAR”) announced that its board of directors had unanimously approved the pursuit of a separation of its Arlo business from NETGEAR (the “Separation”) to be effected through an initial public offering (the “IPO”) of newly issued shares of the common stock of Arlo, then a wholly owned subsidiary of NETGEAR. On July 6, 2018, the Company filed a registration statement (as amended, the "IPO Registration Statement") relating to the IPO of common stock of Arlo with the U.S. Securities and Exchange Commission (the "SEC"). Following a series of restructuring steps prior to the completion of the IPO of Arlo common stock, the Arlo business was transferred from NETGEAR to Arlo (collectively, the “Contribution”). On August 2, 2018, NETGEAR and Arlo announced the pricing of the IPO of 10,215,000 shares of Arlo’s common stock at a price to the public of $16.00 per share. On August 3, 2018, Arlo’s shares began trading on the New York Stock Exchange under the ticker symbol “ARLO.” On August 7, 2018, the Company completed its IPO of 11,747,250 shares of common stock (including 1,532,250 shares of common stock pursuant to the underwriters’ option to purchase additional shares, which was exercised in full on August 3, 2018), at $16.00 per share, before underwriting discounts and commissions and estimated offering costs. Cash proceeds from the IPO were $173.4 million, net of the portion of the offering cost paid by Arlo, which portion was $1.4 million. The total offering cost was $4.6 million, of which $3.2 million was paid by NETGEAR. Prior to the completion of the IPO, the Company was a wholly owned subsidiary of NETGEAR and upon the closing of the IPO (including the issuance of additional shares of common stock pursuant to the underwriters’ option to purchase additional shares, which was exercised in full) on August 7, 2018, NETGEAR owned approximately 84.2% of the shares of Arlo’s outstanding common stock. On November 29, 2018, NETGEAR announced that its board of directors had approved a special stock dividend (the “Distribution”) to NETGEAR stockholders of the 62,500,000 shares of Arlo common stock owned by NETGEAR. The Distribution was made on December 31, 2018 (the “Distribution Date”) to all NETGEAR stockholders of record as of the close of business on December 17, 2018 (the “Record Date”). In the Distribution, each NETGEAR stockholder of record on the Record Date received 1.980295 shares of Arlo common stock for every share of NETGEAR common stock held on the Record Date, subject to cash in lieu of fractional shares. The Distribution was intended to qualify as generally tax free to NETGEAR stockholders for U.S. federal income tax purposes. In connection with the Distribution, 62,500,000 shares of Arlo common stock held by NETGEAR were distributed to its stockholders and NETGEAR is no longer considered a related party to the Company. Basis of Presentation The combined financial statements of Arlo that cover dates prior to the completion of the IPO have been derived and carved out from the consolidated financial statements and accounting records of NETGEAR as if Arlo had operated on a stand-alone basis within the periods presented. In connection with the Separation and IPO, certain assets and liabilities presented have been transferred to Arlo at carry-over (historical cost) basis. Balances contributed by NETGEAR on or before the completion of the IPO were based on the master separation agreement between the Company and NETGEAR and related documents governing the Contribution. Following the completion of the IPO, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All periods presented have been accounted for in conformity with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). Allocated Expenses from NETGEAR Prior to the completion of the IPO, NETGEAR provided certain corporate services to the Company, which were allocated based on revenue, headcount, or other measures the Company has determined as reasonable through July 1, 2018. The amount of these allocations from NETGEAR reflected within operating expenses in the consolidated statements of operations was $30.6 million for the six months ended July 1, 2018, which included $9.4 million for research and development, $10.0 million for sales and marketing, and $11.2 million for general and administrative expense. Following July 1, 2018, the Company assumed responsibility for the costs of these functions. Fiscal periods The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Management bases its estimates on various assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates and operating results for the year ended December 31, 2020 are not necessarily indicative of the results that may be expected for any future period. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Cash and cash equivalents The Company considers all highly liquid investments with an original maturity or a remaining maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions. Restricted cash The Company maintains certain cash balances restricted as to withdrawal or use. Restricted cash is comprised primarily of cash used as a collateral for a letter of credit associated with the Company’s lease agreement for its headquarters in San Jose, California. The Company deposits restricted cash with high credit quality financial institutions. The following table shows reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows: As of December 31, 2020 2019 2018 (In thousands) Cash and cash equivalents $ 186,127 $ 236,680 $ 151,290 Restricted cash 4,164 4,139 4,134 Total as presented on the consolidated statements of cash flows $ 190,291 $ 240,819 $ 155,424 Short-term investments Short-term investments are comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase of greater than three months and no more than 12 months. The marketable securities are held in the Company’s name with a high quality financial institution, which acts as the Company’s custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. Fair value measurements The carrying amounts of the Company’s financial instruments, including cash equivalents, restricted cash, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Derivative financial instruments The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency. Changes in exchange rates between the Company’s functional currency and other currencies in which the Company transacts business will cause fluctuations in cash flow expectations and cash flow realized or settled. Accordingly, the Company uses derivatives to mitigate its business exposure to foreign exchange risk. The Company enters into foreign currency forward contracts in Australian dollars and Canadian dollars to manage its exposure to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses and existing assets and liabilities. The Company’s foreign currency forward contracts do not contain any credit risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counter-parties of its forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one counter-party. In addition, the derivative contracts typically mature in less than six months and the Company continuously evaluates the credit standing of its counter-party financial institutions. The counter-parties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk. The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, materiality, accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with the authoritative guidance for derivatives and hedging. The Company records all derivatives on the balance sheets at fair value. Cash flow hedge gains and losses are recorded in other comprehensive income (“OCI”) until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in Other income (expense), net in the consolidated statements of operations . Cash flow hedges To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges. The effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. Deferred gains and losses in AOCI with such derivative instruments are reclassified immediately into earnings through Other income (expense), net. Any subsequent changes in fair value of such derivative instruments also are reflected in current earnings unless they are re-designated as hedges of other transactions. Non-designated hedges The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of non-functional currency monetary assets and liabilities held on its financial statements to fluctuations in foreign currency exchange rates, as well as to reduce volatility in other income and expense. The non-designated hedges are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. Foreign currency denominated accounts receivable and payable are hedged with non-designated hedges when the related anticipated foreign revenue and expenses are recognized in the Company’s financial statements. Trade accounts receivable The Company is exposed to credit losses primarily through sales of products and services. The Company's allowance for current estimated credit losses for trade accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely and regular account reconciliations, dispute resolution, payment confirmation, review of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of principally investments, derivative financial instruments, and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents, restricted cash, and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company’s investment policy. The Company’s short-term investments consist of investment-grade securities, and the Company’s cash and investments are held and managed by high credit quality financial institutions. The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any counterparty. The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. In addition, the derivative contracts typically mature in less than six months and the Company continuously evaluates the credit standing of its counterparty financial institutions. The counterparties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. The Company’s customers are primarily retailers and wholesale distributors who sell or distribute the products to a large group of end-users. The Company regularly performs credit evaluations of the Company’s customers’ financial condition and performance and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers’ ability to pay. The Company does not require collateral from its customers. Historically, a substantial portion of the Company’s revenue has been derived from a limited number of retailers and wholesale distribution partners. As of December 31, 2020, three customers accounted for 32.7%, 18.5% and 15.3% of the Company’s total accounts receivable, net. As of December 31, 2019, one customer accounted for 51.3% of the Company’s total accounts receivable, net. No other customer accounted for 10% or greater of the Company’s total accounts receivable, net. Inventories Inventories consist of finished goods which are valued at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete amounts, determined primarily based on demand forecasts, but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand. Property and equipment, net Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Asset Category: Range of Useful Lives Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of remaining lease term or 7 years Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment. There was no impairment loss of property and equipment for the years ended December 31, 2020, 2019 and 2018. Goodwill Goodwill pertains to the acquisitions of Avaak, Inc. (“Avaak”) and Placemeter, Inc. (“Placemeter”). Goodwill represents the amount by which the purchase price exceeds estimated fair value of net assets of businesses acquired in a business combination. The Company performs an annual impairment assessment of goodwill at the reporting unit level on the first day of the fourth fiscal quarter. The Company identified that it has one reporting unit for the purpose of goodwill impairment testing and the reporting unit is at the same level as its operating segment and reportable segment. The analysis may include both qualitative and quantitative factors to assess the likelihood of an impairment. Should certain events or indicators of impairment occur between annual impairment tests, the Company will perform the impairment test as those events or indicators occur. Examples of such events or circumstances include a significant decline in the Company’s expected future cash flows, a sustained, significant decline in the Company’s stock price and market capitalization, a significant adverse change in the business climate and slower growth rates. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying amount. The qualitative assessment considers macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company’s stock price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying amount of its reporting unit, including goodwill. If the fair value is greater than the carrying amount of its reporting unit, no impairment is recorded. Goodwill is also tested for impairment by performing a quantitative assessment, which is used to identify both the existence of impairment and the amount of impairment loss. The quantitative assessment compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value is less than the carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge, if any would be recorded to earnings in the consolidated statements of operations. There was no impairment loss of goodwill for the years ended December 31, 2020, 2019 and 2018. Intangibles, net Intangibles, net pertain to the acquisitions of Avaak and Placemeter. Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic useful life, which range from three Revenue recognition On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to Net parent investment effective January 1, 2018. Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of revenue comes from sales of hardware products to customers (retailers, distributors, security solution providers, service providers, and Arlo's direct to consumer store). Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery, dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company sells paid subscription services to its end user customers where it provides customers access to its cloud services. Revenue for subscription sales is generally recognized on a ratable basis over the contract term, beginning on the date that the service is made available to the customers at the time of registration. The subscription contracts are generally 30 days or 12 months in length, billed in advance. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed, as the contracts generally provide the customer equal benefit throughout the contract period. In addition to selling paid subscriptions, the Company also sells services bundled with hardware products and accounts for these sales in line with the multiple performance obligations guidance. Revenue from all sales types is recognized at transaction price, which is the amount the Company expects to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection related to current period product revenue. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, management analyzes historical sales and returns data, channel inventory levels, current economic trends, and changes in customer demand for the Company’s products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and estimated future expenditure based upon historical customary business practice. Typically variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. Contracts with multiple performance obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, various subscription services, and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software in most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Services that are included with certain hardware products are considered distinct and therefore the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Stand-alone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. Stand-alone selling price of the hardware is directly observable from add-on camera and base station sales. Stand-alone selling price of the premium services are directly observable from direct sales to end users while the service is estimated using an adjusted market approach. Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware is recognized at the time control of the product transfers to the customer. The transaction price allocated to the service is recognized over the specified service period or over the estimated useful life of the hardware, beginning when the customer is expected to activate their account. Useful life of the hardware is determined by industry norms, technical and financial relevance, frequency of new model releases, and user history. Long-term Supply Arrangement - Verisure The Company has entered into a Supply Agreement as part of the disposal of the Company's commercial operations in Europe as discussed in Note 4, Disposal of Business, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K, where Verisure prepays future product purchases with a minimum product purchase commitment also required. The Supply Agreement includes product purchases, paid subscription services, basic services, and an option for Verisure to acquire development services by submitting a statement of work (“SOW”). Products sold come with a standard twelve months warranty. Verisure assumes responsibilities for all warranty claims, returns of products and certain technical support provided to the end users. The Company provides technical support for paid subscription services where Verisure cannot resolve the issue. Verisure is responsible for any marketing and promotion of the Company's products and services sold in Europe. Products are priced at a cost plus markup based on markups specified in the Supply Agreement and that price varies based on the cost of the product. The paid subscription services and basic services pricing is based on the number of users monthly and is priced at a cost plus markup specified in the Supply Agreement, which varies based on the user and service type. T he transaction price for products and paid subscription services is entirely variable because the consideration is dependent on the actual costs. The Company allocates variable consideration specified for products entirely to products, and variable consideration specified for the paid subscription services entirely to the paid subscription services. For development services, no contract exists until an SOW is submitted and approved by both parties. For products, since quantity and product types are not specified in the agreement, contracts are not deemed to exist until the Company receives and accepts the customer purchase order ("PO"). Each product with a valid PO is considered a single performance obligation. The Company recognizes variable consideration for products upon delivery and for services when the monthly service is rendered for paid subscription service and basic service. The non-refundable product prepayments do not relate to future goods or services, as such no further assessment of material rights is required. Further, as the transfer of products is at the discretion of the customer (i.e. when Verisure issues a PO), a significant financing component does not exist as it relates to product prepayments. The Company also expects that the product prepayments will be fully utilized by Verisure within 12 to 18 months, hence, no additional accounting consideration is necessary for breakage. The Company also concluded that it is acting as the principal in the Supply Agreement and determined that revenue should be presented gross. NRE Arrangement - Verisure The Supply Agreement also provides for certain development services under an SOW to Verisure ("NRE arrangement") as part of the disposal of the Company's commercial operations in Europe as discussed in Note 4, Disposal of Business, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. In the NRE arrangement, Verisure pays non-refundable installments upon the commencement of agreed-upon milestones. There is a single performance obligation as the distinct goods and services promised under the SOW are highly interdependent or interrelated inputs that produce a single combined output given the nature of such arrangements. The output (or work-in-progress of such output) typically has no alternative use to the Company given the customized nature of the arrangement and the Company has enforceable rights given that the non-refundable milestone payments are prepayments in nature; control for NRE development services therefore transfers over time. The Company determined that the most appropriate measure of progress for revenue recognition is the input method based on cost because the Company can reasonably estimate the total costs for the NRE, and the costs incurred reasonably reflects the Company’s efforts to satisfy the performance obligation. The NRE costs include labor, material, overhead as well as the use of outside services. The total estimated NRE costs are based on a combination of historical costs together with quotes from vendors for supplying parts or services towards the completion. Adjustments to cost and profit estimates are made periodically due to changes in scope of work, hours to complete and estimated profitability, including those arising from final contract settlements. These changes may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Any losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. If total NRE costs calculated upon completion in the current period are more than the estimated total costs at completion used to calculate revenue in a prior period, then the profits in the current period will be lower than if the estimated costs used in the prior period calculation were equal to the actual total costs upon completion. Warranties Sales of hardware products regularly include warranties to end customers that cover bug fixes, minor updates such that the product continues to function according to published specifications in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified for one or more years. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of warranties is accrued as an expense in accordance with authoritative guidance. Sales incentives The Company accrues for sales incentives offered to customers as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue. The Company records estimated reductions to revenue for sales incentives when the related revenue is recognized or ahead of customer or end customer commitment if customary business practice creates an implied expectation that such activities will occur in the future. Shipping and handling costs The Company includes shipping and handling fees billed to customers in Revenue. Shipping and handling costs associated with inbound freight are included in Cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in Revenue. Shipping and handling costs associated with outbound freight are included in Sales and marketing expenses. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $2.7 million, $2.3 million and $3.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Contract costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. If the incremental costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. There were no deferred commissions as of December 31, 2020 and 2019. Contract balances The Company records accounts receivable when it has an unconditional right to consideration. Contract liabilities are recorded when cash payments are received or due in advance of performance. Contract liabilities consist of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Contract liabilities are classified as Deferred revenue on the consolidated balance sheets. Payment terms vary by customer. The time between invoicing and when payment is due is not significant. For certain products or services and customer types, payment is required before the products or services are delivered to the customer. Refer to Note 3, Deferred Revenue, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for detailed disclosures regarding changes in contract balances for the years ended December 31, 2020 and 2019. Research and development Costs incurred in the research and development of new products are expensed as incurred. Advertising costs Advertising costs are expensed as incurred. Total advertising and promotional expenses were $12.7 million, $12.3 million and $13.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Stock-based compensation The Company’s employees have historically participated in NETGEAR’s stock-based compensation plans. Stock-based compensation expense has been allocated to the Company based on the awards and terms previously granted to the Company’s employees as well as an allocation of NETGEAR’s corporate and shared functional employee expenses. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the shares offered under the employee stock purchase plan is estimated us |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Deferred Revenue Deferred revenue consists of advance payments and deferred revenue, where the Company has unsatisfied performance obligations. Deferred revenue consists of prepaid services and customer billings in advance of revenues being recognized from the Company's subscription contracts. Advance payments include prepayments for products and NRE services under the Supply Agreement with Verisure. Refer to Note 4, Disposal of Business, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for a complete discussion of the Verisure transaction. Transaction Price Allocated to the Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied as of the end of the reporting period. Unsatisfied and partially unsatisfied performance obligations consist of contract liabilities, in-transit orders with destination terms, and non-cancellable backlog. Non-cancellable backlog includes goods and services for which customer purchase orders have been accepted and that are scheduled or in the process of being scheduled for shipment. The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020: 1 year 2 years Greater than 2 years Total (In thousands) Performance obligations $ 63,111 $ 15,788 $ 871 $ 79,770 The performance obligation greater than one year pertains to revenue deferral from prepaid services. Contract Balances The following table reflects the changes in contract balances for the year ended December 31, 2020 and 2019: 2020 2020 Balance Sheet Location December 31, 2020 December 31, 2019 (In thousands) Accounts receivable, net Accounts receivable, net $ 77,643 $ 127,317 $ (49,674) (39.0) % Contract liabilities - current Deferred revenue $ 53,142 $ 50,362 $ 2,780 5.5 % Contract liabilities - non-current Non-current deferred revenue $ 16,563 $ 15,736 $ 827 5.3 % For the year ended December 31, 2020, compared to the previous year, Accounts receivable, net decreased, primarily driven by customer mix, lower product shipments, the sale of our commercial operations in Europe to Verisure, and growth in sales from Arlo's direct to consumer store; current portion of deferred revenue increased, primarily due to $29.4 million Verisure prepayment for product purchases, which is expected to be utilized in fiscal 2021, $5.0 million Verisure NRE installment payments, and $7.9 million deferred service revenue, offset by $7.9 million service revenue recognized under the NRE arrangement with Verisure, application of $20.0 million 2019 Verisure prepayment for product purchases in fiscal 2020 against Accounts receivable, and $11.6 million service revenue recognition; and Non-current deferred revenue increased due to $9.8 million deferred service revenue and $10.6 million Verisure prepayment for product purchases, which is expected to be utilized in fiscal 2022. For the years ended December 31, 2020 and 2019, $90.9 million and $71.6 million of revenue was deferred due to unsatisfied performance obligations, primarily relating to over time service revenue and Verisure prepayments for product purchases, and $67.3 million and $47.4 million of revenue was recognized for the satisfaction of performance obligations over time, respectively. $26.2 million and $26.4 million of this recognized revenue was included in the contract liability balance at the beginning of the period. There were no significant changes in estimates during the period that would affect the contract balances. Disaggregation of Revenue The Company conducts business across three geographic regions: Americas, EMEA, and APAC. Sales and usage-based taxes are excluded from revenue. Refer to Note 15, Segment and Geographic Information |
Disposal of Business
Disposal of Business | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal of Business | Disposal of Business On November 4, 2019, the Company and Verisure concurrently entered into an Asset Purchase Agreement (the “Purchase Agreement”) and Supply Agreement (the “Supply Agreement” and together with the Purchase Agreement, the “Verisure Agreements”). The Verisure Agreements created a strategic partnership that leverages both the Company and Verisure’s capabilities to create incremental scale to address the ever-growing demand for residential and commercial security. The strategic partnership will combine the Company’s innovative connected cameras and cloud services platform with Verisure’s professionally monitored security solutions to provide a new level of smart security for European customers. The Purchase Agreement provided that, upon the terms and subject to the conditions set forth in the Purchase Agreement, the Company transferred, sold and assigned to Verisure certain assets (the "Assets") related to the Company’s commercial operations in Europe (the "Business") to Verisure for $50.0 million in cash plus additional cash for certain inventory. The Purchase Agreement contains customary representations and warranties regarding Verisure, the Business and the Assets, indemnification provisions, termination rights and other customary provisions. The Company has agreed not to engage in any business that competes with the Business for a period of three years. The transaction closed on December 30, 2019 pursuant to which the Company received $52.7 million including working capital adjustments, which resulted in a pretax gain of $54.9 million in the fourth fiscal quarter of 2019. In the first fiscal quarter of 2020, the Company recorded an additional gain of $292 thousand that was recorded in Gain on sale of business in the Company's unaudited condensed consolidated statements of operations as a result of the final working capital adjustment. As part of the transaction, certain employees were transferred to Verisure. These employees hold Company RSU awards, and the terms of the RSU awards were modified such that the RSU awards will continue to vest and settle after closing of the transaction in accordance with the original terms and conditions of RSU awards. Refer to Note.13 Employee Benefit Plans , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for further detail relating to this modification. The assets and liabilities sold and assigned to Verisure were determined to have met the criteria to be classified as held for sale as of November 4, 2019, the execution date of the Purchase Agreement. The transaction contemplated by the Purchase Agreement did not meet the criteria for discontinued operations as the Company is expected to have continued involvement in Europe through manufacturing and shipping of products to the region through sales to Verisure as part of the Supply Agreement and therefore no significant change in revenue from the region is expected; it was determined the transaction did not represent a strategic shift. The Company also assessed whether a loss is needed to be recorded upon initial classification of the assets and liabilities as held for sale to adjust its carrying amount to the fair value less cost to sell. As the carrying amount of the assets and liabilities was lower than fair value less cost to sell, no adjustment was necessary. As of the closing date of December 30, 2019, the Company concluded that no impairment exists for the assets and no adjustment was necessary for the liabilities. Further, the Company reassessed the fair value and cost to sell, and noted that they did not change since the initial classification of the assets and liabilities as held for sale. Given such, no loss adjustment was necessary. The Supply Agreement provides that Verisure will become the exclusive distributor of Company products in Europe for all channels, and will non-exclusively distribute the Company's products through its direct channels globally for an initial terms of five years. During the five-year period commencing January 1, 2020, Verisure has an aggregate purchase commitment of $500.0 million. As of December 31, 2020, $47.3 million of the purchase commitment has been fulfilled. In 2019 and 2020, Verisure prepaid the Company $20.0 million for product purchases in fiscal 2020 and $40.0 million for product purchases in fiscal 2021 and fiscal 2022, respectively. The Supply Agreement also provides certain NRE service to Verisure, including developing certain custom products specified by Verisure in exchange for an aggregate of $10.0 million, payable in installments upon meeting certain development milestones. In the second fiscal quarter of 2020, an additional $3.5 million was added to the contract price as a result of a modification to Verisure's specification for the Outdoor Custom Camera. As of December 31, 2020, Verisure has paid $7.5 million for this NRE service. For the year ended December 31, 2020, the Company has recognized service revenue of $7.9 million for this NRE service. As part of the Purchase Agreement, the Company also entered into a Transition Services Agreement with Verisure (“Verisure TSA”) to assist Verisure with the transition of the Company’s European commercial operations. These transition services primarily include IT support and other services, including sales and marketing, operations and supply chain, finance, legal, and human resources. As compensation for these transition services, the Company will be reimbursed by Verisure based on actual direct costs plus allocation of overhead. For the year ended December 31, 2020, the Company charged Verisure $4.0 million for Verisure TSA services which was recorded as Other income, given such services are not related to the primary business in which the Company operates. The related Verisure TSA expenses in the same amount were recognized as incurred and reported under their natural expense classification. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components Available-for-sale short-term investments As of December 31, 2020 As of December 31, 2019 Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cost Unrealized Gains Unrealized Losses Estimated Fair Value (In thousands) U.S. treasuries $ 19,996 $ 1 $ — $ 19,997 $ 19,967 $ 23 $ — $ 19,990 The Company’s short-term investments are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months. Accordingly, none of the available-for-sale securities have unrealized losses greater than twelve months. The Company did not recognize any other-than-temporary impairment losses related to available-for-sale short-term investment for the years ended December 31, 2019 and 2018. During the year ended December 31, 2020, with the adoption of ASU 2016-13, the Company did not recognize any allowance for credit losses related to available-for-sale short-term investment for the year ended . Accounts receivable, net As of December 31, 2020 2019 (In thousands) Gross accounts receivable $ 78,162 $ 127,926 Allowance for credit losses (519) (609) Total accounts receivable, net $ 77,643 $ 127,317 The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected. Years Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 609 $ 127 $ 207 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings — — — Provision for expected credit losses 186 482 — Amount recovered due to collection (276) — (80) Balance at the end of the period $ 519 $ 609 $ 127 Property and equipment, net As of December 31, 2020 2019 (In thousands) Machinery and equipment $ 14,397 $ 13,402 Software 13,192 11,945 Computer equipment 4,083 4,047 Leasehold improvements 8,023 8,087 Furniture and fixtures 4,048 4,075 Total property and equipment, gross 43,743 41,556 Accumulated depreciation (27,922) (20,204) Total property and equipment, net $ 15,821 $ 21,352 Depreciation expense pertaining to property and equipment was $8.8 million, $9.2 million and $3.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. Allocated depreciation expense from NETGEAR was $1.2 million for the year ended December 31, 2018. For the periods prior to the completion of the IPO, the consolidated statements of operations include both the depreciation expense directly identifiable as Arlo’s and allocated depreciation expense from NETGEAR. Refer to Allocated Expenses from NETGEAR as discussed in Note 1, The Company and Basis of Presentation , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for detailed disclosures regarding the methodology used for allocated expenses from NETGEAR. Intangibles, net As of December 31, 2020 As of December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 9,800 $ (9,800) $ — 9,800 $ (8,540) $ 1,260 Other 500 (500) — 500 (454) 46 Total intangibles, net $ 10,300 $ (10,300) $ — $ 10,300 $ (8,994) $ 1,306 As of December 31, 2020, all finite-lived intangibles were fully amortized. Amortization expense of finite-lived intangibles was $1.3 million, $1.5 million and $1.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. No impairment charges were recorded for all periods presented. Goodwill There was no change in the carrying amount of goodwill during the year ended December 31, 2020, and the goodwill as of December 31, 2020 and December 31, 2019 was $11.0 million. On December 30, 2019, the Company derecognized $4.6 million goodwill associated with the Company's commercial operations in Europe, which was incorporated in the calculation of the gain on the sale of business to Verisure. Goodwill Impairment The Company performs an annual assessment of goodwill at the reporting unit level on the first day of the fourth fiscal quarter and during interim periods if there are triggering events to reassess goodwill. The Company operates as one operating and reportable segment. In the first fiscal quarter of 2020, the uncertainty brought about by the COVID-19 pandemic adversely impacted the Company's stock price. The resulting impact to the Company’s market capitalization is a qualitative factor to consider when evaluating whether events or changes in circumstances indicate that it is more likely than not that a potential goodwill impairment exists. The Company concluded that the decline in the price of its common stock as a result of the COVID-19 impact was an indicator that the Company’s goodwill might be impaired. As a result, in the first fiscal quarter of 2020, the Company performed a quantitative assessment using the discounted cash flow model ("DCF model") as of March 29, 2020. The Company estimated the fair value of the business using the DCF model, as management believes forecasted operating cash flows are the best indicator of current fair value. The assumptions used in the DCF model include weighted-average cost of capital, projected revenue based on projected revenue growth rate, projected operating expenses, income taxes as well as capital expenditures and change in working capital. Estimating the fair value of the business was a subjective process involving the use of estimates and judgments, particularly related to future cash flows, which are inherently uncertain. Based on the results of the quantitative assessment using the DCF model, as of March 29, 2020, the respective fair value was substantially in excess of the carrying amount by $94.1 million, or 53%. On the first day of the fourth quarter of 2020, the Company performed a qualitative assessment in consideration of macroeconomic conditions, industry and market conditions, cost factors, overall company financial performance, and changes in the Company's stock price. The Company did not believe it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company also performed a quantitative assessment by utilizing its market capitalization as a proxy for fair value of the business and comparing it to the carrying amount as of October 1, 2020. Based on the results of the quantitative assessment, the respective fair value was substantially in excess of the carrying amount by $276.2 million, or 195%. As fair value was greater than carrying amount, goodwill was not impaired as of December 31, 2020. If there are events occurred or circumstances changed (i.e. a decline in the Company’s stock price based on market conditions and deterioration of the Company’s business) that would more likely than not reduce the fair value of the Company below its carrying amount, the Company may have to record a charge to its earnings for the associated goodwill impairment of up to $11.0 million . Other non-current assets As of December 31, 2020 2019 (In thousands) Non-current deferred income taxes $ 1,269 $ 1,318 Deposits 122 764 Other 1,008 1,926 Total other non-current assets $ 2,399 $ 4,008 Accrued liabilities As of December 31, 2020 2019 (In thousands) Sales and marketing $ 38,577 53,974 Sales returns 37,689 28,817 Accrued employee compensation 15,089 11,795 Operating lease liabilities 4,400 3,912 Freight 3,558 2,690 Warranty obligation 2,451 3,169 Other 20,002 23,043 Total accrued liabilities $ 121,766 $ 127,400 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019: As of December 31, 2020 Total Quoted market Significant (In thousands) Assets: Cash equivalents: money-market funds (<90 days) $ 1,934 $ 1,934 $ — Available-for-sale securities: U.S. treasuries (1) 19,997 19,997 — Foreign currency forward contracts (2) 24 — 24 Total assets measured at fair value $ 21,955 $ 21,931 $ 24 Liabilities: Foreign currency forward contracts (3) $ 199 $ — $ 199 Total liabilities measured at fair value $ 199 $ — $ 199 December 31, 2019 Total Quoted market Significant (In thousands) Assets: Cash equivalents: U.S. treasuries (<90 days) $ 31,472 $ 31,472 $ — Available-for-sale securities: U.S. treasuries (1) 19,990 19,990 — Foreign currency forward contracts (2) 27 — 27 Total assets measured at fair value $ 51,489 $ 51,462 $ 27 Liabilities: Foreign currency forward contracts (3) $ 375 $ — $ 375 Total liabilities measured at fair value $ 375 $ — $ 375 _________________________ (1) Included in Short-term investments on the Company’s consolidated balance sheets. (2) Included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. (3) Included in Accrued liabilities on the Company’s consolidated balance sheets . The Company’s investments in cash equivalents and available-for-sale securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The Company’s foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. Additionally, the Company includes an adjustment for non-performance risk in the recognized measure of fair value of derivative instruments. As of December 31, 2020, the adjustment for non-performance risk did not have a material impact on the fair value of the Company’s foreign currency forward contracts. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities. As of December 31, 2020, the Company has no Level 3 fair value assets or liabilities. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Fair value of derivative instruments The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2020 and 2019 are summarized as follows: December 31, December 31, Derivative Assets Balance Sheet 2020 2019 Balance Sheet 2020 2019 (In thousands) (In thousands) Derivative assets not designated as hedging instruments Prepaid expenses and other current assets $ 22 $ 27 Other accrued liabilities $ 199 $ 347 Derivative assets designated as hedging instruments Prepaid expenses and other current assets 2 — Other accrued liabilities — 28 Total $ 24 $ 27 $ 199 $ 375 Refer to Note 6, Fair Value Measurements, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for detailed disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures. Gross amounts offsetting of derivative instruments The Company has entered into master netting arrangements which allow net settlements under certain conditions. Although netting is permitted, it is currently the Company’s policy and practice to record all derivative assets and liabilities on a gross basis in the consolidated balance sheets. The following tables set forth the offsetting of derivative assets and liabilities as of December 31, 2020 and 2019: As of December 31, 2020 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Wells Fargo Bank $ 24 $ — $ 24 $ (24) $ — $ — As of December 31, 2020 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Wells Fargo Bank $ 199 $ — $ 199 $ (24) $ — $ 175 As of December 31, 2019 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) HSBC $ 6 $ — $ 6 $ (6) $ — $ — Wells Fargo Bank 21 — 21 (21) — — Total $ 27 $ — $ 27 $ (27) $ — $ — As of December 31, 2019 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) HSBC $ 83 $ — $ 83 $ (6) $ — $ 77 Wells Fargo Bank 292 — 292 (21) — 271 Total $ 375 $ — $ 375 $ (27) $ — $ 348 Cash flow hedges The Company typically hedges portions of its anticipated foreign currency exposure which generally are less than six months. The Company entered into six forward contracts related to its cash flow hedging program for the year ended December 31, 2020 with an average size of $1.4 million equivalent related to its cash flow hedging program. The effects of the Company’s cash flow hedges on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 are summarized as follows: Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2020 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 357,154 $ 301,765 $ 60,137 $ 49,064 $ 51,096 Gains (losses) on cash flow hedge $ (32) $ — $ 5 $ 4 $ — Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2019 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 370,007 $ 334,203 $ 69,384 $ 56,985 $ 47,624 Gains (losses) on cash flow hedge $ 390 $ (3) $ (28) $ (44) $ (13) Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2018 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 464,918 $ 372,843 $ 58,794 $ 52,593 $ 28,209 Gains (losses) on cash flow hedge $ 315 $ — $ (2) $ (28) $ (11) The Company expects to reclassify to earnings all of the amounts recorded in AOCI associated with its cash flow hedges over the next twelve months. For information on the unrealized gains or losses on derivatives reclassified out of AOCI into the consolidated statements of operations, refer to Note 8, Accumulative Other Comprehensive Income (Loss), in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. The Company did not recognize any material net gains or losses related to the loss of hedge designation as there were no discontinued cash flow hedges during the year ended December 31, 2020, 2019 and 2018. Non-designated hedges The Company adjusts its non-designated hedges monthly and enters into about eight non-designated derivative per quarter with an average size of $2.4 million USD equivalent. The hedges range typically from 1 to 3 months in duration. The effects of the Company’s non-designated hedge included in Other income (expense), net on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 are as follows: December 31, Derivatives Not Designated as Location of Gains (Losses) 2020 2019 2018 (In thousands) Foreign currency forward contracts Other income (expense), net $ (95) $ (24) $ 589 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table sets forth the changes in AOCI by component for the years ended December 31, 2020, 2019 and 2018: Unrealized gains (losses) on available-for-sale securities Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2017 $ — $ — $ — $ — Other comprehensive income (loss) before reclassifications (2) 276 — 274 Less: Amount reclassified from accumulated other comprehensive income (loss) — 274 — 274 Net current period other comprehensive income (loss) (2) 2 — — Balance as of December 31, 2018 (2) 2 — — Other comprehensive income (loss) before reclassifications 25 275 — 300 Less: Amount reclassified from accumulated other comprehensive income (loss) — 302 — 302 Net current period other comprehensive income (loss) 25 (27) — (2) Balance as of December 31, 2019 23 (25) — (2) Other comprehensive income (loss) before reclassifications (22) 4 — (18) Less: Amount reclassified from accumulated other comprehensive income (loss) — (23) — (23) Net current period other comprehensive income (loss) (22) 27 — 5 Balance as of December 31, 2020 $ 1 $ 2 $ — $ 3 The following tables provide details about significant amounts reclassified out of each component of AOCI for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Affected Line Item in the Statements of Operations (In thousands) Gains (losses) on cash flow hedge: Foreign currency contracts $ 4 $ (32) $ 275 $ 390 $ 276 $ 315 Revenue Foreign currency contracts — $ — — (3) — — Cost of revenue Foreign currency contracts — $ 5 — (28) — (2) Research and development Foreign currency contracts — $ 4 — (44) — (28) Sales and marketing Foreign currency contracts — $ — — (13) — (11) General and administrative $ 4 $ (23) $ 275 $ 302 $ 276 $ 274 Total * _________________________ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesIncome (loss) before provision for income taxes consisted of the following: Year Ended December 31, 2020 2019 2018 (In thousands) United States $ (104,551) $ (103,836) $ (79,581) International 3,925 22,265 4,870 Total $ (100,626) $ (81,571) $ (74,711) Provision for income taxes consisted of the following: Year Ended December 31, 2020 2019 2018 (In thousands) Current: U.S. Federal $ — $ — $ — State 84 58 16 Foreign 438 4,524 1,425 522 4,582 1,441 Deferred: U.S. Federal — — — State — — — Foreign 103 (202) (669) 103 (202) (669) Total $ 625 $ 4,380 $ 772 Net deferred tax assets consisted of the following: As of December 31, 2020 2019 (In thousands) Deferred Tax Assets: Accruals and allowances $ 14,389 $ 11,334 Net operating loss carryforwards 22,216 14,355 Stock-based compensation 3,731 3,228 Lease liabilities 7,063 8,212 Deferred revenue 3,673 4,417 Tax credit carryforwards 6,311 3,262 Depreciation and amortization 2,810 1,030 Capitalized research and development expenses 17,376 6,847 Total deferred tax assets 77,569 52,685 Deferred Tax Liabilities: Lease assets (5,804) (7,450) Total deferred tax liabilities (5,804) (7,450) Valuation Allowance (70,496) (43,917) Net deferred tax assets $ 1,269 $ 1,318 Changes in allowance for deferred tax assets were as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 43,917 $ 24,477 $ 15,611 Additions 31,890 38,336 13,760 Deductions (5,311) (18,896) (4,894) Balance at the end of the period $ 70,496 $ 43,917 $ 24,477 Realization of the Company’s deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. The Company does not anticipate to realize the net U.S. federal and state deferred tax assets and certain foreign tax attributes, which have been fully offset by a valuation allowance. As of December 31, 2020 and 2019, the valuation allowance was $70.5 million and $43.9 million, respectively. The valuation allowance increased by $26.6 million during 2020 mainly due to the increases in tax attribute carryforwards, capitalized expenditures for income tax purposes, and accruals and allowances. The utilization of our net operating loss and credit carryforwards may be subject to annual limitation due to the ownership changes provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of portions of the net operating loss and tax credit carryforwards before utilization. As of December 31, 2020, net operating loss carryforwards consisted of the following: Amount Beginning Year of Expiration (in thousands) U.S. Federal (1) $ 14,028 2031 U.S. Federal 79,073 Indefinite California (tax effected, net of federal benefit) 981 2040 Other State (tax effected, net of federal benefit) 1,646 2024 _________________________ (1) All of the losses are subject to annual usage limitations under Internal Revenue Code Section 382. As of December 31, 2020, tax credit carryforwards consisted of the following: Amount Beginning Year of Expiration (in thousands) U.S. Federal $ 3,688 2040 California 2,565 Indefinite Foreign 1,309 2031 The effective tax rate differs from the applicable U.S. statutory federal rate as follows: Year Ended December 31, 2020 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 4.4 % 3.0 % 5.9 % Impact of international operations 0.8 % 1.4 % 0.4 % U.S. Taxes on Foreign Entities 2.5 % (3.6) % (1.8) % Stock-based compensation (4.2) % (2.6) % (0.1) % Tax credits 1.6 % 1.6 % 1.5 % Change in valuation allowance (26.4) % (23.8) % (25.2) % Non-deductible transaction costs (0.1) % (0.7) % (2.6) % Goodwill derecognition — % (1.2) % — % Others (0.2) % (0.5) % (0.1) % Provision for income taxes (0.6) % (5.4) % (1.0) % The decrease in provision for income taxes for the year ended December 31, 2020 compared to the prior year was primarily due to lower foreign earnings in 2020, resulting from the sale of our commercial operations in Europe during the fourth quarter of 2019. Furthermore, 2019 included the gain on sale of certain assets related to the Company's commercial operations in Europe during the fourth quarter of 2019. Losses incurred predominantly in the U.S. continue to be subject to a full valuation allowance. The decrease in provision for income taxes for the year ended December 31, 2019 compared to the prior year was primarily due to higher foreign earnings in 2019 and the gain on sale of certain assets related to the Company's commercial operations in Europe during the fourth quarter of 2019. Losses incurred predominantly in the U.S. continue to be subject to a full valuation allowance. As of December 31, 2020, withholding taxes and state income taxes expected to be incurred on the foreign subsidiaries’ earnings that are not indefinitely reinvested are immaterial. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows: Federal, State, and Foreign Tax (In thousands) Balance as of December 31, 2017 $ 1,022 Additions based on tax positions related to the current year 338 Adjustments to Net parent investments (1,338) Balance as of December 31, 2018 22 Additions based on tax positions related to the current year 674 Additions for tax positions of prior years 8 Balance as of December 31, 2019 704 Additions based on tax positions related to the current year 503 Additions for tax positions of prior years 148 Balance as of December 31, 2020 $ 1,355 The total amount of unrecognized tax benefits, including interest and penalties, was $1.4 million and $0.7 million as of December 31, 2020 and 2019 respectively. The Company recognizes interest and penalties accrued related to unrecognized tax benefits as part of the provision for income taxes. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Credit Facility On November 5, 2019, the Company entered into a Business Financing Agreement (the “Credit Agreement”) with Western Alliance Bank, an Arizona corporation, as lender (the “Lender”). The Credit Agreement provides for a two-year revolving credit facility (the “Credit Facility”) that matures on November 5, 2021 and that may, by its terms, be extended by mutual written agreement between the Company and the Lender. Borrowings under the Credit Facility are limited to the lesser of (x) $40.0 million, and (y) an amount equal to the borrowing base. The borrowing base will be 60% of the Company’s eligible receivables and eligible accounts receivable, less such reserves as the Lender may deem proper and necessary from time to time. The Lender is not required to make any advance under the Credit Facility during the period beginning on January 1st and continuing through June 30th, except for advances made against eligible receivables first invoiced between July 1 and December 31, 2019. The Credit Agreement also includes sublimits for the issuance by the Lender of letters of credit, credit card indebtedness and foreign exchange forward contract. Repayment of the borrowings under the Credit Facility are due upon collection of the eligible receivables. The proceeds of the borrowings under the Credit Facility may be used for working capital and general corporate purposes. The obligations of the Company under the Credit Agreement are secured by substantially all of the Company’s domestic personal property, excluding intellectual property assets and more than 65% of the shares of voting capital stock of any of the Company’s foreign subsidiaries. Borrowings under the Credit Agreement generally bear interest at floating rates based upon the prime rate subject to a floor rate of five percent (5%) plus two and one-quarter percentage points (2.25%), plus an additional five percentage points (5.0%) during any period that an event of default has occurred and is continuing. Among other fees, the Company is required to pay an annual facility fee equal to 0.25% of the limit under the Credit Facility due upon entry into the Credit Agreement and on each anniversary thereof. The annual facility fee is capitalized and being amortized as interest expense over a 12-month period. The Company incurred debt issuance costs for the Credit Agreement, which are recorded in prepaid expenses and other current assets in the Company's Consolidated Balance Sheets and are being amortized as interest expense over the contractual term of the Credit Agreement. The Credit Agreement contains customary events of default and other restrictions, including a financial covenant that requires the Company to maintain $20.0 million of domestic cash and certain restrictions on the Company’s ability to incur additional indebtedness, consolidate or merge, enter into acquisitions, pay any dividend or distribution on the Company’s capital stock, redeem, retire or purchase shares of the Company’s capital stock, make investments or pledge or transfer assets, in each case subject to limited exceptions. If an event of default under the Credit Agreement occurs, then the Lender may cease making advances under the Credit Agreement and declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if the Company files a bankruptcy petition, a bankruptcy petition is filed against the Company and is not dismissed or stayed within forty-five days, or the Company makes a general assignment for the benefit of creditors, then any outstanding obligations under the Credit Agreement will automatically and without notice or demand become immediately due and payable. As of December 31, 2020, the Company is in compliance with all the covenants of the Credit Agreement. No amounts had been drawn under the Credit Facility as of December 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company primarily leases office space, with various expiration dates through June 2029. Some of the leases include options to extend such leases for up to five years, and some include options to terminate such leases within one year. The terms of certain of the Company’s leases provide for rental payments on a graduated scale. The Company recognizes lease expense on a straight-line basis over the lease term. For the six months ended July 1, 2018, lease expense reflected allocations from NETGEAR and may not be indicative of the Company’s results. Lease expense was $7.0 million, $7.0 million and $1.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The lease expense was recorded within Cost of revenue, Research and development, and General and administrative on the Company's consolidated statements of operations. Short-term and variable lease costs were included in the lease expense and they were immaterial. In connection with the leases for the Company's offices in San Jose, California and Richmond, Canada, the Company received tenant improvement allowances ("TIA") of $3.5 million and $450 thousand, respectively, in the second fiscal quarter of 2020 from lessors for certain improvements the Company made to the leased properties. The improvement made to the leased property in San Jose, California is considered as lessee-owned, and the Company recorded the improvement as a leasehold improvement within property and equipment, net and the TIA as a reduction to the ROU asset with the impact of the decrease recognized prospectively over the remaining lease term. The improvement made to the leased property in Richmond, Canada is considered as lessor-owned, and the Company recorded the improvement as a prepaid rent within prepaid expenses and other current assets and the TIA as a reduction to prepaid rent. Supplemental cash flow information related to operating leases was as follows: Year Ended December 31, 2020 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,991 $ 4,888 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 461 $ 21,742 Other non-cash increases in operating right of use assets $ — $ 788 Weighted average remaining lease term and weighted average discount rate related to operating leases were as follows: As of December 31, 2020 2019 Weighted average remaining lease term 6.9 years 7.7 years Weighted average discount rate 5.69 % 5.67 % The maturity of lease liabilities related to operating leases for each of the next five years and thereafter as of December 31, 2020 was as follows (in thousands): 2021 $ 5,931 2022 5,770 2023 4,977 2024 4,459 2025 3,186 Thereafter 11,498 Total lease payments 35,821 Less: interest (1) (6,392) Total $ 29,429 Accrued liabilities $ 4,400 Non-current operating lease liabilities 25,029 Total $ 29,429 ________________________ (1) Leases that commenced before November 5, 2019 were calculated using the Company’s incremental borrowing rate on a collateralized basis plus LIBOR rate that closely matches contractual term of most leases. Leases that commenced after November 5, 2019 were calculated using the Company's borrowing rate defined in the Credit Agreement with Western Alliance Bank. As of December 31, 2019, maturity of lease liabilities related to operating leases for each of the next five years and thereafter were as follows (in thousands): 2020 $ 5,660 2021 5,735 2022 5,589 2023 4,908 2024 4,450 Thereafter 14,669 Total lease payments 41,011 Less: interest (1) (8,098) Total $ 32,913 Accrued liabilities $ 3,912 Non-current operating lease liabilities 29,001 Total $ 32,913 ________________________ (1) Calculated using the Company’s incremental borrowing rate on a collateralized basis plus LIBOR rate that closely matches contractual term of most leases. Letters of Credit In connection with the build-to-suit lease agreement for the headquarters located in San Jose, California, the Company executed a letter of credit with the landlord as the beneficiary. As of December 31, 2020, the Company had approximately $3.6 million of unused letters of credit outstanding, of which $3.1 million pertains to the lease arrangement in San Jose, California. Purchase Obligations The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving a 46 to 60 days notice prior to the expected shipment date and 25% of orders are cancelable by giving a 31 to 45 days notice prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. As of December 31, 2020, the Company had approximately $19.5 million in non-cancelable purchase commitments with suppliers, respectively. The Company establishes a loss liability for all products it does not expect to sell for which it has committed purchases from suppliers. As of December 31, 2020, the loss liability from committed purchases was $1.2 million. From time to time the Company’s suppliers procure unique complex components on the Company’s behalf. If these components do not meet specified technical criteria or are defective, the Company should not be obligated to purchase the materials. Warranty Obligations Changes in the Company’s warranty liability, which is included in Accrued liabilities in the consolidated balance sheets, were as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 3,169 $ 3,712 $ 31,756 Reclassified to sales returns upon adoption of ASC 606 (1) — — (28,713) Provision for warranty obligation made during the period — 260 1,477 Settlements made during the period (718) (803) (808) Balance at the end of the period $ 2,451 $ 3,169 $ 3,712 ________________________ (1) Upon adoption of ASC 606 on January 1, 2018, warranty reserve balances totaling $28.7 million were reclassified to sales returns as these liabilities are payable to the Company’s customers and settled in cash or by credit on account. Under ASC 606, these amounts are to be accounted for as sales with right of return. Litigation and Other Legal Matters Securities Class Action Lawsuits and Derivative Suit The Company is involved in disputes, litigation, and other legal actions, including, but not limited to, the matters described below. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within litigation reserves, net. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. In relation to such matters, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position within the next 12 months, or the outcome of these matters is currently not determinable. There are many uncertainties associated with any litigation, and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, which could result in the need to adjust the liability and record additional expenses. Beginning on December 11, 2018, purported stockholders of Arlo Technologies, Inc. filed six putative securities class action complaints in the Superior Court of California, County of Santa Clara, and one complaint in the U.S. District Court for the Northern District of California against the Company and certain of its executives and directors. Some of these actions also name as defendants the underwriters in the Company’s initial public offering ("IPO") and NETGEAR, Inc. ("NETGEAR"). The actions pending in state court are Aversa v. Arlo Technologies, Inc., et al. , No. 18CV339231, filed Dec. 11, 2018; Pham v. Arlo Technologies, Inc. et al. , No. 19CV340741, filed January 9, 2019; Patel v. Arlo Technologies, Inc. , No. 19CV340758, filed January 10, 2019; Perros v. NetGear, Inc. , No. 19CV342071, filed February 1, 2019; Vardanian v. Arlo Technologies, Inc. , No. 19CV342318, filed February 8, 2019; and Hill v. Arlo Technologies, Inc. et al. , No. 19CV343033, filed February 22, 2019. On April 26, 2019, the state court consolidated these actions as In re Arlo Technologies, Inc. Shareholder Litigation , No. 18CV339231 (the “State Action"). The action pending in federal court is Wong v. Arlo Technologies, Inc. et al. , No. 19-CV-00372 (the “Federal Action”). The plaintiffs in the State Action filed a consolidated complaint on May 1, 2019. The plaintiffs allege that the Company failed to adequately disclose quality control problems and adverse sales trends ahead of its IPO, violating the Securities Act of 1933, as amended. The complaint seeks unspecified monetary damages and other relief on behalf of investors who purchased Company common stock issued pursuant and/or traceable to the IPO. On June 21, 2019, the court stayed the State Action pending resolution of the Federal Action, given the substantial overlap between the claims. The court has set a case management conference for May 5, 2021, so the parties can provide an update regarding the Federal Action. In the Federal Action, the court appointed a shareholder named Matis Nayman as lead plaintiff. On June 7, 2019, plaintiff filed an amended complaint. Plaintiff alleges violations of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, based on alleged materially false and misleading statements about the Company’s sales trends and products. In the amended complaint, plaintiff sought to represent a class of persons who purchased or otherwise acquired the Company’s common stock (i) during the period between August 3, 2018 through December 3, 2018 and/or (ii) pursuant to or traceable to the IPO. Plaintiff seeks class certification, an award of unspecified damages, an award of costs and expenses, including attorneys’ fees, and other further relief as the court may deem just and proper. On August 6, 2019, defendants filed a motion to dismiss. The court granted that motion, and plaintiff filed a second amended complaint. On June 12, 2020, plaintiff filed an unopposed motion for preliminary approval of a class action settlement for $1.25 million, which was also the amount that the Company had accrued for loss contingency. The settlement remains subject to further court approval. On September 24, 2020, the court entered an order preliminarily approving the settlement. On February 5, 2021, plaintiff filed a motion for final approval of the settlement. The final approval hearing is scheduled for March 11, 2021. In October 2020, the Company made a $1.25 million payment an escrow account administered by the court and plaintiff’s counsel (the “Settlement Fund”). The Settlement Fund shall be deemed to be in the custody of the court and shall remain subject to the jurisdiction of the court until such time as the Settlement Fund is distributed pursuant to the settlement agreement and/or further order of the court. In addition, to the State Action and the Federal Action, a purported stockholder named Leonard Pinto filed a tagalong derivative action on June 13, 2019 (the “Derivative Action”) in the U.S. District Court for the Northern District of California. The action is brought on behalf of the Company against the majority of the Company’s current directors. The complaint is based on the same alleged misconduct as the securities class actions but asserts claims for breach of fiduciary duty, waste of corporate assets, and violation of the Securities Exchange Act of 1934, as amended. On August 20, 2019, the court stayed the Derivative Action in deference to the Federal Action. David W. Foster v. Arlo Technologies, Inc. On April 15, 2020, a purported stockholder named David W. Foster filed a lawsuit under 8 Del. C. § 220 in the Delaware Court of Chancery. Plaintiff seeks inspection of corporate books and records to investigate the allegations underlying the State Actions and Federal Action. Plaintiff also seeks an order directing the Company to pay his costs and expenses. On June 30, 2020, the parties filed a stipulation to stay the case so that they could attempt to reach a negotiated resolution. On July 1, 2020, the court approved the stipulation. The parties have reached an agreement in principle to resolve the action and are working to resolve the remaining issues. The impact on the Company's financial statements is expected to be immaterial. Skybell Technologies, Inc. v. Arlo Technologies, Inc. On December 18, 2020, Skybell Technologies, Inc., SB IP Holdings, LLC, and Eyetalk365, LLC (collectively, “Complainants” or “Skybell”) filed a Section 337 complaint against the Company, Vivint Smart Home, Inc. (“Vivint”), and SimpliSafe, Inc. (“SimpliSafe”) at the U.S. International Trade Commission (“ITC”). The action alleges that the Company’s cameras and video doorbell cameras infringe seven patents: 10,097,796 (“the ’796 patent”), 10,200,660 (“the ’660 patent”), 10,523,906 (“the ’906 patent”), 10,097,797 (“the ’797 patent”), 9,485,478 (“the ’478 patent”), 10,674,120 (“the ’120 patent”), and 9,432,638 (“the ’638 patent”) (collectively, “the Asserted Patents”). The Asserted Patents are all from the same family and generally directed to detecting a person at a camera and communicating video and audio from the camera to a cell phone along with various other features. The case was instituted on January 25, 2021 as Investigation No. 337-TA-1242. At December 31, 2020, it is too early to reasonably estimate any financial impact to the Company from this matter. Indemnification of Directors and Officers The Company, as permitted under Delaware law and in accordance with its bylaws, has agreed to indemnify its officers and directors for certain events or occurrences, subject to certain conditions, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that will enable it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the fair value of each indemnification agreement will be minimal. The Company had no liabilities recorded for these agreements as of December 31, 2020 and 2019. Indemnifications Prior to the completion of the IPO, the Company historically participated in NETGEAR’s sales agreements. In its sales agreements, NETGEAR typically agrees to indemnify its direct customers, distributors and resellers (the “Indemnified Parties”) for any expenses or liability resulting from claimed infringements by NETGEAR’s products of patents, trademarks or copyrights of third parties that are asserted against the Indemnified Parties, subject to customary carve-outs. The terms of these indemnification agreements are generally perpetual after execution of the agreement. The maximum amount of potential future indemnification is generally unlimited. From time to time, the Company receives requests for indemnity and may choose to assume the defense of such litigation asserted against the Indemnified Parties. The Company had no liabilities recorded for these agreements as of December 31, 2020 and 2019. In connection with the Separation, and after July 1, 2018, certain sales agreements were transferred to the Company, and the Company has replaced certain shared contracts, which include similar indemnification terms. In addition, pursuant to the master separation agreement and certain other agreements entered into with NETGEAR in connection with the Separation and the IPO, NETGEAR has agreed to indemnify the Company for certain liabilities. The master separation agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of its business with the Company and financial responsibility for the obligations and liabilities of NETGEAR’s business with NETGEAR. Under the intellectual property rights cross-license agreement entered into between the Company and NETGEAR, each party, in its capacity as a licensee, indemnifies the other party, in its capacity as a licensor, and its directors, officers, agents, successors and subsidiaries against any losses suffered by such indemnified party as a result of the indemnifying party’s practice of the intellectual property licensed to such indemnifying party under the intellectual property rights cross-license agreement. Also, under the tax matters agreement entered into between the Company and NETGEAR, each party is liable for, and indemnifies the other party and its subsidiaries from and against any liability for, taxes that are allocated to the indemnifying party under the tax matters agreement. In addition, the Company has agreed in the tax matters agreement that each party will generally be responsible for any taxes and related amounts imposed on it or NETGEAR as a result of the failure of the Distribution, together with certain related transactions, to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant representations or covenants made by that party in the tax matters agreement. The transition services agreement generally provides that the applicable service recipient indemnifies the applicable service provider for liabilities that such service provider incurs arising from the provision of services other than liabilities arising from such service provider’s gross negligence, bad faith or willful misconduct or material breach of the transition services agreement, and that the applicable service provider indemnifies the applicable service recipient for liabilities that such service recipient incurs arising from such service provider’s gross negligence, bad faith or willful misconduct or material breach of the transition services agreement. Pursuant to the registration rights agreement, the Company has agreed to indemnify NETGEAR and its subsidiaries that hold registrable securities (and their directors, officers, agents and, if applicable, each other person who controls such holder under Section 15 of the Securities Act) registering shares pursuant to the registration rights agreement against certain losses, expenses and liabilities under the Securities Act, common law or otherwise. NETGEAR and its subsidiaries that hold registrable securities similarly indemnify the Company but such indemnification will be limited to an amount equal to the net proceeds received by such holder under the sale of registrable securities giving rise to the indemnification obligation. Refer to Note 1, The Company and Basis of Presentation , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for details relating to the Company’s IPO and related transactions. Change in Control and Severance Agreements The Company has entered into change in control and severance agreements with certain of its executive officers (the “Severance Agreements”). Pursuant to the Severance Agreements, upon a termination without cause or resignation with good reason, the individual would be entitled to (1) cash severance equal to (a) the individual’s annual base salary and an additional amount equal to his or her target annual bonus (for the Chief Executive Officer) or (b) the individual’s annual base salary (for other executive officers), (2) 12 months of health benefits continuation, and (3) accelerated vesting of any unvested time-based equity awards that would have vested during the 12 months following the termination date. Upon a termination without cause or resignation with good reason that occurs during the one month prior to or 12 months following a change in control, the individual would be entitled to (1) (a) cash severance equal to a multiple (2 times for the Chief Executive Officer and 1 times for other executive officers) of the sum of the individual’s annual base salary and target annual bonus, (2) a number of months of health benefits continuation (24 months for the Chief Executive Officer and 12 months for other executive officers) and (3) vesting of all outstanding, unvested equity awards (for the Chief Executive Officer) and the vesting of all outstanding, unvested time-based equity awards (for other executive officers). Severance will be conditioned upon the execution and non-revocation of a release of claims. The Company had no liabilities recorded for these agreements as of December 31, 2020. On June 15, 2020 (the “Retirement Date”), Christine Gorjanc retired as the Chief Financial Officer, principal financial officer and principal accounting officer of the Company. In connection with her retirement, the Company, NETGEAR and Ms. Gorjanc entered into a Separation Agreement and Release (the “Separation Agreement”) pursuant to which Ms. Gorjanc received a $15,000 cash payment and accelerated vesting of (i) 8,749 shares subject to Company stock options, (ii) 43,216 shares subject to Company restricted stock units, (iii) 2,897 shares subject to NETGEAR stock options and (iv) 15,000 shares subject to NETGEAR restricted stock units. The Board of Directors of the Company appointed Gordon Mattingly as the Company's Chief Financial Officer, principal financial officer and principal accounting officer, effective as of the Retirement Date. In connection with his appointment as the Company’s Chief Financial Officer, the Company entered into a confirmatory employment letter (the “Employment Agreement”) with Mr. Mattingly. Pursuant to the Employment Agreement, Mr. Mattingly receives an annual base salary of $383,000 and is eligible to receive an annual target bonus of 70% of his annual base salary. Mr. Mattingly will also continue to be eligible to participate in the Company’s equity compensation plans and employee benefit plans available to other employees of the Company. The Company also entered into an updated change in control and severance agreement consistent with Mr. Mattingly’s new role of Chief Financial Officer. On May 2, 2019, the Company and Patrick J. Collins III, the Company’s Senior Vice President of Products, entered into a Separation and Release Agreement (the “Separation Agreement”) regarding Mr. Collins’ separation from the Company, effective May 1, 2019. Pursuant to the Separation Agreement, Mr. Collins received cash severance equal to his annual base salary, 12 months of health benefits continuation and accelerated vesting of any of his unvested equity awards that would have vested during the 12 months following the termination date. Environmental Regulation The Company is required to comply and is currently in compliance with the European Union (“EU”) and other Directives on the Restrictions of the use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”), Waste Electrical and Electronic Equipment (“WEEE”) requirements, Energy Using Product (“EuP”) requirements, the REACH Regulation, Packaging Directive and the Battery Directive. The Company is subject to various federal, state, local, and foreign environmental laws and regulations, including those governing the use, discharge, and disposal of hazardous substances in the ordinary course of its manufacturing process. The Company believes that its current manufacturing and other operations comply in all material respects with applicable environmental laws and regulations; however, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create an environmental liability with respect to its facilities, operations, or products. |
Restructuring Related Charges
Restructuring Related Charges | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Related Charges | Restructuring Related Charges On November 7, 2019, the Company announced a restructuring plan that includes, but is not limited to, reducing outside services, headcount, marketing and capital expenditures to manage the Company's operating expenses. As a result, the Company recorded restructuring charges of $44 thousand and $631 thousand for the years ended December 31, 2020 and 2019, respectively, which were primarily associated with headcount-related charges under the restructuring plan. The restructuring was completed in the first quarter of 2020. The following table represents the severance expense recorded in the Company's Consolidated Statements of Operations: Year Ended December 31, 2020 2019 (In thousands) Cost of revenue $ 23 $ 69 Research and development — 262 Sales and marketing — 198 General and administrative 21 102 Total $ 44 $ 631 Accrued restructuring and other charges are classified within Accrued liabilities on the Company's Consolidated Balance Sheets. The following table provides a summary of accrued restructuring and other charges activity: Year Ended December 31, 2020 2019 (In thousands) Balance at the beginning of the period $ 120 $ — Additions 44 631 Cash payments (164) (511) Balance at the end of the period $ — $ 120 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company grants options and RSUs under the 2018 Equity Incentive Plan (the "2018 Plan"), under which awards may be granted to all employees. Award vesting periods for this plan are generally three The Company’s employees have historically participated in NETGEAR’s various stock-based plans, which are described below and represent the portion of NETGEAR’s stock-based plans in which Arlo employees participated as of December 31, 2020. The Company’s consolidated statements of operations reflect compensation expense for these stock-based plans associated with the portion of NETGEAR’s plans in which Arlo employees participated. The following table sets forth the available shares for future grants under the 2018 Plan as of December 31, 2020 and December 31, 2019: Number of Shares (In thousands) Shares reserved as of December 31, 2018 3,969 Additional authorized shares 2,970 Granted (1) (6,700) Forfeited/ cancelled (2) 2,011 Shares traded for taxes 380 Shares available for grants as of December 31, 2019 2,630 Additional authorized shares 3,031 Granted (3) (7,396) Forfeited/ cancelled (4) 3,569 Shares traded for taxes 1,279 Shares available for grants as of December 31, 2020 3,113 _________________________ (1) Includes 0.8 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant) and MPSUs (25% of the grant) granted to the Company's Named Executive Officers ("NEOs") during the fiscal quarter ended September 29, 2019. The shares subject to the MPSUs that were granted to Ms. Gorjanc were cancelled in connection with her separation from the Company during the fiscal quarter ended June 28, 2020. This also includes 0.2 million shares as a result of modification for the employees transferred in the Verisure transaction. (2) Includes 0.3 million shares subject to awards that were cancelled in connection with Mr. Collins’ separation from the Company, 0.5 million shares subject to the options granted to the CEO in connection with the IPO ("IPO Options") that were cancelled as the performance metrics for Tranches 4 and 5 of the IPO Options were not achieved, 59 thousand shares subject to the IPO Options issued to Mrs. Gorjanc that were cancelled as the performance metrics for such options were not achieved, and 0.2 million shares as a result of modification for the employees transferred in the Verisure transaction. (3) Includes 2.0 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant), and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended June 28, 2020. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (4) Includes (a) 1.4 million IPO options that were voluntarily cancelled by the Company's CEO in January 2020 with no replacement award, (b) 0.1 million IPO Options granted to Ms. Gorjanc that were cancelled for not achieving performance milestones, (c) 0.2 million shares subject to the PSUs granted to the Company's NEOs that were cancelled as the performance milestone was not achieved, and (d) awards that were cancelled in connection with Ms. Gorjanc's separation from the Company (0.3 million IPO Options and 54 thousand shares subject to the MPSUs). On March 3, 2020, the Company registered an aggregate of up to 3,788,756 shares of the Company’s common stock on Registration Statement on Form S-8, including 3,031,005 shares issuable pursuant to the Company's 2018 Plan that were automatically added to the shares authorized for issuance under the 2018 Plan on January 1, 2020 pursuant to an “evergreen” provision contained in the 2018 Plan and 757,751 shares issuable pursuant to the Company’s 2018 ESPP that were automatically added to the shares authorized for issuance under the 2018 ESPP on January 1, 2020 pursuant to an “evergreen” provision contained in the 2018 ESPP. Employee Stock Purchase Plan The Company sponsors an Employee Stock Purchase Plan ("ESPP"), pursuant to which eligible employees may contribute up to 15% of compensation, subject to certain income limits, to purchase shares of Arlo’s common stock. The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six months, with the first offering period having commenced on February 15, 2019 and ended on August 14, 2019. As of December 31, 2020, approximately 1.1 million shares were available for issuance under the ESPP. The Company’s employees have historically participated in NETGEAR’s ESPP. For the year ended December 31, 2018, the Company recognized ESPP compensation expense of $0.2 million. For the year ended December 31, 2018, employees specifically identifiable to Arlo purchased approximately 37,000 shares of NETGEAR’s common stock at an average exercise price of $45.06. Option Activity The Company’s stock option activity during the year ended of December 31, 2020 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 (2) 6,040 $ 11.56 Granted — — Exercised (247) 6.98 Forfeited/ Cancelled (3) (2,359) 14.72 Expired — — Outstanding as of December 31, 2020 3,434 $ 9.72 4.80 $ 1,595 Vested and expected to vest as of December 31, 2020 3,434 $ 9.72 4.80 $ 1,595 Exercisable Options as of December 31, 2020 2,998 $ 9.10 4.44 $ 1,569 _________________________ (1) Representing the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2020 and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2020 . This amount changes based on the fair market value of the Company’s stock. (2) Includes IPO Options of 2.8 million shares. Tranches 1 to 5 granted to Mr. Collins were cancelled in connection with his separation from the Company in May 2019. Tranches 4 and 5 granted to the CEO were cancelled in 2019 as the performance milestones for those tranches were not achieved, Tranches 1, 2 and 3 granted to the CEO were voluntarily forfeited in January 2020 with no replacement award. The performance milestones for Tranches 4 and 5 that were granted to Ms. Gorjanc were not met, hence, Tranche 4 was cancelled in 2019 and Tranche 5 was cancelled in June 2020. Tranches 1 to 3 granted to Ms. Gorjanc were cancelled in connection with her separation from the Company in June 2020. (3) Includes 1.4 million shares subject to the IPO Options that were voluntarily cancelled by the CEO in January 2020 with no replacement award, 0.1 million IPO Options granted to Ms. Gorjanc that were cancelled as the performance milestone was not achieved, and 0.3 million IPO Options that were cancelled in connection with Ms. Gorjanc's separation from the Company. Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of options exercised $ 0.20 $ — $ — Total fair value of options vested $ 1.00 $ 3.10 $ — Weighted-average grant date fair value per share of options granted NA $ 2.59 $ 7.02 The following table summarizes significant ranges of outstanding the Company’s stock options as of December 31, 2020. Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) 3.90 - 6.67 778 3.26 $ 6.47 772 $ 6.49 6.68 - 7.83 688 1.25 6.97 688 6.97 8.11 - 8.76 892 5.85 8.46 830 8.43 10.09 - 14.39 596 7.10 13.98 428 13.98 16.00 - 16.00 480 7.59 16.00 280 16.00 3.90 - 16.00 3,434 4.80 9.72 2,998 9.10 The following table sets forth the weighted average assumptions used to estimate the fair value of the Company’s stock options granted using Black-Scholes option pricing model during the years ended December 31, 2020, 2019 and 2018 and purchase rights granted under the Company's ESPP during the years ended December 31, 2020 and 2019: Stock Options ESPP 2020 2019 2018 2020 2019 Expected life (in years) NA 6.3 6.3 0.5 0.5 Risk-free interest rate NA 2.28 % 2.86 % 0.84 % 2.49 % Expected volatility NA 73.0 % 40.0 % 102.0 % 97.6 % Dividend yield NA — — — — The Company’s common stock did not have sufficient history of being publicly traded at grant date, hence, the estimated term of the Company’s stock options granted was determined by a combination of using a simplified method, which is an average of the contractual term and vesting period of the stock options and using management best estimate of the expected term. The risk-free interest rate of stock options granted was based on the implied yield currently available on U.S. Treasury securities, with a remaining term commensurate with the estimated expected term. The estimated volatility assumption was calculated based on a compensation peer group analysis of stock price volatility on the grant date. The risk-free interest rate of the purchase rights granted under the Company's ESPP is based on the implied yield currently available on U.S. Treasury securities, with a remaining term commensurate with the estimated expected term. Expected volatility of the purchase rights granted under the Company’s ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term. NETGEAR’s stock option activity for Company employees during the year ended December 31, 2020 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Aggregate (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 205 $ 25.94 Exercised (142) $ 22.74 Forfeited/cancelled (47) $ 36.73 Expired — $ — Outstanding as of December 31, 2020 16 $ 22.49 3.00 $ 288 Vested and expected to vest as of December 31, 2020 16 $ 22.49 3.00 $ 288 Exercisable options as of December 31, 2020 12 $ 20.11 1.66 $ 241 Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of options exercised $ 0.6 $ 0.6 $ 0.6 Total fair value of options vested $ — $ 0.8 $ 1.1 Weighted-average grant date fair value per share of NETGEAR’s stock options granted to employees specifically identifiable to Arlo NA $ — $ 20.63 The following table summarizes significant ranges of outstanding NETGEAR’s stock options as of December 31, 2020. Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) 19.19 - 19.19 7 1.56 $ 19.19 7 $ 19.19 20.10 - 20.10 2 1.30 20.10 2 20.10 21.86 - 21.86 3 2.10 21.86 3 21.86 29.23 - 29.23 4 6.80 29.23 — — 19.19 - 29.23 16 3.00 22.49 12 20.11 The following table sets forth the weighted average assumptions used to estimate the fair value of NETGEAR’s stock options granted and purchase rights granted under the NETGEAR’s ESPP for Company employees during the year ended December 31, 2018: Stock Options ESPP (1) Expected life (in years) 4.4 0.5 Risk-free interest rate 2.32 % 1.81 % Expected volatility 30.9 % 37.1 % Dividend yield — — _________________________ (1) Company employees have completed their participation into NETGEAR’s ESPP by the end of the second quarter of fiscal 2018. As of December 31, 2018, no shares had been purchased under the 2018 ESPP by Company employees, as the program was suspended until the completion of the Distribution. The estimated expected term of NETGEAR’s options granted to Company employees under NETGEAR’s plans is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free interest rate of options granted and the purchase rights granted under NETGEAR’s ESPP is based on the implied yield currently available on U.S. Treasury securities, with a remaining term commensurate with the estimated expected term. Expected volatility of NETGEAR’s options granted and the purchase rights granted under NETGEAR’s ESPP is based on historical volatility over the most recent period commensurate with the estimated expected term. RSU Activity Arlo’s RSU activity during the year ended of December 31, 2020 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 (1) 7,851 $ 6.50 Granted (2) 7,396 3.03 Vested (3) (3,474) 6.38 Forfeited (4) (1,210) 4.63 Outstanding as of December 31, 2020 10,563 $ 4.33 1.43 $ 82,287 _________________________ (1) Includes 0.8 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant) and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended September 29, 2019. The RSUs will vest in three equal annual installments during the period that begins on the RSU grant date. The shares subject to PSUs that were granted to the Company's NEOs were cancelled as the revenue milestone was not achieved for the year ended December 31, 2019. The MPSUs will vest at the end of the three-year period that begins on the MPSU grant date based on performance of the Company's common stock relative to the Benchmark during the three-year period from the grant date. A positive 3.3x or negative 2.5x multiplier will be applied to the total shareholder returns (“TSR”), such that the number of shares vested will increase by 3.3% or decrease by 2.5% of the target numbers, for each 1% of positive or negative TSR relative to the Benchmark. In the event the Company's common stock performance is below negative 30% relative to the Benchmark, no shares will be vested. In no event will the number of shares vested exceed 200% of the target for that tranche. As of December 31, 2020 , 200% of the outstanding MPSUs are expected to vest. (2) Includes 2.0 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant), and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended June 28, 2020. The RSUs will vest in three equal annual installments during the period that begins on the RSU grant date. The PSUs will vest in three equal annual installments during the period that begins on the PSU grant date based on the extent to which a cash balance milestone as of December 31, 2020 is achieved. The maximum number of shares that NEOs can earn is 120% of the target number of the PSUs. The minimum number of shares that NEOs can earn is 75% of the target number of the PSUs. As of December 31, 2020, 120% of the outstanding PSUs are expected to vest. The MPSUs will vest at the end of the three-year period that begins on the MPSU grant date based on performance of the Company's common stock relative to the Benchmark during the three-year period from the grant date. A positive 3.3x or negative 2.5x multiplier will be applied to the total shareholder returns (“TSR”), such that the number of shares vested will increase by 3.3% or decrease by 2.5% of the target numbers, for each 1% of positive or negative TSR relative to the Benchmark. In the event the Company's common stock performance is below negative 30% relative to the Benchmark, no shares will be vested. In no event will the number of shares vested exceed 200% of the target for that tranche. As of December 31, 2020, 200% of the outstanding MPSUs are expected to vest. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (3) Includes 43 thousand shares subject to the RSUs that were accelerated in connection with Ms. Gorjanc's separation from the Company. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (4) Includes 0.2 million shares subject to the PSUs granted to the Company's NEOs that were cancelled as the performance milestone was not achieved and 54 thousand shares subject to the MPSUs granted to Ms. Gorjanc that were cancelled in connection with her separation from the Company. Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of RSUs vested (the release date fair value) $ 13.02 $ 5.51 $ 0.04 Total fair value of RSUs vested (the grant date fair value) $ 22.15 $ 12.90 $ 0.04 RSU granted weighted-average fair value per share $ 3.03 $ 4.77 $ 14.46 The Company determined the fair value of the PSUs using the closing price of the Company's common stock as of the grant date. For PSUs, stock-based compensation expense of performance milestone is recognized over the expected performance achievement period when the achievement becomes probable. The Company utilized a Monte Carlo pricing model customized to the specific provisions of the 2018 Plan to value the MPSUs awards on the grant date. The fair value of the MPSUs granted during the three months ended June 28, 2020 and September 29, 2019 was $4.11 and $4.14 per share, respectively. The assumptions used in this model to estimate fair value at the grant date are as follows: Year Ended December 31, 2020 2019 Expected life 3.0 3.0 Risk-free interest rate 0.24 % 1.52 % Expected volatility 69.3 % 65.1 % Dividend yield — — Stock Beta 0.48 0.30 NETGEAR’s RSU activity for Company employees during the year ended December 31, 2020 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 278 $ 36.14 Vested (1) (129) 34.53 Forfeited (22) 36.08 Outstanding as of December 31, 2020 127 37.81 0.66 $ 5,147 _________________________ (1) Includes 15 thousand shares subject to the RSUs that were accelerated in connection with Ms. Gorjanc's separation from the Company. Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of RSUs vested (the release date fair value) $ 3.2 $ 5.8 $ 6.9 Total fair value of RSUs vested (the grant date fair value) $ 4.5 $ 5.6 $ 5.0 RSU granted weighted-average fair value per share NA NA $ 67.24 Stock-Based Compensation Expense The Company's employees have historically participated in NETGEAR's various stock-based plans, which are described below and represent the portion of NETGEAR's stock-based plans in which Company employees participated. The Company's consolidated statements of income reflect compensation expense for these stock-based plans associated with the portion of NETGEAR's plans in which Company employees participated. The stock-based compensation expense for Company employees consist of Company RSUs, PSUs, MPSUs and stock options and NETGEAR RSUs and stock options granted to Company employees, employees' annual bonus in RSU form, allocated charges deemed attributable to Company operations resulting from NETGEAR’s in 2018, and the purchase rights under the NETGEAR’s ESPP in 2018. The following table sets forth the stock-based compensation expense included in the Company’s consolidated statements of operations during the periods indicated: Year Ended December 31, 2020 2019 2018 Total Total Direct (1) Indirect Total (In thousands) Cost of revenue $ 2,961 $ 2,013 $ 608 $ 583 $ 1,191 Research and development 9,055 6,868 3,078 396 3,474 Sales and marketing 4,106 3,859 1,992 969 2,961 General and administrative 19,125 10,154 3,153 2,100 5,253 Total stock-based compensation expense (2) $ 35,247 $ 22,894 $ 8,831 $ 4,048 $ 12,879 _________________________ (1) Reflecting expenses for those legacy NETGEAR stock-based plans that have converted to equivalent Arlo stock-based plans upon the spin-off transaction. (2) There was no tax benefit as a result of the Company's net operating loss position. The Company recognizes these compensation expenses generally on a straight-line basis over the requisite service period of the award. As part of the Verisure transaction in 2019, certain employees who held Company RSU awards granted under the 2018 Plan, were transferred to Verisure. Such RSU awards continued to vest and settle after the closing of the transaction in accordance with the terms and conditions under the original award’s plan. Management determined that the modification of the RSUs awards was a Type III modification (improbable-to-probable) under ASC 718, under which any compensation expense previously recognized was reversed and the total fair value of the modified awards was recognized as a liability in the Company’s consolidated balance sheets on the closing date. Accordingly, the modification of the awards resulted in a liability of $859 thousand and total compensation expense of $623 thousand on the closing date in 2019. In January 2020, the IPO Options granted to the CEO were voluntarily forfeited with no replacement award. The cancellation was treated as a settlement for no consideration and all remaining unrecognized compensation cost of $7.4 million was accelerated and recognized as stock-based compensation expense for the three months ended March 29, 2020. In the second fiscal quarter of 2020, $1.2 million of previously recognized compensation expense was reversed as a result of cancellation of unvested shares upon Ms. Gorjanc's separation from the Company. In addition, $0.4 million of compensation expense was recognized for Ms. Gorjanc's accelerated vested shares upon her separation from the Company. As of December 31, 2020, $1.4 million of unrecognized compensation cost related to Arlo’s stock options was expected to be recognized over a weighted-average period of 1.2 years. $27.4 million of unrecognized compensation cost related to unvested Arlo’s RSUs, PSUs and MPSUs was expected to be recognized over a weighted-average period of 2.3 years. As of December 31, 2020, $31 thousand of unrecognized compensation cost related to NETGEAR’s stock options for Arlo employees was expected to be recognized over a weighted-average period of 0.8 years. $2.8 million of unrecognized compensation cost related to unvested NETGEAR’s RSUs for Arlo employees was expected to be recognized over a weighted-average period of 1.1 years. 401(k) Plan In January 2019, the Company adopted the Arlo 401(k) Plan to which employees may contribute up to 100% of salary subject to the legal maximum. In the fourth quarter of fiscal year 2018, the Company began matching 50% of contributions for employees that remain active with the Company through the end of the fiscal year, up to a maximum of $8,000 before fiscal 2020 and $4,000 starting fiscal 2020 in employee contributions per fiscal year. During the years ended December 31, 2020 and 2019, the Company recognized $0.9 million and $1.5 million in expenses for Arlo employees related to Arlo 401(k) Plan match, respectively. The Company’s employees historically participated in NETGEAR’s 401(k) Plan, which was adopted in April 2000. Under NETGEAR’s 401(k) Plan, employees were able to contribute up to 100% of salary subject to the legal maximum while NETGEAR matched 50% of contributions for employees that remain active with NETGEAR or its subsidiaries through the end of the fiscal year, up to a maximum of $6,000 in employee contributions per fiscal year. During the year ended December 31, 2018, the Company recognized $0.5 million in expenses for employees specifically identifiable to Arlo related to NETGEAR 401(k) Plan match. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. The weighted average number of shares outstanding for the basic and diluted net income (loss) per share for the periods prior to the completion of the IPO is based on the number of shares of Arlo common stock outstanding on August 2, 2018, the effective date of the registration statement relating to the IPO (the “IPO Registration Statement”). On that date, the Company issued 62,499,000 shares of common stock to the Company’s sole stockholder of record, NETGEAR (after which NETGEAR held 62,500,000 shares of common stock, which represented all of the then issued and outstanding common stock). Potentially dilutive common shares, such as common shares issuable upon exercise of stock options and vesting of restricted stock awards are typically reflected in the computation of diluted net income (loss) per share by application of the treasury stock method. For certain periods presented, due to the net losses reported, these potentially dilutive securities were excluded from the computation of diluted net loss per share, since their effect would be anti-dilutive. Net loss per share for the years ended December 31, 2020, 2019 and 2018 were as follows: Year Ended December 31, 2020 2019 2018 (In thousands, except for per share data) Numerator: Net loss $ (101,251) $ (85,951) $ (75,483) Denominator: Weighted average common shares - basic 78,084 75,074 67,231 Potentially dilutive common shares — — — Stock option and RSU conversion (1) — — — Weighted average common shares - dilutive 78,084 75,074 67,231 Basic net loss per share $ (1.30) $ (1.14) $ (1.12) Diluted net loss per share $ (1.30) $ (1.14) $ (1.12) Anti-dilutive employee stock-based awards, excluded 5,623 9,692 1,109 _________________________ (1) On December 31, 2018, 6.8 million shares subject to stock options and RSUs were added to the Company’s equity awards as issued and outstanding resulting from the adjustment of NETGEAR’s equity awards that were granted to both NETGEAR and Arlo employees and non-employee directors, a portion of which were converted as Arlo awards. The dilutive effect of these converted stock options and RSUs is reflected above per share by application of the treasury stock method and none are potentially dilutive. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information Segment Information The Company operates as one operating and reportable segment. The Company has identified its CEO as the Chief Operating Decision Maker (“CODM”). The CODM reviews financial information presented on a combined basis for purposes of allocating resources and evaluating financial performance. Geographic Information The Company conducts business across three geographic regions: Americas, EMEA and APAC. Revenue consists of gross product shipments and service revenue, less allowances for estimated sales returns, price protection, end-user customer rebates and other channel sales incentives deemed to be a reduction of revenue per the authoritative guidance for revenue recognition, net changes in deferred revenue, and gains or losses from hedging. For reporting purposes, revenue by geography is generally based upon the ship-to location of the customer for device sales and device location for service sales. The following table shows revenue by geography for the periods indicated: Year Ended December 31, 2020 2019 2018 (In thousands) Americas United States (“U.S.”) $ 255,599 $ 271,502 $ 359,936 Americas (excluding U.S.) 13,796 17,658 16,869 EMEA 61,832 57,232 65,462 APAC 25,927 23,615 22,651 Total revenue $ 357,154 $ 370,007 $ 464,918 The Company’s Property and equipment, net are located in the following geographic locations: As of December 31, 2020 2019 (In thousands) Americas United States (“U.S.”) $ 12,644 $ 17,100 Americas (excluding U.S.) 629 904 EMEA 234 316 APAC China 1,821 2,089 APAC (excluding China) 493 943 Total property and equipment, net $ 15,821 $ 21,352 Significant Customers |
Quarterly Unaudited Financial D
Quarterly Unaudited Financial Data | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Unaudited Financial Data | QUARTERLY UNAUDITED FINANCIAL DATA The following table presents unaudited quarterly financial information for the years ended December 31, 2020 and 2019. December 31, September 27, June 28, March 29, (In thousands, except per share amounts) Revenue $ 114,836 $ 110,236 $ 66,632 $ 65,450 Gross profit $ 24,538 $ 21,409 $ 5,489 $ 3,953 Provision for (benefit from) income taxes $ 182 $ 115 $ 183 $ 145 Net income (loss) $ (15,210) $ (17,459) $ (29,256) $ (39,326) Net income (loss) per share—basic (1) $ (0.19) $ (0.22) $ (0.38) $ (0.51) Net income (loss) per share—diluted $ (0.19) $ (0.22) $ (0.38) $ (0.51) December 31, 2019 (2) September 29, June 30, March 31, (In thousands, except per share amounts) Revenue $ 122,413 $ 106,116 $ 83,598 $ 57,880 Gross profit $ 13,706 $ 10,503 $ 9,650 $ 1,945 Provision for income taxes $ 3,525 $ 286 $ 349 $ 220 Net loss $ 19,615 $ (30,590) $ (33,692) $ (41,284) Net loss per share—basic (1) $ 0.26 $ (0.41) $ (0.45) $ (0.55) Net loss per share—diluted $ 0.26 $ (0.41) $ (0.45) $ (0.55) _________________________ (1) Net loss per share basic and diluted are computed independently for each quarter presented based on the weighted-average basic and fully diluted shares outstanding for each quarter. As a result, the sum of quarterly Net loss per share basic and diluted information may not equal annual Net loss per share basic and diluted. (2) The Company disposed its commercial operations in Europe in the fourth quarter of 2019. Refer to Note 4, Disposal of Business , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for a complete discussion of the disposal. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The combined financial statements of Arlo that cover dates prior to the completion of the IPO have been derived and carved out from the consolidated financial statements and accounting records of NETGEAR as if Arlo had operated on a stand-alone basis within the periods presented. In connection with the Separation and IPO, certain assets and liabilities presented have been transferred to Arlo at carry-over (historical cost) basis. Balances contributed by NETGEAR on or before the completion of the IPO were based on the master separation agreement between the Company and NETGEAR and related documents governing the Contribution. |
Fiscal periods | Fiscal periods The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Management bases its estimates on various assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates and operating results for the year ended December 31, 2020 are not necessarily indicative of the results that may be expected for any future period. |
Cash and cash equivalents and restricted cash | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity or a remaining maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions. Restricted cash |
Short-term investments | Short-term investments Short-term investments are comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase of greater than three months and no more than 12 months. The marketable securities are held in the Company’s name with a high quality financial institution, which acts as the Company’s custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders’ equity. |
Fair value measurement | Fair value measurements The carrying amounts of the Company’s financial instruments, including cash equivalents, restricted cash, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). |
Derivative financial instruments | Derivative financial instruments The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency. Changes in exchange rates between the Company’s functional currency and other currencies in which the Company transacts business will cause fluctuations in cash flow expectations and cash flow realized or settled. Accordingly, the Company uses derivatives to mitigate its business exposure to foreign exchange risk. The Company enters into foreign currency forward contracts in Australian dollars and Canadian dollars to manage its exposure to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses and existing assets and liabilities. The Company’s foreign currency forward contracts do not contain any credit risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counter-parties of its forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one counter-party. In addition, the derivative contracts typically mature in less than six months and the Company continuously evaluates the credit standing of its counter-party financial institutions. The counter-parties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk. The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, materiality, accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with the authoritative guidance for derivatives and hedging. The Company records all derivatives on the balance sheets at fair value. Cash flow hedge gains and losses are recorded in other comprehensive income (“OCI”) until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in Other income (expense), net in the consolidated statements of operations . Cash flow hedges To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges. The effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in stockholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. Deferred gains and losses in AOCI with such derivative instruments are reclassified immediately into earnings through Other income (expense), net. Any subsequent changes in fair value of such derivative instruments also are reflected in current earnings unless they are re-designated as hedges of other transactions. Non-designated hedges The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of non-functional currency monetary assets and liabilities held on its financial statements to fluctuations in foreign currency exchange rates, as well as to reduce volatility in other income and expense. The non-designated hedges are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. Foreign currency denominated accounts receivable and payable are hedged with non-designated hedges when the related anticipated foreign revenue and expenses are recognized in the Company’s financial statements. |
Trade accounts receivable | Trade accounts receivable The Company is exposed to credit losses primarily through sales of products and services. The Company's allowance for current estimated credit losses for trade accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimated amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely and regular account reconciliations, dispute resolution, payment confirmation, review of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of principally investments, derivative financial instruments, and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents, restricted cash, and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company’s investment policy. The Company’s short-term investments consist of investment-grade securities, and the Company’s cash and investments are held and managed by high credit quality financial institutions. The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any counterparty. The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. In addition, the derivative contracts typically mature in less than six months and the Company continuously evaluates the credit standing of its counterparty financial institutions. The counterparties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. |
Inventories | Inventories Inventories consist of finished goods which are valued at the lower of cost or net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete amounts, determined primarily based on demand forecasts, but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Asset Category: Range of Useful Lives Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of remaining lease term or 7 years |
Goodwill | Goodwill Goodwill pertains to the acquisitions of Avaak, Inc. (“Avaak”) and Placemeter, Inc. (“Placemeter”). Goodwill represents the amount by which the purchase price exceeds estimated fair value of net assets of businesses acquired in a business combination. The Company performs an annual impairment assessment of goodwill at the reporting unit level on the first day of the fourth fiscal quarter. The Company identified that it has one reporting unit for the purpose of goodwill impairment testing and the reporting unit is at the same level as its operating segment and reportable segment. The analysis may include both qualitative and quantitative factors to assess the likelihood of an impairment. Should certain events or indicators of impairment occur between annual impairment tests, the Company will perform the impairment test as those events or indicators occur. Examples of such events or circumstances include a significant decline in the Company’s expected future cash flows, a sustained, significant decline in the Company’s stock price and market capitalization, a significant adverse change in the business climate and slower growth rates. Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying amount. The qualitative assessment considers macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company’s stock price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying amount of its reporting unit, including goodwill. If the fair value is greater than the carrying amount of its reporting unit, no impairment is recorded. |
Intangibles, net | Intangibles, net Intangibles, net pertain to the acquisitions of Avaak and Placemeter. Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic useful life, which range from three |
Revenue recognition | Revenue recognition On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and applied this guidance to those contracts which were not completed at the date of adoption using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to Net parent investment effective January 1, 2018. Revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of revenue comes from sales of hardware products to customers (retailers, distributors, security solution providers, service providers, and Arlo's direct to consumer store). Revenue is recognized at a point in time when control of the goods is transferred to the customer, generally occurring upon shipment or delivery, dependent upon the terms of the underlying contract. The amount recognized reflects the consideration the Company expects to be entitled to in exchange for the transferred goods. The Company sells paid subscription services to its end user customers where it provides customers access to its cloud services. Revenue for subscription sales is generally recognized on a ratable basis over the contract term, beginning on the date that the service is made available to the customers at the time of registration. The subscription contracts are generally 30 days or 12 months in length, billed in advance. All such service or support sales are typically recognized using an output measure of progress by looking at the time elapsed, as the contracts generally provide the customer equal benefit throughout the contract period. In addition to selling paid subscriptions, the Company also sells services bundled with hardware products and accounts for these sales in line with the multiple performance obligations guidance. Revenue from all sales types is recognized at transaction price, which is the amount the Company expects to be entitled to in exchange for transferring goods or providing services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns, sales incentives, and price protection related to current period product revenue. The Company’s standard obligation to its direct customers generally provides for a full refund in the event that such product is not merchantable or is found to be damaged or defective. In determining estimates for future returns, management analyzes historical sales and returns data, channel inventory levels, current economic trends, and changes in customer demand for the Company’s products. Sales incentives and price protection are determined based on a combination of the actual amounts committed and estimated future expenditure based upon historical customary business practice. Typically variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. Contracts with multiple performance obligations Some of the Company’s contracts with customers contain multiple promised goods or services. Such contracts include hardware products with bundled services, various subscription services, and support. For these contracts, the Company accounts for the promises separately as individual performance obligations if they are distinct. Performance obligations are determined to be considered distinct if they are both capable of being distinct and distinct within the context of the contract. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. The embedded software in most of the hardware products is not considered distinct and therefore the combined hardware and incidental software are treated as one performance obligation and recognized at the point in time when control of product transfers to the customer. Services that are included with certain hardware products are considered distinct and therefore the hardware and service are treated as separate performance obligations. After identifying the separate performance obligations, the transaction price is allocated to the separate performance obligations on a relative stand-alone selling price basis. Stand-alone selling prices are generally determined based on the prices charged to customers or using an adjusted market assessment. Stand-alone selling price of the hardware is directly observable from add-on camera and base station sales. Stand-alone selling price of the premium services are directly observable from direct sales to end users while the service is estimated using an adjusted market approach. Revenue is then recognized for each distinct performance obligation as control is transferred to the customer. Revenue attributable to hardware is recognized at the time control of the product transfers to the customer. The transaction price allocated to the service is recognized over the specified service period or over the estimated useful life of the hardware, beginning when the customer is expected to activate their account. Useful life of the hardware is determined by industry norms, technical and financial relevance, frequency of new model releases, and user history. Long-term Supply Arrangement - Verisure The Company has entered into a Supply Agreement as part of the disposal of the Company's commercial operations in Europe as discussed in Note 4, Disposal of Business, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K, where Verisure prepays future product purchases with a minimum product purchase commitment also required. The Supply Agreement includes product purchases, paid subscription services, basic services, and an option for Verisure to acquire development services by submitting a statement of work (“SOW”). Products sold come with a standard twelve months warranty. Verisure assumes responsibilities for all warranty claims, returns of products and certain technical support provided to the end users. The Company provides technical support for paid subscription services where Verisure cannot resolve the issue. Verisure is responsible for any marketing and promotion of the Company's products and services sold in Europe. Products are priced at a cost plus markup based on markups specified in the Supply Agreement and that price varies based on the cost of the product. The paid subscription services and basic services pricing is based on the number of users monthly and is priced at a cost plus markup specified in the Supply Agreement, which varies based on the user and service type. T he transaction price for products and paid subscription services is entirely variable because the consideration is dependent on the actual costs. The Company allocates variable consideration specified for products entirely to products, and variable consideration specified for the paid subscription services entirely to the paid subscription services. For development services, no contract exists until an SOW is submitted and approved by both parties. For products, since quantity and product types are not specified in the agreement, contracts are not deemed to exist until the Company receives and accepts the customer purchase order ("PO"). Each product with a valid PO is considered a single performance obligation. The Company recognizes variable consideration for products upon delivery and for services when the monthly service is rendered for paid subscription service and basic service. The non-refundable product prepayments do not relate to future goods or services, as such no further assessment of material rights is required. Further, as the transfer of products is at the discretion of the customer (i.e. when Verisure issues a PO), a significant financing component does not exist as it relates to product prepayments. The Company also expects that the product prepayments will be fully utilized by Verisure within 12 to 18 months, hence, no additional accounting consideration is necessary for breakage. The Company also concluded that it is acting as the principal in the Supply Agreement and determined that revenue should be presented gross. NRE Arrangement - Verisure The Supply Agreement also provides for certain development services under an SOW to Verisure ("NRE arrangement") as part of the disposal of the Company's commercial operations in Europe as discussed in Note 4, Disposal of Business, in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K. In the NRE arrangement, Verisure pays non-refundable installments upon the commencement of agreed-upon milestones. There is a single performance obligation as the distinct goods and services promised under the SOW are highly interdependent or interrelated inputs that produce a single combined output given the nature of such arrangements. The output (or work-in-progress of such output) typically has no alternative use to the Company given the customized nature of the arrangement and the Company has enforceable rights given that the non-refundable milestone payments are prepayments in nature; control for NRE development services therefore transfers over time. The Company determined that the most appropriate measure of progress for revenue recognition is the input method based on cost because the Company can reasonably estimate the total costs for the NRE, and the costs incurred reasonably reflects the Company’s efforts to satisfy the performance obligation. The NRE costs include labor, material, overhead as well as the use of outside services. The total estimated NRE costs are based on a combination of historical costs together with quotes from vendors for supplying parts or services towards the completion. Adjustments to cost and profit estimates are made periodically due to changes in scope of work, hours to complete and estimated profitability, including those arising from final contract settlements. These changes may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Any losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. If total NRE costs calculated upon completion in the current period are more than the estimated total costs at completion used to calculate revenue in a prior period, then the profits in the current period will be lower than if the estimated costs used in the prior period calculation were equal to the actual total costs upon completion. Warranties Sales of hardware products regularly include warranties to end customers that cover bug fixes, minor updates such that the product continues to function according to published specifications in a dynamic environment, and phone support. These standard warranties are assurance type warranties and do not offer any services in addition to the assurance that the product will continue working as specified for one or more years. Therefore, warranties are not considered separate performance obligations in the arrangement. Instead, the expected cost of warranties is accrued as an expense in accordance with authoritative guidance. Sales incentives The Company accrues for sales incentives offered to customers as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue. The Company records estimated reductions to revenue for sales incentives when the related revenue is recognized or ahead of customer or end customer commitment if customary business practice creates an implied expectation that such activities will occur in the future. Shipping and handling costs The Company includes shipping and handling fees billed to customers in Revenue. Shipping and handling costs associated with inbound freight are included in Cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in Revenue. Shipping and handling costs associated with outbound freight are included in Sales and marketing expenses. The Company has elected to account for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with outbound freight totaled $2.7 million, $2.3 million and $3.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. Contract costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in sales and marketing and general and administrative expenses. If the incremental costs of obtaining a contract, which consist of sales commissions, relate to a service recognized over a period longer than one year, costs are deferred and amortized in line with the related services over the period of benefit. Deferred commissions are classified as non-current based on the original amortization period of over one year. There were no deferred commissions as of December 31, 2020 and 2019. Contract balances |
Research and development | Research and development Costs incurred in the research and development of new products are expensed as incurred. |
Advertising costs | Advertising costsAdvertising costs are expensed as incurred. |
Stock-based compensation | Stock-based compensation The Company’s employees have historically participated in NETGEAR’s stock-based compensation plans. Stock-based compensation expense has been allocated to the Company based on the awards and terms previously granted to the Company’s employees as well as an allocation of NETGEAR’s corporate and shared functional employee expenses. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options and the shares offered under the employee stock purchase plan is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units ("RSUs") is based on the closing fair market value of NETGEAR’s common stock on the date of grant. Equity awards granted by the Company under its own stock-based compensation plans on or after the completion of the IPO are comprised of performance-based stock options (the “PSOs”), stock options, RSUs, performance RSUs ("PSUs"), and market-based performance RSUs ("MPSUs"). The Company uses the fair value method of accounting for its equity awards granted to employees and measures the cost of employee services received in exchange for the stock-based awards. The Company recognizes this compensation expense generally on a straight-line basis over the requisite service period of the award. The fair value of stock options and PSOs is estimated on the grant or offering date using the Black-Scholes option pricing model and the forfeitures are recorded as they occur. The fair value of RSUs and PSUs is measured on the grant date based on the closing fair market value of the Company’s common stock. The Company utilizes a Monte Carlo pricing model customized to the specific provisions of the 2018 Plan to value the MPSUs awards on the grant date. The fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and Russell 2000 Index, risk-free interest rates, and dividend yield. The stock-based compensation cost is recognized ratably over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period, which is generally four years for stock options and three The Company's 2018 Employee Stock Purchase Plan (“ESPP”) is intended to provide employees with the opportunity to purchase the Company's common stock through accumulated payroll deductions at the end of specified purchase period. Eligible employees may contribute up to 15% of compensation, subject to certain income limits, to purchase shares of the Company's common stock. The terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each purchasing period is generally six months. The Company determines the fair value using the Black-Scholes Model using various inputs, including our estimate of expected volatility, term, dividend yield and risk-free interest rate. The Company recognizes compensation costs for the ESPP on a straight-line basis over the requisite service period of the award. On the Distribution Date, outstanding equity awards granted to Arlo employees under NETGEAR’s stock-based compensation plans were adjusted into NETGEAR awards and Arlo awards based on the conversion ratio as set forth in the employee matters agreement between Arlo and NETGEAR. The Company did not recognize any incremental expense in connection with the conversion of NETGEAR’s Stock based awards into Arlo awards. Refer to Note 13, Employee Benefit Plans , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for a further discussion on stock-based compensation. |
Leases | Leases Effective January 1, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first fiscal quarter of 2019. The Company determines if an arrangement is a lease at inception. Under the new standard, operating leases are included in operating lease right-of-use (“ROU”) assets, accrued liabilities, and non-current operating lease liabilities in the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Fixed lease expense for lease payments are recognized in the consolidated statements of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. ROU assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the incremental borrowing rate based on the information available was used at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made before the lease commencement date less any lease incentives received. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the options. The lease agreements with lease and non-lease components are generally accounted as a single component. |
Net income (loss) per share | Net income (loss) per share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options and vesting of restricted stock awards, which are reflected in diluted net income (loss) per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive. |
Segment Information | Segment Information The Company operates as one operating and reportable segment. The Company has identified its CEO as the Chief Operating Decision Maker (“CODM”). The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income consists of net income (loss) and other gains and losses affecting stockholders’ equity that the Company excluded from net income (loss), including unrealized gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding at the end of the year. |
Foreign currency translation and re-measurement | Foreign currency translation and re-measurement The Company’s functional currency is the U.S. dollar. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Revenue is re-measured at average exchange rates in effect during each period. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets and liabilities, which are re-measured at historical exchange rates. Gains and losses arising from foreign currency transactions are included in Other income (expense), net on the consolidated statements of operations. |
Income taxes | Income taxes We record our provision for income taxes in our consolidated financial statements using the asset and liability method. Under this method, we recognize income tax liabilities or receivable for the current year. We also recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. Our assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing our future taxable income on a jurisdictional basis, we consider the effect of its transfer pricing policies on that income. We have placed a valuation allowance against U.S. federal and state deferred tax assets and certain foreign tax attribute carryforwards since we do not anticipate to realize the benefits of deferred tax assets. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. As we expand internationally, we will face increased complexity in determining the appropriate tax jurisdictions for revenue and expense items. Our policy is to adjust these unrecognized tax benefits in the period when facts and circumstances change, such as the closing of a tax audit, the expiration of statute of limitation for a relevant taxing authority to examine a tax position, or when additional information becomes available. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. The provision for income taxes includes the effects of any accruals that we believe are appropriate, as well as the related interest and penalties. The Tax Act introduced the GILTI provisions effective in 2018, which generally impose a tax on the net income earned by foreign subsidiaries of U.S company in excess of a deemed return on their tangible assets. We recognize the tax on GILTI as a period cost when the tax is incurred. |
Certain risks and uncertainties | Certain risks and uncertainties The Company’s products are concentrated in the connected lifestyle solution industries, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management’s ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products and services could materially adversely affect the Company’s business, results of operations and financial condition. The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company’s third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could materially adversely affect the Company’s business, results of operations and financial condition. |
Recent accounting pronouncements | Recent accounting pronouncements Emerging Growth Company Status As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, unless the Company otherwise irrevocably elects not to avail itself of this exemption. The Company did not make such an irrevocable election and has not delayed the adoption of any applicable accounting standards. Accounting Pronouncements Recently Adopted ASU 2016-13 - Measurement of Credit Losses on Financial Instruments In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses, limited to the amount by which fair value is below amortized cost. The Company adopted Topic 326 on January 1, 2020, using a modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. There was no cumulative-effect adjustment recorded on January 1, 2020. ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning January 1, 2022 (or January 1, 2021 should the Company cease to be classified as an EGC), with early adoption permitted. The Company early adopted ASU 2019-12 on January 1, 2020. There was no material impact from the adoption of ASU 2019-12 on the Company's financial statements. Accounting Pronouncements Not Yet Effective In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The accounting standards update is intended to provide temporary optional expedients and exceptions to the U.S. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table shows reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheets to the amounts shown in the statements of cash flows: As of December 31, 2020 2019 2018 (In thousands) Cash and cash equivalents $ 186,127 $ 236,680 $ 151,290 Restricted cash 4,164 4,139 4,134 Total as presented on the consolidated statements of cash flows $ 190,291 $ 240,819 $ 155,424 |
Summary of Property, Plant and Equipment Range of Useful Lives | Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Asset Category: Range of Useful Lives Computer equipment 2 years Furniture and fixtures 5 years Software 2-5 years Machinery and equipment 2-3 years Leasehold improvements Shorter of remaining lease term or 7 years |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Remaining Performance Obligations | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2020: 1 year 2 years Greater than 2 years Total (In thousands) Performance obligations $ 63,111 $ 15,788 $ 871 $ 79,770 |
Schedule of Changes in Contract Balances | The following table reflects the changes in contract balances for the year ended December 31, 2020 and 2019: 2020 2020 Balance Sheet Location December 31, 2020 December 31, 2019 (In thousands) Accounts receivable, net Accounts receivable, net $ 77,643 $ 127,317 $ (49,674) (39.0) % Contract liabilities - current Deferred revenue $ 53,142 $ 50,362 $ 2,780 5.5 % Contract liabilities - non-current Non-current deferred revenue $ 16,563 $ 15,736 $ 827 5.3 % |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Available-for-sale short-term Investments | Available-for-sale short-term investments As of December 31, 2020 As of December 31, 2019 Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cost Unrealized Gains Unrealized Losses Estimated Fair Value (In thousands) U.S. treasuries $ 19,996 $ 1 $ — $ 19,997 $ 19,967 $ 23 $ — $ 19,990 |
Schedule of Accounts Receivable, Net | Accounts receivable, net As of December 31, 2020 2019 (In thousands) Gross accounts receivable $ 78,162 $ 127,926 Allowance for credit losses (519) (609) Total accounts receivable, net $ 77,643 $ 127,317 |
Schedule of Allowance for Doubtful Accounts | The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected. Years Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 609 $ 127 $ 207 Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings — — — Provision for expected credit losses 186 482 — Amount recovered due to collection (276) — (80) Balance at the end of the period $ 519 $ 609 $ 127 |
Schedule of Property and Equipment, Net | Property and equipment, net As of December 31, 2020 2019 (In thousands) Machinery and equipment $ 14,397 $ 13,402 Software 13,192 11,945 Computer equipment 4,083 4,047 Leasehold improvements 8,023 8,087 Furniture and fixtures 4,048 4,075 Total property and equipment, gross 43,743 41,556 Accumulated depreciation (27,922) (20,204) Total property and equipment, net $ 15,821 $ 21,352 |
Schedule of Intangible, Net | Intangibles, net As of December 31, 2020 As of December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net (In thousands) Technology $ 9,800 $ (9,800) $ — 9,800 $ (8,540) $ 1,260 Other 500 (500) — 500 (454) 46 Total intangibles, net $ 10,300 $ (10,300) $ — $ 10,300 $ (8,994) $ 1,306 |
Schedule of Other Non-Current Assets | Other non-current assets As of December 31, 2020 2019 (In thousands) Non-current deferred income taxes $ 1,269 $ 1,318 Deposits 122 764 Other 1,008 1,926 Total other non-current assets $ 2,399 $ 4,008 |
Schedule of Other Accrued Liabilities | Accrued liabilities As of December 31, 2020 2019 (In thousands) Sales and marketing $ 38,577 53,974 Sales returns 37,689 28,817 Accrued employee compensation 15,089 11,795 Operating lease liabilities 4,400 3,912 Freight 3,558 2,690 Warranty obligation 2,451 3,169 Other 20,002 23,043 Total accrued liabilities $ 121,766 $ 127,400 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019: As of December 31, 2020 Total Quoted market Significant (In thousands) Assets: Cash equivalents: money-market funds (<90 days) $ 1,934 $ 1,934 $ — Available-for-sale securities: U.S. treasuries (1) 19,997 19,997 — Foreign currency forward contracts (2) 24 — 24 Total assets measured at fair value $ 21,955 $ 21,931 $ 24 Liabilities: Foreign currency forward contracts (3) $ 199 $ — $ 199 Total liabilities measured at fair value $ 199 $ — $ 199 December 31, 2019 Total Quoted market Significant (In thousands) Assets: Cash equivalents: U.S. treasuries (<90 days) $ 31,472 $ 31,472 $ — Available-for-sale securities: U.S. treasuries (1) 19,990 19,990 — Foreign currency forward contracts (2) 27 — 27 Total assets measured at fair value $ 51,489 $ 51,462 $ 27 Liabilities: Foreign currency forward contracts (3) $ 375 $ — $ 375 Total liabilities measured at fair value $ 375 $ — $ 375 _________________________ (1) Included in Short-term investments on the Company’s consolidated balance sheets. (2) Included in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. (3) Included in Accrued liabilities on the Company’s consolidated balance sheets . |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of the Company's Derivative Instruments and the Line Items on the Consolidated Balance Sheets | The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2020 and 2019 are summarized as follows: December 31, December 31, Derivative Assets Balance Sheet 2020 2019 Balance Sheet 2020 2019 (In thousands) (In thousands) Derivative assets not designated as hedging instruments Prepaid expenses and other current assets $ 22 $ 27 Other accrued liabilities $ 199 $ 347 Derivative assets designated as hedging instruments Prepaid expenses and other current assets 2 — Other accrued liabilities — 28 Total $ 24 $ 27 $ 199 $ 375 |
Schedule of Offsetting of Derivative Assets | The following tables set forth the offsetting of derivative assets and liabilities as of December 31, 2020 and 2019: As of December 31, 2020 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Wells Fargo Bank $ 24 $ — $ 24 $ (24) $ — $ — As of December 31, 2019 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) HSBC $ 6 $ — $ 6 $ (6) $ — $ — Wells Fargo Bank 21 — 21 (21) — — Total $ 27 $ — $ 27 $ (27) $ — $ — |
Schedule of Offsetting of Derivative Liabilities | As of December 31, 2020 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) Wells Fargo Bank $ 199 $ — $ 199 $ (24) $ — $ 175 As of December 31, 2019 Gross Amounts Not Offset in the Consolidated Balance Sheets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Pledged Net Amount (In thousands) HSBC $ 83 $ — $ 83 $ (6) $ — $ 77 Wells Fargo Bank 292 — 292 (21) — 271 Total $ 375 $ — $ 375 $ (27) $ — $ 348 |
Schedule of Effects and Locations of Gains or Losses Recognized in Income | The effects of the Company’s cash flow hedges on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 are summarized as follows: Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2020 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 357,154 $ 301,765 $ 60,137 $ 49,064 $ 51,096 Gains (losses) on cash flow hedge $ (32) $ — $ 5 $ 4 $ — Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2019 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 370,007 $ 334,203 $ 69,384 $ 56,985 $ 47,624 Gains (losses) on cash flow hedge $ 390 $ (3) $ (28) $ (44) $ (13) Location and Amount of Gains (Losses) Recognized in Income on Cash Flow Hedges Year Ended December 31, 2018 Revenue Cost of revenue Research and development Sales and marketing General and administrative (In thousands) Statements of operations $ 464,918 $ 372,843 $ 58,794 $ 52,593 $ 28,209 Gains (losses) on cash flow hedge $ 315 $ — $ (2) $ (28) $ (11) |
Schedule of Derivatives not Designated as Hedging Instruments | The effects of the Company’s non-designated hedge included in Other income (expense), net on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 are as follows: December 31, Derivatives Not Designated as Location of Gains (Losses) 2020 2019 2018 (In thousands) Foreign currency forward contracts Other income (expense), net $ (95) $ (24) $ 589 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table sets forth the changes in AOCI by component for the years ended December 31, 2020, 2019 and 2018: Unrealized gains (losses) on available-for-sale securities Unrealized gains (losses) on derivatives Estimated tax benefit (provision) Total (In thousands) Balance as of December 31, 2017 $ — $ — $ — $ — Other comprehensive income (loss) before reclassifications (2) 276 — 274 Less: Amount reclassified from accumulated other comprehensive income (loss) — 274 — 274 Net current period other comprehensive income (loss) (2) 2 — — Balance as of December 31, 2018 (2) 2 — — Other comprehensive income (loss) before reclassifications 25 275 — 300 Less: Amount reclassified from accumulated other comprehensive income (loss) — 302 — 302 Net current period other comprehensive income (loss) 25 (27) — (2) Balance as of December 31, 2019 23 (25) — (2) Other comprehensive income (loss) before reclassifications (22) 4 — (18) Less: Amount reclassified from accumulated other comprehensive income (loss) — (23) — (23) Net current period other comprehensive income (loss) (22) 27 — 5 Balance as of December 31, 2020 $ 1 $ 2 $ — $ 3 |
Schedule of Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following tables provide details about significant amounts reclassified out of each component of AOCI for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Gains (Losses) Recognized in OCI - Effective Portion Gains (Losses) Reclassified from OCI to Income - Effective Portion Affected Line Item in the Statements of Operations (In thousands) Gains (losses) on cash flow hedge: Foreign currency contracts $ 4 $ (32) $ 275 $ 390 $ 276 $ 315 Revenue Foreign currency contracts — $ — — (3) — — Cost of revenue Foreign currency contracts — $ 5 — (28) — (2) Research and development Foreign currency contracts — $ 4 — (44) — (28) Sales and marketing Foreign currency contracts — $ — — (13) — (11) General and administrative $ 4 $ (23) $ 275 $ 302 $ 276 $ 274 Total * _________________________ |
Income Taxes Income Taxes (Tabl
Income Taxes Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax | Income (loss) before provision for income taxes consisted of the following: Year Ended December 31, 2020 2019 2018 (In thousands) United States $ (104,551) $ (103,836) $ (79,581) International 3,925 22,265 4,870 Total $ (100,626) $ (81,571) $ (74,711) |
Summary of Income Tax Expense (Benefit) | Provision for income taxes consisted of the following: Year Ended December 31, 2020 2019 2018 (In thousands) Current: U.S. Federal $ — $ — $ — State 84 58 16 Foreign 438 4,524 1,425 522 4,582 1,441 Deferred: U.S. Federal — — — State — — — Foreign 103 (202) (669) 103 (202) (669) Total $ 625 $ 4,380 $ 772 |
Schedule of Deferred Tax Assets and Liabilities | Net deferred tax assets consisted of the following: As of December 31, 2020 2019 (In thousands) Deferred Tax Assets: Accruals and allowances $ 14,389 $ 11,334 Net operating loss carryforwards 22,216 14,355 Stock-based compensation 3,731 3,228 Lease liabilities 7,063 8,212 Deferred revenue 3,673 4,417 Tax credit carryforwards 6,311 3,262 Depreciation and amortization 2,810 1,030 Capitalized research and development expenses 17,376 6,847 Total deferred tax assets 77,569 52,685 Deferred Tax Liabilities: Lease assets (5,804) (7,450) Total deferred tax liabilities (5,804) (7,450) Valuation Allowance (70,496) (43,917) Net deferred tax assets $ 1,269 $ 1,318 |
Schedule of Valuation Allowance for Deferred Income Tax Assets | Changes in allowance for deferred tax assets were as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 43,917 $ 24,477 $ 15,611 Additions 31,890 38,336 13,760 Deductions (5,311) (18,896) (4,894) Balance at the end of the period $ 70,496 $ 43,917 $ 24,477 |
Summary of Operating Loss Carryforwards | As of December 31, 2020, net operating loss carryforwards consisted of the following: Amount Beginning Year of Expiration (in thousands) U.S. Federal (1) $ 14,028 2031 U.S. Federal 79,073 Indefinite California (tax effected, net of federal benefit) 981 2040 Other State (tax effected, net of federal benefit) 1,646 2024 _________________________ (1) All of the losses are subject to annual usage limitations under Internal Revenue Code Section 382. |
Summary of Tax Credit Carryforwards | As of December 31, 2020, tax credit carryforwards consisted of the following: Amount Beginning Year of Expiration (in thousands) U.S. Federal $ 3,688 2040 California 2,565 Indefinite Foreign 1,309 2031 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate differs from the applicable U.S. statutory federal rate as follows: Year Ended December 31, 2020 2019 2018 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 4.4 % 3.0 % 5.9 % Impact of international operations 0.8 % 1.4 % 0.4 % U.S. Taxes on Foreign Entities 2.5 % (3.6) % (1.8) % Stock-based compensation (4.2) % (2.6) % (0.1) % Tax credits 1.6 % 1.6 % 1.5 % Change in valuation allowance (26.4) % (23.8) % (25.2) % Non-deductible transaction costs (0.1) % (0.7) % (2.6) % Goodwill derecognition — % (1.2) % — % Others (0.2) % (0.5) % (0.1) % Provision for income taxes (0.6) % (5.4) % (1.0) % |
Reconciliation of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows: Federal, State, and Foreign Tax (In thousands) Balance as of December 31, 2017 $ 1,022 Additions based on tax positions related to the current year 338 Adjustments to Net parent investments (1,338) Balance as of December 31, 2018 22 Additions based on tax positions related to the current year 674 Additions for tax positions of prior years 8 Balance as of December 31, 2019 704 Additions based on tax positions related to the current year 503 Additions for tax positions of prior years 148 Balance as of December 31, 2020 $ 1,355 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Effect on Financial Statements | Supplemental cash flow information related to operating leases was as follows: Year Ended December 31, 2020 2019 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 5,991 $ 4,888 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 461 $ 21,742 Other non-cash increases in operating right of use assets $ — $ 788 Weighted average remaining lease term and weighted average discount rate related to operating leases were as follows: As of December 31, 2020 2019 Weighted average remaining lease term 6.9 years 7.7 years Weighted average discount rate 5.69 % 5.67 % |
Summary of Operating Lease Maturity | The maturity of lease liabilities related to operating leases for each of the next five years and thereafter as of December 31, 2020 was as follows (in thousands): 2021 $ 5,931 2022 5,770 2023 4,977 2024 4,459 2025 3,186 Thereafter 11,498 Total lease payments 35,821 Less: interest (1) (6,392) Total $ 29,429 Accrued liabilities $ 4,400 Non-current operating lease liabilities 25,029 Total $ 29,429 ________________________ (1) Leases that commenced before November 5, 2019 were calculated using the Company’s incremental borrowing rate on a collateralized basis plus LIBOR rate that closely matches contractual term of most leases. Leases that commenced after November 5, 2019 were calculated using the Company's borrowing rate defined in the Credit Agreement with Western Alliance Bank. As of December 31, 2019, maturity of lease liabilities related to operating leases for each of the next five years and thereafter were as follows (in thousands): 2020 $ 5,660 2021 5,735 2022 5,589 2023 4,908 2024 4,450 Thereafter 14,669 Total lease payments 41,011 Less: interest (1) (8,098) Total $ 32,913 Accrued liabilities $ 3,912 Non-current operating lease liabilities 29,001 Total $ 32,913 ________________________ (1) Calculated using the Company’s incremental borrowing rate on a collateralized basis plus LIBOR rate that closely matches contractual term of most leases. |
Schedule of Changes in Warranty Obligation | Changes in the Company’s warranty liability, which is included in Accrued liabilities in the consolidated balance sheets, were as follows: Year Ended December 31, 2020 2019 2018 (In thousands) Balance at the beginning of the period $ 3,169 $ 3,712 $ 31,756 Reclassified to sales returns upon adoption of ASC 606 (1) — — (28,713) Provision for warranty obligation made during the period — 260 1,477 Settlements made during the period (718) (803) (808) Balance at the end of the period $ 2,451 $ 3,169 $ 3,712 ________________________ |
Restructuring Related Charges (
Restructuring Related Charges (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Summary of Severance Expense Recorded in the Company's Consolidated Statements of Operations | The following table represents the severance expense recorded in the Company's Consolidated Statements of Operations: Year Ended December 31, 2020 2019 (In thousands) Cost of revenue $ 23 $ 69 Research and development — 262 Sales and marketing — 198 General and administrative 21 102 Total $ 44 $ 631 |
Summary of Accrued Restructuring and Other Charges Activity | The following table provides a summary of accrued restructuring and other charges activity: Year Ended December 31, 2020 2019 (In thousands) Balance at the beginning of the period $ 120 $ — Additions 44 631 Cash payments (164) (511) Balance at the end of the period $ — $ 120 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Share-based Compensation Activity | The following table sets forth the available shares for future grants under the 2018 Plan as of December 31, 2020 and December 31, 2019: Number of Shares (In thousands) Shares reserved as of December 31, 2018 3,969 Additional authorized shares 2,970 Granted (1) (6,700) Forfeited/ cancelled (2) 2,011 Shares traded for taxes 380 Shares available for grants as of December 31, 2019 2,630 Additional authorized shares 3,031 Granted (3) (7,396) Forfeited/ cancelled (4) 3,569 Shares traded for taxes 1,279 Shares available for grants as of December 31, 2020 3,113 _________________________ (1) Includes 0.8 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant) and MPSUs (25% of the grant) granted to the Company's Named Executive Officers ("NEOs") during the fiscal quarter ended September 29, 2019. The shares subject to the MPSUs that were granted to Ms. Gorjanc were cancelled in connection with her separation from the Company during the fiscal quarter ended June 28, 2020. This also includes 0.2 million shares as a result of modification for the employees transferred in the Verisure transaction. (2) Includes 0.3 million shares subject to awards that were cancelled in connection with Mr. Collins’ separation from the Company, 0.5 million shares subject to the options granted to the CEO in connection with the IPO ("IPO Options") that were cancelled as the performance metrics for Tranches 4 and 5 of the IPO Options were not achieved, 59 thousand shares subject to the IPO Options issued to Mrs. Gorjanc that were cancelled as the performance metrics for such options were not achieved, and 0.2 million shares as a result of modification for the employees transferred in the Verisure transaction. (3) Includes 2.0 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant), and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended June 28, 2020. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (4) Includes (a) 1.4 million IPO options that were voluntarily cancelled by the Company's CEO in January 2020 with no replacement award, (b) 0.1 million IPO Options granted to Ms. Gorjanc that were cancelled for not achieving performance milestones, (c) 0.2 million shares subject to the PSUs granted to the Company's NEOs that were cancelled as the performance milestone was not achieved, and (d) awards that were cancelled in connection with Ms. Gorjanc's separation from the Company (0.3 million IPO Options and 54 thousand shares subject to the MPSUs). |
Schedule of Stock Option Activity | The Company’s stock option activity during the year ended of December 31, 2020 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 (2) 6,040 $ 11.56 Granted — — Exercised (247) 6.98 Forfeited/ Cancelled (3) (2,359) 14.72 Expired — — Outstanding as of December 31, 2020 3,434 $ 9.72 4.80 $ 1,595 Vested and expected to vest as of December 31, 2020 3,434 $ 9.72 4.80 $ 1,595 Exercisable Options as of December 31, 2020 2,998 $ 9.10 4.44 $ 1,569 _________________________ (1) Representing the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2020 and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2020 . This amount changes based on the fair market value of the Company’s stock. (2) Includes IPO Options of 2.8 million shares. Tranches 1 to 5 granted to Mr. Collins were cancelled in connection with his separation from the Company in May 2019. Tranches 4 and 5 granted to the CEO were cancelled in 2019 as the performance milestones for those tranches were not achieved, Tranches 1, 2 and 3 granted to the CEO were voluntarily forfeited in January 2020 with no replacement award. The performance milestones for Tranches 4 and 5 that were granted to Ms. Gorjanc were not met, hence, Tranche 4 was cancelled in 2019 and Tranche 5 was cancelled in June 2020. Tranches 1 to 3 granted to Ms. Gorjanc were cancelled in connection with her separation from the Company in June 2020. (3) Includes 1.4 million shares subject to the IPO Options that were voluntarily cancelled by the CEO in January 2020 with no replacement award, 0.1 million IPO Options granted to Ms. Gorjanc that were cancelled as the performance milestone was not achieved, and 0.3 million IPO Options that were cancelled in connection with Ms. Gorjanc's separation from the Company. NETGEAR’s stock option activity for Company employees during the year ended December 31, 2020 was as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Aggregate (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 205 $ 25.94 Exercised (142) $ 22.74 Forfeited/cancelled (47) $ 36.73 Expired — $ — Outstanding as of December 31, 2020 16 $ 22.49 3.00 $ 288 Vested and expected to vest as of December 31, 2020 16 $ 22.49 3.00 $ 288 Exercisable options as of December 31, 2020 12 $ 20.11 1.66 $ 241 |
Share-based Compensation Arrangements by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest | Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of options exercised $ 0.20 $ — $ — Total fair value of options vested $ 1.00 $ 3.10 $ — Weighted-average grant date fair value per share of options granted NA $ 2.59 $ 7.02 Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of options exercised $ 0.6 $ 0.6 $ 0.6 Total fair value of options vested $ — $ 0.8 $ 1.1 Weighted-average grant date fair value per share of NETGEAR’s stock options granted to employees specifically identifiable to Arlo NA $ — $ 20.63 Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of RSUs vested (the release date fair value) $ 13.02 $ 5.51 $ 0.04 Total fair value of RSUs vested (the grant date fair value) $ 22.15 $ 12.90 $ 0.04 RSU granted weighted-average fair value per share $ 3.03 $ 4.77 $ 14.46 Year Ended December 31, 2020 2019 2018 (In millions, except per share data) Total intrinsic value of RSUs vested (the release date fair value) $ 3.2 $ 5.8 $ 6.9 Total fair value of RSUs vested (the grant date fair value) $ 4.5 $ 5.6 $ 5.0 RSU granted weighted-average fair value per share NA NA $ 67.24 |
Summarizes Significant Ranges of Outstanding Arlo’s Stock Options | The following table summarizes significant ranges of outstanding the Company’s stock options as of December 31, 2020. Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) 3.90 - 6.67 778 3.26 $ 6.47 772 $ 6.49 6.68 - 7.83 688 1.25 6.97 688 6.97 8.11 - 8.76 892 5.85 8.46 830 8.43 10.09 - 14.39 596 7.10 13.98 428 13.98 16.00 - 16.00 480 7.59 16.00 280 16.00 3.90 - 16.00 3,434 4.80 9.72 2,998 9.10 The following table summarizes significant ranges of outstanding NETGEAR’s stock options as of December 31, 2020. Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Per Share Shares Exercisable Weighted- Average Exercise Price Per Share (In thousands) (In years) (In dollars) (In thousands) (In dollars) 19.19 - 19.19 7 1.56 $ 19.19 7 $ 19.19 20.10 - 20.10 2 1.30 20.10 2 20.10 21.86 - 21.86 3 2.10 21.86 3 21.86 29.23 - 29.23 4 6.80 29.23 — — 19.19 - 29.23 16 3.00 22.49 12 20.11 |
Schedule of Weighted Average Assumptions | The following table sets forth the weighted average assumptions used to estimate the fair value of the Company’s stock options granted using Black-Scholes option pricing model during the years ended December 31, 2020, 2019 and 2018 and purchase rights granted under the Company's ESPP during the years ended December 31, 2020 and 2019: Stock Options ESPP 2020 2019 2018 2020 2019 Expected life (in years) NA 6.3 6.3 0.5 0.5 Risk-free interest rate NA 2.28 % 2.86 % 0.84 % 2.49 % Expected volatility NA 73.0 % 40.0 % 102.0 % 97.6 % Dividend yield NA — — — — The following table sets forth the weighted average assumptions used to estimate the fair value of NETGEAR’s stock options granted and purchase rights granted under the NETGEAR’s ESPP for Company employees during the year ended December 31, 2018: Stock Options ESPP (1) Expected life (in years) 4.4 0.5 Risk-free interest rate 2.32 % 1.81 % Expected volatility 30.9 % 37.1 % Dividend yield — — _________________________ (1) Company employees have completed their participation into NETGEAR’s ESPP by the end of the second quarter of fiscal 2018. As of December 31, 2018, no shares had been purchased under the 2018 ESPP by Company employees, as the program was suspended until the completion of the Distribution. Year Ended December 31, 2020 2019 Expected life 3.0 3.0 Risk-free interest rate 0.24 % 1.52 % Expected volatility 69.3 % 65.1 % Dividend yield — — Stock Beta 0.48 0.30 |
Schedule of RSU Activity | Arlo’s RSU activity during the year ended of December 31, 2020 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 (1) 7,851 $ 6.50 Granted (2) 7,396 3.03 Vested (3) (3,474) 6.38 Forfeited (4) (1,210) 4.63 Outstanding as of December 31, 2020 10,563 $ 4.33 1.43 $ 82,287 _________________________ (1) Includes 0.8 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant) and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended September 29, 2019. The RSUs will vest in three equal annual installments during the period that begins on the RSU grant date. The shares subject to PSUs that were granted to the Company's NEOs were cancelled as the revenue milestone was not achieved for the year ended December 31, 2019. The MPSUs will vest at the end of the three-year period that begins on the MPSU grant date based on performance of the Company's common stock relative to the Benchmark during the three-year period from the grant date. A positive 3.3x or negative 2.5x multiplier will be applied to the total shareholder returns (“TSR”), such that the number of shares vested will increase by 3.3% or decrease by 2.5% of the target numbers, for each 1% of positive or negative TSR relative to the Benchmark. In the event the Company's common stock performance is below negative 30% relative to the Benchmark, no shares will be vested. In no event will the number of shares vested exceed 200% of the target for that tranche. As of December 31, 2020 , 200% of the outstanding MPSUs are expected to vest. (2) Includes 2.0 million shares consisting of RSUs (50% of the grant), PSUs (25% of the grant), and MPSUs (25% of the grant) granted to the Company's NEOs during the fiscal quarter ended June 28, 2020. The RSUs will vest in three equal annual installments during the period that begins on the RSU grant date. The PSUs will vest in three equal annual installments during the period that begins on the PSU grant date based on the extent to which a cash balance milestone as of December 31, 2020 is achieved. The maximum number of shares that NEOs can earn is 120% of the target number of the PSUs. The minimum number of shares that NEOs can earn is 75% of the target number of the PSUs. As of December 31, 2020, 120% of the outstanding PSUs are expected to vest. The MPSUs will vest at the end of the three-year period that begins on the MPSU grant date based on performance of the Company's common stock relative to the Benchmark during the three-year period from the grant date. A positive 3.3x or negative 2.5x multiplier will be applied to the total shareholder returns (“TSR”), such that the number of shares vested will increase by 3.3% or decrease by 2.5% of the target numbers, for each 1% of positive or negative TSR relative to the Benchmark. In the event the Company's common stock performance is below negative 30% relative to the Benchmark, no shares will be vested. In no event will the number of shares vested exceed 200% of the target for that tranche. As of December 31, 2020, 200% of the outstanding MPSUs are expected to vest. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (3) Includes 43 thousand shares subject to the RSUs that were accelerated in connection with Ms. Gorjanc's separation from the Company. Also includes 1.1 million immediately vested shares granted to employees for annual bonus in RSU form. (4) Includes 0.2 million shares subject to the PSUs granted to the Company's NEOs that were cancelled as the performance milestone was not achieved and 54 thousand shares subject to the MPSUs granted to Ms. Gorjanc that were cancelled in connection with her separation from the Company. NETGEAR’s RSU activity for Company employees during the year ended December 31, 2020 was as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In dollars) (In years) (In thousands) Outstanding as of December 31, 2019 278 $ 36.14 Vested (1) (129) 34.53 Forfeited (22) 36.08 Outstanding as of December 31, 2020 127 37.81 0.66 $ 5,147 _________________________ (1) Includes 15 thousand shares subject to the RSUs that were accelerated in connection with Ms. Gorjanc's separation from the Company. |
Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, Restricted Stock Awards, and the Employee Stock Purchase Plan | The following table sets forth the stock-based compensation expense included in the Company’s consolidated statements of operations during the periods indicated: Year Ended December 31, 2020 2019 2018 Total Total Direct (1) Indirect Total (In thousands) Cost of revenue $ 2,961 $ 2,013 $ 608 $ 583 $ 1,191 Research and development 9,055 6,868 3,078 396 3,474 Sales and marketing 4,106 3,859 1,992 969 2,961 General and administrative 19,125 10,154 3,153 2,100 5,253 Total stock-based compensation expense (2) $ 35,247 $ 22,894 $ 8,831 $ 4,048 $ 12,879 _________________________ (1) Reflecting expenses for those legacy NETGEAR stock-based plans that have converted to equivalent Arlo stock-based plans upon the spin-off transaction. (2) There was no tax benefit as a result of the Company's net operating loss position. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Net Income Per Share | Net loss per share for the years ended December 31, 2020, 2019 and 2018 were as follows: Year Ended December 31, 2020 2019 2018 (In thousands, except for per share data) Numerator: Net loss $ (101,251) $ (85,951) $ (75,483) Denominator: Weighted average common shares - basic 78,084 75,074 67,231 Potentially dilutive common shares — — — Stock option and RSU conversion (1) — — — Weighted average common shares - dilutive 78,084 75,074 67,231 Basic net loss per share $ (1.30) $ (1.14) $ (1.12) Diluted net loss per share $ (1.30) $ (1.14) $ (1.12) Anti-dilutive employee stock-based awards, excluded 5,623 9,692 1,109 _________________________ (1) On December 31, 2018, 6.8 million shares subject to stock options and RSUs were added to the Company’s equity awards as issued and outstanding resulting from the adjustment of NETGEAR’s equity awards that were granted to both NETGEAR and Arlo employees and non-employee directors, a portion of which were converted as Arlo awards. The dilutive effect of these converted stock options and RSUs is reflected above per share by application of the treasury stock method and none are potentially dilutive. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Net Revenue by Geography | The following table shows revenue by geography for the periods indicated: Year Ended December 31, 2020 2019 2018 (In thousands) Americas United States (“U.S.”) $ 255,599 $ 271,502 $ 359,936 Americas (excluding U.S.) 13,796 17,658 16,869 EMEA 61,832 57,232 65,462 APAC 25,927 23,615 22,651 Total revenue $ 357,154 $ 370,007 $ 464,918 |
Schedule of Long-Lived Asset By Geographic Areas | The Company’s Property and equipment, net are located in the following geographic locations: As of December 31, 2020 2019 (In thousands) Americas United States (“U.S.”) $ 12,644 $ 17,100 Americas (excluding U.S.) 629 904 EMEA 234 316 APAC China 1,821 2,089 APAC (excluding China) 493 943 Total property and equipment, net $ 15,821 $ 21,352 |
Quarterly Unaudited Financial_2
Quarterly Unaudited Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Unaudited Financial Data | The following table presents unaudited quarterly financial information for the years ended December 31, 2020 and 2019. December 31, September 27, June 28, March 29, (In thousands, except per share amounts) Revenue $ 114,836 $ 110,236 $ 66,632 $ 65,450 Gross profit $ 24,538 $ 21,409 $ 5,489 $ 3,953 Provision for (benefit from) income taxes $ 182 $ 115 $ 183 $ 145 Net income (loss) $ (15,210) $ (17,459) $ (29,256) $ (39,326) Net income (loss) per share—basic (1) $ (0.19) $ (0.22) $ (0.38) $ (0.51) Net income (loss) per share—diluted $ (0.19) $ (0.22) $ (0.38) $ (0.51) December 31, 2019 (2) September 29, June 30, March 31, (In thousands, except per share amounts) Revenue $ 122,413 $ 106,116 $ 83,598 $ 57,880 Gross profit $ 13,706 $ 10,503 $ 9,650 $ 1,945 Provision for income taxes $ 3,525 $ 286 $ 349 $ 220 Net loss $ 19,615 $ (30,590) $ (33,692) $ (41,284) Net loss per share—basic (1) $ 0.26 $ (0.41) $ (0.45) $ (0.55) Net loss per share—diluted $ 0.26 $ (0.41) $ (0.45) $ (0.55) _________________________ (1) Net loss per share basic and diluted are computed independently for each quarter presented based on the weighted-average basic and fully diluted shares outstanding for each quarter. As a result, the sum of quarterly Net loss per share basic and diluted information may not equal annual Net loss per share basic and diluted. (2) The Company disposed its commercial operations in Europe in the fourth quarter of 2019. Refer to Note 4, Disposal of Business , in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K for a complete discussion of the disposal. |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Narrative (Details) $ / shares in Units, $ in Millions | Nov. 29, 2018shares | Aug. 07, 2018USD ($)$ / sharesshares | Jul. 01, 2018USD ($) | Dec. 31, 2020regionshares | Dec. 31, 2019shares | Aug. 02, 2018$ / sharesshares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of geographic regions in which the Company conducts business | region | 3 | |||||
Common stock, shares, issued (in shares) | shares | 79,336,242 | 75,785,952 | ||||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares, issued (in shares) | shares | 11,747,250 | 10,215,000 | ||||
Stock price, common stock (in dollars per share) | $ / shares | $ 16 | $ 16 | ||||
Proceeds from initial public offering, net of offering costs | $ 173.4 | |||||
Over-Allotment Option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares, issued (in shares) | shares | 1,532,250 | |||||
Arlo | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Proceeds from initial public offering, net of offering costs | $ 1.4 | |||||
Payments for offering costs | 4.6 | |||||
NETGEAR | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Payments for offering costs | $ 3.2 | |||||
Percentage of shares owned | 84.20% | |||||
NETGEAR | Special Stock Dividend Distribution | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued (in shares) | shares | 62,500,000 | |||||
Ratio of Arlo to NETGEAR common stock (as a ratio) | 1.980295 | |||||
NETGEAR | Allocation of Corporate Expenses | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchases from related party | $ 30.6 | |||||
NETGEAR | Allocation of Corporate Expenses | Research and development | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchases from related party | 9.4 | |||||
NETGEAR | Allocation of Corporate Expenses | Sales and marketing | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchases from related party | 10 | |||||
NETGEAR | Allocation of Corporate Expenses | General and administrative | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Purchases from related party | $ 11.2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 186,127 | $ 236,680 | $ 151,290 | |
Restricted cash | 4,164 | 4,139 | 4,134 | |
Total as presented on the consolidated statements of cash flows | $ 190,291 | $ 240,819 | $ 155,424 | $ 108 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)segmentreporting_unit | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Impairment loss of property and equipment | $ 0 | $ 0 | $ 0 |
Number of reporting units | reporting_unit | 1 | ||
Goodwill impairment loss | $ 0 | 0 | 0 |
Product warranty term | 12 months | ||
Total cost of revenue | $ 301,765,000 | 334,203,000 | $ 372,843,000 |
Non-current deferred revenue | $ 16,563,000 | 15,736,000 | |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Stock Options | 2018 Plan | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Vesting period | 4 years | ||
ESPP purchase price of common stock, percent of market price | 100.00% | ||
ESPP | 2018 Stock Repurchase Program | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Maximum percentage of compensation contributed by employees | 15.00% | ||
ESPP purchase price of common stock, percent of market price | 85.00% | ||
Offering period (in years) | 6 months | ||
Shipping and Handling | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total cost of revenue | $ 2,700,000 | 2,300,000 | $ 3,700,000 |
Advertising | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total cost of revenue | 12,700,000 | 12,300,000 | $ 13,400,000 |
Deferred Commission | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Non-current deferred revenue | $ 0 | $ 0 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Estimated economic useful life | 3 years | ||
Subscription contracts term | 30 days | ||
Minimum | 2018 Plan | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Vesting period | 3 years | ||
Minimum | RSUs | 2018 Plan | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Vesting period | 3 years | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Estimated economic useful life | 5 years | ||
Subscription contracts term | 12 months | ||
Maximum | 2018 Plan | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Vesting period | 4 years | ||
Maximum | RSUs | 2018 Plan | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Vesting period | 4 years | ||
Customer One | Customer Concentration Risk | Accounts Receivable | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Concentration risk (as a percentage) | 32.70% | 51.30% | |
Customer Two | Customer Concentration Risk | Accounts Receivable | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Concentration risk (as a percentage) | 18.50% | ||
Customer Three | Customer Concentration Risk | Accounts Receivable | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Concentration risk (as a percentage) | 15.30% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Property, Plant and Equipment Range of Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 2 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 2 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 5 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 3 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Range of Useful Lives | 7 years |
Deferred Revenue - Schedule of
Deferred Revenue - Schedule of Remaining Performance Obligations (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 79,770 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 63,111 |
Remaining performance obligations, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 15,788 |
Remaining performance obligations, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 871 |
Remaining performance obligations, expected timing of satisfaction |
Deferred Revenue - Schedule o_2
Deferred Revenue - Schedule of Changes in Contract Balances and Impacts of Entries to Adopt ASC 606 (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Accounts receivable, net | |
Beginning balance | $ 127,317 |
$ change | $ (49,674) |
% change | (39.00%) |
Ending balance | $ 77,643 |
Contract liabilities - current | |
Beginning balance | 50,362 |
$ change | $ 2,780 |
% change | 5.50% |
Ending balance | $ 53,142 |
Contract liabilities - non-current | |
Beginning balance | 15,736 |
$ change | $ 827 |
% change | 5.30% |
Ending balance | $ 16,563 |
Deferred Revenue - Narrative (D
Deferred Revenue - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 27, 2020USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)region | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||||||
Service revenue | $ 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | $ 357,154 | $ 370,007 | $ 464,918 |
Performance obligations | 79,770 | 79,770 | |||||||||
Revenue deferred due to unsatisfied performance obligations | 90,900 | 71,600 | |||||||||
Recognized revenue | 67,300 | 47,400 | |||||||||
Recognized revenue that was included in contract liability balance at beginning of period | $ 26,200 | 26,400 | |||||||||
Number of geographic regions in which the company conducts business | region | 3 | ||||||||||
NRE Service | Up-front Payment Arrangement | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue deferred for installment | $ 5,000 | ||||||||||
Products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Service revenue | 284,868 | 323,242 | 427,113 | ||||||||
Products | Up-front Payment Arrangement | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue deferred, prepayment | 29,400 | ||||||||||
Deferred revenue | 20,000 | 20,000 | |||||||||
Liability, prepayment, non-current | 10,600 | ||||||||||
Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Service revenue | 72,286 | $ 46,765 | $ 37,805 | ||||||||
Services | Up-front Payment Arrangement | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Deferred service revenue | 7,900 | 7,900 | |||||||||
Service revenue | 11,600 | ||||||||||
Liability, service, non-current | $ 9,800 | $ 9,800 |
Deferred Revenue (Details)
Deferred Revenue (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Disaggregation of Revenue [Line Items] | |
Performance obligations | $ 79,770 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations | 15,788 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Disaggregation of Revenue [Line Items] | |
Performance obligations | 871 |
NRE Service | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Up-front Payment Arrangement | |
Disaggregation of Revenue [Line Items] | |
Performance obligations | $ 7,900 |
Disposal of Business (Details)
Disposal of Business (Details) - USD ($) $ in Thousands | Dec. 30, 2019 | Nov. 04, 2019 | Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||||||
Proceeds from sale of business | $ 0 | $ 52,694 | $ 0 | ||||||||||
Gain on sale of business | 292 | 54,881 | 0 | ||||||||||
Purchase commitment, remaining minimum amount committed | $ 19,500 | 19,500 | |||||||||||
Purchase commitment amount fulfilled | 47,300 | 47,300 | |||||||||||
Revenue | 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | 357,154 | 370,007 | 464,918 | ||
Products | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Revenue | 284,868 | 323,242 | $ 427,113 | ||||||||||
Verisure S.a.r.l | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Agreed upon amount for sale of business plus additional cash for certain inventory | $ 50,000 | ||||||||||||
Noncompete agreements term | 3 years | ||||||||||||
Proceeds from sale of business | $ 52,700 | ||||||||||||
Gain on sale of business | $ 292 | 54,900 | |||||||||||
Transition services agreement, consideration | $ 4,000 | ||||||||||||
Verisure S.a.r.l | Products | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Supply commitment, term of contract | 5 years | ||||||||||||
Purchase commitment, remaining minimum amount committed | 500,000 | $ 500,000 | |||||||||||
Prepayments received | $ 20,000 | 20,000 | |||||||||||
Prepayments received | 40,000 | $ 40,000 | 40,000 | $ 40,000 | |||||||||
Verisure S.a.r.l | NRE Service | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Aggregate consideration for services | $ 10,000 | $ 3,500 | |||||||||||
Proceeds received on NRE Service | $ 7,500 | 7,500 | |||||||||||
Revenue | $ 7,900 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Available-for-Sale Short-Term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-For-Sale [Line Items] | ||
Estimated Fair Value | $ 19,997 | $ 19,990 |
U.S. treasuries | ||
Debt Securities, Available-For-Sale [Line Items] | ||
Cost | 19,996 | 19,967 |
Unrealized Gains | 1 | 23 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 19,997 | $ 19,990 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||||
Gross accounts receivable | $ 78,162 | $ 127,926 | ||
Allowance for credit losses | (519) | (609) | $ (127) | $ (207) |
Total accounts receivable, net | $ 77,643 | $ 127,317 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | $ 609 | $ 127 | $ 207 |
Provision for expected credit losses | 186 | 482 | 0 |
Amount recovered due to collection | (276) | 0 | (80) |
Balance at the end of the period | 519 | 609 | 127 |
Cumulative-effect adjustment from adoption | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | $ 0 | 0 | 0 |
Balance at the end of the period | $ 0 | $ 0 |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total property and equipment, gross | $ 43,743 | $ 41,556 |
Accumulated depreciation | (27,922) | (20,204) |
Total property and equipment, net | 15,821 | 21,352 |
Machinery and equipment | ||
Total property and equipment, gross | 14,397 | 13,402 |
Software | ||
Total property and equipment, gross | 13,192 | 11,945 |
Computer equipment | ||
Total property and equipment, gross | 4,083 | 4,047 |
Leasehold improvements | ||
Total property and equipment, gross | 8,023 | 8,087 |
Furniture and fixtures | ||
Total property and equipment, gross | $ 4,048 | $ 4,075 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Other Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation expense | $ 8.8 | $ 9.2 | $ 3.8 |
Depreciation expense allocated from NETGEAR | $ 1.2 |
Balance Sheet Components - Sc_5
Balance Sheet Components - Schedule of Intangibles, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 10,300 | $ 10,300 |
Accumulated amortization | (10,300) | (8,994) |
Finite-Lived Intangible Assets, Net, Total | 0 | 1,306 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 9,800 | 9,800 |
Accumulated amortization | (9,800) | (8,540) |
Finite-Lived Intangible Assets, Net, Total | 0 | 1,260 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 500 | 500 |
Accumulated amortization | (500) | (454) |
Finite-Lived Intangible Assets, Net, Total | $ 0 | $ 46 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangibles, Other Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense of intangibles | $ 1,300,000 | $ 1,500,000 | $ 1,500,000 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Increase (decrease) in goodwill | $ 0 | ||
Goodwill | $ 11,038,000 | $ 11,038,000 | |
Derecognize goodwill | $ 4,600,000 |
Balance Sheet Components - Go_2
Balance Sheet Components - Goodwill Impairment Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)segment | Oct. 01, 2020USD ($) | Mar. 29, 2020USD ($) | Dec. 31, 2019USD ($) | |
Balance Sheet Related Disclosures [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Fair value in excess of carrying amount | $ 276,200 | $ 94,100 | ||
Fair value in excess of carrying amount (as a percentage) | 195.00% | 53.00% | ||
Goodwill | $ 11,038 | $ 11,038 |
Balance Sheet Components - Sc_6
Balance Sheet Components - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Non-current deferred income taxes | $ 1,269 | $ 1,318 |
Deposits | 122 | 764 |
Other | 1,008 | 1,926 |
Total other non-current assets | $ 2,399 | $ 4,008 |
Balance Sheet Components - Sc_7
Balance Sheet Components - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Sales and marketing | $ 38,577 | $ 53,974 |
Sales returns | 37,689 | 28,817 |
Accrued employee compensation | 15,089 | 11,795 |
Operating lease liabilities | 4,400 | 3,912 |
Freight | 3,558 | 2,690 |
Warranty obligation | 2,451 | 3,169 |
Other | 20,002 | 23,043 |
Accrued liabilities | $ 121,766 | $ 127,400 |
Operating lease, liability, Statement of Financial Position | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Valuation of Company's Financial Instruments by Various Levels (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Available-for-sale securities: U.S. treasuries | $ 19,997,000 | $ 19,990,000 |
Derivative asset | 0 | |
Liabilities: | ||
Net Amount | 348,000 | |
Fair value, measurements, recurring | ||
Assets: | ||
Available-for-sale securities: U.S. treasuries | 19,997,000 | 19,990,000 |
Total assets measured at fair value | 21,955,000 | 51,489,000 |
Liabilities: | ||
Total liabilities measured at fair value | 199,000 | 375,000 |
Fair value, measurements, recurring | Foreign currency forward contracts | ||
Assets: | ||
Derivative asset | 24,000 | 27,000 |
Liabilities: | ||
Net Amount | 199,000 | 375,000 |
Fair value, measurements, recurring | Quoted market prices in active markets (Level 1) | ||
Assets: | ||
Available-for-sale securities: U.S. treasuries | 19,997,000 | 19,990,000 |
Total assets measured at fair value | 21,931,000 | 51,462,000 |
Liabilities: | ||
Total liabilities measured at fair value | 0 | 0 |
Fair value, measurements, recurring | Quoted market prices in active markets (Level 1) | Foreign currency forward contracts | ||
Assets: | ||
Derivative asset | 0 | 0 |
Liabilities: | ||
Net Amount | 0 | 0 |
Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Assets: | ||
Available-for-sale securities: U.S. treasuries | 0 | 0 |
Total assets measured at fair value | 24,000 | 27,000 |
Liabilities: | ||
Total liabilities measured at fair value | 199,000 | 375,000 |
Fair value, measurements, recurring | Significant other observable inputs (Level 2) | Foreign currency forward contracts | ||
Assets: | ||
Derivative asset | 24,000 | 27,000 |
Liabilities: | ||
Net Amount | 199,000 | 375,000 |
Fair value, measurements, recurring | Fair Value, Inputs, Level 3 | ||
Assets: | ||
Total assets measured at fair value | 0 | |
Liabilities: | ||
Total liabilities measured at fair value | 0 | |
Fair value, measurements, recurring | Money-market funds | ||
Assets: | ||
Cash equivalents | 1,934,000 | |
Fair value, measurements, recurring | Money-market funds | Quoted market prices in active markets (Level 1) | ||
Assets: | ||
Cash equivalents | 1,934,000 | |
Fair value, measurements, recurring | Money-market funds | Significant other observable inputs (Level 2) | ||
Assets: | ||
Cash equivalents | $ 0 | |
Fair value, measurements, recurring | U.S. treasuries | ||
Assets: | ||
Cash equivalents | 31,472,000 | |
Fair value, measurements, recurring | U.S. treasuries | Quoted market prices in active markets (Level 1) | ||
Assets: | ||
Cash equivalents | 31,472,000 | |
Fair value, measurements, recurring | U.S. treasuries | Significant other observable inputs (Level 2) | ||
Assets: | ||
Cash equivalents | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Schedule of Fair Values of the Company's Derivative Instruments and the Line Items on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | $ 24 | $ 27 |
Gross Amounts of recognized liabilities | 199 | 375 |
Prepaid expenses and other current assets | Derivative assets not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | 22 | 27 |
Prepaid expenses and other current assets | Derivative assets designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized assets | 2 | 0 |
Other accrued liabilities | Derivative assets not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized liabilities | 199 | 347 |
Other accrued liabilities | Derivative assets designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of recognized liabilities | $ 0 | $ 28 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Offsetting of Derivative Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | $ 24 | $ 27 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts Of Assets Presented in the Consolidated Balance Sheets | 27 | |
Financial Instruments | (27) | |
Cash Collateral Pledged | 0 | |
Net Amount | 0 | |
HSBC | ||
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 6 | |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts Of Assets Presented in the Consolidated Balance Sheets | 6 | |
Financial Instruments | (6) | |
Cash Collateral Pledged | 0 | |
Net Amount | 0 | |
Wells Fargo Bank | ||
Offsetting of Derivative Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 24 | 21 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Of Assets Presented in the Consolidated Balance Sheets | 24 | 21 |
Financial Instruments | (24) | (21) |
Cash Collateral Pledged | 0 | 0 |
Net Amount | $ 0 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Offsetting of Derivative Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Offsetting of Derivative Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 199 | $ 375 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets | 375 | |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Financial Instruments | (27) | |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Cash Collateral Pledged | 0 | |
Net Amount | 348 | |
HSBC | ||
Offsetting of Derivative Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 83 | |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets | 83 | |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Financial Instruments | (6) | |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Cash Collateral Pledged | 0 | |
Net Amount | 77 | |
Wells Fargo Bank | ||
Offsetting of Derivative Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 199 | 292 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets | 199 | 292 |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Financial Instruments | (24) | (21) |
Gross Amounts Not Offset in the Unaudited Condensed Consolidated Balance Sheets: Cash Collateral Pledged | 0 | 0 |
Net Amount | $ 175 | $ 271 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Narrative (Details) - Foreign currency contracts $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)derivative_instrument | |
Derivative [Line Items] | |
Term of derivative contracts | 6 months |
Derivatives Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Number of derivatives entered into | derivative_instrument | 8 |
Average size of derivative contracts | $ | $ 2.4 |
Derivatives Not Designated as Hedging Instruments | Minimum | |
Derivative [Line Items] | |
Term of derivative contracts | 1 month |
Derivatives Not Designated as Hedging Instruments | Maximum | |
Derivative [Line Items] | |
Term of derivative contracts | 3 months |
Cash Flow Hedges | |
Derivative [Line Items] | |
Number of derivatives entered into | derivative_instrument | 6 |
Average size of derivative contracts | $ | $ 1.4 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Schedule of Effects and Locations of Gains or Losses Recognized in Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Revenue | $ 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | $ 357,154 | $ 370,007 | $ 464,918 |
Cost of revenue | 301,765 | 334,203 | 372,843 | ||||||||
Research and development | 60,137 | 69,384 | 58,794 | ||||||||
Sales and marketing | 49,064 | 56,985 | 52,593 | ||||||||
General and administrative | 51,096 | 47,624 | 28,209 | ||||||||
Gains (losses) on cash flow hedge | Foreign currency contracts | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Revenue | 4 | 275 | 276 | ||||||||
Cost of revenue | 0 | 0 | 0 | ||||||||
Research and development | 0 | 0 | 0 | ||||||||
Sales and marketing | 0 | 0 | 0 | ||||||||
General and administrative | 0 | 0 | 0 | ||||||||
Gains (losses) on cash flow hedge | Amount Reclassified from AOCI | Foreign currency contracts | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Revenue | (32) | 390 | 315 | ||||||||
Cost of revenue | 0 | (3) | 0 | ||||||||
Research and development | 5 | (28) | (2) | ||||||||
Sales and marketing | 4 | (44) | (28) | ||||||||
General and administrative | $ 0 | $ (13) | $ (11) |
Derivative Financial Instrume_8
Derivative Financial Instruments - Schedule of Derivatives not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other income (expense), net | Foreign currency contracts | Derivatives Not Designated as Hedging Instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on cash flow hedge | $ (95) | $ (24) | $ 589 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI, before tax | |||
Beginning balance | $ 203,376 | $ 269,502 | $ 125,419 |
Ending balance | 133,767 | 203,376 | 269,502 |
Estimated tax benefit (provision) | |||
Beginning balance, tax | 0 | 0 | 0 |
Other comprehensive income (loss) before reclassifications, tax | 0 | 0 | 0 |
Less: Amount reclassified from accumulated other comprehensive income (loss), tax | 0 | 0 | 0 |
Net current period after comprehensive income (loss), tax | 0 | 0 | 0 |
Ending balance, tax | 0 | 0 | 0 |
Total | |||
Beginning balance | 203,376 | 269,502 | 125,419 |
Other comprehensive income (loss) before reclassifications | (18) | 300 | 274 |
Less: Amount reclassified from accumulated other comprehensive income (loss) | (23) | 302 | 274 |
Total other comprehensive income (loss), net of tax | 5 | (2) | 0 |
Ending balance | 133,767 | 203,376 | 269,502 |
Unrealized gains (losses) on available-for-sale securities | |||
AOCI, before tax | |||
Beginning balance | 23 | (2) | 0 |
Other comprehensive income (loss) before reclassifications | (22) | 25 | (2) |
Less: Amount reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Total other comprehensive income (loss), before tax | (22) | 25 | (2) |
Ending balance | 1 | 23 | (2) |
Total | |||
Beginning balance | 23 | (2) | 0 |
Ending balance | 1 | 23 | (2) |
Gains (losses) on cash flow hedge | |||
AOCI, before tax | |||
Beginning balance | (25) | 2 | 0 |
Other comprehensive income (loss) before reclassifications | 4 | 275 | 276 |
Less: Amount reclassified from accumulated other comprehensive income (loss) | (23) | 302 | 274 |
Total other comprehensive income (loss), before tax | 27 | (27) | 2 |
Ending balance | 2 | (25) | 2 |
Total | |||
Beginning balance | (25) | 2 | 0 |
Ending balance | 2 | (25) | 2 |
Total | |||
AOCI, before tax | |||
Beginning balance | (2) | 0 | 0 |
Ending balance | 3 | (2) | 0 |
Total | |||
Beginning balance | (2) | 0 | 0 |
Ending balance | $ 3 | $ (2) | $ 0 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Reclassifications out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total revenue | $ 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | $ 357,154 | $ 370,007 | $ 464,918 |
Total cost of revenue | 301,765 | 334,203 | 372,843 | ||||||||
Research and development | 60,137 | 69,384 | 58,794 | ||||||||
Sales and marketing | 49,064 | 56,985 | 52,593 | ||||||||
General and administrative | 51,096 | 47,624 | 28,209 | ||||||||
Gains (losses) on cash flow hedge | |||||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total | 4 | 275 | 276 | ||||||||
Total | (23) | 302 | 274 | ||||||||
Gains (losses) on cash flow hedge | Foreign currency contracts | |||||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total revenue | 4 | 275 | 276 | ||||||||
Total cost of revenue | 0 | 0 | 0 | ||||||||
Research and development | 0 | 0 | 0 | ||||||||
Sales and marketing | 0 | 0 | 0 | ||||||||
General and administrative | 0 | 0 | 0 | ||||||||
Total | 4 | 275 | 276 | ||||||||
Amount Reclassified from AOCI | Gains (losses) on cash flow hedge | Foreign currency contracts | |||||||||||
Reclassification Out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Total revenue | (32) | 390 | 315 | ||||||||
Total cost of revenue | 0 | (3) | 0 | ||||||||
Research and development | 5 | (28) | (2) | ||||||||
Sales and marketing | 4 | (44) | (28) | ||||||||
General and administrative | 0 | (13) | (11) | ||||||||
Total | $ (23) | $ 302 | $ 274 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (104,551) | $ (103,836) | $ (79,581) |
International | 3,925 | 22,265 | 4,870 |
Loss before income taxes | $ (100,626) | $ (81,571) | $ (74,711) |
Income Taxes - Summary of Inc_2
Income Taxes - Summary of Income Tax Provision/Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||||||||||
U.S. Federal | $ 0 | $ 0 | $ 0 | ||||||||
State | 84 | 58 | 16 | ||||||||
Foreign | 438 | 4,524 | 1,425 | ||||||||
Current income tax expense (benefit) | 522 | 4,582 | 1,441 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 0 | 0 | 0 | ||||||||
State | 0 | 0 | 0 | ||||||||
Foreign | 103 | (202) | (669) | ||||||||
Deferred income tax expense (benefit) | 103 | (202) | (669) | ||||||||
Provision for income taxes | $ 182 | $ 115 | $ 183 | $ 145 | $ 3,525 | $ 286 | $ 349 | $ 220 | $ 625 | $ 4,380 | $ 772 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||||
Accruals and allowances | $ 14,389 | $ 11,334 | ||
Net operating loss carryforwards | 22,216 | 14,355 | ||
Stock-based compensation | 3,731 | 3,228 | ||
Lease liabilities | 7,063 | 8,212 | ||
Deferred revenue | 3,673 | 4,417 | ||
Tax credit carryforwards | 6,311 | 3,262 | ||
Depreciation and amortization | 2,810 | 1,030 | ||
Capitalized research and development expenses | 17,376 | 6,847 | ||
Total deferred tax assets | 77,569 | 52,685 | ||
Deferred Tax Liabilities: | ||||
Lease assets | (5,804) | (7,450) | ||
Total deferred tax liabilities | (5,804) | (7,450) | ||
Valuation Allowance | (70,496) | (43,917) | $ (24,477) | $ (15,611) |
Net deferred tax assets | $ 1,269 | $ 1,318 |
Income Taxes - Schedule of Valu
Income Taxes - Schedule of Valuation Allowance for Deferred Income Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Balance at the beginning of the period | $ 43,917 | $ 24,477 | $ 15,611 |
Additions | 31,890 | 38,336 | 13,760 |
Deductions | (5,311) | (18,896) | (4,894) |
Balance at the end of the period | $ 70,496 | $ 43,917 | $ 24,477 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Valuation Allowance | $ 70,496 | $ 43,917 | $ 24,477 | $ 15,611 |
Increase in valuation allowance during period | 26,600 | |||
Unrecognized tax benefits | $ 1,355 | $ 704 | $ 22 | $ 1,022 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands | Dec. 31, 2020USD ($) |
U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 14,028 |
U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 79,073 |
California (tax effected, net of federal benefit) | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 981 |
Other State (tax effected, net of federal benefit) | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 1,646 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands | Dec. 31, 2020USD ($) |
U.S. Federal | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 3,688 |
California | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | 2,565 |
Foreign | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward | $ 1,309 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Income Tax Rate Reconciliation, Percent (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% |
State, net of federal benefit | 4.40% | 3.00% | 5.90% |
Impact of international operations | 0.80% | 1.40% | 0.40% |
U.S. Taxes on Foreign Entities | 2.50% | (3.60%) | (1.80%) |
Stock-based compensation | (4.20%) | (2.60%) | (0.10%) |
Tax credits | 1.60% | 1.60% | 1.50% |
Change in valuation allowance | (26.40%) | (23.80%) | (25.20%) |
Non-deductible transaction costs | (0.10%) | (0.70%) | (2.60%) |
Goodwill derecognition | 0.00% | (1.20%) | 0.00% |
Others | (0.20%) | (0.50%) | (0.10%) |
Provision for income taxes | (0.60%) | (5.40%) | (1.00%) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits beginning balance | $ 704 | $ 22 | $ 1,022 |
Additions based on tax positions related to the current year | 503 | 674 | 338 |
Adjustments to Net parent investments | (1,338) | ||
Additions for tax positions of prior years | 148 | 8 | |
Unrecognized tax benefits ending balance | $ 1,355 | $ 704 | $ 22 |
Debt (Details)
Debt (Details) - USD ($) | Nov. 05, 2019 | Dec. 31, 2020 |
Short-term Debt [Line Items] | ||
Domestic cash to be maintained by financial covenant | $ 20,000,000 | |
Revolving Credit Facility | Credit Agreement | Line of Credit | ||
Short-term Debt [Line Items] | ||
Debt term (in years) | 2 years | |
Maximum borrowing capacity | $ 40,000,000 | |
Borrowing base multiplier (as a percentage) | 60.00% | |
Minimum amount of foreign subsidiaries voting interest not secured (as a percentage) | 65.00% | |
Additional interest in event of default (as a percentage) | 5.00% | |
Annual facility fee (as a percentage) | 0.25% | |
Outstanding borrowing under the credit facility | $ 0 | |
Revolving Credit Facility | Credit Agreement | Line of Credit | Prime Rate | ||
Short-term Debt [Line Items] | ||
Debt instrument, floor interest rate (as a percentage) | 5.00% | |
Basis spread on variable rate (as a percentage) | 2.25% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Jun. 15, 2020USD ($)shares | Jun. 12, 2020USD ($) | Dec. 11, 2018claim | Oct. 31, 2020USD ($) | Jun. 28, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Loss Contingencies [Line Items] | ||||||||
Option to extend lease (in years) | 5 years | |||||||
Option to terminate lease (in years) | 1 year | |||||||
Operating lease, expense | $ 1,400,000 | $ 7,000,000 | $ 7,000,000 | |||||
Number of days for non-cancellation of purchase obligations prior to expected shipment date | 30 days | |||||||
Non-cancelable purchase commitments with suppliers | $ 19,500,000 | |||||||
Number of complaints | claim | 6 | |||||||
Liabilities recorded for director and officer indemnification agreements | 0 | 0 | ||||||
Liabilities recorded for customers, distributors, and resellers indemnification agreements | $ 0 | $ 0 | ||||||
Severance agreement, termination without cause or resignation with good reason, period of health benefits continuation | 12 months | |||||||
Severance agreement, termination without cause or resignation with good reason, accelerated vesting, period of awards would have vested following termination date | 12 months | |||||||
Liabilities for executive's employment agreements | $ 0 | |||||||
Chief Executive Officer | ||||||||
Loss Contingencies [Line Items] | ||||||||
Severance agreement, termination without cause or resignation with good reason, cash severance multiple | 2 | |||||||
Severance agreement, termination without cause or resignation with good reason, during one month prior to or 12 months following change in control, period of health benefits continuation | 24 months | |||||||
Executive Officer | ||||||||
Loss Contingencies [Line Items] | ||||||||
Severance agreement, termination without cause or resignation with good reason, cash severance multiple | 1 | |||||||
Severance agreement, termination without cause or resignation with good reason, during one month prior to or 12 months following change in control, period of health benefits continuation | 12 months | |||||||
Chief Financial Officer | ||||||||
Loss Contingencies [Line Items] | ||||||||
Cash payment per separation agreement | $ 15,000 | |||||||
Annual base salary | $ 383,000 | |||||||
Annual target bonus as percentage of annual base salary | 70.00% | |||||||
Chief Financial Officer | Stock Options | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accelerated vesting, number of shares (in shares) | shares | 8,749 | |||||||
Chief Financial Officer | Stock Options | NETGEAR | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accelerated vesting, number of shares (in shares) | shares | 2,897 | |||||||
Chief Financial Officer | RSUs | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accelerated vesting, number of shares (in shares) | shares | 43,216 | |||||||
Chief Financial Officer | RSUs | NETGEAR | ||||||||
Loss Contingencies [Line Items] | ||||||||
Accelerated vesting, number of shares (in shares) | shares | 15,000 | |||||||
Federal Action | ||||||||
Loss Contingencies [Line Items] | ||||||||
Litigation class action settlement amount | $ 1,250,000 | |||||||
Payments for legal settlement | $ 1,250,000 | |||||||
Loss Liability From Committed Purchases | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency accrual | $ 1,200,000 | |||||||
46 to 60 Days | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of cancelable orders | 50.00% | |||||||
46 to 60 Days | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Required notice period prior to expected shipment date | 46 days | |||||||
46 to 60 Days | Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Required notice period prior to expected shipment date | 60 days | |||||||
31 to 45 Days | ||||||||
Loss Contingencies [Line Items] | ||||||||
Percentage of cancelable orders | 25.00% | |||||||
31 to 45 Days | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Required notice period prior to expected shipment date | 31 days | |||||||
31 to 45 Days | Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Required notice period prior to expected shipment date | 45 days | |||||||
Letters of Credit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Unused letters of credit outstanding | $ 3,600,000 | |||||||
Letters of Credit | Build-to-Suit | ||||||||
Loss Contingencies [Line Items] | ||||||||
Unused letters of credit outstanding | $ 3,100,000 | |||||||
United States (“U.S.”) | ||||||||
Loss Contingencies [Line Items] | ||||||||
Tenant improvement allowance | $ 3,500,000 | |||||||
CANADA | ||||||||
Loss Contingencies [Line Items] | ||||||||
Tenant improvement allowance | $ 450,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 5,991 | $ 4,888 |
Right-of-use assets obtained in exchange for lease liabilities | ||
Operating leases | 461 | 21,742 |
Other non-cash increases in operating right of use assets | $ 0 | $ 788 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Weighted Averages Related to Operating Leases (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted average remaining lease term | 6 years 10 months 24 days | 7 years 8 months 12 days |
Weighted average discount rate | 5.69% | 5.67% |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 5,931 | $ 5,660 |
2022 | 5,770 | 5,735 |
2023 | 4,977 | 5,589 |
2024 | 4,459 | 4,908 |
2025 | 3,186 | 4,450 |
Thereafter | 11,498 | 14,669 |
Total lease payments | 35,821 | 41,011 |
Less: interest | (6,392) | (8,098) |
Total | 29,429 | 32,913 |
Accrued liabilities | 4,400 | 3,912 |
Non-current operating lease liabilities | $ 25,029 | $ 29,001 |
Commitments and Contingencies_5
Commitments and Contingencies - Summary of Future Minimum Lease Payment Prior Year (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 5,931 | $ 5,660 |
2021 | 5,770 | 5,735 |
2022 | 4,977 | 5,589 |
2023 | 4,459 | 4,908 |
2024 | 3,186 | 4,450 |
Thereafter | 11,498 | 14,669 |
Total lease payments | 35,821 | 41,011 |
Less: interest | (6,392) | (8,098) |
Total | 29,429 | 32,913 |
Accrued liabilities | 4,400 | 3,912 |
Non-current operating lease liabilities | $ 25,029 | $ 29,001 |
Commitments and Contingencies_6
Commitments and Contingencies - Schedule of Changes in Warranty Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Balance at the beginning of the period | $ 3,169 | $ 3,712 | $ 31,756 |
Reclassified to sales returns upon adoption of ASC 606 | 0 | 0 | (28,713) |
Provision for warranty obligation made during the period | 0 | 260 | 1,477 |
Settlements made during the period | (718) | (803) | (808) |
Balance at the end of the period | $ 2,451 | $ 3,169 | $ 3,712 |
Restructuring Related Charges -
Restructuring Related Charges - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring charges | $ 44 | $ 631 |
Restructuring Related Charges_2
Restructuring Related Charges - Schedule of Severance Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 44 | $ 631 |
Cost of revenue | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 23 | 69 |
Research and development | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 262 |
Sales and marketing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 198 |
General and administrative | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 21 | $ 102 |
Restructuring Related Charges_3
Restructuring Related Charges - Summary of Accrued Restructuring and Other Charges Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Balance at the beginning of the period | $ 120 | $ 0 |
Additions | 44 | 631 |
Cash payments | (164) | (511) |
Balance at the end of the period | $ 0 | $ 120 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 03, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Sep. 29, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Additional authorized shares (in shares) | 3,788,756 | ||||||
Award modification, liability | $ 859 | ||||||
Compensation expense | $ 623 | ||||||
Chief Executive Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Accelerated share-based compensation cost | $ 7,400 | ||||||
Chief Financial Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Accelerated share-based compensation cost | $ 400 | ||||||
Reversal of share-based compensation expense | $ 1,200 | ||||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value MPSUs granted (in dollars per share) | $ 2.59 | $ 7.02 | |||||
Total unrecognized compensation | $ 1,400 | ||||||
Weighted-average period of recognition of stock based compensation (in years) | 1 year 2 months 12 days | ||||||
Stock Options | NETGEAR | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value MPSUs granted (in dollars per share) | $ 0 | $ 20.63 | |||||
Total unrecognized compensation | $ 31 | ||||||
Weighted-average period of recognition of stock based compensation (in years) | 9 months 18 days | ||||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares purchased (in shares) | 0 | ||||||
Performance-Based Restricted Stock Units, Market-Based Performance Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation | $ 27,400 | ||||||
Weighted-average period of recognition of stock based compensation (in years) | 2 years 3 months 18 days | ||||||
RSUs | NETGEAR | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation | $ 2,800 | ||||||
Weighted-average period of recognition of stock based compensation (in years) | 1 year 1 month 6 days | ||||||
2018 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Additional authorized shares (in shares) | 3,031,005 | 3,031,000 | 2,970,000 | ||||
Reserved stock for issuance, common stock (in shares) | 3,113,000 | 2,630,000 | 3,969,000 | ||||
2018 Plan | Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 4 years | ||||||
Award expiration period | 10 years | ||||||
Purchase price of common stock, percent of market price (no less than) | 100.00% | ||||||
2018 Plan | Stock Options | Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 12 months | ||||||
2018 Plan | Stock Options | Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 3 years | ||||||
2018 Plan | MPSU | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Fair value MPSUs granted (in dollars per share) | $ 4.11 | $ 4.14 | |||||
ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Additional authorized shares (in shares) | 757,751 | ||||||
ESPP | ESPP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Maximum percentage of compensation contributed by employees (as a percentage) | 15.00% | ||||||
Percentage of stock price purchased at offering date (as a percentage) | 85.00% | ||||||
Offering period (in years) | 6 months | ||||||
Reserved stock for issuance, common stock (in shares) | 1,100,000 | ||||||
ESPP | ESPP | NETGEAR | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
ESPP compensation expense | $ 200 | ||||||
Number of shares purchased (in shares) | 37,000 | ||||||
Average exercise price (in dollars per share) | $ 45.06 | ||||||
Minimum | 2018 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 3 years | ||||||
Minimum | 2018 Plan | RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 3 years | ||||||
Maximum | 2018 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 4 years | ||||||
Maximum | 2018 Plan | RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, vesting term (in years) | 4 years |
Employee Benefit Plans - Arlo S
Employee Benefit Plans - Arlo Summary of Available Shares for Future Grants (Details) - shares | Mar. 03, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of Shares | |||
Additional authorized shares (in shares) | 3,788,756 | ||
2018 Plan | |||
Number of Shares | |||
Beginning balance (in shares) | 2,630,000 | 3,969,000 | |
Additional authorized shares (in shares) | 3,031,005 | 3,031,000 | 2,970,000 |
Granted (in shares) | (7,396,000) | (6,700,000) | |
Forfeited / cancelled (in shares) | 3,569,000 | 2,011,000 | |
Shares traded for taxes (in shares) | 1,279,000 | 380,000 | |
Ending balance (in shares) | 3,113,000 | 2,630,000 |
Employee Benefit Plans - Arlo_2
Employee Benefit Plans - Arlo Summary of Available Shares for Future Grants footnote (Details) - shares shares in Thousands | Jun. 15, 2020 | Jan. 31, 2020 | Jun. 28, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
2018 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 7,396 | 6,700 | |||
Forfeited / cancelled (in shares) | 3,569 | 2,011 | |||
2018 Plan | Bonus RSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 1,100 | ||||
Executive Officer | PSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited / cancelled (in shares) | 200 | ||||
Executive Officer | Stock Options, IPO performance-based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited /cancelled (in shares) | 59 | ||||
Terminated NEO | Stock Options, IPO performance-based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited /cancelled (in shares) | 300 | ||||
CEO | Stock Options, IPO performance-based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited /cancelled (in shares) | 500 | ||||
Chief Executive Officer | Stock Options, IPO performance-based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited / cancelled (in shares) | 1,400 | ||||
Chief Financial Officer | MPSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited / cancelled (in shares) | 54 | ||||
Chief Financial Officer | Stock Options, IPO performance-based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Forfeited / cancelled (in shares) | 300 | 100 | |||
Verisure S.a.r.l | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employees transferred (in shares) | 200 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jun. 15, 2020 | Jan. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
2018 Plan | |||||
Weighted Average Exercise Price Per Share | |||||
Reserved stock for issuance, common stock (in shares) | 3,113 | 2,630 | 3,969 | ||
Forfeited / cancelled (in shares) | 3,569 | 2,011 | |||
Stock Options | |||||
Number of Shares | |||||
Beginning balance (in shares) | 6,040 | 6,040 | |||
Granted (in shares) | 0 | ||||
Exercised (in shares) | (247) | ||||
Forfeited/ cancelled (in shares) | (2,359) | ||||
Expired (in shares) | 0 | ||||
Ending balance (in shares) | 3,434 | 6,040 | |||
Number of shares, Vested and expected to vest (in shares) | 3,434 | ||||
Number of shares, Exercisable Options (in shares) | 2,998 | ||||
Weighted Average Exercise Price Per Share | |||||
Beginning balance (in dollars per share) | $ 11.56 | $ 11.56 | |||
Granted (in dollars per share) | 0 | ||||
Exercised (in dollars per share) | 6.98 | ||||
Forfeited / cancelled (in dollars per share) | 14.72 | ||||
Expired (in dollars per share) | 0 | ||||
Ending balance (in dollars per share) | 9.72 | $ 11.56 | |||
Weighted average exercise price, Vested and expected to vest (in dollars per share) | 9.72 | ||||
Weighted average exercise price, Exercisable Options (in dollars per share) | $ 9.10 | ||||
Weighted average remaining term (in years) | 4 years 9 months 18 days | ||||
Outstanding shares, Aggregate intrinsic value | $ 1,595 | ||||
Vested and expected to vest, Weighted average remaining contractual term (in years) | 4 years 9 months 18 days | ||||
Vested and expected to vest, Aggregate intrinsic value | $ 1,595 | ||||
Exercisable Options, Weighted average remaining contractual term (in years) | 4 years 5 months 8 days | ||||
Exercisable Options, Aggregate intrinsic value | $ 1,569 | ||||
Stock Options, IPO performance-based | 2018 Plan | |||||
Weighted Average Exercise Price Per Share | |||||
Reserved stock for issuance, common stock (in shares) | 2,800 | ||||
Stock Options, IPO performance-based | Chief Executive Officer | |||||
Weighted Average Exercise Price Per Share | |||||
Forfeited / cancelled (in shares) | 1,400 | ||||
Stock Options, IPO performance-based | Chief Financial Officer | |||||
Weighted Average Exercise Price Per Share | |||||
Forfeited / cancelled (in shares) | 300 | 100 |
Employee Benefit Plans - Arlo E
Employee Benefit Plans - Arlo Estimated Volatility Assumption (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of options exercised | $ 200 | $ 0 | $ 0 |
Total fair value of options vested | $ 1,000 | $ 3,100 | $ 0 |
Weighted-average grant date fair value per share of options granted (in dollars per share) | $ 2.59 | $ 7.02 |
Employee Benefit Plans - Arlo_3
Employee Benefit Plans - Arlo Schedule of Ranges of Outstanding and Exercisable Stock Options (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | $ 3.90 |
Exercise price range, Upper range limit (in dollars per share) | 16 |
3.90 - 6.67 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 3.90 |
Exercise price range, Upper range limit (in dollars per share) | 6.67 |
6.68 - 7.83 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 6.68 |
Exercise price range, Upper range limit (in dollars per share) | 7.83 |
8.11 - 8.76 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 8.11 |
Exercise price range, Upper range limit (in dollars per share) | 8.76 |
10.09 - 14.39 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 10.09 |
Exercise price range, Upper range limit (in dollars per share) | 14.39 |
16.00 - 16.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 16 |
Exercise price range, Upper range limit (in dollars per share) | 16 |
19.19 - 19.19 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 19.19 |
Exercise price range, Upper range limit (in dollars per share) | 19.19 |
20.10 - 20.10 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 20.10 |
Exercise price range, Upper range limit (in dollars per share) | 20.10 |
21.86 - 21.86 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 21.86 |
Exercise price range, Upper range limit (in dollars per share) | 21.86 |
29.23 - 29.23 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 29.23 |
Exercise price range, Upper range limit (in dollars per share) | 29.23 |
19.19 - 29.23 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, Lower range limit (in dollars per share) | 19.19 |
Exercise price range, Upper range limit (in dollars per share) | $ 29.23 |
Stock Options | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 3,434 |
Options outstanding, Weighted- average remaining contractual life | 4 years 9 months 18 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 9.72 |
Options exercisable, Number of exercisable options (in shares) | shares | 2,998 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 9.10 |
Stock Options | 3.90 - 6.67 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 778 |
Options outstanding, Weighted- average remaining contractual life | 3 years 3 months 3 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 6.47 |
Options exercisable, Number of exercisable options (in shares) | shares | 772 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 6.49 |
Stock Options | 6.68 - 7.83 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 688 |
Options outstanding, Weighted- average remaining contractual life | 1 year 3 months |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 6.97 |
Options exercisable, Number of exercisable options (in shares) | shares | 688 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 6.97 |
Stock Options | 8.11 - 8.76 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 892 |
Options outstanding, Weighted- average remaining contractual life | 5 years 10 months 6 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 8.46 |
Options exercisable, Number of exercisable options (in shares) | shares | 830 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 8.43 |
Stock Options | 10.09 - 14.39 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 596 |
Options outstanding, Weighted- average remaining contractual life | 7 years 1 month 6 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 13.98 |
Options exercisable, Number of exercisable options (in shares) | shares | 428 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 13.98 |
Stock Options | 16.00 - 16.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 480 |
Options outstanding, Weighted- average remaining contractual life | 7 years 7 months 2 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 16 |
Options exercisable, Number of exercisable options (in shares) | shares | 280 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 16 |
Stock Options | 19.19 - 19.19 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 7 |
Options outstanding, Weighted- average remaining contractual life | 1 year 6 months 21 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 19.19 |
Options exercisable, Number of exercisable options (in shares) | shares | 7 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 19.19 |
Stock Options | 20.10 - 20.10 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 2 |
Options outstanding, Weighted- average remaining contractual life | 1 year 3 months 18 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 20.10 |
Options exercisable, Number of exercisable options (in shares) | shares | 2 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 20.10 |
Stock Options | 21.86 - 21.86 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 3 |
Options outstanding, Weighted- average remaining contractual life | 2 years 1 month 6 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 21.86 |
Options exercisable, Number of exercisable options (in shares) | shares | 3 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 21.86 |
Stock Options | 29.23 - 29.23 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 4 |
Options outstanding, Weighted- average remaining contractual life | 6 years 9 months 18 days |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 29.23 |
Options exercisable, Number of exercisable options (in shares) | shares | 0 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 0 |
Stock Options | 19.19 - 29.23 | NETGEAR | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of outstanding options (in shares) | shares | 16 |
Options outstanding, Weighted- average remaining contractual life | 3 years |
Options outstanding, Weighted- average exercise price per share (in dollars per share) | $ 22.49 |
Options exercisable, Number of exercisable options (in shares) | shares | 12 |
Options exercisable, Weighted- average exercise price per share (in dollars per share) | $ 20.11 |
Employee Benefit Plans - Arlo W
Employee Benefit Plans - Arlo Weighted-Average Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | |
Risk-free interest rate | 2.28% | 2.86% | |
Expected volatility | 73.00% | 40.00% | |
Dividend yield | 0.00% | 0.00% | |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 months | 6 months | |
Risk-free interest rate | 0.84% | 2.49% | |
Expected volatility | 102.00% | 97.60% | |
Dividend yield | 0.00% | 0.00% |
Employee Benefit Plans - NETGEA
Employee Benefit Plans - NETGEAR Schedule of Stock Option Activity (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Shares | |
Beginning balance (in shares) | shares | 6,040 |
Exercised (in shares) | shares | (247) |
Forfeited/ cancelled (in shares) | shares | (2,359) |
Expired (in shares) | shares | 0 |
Ending balance (in shares) | shares | 3,434 |
Number of shares, Vested and expected to vest (in shares) | shares | 3,434 |
Number of shares, Exercisable Options (in shares) | shares | 2,998 |
Weighted Average Exercise Price Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 11.56 |
Exercised (in dollars per share) | $ / shares | 6.98 |
Forfeited / cancelled (in dollars per share) | $ / shares | 14.72 |
Expired (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 9.72 |
Weighted average exercise price, Vested and expected to vest (in dollars per share) | $ / shares | 9.72 |
Weighted average exercise price, Exercisable Options (in dollars per share) | $ / shares | $ 9.10 |
Weighted average remaining term (in years) | 4 years 9 months 18 days |
Outstanding shares, Aggregate intrinsic value | $ | $ 1,595 |
Vested and expected to vest, Weighted average remaining contractual term (in years) | 4 years 9 months 18 days |
Vested and expected to vest, Aggregate intrinsic value | $ | $ 1,595 |
Exercisable Options, Weighted average remaining contractual term (in years) | 4 years 5 months 8 days |
Exercisable Options, Aggregate intrinsic value | $ | $ 1,569 |
NETGEAR | |
Number of Shares | |
Beginning balance (in shares) | shares | 205 |
Exercised (in shares) | shares | (142) |
Forfeited/ cancelled (in shares) | shares | (47) |
Expired (in shares) | shares | 0 |
Ending balance (in shares) | shares | 16 |
Number of shares, Vested and expected to vest (in shares) | shares | 16 |
Number of shares, Exercisable Options (in shares) | shares | 12 |
Weighted Average Exercise Price Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 25.94 |
Exercised (in dollars per share) | $ / shares | 22.74 |
Forfeited / cancelled (in dollars per share) | $ / shares | 36.73 |
Expired (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 22.49 |
Weighted average exercise price, Vested and expected to vest (in dollars per share) | $ / shares | 22.49 |
Weighted average exercise price, Exercisable Options (in dollars per share) | $ / shares | $ 20.11 |
Weighted average remaining term (in years) | 3 years |
Outstanding shares, Aggregate intrinsic value | $ | $ 288 |
Vested and expected to vest, Weighted average remaining contractual term (in years) | 3 years |
Vested and expected to vest, Aggregate intrinsic value | $ | $ 288 |
Exercisable Options, Weighted average remaining contractual term (in years) | 1 year 7 months 28 days |
Exercisable Options, Aggregate intrinsic value | $ | $ 241 |
Employee Benefit Plans - NETG_2
Employee Benefit Plans - NETGEAR Estimated Volatility Assumption (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of options exercised | $ 200 | $ 0 | $ 0 |
Total fair value of options vested | 1,000 | $ 3,100 | $ 0 |
Weighted-average grant date fair value per share of NETGEAR’s stock options granted to employees specifically identifiable to Arlo (in dollars per share) | $ 2.59 | $ 7.02 | |
NETGEAR | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of options exercised | 600 | $ 600 | $ 600 |
Total fair value of options vested | $ 0 | $ 800 | $ 1,100 |
Weighted-average grant date fair value per share of NETGEAR’s stock options granted to employees specifically identifiable to Arlo (in dollars per share) | $ 0 | $ 20.63 |
Employee Benefit Plans - NETG_3
Employee Benefit Plans - NETGEAR Weighted-Average Assumptions (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 years 3 months 18 days | 6 years 3 months 18 days | |
Risk-free interest rate | 2.28% | 2.86% | |
Expected volatility | 73.00% | 40.00% | |
Dividend yield | 0.00% | 0.00% | |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 months | 6 months | |
Risk-free interest rate | 0.84% | 2.49% | |
Expected volatility | 102.00% | 97.60% | |
Dividend yield | 0.00% | 0.00% | |
Number of shares purchased (in shares) | 0 | ||
NETGEAR | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 4 years 4 months 24 days | ||
Risk-free interest rate | 2.32% | ||
Expected volatility | 30.90% | ||
Dividend yield | 0.00% | ||
NETGEAR | ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 6 months | ||
Risk-free interest rate | 1.81% | ||
Expected volatility | 37.10% | ||
Dividend yield | 0.00% |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of RSU Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Jun. 15, 2020shares | Sep. 27, 2020segment | Jun. 28, 2020shares | Sep. 29, 2019shares | Dec. 31, 2020USD ($)segment$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / shares |
2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Granted (in shares) | 7,396 | 6,700 | |||||
RSUs | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Granted (in dollars per share) | $ / shares | $ 3.03 | $ 4.77 | $ 14.46 | ||||
Bonus RSU | 2018 Plan | |||||||
Number of Shares | |||||||
Granted (in shares) | 1,100 | ||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Granted (in shares) | 1,100 | ||||||
Arlo | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Weighted average remaining contractual term (in years) | 1 year 5 months 4 days | ||||||
Outstanding shares, Aggregate intrinsic value | $ | $ 82,287 | ||||||
Arlo | RSUs | |||||||
Number of Shares | |||||||
Beginning balance (in shares) | 7,851 | ||||||
Granted (in shares) | 7,396 | ||||||
Vested (in shares) | (3,474) | ||||||
Forfeited / Cancelled (in shares) | (1,210) | ||||||
Ending balance (in shares) | 10,563 | 7,851 | |||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Beginning Balance (in dollars per share) | $ / shares | $ 6.50 | ||||||
Granted (in dollars per share) | $ / shares | 3.03 | ||||||
Vested (in dollars per share) | $ / shares | 6.38 | ||||||
Forfeited (in dollars per share) | $ / shares | 4.63 | ||||||
Ending Balance (in dollars per share) | $ / shares | $ 4.33 | $ 6.50 | |||||
Granted (in shares) | 7,396 | ||||||
Vested (in shares) | 3,474 | ||||||
Arlo | RSU, PSU, MPSU | |||||||
Number of Shares | |||||||
Granted (in shares) | 800 | ||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Granted (in shares) | 800 | ||||||
Arlo | PSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Threshold (as a percentage) | 120.00% | ||||||
Arlo | MPSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vesting period | 3 years | ||||||
Positive movement of benchmark (multiplier) | 3.3 | ||||||
Negative movement of benchmark (multiplier) | 2.5 | ||||||
Positive movement of benchmark (as a percentage) | 3.30% | ||||||
Negative movement of benchmark (as a percentage) | 2.50% | ||||||
Movement of benchmark, increment (as a percentage) | 1.00% | ||||||
Threshold (as a percentage) | 30.00% | ||||||
NETGEAR | RSUs | |||||||
Number of Shares | |||||||
Beginning balance (in shares) | 278 | ||||||
Vested (in shares) | (129) | ||||||
Forfeited / Cancelled (in shares) | (22) | ||||||
Ending balance (in shares) | 127 | 278 | |||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Beginning Balance (in dollars per share) | $ / shares | $ 36.14 | ||||||
Granted (in dollars per share) | $ / shares | $ 67.24 | ||||||
Vested (in dollars per share) | $ / shares | 34.53 | ||||||
Forfeited (in dollars per share) | $ / shares | 36.08 | ||||||
Ending Balance (in dollars per share) | $ / shares | $ 37.81 | $ 36.14 | |||||
Weighted average remaining contractual term (in years) | 7 months 28 days | ||||||
Outstanding shares, Aggregate intrinsic value | $ | $ 5,147 | ||||||
Vested (in shares) | 129 | ||||||
Maximum | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vesting period | 4 years | ||||||
Maximum | RSUs | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vesting period | 4 years | ||||||
Maximum | PSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Number of shares that can be earned of targeted award (as a percentage) | 120.00% | ||||||
Maximum | Arlo | MPSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Threshold (as a percentage) | 200.00% | ||||||
Minimum | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vesting period | 3 years | ||||||
Minimum | RSUs | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vesting period | 3 years | ||||||
Minimum | PSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Number of shares that can be earned of targeted award (as a percentage) | 75.00% | ||||||
Executive Officer | RSUs | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Number of annual vesting installments | segment | 3 | 3 | |||||
Executive Officer | PSU | |||||||
Number of Shares | |||||||
Forfeited / Cancelled (in shares) | (200) | ||||||
Executive Officer | PSU | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Number of annual vesting installments | segment | 3 | ||||||
Executive Officer | Arlo | RSUs | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Awards granted, percentage | 50.00% | ||||||
Executive Officer | Arlo | RSUs | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Percentage of total grants | 50.00% | ||||||
Executive Officer | Arlo | PSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Awards granted, percentage | 25.00% | ||||||
Executive Officer | Arlo | PSU | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Percentage of total grants | 25.00% | ||||||
Executive Officer | Arlo | MPSU | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Awards granted, percentage | 25.00% | ||||||
Executive Officer | Arlo | MPSU | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Percentage of total grants | 25.00% | ||||||
Executive Officer | Arlo | RSUs, PSUs And MPSUs | 2018 Plan | |||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Granted (in shares) | 2,000 | ||||||
Chief Financial Officer | MPSU | |||||||
Number of Shares | |||||||
Forfeited / Cancelled (in shares) | (54) | ||||||
Chief Financial Officer | Arlo | RSUs | |||||||
Number of Shares | |||||||
Vested (in shares) | (43) | ||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vested (in shares) | 43 | ||||||
Chief Financial Officer | NETGEAR | RSUs | |||||||
Number of Shares | |||||||
Vested (in shares) | (15) | ||||||
Weighted Average Grant Date Fair Value Per Share | |||||||
Vested (in shares) | 15 |
Employee Benefit Plans - Arlo R
Employee Benefit Plans - Arlo RSU Estimated Volatility Assumption (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of RSUs vested (the release date fair value) | $ 13,020 | $ 5,510 | $ 40 |
Total fair value of RSUs vested (the grant date fair value) | $ 22,150 | $ 12,900 | $ 40 |
RSU granted weighted-average fair value per share (in dollars per share) | $ 3.03 | $ 4.77 | $ 14.46 |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimate Fair Value at Grant Date (Details) - 2018 Plan - MPSU | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 3 years | 3 years |
Risk-free interest rate | 0.24% | 1.52% |
Expected volatility | 69.30% | 65.10% |
Dividend yield | 0.00% | 0.00% |
Stock Beta | 0.48 | 0.30 |
Employee Benefit Plans - NETG_4
Employee Benefit Plans - NETGEAR RSU Estimated Volatility Assumption (Details) - RSUs - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of RSUs vested (the release date fair value) | $ 13,020 | $ 5,510 | $ 40 |
Total fair value of RSUs vested (the grant date fair value) | $ 22,150 | $ 12,900 | $ 40 |
RSU granted weighted-average fair value per share (in dollars per share) | $ 3.03 | $ 4.77 | $ 14.46 |
NETGEAR | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of RSUs vested (the release date fair value) | $ 3,200 | $ 5,800 | $ 6,900 |
Total fair value of RSUs vested (the grant date fair value) | $ 4,500 | $ 5,600 | $ 5,000 |
RSU granted weighted-average fair value per share (in dollars per share) | $ 67.24 |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, Restricted Stock Awards, and the Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 35,247 | $ 22,894 | $ 12,879 |
Direct | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 8,831 | ||
Indirect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 4,048 | ||
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 2,961 | 2,013 | 1,191 |
Cost of revenue | Direct | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 608 | ||
Cost of revenue | Indirect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 583 | ||
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 9,055 | 6,868 | 3,474 |
Research and development | Direct | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 3,078 | ||
Research and development | Indirect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 396 | ||
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 4,106 | 3,859 | 2,961 |
Sales and marketing | Direct | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,992 | ||
Sales and marketing | Indirect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 969 | ||
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 19,125 | $ 10,154 | 5,253 |
General and administrative | Direct | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 3,153 | ||
General and administrative | Indirect | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 2,100 |
Employee Benefit Plans - 401(k)
Employee Benefit Plans - 401(k) Plan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum annual contributions per employee (as a percentage) | 100.00% | ||||
Employer matching contribution, percent of employees' gross pay (as a percentage) | 50.00% | ||||
Maximum matching contribution by employer | $ 8,000 | $ 4,000 | |||
Cost recognized | $ 900,000 | $ 1,500,000 | |||
NETGEAR | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum annual contributions per employee (as a percentage) | 100.00% | ||||
Employer matching contribution, percent of employees' gross pay (as a percentage) | 50.00% | ||||
Maximum matching contribution by employer | $ 6,000 | ||||
Cost recognized | $ 500,000 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 02, 2018 | Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 02, 2018 | Aug. 02, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||
Stock issued during period, common stock (in shares) | 62,499 | 62,500 | |||||||||||||
Numerator: | |||||||||||||||
Net loss | $ (15,210) | $ (17,459) | $ (29,256) | $ (39,326) | $ 19,615 | $ (30,590) | $ (33,692) | $ (41,284) | $ (45,849) | $ (29,634) | $ (101,251) | $ (85,951) | $ (75,483) | ||
Denominator: | |||||||||||||||
Weighted average common shares - basic (in shares) | 78,084 | 75,074 | 67,231 | ||||||||||||
Potentially dilutive common shares (in shares) | 0 | 0 | 0 | ||||||||||||
Stock option and RSU conversion (in shares) | 0 | 0 | 0 | ||||||||||||
Weighted average common shares - dilutive (in shares) | 78,084 | 75,074 | 67,231 | ||||||||||||
Basic net loss per share (in dollars per share) | $ (0.19) | $ (0.22) | $ (0.38) | $ (0.51) | $ 0.26 | $ (0.41) | $ (0.45) | $ (0.55) | $ (1.30) | $ (1.14) | $ (1.12) | ||||
Diluted net loss per share (in dollars per share) | $ (0.19) | $ (0.22) | $ (0.38) | $ (0.51) | $ 0.26 | $ (0.41) | $ (0.45) | $ (0.55) | $ (1.30) | $ (1.14) | $ (1.12) | ||||
Anti-dilutive employee stock-based awards, excluded (in shares) | 5,623 | 9,692 | 1,109 | ||||||||||||
2018 Plan | NETGEAR | |||||||||||||||
Denominator: | |||||||||||||||
Converted at Distribution (in shares) | 6,800 | 6,800 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020segmentregioncustomer | Dec. 31, 2019customer | Dec. 31, 2018customer | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 1 | ||
Number of operating segments | 1 | ||
Number of geographic regions in which the company conducts business | region | 3 | ||
Number of customers | customer | 4 | 2 | 3 |
Customer One | Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk (as a percentage) | 20.60% | 32.30% | 24.40% |
Customer Two | Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk (as a percentage) | 17.30% | 10.10% | 17.50% |
Customer Three | Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk (as a percentage) | 14.60% | 16.60% | |
Customer Four | Revenue | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk (as a percentage) | 12.20% |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Net Revenue by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | $ 357,154 | $ 370,007 | $ 464,918 |
United States (“U.S.”) | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 255,599 | 271,502 | 359,936 | ||||||||
Americas (excluding U.S.) | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 13,796 | 17,658 | 16,869 | ||||||||
EMEA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 61,832 | 57,232 | 65,462 | ||||||||
APAC | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 25,927 | $ 23,615 | $ 22,651 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Long-Lived Asset by Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 15,821 | $ 21,352 |
United States (“U.S.”) | ||
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 12,644 | 17,100 |
Americas (excluding U.S.) | ||
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 629 | 904 |
EMEA | ||
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 234 | 316 |
China | ||
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 1,821 | 2,089 |
APAC (excluding China) | ||
Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 493 | $ 943 |
Quarterly Unaudited Financial_3
Quarterly Unaudited Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 5 Months Ended | 7 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 31, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 02, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Total revenue | $ 114,836 | $ 110,236 | $ 66,632 | $ 65,450 | $ 122,413 | $ 106,116 | $ 83,598 | $ 57,880 | $ 357,154 | $ 370,007 | $ 464,918 | ||
Gross profit | 24,538 | 21,409 | 5,489 | 3,953 | 13,706 | 10,503 | 9,650 | 1,945 | 55,389 | 35,804 | 92,075 | ||
Provision for (benefit from) income taxes | 182 | 115 | 183 | 145 | 3,525 | 286 | 349 | 220 | 625 | 4,380 | 772 | ||
Net loss | $ (15,210) | $ (17,459) | $ (29,256) | $ (39,326) | $ 19,615 | $ (30,590) | $ (33,692) | $ (41,284) | $ (45,849) | $ (29,634) | $ (101,251) | $ (85,951) | $ (75,483) |
Net income (loss) per share—basic (in dollars per share) | $ (0.19) | $ (0.22) | $ (0.38) | $ (0.51) | $ 0.26 | $ (0.41) | $ (0.45) | $ (0.55) | $ (1.30) | $ (1.14) | $ (1.12) | ||
Net income (loss) per share—diluted (in dollars per share) | $ (0.19) | $ (0.22) | $ (0.38) | $ (0.51) | $ 0.26 | $ (0.41) | $ (0.45) | $ (0.55) | $ (1.30) | $ (1.14) | $ (1.12) |
Uncategorized Items - arlo-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201409Member |
Net Parent Investment [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ (29,634,000) |
Retained Earnings [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ (45,849,000) |