Schedule of Reportable Segments and Reconciliation of Segment Contribution Income to Income Before Income Taxes |
Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows: | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, 2018 | | October 1, 2017 | | September 30, 2018 | | October 1, 2017 | | (In thousands, except percentage data) | Net revenue: | | | | | | | | Arlo | $ | 131,174 |
| | $ | 110,460 |
| | $ | 332,197 |
| | $ | 249,904 |
| Connected Home | 194,684 |
| | 183,099 |
| | 563,628 |
| | 563,365 |
| SMB | 74,728 |
| | 61,924 |
| | 216,554 |
| | 196,594 |
| Total net revenue | $ | 400,586 |
| | $ | 355,483 |
| | $ | 1,112,379 |
| | $ | 1,009,863 |
| Contribution income: | | | | | | | | Arlo | $ | 8,495 |
| | $ | 15,230 |
| | $ | 12,813 |
| | $ | 18,723 |
| Arlo contribution margin | 6.5 | % | | 13.8 | % | | 3.9 | % | | 7.5 | % | Connected Home | $ | 31,283 |
| | $ | 24,546 |
| | $ | 87,143 |
| | $ | 81,382 |
| Connected Home contribution margin | 16.1 | % | | 13.4 | % | | 15.5 | % | | 14.4 | % | SMB | $ | 21,200 |
| | $ | 12,583 |
| | $ | 58,130 |
| | $ | 47,839 |
| SMB contribution margin | 28.4 | % | | 20.3 | % | | 26.8 | % | | 24.3 | % | Total segment contribution income | $ | 60,978 |
| | $ | 52,359 |
| | $ | 158,086 |
| | $ | 147,944 |
| Corporate and unallocated costs | (32,454 | ) | | (18,740 | ) | | (82,003 | ) | | (53,974 | ) | Amortization of intangibles (1) | (2,304 | ) | | (2,608 | ) | | (7,111 | ) | | (10,136 | ) | Stock-based compensation expense | (9,554 | ) | | (5,583 | ) | | (26,674 | ) | | (16,412 | ) | Separation expense | (7,054 | ) | | — |
| | (25,822 | ) | | — |
| Restructuring and other charges | (1 | ) | | (19 | ) | | (1,368 | ) | | (78 | ) | Litigation reserves, net | — |
| | (15 | ) | | (5 | ) | | (68 | ) | Interest income | 1,490 |
| | 501 |
| | 3,310 |
| | 1,388 |
| Other income (expense), net | 829 |
| | 666 |
| | 638 |
| | 1,384 |
| Income before income taxes | $ | 11,930 |
| | $ | 26,561 |
| | $ | 19,051 |
| | $ | 70,048 |
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_________________________ | | (1) | Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue. |
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Schedule of Net Revenue by Geography |
The following table shows net revenue by geography for the periods indicated: | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, 2018 | | October 1, 2017 | | September 30, 2018 | | October 1, 2017 | | (In thousands) | United States (U.S.) | $ | 280,639 |
| | $ | 235,584 |
| | $ | 762,619 |
| | $ | 663,096 |
| Americas (excluding U.S.) | 8,145 |
| | 8,804 |
| | 19,611 |
| | 19,870 |
| EMEA | 64,917 |
| | 62,161 |
| | 200,227 |
| | 175,810 |
| APAC | 46,885 |
| | 48,934 |
| | 129,922 |
| | 151,087 |
| Total net revenue | $ | 400,586 |
| | $ | 355,483 |
| | $ | 1,112,379 |
| | $ | 1,009,863 |
|
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Schedule of Long-Lived Asset By Geographic Areas |
Long-lived assets include purchased intangibles, goodwill and property and equipment. The Company's property and equipment are located in the following geographic locations: | | | | | | | | | | As of | | September 30, 2018 | | December 31, 2017 | | (In thousands) | United States ("U.S.") | $ | 41,799 |
| | $ | 9,216 |
| Americas (excluding U.S.) | 4,189 |
| | 1,807 |
| EMEA | 386 |
| | 141 |
| China | 7,021 |
| | 6,803 |
| APAC (excluding China) | 3,252 |
| | 2,693 |
| Total property and equipment, net | $ | 56,647 |
| | $ | 20,660 |
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