QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to Section 12(b) of the Act: | ||
(Title of each class) | (Trading Symbol) | (Name of each exchange on which registered) |
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Class | Outstanding as of August 4, 2020 | |
Common Stock, $0.0003 par value per share |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II: OTHER INFORMATION | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 1. | Financial Statements (Unaudited) |
June 30, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Accounts receivable, net of allowance | |||||||
Other receivables | |||||||
Inventories | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Intangible assets, net | |||||||
Goodwill | |||||||
Deferred commissions | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
Liabilities and stockholders' equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | $ | |||||
Accrued payroll and other current liabilities | |||||||
Deferred revenue, current | |||||||
Total current liabilities | |||||||
Deferred revenue, long-term | |||||||
Convertible senior notes, net | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 9) | |||||||
Stockholders' equity | |||||||
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of June 30, 2020 and December 31, 2019; zero shares issued and outstanding | |||||||
Common stock, $0.0003 par value - 100,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 32,347,972 and 31,660,709 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated other comprehensive income | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | |||||||||||||||
Product | $ | $ | $ | $ | |||||||||||
Service | |||||||||||||||
Total revenue | |||||||||||||||
Cost of revenue | |||||||||||||||
Product | |||||||||||||||
Service | |||||||||||||||
Total cost of revenue | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Total operating expenses | |||||||||||||||
Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest income | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income (expense), net | ( | ) | ( | ) | ( | ) | |||||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Benefit from (provision for) income taxes | ( | ) | |||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Loss per share | |||||||||||||||
Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Weighted average shares used to compute net loss per share | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Other comprehensive loss, net: | |||||||||||||||
Change in unrealized gain on investments, net of tax | |||||||||||||||
Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Common stock | Additional paid-in capital | Accum. other comprehensive income (loss) | Accumulated deficit | Total stockholders’ equity | |||||||||||||
Shares | Amount | ||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Exercise of stock options | — | — | — | ||||||||||||||
RSUs released net of shares withheld for tax settlement | — | ( | ) | — | — | ( | ) | ||||||||||
Employee stock-based compensation expense | — | — | — | — | |||||||||||||
Net loss | — | — | — | — | ( | ) | ( | ) | |||||||||
Other comprehensive gain | — | — | — | — | |||||||||||||
Balance at March 31, 2019 | ( | ) | ( | ) | |||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||
RSUs released net of shares withheld for tax settlement | — | ( | ) | — | — | ( | ) | ||||||||||
Common stock issued under employee stock purchase plan | |||||||||||||||||
Employee stock-based compensation expense | — | — | — | — | |||||||||||||
Net loss | — | — | — | — | ( | ) | ( | ) | |||||||||
Other comprehensive gain | — | — | — | — | |||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ |
Balance at December 31, 2019 | $ | $ | $ | $ | ( | ) | $ | ||||||||||
Exercise of stock options | — | — | — | ||||||||||||||
RSUs released net of shares withheld for tax settlement | — | ( | ) | — | — | ( | ) | ||||||||||
Employee stock-based compensation expense | — | — | — | — | |||||||||||||
Net loss | — | — | — | — | ( | ) | ( | ) | |||||||||
Other comprehensive loss | — | — | — | ( | ) | — | ( | ) | |||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
Exercise of stock options | — | — | — | ||||||||||||||
RSUs released net of shares withheld for tax settlement | — | ( | ) | — | — | ( | ) | ||||||||||
Common stock issued under employee stock purchase plan | — | — | — | ||||||||||||||
Employee stock-based compensation expense | — | — | — | — | |||||||||||||
Net loss | — | — | — | — | ( | ) | ( | ) | |||||||||
Other comprehensive gain | — | — | — | — | |||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ |
Six months ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | |||||||
Change in lease-related performance obligations | ( | ) | ( | ) | |||
Stock-based compensation expense | |||||||
Amortization of debt discount and issuance costs | |||||||
Other | |||||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | |||||||
Other receivables | ( | ) | ( | ) | |||
Inventories | ( | ) | ( | ) | |||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Deferred commissions | ( | ) | |||||
Accounts payable | ( | ) | ( | ) | |||
Accrued payroll and other liabilities | ( | ) | |||||
Deferred revenue | ( | ) | ( | ) | |||
Net cash provided by operating activities | |||||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | ( | ) | ( | ) | |||
Purchase of short-term investments | ( | ) | ( | ) | |||
Maturities of short-term investments | |||||||
Sales of short-term investments | |||||||
Net cash provided by (used in) investing activities | ( | ) | |||||
Cash flows from financing activities | |||||||
Cash from lease-related performance obligations | |||||||
Proceeds from issuance of common stock from the employee stock purchase plan | |||||||
Proceeds from exercise of stock options | |||||||
Tax withholdings paid on behalf of employees for net share settlement | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Net increase in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Property and equipment in accounts payable and accrued liabilities | $ | $ |
1. |
2. | Revenue, deferred revenue and deferred commissions |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Product revenue | |||||||||||||||
Device | $ | $ | $ | $ | |||||||||||
Software | |||||||||||||||
Total product | |||||||||||||||
Service revenue | |||||||||||||||
Maintenance and support | |||||||||||||||
Professional services and training | |||||||||||||||
Total service | |||||||||||||||
Total revenue | $ | $ | $ | $ |
(in thousands) | March 31, 2020 | Additions | Commissions Recognized | June 30, 2020 | |||||||||||
Deferred commissions | $ | $ | $ | ( | ) | $ |
(in thousands) | December 31, 2019 | Additions | Commissions Recognized | June 30, 2020 | |||||||||||
Deferred commissions | $ | $ | $ | ( | ) | $ |
(in thousands) | March 31, 2020 | Additions | Revenue Recognized | June 30, 2020 | |||||||||||
Deferred revenue | $ | $ | $ | ( | ) | $ |
(in thousands) | December 31, 2019 | Additions | Revenue Recognized | June 30, 2020 | |||||||||||
Deferred revenue | $ | $ | $ | ( | ) | $ |
3. | Fair Value of Financial Instruments |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||
Assets | |||||||||||||||||||
Money market funds | $ | $ | $ | $ | $ | $ | |||||||||||||
Commercial paper | |||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||
Corporate debt securities | |||||||||||||||||||
Total assets measured at fair value | $ | $ | $ | $ | $ | $ |
4. | Cash, Cash Equivalents and Short-Term Investments |
As of June 30, 2020 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair value | ||||||||||||
Cash and cash equivalents: | |||||||||||||||
Demand deposits and other cash | $ | $ | $ | $ | |||||||||||
Money market funds | |||||||||||||||
Total cash and cash equivalents | |||||||||||||||
Short-Term Investments: | |||||||||||||||
Commercial paper | ( | ) | |||||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Total short-term investments | ( | ) | |||||||||||||
Total cash, cash equivalents and short-term investments | $ | $ | $ | ( | ) | $ |
As of December 31, 2019 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair value | ||||||||||||
Cash and cash equivalents: | |||||||||||||||
Demand deposits and other cash | $ | $ | $ | $ | |||||||||||
Money market funds | |||||||||||||||
Total cash and cash equivalents | |||||||||||||||
Short-Term Investments: | |||||||||||||||
Commercial paper | ( | ) | |||||||||||||
U.S. government agency securities | |||||||||||||||
Corporate debt securities | ( | ) | |||||||||||||
Total short-term investments | ( | ) | |||||||||||||
Total cash, cash equivalents and short-term investments | $ | $ | $ | ( | ) | $ |
(in thousands) | One year or shorter | Between 1 and 2 years | Total | ||||||||
Balances as of June 30, 2020 | |||||||||||
Cash and cash equivalents (1) | $ | $ | $ | ||||||||
Short-term investments | |||||||||||
Cash, cash equivalents and short-term investments | $ | $ | $ | ||||||||
Balances as of December 31, 2019 | |||||||||||
Cash and cash equivalents (1) | $ | $ | $ | ||||||||
Short-term investments | |||||||||||
Cash, cash equivalents and short-term investments | $ | $ | $ | ||||||||
(1) Includes demand deposits and other cash, money market funds and other cash equivalent securities, all with 0-90 day maturity at purchase. |
5. | Loss Per Share |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Denominator: | |||||||||||||||
Weighted average shares used to compute net loss per common share - basic | |||||||||||||||
Weighted-average shares used to compute net loss per common share - diluted | |||||||||||||||
Net loss per share | |||||||||||||||
Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||
Options to purchase common stock, including ESPP | |||||||||||
Restricted stock units and Performance stock units |
6. | Goodwill and Intangible Assets |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||
(in thousands) | Range of Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Developed technology | 3 to 7 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Customer relationships | 7 to 9 | ||||||||||||||||||||||||
Backlog | 3 | ||||||||||||||||||||||||
Non-compete agreements | 2 to 4 | ||||||||||||||||||||||||
Trademarks | 3 to 7 | ||||||||||||||||||||||||
Intangible assets, net book value | $ | $ | $ | $ | $ | $ |
(in thousands) | Future amortization | |||
2020 (remaining six months) | $ | |||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Future amortization expense | $ |
7. | Balance Sheet Components |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||
Raw materials | $ | $ | |||||
Finished goods | |||||||
Total inventories | $ | $ |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||
Computer equipment and software | $ | $ | |||||
Furniture, fixtures and equipment | |||||||
Leasehold improvements | |||||||
Manufacturing tools and equipment | |||||||
Construction in process | |||||||
Property and equipment, at cost | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Property and equipment, net | $ | $ |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||
Minimum payments to be received on sales-type leases | $ | $ | |||||
Less: Unearned interest income and executory revenue portion | ( | ) | ( | ) | |||
Net investment in sales-type leases | |||||||
Less: Current portion | ( | ) | ( | ) | |||
Non-current net investment in sales-type leases | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Lease revenue | $ | $ | $ | $ | |||||||||||
Less: Cost of lease shipments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Gross profit | $ | $ | $ | $ | |||||||||||
Interest income (expense), net on lease receivable | $ | ( | ) | $ | $ | ( | ) | $ | |||||||
Initial direct cost incurred | $ | $ | $ | $ |
(in thousands) | Future lease payments | ||
2020 (remaining six months) | $ | ||
2021 | |||
2022 | |||
2023 | |||
Total | $ |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||
Payroll and related expenses | $ | $ | |||||
Accrued payables | |||||||
Operating lease liabilities, current portion | |||||||
Lease financing, current portion | |||||||
Product warranty | |||||||
Customer prepayments | |||||||
Sales and use tax payable | |||||||
Other | |||||||
Total accrued payroll and other current liabilities | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Warranty balance at the beginning of the period | $ | $ | $ | $ | |||||||||||
Warranty expense accrued for shipments during the period | |||||||||||||||
Changes in estimate related to pre-existing warranties | ( | ) | ( | ) | |||||||||||
Warranty settlements made | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total product warranty | $ | $ | $ | $ |
(in thousands) | June 30, 2020 | ||
Other long-term assets | $ | 5,191 | |
Accrued payroll and other current liabilities | |||
Other long-term liabilities | |||
Total operating lease liabilities | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||
Supplemental Cash Flow Information | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | $ | ||||||||||
Right-of-use assets obtained in exchange for lease obligations | $ | $ | $ | ||||||||||
Weighted average remaining lease term | |||||||||||||
Weighted average discount rate | % | % | % | % |
(in thousands) | Operating leases | ||
2020 (remaining six months) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Total maturities of lease liabilities | |||
Less imputed interest | ( | ) | |
Total | $ |
8. | Convertible Senior Notes |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||
Liability: | |||||||
Principal | $ | $ | |||||
Unamortized debt discount | ( | ) | ( | ) | |||
Unamortized issuance costs | ( | ) | ( | ) | |||
Net carrying amount | $ | $ | |||||
Stockholders’ equity: | |||||||
Debt discount for conversion option | $ | $ | |||||
Issuance costs | ( | ) | ( | ) | |||
Net carrying amount | $ | $ |
Three months ended June 30, | Six months ended June 30, | |||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||
Contractual interest expense | $ | $ | $ | $ | ||||||||
Amortization of debt discount | ||||||||||||
Amortization of issuance costs | ||||||||||||
Total interest expense | $ | $ | $ | $ |
(in thousands) | June 30, 2020 | ||
Conversion option | $ | ||
Purchase of capped calls | ( | ) | |
Issuance costs | ( | ) | |
Total | $ |
9. | Commitments and Contingencies |
10. | Stock-based Compensation and Awards |
Options Outstanding | ||||||||||
Number of options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||
(in years) | (in thousands) | |||||||||
Outstanding at December 31, 2019 | $ | $ | ||||||||
Options granted | ||||||||||
Options exercised | ( | ) | ||||||||
Options canceled | ( | ) | ||||||||
Outstanding at June 30, 2020 | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||
2020 | 2019 | 2020 | 2019 | ||||
Expected term (in years) | |||||||
Volatility | 50% - 54.14% | 33% - 45.2% | 50% - 54.14% | 33% - 45.2% | |||
Risk-free interest rate | 0.15% - 1.59% | 2.43% - 2.51% | 0.15% - 1.59% | 2.43% - 2.51% | |||
Dividend yield |
Restricted Stock Units and Performance Stock Units | ||||||
Number of shares | Weighted Average Grant Date Fair Value per Share | |||||
Outstanding at December 31, 2019 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at June 30, 2020 | $ |
June 30, 2020 | |||
Grant date fair value per share | $ | ||
Expected term (in years) | |||
Volatility | % | ||
Risk-free interest rate | % | ||
Dividend yield | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Cost of revenue | $ | $ | $ | $ | |||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Revenue | |||||||||||||||
Product | $ | $ | $ | $ | |||||||||||
Service | |||||||||||||||
Total revenue | |||||||||||||||
Cost of revenue | |||||||||||||||
Product | |||||||||||||||
Service | |||||||||||||||
Total cost of revenue | |||||||||||||||
Gross profit | |||||||||||||||
Product | |||||||||||||||
Service | |||||||||||||||
Total gross profit | |||||||||||||||
Operating expenses | |||||||||||||||
Interest expense, net and other | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
12. | Income Taxes |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | We have taken measures to protect the health and safety of our employees by shifting the majority of our employees to remote work. |
• | We booked some urgent orders in the first and second quarter to serve hospitals focused on preparations for COVID-19. |
• | We issued some free “surge” software licenses to our customers that they can use for a limited time while they are responding to the pandemic. |
• | Our access to our healthcare customers’ locations for sales and implementation activities has been limited in many cases. The sales cycle and implementation timeline for broader strategic deals was elongated as they shifted their primary focus to preparing for and responding to the pandemic. |
• | We have experienced some delays in receiving parts due to supplier and shipping issues. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
Consolidated statement of operations data: | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
(in thousands) | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||
Revenue | |||||||||||||||||||||||||||
Product | $ | 23,951 | 50.6 | % | $ | 23,132 | 51.7 | % | $ | 41,801 | 47.5 | % | $ | 37,135 | 46.4 | % | |||||||||||
Service | 23,396 | 49.4 | 21,627 | 48.3 | 46,219 | 52.5 | 42,933 | 53.6 | |||||||||||||||||||
Total revenue | 47,347 | 100.0 | 44,759 | 100.0 | 88,020 | 100.0 | 80,068 | 100.0 | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||||||
Product | 7,710 | 16.3 | 6,912 | 15.4 | 14,074 | 16.0 | 12,246 | 15.3 | |||||||||||||||||||
Service | 9,694 | 20.5 | 10,831 | 24.2 | 20,217 | 23.0 | 21,121 | 26.4 | |||||||||||||||||||
Total cost of revenue | 17,404 | 36.8 | 17,743 | 39.6 | 34,291 | 39.0 | 33,367 | 41.7 | |||||||||||||||||||
Gross profit | 29,943 | 63.2 | 27,016 | 60.4 | 53,729 | 61.0 | 46,701 | 58.3 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Research and development | 9,349 | 19.7 | 8,943 | 20.0 | 18,381 | 20.9 | 17,089 | 21.3 | |||||||||||||||||||
Sales and marketing | 15,998 | 33.8 | 15,478 | 34.6 | 32,961 | 37.4 | 31,497 | 39.3 | |||||||||||||||||||
General and administrative | 6,923 | 14.6 | 6,535 | 14.6 | 13,314 | 15.1 | 13,115 | 16.4 | |||||||||||||||||||
Total operating expenses | 32,270 | 68.1 | 30,956 | 69.2 | 64,656 | 73.4 | 61,701 | 77.0 | |||||||||||||||||||
Loss from operations | (2,327 | ) | (4.9 | ) | (3,940 | ) | (8.8 | ) | (10,927 | ) | (12.4 | ) | (15,000 | ) | (18.7 | ) | |||||||||||
Interest income | 913 | 1.9 | 1,332 | 3.0 | 2,033 | 2.3 | 2,611 | 3.3 | |||||||||||||||||||
Interest expense | (2,308 | ) | (4.9 | ) | (2,170 | ) | (4.8 | ) | (4,582 | ) | (5.2 | ) | (4,291 | ) | (5.4 | ) | |||||||||||
Other income (expense), net | 210 | 0.4 | (159 | ) | (0.4 | ) | (381 | ) | (0.4 | ) | (28 | ) | — | ||||||||||||||
Loss before income taxes | (3,512 | ) | (7.5 | ) | (4,937 | ) | (11.0 | ) | (13,857 | ) | (15.7 | ) | (16,708 | ) | (20.8 | ) | |||||||||||
Benefit from (provision for) income taxes | 44 | 0.1 | 80 | 0.2 | (81 | ) | (0.1 | ) | 116 | 0.1 | |||||||||||||||||
Net loss | $ | (3,468 | ) | (7.4 | )% | $ | (4,857 | ) | (10.8 | )% | $ | (13,938 | ) | (15.8 | )% | $ | (16,592 | ) | (20.7 | )% |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||
(in thousands) | Amount | Amount | Amount | % | Amount | Amount | Amount | % | |||||||||||||||||||
Product revenue | |||||||||||||||||||||||||||
Device | $ | 17,100 | $ | 14,504 | $ | 2,596 | 17.9 | % | $ | 31,003 | $ | 24,564 | $ | 6,439 | 26.2 | % | |||||||||||
Software | 6,851 | 8,628 | (1,777 | ) | (20.6 | ) | 10,798 | 12,571 | (1,773 | ) | (14.1 | ) | |||||||||||||||
Total product | 23,951 | 23,132 | 819 | 3.5 | 41,801 | 37,135 | 4,666 | 12.6 | |||||||||||||||||||
Service revenue | |||||||||||||||||||||||||||
Maintenance and support | 18,994 | 16,928 | 2,066 | 12.2 | 37,063 | 33,321 | 3,742 | 11.2 | |||||||||||||||||||
Professional services and training | 4,402 | 4,699 | (297 | ) | (6.3 | ) | 9,156 | 9,612 | (456 | ) | (4.7 | ) | |||||||||||||||
Total service | 23,396 | 21,627 | 1,769 | 8.2 | 46,219 | 42,933 | 3,286 | 7.7 | |||||||||||||||||||
Total revenue | $ | 47,347 | $ | 44,759 | $ | 2,588 | 5.8 | % | $ | 88,020 | $ | 80,068 | $ | 7,952 | 9.9 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||
(in thousands) | Amount | Amount | Amount | % | Amount | Amount | Amount | % | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||||||
Product | $ | 7,710 | $ | 6,912 | $ | 798 | 11.5 | % | $ | 14,074 | $ | 12,246 | $ | 1,828 | 14.9 | % | |||||||||||
Service | 9,694 | 10,831 | (1,137 | ) | (10.5 | ) | 20,217 | 21,121 | (904 | ) | (4.3 | ) | |||||||||||||||
Total cost of revenue | $ | 17,404 | $ | 17,743 | $ | (339 | ) | (1.9 | )% | $ | 34,291 | $ | 33,367 | $ | 924 | 2.8 | % | ||||||||||
Gross margin | |||||||||||||||||||||||||||
Product | 67.8 | % | 70.1 | % | (2.3 | )% | 66.3 | % | 67.0 | % | (0.7 | )% | |||||||||||||||
Service | 58.6 | % | 49.9 | % | 8.7 | % | 56.3 | % | 50.8 | % | 5.5 | % | |||||||||||||||
Total gross margin | 63.2 | % | 60.4 | % | 2.8 | % | 61.0 | % | 58.3 | % | 2.7 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||
(in thousands) | Amount | Amount | Amount | % | Amount | Amount | Amount | % | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||
Research and development | $ | 9,349 | $ | 8,943 | $ | 406 | 4.5 | % | $ | 18,381 | $ | 17,089 | $ | 1,292 | 7.6 | % | |||||||||||
Sales and marketing | 15,998 | 15,478 | 520 | 3.4 | 32,961 | 31,497 | 1,464 | 4.6 | |||||||||||||||||||
General and administrative | 6,923 | 6,535 | 388 | 5.9 | 13,314 | 13,115 | 199 | 1.5 | |||||||||||||||||||
Total operating expenses | $ | 32,270 | $ | 30,956 | $ | 1,314 | 4.2 | % | $ | 64,656 | $ | 61,701 | $ | 2,955 | 4.8 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in thousands) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||
Interest income | $ | 913 | $ | 1,332 | $ | (419 | ) | $ | 2,033 | $ | 2,611 | $ | (578 | ) | |||||||||
Interest expense | (2,308 | ) | (2,170 | ) | (138 | ) | (4,582 | ) | (4,291 | ) | (291 | ) | |||||||||||
Other income (expense), net | 210 | (159 | ) | 369 | (381 | ) | (28 | ) | (353 | ) |
Six months ended June 30, | |||||||
(in thousands) | 2020 | 2019 | |||||
Consolidated Statements of Cash Flow Data: | |||||||
Net cash provided by operating activities | $ | 6,861 | $ | 81 | |||
Net cash provided by (used in) investing activities | (1,197 | ) | 16,066 | ||||
Net cash used in financing activities | (1,982 | ) | (5,522 | ) | |||
Net increase in cash and cash equivalents | $ | 3,682 | $ | 10,625 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | manage our expenses in line with our operating plans and current business environment; |
• | maintain and enhance our operational, financial and management controls, reporting systems and procedures; |
• | integrate acquired businesses, technologies or assets; |
• | manage operations in multiple locations and time zones; and |
• | develop and deliver new solutions and enhancements to existing solutions efficiently and reliably. |
• | the ongoing impact of the COVID-19 pandemic; |
• | the financial health of our healthcare customers and budgetary constraints on their ability to upgrade their communications, particularly in light of the pandemic; |
• | the availability of government funding for healthcare facilities operated by the United States federal, state and local governments; |
• | changes in customer purchasing patterns or sales cycles; |
• | market acceptance of our Smartbadge and its impact on orders for our existing Badge and related software; |
• | changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services; |
• | our ability to expand our sales and marketing operations; |
• | our ability to successfully integrate acquired businesses, technologies or assets; |
• | the announcement of new significant contracts or relationships; |
• | the procurement and deployment cycles of our healthcare customers and the length of our sales cycles; |
• | changes in how healthcare operating and capital budgets are administered within the enterprise; |
• | changes in customer deployment timelines; |
• | variations in the amount of orders booked in a prior quarter but not delivered until later quarters; |
• | our mix of solutions and the varying revenue recognition rules that apply; |
• | pricing, including discounts by us or our competitors; |
• | our ability to expand into non-healthcare markets; |
• | our ability to develop significant new reseller relationships and maintain existing reseller relationships; |
• | the financial health of our resellers; |
• | our ability to successfully deploy our solutions in a timely manner; |
• | our ability to sell and integrate third-party products and services, and our customer’s satisfaction with those third-party products and services; |
• | our ability to forecast demand and manage lead times for the manufacture of our solutions; |
• | our ability to develop and introduce new solutions and features to existing solutions that achieve market acceptance; |
• | the announcement of a new product, which may cause sales cycles to lengthen; |
• | federal government shutdowns; |
• | occurrence of health epidemics or contagious diseases and potential effects on our business and manufacturing operations; |
• | fluctuations in foreign currencies in the international markets in which we operate; and |
• | future accounting pronouncements and changes in accounting policies. |
• | experience technical issues as we integrate acquired businesses, technologies or assets into our existing solutions; |
• | encounter difficulties leveraging our existing sales and marketing organizations, and direct sales channels, to increase our revenue from acquired businesses, technologies or assets; |
• | find that the acquisition does not further our business strategy, we overpaid for the acquisition or the economic conditions underlying our acquisition decision have changed; |
• | have difficulty retaining key personnel of acquired businesses; |
• | suffer disruption to our ongoing business and diversion of our management’s attention as a result of transition or integration issues and the challenges of managing geographically or culturally diverse enterprises; |
• | experience unforeseen and significant problems or liabilities associated with quality, technology and legal contingencies relating to the acquisition, such as intellectual property or employment matters; and |
• | incur substantial costs to integrate the acquired business. |
• | challenges incorporating non-English speech recognition capabilities into our solutions as we expand into non-English speaking jurisdictions; |
• | difficulties integrating our solutions with wireless infrastructures with which we do not have experience; |
• | difficulties integrating local dialing plans and applicable PBX standards; |
• | challenges associated with delivering support, training and documentation in several languages; |
• | difficulties in staffing and managing personnel and resellers; |
• | the need to comply with a wide variety of foreign laws and regulations, including increasingly stringent data privacy regulations, requirements for export controls for encryption technology, employment laws, changes in tax laws and tax audits by government agencies; |
• | political and economic instability in, or foreign conflicts that involve or affect, the countries of our customers; |
• | the impacts associated with epidemics or contagious diseases; |
• | adverse effects on us directly, or on our customers and suppliers, of changes in trade, fiscal or tax policies, including the imposition of tariffs; |
• | difficulties in collecting accounts receivable and longer accounts receivable payment cycles; |
• | exposure to competitors who are more familiar with local markets; |
• | risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance; |
• | difficulties associated with resolving contract disputes in foreign countries with varied legal systems; |
• | limited or unfavorable intellectual property protection in some countries; and |
• | currency exchange rate fluctuations, which could affect the price of our solutions relative to locally produced solutions. |
• | delayed market acceptance of our affected solutions; |
• | loss of revenue or delay in revenue recognition; |
• | loss of customers or inability to attract new customers; |
• | diversion of engineering or other resources for remedying the defect or error; |
• | damage to our brand and reputation; |
• | delay in delivery of information; |
• | increased service and warranty costs, including potential replacement costs for product recalls or returns; and |
• | legal actions by our customers and hospital patients, including product liability claims. |
• | current or future U.S. or foreign patent applications will be approved; |
• | our issued patents will protect our intellectual property and not be held invalid or unenforceable if challenged by third parties; |
• | we will succeed in protecting our technology adequately in all key jurisdictions in which we develop technology, or we or our competitors operate; or |
• | others will not independently develop similar or competing products or methods or design around any patents that may be issued to us. |
• | heighten our vulnerability to adverse general economic conditions and heightened competitive pressures; |
• | require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes; |
• | limit our flexibility in planning for, or reacting to, changes in our business and industry; and |
• | impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes. |
• | actual or anticipated variation in anticipated operating results of us or our competitors; |
• | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
• | announcements by us or our competitors of new solutions, new or terminated significant contracts, commercial relationships or capital commitments; |
• | changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services, and other actual or anticipated legal or regulatory developments in the United States or foreign countries; |
• | actual or anticipated developments in our competitors’ businesses or the competitive landscape generally; |
• | failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
• | developments or disputes concerning our intellectual property or other proprietary rights; |
• | commencement of, or our involvement in, litigation; |
• | announced or completed acquisitions of businesses, technologies or assets by us or our competitor; |
• | changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; |
• | price and volume fluctuations attributable to inconsistent trading volume levels of our common stock; |
• | our decision to seek additional equity or debt financing; |
• | our public float relative to the total number of shares of our common stock that are issued and outstanding; |
• | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
• | rumors and market speculation involving us or other companies in our industry; |
• | the dissemination of adverse or misleading reports or opinions about our business; |
• | any major change in our management; |
• | unfavorable economic conditions and slow or negative growth of our markets; and |
• | other events or factors, including those resulting from war, incidents of terrorism or health epidemics or contagious diseases. |
• | authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt; |
• | prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a meeting of stockholders; |
• | establish advance notice procedures for nominating candidates to our board of directors or proposing matters that can be acted upon by stockholders at stockholder meetings; |
• | limit the ability of our stockholders to call special meetings of stockholders; |
• | prohibit stockholders from cumulating their votes for the election of directors; |
• | permit newly created directorships resulting from an increase in the authorized number of directors or vacancies on our board of directors to be filled only by majority vote of our remaining directors, even if less than a quorum is then in office; |
• | provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; |
• | establish a classified board of directors so that not all members of our board are elected at one time; |
• | provide that our directors may be removed only for “cause” and only with the approval of the holders of at least 66 2/3rds percent of our outstanding stock; and |
• | require super-majority voting to amend certain provisions in our certificate of incorporation and bylaws. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit Index Number | Exhibit title | |
3.01 | ||
31.01 | ||
31.02 | ||
32.01+ | ||
101.INS | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Schema Linkbase Document | |
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
104 | Cover Page Interactive Data File - (formatted in Inline XBRL and contained in Exhibit 101). |
+ | This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. |
VOCERA COMMUNICATIONS, INC. | ||
Date: August 5, 2020 | By: | /S/ Brent D. Lang |
Brent D. Lang Chief Executive Officer | ||
Date: August 5, 2020 | By: | /S/ Justin R. Spencer |
Justin R. Spencer Chief Financial Officer | ||
(Principal Financial Officer) |
Date: August 5, 2020 | /s/ Brent D. Lang | |
Brent D. Lang | ||
Chief Executive Officer |
Date: August 5, 2020 | /s/ Justin R. Spencer | |
Justin R. Spencer | ||
Chief Financial Officer |
/s/ Brent D. Lang | /s/ Justin R. Spencer | |||
Brent D. Lang | Justin R. Spencer | |||
Chief Executive Officer | Chief Financial Officer |
Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (Paranthetical) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Liabilities and stockholders' equity | ||
Common stock par value | $ 0.0003 | $ 0.0003 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 32,347,972 | 31,660,709 |
Common stock shares outstanding | 32,347,972 | 31,660,709 |
Preferred Stock | ||
Liabilities and stockholders' equity | ||
Preferred stock par value | $ 0.0003 | $ 0.0003 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue | ||||
Total revenue | $ 47,347 | $ 44,759 | $ 88,020 | $ 80,068 |
Cost of revenue | ||||
Total cost of revenue | 17,404 | 17,743 | 34,291 | 33,367 |
Gross profit | 29,943 | 27,016 | 53,729 | 46,701 |
Operating expenses | ||||
Research and development | 9,349 | 8,943 | 18,381 | 17,089 |
Sales and marketing | 15,998 | 15,478 | 32,961 | 31,497 |
General and administrative | 6,923 | 6,535 | 13,314 | 13,115 |
Total operating expenses | 32,270 | 30,956 | 64,656 | 61,701 |
Loss from operations | (2,327) | (3,940) | (10,927) | (15,000) |
Interest income | 913 | 1,332 | 2,033 | 2,611 |
Interest expense | (2,308) | (2,170) | (4,582) | (4,291) |
Other income (expense), net | 210 | (159) | (381) | (28) |
Loss before income taxes | (3,512) | (4,937) | (13,857) | (16,708) |
Benefit from (provision for) income taxes | 44 | 80 | (81) | 116 |
Net loss | (3,468) | $ (4,857) | $ (13,938) | $ (16,592) |
Weighted average shares used to compute net loss per share | ||||
Basic and Diluted | 31,242 | 31,945 | 31,022 | |
Product | ||||
Revenue | ||||
Total revenue | 23,951 | $ 23,132 | $ 41,801 | $ 37,135 |
Cost of revenue | ||||
Total cost of revenue | 7,710 | 6,912 | 14,074 | 12,246 |
Service | ||||
Revenue | ||||
Total revenue | 23,396 | 21,627 | 46,219 | 42,933 |
Cost of revenue | ||||
Total cost of revenue | $ 9,694 | $ 10,831 | $ 20,217 | $ 21,121 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (3,468) | $ (4,857) | $ (13,938) | $ (16,592) |
Other comprehensive loss, net: | ||||
Change in unrealized gain on investments, net of tax | 1,806 | 294 | 850 | 719 |
Comprehensive loss | $ (1,662) | $ (4,563) | $ (13,088) | $ (15,873) |
The Company and Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies Organization and Business Vocera Communications, Inc. and its subsidiaries (collectively the “Company” or “Vocera”) is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, retail, energy, education and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the Company’s business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, safety, patient and staff experience and increase operational efficiency. The Vocera communication and collaboration solution includes: an intelligent enterprise software platform; a lightweight, wearable, voice-controlled communication badge and recently introduced Smartbadge; and smartphone applications. The solution enables users to connect instantly with other staff simply by saying the name, function or group name of the desired recipient. It also delivers HIPAA-compliant secure text messages, alerts and alarms directly to the Vocera Badge, Vocera Smartbadge, smartphones and other mobile communication devices both inside and outside the hospital, replacing legacy pagers and in-building wireless phones. Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or any other future year. Except for the change in certain accounting policies upon adoption of the accounting standards described below, there have been no material changes to the Company’s significant accounting policies compared to the accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires the Company 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 revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, accounts receivable reserves, inventory reserves, bonuses, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued new guidance related to the accounting for credit losses on instruments for both financial services and non-financial services entities. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new guidance was effective for the Company beginning January 1, 2020. The Company applied the guidance using a modified retrospective approach requiring that the Company recognize the cumulative effect of initially applying the impairment standard as an adjustment to opening accumulated deficit in the period of initial application. There was no adjustment to the Company’s opening accumulated deficit in the period as there were no incremental impairment losses as a result of the adoption. In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance simplifies the measurement of goodwill impairment by removing step 2 of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard was effective for the Company beginning January 1, 2020. The adoption of this guidance did not have an impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued new guidance simplifying the accounting for income taxes, which removes certain exceptions for intra period allocations, recognizing deferred taxes for investments and calculating income taxes in interim periods. This guidance also reduces complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new standard is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. In the second quarter of fiscal year 2020, the Company early adopted the guidance on a prospective basis. The adoption did not have a material impact on the Company's condensed consolidated financial statements.
|
Revenue, deferred revenue, and deferred commissions |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, deferred revenue, and deferred commissions | Revenue, deferred revenue and deferred commissions Disaggregation of Revenue A typical sales arrangement involves multiple arrangements, such as the sales of the Company’s proprietary communication device (“Vocera Badge”), perpetual software licenses, professional services and maintenance and support services which entitle customers to unspecified upgrades, patch releases and telephone-based support. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how the Company evaluates its financial performance:
Contract balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount and in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of June 30, 2020 and December 31, 2019 is presented in the accompanying condensed consolidated balance sheets. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of June 30, 2020 and December 31, 2019, contract assets totaling $4.7 million and $4.3 million, respectively, were included in other receivables in the condensed consolidated balance sheets. Costs to obtain and fulfill a contract The Company capitalizes certain incremental contract acquisition costs consisting primarily of commissions paid and the related payroll taxes when customer contracts are signed. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation and is included in sales and marketing expense in the condensed consolidated statements of operations. The Company determines its estimated period of benefit by evaluating the expected renewals of its customer contracts, the duration of its relationships with its customers and other factors. Deferred costs are periodically reviewed for impairment. Changes in the balance of total deferred commissions (contract asset) during the three and six months ended June 30, 2020 are as follows:
Of the $11.1 million total deferred commissions balance as of June 30, 2020, the Company expects to recognize approximately 49% as commission expense over the next 12 months and the remainder thereafter. Deferred revenue The Company records deferred revenue when cash payments are received in advance of the performance under the contract. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the condensed consolidated balance sheet date. Changes in the balance of total deferred revenue (contract liability) during the three and six months ended June 30, 2020 are as follows:
Revenue recognized during the three and six months ended June 30, 2020 from deferred revenue balances at the beginning of the period was $19.5 million and $34.2 million, respectively. Revenue recognized during the three and six months ended June 30, 2019 from deferred revenue balances at the beginning of the period was $17.0 million and $29.4 million. The “contracted but not recognized” performance obligations represent the Company’s deferred revenue and non-cancelable backlog amounts. This balance as of June 30, 2020 was $115.9 million, of which the Company expects to recognize approximately 66% as revenue over the next 12 months and the remainder thereafter.
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Fair Value of Financial Instruments |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. During the six months ended June 30, 2020, there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers in or out of Level 3. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities is obtained from independent pricing services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs, corroborated by observable market data. The Company does not have any financial instruments which are valued using Level 3 inputs. In addition to its cash, cash equivalents and short-term investments, the Company measures the fair value of its Convertible Senior Notes on a quarterly basis for disclosure purposes. The Company considers the fair value of the Convertible Senior Notes at June 30, 2020 to be a Level 2 measurement due to limited trading activity of the Convertible Senior Notes. Refer to Note 8 to the condensed consolidated financial statements for further information. The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of June 30, 2020 and December 31, 2019, are summarized as follows (in thousands):
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Cash, Cash Equivalents and Short-term Investments |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, and Short-term Investments | Cash, Cash Equivalents and Short-Term Investments The following tables present cash, cash equivalents and short-term investments (in thousands) as of June 30, 2020 and December 31, 2019:
The Company has determined that the unrealized losses on its short-term investments as of June 30, 2020 and December 31, 2019 do not constitute an “other than temporary impairment”. The unrealized losses for the short-term investments have all been in a continuous unrealized loss position for less than twelve months. The Company’s conclusion of no “other than temporary impairment” is based on the high credit quality of the securities, their short remaining maturity and the Company’s intent and ability to hold such loss securities until maturity. Classification of the cash, cash equivalents and short-term investments by contractual maturity was as follows:
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Loss Per Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):
The following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill As of June 30, 2020 and December 31, 2019, the Company had $49.2 million and $49.2 million of goodwill, respectively, with $41.2 million and $8.0 million allocated to the Company’s Product and Services operating segments, respectively. As of June 30, 2020, there were no changes in circumstances indicating that the carrying values of goodwill or acquired intangibles may not be recoverable. Intangible Assets Acquisition-related intangible assets are amortized either straight-line, or over the life of the assets on a basis that resembles the economic benefit of the assets. This yields amortization in the latter case that is higher in earlier periods of the useful life. The estimated useful lives and carrying value of acquired intangible assets are as follows:
Amortization expense was $0.3 million and $1.0 million for the three months ended June 30, 2020 and 2019, respectively. Amortization expense was $0.6 million and $2.0 million for the six months ended June 30, 2020 and 2019, respectively Amortization of acquired intangible assets is reflected in the cost of revenue for developed technology and backlog and in operating expenses for the other intangible assets. The estimated future amortization of existing acquired intangible assets as of June 30, 2020 was as follows:
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Balance Sheet Components |
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Balance Sheet Components [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Inventories
Property and equipment, net
Depreciation and amortization expense for property and equipment was $1.2 million and $0.9 million for the three months ended June 30, 2020 and 2019, respectively. Depreciation and amortization expense for property and equipment was $2.2 million and $1.8 million for the six months ended June 30, 2020 and 2019, respectively. Net investment in sales-type leases The Company has sales-type leases with terms of 3 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of the Company’s net investment in sales-type leases are as follows:
Sales-type lease activity recognized in the condensed consolidated statement of operations are as follows:
There were no allowances for doubtful accounts on these leases as of June 30, 2020 and December 31, 2019. There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-type leases are reported as components of the condensed consolidated balance sheet captions “other receivables” and “other long-term assets,” respectively. The minimum payments expected to be received for future years under sales-type leases as of June 30, 2020 were as follows:
Accrued payroll and other current liabilities
The changes in the Company’s product warranty reserve are as follows:
Leases The Company has operating leases for office space at its headquarters and subsidiaries under non-cancelable operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. The Company’s leases have remaining lease terms of approximately ten months to approximately five years. Operating lease cost, including short-term operating leases was $0.7 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively and $1.4 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively. Supplemental balance sheet information related to leases was as follows:
Other information related to leases was as follows:
Maturities of lease liabilities as of June 30, 2020 are as follows:
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Convertible Senior Notes |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Senior Notes | Convertible Senior Notes In May 2018, the Company issued $143.75 million aggregate principal amount of 1.50% Convertible Senior Notes due 2023, including $18.75 million aggregate principal amount of such notes pursuant to the exercise in full of options granted to the initial purchasers, collectively the “Notes.” The Notes are unsecured, unsubordinated obligations and bear interest at a fixed rate of 1.50% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2018. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $138.9 million. Each $1,000 principal amount of the Notes will initially be convertible into 31.0073 shares of the Company’s common stock, the “Conversion Option,” which is equivalent to an initial conversion price of approximately $32.25 per share, subject to adjustment upon the occurrence of specified events. The Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding February 15, 2023, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each day of that ten day consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate of the Notes on such trading day; or (3) upon the occurrence of specified corporate events (as set forth in the indenture governing the Notes). On or after February 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If certain specified fundamental changes occur (as set forth in the indenture governing the Notes) prior to the maturity date, holders of the Notes may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date, the Company will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event in certain circumstances. It is the Company’s current intent and policy to settle conversions through combination settlement which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. During the six months ended June 30, 2020, the conditions allowing holders of the Notes to convert have not been met. The Notes are therefore not convertible during the six months ended June 30, 2020 and are classified as long-term debt. In accounting for the transaction, the Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the Conversion Option was $33.4 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component was recorded in additional paid-in capital and will be remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount, the “debt discount,” is amortized to interest expense over the contractual term of the Notes at an effective interest rate of 7.6%. In accounting for the debt issuance costs of $4.9 million related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were $3.8 million and will be amortized to interest expense using the effective interest method over the contractual term of the Notes. Issuance costs attributable to the equity component were $1.1 million and are included with the equity component in additional paid-in capital. The Notes consist of the following:
The total estimated fair value of the Notes as of June 30, 2020 was approximately $141.9 million. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. The fair value of the Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. Based on the closing price of the Company’s common stock of $21.20 on June 30, 2020, the if-converted value of the Notes of $94.5 million was less than their principal amount. Interest expense related to the Notes is as follows:
Capped Calls In connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions with certain counterparties, the “Capped Calls.” The Capped Calls each have an initial strike price of approximately $32.25 per share, subject to certain adjustments, which correspond to the initial conversion price of the Notes. The Capped Calls have initial cap prices of $38.94 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 4.5 million shares of the Company’s common stock. Conditions that cause adjustments to the initial strike price of the Capped Calls mirror conditions that result in corresponding adjustments for the Notes. The Capped Calls are generally intended to reduce or offset the potential dilution to the Company’s common stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of the Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $8.9 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital. The net impact to the Company’s stockholders' equity, included in additional paid-in capital, of the above components of the Notes is as follows:
Impact on Earnings Per Share The Notes will not have an impact on the Company’s diluted earnings per share until they meet the criteria for conversion, as discussed above, as the Company intends to settle the principal amount of the Notes in cash upon conversion. Under the treasury stock method, in periods when the Company reports net income, the Company is required to include the effect of additional shares that may be issued under the Notes when the price of its’ common stock exceeds the conversion price. However, upon conversion, there will be no economic dilution from the Notes until the average market price of the Company’s common stock exceeds the cap price of $38.94 per share, as exercise of the capped calls offsets any dilution from the Notes from the conversion price up to the cap price. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be anti-dilutive under the treasury stock method.
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Commitments |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | Commitments and Contingencies Non-cancelable Material Commitments The Company is required to purchase unused, non-cancelable, non-returnable raw material inventory that was purchased by its contract manufacturers based on committed finished goods orders from the Company, certain long lead-time raw materials based on the Company’s forecast and current work-in-progress materials. As of June 30, 2020 and December 31, 2019, approximately $10.0 million and $9.7 million, respectively, of such inventory was purchased and held by the third-party manufacturers which was subject to these purchase guarantees. Indemnifications The Company undertakes, in the ordinary course of business, to (i) defend customers and other parties from certain third-party claims associated with allegations of trade secret misappropriation, infringement of copyright, patent or other intellectual property rights, tortious damage to persons or property or breaches of certain Company obligations relating to confidentiality (e.g., safeguarding protected health information) and (ii) indemnify and hold harmless such parties from certain resulting damages, costs and other liabilities. The term of these undertakings may be perpetual and the maximum potential liability of the Company under certain of these undertakings is not determinable. Based on its historical experience, the Company believes the liability associated with these undertakings is minimal. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company currently has directors and officers insurance. As there has been no significant history of losses, no expense accrual has been made. Litigation From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses from existing matters that are probable or reasonably possible of being incurred as a result of these matters would not be material to the financial statements as a whole.
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Stock-based Compensation and Awards |
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Stock-based Compensation and Award | Stock-based Compensation and Awards Valuation Assumptions Compensation expense for all share-based payment awards, including stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”), is measured based on the estimated fair value of the award on the grant date over the related vesting or performance periods. We estimate the fair value of our stock-based awards as follows: Restricted Stock Units. The fair value of restricted stock units is determined based on the quoted market price of our common stock on the date of grant. Performance Stock Units. Performance stock units consist of grants of performance-based restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-determined market and service conditions (referred to herein as “performance stock units”). The fair value of our performance stock units is estimated using a Monte-Carlo simulation model which is a probabilistic approach for calculating the fair value of the awards. The Monte-Carlo simulation is a statistical technique used, in this instance, to simulate future stock prices of the Company relative to constituents in the S&P 600 Health Care Equipment and Services Index. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient. Stock Options and Employee Stock Purchase Plan. The fair value of stock options and stock purchase rights granted pursuant to our equity incentive plans and our 2012 Employee Stock Purchase Plan (ESPP), respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on a combination of historical stock price volatility. An expected term is estimated based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior. Stock Option Activity A summary of the stock option activity for the six months ended June 30, 2020 is presented below:
At June 30, 2020, there was no unrecognized compensation cost related to options. As of June 30, 2020, there were 848,424 shares that remained available for future issuance of options, restricted stock units (“RSUs”) or other equity awards under the 2012 Equity Incentive Plan. Employee Stock Purchase Plan In March 2012, the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”) was approved. During the six months ended June 30, 2020 employees purchased 126,046 shares of common stock at an average price of $15.60. During the six months ended June 30, 2019 employees purchased 61,691 shares of common stock at an average price of $29.32. As of June 30, 2020, there were 1,063,572 shares available for future issuance under the ESPP. The following Black-Scholes option-pricing assumptions were used for each respective period for the ESPP:
Restricted Stock Units and Performance Stock Units A summary of RSU and PSU activity for the six months ended June 30, 2020 is presented below:
At June 30, 2020, there was $46.6 million of unrecognized compensation cost related to RSUs and PSUs, which is expected to be recognized over a weighted-average period of 2.18 years. During the three months ended June 30, 2020, we granted 145,877 PSUs to certain executives under our 2012 Equity Incentive Plan (the “2012 Plan”). PSUs are contingent on the achievement of our comparative market-based returns. On the date of grant, we estimated the fair value of the total shareholder return (TSR) component of the PSUs using a Monte Carlo valuation model. The PSUs will vest over a three-year performance period. The number of shares the PSU holder receives is based on the extent to which the corresponding market conditions have been achieved. For awards subject to service and market conditions, the number of shares of our stock issued pursuant to the award can range from 0% to 200% of the target amount. Compensation expense for awards with performance-based and service-based conditions is recognized over the requisite service period if it is probable that the performance condition will be satisfied. The expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The assumptions used in the Monte Carlo valuation model to value the PSUs were as follows:
Allocation of Stock-Based Compensation Expense The following table presents the allocation of stock-based compensation expense:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments The Company has two operating segments, which are both reportable business segments: (i) Product and (ii) Service, both of which are comprised of Vocera and its wholly-owned subsidiaries’ results of operations. The following table presents a summary of the operating segments:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded a $(0.1) million and $0.1 million (provision for) benefit from income taxes for the six months ended June 30, 2020 and 2019, respectively. The expense for the six months ended June 30, 2020 was primarily due to the accretion of deferred tax liability associated with indefinite lived intangibles, taxes on international operations and state income taxes netted against the benefit from the release of the FIN48 liabilities due to the expiration of the statute of limitations. The benefit recorded for the six months ended June 30, 2019 was primarily due to the accretion of the deferred tax liability associated with indefinite lived intangibles, the tax effect of unrealized gains on investments recorded within other comprehensive income, taxes on international operations and state income taxes. As of June 30, 2020, the Company has provided a valuation allowance against certain federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management’s assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination. As of June 30, 2020, the statute of limitations lapsed on the FIN48 liabilities, resulting in a $0.2 million benefit to the tax provision. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted and signed into law. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that NOL provisions of the CARES Act will result in a material benefit to the Company, since the Company has been generating taxable losses. In addition, the CARES Act allows for the deferral of payment on the Company's share of the 6.2% Social Security tax on wages paid from the date of enactment through the end of the year 2020. Half of the deferred payment amount is due by December 31, 2021, with the remainder due by December 31, 2022. While we continue to assess the impact of the CARES Act, the company opted to defer payment of these amounts starting in the three months ended June 30, 2020. This resulted in a deferral of $0.3 million in payroll taxes as of June 30, 2020.
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The Company and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations | Organization and Business Vocera Communications, Inc. and its subsidiaries (collectively the “Company” or “Vocera”) is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, retail, energy, education and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the Company’s business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, safety, patient and staff experience and increase operational efficiency. The Vocera communication and collaboration solution includes: an intelligent enterprise software platform; a lightweight, wearable, voice-controlled communication badge and recently introduced Smartbadge; and smartphone applications. The solution enables users to connect instantly with other staff simply by saying the name, function or group name of the desired recipient. It also delivers HIPAA-compliant secure text messages, alerts and alarms directly to the Vocera Badge, Vocera Smartbadge, smartphones and other mobile communication devices both inside and outside the hospital, replacing legacy pagers and in-building wireless phones.
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Basis of Presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or any other future year.
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Use of Estimates | Use of Estimates The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with GAAP requires the Company 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 revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, accounts receivable reserves, inventory reserves, bonuses, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.
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Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued new guidance related to the accounting for credit losses on instruments for both financial services and non-financial services entities. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The new guidance was effective for the Company beginning January 1, 2020. The Company applied the guidance using a modified retrospective approach requiring that the Company recognize the cumulative effect of initially applying the impairment standard as an adjustment to opening accumulated deficit in the period of initial application. There was no adjustment to the Company’s opening accumulated deficit in the period as there were no incremental impairment losses as a result of the adoption. In January 2017, the FASB issued new guidance to simplify the accounting for goodwill impairment. The guidance simplifies the measurement of goodwill impairment by removing step 2 of the goodwill impairment test, which requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendments should be applied on a prospective basis. The new standard was effective for the Company beginning January 1, 2020. The adoption of this guidance did not have an impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued new guidance simplifying the accounting for income taxes, which removes certain exceptions for intra period allocations, recognizing deferred taxes for investments and calculating income taxes in interim periods. This guidance also reduces complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The new standard is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. In the second quarter of fiscal year 2020, the Company early adopted the guidance on a prospective basis. The adoption did not have a material impact on the Company's condensed consolidated financial statements.
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Fair Value of Fin. Instruments, Policy | Fair Value of Financial Instruments The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. During the six months ended June 30, 2020, there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers in or out of Level 3. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities is obtained from independent pricing services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs, corroborated by observable market data. The Company does not have any financial instruments which are valued using Level 3 inputs.
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Goodwill, Policy | Goodwill As of June 30, 2020 and December 31, 2019, the Company had $49.2 million and $49.2 million of goodwill, respectively, with $41.2 million and $8.0 million allocated to the Company’s Product and Services operating segments, respectively. As of June 30, 2020, there were no changes in circumstances indicating that the carrying values of goodwill or acquired intangibles may not be recoverable.
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Intangible Assets, Policy | Intangible Assets Acquisition-related intangible assets are amortized either straight-line, or over the life of the assets on a basis that resembles the economic benefit of the assets. This yields amortization in the latter case that is higher in earlier periods of the useful life.
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Purchase commitments | Non-cancelable Material Commitments The Company is required to purchase unused, non-cancelable, non-returnable raw material inventory that was purchased by its contract manufacturers based on committed finished goods orders from the Company, certain long lead-time raw materials based on the Company’s forecast and current work-in-progress materials. As of June 30, 2020 and December 31, 2019, approximately $10.0 million and $9.7 million, respectively, of such inventory was purchased and held by the third-party manufacturers which was subject to these purchase guarantees.
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Segment Reporting, Policy | The Company has two operating segments, which are both reportable business segments: (i) Product and (ii) Service, both of which are comprised of Vocera and its wholly-owned subsidiaries’ results of operations.
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Revenue Recognition | Disaggregation of Revenue A typical sales arrangement involves multiple arrangements, such as the sales of the Company’s proprietary communication device (“Vocera Badge”), perpetual software licenses, professional services and maintenance and support services which entitle customers to unspecified upgrades, patch releases and telephone-based support. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how the Company evaluates its financial performance:
Contract balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount and in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of June 30, 2020 and December 31, 2019 is presented in the accompanying condensed consolidated balance sheets. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of June 30, 2020 and December 31, 2019, contract assets totaling $4.7 million and $4.3 million, respectively, were included in other receivables in the condensed consolidated balance sheets. Costs to obtain and fulfill a contract The Company capitalizes certain incremental contract acquisition costs consisting primarily of commissions paid and the related payroll taxes when customer contracts are signed. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation and is included in sales and marketing expense in the condensed consolidated statements of operations. The Company determines its estimated period of benefit by evaluating the expected renewals of its customer contracts, the duration of its relationships with its customers and other factors. Deferred costs are periodically reviewed for impairment. Changes in the balance of total deferred commissions (contract asset) during the three and six months ended June 30, 2020 are as follows:
Of the $11.1 million total deferred commissions balance as of June 30, 2020, the Company expects to recognize approximately 49% as commission expense over the next 12 months and the remainder thereafter. Deferred revenue The Company records deferred revenue when cash payments are received in advance of the performance under the contract. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the condensed consolidated balance sheet date. Changes in the balance of total deferred revenue (contract liability) during the three and six months ended June 30, 2020 are as follows:
Revenue recognized during the three and six months ended June 30, 2020 from deferred revenue balances at the beginning of the period was $19.5 million and $34.2 million, respectively. Revenue recognized during the three and six months ended June 30, 2019 from deferred revenue balances at the beginning of the period was $17.0 million and $29.4 million. The “contracted but not recognized” performance obligations represent the Company’s deferred revenue and non-cancelable backlog amounts. This balance as of June 30, 2020 was $115.9 million, of which the Company expects to recognize approximately 66% as revenue over the next 12 months and the remainder thereafter.
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Revenue, deferred revenue, and deferred commissions (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregation of Revenue A typical sales arrangement involves multiple arrangements, such as the sales of the Company’s proprietary communication device (“Vocera Badge”), perpetual software licenses, professional services and maintenance and support services which entitle customers to unspecified upgrades, patch releases and telephone-based support. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how the Company evaluates its financial performance:
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Contract with Customer, Asset and Liability | Deferred revenue The Company records deferred revenue when cash payments are received in advance of the performance under the contract. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the condensed consolidated balance sheet date. Changes in the balance of total deferred revenue (contract liability) during the three and six months ended June 30, 2020 are as follows:
Contract balances The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount and in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of June 30, 2020 and December 31, 2019 is presented in the accompanying condensed consolidated balance sheets. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of June 30, 2020 and December 31, 2019, contract assets totaling $4.7 million and $4.3 million, respectively, were included in other receivables in the condensed consolidated balance sheets. Costs to obtain and fulfill a contract The Company capitalizes certain incremental contract acquisition costs consisting primarily of commissions paid and the related payroll taxes when customer contracts are signed. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation and is included in sales and marketing expense in the condensed consolidated statements of operations. The Company determines its estimated period of benefit by evaluating the expected renewals of its customer contracts, the duration of its relationships with its customers and other factors. Deferred costs are periodically reviewed for impairment. Changes in the balance of total deferred commissions (contract asset) during the three and six months ended June 30, 2020 are as follows:
Of the $11.1 million total deferred commissions balance as of June 30, 2020, the Company expects to recognize approximately 49% as commission expense over the next 12 months and the remainder thereafter.
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Fair Value of Financial Insturments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of June 30, 2020 and December 31, 2019, are summarized as follows (in thousands):
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Cash, Cash Equivalents and Short-term Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Available-For-Sale Investments | The following tables present cash, cash equivalents and short-term investments (in thousands) as of June 30, 2020 and December 31, 2019:
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Investments Classified by Contractual Maturity Date | Classification of the cash, cash equivalents and short-term investments by contractual maturity was as follows:
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Net Loss Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the computation of basic and diluted net income (loss) per share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):
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Schedule of antidilutive securities excluded from computation of earnings per share | The following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | The estimated useful lives and carrying value of acquired intangible assets are as follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization of acquired intangible assets is reflected in the cost of revenue for developed technology and backlog and in operating expenses for the other intangible assets. The estimated future amortization of existing acquired intangible assets as of June 30, 2020 was as follows:
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Balance Sheet Components (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories
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Property and Equipment | Property and equipment, net Depreciation and amortization expense for property and equipment was $1.2 million and $0.9 million for the three months ended June 30, 2020 and 2019, respectively.
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Schedule of Components of Leveraged Lease Investments | Net investment in sales-type leases The Company has sales-type leases with terms of 3 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of the Company’s net investment in sales-type leases are as follows:
Sales-type lease activity recognized in the condensed consolidated statement of operations are as follows:
There were no allowances for doubtful accounts on these leases as of June 30, 2020 and December 31, 2019. There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-type leases are reported as components of the condensed consolidated balance sheet captions “other receivables” and “other long-term assets,” respectively.
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Schedule of Future Minimum Lease Payments for Capital Leases | The minimum payments expected to be received for future years under sales-type leases as of June 30, 2020 were as follows:
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Accrued Liabilities | Accrued payroll and other current liabilities
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Schedule of Product Warranty Liability | The changes in the Company’s product warranty reserve are as follows:
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Information Related to Leases | Supplemental balance sheet information related to leases was as follows:
Other information related to leases was as follows:
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Convertible Senior Notes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes | The Notes consist of the following:
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Schedule of Interest Expense Related to the Notes | Interest expense related to the Notes is as follows:
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Schedule of Net Impact on Stockholders' Equity of Components of Convertible Debt | The net impact to the Company’s stockholders' equity, included in additional paid-in capital, of the above components of the Notes is as follows:
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Stock-based Compensation and Awards (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of stock option activity | A summary of the stock option activity for the six months ended June 30, 2020 is presented below:
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Equity B-S-M Valuation Assumptions | The following Black-Scholes option-pricing assumptions were used for each respective period for the ESPP:
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Rollforward of RSA and RSU activty | A summary of RSU and PSU activity for the six months ended June 30, 2020 is presented below:
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PSU Valuation Assumptions | The assumptions used in the Monte Carlo valuation model to value the PSUs were as follows:
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Allocation of Recognized Period Costs | The following table presents the allocation of stock-based compensation expense:
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Segments Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | The following table presents a summary of the operating segments:
|
The Company and Summary of Significant Accounting Policies Narrative (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Total operating lease liabilities | $ 5,919 |
Revenue, deferred revenue, and deferred commissions - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Other receivables | $ 6,645 | $ 6,312 | |
Deferred revenue, current | 43,841 | 50,033 | |
Deferred revenue, long-term | 10,173 | 11,442 | |
Total deferred revenue | 54,014 | $ 56,676 | 61,475 |
Stockholders' equity | $ 160,655 | $ 163,825 |
Revenue, deferred revenue, and deferred commissions - Consolidated Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue | ||||||
Total revenue | $ 47,347 | $ 44,759 | $ 88,020 | $ 80,068 | ||
Gross Profit | 29,943 | 27,016 | 53,729 | 46,701 | ||
Operating expenses | 32,270 | 30,956 | 64,656 | 61,701 | ||
Operating Income (Loss) | (2,327) | (3,940) | (10,927) | (15,000) | ||
Net loss | (3,468) | $ (10,470) | (4,857) | $ (11,735) | (13,938) | (16,592) |
Product | ||||||
Revenue | ||||||
Total revenue | 23,951 | 23,132 | 41,801 | 37,135 | ||
Service | ||||||
Revenue | ||||||
Total revenue | $ 23,396 | $ 21,627 | $ 46,219 | $ 42,933 |
Revenue, deferred revenue, and deferred commissions - Cash Flows From Operating Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Net loss | $ (3,468) | $ (10,470) | $ (4,857) | $ (11,735) | $ (13,938) | $ (16,592) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Deferred commissions | (640) | 385 | ||||
Deferred revenue | $ (7,461) | $ (6,027) |
Revenue, deferred revenue, and deferred commissions - Significant Changes in Deferred Commissions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Change in Contract with Customer, Asset [Roll Forward] | ||
Beginning balance | $ 10,307 | $ 10,477 |
Additions | 3,163 | 5,116 |
Commissions Recognized | (2,352) | (4,475) |
Ending balance | $ 11,118 | $ 11,118 |
Revenue, deferred revenue, and deferred commissions - Significant Changes in Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized pertaining to amounts deferred as of Beginning of Period | $ 34,200 | ||
Revenue recognized pertaining to amounts deferred as of End of Period | $ 17,000 | $ 29,400 | |
Change in Contract with Customer, Liability [Roll Forward] | |||
Beginning balance | 56,676 | 61,475 | |
Additions | 17,385 | 32,330 | |
Revenue Recognized | (20,047) | (39,791) | |
Ending balance | $ 54,014 | $ 54,014 |
Revenue, deferred revenue, and deferred commissions - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Revenue from Contract with Customer [Abstract] | |||||
Payment terms on invoiced amounts | 30 days | ||||
Deferred commissions | $ 11,118 | $ 11,118 | $ 10,307 | $ 10,477 | |
Percentage of deferred commissions to be recognized as commission expense in the next 12 months | 49.00% | 49.00% | |||
Revenue recognized pertaining to amounts deferred as of Beginning of Period | $ 34,200 | ||||
Revenue recognized pertaining to amounts deferred as of End of Period | $ 17,000 | $ 29,400 | |||
Deferred revenue and backlog | $ 115,900 | $ 115,900 | |||
Percentage of deferred revenue to be recognized over the next 12 months | 66.00% | 66.00% | |||
Contract with Customer, Asset, before Allowance for Credit Loss | $ 4,700 | $ 4,700 | $ 4,300 |
Contractual maturities of cash, cash equivalent and short-term investment (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | $ 29,386 | $ 25,704 |
Short-term investments | 204,476 | 204,164 |
Cash, cash equivalents and short-term investments | 233,862 | 229,868 |
Maturity up to one year | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 29,386 | 25,704 |
Short-term investments | 121,605 | 113,010 |
Cash, cash equivalents and short-term investments | 150,991 | 138,714 |
maturity between 1 and 2 years [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 82,871 | 91,154 |
Cash, cash equivalents and short-term investments | $ 82,871 | $ 91,154 |
Schedule of the computation of basic and diluted net income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||||
Weighted Average Number of Shares Outstanding, Diluted | 32,152 | 31,242 | 31,945 | 31,022 | ||
Weighted Average Number of Shares Outstanding, Basic | 32,152 | 31,242 | 31,945 | 31,022 | ||
Numerator: | ||||||
Net loss | $ (3,468) | $ (10,470) | $ (4,857) | $ (11,735) | $ (13,938) | $ (16,592) |
Denominator: | ||||||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 31,242 | 31,945 | 31,022 | |||
Net loss per share | ||||||
Earnings Per Share, Basic | $ (0.11) | $ (0.16) | $ (0.44) | $ (0.53) | ||
Earnings Per Share, Diluted | $ (0.11) | $ (0.16) | $ (0.44) | $ (0.53) |
Schedule of antidilutive securities excluded from computation of earnings per share (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Options to purchase common stock, including ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 517 | 656 | 568 | 690 |
Restricted stock units and Performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,125 | 1,671 | 1,880 | 1,760 |
Future amortization schedule (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Goodwill and intangible assets [Abstract] | |
Finite-Lived Intangible Asset, Expected Amortization, Year One | $ 729 |
Finite-Lived Intangible Asset, Expected Amortization, Year Two | 1,130 |
Finite-Lived Intangible Asset, Expected Amortization, Year Three | 1,050 |
Finite-Lived Intangible Asset, Expected Amortization, Year Four | 1,050 |
Finite-Lived Intangibles, Amortization Expense, Year Five | 875 |
Finite-Lived Intangible Assets, Net | $ 4,834 |
Goodwill and Intangible Assets Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 49,246 | $ 49,246 | $ 49,246 | ||
Intangibles - period amortization expense [Abstract] | |||||
Amortization expense | 300 | $ 1,000 | 600 | $ 2,000 | |
Product Segment [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 41,200 | 41,200 | |||
Service Segment [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 8,000 | $ 8,000 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials | $ 637 | $ 831 |
Finished goods | 7,919 | 3,745 |
Total inventories | $ 8,556 | $ 4,576 |
Investment in Sales Type Leases (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Capital Leased Assets [Line Items] | ||
Sales-type and Direct Financing Leases, Lease Receivable, Payments to be Received | $ 1,687 | $ 2,078 |
Sales-type and Direct Financing Leases, Lease Receivable, Undiscounted Excess Amount | 860 | 1,190 |
Net Investment in Lease | 827 | 888 |
Net Investment in Lease, Current | 435 | 452 |
Net Investment in Lease, Noncurrent | $ 392 | $ 436 |
Minimum | ||
Capital Leased Assets [Line Items] | ||
Lessors, Capital Leases, Term of contract | 3 years | |
Maximum | ||
Capital Leased Assets [Line Items] | ||
Lessors, Capital Leases, Term of contract | 4 years |
Balance Sheet Components Sales Type Lease Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Balance Sheet Components [Abstract] | ||||
Lease revenue | $ 1,118 | $ 2,703 | $ 1,553 | $ 3,364 |
Less: Cost of lease shipments | (165) | (805) | (175) | (857) |
Gross profit | 953 | 1,898 | 1,378 | 2,507 |
Sales-type Lease, Interest Income, Lease Receivable | 6 | 3 | 12 | 0 |
Initial direct cost incurred | $ 60 | $ 109 | $ 83 | $ 140 |
Future payments- sales type leases (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Balance Sheet Components [Abstract] | |
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year One | $ 433 |
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year Four | 126 |
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year Two | 678 |
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year Three | $ 450 |
Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Payroll and related expenses | $ 8,214 | $ 6,053 |
Accrued payables | 2,368 | 2,674 |
Accrued payroll and other current liabilities | 2,389 | 2,323 |
Lease financing, current portion | 905 | 1,033 |
Product warranty | 521 | 420 |
Customer Refund Liability, Current | 1,147 | 631 |
Sales and use tax payable | 334 | 599 |
Other | 1,201 | 1,024 |
Total accrued payroll and other current liabilities | $ 17,079 | $ 14,757 |
Schedule of Product Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2017 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||||
Product warranty accrual, at the beginning of the period | $ 440 | $ 374 | $ 420 | |||
Warranty expenses accrued | 115 | 92 | 223 | $ 169 | ||
Product Warranty Accrual, Preexisting, Increase (Decrease) | 40 | (55) | 9 | (86) | ||
Warranty settlements made | (74) | (56) | (131) | (104) | ||
Product Warranty Accrual | $ 521 | $ 355 | $ 521 | $ 355 | $ 355 | $ 376 |
Balance Sheet Components Leases (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Other long-term assets | $ 0.7 | $ 0.5 | $ 1.4 | $ 1.1 |
Minimum | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Operating lease remaining term (years) | 10 months | 10 months | ||
Maximum | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Operating lease remaining term (years) | 5 years | 5 years |
Balance Sheet Components Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Balance Sheet Components [Abstract] | ||
Accrued payroll and other current liabilities | $ 2,389 | $ 2,323 |
Other long-term liabilities | 3,530 | |
Total operating lease liabilities | $ 5,919 |
Balance Sheet Components Other Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Balance Sheet Components [Abstract] | ||||
Cash paid for amounts included in the measurement of lease liabilities | $ 732 | $ 634 | $ 1,444 | $ 1,264 |
Right-of-use assets obtained in exchange for lease obligations | $ 122 | $ 329 | $ 122 | $ 1,018 |
Weighted average remaining lease term | 2 years 5 months 15 days | 2 years 10 months 2 days | 2 years 5 months 15 days | 2 years 10 months 2 days |
Weighted average discount rate | 8.00% | 8.00% | 8.00% | 8.00% |
Balance Sheet Components Maturities of Leases (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Balance Sheet Components [Abstract] | |
2020 (remaining six months) | $ 1,389 |
2020 | 3,022 |
2021 | 1,380 |
2022 | 439 |
2023 | 325 |
Total maturities of lease liabilities | 6,555 |
Less imputed interest | (636) |
Total operating lease liabilities | $ 5,919 |
Convertible Senior Notes - Capped Calls (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions |
1 Months Ended | 6 Months Ended | |
---|---|---|---|
May 31, 2018 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||
Capped Calls, initial strike price (in dollars per share) | $ 32.25 | ||
Capped Calls, initial cap price (in dollars per share) | $ 38.94 | ||
Capped Calls, number of shares covered | 4.5 | ||
Payment for purchase of capped calls | $ (8,900) | $ (8,907) | |
Issuance costs | (1,136) | ||
Convertible Debt | Convertible Senior Notes At 1.50%, Option Portion | |||
Debt Instrument [Line Items] | |||
Carrying amount of the equity component | $ 33,400 | 33,350 | $ 33,350 |
Carrying amount of equity component, net of capped calls | $ 23,307 |
Commitments Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventories | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
Unrecorded Unconditional Purchase Obligation | $ 10.0 | $ 9.7 |
Summary of Equity B-S-M Assumptiuons (Details) - 2012 Employee Stock Purchase Plan - ESPP |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Equity B-S-M Fair Value Assumptions | ||||
Expected term (in years) | 6 months | 6 months | 6 months | 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum | ||||
Equity B-S-M Fair Value Assumptions | ||||
Volatility | 50.00% | 33.00% | ||
Risk-free interest rate | 0.15% | 2.43% | ||
Maximum | ||||
Equity B-S-M Fair Value Assumptions | ||||
Volatility | 54.10% | 45.20% | ||
Risk-free interest rate | 1.59% | 2.51% |
Summary of Restricted Stock Activity (Details) - Restricted Stock Units - $ / shares |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Term (in years) | 3 years | |
Stock Comp-other than options - Period for Recognition- Comp cost not yet rocognized | 2 years 2 months 4 days | |
Number of Shares: | ||
Beginning balance | 1,550,646 | |
Granted | 1,308,571 | |
Vested | (705,835) | |
Forfeited | (28,158) | |
Ending balance | 2,125,224 | 2,125,224 |
Weighted Average Grant Date Fair Value per Share (in dollars per share): | ||
Beginning balance | $ 28.94 | |
Granted | 21.91 | |
Vested | 27.97 | |
Forfeited | 28.03 | |
Ending balance | $ 24.95 | $ 24.95 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 42.68% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.20% |
Stock-based Compensation and Awards PSU Valuation Assumptions (Details) - Restricted Stock Units |
3 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date fair value per share (in dollars per share) | $ 30.70 |
Expected term (in years) | 3 years |
Volatility | 42.68% |
Risk-free interest rate | 0.20% |
Dividend yield | 0.00% |
Share-based Compensaton Allocated to Expense Captions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 6,366 | $ 12,207 | $ 11,653 | |
Cost of Sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,114 | $ 1,178 | 2,087 | 2,156 |
Research and Development Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,023 | 1,034 | 1,989 | 1,856 |
Selling and Marketing Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,961 | 1,758 | 3,821 | 3,478 |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 2,268 | $ 2,139 | $ 4,310 | $ 4,163 |
Segments Operating Segments (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
Segments
|
Jun. 30, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segments | 2 | |||
Revenue | ||||
Total revenue | $ 47,347 | $ 44,759 | $ 88,020 | $ 80,068 |
Cost of revenue | ||||
Total cost of revenue | 17,404 | 17,743 | 34,291 | 33,367 |
Gross profit | ||||
Product | 16,241 | 16,220 | 27,727 | 24,889 |
Service | 13,702 | 10,796 | 26,002 | 21,812 |
Total gross profit | 29,943 | 27,016 | 53,729 | 46,701 |
Calculation of pretax profit (loss) [Abstract] | ||||
Operating expenses | 32,270 | 30,956 | 64,656 | 61,701 |
Interest expense, net and other | (1,185) | (997) | (2,930) | (1,708) |
Loss before income taxes | (3,512) | (4,937) | (13,857) | (16,708) |
Product | ||||
Revenue | ||||
Total revenue | 23,951 | 23,132 | 41,801 | 37,135 |
Cost of revenue | ||||
Total cost of revenue | 7,710 | 6,912 | 14,074 | 12,246 |
Service | ||||
Revenue | ||||
Total revenue | 23,396 | 21,627 | 46,219 | 42,933 |
Cost of revenue | ||||
Total cost of revenue | $ 9,694 | $ 10,831 | $ 20,217 | $ 21,121 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 44 | $ 80 | $ (81) | $ 116 |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 200 | |||
Deferred payroll taxes, CARES Act | $ 300 | $ 300 |
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