Balance Sheet Components

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

4. Balance Sheet Components

Accounts Receivable, Net

The Company’s allowance for credit losses related to accounts receivable balances was comprised of the following (in thousands):

	Balance At Beginning Of Year	Write-offs	Provision for (Benefit from) Expected Credit Losses (1)		Recoveries	Balance At End Of Year
For the year ended:
December 31, 2020	2,946	(2,361)	$	1,613	—	2,198
December 31, 2021	2,198	—	$	—	(106)	2,092
December 31, 2022	2,092	—	$	(1,230)	—	862

(1) On January 1, 2020, the Company recorded a $1.3 million adjustment to opening retained earnings upon the adoption of ASU 2016-13.

 Inventories

The components of inventories consisted of the following (in thousands):

	December 31,
	2022		2021
Raw materials	$	90,786	$	68,374
Work in process	26,793		18,678
Finished goods	216,427		176,452
Inventories	$	334,006	$	263,504

In the fourth quarter of 2020, the Company reclassified $17.7 million of REAL Immersive System products and components from Property and equipment, net to Inventories as a result of changes in its go to market strategy. The Company classified cash flows associated with its REAL Immersive System prior to its change in its go to market strategy during the fourth quarter of 2020 as investing activities, which is consistent with the Company's intent when the cash flows occurred.

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	December 31,
	2022		2021
Machinery and equipment	$	37,160	$	30,429
Furniture and fixtures	16,042		14,360
Leasehold improvements	25,611		23,934
Software	16,863		7,989
Computers	9,841		9,457
Construction in progress	7,523		11,101
Total property and equipment	113,040		97,270
Less: Accumulated depreciation and amortization	(48,025)		(38,414)
Property and equipment, net	$	65,015	$	58,856

Depreciation and amortization expense, excluding intangible assets and software, was $9.8 million, $9.3 million and $8.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. Software amortization expense was $1.7 million, $1.0 million and $1.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. The Company had accumulated software amortization of $6.3 million and $4.9 million for the years ended December 31, 2022 and 2021, respectively.

Accrued Liabilities

The following table shows the components of accrued liabilities as of December 31, 2022 and 2021 (in thousands):

	December 31, 2022		December 31, 2021
Payroll and employee-related expenses	$	60,480	$	60,015
Accrued expenses	10,902		12,245
Deferred revenue	9,158		—
Other accrued liabilities	25,760		27,536
Total accrued liabilities	$	106,300	$	99,796

The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of December 31, 2022, 2021 and 2020 (in thousands):

	December 31,
	2022		2021		2020
Balance at the beginning of the year	$	4,310	$	2,896	$	2,318
Accruals of warranties issued	2,451		2,973		1,589
Settlements of warranty claims	(1,391)		(1,559)		(1,011)
Balance at the end of the year	$	5,370	$	4,310	$	2,896