10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2014

OR

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-36171

  Mavenir Systems, Inc.

(Exact name of registrant as specified in its charter)

Delaware	61-1489105
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1700 International Parkway, Suite 200

Richardson, TX 75081

(Address of principal executive offices)

Telephone Number (469) 916-4393

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:    Yes  ý    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of October 24, 2014, there were approximately 28,855,211 shares of the Registrant’s Common Stock outstanding.

Mavenir Systems, Inc.

FORM 10-Q

September 30, 2014

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations and Comprehensive Loss	4
Condensed Consolidated Statements of Cash Flows	5
Notes to Condensed Consolidated Financial Statements	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4. CONTROLS AND PROCEDURES	31
PART II. OTHER INFORMATION	32
ITEM 1. LEGAL PROCEEDINGS	32
ITEM 1A. RISK FACTORS	32
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	32
ITEM 4. MINE SAFETY DISCLOSURES	32
ITEM 5. OTHER INFORMATION	32
ITEM 6. EXHIBITS	33
SIGNATURE	35

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	September 30, 2014			December 31, 2013
	(unaudited)			(as adjusted, see Note 1)
Assets
Current assets:
Cash and cash equivalents	$	64,367		$	38,930
Accounts receivable, net of allowance of $253 and $587 at September 30, 2014 and December 31, 2013, respectively	33,831			23,641
Unbilled revenue	14,713			11,213
Inventories	2,924			7,109
Prepaid expenses and other current assets	2,335			3,614
Deferred contract costs	5,098			9,313
Total current assets	123,268			93,820
Non-current assets:
Property and equipment, net	6,278			5,054
Intangible assets, net	4,350			5,202
Deposits and other assets	1,865			1,657
Deferred tax assets	1,136			—
Goodwill	832			866
Total assets	$	137,729		$	106,599
Liabilities and shareholders’ equity:
Current liabilities:
Trade accounts payable	$	7,571		$	7,152
Accrued liabilities	13,122			11,939
Deferred revenue	11,487			15,785
Income tax payable	466			765
Current portion of long-term debt	3,125			—
Total current liabilities	35,771			35,641
Non-current liabilities:
Uncertain tax positions	2,932			3,153
Other long-term liabilities	416			351
Long-term debt	21,809			23,423
Total liabilities	60,928			62,568
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.001 par value. 300,000,000 shares authorized; 28,854,603 and 23,420,759 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	28			23
Additional paid-in capital	200,964			155,198
Accumulated deficit	(125,928		)	(112,187		)
Accumulated other comprehensive income	1,737			997
Total shareholders’ equity	76,801			44,031
Total liabilities and shareholders’ equity	$	137,729		$	106,599

See Notes to Condensed Consolidated Financial Statements

3

Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenues
Software products	$	27,311		$	20,788		$	77,503		$	58,052
Maintenance	6,741			5,183			18,565			16,109
	34,052			25,971			96,068			74,161
Cost of revenues
Software products	12,393			10,806			34,258			28,220
Maintenance	3,677			2,716			9,364			5,543
	16,070			13,522			43,622			33,763
Gross profit	17,982			12,449			52,446			40,398
Operating expenses:
Research and development	7,958			5,436			21,281			16,934
Sales and marketing	8,124			4,675			23,223			14,331
General and administrative	5,737			5,745			16,231			15,106
Total operating expenses	21,819			15,856			60,735			46,371
Operating loss	(3,837		)	(3,407		)	(8,289		)	(5,973		)
Other expense (income):
Interest and other income	(26		)	(4		)	(87		)	(12		)
Interest and other expense	430			1,072			1,638			2,187
Loss on early extinguishment of debt	—			—			1,783			—
Foreign exchange loss (gain)	2,221			(316		)	2,275			2,328
Total other expense (income), net	2,625			752			5,609			4,503
Loss before income tax	(6,462		)	(4,159		)	(13,898		)	(10,476		)
Income tax (benefit) expense	(657		)	354			(157		)	1,972
Net loss	$	(5,805	)	$	(4,513	)	$	(13,741	)	$	(12,448	)
Other comprehensive income (loss)
Foreign currency translation adjustments	779			52			740			(50		)
Total comprehensive loss	$	(5,026	)	$	(4,461	)	$	(13,001	)	$	(12,498	)
Net loss per common share:
Basic	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)
Diluted	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)
Weighted-average common shares outstanding:
Basic and diluted	27,392			1,348			25,012			1,342

See Notes to Condensed Consolidated Financial Statements

4

Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2014			2013
Operating activities:
Net loss	$	(13,741	)	$	(12,448	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	2,442			1,769
Amortization of intangible assets	1,504			1,080
Amortization of debt discount	115			216
Provision for bad debt	(302		)	388
Stock-based compensation expense	3,071			1,161
Unrealized foreign currency loss	1,073			663
Loss on early extinguishment of debt	1,783			—
Changes in operating assets and liabilities:
Accounts receivable	(10,420		)	(1,686		)
Unbilled revenue	(3,641		)	925
Deposits and other current assets	(1,919		)	(465		)
Inventories	4,185			(2,592		)
Prepaid expenses	1,487			(527		)
Deferred contract costs	4,125			(1,399		)
Deferred revenue	(4,180		)	(3,325		)
Accounts payable and accrued liabilities	1,447			(738		)
Net cash used in operating activities	(12,971		)	(16,978		)
Investing activities:
Purchases of property and equipment	(4,334		)	(1,962		)
Net cash used in investing activities	(4,334		)	(1,962		)
Financing activities:
Proceeds from follow-on public offering, net of offering costs	41,686			—
Borrowings from long-term debt	25,000			15,000
Borrowings from line of credit	—			12,000
Repayments of long-term debt	(15,000		)	—
Repayments of line of credit borrowing	(10,000		)	(7,000		)
Exercise of options and warrants to purchase common stock	1,014			17
Net cash provided by financing activities	42,700			20,017
Effect of foreign currency exchange rate changes on cash and cash equivalents	42			(511		)
Net increase in cash and cash equivalents	25,437			566
Cash and cash equivalents at beginning of period	38,930			7,402
Cash and cash equivalents at end of period	$	64,367		$	7,968
Supplemental cash flow information:
Cash paid for interest	$	1,454		$	1,627
Income tax payments, net	$	707		$	254

See Notes to Condensed Consolidated Financial Statements

5

Mavenir Systems, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of the Business and Basis of Presentation

Throughout these condensed consolidated financial statements, Mavenir Systems, Inc. is referred to as “Mavenir,” the “Company,” “we,” “us” and “our.”

Description of Business

Mavenir was originally formed as a limited liability company on April 26, 2005. We were incorporated under the laws of Texas in August 2005, and subsequently incorporated under the laws of Delaware in March 2006.

We are a leading provider of software-based telecommunications networking solutions that enable mobile service providers to deliver internet protocol (IP)-based voice, video, rich communication and enhanced messaging services to their subscribers globally. Our solutions deliver Rich Communication Suite (“RCS”)-based services, which enable enhanced mobile communications such as group text messaging, multi-party voice or video calling and live video streaming as well as the exchange of files or images, over existing 2G and 3G networks as well as next generation 4G Long Term Evolution (“LTE”) networks. Our solutions also deliver voice services over LTE technology and wireless (“Wi-Fi”) networks known respectively as Voice over LTE (“VoLTE”) and Voice over Wi-Fi (“VoWi-Fi”).

We are headquartered in Richardson, Texas, and have research and development personnel located at our wholly-owned subsidiaries in China and India. Additionally, we have a sales and operations presence in the Asia Pacific (“APAC”) and the Europe, Middle East and Africa (“EMEA”) regions.

Basis of Presentation and Consolidation

The unaudited interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our consolidated financial position as of September 30, 2014, and our results of operations and cash flows for the three and nine months endedSeptember 30, 2014 and 2013. We have omitted certain information and disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) pursuant to those rules and regulations, although we believe that the disclosures we have made are adequate to make the information presented not misleading. The results of operations for the three and nine months endedSeptember 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014, or for any other future annual or interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission on February 21, 2014.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation. Specifically, the beginning balance of our uncertain tax positions presented in Note 10 is now presented gross, per Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. There was no change to the presentation on the condensed consolidated balance sheet.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates.

6

Revision of Prior Period Financial Statements and Out-of-Period Adjustment

During our review of the three months ended March 31, 2014, we identified a non-cash error that originated in prior periods. The error related to performance-based warrants issued to a channel partner in 2008, earned in 2011 and exercised in April of 2014. The achievement of the performance milestone occurred in 2011 and would have resulted in a reduction to revenue of $1.3 million in 2011. We assessed the materiality of this error in accordance with the SEC guidance on considering the effects of prior period misstatements based on an analysis of quantitative and qualitative factors. Based on this analysis, we determined that the error was immaterial to the prior reporting periods affected and, therefore, amendments of reports previously filed with the SEC were not required. However, we have concluded that correcting the error in our 2014 financial statements would materially impact our results for the quarter ended March 31, 2014 and the year ending December 31, 2014. Accordingly, we have reflected the correction of this prior period error in the period in which it originated and revised our consolidated balance sheet as of December 31, 2013, as presented in this Quarterly Report on Form 10-Q. In addition, a reduction to accumulated deficit will be reflected as an adjustment to the beginning balance for the earliest year presented in the financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2014.

The effect of the immaterial correction on the consolidated balance sheet as of December 31, 2013 is as follows (in thousands):

	As Reported			Correction			As Revised
Other shareholders’ equity	$	1,020		$	—		$	1,020
Additional paid-in capital	153,878			1,320			155,198
Accumulated deficit	(110,867		)	(1,320		)	$	(112,187	)
Total shareholders’ equity	$	44,031		$	—		$	44,031

2. Summary of Significant Accounting Policies and New Accounting Pronouncements

Significant Accounting Policies

Our significant accounting policies and others are presented in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 21, 2014. The policies include significant estimates made by management using information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers: Topic 606” (“ASU 2014-9”). ASU 2014-9 is intended to enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, improve disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized, and provide guidance for transactions that are not currently addressed comprehensively. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods therein, and does not allow for early adoption. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company has begun the evaluation of the impact that the standard will have on its consolidated financial statements but has not yet selected a transition method.

3. Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value.

The hierarchy can be described 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, or

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 us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. We evaluate transfers between levels at the end of each reporting period. There were no transfers of

7

assets or liabilities between Level 1 and Level 2 during the three and nine months ended September 30, 2014 and 2013 or for the year ended December 31, 2013.

Our financial instruments consist primarily of cash and cash equivalents, billed accounts receivable, accounts payable and debt. The carrying amounts of financial instruments, other than the debt instruments, are representative of their fair values due to their short maturities. Our debt agreements are considered level 2 instruments and bear interest at market rates and thus management believes their carrying amounts approximate fair value.

We do not have any other financial or non-financial assets or liabilities that would be characterized as Level 2 or Level 3 instruments.

4. Property and Equipment

Property and equipment consists of the following (in thousands):

	Estimated Useful Life	September 30, 2014			December 31, 2013
Computer software	3 years	$	5,095		$	5,046
Computer and lab equipment	3 years	11,448			8,917
Other equipment	2-5 years	2,546			1,468
Property and equipment, gross		19,089			15,431
Less: accumulated depreciation and amortization		(12,811		)	(10,377		)
Property and equipment, net		$	6,278		$	5,054

Depreciation expense of property and equipment totaled $0.8 million and $2.4 million for the three and nine months endedSeptember 30, 2014, compared to $0.7 million and $1.8 million for the same periods in 2013.

5. Accrued Liabilities

The following table presents the detail of accrued liabilities as of the periods ending (in thousands):

	September 30, 2014		December 31, 2013
Accrued payroll	$	7,005	$	7,221
Accrued expenses on contracts	3,813		1,446
Accrued professional fees	216		136
Other	2,088		3,136
Total accrued liabilities	$	13,122	$	11,939

6. Long-Term Debt

Long-term debt consists of the following (in thousands):

	September 30, 2014			December 31, 2013
Silicon Valley Bank senior loan	$	25,000		$	—
Silicon Valley Bank subordinated loan	—			10,000
Silver Lake Waterman subordinated loan	—			15,000
Discount related to issuance of warrants	(66		)	(1,577		)
Total debt	24,934			23,423
Less: current portion	3,125			—
Long-term portion	$	21,809		$	23,423

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Silicon Valley Bank Subordinated and Senior Loans

On October 18, 2012, we entered into loan agreements with Silicon Valley Bank (“SVB”). Under the agreements, we obtained two loans totaling $32.5 million (the “Old SVB Loans”). In February 2013, we amended the Old SVB Loans to join certain of our subsidiaries, including our non-U.S. subsidiaries, as co-borrowers. We also amended our minimum tangible net worth covenant. The Old SVB Loans included a $22.5 million Senior Loan (“Senior Loan”) secured by substantially all of our assets, including intellectual property. The Senior Loan had a term of three years at a floating rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25%. Under the terms of the agreement, we could draw up to 80% of eligible trade receivables up to $15.0 million, with the remaining $7.5 million generally available for working capital and cash management purposes. We also obtained a $10.0 million Subordinated Loan, also secured by substantially all of our assets including intellectual property that had a three years term at a fixed rate of 11%. The Old SVB Loans were replaced by an amended and restated loan and security agreement (“Amended and Restated Agreement”) that we entered into with SVB on March 6, 2014, as discussed below.

On March 6, 2014, we entered into an Amended and Restated Agreement with SVB to replace our $22.5 million Senior Loan facility with SVB. The Amended and Restated Agreement includes a five-year term loan of $25.0 million (“Term Loan”), a $15.0 million secured revolving line of credit (“Revolver”) and a $5 million secured line for letters of credit, foreign exchange and cash management services. The Term Loan has an initial floating interest rate of 2.75% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. At September 30, 2014, the interest rate was 6.0%. After the achievement of the one of the two performance triggers described in the following sentence, the interest rate will be reduced to 2.25% above the U.S. prime rate; after the achievement of the second performance trigger the interest rate will be further reduced to 1.75% above the U.S. prime rate. The performance triggers are the following: (i) our achievement, on a consolidated basis, of positive EBITDA (as defined in the loan agreement) for two consecutive fiscal quarters, and (ii) the completion of an equity offering resulting in net proceeds to the Company of at least $50 million. The Term Loan provides for monthly payments of interest only until April 1, 2015; thereafter we are required to repay the outstanding principal amount in 48 monthly installments. The Term Loan has a maturity of March 1, 2019. If we prepay the Term Loan within one year of the Amended and Restated Loan Agreement, we will have to pay a prepayment premium of $250,000; thereafter, the Term Loan may be prepaid without penalty.

Under the Revolver, we may draw up to 80% of eligible domestic trade receivables, 70% of eligible foreign trade receivables and 35% of eligible accrued but unbilled accounts up to a maximum of $15.0 million. The Revolver has a three-year term and bears interest at a floating interest rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. We are also required to pay an unused facility fee, monthly in arrears, of 0.25% per annum of the unused amount of the Revolver. The Revolver may be prepaid at any time without penalty. As of September 30, 2014, we had no borrowings outstanding on the Revolver and had $15.0 million available.

As of March 5, 2014, we had approximately $0.3 million in deferred costs and $0.2 million in debt discount related to the Old SVB Loans on our condensed consolidated balance sheet. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470, Debt (“ASC 470”), we recorded a $0.3 million loss on early extinguishment of debt related to the Amended and Restated Agreement.

The Amended and Restated Agreement contains certain restrictive covenants, and requires us to maintain a minimum liquidity ratio and other earnings related amounts as defined in the Amended and Restated Agreement. The Amended and Restated Agreement also contains usual and customary events of default, the occurrence of which may result in all outstanding amounts under the loan agreements becoming due and payable immediately, and they also impose an interest penalty of an additional 5% above the otherwise applicable interest rate at any time when an event of default is continuing. As of September 30, 2014, we were in compliance with all covenants under the Amended and Restated Agreement.

Silver Lake Waterman Growth Capital Loan

On March 5, 2014, we repaid the balance of our $15.0 million subordinated term loan (“Silver Lake Loan”) with Silver Lake Waterman Fund (“Silver Lake”) using funds from our initial public offering.

As of March 5, 2014, we had approximately $0.2 million in deferred costs and $1.3 million in debt discount related to the Silver Lake Loan on our condensed consolidated balance sheet. The entire $1.5 million was recognized during the nine months endedSeptember 30, 2014, as a loss on early extinguishment of debt related to the payoff of the Silver Lake Loan on March 5, 2014.

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7. Contingencies

Legal Proceedings

From time to time, we, our customers and our competitors are subject to various litigation and claims arising in the ordinary course of business. The software and communications infrastructure industries are characterized by frequent litigation and claims, including claims regarding patent and other intellectual property rights, claims for damages or indemnification for alleged breach under commercial supply or service contracts and claims regarding alleged improper hiring practices.

We are not aware of any pending or threatened legal proceeding against us that could have a material adverse effect on our business, operating results or financial condition.

8. Stockholders’ Equity

Follow-on Public Offering

On August 6, 2014, we closed a follow-on public offering, in which we sold 4,090,000 shares of common stock at a price to the public of $11.00 per share, before underwriting discounts and commissions. We raised approximately $41.7 million in net proceeds after deducting underwriting discounts and commissions of approximately $2.5 million and other estimated offering costs of approximately $0.8 million.

Equity Compensation Plans

We have two stock option plans: the Amended and Restated 2005 Stock Plan (the “2005 Plan”), and the Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”). In January 2013, we terminated the 2005 Plan and provided that no further stock awards were to be granted under the 2005 Plan and adopted the 2013 Plan as a continuation of and successor to the 2005 Plan. Upon our initial public offering (“IPO”), all shares that were reserved under the 2005 Plan but not issued were assumed by the 2013 Plan. All outstanding stock awards under the 2005 Plan continue to be governed by the existing terms. Under the 2013 Plan, we have the ability to issue incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and/or performance shares. Additionally, the 2013 Plan provides for the grant of performance cash awards to employees, directors and consultants. Stock options are granted at a price per common share not less than the fair value at date of grant. Stock options granted to date generally vest over a four-year period with 25% vesting at the end of one year and the remaining vesting monthly thereafter. Stock options granted generally are exercisable up to 10 years from the date of grant.

At September 30, 2014, there were 1,088,349 common shares available for future grants under the 2013 Plan.

To determine the weighted-average fair value of stock options granted, we used the Black-Scholes option pricing model with the following weighted-average assumptions during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected dividend yield	—	%	—	%	—	%	—	%
Risk-free interest rate (U.S. Treasury)	1.9	%	1.7	%	2.0	%	1.7	%
Expected term	6.3 years		6.0 years		6.3 years		6.0 years
Expected volatility	61.5	%	57.0	%	60.9	%	57.0	%

The fair value of all the awards granted is amortized to expense on a straight-line basis over the requisite service periods, which are generally the vesting periods. We granted stock options with a weighted-average grant date fair value during the nine months endedSeptember 30, 2014 of $9.33 per share.

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The following table summarizes the stock option activity for the nine months endedSeptember 30, 2014:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic  Value
					(years)	(in thousands)
Outstanding as of January 1, 2014	3,287,272		$	3.86
Granted	1,259,767		16.02
Exercised	(498,109	)	1.89
Forfeited or expired	(178,441	)	11.31
Outstanding as of September 30, 2014	3,870,489		$	7.80	7.5	$	22,943
Exercisable as of September 30, 2014	1,978,922		$	3.13	6.0	$	19,149

The following table presents our share-based compensation resulting from equity awards that we recorded in our condensed consolidated statements of operations and comprehensive loss (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenues	$	221	$	131	$	431	$	131
Research and development	218		209		536		209
Sales and marketing	285		400		692		400
General and administrative	633		121		1,412		421
Total	$	1,357	$	861	$	3,071	$	1,161

Warrant Exercises

In March of 2014, we issued 44,340 shares of our common stock to SVB upon the exercise in full of a warrant held by SVB. The warrant gave SVB the right to purchase up to 64,286 shares of our common stock at $5.11 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with SVB.

In April 2014, we issued 555,034 shares of our common stock to Cisco Systems, Inc. (“Cisco”) upon the exercise in full of a warrant held by Cisco. The warrant gave Cisco the right to purchase up to 898,294 shares of our common stock at $6.6794 per share on the achievement of certain bookings milestones. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with Cisco.

In May 2014, we issued 40,871 shares of our common stock to WestRiver Mezzanine Loans, LLC (“WestRiver”) upon the exercise in full of a warrant held by WestRiver. The warrant gave WestRiver the right to purchase up to 64,285 shares of our common stock at $5.11 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with WestRiver.

In June 2014, we issued 194,606 shares of our common stock to Silver Lake Waterman Fund, L.P. (“Silver Lake”) upon the exercise in full of a warrant held by Silver Lake. The warrant gave Silver Lake the right to purchase up to 194,694 shares of our common stock at $0.007 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with Silver Lake.

In June 2014, we issued 11,228 shares of our common stock to Comerica Ventures Incorporated (“Comerica”) upon the exercise in full of a warrant held by Comerica. The exercise price was $6.6794 per share, which resulted in proceeds of approximately $0.1 million.

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9. Net Loss per Share

We calculate basic net loss per share by dividing net loss attributable for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted, net loss per share is computed by giving effect to all potential weighted-average diluted common stock, including options and warrants, using the treasury stock method.

The computation of basic and diluted net loss per share is as follows (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(5,805	)	$	(4,513	)	$	(13,741	)	$	(12,448	)
Basic common shares:
Weighted-average number of shares outstanding	27,392			1,348			25,012			1,342
Diluted common shares:
Weighted-average shares used to compute diluted net loss per share	27,392			1,348			25,012			1,342
Net loss per share attributable to common stockholders:
Basic	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)
Diluted	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)

We excluded certain shares from the computation of diluted net loss per share because the effect of these shares would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Convertible preferred stock	—	16,452,467	—	16,452,467
Stock options	1,027,462	2,042,036	1,685,499	1,919,410
Warrants	—	1,235,633	—	1,235,633

10. Income Taxes

We base our provision for income taxes in our interim condensed consolidated financial statements on estimated annual effective tax rates in the tax jurisdictions where we operate. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective income tax rate, future income tax expense could be materially affected. For the three and nine months ended September 30, 2014, total income tax benefit is approximately $0.7 million and $0.2 million on a worldwide basis compared with total income tax expense of approximately $0.4 million and $2.0 million for the three and nine months ended September 30, 2013. The difference is due primarily to discrete items recognized in the current quarter related to foreign taxes and the benefit realized from changes in our uncertain tax positions as described below.

We apply a two-step process for the evaluation of uncertain income tax positions based on a “more likely than not” threshold to determine if a tax position will be sustained upon examination by the taxing authorities. The recognition threshold in step one permits the benefit from an uncertain position to be recognized only if it is more likely than not, or 50% assured that the tax position will be sustained upon examination by the taxing authorities. The measurement methodology in step two is based on “cumulative probability,” resulting in the recognition of the largest amount that is greater than 50% likely of being realized upon settlement with the taxing authority.

During the nine months endedSeptember 30, 2014, we completed a review of certain of our internal accounts and pricing and determined that it has reduced tax exposures, on an overall basis, primarily related to the way we account for certain intercompany transactions relating to management fees, sales support services, research and development services, license fees, or other development costs. These services are offered to and received from various related companies resulting in payables and receivables which are disregarded for our GAAP financial reporting but are recognized for tax purposes in several jurisdictions. Therefore, the tax treatment of the intercompany transactions has been analyzed in each entity’s jurisdiction and exposures were identified and quantified by jurisdiction. The net effect of the adjustment is approximately $0.2 million and is recorded as a decrease to income tax expense in the nine months endedSeptember 30, 2014.

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The resulting balance of our uncertain tax positions is depicted in the table below, on a gross basis, as of September 30, 2014 (in thousands):

Balance as of January 1, 2014	$	4,207
Additions to unrecognized tax benefits taken during the period	—
Additions to unrecognized tax benefits as a result of positions taken in prior periods	2,189
Decrease in unrecognized tax benefits relating to settlements with taxing authorities	—
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	—
Reduction to unrecognized tax benefits as a result of positions taken during the period	(2,302		)
Balance as of September 30, 2014	$	4,094

Total deferred tax assets of approximately $2.8 million were available for offset on identified uncertain tax positions. Additional interest and penalties of approximately $1.6 million are not reflected on the above roll forward are recorded as a component of the total liability for uncertain tax positions. The net impact of the deferred tax asset offsets and interest and penalties result in a net uncertain tax position liability of approximately $2.9 million on our balance sheet.

The Company believes that deferred tax assets in China and Canada related to net operating losses and tax credits, respectively, will more-likely-than-not be realized in the current and future years in these jurisdictions. An income tax benefit of approximately $1.1 million has been recognized during the quarter. The deferred tax assets in jurisdictions outside of China and Canada are not considered realizable on a more-likely-than-not basis and continue to be offset with a valuation allowance. We have not accrued a provision for income taxes on undistributed earnings of approximately $14.8 million of certain non-U.S. subsidiaries, as of September 30, 2014 since such earnings are considered to be reinvested indefinitely. If the earnings were distributed, we would be subject to U.S. federal income and foreign withholding taxes. Determination of an unrecognized deferred income tax liability with respect to such earnings is not practicable.

11. Segment and Geographic Information

Operating segments are defined as components of an enterprise in which separate financial information is available that is evaluated regularly by the chief operating decision makers, in deciding how to allocate resources and in assessing performance. Our chief operating decision-makers (i.e., our chief executive officer and his direct reports) review financial information presented on a condensed consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of allocating resources and evaluating financial performance. We have concluded that we operate in one segment and have provided the required enterprise-wide disclosures.

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Revenues by geographic area are based on the deployment site location of the end customers. The following tables present our revenues and long-lived assets by geographic region (in thousands):

Revenues

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Americas	$	16,215	$	15,678	$	49,526	$	37,041
EMEA	12,242		7,325		34,039		24,994
APAC	5,595		2,968		12,503		12,126
Total	$	34,052	$	25,971	$	96,068	$	74,161

Long-Lived Assets

	September 30, 2014		December 31, 2013
Americas	$	9,081	$	8,475
EMEA	1,482		1,888
APAC	897		759
Total	$	11,460	$	11,122

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2013 (which we refer to as our 2013 Form 10-K).

Throughout our Management’s Discussion and Analysis (“MD&A”), we refer to Mavenir Systems, Inc. as “Mavenir,” the “Company,” “we,” “us” and “our.” Throughout our MD&A, where we provide discussion of the three and nine months ended September 30, 2014, and we provide data for the same period in the prior year, we refer to the prior period as “2013.”

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Our forward-looking statements are based on the beliefs and assumptions of our management based on information currently available to management, and are not guarantees of future performance or development. All of our forward-looking statements are subject to risks, uncertainties and other important factors, some of which are outside our control, which could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included under Part I, Item 1A of our 2013 Form 10-K and those risks discussed in other documents we file with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

We are a leading provider of software-based telecommunications networking solutions that enable mobile service providers to deliver internet protocol (IP)-based voice, video, rich communications and enhanced messaging services to their subscribers globally. Our solutions deliver Rich Communication Services (RCS), which enable enhanced mobile communications, such as group text messaging, multi-party voice or video calling and live video streaming as well as the exchange of files or images, over existing 2G and 3G networks and next generation 4G Long Term Evolution (LTE) networks. Our solutions also deliver voice services over LTE technology and wireless (Wi-Fi) networks, known respectively as Voice over LTE (VoLTE) and Voice over Wi-Fi (VoWi-Fi). We enable mobile service providers to offer services that generate increased revenue and improve subscriber satisfaction and retention, while allowing them to improve time-to-market of new services and reduce network costs. Our mOne® Convergence Platform has enabled MetroPCS (now part of T-Mobile), a leading mobile service provider, to introduce the industry’s first live network deployment of VoLTE and the industry’s first live deployment of next-generation RCS 5.

We sell our solutions principally to wireless mobile service providers globally through our direct sales force or strategic third-party reseller partners. For the three and nine months ended September 30, 2014, 61% and 53% of our revenue came from outside of the United States and compared to 43% and 53% for the three and nine months ended September 30, 2013.

Revenue from our solutions is generated from the sale of software products and maintenance and support. Software products revenues consist of software licenses, hardware and professional services fees from software customizations, feature development and training for customers. Maintenance revenue includes support, annual software maintenance agreements and extended hardware warranty arrangements.

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GAAP financial highlights for the three months ended September 30, 2014 include:

• For the three months ended September 30, 2014, we generated revenues of $34.1 million, representing growth of 31.1% over the same period in 2013.

• Revenues from our Voice and Video product group increased by 136.3% for the three months ended September 30, 2014 compared to the same period in 2013.

• We experienced revenue growth of 4.4% in the Americas region, 58.6% in the Asia-Pacific region and 77.3% in the Europe, Middle East and Africa region, for the three months ended September 30, 2014, compared to the same period in 2013.

Non-GAAP financial highlights for the three months ended September 30, 2014 include:

• Non-GAAP gross profit increased to $18.5 million, or 54.3% of revenue, compared to $12.7 million, or 49.0% of revenue, over the same period in 2013.

• Non-GAAP operating loss decreased to $1.1 million, compared to $1.5 million over the same period in 2013.

• Non-GAAP net loss decreased to $0.8 million, from a loss of $2.9 million over the same period in 2013.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe that the assumptions and estimates associated with revenue recognition, income taxes and stock-based compensation have the greatest potential impact on our condensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. These policies are summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2013 Form 10-K.

Key Operating and Financial Performance Metrics

We monitor and evaluate the key operating and financial performance metrics noted below to help us establish our budgets, measure our business operating performance, assess trends and evaluate our performance as compared to that of our competitors. We discuss revenue, gross profit margin and operating results below under “Components of Operating Results.” We discuss cash and cash equivalents and cash flows from operations below under “Liquidity and Capital Resources.”

	As of and for the Three Months Ended September 30,						As of and for the Nine Months Ended September 30,
	2014			2013			2014			2013
	(in thousands)
Revenues	$	34,052		$	25,971		$	96,068		$	74,161
Gross profit margin	52.8		%	47.9		%	54.6		%	54.5		%
Operating loss	(3,837		)	(3,407		)	(8,289		)	(5,973		)
Cash and cash equivalents	64,367			7,968			64,367			7,968
Cash used in operations	(54		)	(6,803		)	(12,971		)	(16,978		)

Components of Operating Results

Revenue

Revenue from our solutions is generated from the sale of software products and maintenance and support. Software products revenues consist of software licenses, hardware and professional services fees from software customizations, feature development and training for customers. Maintenance revenue includes support, annual software maintenance agreements and extended hardware warranty arrangements.

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We report two classifications of revenue:

• Software products revenue includes revenue arrangements that consist of tangible products with essential software elements, perpetual right-to-use (RTU) software licenses and sales of industry standard hardware. Software products revenue is supported by customer contracts that generally outline terms and conditions, including those that relate to acceptance of the product. Software products revenue also includes software customizations and feature development for individual customers and training of customers.

• Maintenance revenue includes support, annual software maintenance agreements and extended hardware warranty arrangements. Revenue from these services is recognized ratably over the service delivery period.

Cost of Revenue

Our cost of software products revenue consists of payroll-related costs of service personnel, third-party hardware and third-party software licenses and the shipping and installation costs to any of our customers. The costs associated with our RTU software licenses are expensed as incurred in operating costs under research and development.

Our cost of maintenance revenue includes salaries, employee benefits, stock-based compensation and other related expenses. Additionally, hardware and third-party software licenses and services are included.

Gross Profit and Gross Profit Margin

Gross profit is the calculation of total revenue minus total cost of revenue. Our gross profit margin is our gross profit expressed as a percentage of revenue. Our gross profit margin has been and will continue to be affected by a variety of factors, including the mix of customers and types of revenue, cost fluctuations and reduction activities, including technological changes. Additionally, changes in foreign exchange rates may impact gross profit and gross profit margin.

Operating Expenses

Operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Salaries and personnel costs are the most significant component of each of these expense categories.

Research and Development Expenses. Research and development expenses primarily consist of salaries and personnel costs for research and development employees, including stock-based compensation and bonuses. Additional expenses include costs related to development, quality assurance and testing of new software and enhancement of existing software, consulting, travel and other related overhead such as facility costs.

Additionally, we supplement our own research and development resources with third-party international and domestic subcontractors for software development, documentation, quality assurance and software support. We believe continuing to invest in research and development efforts is essential to maintaining our competitive position. We expect research and development expenses to increase in the foreseeable future as we continue to broaden our product portfolio.

Sales and Marketing Expenses. Sales and marketing expenses consist primarily of salaries and personnel costs for our sales and marketing employees, including stock-based compensation, commissions and bonuses. Additional expenses include attendance at trade shows, marketing programs, consulting, travel and other related overhead. We expect our sales and marketing expenses to increase in the foreseeable future as we further increase the number of our sales and marketing professionals as we continue our geographic expansion and continue to grow our business.

General and Administrative Expenses. General and administrative expenses primarily consist of salary and personnel costs for administration, finance and accounting, legal, information systems and human resources employees, including stock-based compensation and bonuses. Additional expenses include consulting and professional fees, travel, insurance and other corporate expenses and gain or loss on disposal of assets. Expenses related to the acquisition of Airwide Solutions, including the amortization of intangible assets relating to customer relationships and technology, are included.

Operating Results

Operating results are the result of subtracting our total operating expenses from our gross profits. We use operating results to analyze the profitability of our operations without the effects of non-operating income and expenses.

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Stock-Based Compensation

We include stock-based compensation as part of cost of revenue and operating expenses in connection with the grant or modification of stock options and other equity awards to our independent directors, employees and consultants. We apply the fair value method in accordance with authoritative guidance for determining the cost of stock-based compensation. The total cost of the grant or modification is measured based on the estimated fair value of the award at the date of grant.

The following table presents our stock-based compensation expense resulting from stock options that we recorded in our condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenues	$	221	$	131	$	431	$	131
Research and development	218		209		536		209
Sales and marketing	285		400		692		400
General and administrative	633		121		1,412		421
Total	$	1,357	$	861	$	3,071	$	1,161

Net Interest Expense

Net interest expense consists of the difference between interest income and interest expense. Interest income represents interest received on our cash and cash equivalents. Interest expense is due to commercial loans. See “Liquidity and Capital Resources” elsewhere in this section.

Income Tax Expense

Income tax expense consists of U.S. federal, state and foreign income taxes. We are required to pay income taxes in certain states and foreign jurisdictions. Historically, we have not been required to pay U.S. federal income taxes due to our accumulated net operating losses. For the three and nine months ended September 30, 2014, we have net operating loss carryforwards available to be utilized in the U.S. and certain foreign jurisdictions against future taxable income.

Results of Operations

Three Months Ended September 30, 2014 and 2013

Revenues

	Three Months Ended September 30,
			% of Total				% of Total		Change
	2014		Revenue		2013		Revenue		Amount			%
	(in thousands)
Revenue by type:
Software products	$	27,311	80.2	%	$	20,788	80.0	%	$	6,523		31.4	%
Maintenance	6,741		19.8	%	5,183		20.0	%	1,558			30.1	%
Total revenues	$	34,052	100	%	$	25,971	100	%	$	8,081		31.1	%
Revenue by Geographic Area:
Americas	$	16,215	47.6	%	$	15,537	59.8	%	$	678		4.4	%
EMEA	12,242		36.0	%	6,906		26.6	%	5,336			77.3	%
APAC	5,595		16.4	%	3,528		13.6	%	2,067			58.6	%
Total revenues	$	34,052	100	%	$	25,971	100	%	$	8,081		31.1	%
Revenue by Product Group:
Voice and Video	$	23,464	68.9	%	$	9,930	38.2	%	$	13,534		136.3	%
Enhanced Messaging	10,588		31.1	%	16,041		61.8	%	(5,453		)	(34.0	)%
Total revenues	$	34,052	100	%	$	25,971	100	%	$	8,081		31.1	%

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Revenues increased by 31.1%, or $8.1 million, for the three months ended September 30, 2014, compared to the same period in the prior year. Our revenue growth was the result of the expansion of existing customer relationships, in particular additional sales opportunities for our solutions generated by successful product launches. Software products revenue grew $6.5 million, or 31.4%, to $27.3 million in the three months ended September 30, 2014 from $20.8 million for the same period in 2013. The increased revenues were primarily from additional customer contracts. Maintenance revenues increased by 30.1%, or $1.6 million for the three months ended September 30, 2014, compared to the same period in the prior year, primarily due to additional customer contracts, as well as extended support agreements with existing customers.

Total revenue from the Americas region grew by $0.7 million, or 4.4%, to $16.2 million for the three months ended September 30, 2014 from $15.5 million for same period in 2013. Revenues in the EMEA region increased $5.3 million, or 77.3%, to $12.2 million for the three months ended September 30, 2014 from $6.9 million for same period in 2013. Revenues in the APAC region increased $2.1 million, or 58.6%, to $5.6 million for the three months ended September 30, 2014 from $3.5 million for same period in 2013. Revenues in the Americas and EMEA regions increased due to expansion of solutions to existing customers, while the increase in the APAC region primarily resulted from a customer contract that was entered into during 2014.

Revenue from the Voice and Video product group grew by $13.5 million, or 136.3%, to $23.5 million for the three months ended September 30, 2014 from $9.9 million for same period in 2013. Revenues from Voice and Video products increased, as we generated additional sales opportunities for our next-generation solutions through successful product launches with existing customers and our existing customers rolled out our solutions to larger numbers of subscribers. Revenues from Enhanced Messaging products decreased by $5.5 million, or 34.0%, to $10.6 million for the three months ended September 30, 2014 from $16.0 million for same period in 2013. Revenues from Enhanced Messaging products decreased due to a slowing of some of our legacy products and due to the timing of revenue recognition.

Cost of Revenue and Gross Profit

	Three Months Ended September 30,
			% of Related				% of Related		Change
	2014		Revenue		2013		Revenue		Amount		%
	(in thousands)
Cost of Revenue
Software products	$	12,393	45.4	%	$	10,806	52.0	%	$	1,587	14.7	%
Maintenance	3,677		54.5	%	2,716		52.4	%	961		35.4	%
Total	$	16,070	47.2	%	$	13,522	52.1	%	$	2,548	18.8	%
Gross Profit
Software products	$	14,918	54.6	%	$	9,982	48.0	%	$	4,936	49.4	%
Maintenance	3,064		45.5	%	2,467		47.6	%	597		24.2	%
Total	$	17,982	52.8	%	$	12,449	47.9	%	$	5,533	44.4	%

Our cost of revenue increased $2.5 million, or 18.8%, to $16.1 million for the three months ended September 30, 2014 from $13.5 million for the same period in 2013. Cost of revenue increased due to an increase in revenues, as well as increased operations personnel costs to expand and service new markets.

Total gross profit increased $5.5 million, or 44.4%, to $18.0 million for the three months ended September 30, 2014 from $12.4 million for same period in 2013. Gross profit margin increased to 52.8% for the three months ended September 30, 2014 from 47.9% for same period in 2013. The increase was primarily due to a shift from initial deployments, which generally have lower margins.

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Operating Expenses

	Three Months Ended September 30,
			% of Total Revenue				% of Total Revenue		Change
	2014				2013				Amount			%
	(in thousands)
Research and development	$	7,958	23.4	%	$	5,436	20.9	%	$	2,522		46.4	%
Sales and marketing	8,124		23.9	%	4,675		18.0	%	3,449			73.8	%
General and administrative	5,737		16.8	%	5,745		22.1	%	(8		)	(0.1	)%
Total	$	21,819	64.1	%	$	15,856	61.0	%	$	5,963		37.6	%

Research and Development

Research and development expenses increased by $2.5 million, or 46.4%, for the three months ended September 30, 2014, compared to the same period in the prior year. Research and development expense increased as we added headcount to enhance existing products and develop future product capability and new customer solutions.

Sales and Marketing

Sales and marketing costs increased by $3.4 million for the three months ended September 30, 2014, compared to the same period in the prior year. The growth in sales and marketing expense was primarily due to an increase in personnel costs and related expense to further enhance direct selling opportunities and to support sales growth into additional geographic areas.

General and Administrative

General and administrative expenses was essentially unchanged at $5.7 million for the three months ended September 30, 2014, and the same period in the prior year.

Net Interest Expense

	Three Months Ended September 30,
				% of Total					% of Total		Change
	2014			Revenue		2013			Revenue		Amount			%
	(in thousands)
Interest income	$	(26	)	(0.1	)%	$	(4	)	—	%	$	(22	)	550.0	%
Interest expense	430			1.3	%	1,072			4.1	%	(642		)	(59.9	)%
Total net interest expense	$	404		1.2	%	$	1,068		4.1	%	$	(664	)	(62.2	)%

Net interest expense decreased by $0.7 million for the three months ended September 30, 2014, compared to the same period in the prior year. The decrease was attributable to lower average outstanding debt during the three months ended September 30, 2014, compared to the same period in 2013, as well as the amendment made to our debt facility in March 2014, which lowered the overall interest rate on our outstanding debt balances.

Foreign Exchange

Foreign exchange loss increased to $2.2 million for the three months ended September 30, 2014 compared to a $0.3 million gain for the same period in 2013. The change is due to changes in transactional currencies compared to the functional currencies during the respective periods.

Income Tax Expense

Income tax benefit was $0.7 million for the three months ended September 30, 2014 compared to income tax expense of $0.4 million for the same period in 2013.  The decrease in income tax expense is related primarily to the release of valuation allowance against deferred tax assets, reduced foreign withholding taxes and a reduction in the FIN48 liability recorded in the three months ended September 30, 2014 .

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Results of Operations

Nine Months EndedSeptember 30, 2014 and 2013

Revenues

	Nine Months Ended September 30,
			% of Total				% of Total		Change
	2014		Revenue		2013		Revenue		Amount			%
	(in thousands)
Revenue by type:
Software products	$	77,503	80.7	%	$	58,052	78.3	%	$	19,451		33.5	%
Maintenance	18,565		19.3	%	16,109		21.7	%	2,456			15.2	%
Total revenues	$	96,068	100	%	$	74,161	100	%	$	21,907		29.5	%
Revenue by Geographic Area:
Americas	$	49,526	51.6	%	$	36,873	49.8	%	$	12,653		34.3	%
Europe, Middle East and Africa (“EMEA”)	34,039		35.4	%	24,502		33.0	%	9,537			38.9	%
Asia-Pacific (“APAC”)	12,503		13.0	%	12,786		17.2	%	(283		)	(2.2	)%
Total revenues	$	96,068	100	%	$	74,161	100	%	$	21,907		29.5	%
Revenue by Product Group:
Voice and Video	$	66,334	69.0	%	$	24,770	33.4	%	$	41,564		167.8	%
Enhanced Messaging	29,734		31.0	%	49,391		66.6	%	(19,657		)	(39.8	)%
Total revenues	$	96,068	100	%	$	74,161	100	%	$	21,907		29.5	%

Revenues increased by 29.5%, or $21.9 million, for the nine months endedSeptember 30, 2014, compared to the same period in the prior year. Our revenue growth was the result of the expansion of existing customer relationships, in particular additional sales opportunities for our solutions generated by successful product launches. Software products revenue grew $19.5 million, or 33.5%, to $77.5 million in the nine months endedSeptember 30, 2014 from $58.1 million for the same period in 2013. The increased revenues were primarily from additional sales to new and existing customers. Software products revenues increased at a faster pace than maintenance revenues for the nine months endedSeptember 30, 2014, compared to the same period in the prior year, as software sales precede maintenance revenues.

Total revenue from the Americas region grew by $12.7 million, or 34.3%, to $49.5 million for the nine months endedSeptember 30, 2014 from $36.9 million for same period in 2013. Revenues in the EMEA region increased $9.5 million, or 38.9%, to $34.0 million for the nine months endedSeptember 30, 2014 from $24.5 million for same period in 2013. Revenues in the APAC region decreased $0.3 million, or 2.2%, to $12.5 million for the nine months endedSeptember 30, 2014 from $12.8 million for same period in 2013. Revenues in the EMEA and Americas regions increased due to strong sales of Voice and Video solutions in both markets. The decrease in the APAC region was primarily due to a large Enhanced Messaging contract recognized during the nine months ended September 30, 2013 that was not recurring in 2014. This decrease was substantially offset by additional new customer contracts.

Revenue from the Voice and Video product group grew by $41.6 million, or 167.8%, to $66.3 million for the nine months endedSeptember 30, 2014 from $24.8 million for same period in 2013. Revenues from Voice and Video products increased as we generated additional sales of next-generation solutions to existing customers and our existing customers rolled out our solutions to larger numbers of subscribers. Revenues from Enhanced Messaging products decreased by $19.7 million, or 39.8%, to $29.7 million for the nine months endedSeptember 30, 2014 from $49.4 million for same period in 2013. Revenues from Enhanced Messaging products decreased due to a large initial deployment in 2013 that we did not have in 2014.

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Cost of Revenue and Gross Profit

	Nine Months Ended September 30,
			% of Related				% of Related		Change
	2014		Revenue		2013		Revenue		Amount			%
	(in thousands)
Cost of Revenue
Software products	$	34,258	44.2	%	$	28,220	48.6	%	$	6,038		21.4	%
Maintenance	9,364		50.4	%	5,543		34.4	%	3,821			68.9	%
Total	$	43,622	45.4	%	$	33,763	45.5	%	$	9,859		29.2	%
Gross Profit
Software products	$	43,245	55.8	%	$	29,832	51.4	%	$	13,413		45.0	%
Maintenance	9,201		49.6	%	10,566		65.6	%	(1,365		)	(12.9	)%
Total	$	52,446	54.6	%	$	40,398	54.5	%	$	12,048		29.8	%

Our cost of revenue increased $9.9 million, or 29.2%, to $43.6 million for the nine months endedSeptember 30, 2014 from $33.8 million for the same period in 2013. Cost of revenue increased due to an increase in revenues, as well as increased operations personnel costs to expand into new markets.

Total gross profit increased $12.0 million, or 29.8%, to $52.4 million for the nine months endedSeptember 30, 2014 from $40.4 million for same period in 2013. Gross profit margin remained essentially unchanged at 54.6% for the nine months endedSeptember 30, 2014 from 54.5% for same period in 2013.

Operating Expenses

	Nine Months Ended September 30,
			% of Total				% of Total		Change
	2014		Revenue		2013		Revenue		Amount		%
	(in thousands)
Research and development	$	21,281	22.2	%	$	16,934	22.8	%	$	4,347	25.7	%
Sales and marketing	23,223		24.2	%	14,331		19.3	%	8,892		62.0	%
General and administrative	16,231		16.9	%	15,106		20.4	%	1,125		7.4	%
Total	$	60,735	63.3	%	$	46,371	62.5	%	$	14,364	31.0	%

Research and Development

Research and development expenses increased by $4.3 million, or 25.7%, for the nine months endedSeptember 30, 2014, compared to the same period in the prior year. Research and development expense increased as we added headcount to enhance existing products and develop future product capability and new customer solutions.

Sales and Marketing

Sales and marketing costs increased by $8.9 million for the nine months endedSeptember 30, 2014, compared to the same period in the prior year. The growth in sales and marketing expense was primarily due to an increase in personnel costs and related expense to further enhance direct selling opportunities and to support sales growth into additional geographic areas.

General and Administrative

General and administrative expenses increased by $1.1 million for the nine months endedSeptember 30, 2014, compared to the same period in the prior year. The growth in general and administrative expense was primarily due to an increase in personnel costs and related expenses of approximately $1.9 million and increased cost of being a public company of approximately $0.9 million, driven by a headcount increase to support our growth. This increase was offset by a reduction in our professional services expense of approximately $1.0 million and bad debt expense of approximately $0.7 million due to our increased collection efforts. The remaining increase is due to our overall growth.

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Net Interest Expense

	Nine Months Ended September 30,
				% of Total					% of Total		Change
	2014			Revenue		2013			Revenue		Amount			%
	(in thousands)
Interest income	$	(87	)	(0.1	)%	$	(12	)	—	%	$	(75	)	625	%
Interest expense	1,638			1.7	%	2,187			2.9	%	(549		)	(25.1	)%
Total net interest expense	$	1,551		1.6	%	$	2,175		2.9	%	$	(624	)	(28.7	)%

Net interest expense decreased by $0.6 million for the nine months endedSeptember 30, 2014, compared to the same period in the prior year. The decrease was primarily attributable to the amendment made to our debt facility in March 2014, which lowered the overall interest rate on our outstanding debt balances.

Foreign Exchange

Foreign exchange loss was essentially unchanged at $2.3 million, for the nine months endedSeptember 30, 2014 compared to the same period in 2013.

Income Tax Expense

Income tax benefit was $0.2 million for the nine months ended September 30, 2014 compared to income tax expense of $2.0 million for the same period in 2013.  The decrease in income tax expense is related primarily to the release of valuation allowance against deferred tax assets, reduced foreign withholding taxes and a reduction in the FIN48 liability recorded in the nine months ended September 30, 2014 .

Liquidity and Capital Resources

We have funded our operations from 2005 to September 30, 2014 primarily with net proceeds from issuances of preferred stock of approximately $105 million, net proceeds from our IPO of approximately $44.8 million, net proceeds from our follow-on public common stock offering of approximately $41.7 million and, to a lesser extent, borrowings under credit facilities.

As of September 30, 2014, our capital resources consisted principally of cash and cash equivalents totaling $64.4 million. Our cash and cash equivalents are comprised primarily of money market funds and time deposits.

We restructured our loan arrangement with Silicon Valley Bank during the first quarter of 2014 to reduce our financing costs. We also used a portion of our initial public offering proceeds to repay the entire $15 million outstanding principal amount under our subordinated loan agreement with Silver Lake Waterman in the first quarter of 2014 and terminated our Silver Lake Waterman loan. Our Silicon Valley Bank loan arrangement is described below.

Cash continues to be used in operations and we expect that our current loan agreement with Silicon Valley Bank (or refinancing thereof), cash generated from operations and the net proceeds of our IPO and follow-on offering will provide cash sufficient to meet our currently anticipated cash requirements for at least the next twelve months.

Our cash flows were as follows (in thousands):

	Nine Months Ended September 30,
	2014			2013			Change
Cash Provided by (Used in)
Operating	$	(12,971	)	$	(16,978	)	$	4,007
Investing	$	(4,334	)	$	(1,962	)	$	(2,372	)
Financing	$	42,700		$	20,017		$	22,683

Operating Activities

Cash flows from operating activities are an additional measure of our overall business performance, as it enables us to analyze our financial performance without the effects of certain non-cash items such as depreciation, amortization and stock-based compensation expense.

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Cash flow used in operating activities during the nine months endedSeptember 30, 2014 consisted primarily of a net loss of $13.7 million as well as working capital requirements and other activities of $0.8 million. The decrease in cash used in operating activities during the nine months endedSeptember 30, 2014 compared to the same period in 2013 was primarily due to increased working capital needs to support the continued growth of the business.

Investing Activities

Our investing activities have consisted primarily of purchases of equipment, including software.

For the nine months endedSeptember 30, 2014, net cash used for investing activities was $4.3 million, compared to $2.0 million for the nine months endedSeptember 30, 2013. Capital expenditures increased by $2.3 million during the nine months endedSeptember 30, 2014 compared to the same period in the prior year, primarily due to the acquisition of computer hardware and other equipment.

Financing Activities

Our financing activities have consisted primarily of our follow-on public offering of common stock and the incurrence and repayment of indebtedness under loan arrangements.

For the nine months endedSeptember 30, 2014, net cash provided by financing activities was $42.7 million, consisting primarily of proceeds from our August 2014 follow-on offering of common stock. The increase in cash provided by financing activities during the nine months endedSeptember 30, 2014 compared to the same period in 2013 was mainly due to the follow-on offering proceeds, offset by the decrease in net borrowings of approximately $20.0 million compared to the same period in the prior year.

Operating and Capital Expenditure Requirements

In the future, we expect our operating and capital expenditures to increase as we increase headcount, expand our business activities, grow our customer base, implement and enhance our information technology and enterprise resource planning system and operate as a public company. As revenues increase, we expect our accounts receivable balance to increase. Any such increase in accounts receivable may not be completely offset by increases in accounts payable and accrued expenses, which would likely result in greater working capital requirements.

If our available cash balances are insufficient to satisfy our liquidity requirements, we may seek to sell equity or convertible debt securities or enter into additional credit facilities. The sale of equity and convertible debt securities may result in dilution to our stockholders and those securities may have rights senior to those of our common shares. If we raise additional funds through the issuance of convertible debt securities, these securities could contain covenants that would restrict our operations. We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, or at all.

Our estimates of the period of time through which our financial resources will be adequate to support our operations and the costs to support research and development and our sales and marketing activities are forward-looking statements and involve risks and uncertainties and actual results could vary materially and negatively as a result of a number of factors, including the factors discussed in the section “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014. We have based our estimates on assumptions that may prove to be wrong and we could utilize our available capital resources sooner than we currently expect.

Our short- and long-term capital requirements will depend on many factors, including the following:

• our development of new products;

• market acceptance of our products and our competitive position in the marketplace;

• our ability to generate cash from operations;

• our ability to control our costs;

• the emergence of competing or complementary technological developments;

• the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights or participating in litigation-related activities; and

• the acquisition of businesses, products and technologies.

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Silicon Valley Bank Loan

On March 6, 2014, we entered into an Amended and Restated Loan Agreement with SVB to replace our former $22.5 million Senior Loan facility with SVB. The Amended and Restated Loan Agreement includes a five-year term loan of $25.0 million (“Term Loan”), a $15.0 million secured revolving line of credit (“Revolver”) and a $5 million secured line for letters of credit, foreign exchange and cash management services. The Term Loan has an initial floating interest rate of 2.75% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. At September 30, 2014, the interest rate was 6.0%. After the achievement of the one of the two performance triggers described in the following sentence, the interest rate will be reduced to 2.25% above the U.S. prime rate; after the achievement of the second performance trigger the interest rate will be further reduced to 1.75% above the U.S. prime rate. The performance triggers are the following: (i) our achievement, on a consolidated basis, of positive EBITDA (as defined in the loan agreement) for two consecutive fiscal quarters, and (ii) the completion of an equity offering resulting in net proceeds to the Company of at least $50 million. The Term Loan provides for monthly payments of interest only until April 1, 2015; thereafter we are required to repay the outstanding principal amount in 48 monthly installments. The Term Loan has a maturity of March 1, 2019. If we prepay the Term Loan within one year of the Amended and Restated Loan Agreement, we will have to pay a prepayment premium of $250,000; thereafter, the Term Loan may be prepaid without penalty.

Under the Revolver, we may draw up to 80% of eligible domestic trade receivables, 70% of eligible foreign trade receivables and 35% of eligible accrued but unbilled accounts up to a maximum of $15.0 million. The Revolver has a three-year term and bears interest at a floating interest rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. We are also required to pay an unused facility fee, monthly in arrears, of 0.25% per annum of the unused amount of the Revolver. The Revolver may be prepaid at any time without penalty. As of September 30, 2014, we had no borrowings outstanding on our Revolver and had $15.0 million available.

The Amended and Restated Loan Agreement requires us to maintain compliance with the following financial covenants:

• A minimum liquidity ratio — defined as the sum of our consolidated unrestricted cash and cash equivalents plus eligible net accounts receivable (as defined in the Amended and Restated Loan Agreement) divided by the amount of outstanding obligations to the lender — of 1.35, as measured at the end of each calendar month;

• A minimum two-quarter rolling EBITDA as follows:

• $(10.0) million for the quarter ending March 31, 2014;

• $(7.5) million for the quarters ending June 30, 2014 and September 30, 2014;

• $(5.0) million for the quarter ending December 31, 2014;

• $(2.5) million for the quarter ending March 31, 2015;

• $(1.25) million for the quarter ending June 30, 2015; and

• $0 for each quarter thereafter.

EBITDA as defined in the Amended and Restated Loan Agreement is permitted to exclude non-cash stock compensation expense, non-cash foreign currency translation expense and other non-cash adjustments made in accordance with GAAP.

The Amended and Restated Loan Agreement contains certain restrictive covenants that limit our ability to, among other things, incur liens on the our assets or incur additional debt, pay dividends, make investments or engage in acquisitions, and that prevent dissolution, liquidation, merger or a sale of our assets without the prior consent of SVB. The agreement also contains usual and customary events of default, the occurrence of which may result in all outstanding amounts under the loan agreement becoming due and payable immediately, and also imposes an interest penalty of an additional 5% above the otherwise applicable interest rate at any time when an event of default is continuing. As of September 30, 2014, we were in compliance with all covenants under the Amended and Restated Agreement.

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Contractual Obligations and Commercial Commitments

The following table discloses aggregate information about our contractual obligations and periods in which payments are due as of September 30, 2014 (in thousands):

	Payments Due By Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Operating leases	$	6,629	$	1,779	$	2,751	$	1,493	$	606
Silicon Valley Bank term loan (1)	25,000		3,125		12,500		9,375		—
Total	$	31,629	$	4,904	$	15,251	$	10,868	$	606

(1) The Silicon Valley Bank term loan matures in March 2019. The initial interest is payable at a floating rate of 2.75% above the U.S prime rate, subject to a minimum interest rate of 4.25%, which was 6.0% at September 30, 2014. We are required to make monthly interest-only payments through March 2015.

Operating leases relate to our office leases for various locations across the globe. We have several office leases expiring at different times through 2019. Our principal office leases are in Richardson, Texas, Reading, UK, Bangalore, India and Shanghai, China.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Non-GAAP Financial Measures

In addition to our GAAP operating results, we use certain non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax position, depreciation, amortization, stock-based compensation expense and certain other expenses. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for revenue recognized in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate such measures differently, which reduces its usefulness as a comparative measure. We believe that these non-GAAP measures reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business.

The presentation of non-GAAP net loss, non-GAAP net loss per share, non-GAAP gross profit, non-GAAP operating loss and other non-GAAP financial measures in this report is not meant to be a substitute for “net loss,” “net loss per share,” “gross profit,” “operating loss” or other financial measures presented in accordance with GAAP, but rather should be evaluated in conjunction with such data. Our definition of “non-GAAP net loss,” “non-GAAP net loss per share,” “non-GAAP gross profit,” “non-GAAP operating loss” and other non-GAAP financial measures may differ from similarly titled non-GAAP measures used by other companies and may differ from period to period. In reporting non-GAAP measures in the future, we may make other adjustments for expenses and gains we do not consider reflective of core operating performance in a particular period and may modify “non-GAAP net loss,” “non-GAAP net loss per share,” “non-GAAP gross profit,” “non-GAAP operating loss” and such other non-GAAP measures by excluding these expenses and gains.

Non-GAAP gross profit, software products gross profit and maintenance gross profit. We define non-GAAP gross profit as gross profit plus stock-based compensation expense and amortization and depreciation expense. We consider non-GAAP gross profit to be a useful metric for management and our investors because it excludes the effect of certain non-cash expenses, allowing for a comparison of our sales margins over multiple periods.

Non-GAAP operating expenses, research and development expense (“R&D”), sales and marketing expense (“S&M”), and general and administrative expense (“G&A”). We define non-GAAP operating expenses as operating expenses adjusted to exclude stock-based compensation expense and amortization and depreciation expense allocated to research and development, sales and marketing and general and administrative expenses. Similarly, we define non-GAAP research and development, sales

26

and marketing and general and administrative expenses as the relevant GAAP measure adjusted to exclude stock-based compensation expense and amortization and depreciation expense allocated to the particular expense item.

Non-GAAP operating loss. We define non-GAAP operating loss as operating loss adjusted to exclude stock-based compensation expense and amortization and depreciation expense. We consider non-GAAP operating loss to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses so management and investors can compare our core business operating results over multiple periods.

Non-GAAP net loss. We define non-GAAP net loss as non-GAAP operating loss after interest and taxes, as adjusted for uncertain tax positions component. We consider non-GAAP net loss to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses and foreign exchange gains and losses that are shown on the consolidated statement of operations and comprehensive loss. Excluding foreign exchange gains and losses helps management and investors compare our results to companies without such charges and over multiple periods, as foreign exchange gain or loss is difficult to predict and can vary greatly over multiple periods.

Non-GAAP net loss per share. We define non-GAAP net loss per share as non-GAAP net income divided by the non-GAAP weighted-average common shares outstanding, which assumes the conversion of preferred shares at the beginning of the period.

27

Mavenir Systems, Inc. and Subsidiaries

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Software Products
Revenue	$	27,311		$	20,788		$	77,503		$	58,052
Cost of revenue	12,393			10,806			34,258			28,220
Amortization and depreciation	279			133			755			375
Stock-based compensation	221			131			431			131
Gross profit (GAAP)	14,918			9,982			43,245			29,832
Gross profit (Non-GAAP)	15,418			10,246			44,431			30,338
Maintenance
Revenue	$	6,741		$	5,183		$	18,565		$	16,109
Cost of revenue	3,677			2,716			9,364			5,543
Gross profit (GAAP)	3,064			2,467			9,201			10,566
Gross profit (Non-GAAP)	3,064			2,467			9,201			10,566
Total Revenue	$	34,052		$	25,971		$	96,068		$	74,161
Total Gross Profit (GAAP)	$	17,982		$	12,449		$	52,446		$	40,398
Gross Profit Margin % (GAAP)	52.8		%	47.9		%	54.6		%	54.5		%
Gross Profit (Non-GAAP)	$	18,482		$	12,713		$	53,632		$	40,904
Gross Profit Margin % (Non-GAAP)	54.3		%	49.0		%	55.8		%	55.2		%
Operations Expenses
R&D (GAAP)	$	7,958		$	5,436		$	21,281		$	16,934
Amortization and depreciation	527			284			1,584			777
Stock-based compensation	218			209			536			209
R&D (Non-GAAP)	$	7,213		$	4,943		$	19,161		$	15,948
S&M (GAAP)	$	8,124		$	4,675		$	23,223		$	14,331
Amortization and depreciation	—			—			—			—
Stock-based compensation	285			400			692			400
S&M (Non-GAAP)	$	7,839		$	4,275		$	22,531		$	13,931
G&A (GAAP)	$	5,737		$	5,745		$	16,231		$	15,106
Amortization and depreciation	530			638			1,607			1,697
Stock-based compensation	633			121			1,412			421
G&A (Non-GAAP)	$	4,574		$	4,986		$	13,212		$	12,988
Total Operating Expenses (GAAP)	$	21,819		$	15,856		$	60,735		$	46,371
Operating Expenses (Non-GAAP)	$	19,626		$	14,204		$	54,904		$	42,867
Operating Loss (GAAP)	$	(3,837	)	$	(3,407	)	$	(8,289	)	$	(5,973	)
Net interest	404			1,068			1,551			2,175
Loss on early extinguishment of debt	—			—			1,783			—
Foreign exchange loss (gain)	2,221			(316		)	2,275			2,328
Income taxes	(657		)	354			(157		)	1,972
Net Loss (GAAP)	$	(5,805	)	$	(4,513	)	$	(13,741	)	$	(12,448	)
Operating Income (Loss) (Non-GAAP)	$	(1,144	)	$	(1,491	)	$	(1,272	)	$	(1,963	)
Net interest	404			1,068			1,551			2,175
Income taxes	(657		)	354			(157		)	1,972
Adjusted for uncertain tax positions component	(102		)	—			184			—
Net Loss (Non-GAAP)	$	(789	)	$	(2,913	)	$	(2,850	)	$	(6,110	)

28

Mavenir Systems, Inc. and Subsidiaries

Non-GAAP Net Loss Per Share

(all shares are weighted-average outstanding for period presented)

( In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
GAAP weighted-average common shares outstanding	27,392			1,348			25,012			1,342
Conversion of preferred shares *	—			16,452			—			16,452
Adjusted weighted-average common shares outstanding	27,392			17,800			25,012			17,794
Non-GAAP net loss	$	(789	)	$	(2,913	)	$	(2,850	)	$	(6,110	)
Non-GAAP net loss per share	$	(0.03	)	$	(0.16	)	$	(0.11	)	$	(0.34	)

* Assumes conversion of preferred shares at beginning of period

Implications of Being an Emerging Growth Company

As an emerging growth company, as defined under the Jumpstart Our Business Startups Act of 2012 (JOBS Act), we are subject to certain reduced reporting requirements as a public company. For example, until we are no longer an emerging growth company, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act and we will be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the independent registered public accounting firm’s report on financial statements. We could remain an emerging growth company until as late as December 31, 2018 (the fiscal year-end following the fifth anniversary of our IPO).

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk related to inflation, changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative, hedging or trading purposes, although in the future we may enter into interest rate or exchange rate hedging arrangements to manage the risks described below.

Inflation Risk

We may be exposed to inflation risk in that some of our international operations, particularly in developing countries, may be subject to increased costs as a result of higher inflation. Because we compete with other solutions providers on a global basis, our customers would not expect, and may not be willing, to pay for any cost increases from inflation. Therefore, our future margins could be impacted. Where competitively possible we attempt to offset some of this risk with contracted price adjustments.

Interest Rate Risk

Cash held in our operating business units is generally available for local operations. Most of our cash is retained by our U.S. business. The majority of these funds are in low to zero interest bank accounts. Our borrowings under our Term Loan and Revolver with Silicon Valley Bank are at variable rates based on the U.S. prime rate and, as a result, increases in interest rates would generally result in increased interest expense on outstanding borrowings. A one-percent increase above the minimum floor calculation would increase our interest expense by as much as $0.3 million if the entire facilities were drawn throughout the year.

Foreign Currency Exchange Risk

We have significant international operations with subsidiaries and operations in eight countries outside of the U.S. and as such we face exposure to adverse movements in foreign currency exchange rates. While these exposures may change over time as business practices evolve, adverse movements in foreign currency exchange rates may have a material adverse impact on our financial results. Our primary exposures have been related to non-U.S. dollar-denominated net operating income or net operating losses. As a consequence, our results of operations would generally be adversely affected by an increase in the value of the U.S. dollar relative to the currencies of the countries in which we are profitable and a decrease in the value of the U.S. dollar relative to the currencies of the countries in which we are not profitable. However, based on the locations of our international operations and the amount of our operating results denominated in foreign currencies, we would not expect a 10% change in the value of the U.S. dollar from rates as of September 30, 2014, to have a material effect on our financial position or results of operations. If and when our international business grows substantially, relative to our U.S. business, the net exposure is likely to increase as will the impact of foreign exchange rate movements.

The functional currency for each of our non-U.S. subsidiaries is the applicable local currency. Assets and liabilities of a non-U.S. subsidiary are translated to U.S. dollars at period end exchange rates. Income and expense items are translated at the rates of exchange prevailing during the year. The adjustments resulting from translating the financial statements of the non-U.S. subsidiary are reflected in comprehensive income or loss.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

We recorded net transaction losses of $2.2 million and approximately $2.3 million for the three and nine months ended September 30, 2014, respectively, compared to a gain of $0.3 million and loss of $2.3 million for the same periods in 2013.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of September 30, 2014, management carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon the evaluation, and due to the presence of the material weakness in internal control over financial reporting described in our Annual Report on Form 10-K for the year ended December 31, 2013, our chief executive officer and chief financial officer concluded that, as of September 30, 2014, our disclosure controls and procedures were not effective at the reasonable assurance level.

Previously Reported Material Weakness

Our management concluded that our internal control over financial reporting was ineffective as of December 31, 2013, because a material weakness existed in our internal control over financial reporting related to the period-end financial close and reporting process, which resulted in the failure to record certain entries and adjustments during the year-end closing and consolidation process. Specifically, this material weakness was the result of the following:

a) the ineffective design and maintenance of controls for the review, supervision and monitoring of our accounting operations throughout the organization and for monitoring and evaluating the adequacy of our internal control over financial reporting;

b) ineffective controls over the preparation, review and approval of all financial statement account reconciliations; and

c) ineffective controls over the review, approval, documentation and recording of our journal entries. Specifically, effective controls were not designed and in place to ensure the existence, accuracy and completeness of the journal entries recorded, both, recurring and non-recurring.

As a result of this material weakness, our control environment is ineffective to ensure that the design and execution of our controls have consistently resulted in effective and timely review of our financial statements and supervision by appropriate individuals.

Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

As part of ongoing efforts to improve the design and operating effectiveness of our internal control environment and remediate this material weakness over financial reporting, we have provided training on how to document reviews to a level of precision sufficient to reduce the risk of error to an acceptable level. We have implemented a system which interfaces with our general ledger and allows us to automate the review and approval of reconciliations. We have begun to evaluate automated journal entry review and approval options and will implement a manual review process in the fourth quarter of 2014. Additionally, we continue the documentation and testing of our internal control over financial reporting. Management expects remediation efforts to progress throughout 2014, as we continue to improve our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we, our customers and our competitors are subject to various litigation and claims arising in the ordinary course of business. The software and communications infrastructure industries are characterized by frequent litigation and claims, including claims regarding patent and other intellectual property rights, claims for damages or indemnification for alleged breach under commercial supply or service contracts and claims regarding alleged improper hiring practices. From time to time we may be involved in various legal proceedings or claims but we are not aware of any pending or threatened legal proceeding against us that could have a material adverse effect on our business, operating results or financial condition.

ITEM 1A. Risk Factors

There have been no material changes in risk factors from those disclosed in Part 1, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which was filed with the Securities and Exchange Commission, or SEC, on February 21, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Unregistered Sales of Equity Securities

None.

(b) Use of Proceeds from Public Offering of Common Stock

In November 2013, we closed our IPO, in which we sold 5,320,292 shares of common stock and certain selling stockholders sold 129,708 shares of common stock at a price to the public of $10.00 per share, before underwriting discounts and commissions. The aggregate offering price for shares sold in the offering was approximately $53.2 million. In December 2013, the underwriters exercised a 30-day option to purchase additional shares of common stock at the initial public offering price, resulting in the issuance of an additional 145,339 shares for additional proceeds of approximately $1.5 million. The offer and sale of all of the shares in the IPO were registered under the Securities Act of 1933, as amended, ("Securities Act") pursuant to a registration statement on Form S-1 (File No. 333-191563), which was declared effective by the SEC on November 5, 2013 and a registration statement on Form S-1 (File No. 333-192148), which became automatically effective on November 6, 2013 pursuant to Rule 462(b) under the Securities Act. The offering commenced as of November 6, 2013 and did not terminate before all of the securities registered under the registration statements were sold. Morgan Stanley, BofA, Merrill Lynch, Deutsche Bank Securities and Needham & Company acted as the underwriters.

We raised approximately $44.8 million in net proceeds after deducting underwriting discounts and commissions of approximately $3.8 million and other estimated offering expenses of approximately $6.1 million. We did not receive any proceeds from the sale of shares by the selling stockholders in the IPO. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries. There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on November 7, 2013 pursuant to Rule 424(b) of the Securities Act. We invested the funds received in money market funds.

On November 19, 2013, we repaid $10.0 million outstanding under our senior loan with SVB. On March 5, 2014, we repaid the full $15.0 million amount outstanding under our subordinated loan agreement with Silver Lake Waterman Fund (“Silver Lake”). In addition to the repayment to Silver Lake, we estimate that we used approximately $16.3 million of the proceeds from our IPO for working capital and other general purposes during the nine months ended September 30, 2014.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(a) The following exhibits are filed as a part of this report:

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of First Filing	Exhibit Number	Provided Herewith
10.1	Amended and Restated 2013 Employee Stock Purchase Plan.	—	—	—	—	X
31.1	Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).	—	—	—	—	X
31.2	Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).	—	—	—	—	X
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).	—	—	—	—	X
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).	—	—	—	—	X
101**	Condensed Consolidated financial statements from the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2014, formatted in XBRL.	—	—	—	—	X

* This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.

** The following condensed consolidated financial statements from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014, formatted in XBRL: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

33

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: October 27, 2014

Mavenir Systems, Inc.
By	/s/ Terry Hungle
	Terry Hungle
	Chief Financial Officer Principal financial officer and duly authorized signatory

34

EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Date of First Filing	Exhibit Number	Provided Herewith
10.1	Amended and Restated 2013 Employee Stock Purchase Plan.	—	—	—	—	X
31.1	Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).	—	—	—	—	X
31.2	Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).	—	—	—	—	X
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).	—	—	—	—	X
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).	—	—	—	—	X
101**	Condensed Consolidated financial statements from the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2014, formatted in XBRL.	—	—	—	—	X

* This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference.

** The following condensed consolidated financial statements from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2014, formatted in XBRL: (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

35

EX-10.1

Exhibit 10.1

MAVENIR SYSTEMS, INC.

EMPLOYEE STOCK PURCHASE PLAN

As amended and restated September 10, 2014

ARTICLE I.

PURPOSE OF THE PLAN

This Employee Stock Purchase Plan is intended to promote the interests of Mavenir Systems, Inc., a Delaware corporation, by providing eligible employees with the opportunity to acquire a proprietary interest in the Company through participation in an employee stock purchase plan designed to qualify under Section 423 of the Code for one or more specified offerings made under such plan.

The Plan shall become effective on November 20, 2014 (the “Effective Time”). Capitalized terms herein shall have the meanings assigned to such terms in the attached

Appendix.

ARTICLE II.

ADMINISTRATION OF THE PLAN

2.1 The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to bring one or more offerings under the Plan into compliance with the requirements of Code Section 423.

2.2 The Plan Administer may authorize one or more offerings under the Plan that are not designed to comply with the requirements of Code Section 423 but with the requirements of the foreign jurisdictions in which those offerings are conducted. Such offerings shall be separate from any offerings designed to comply with the Code Section 423 requirements but may be conducted concurrently with those offerings.

2.3 Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan.

ARTICLE III.

STOCK SUBJECT TO PLAN

3.1 The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. The number of shares of Common Stock reserved for issuance over the term of the Plan shall initially be limited to 482,143 shares.

3.2 The number of shares of Common Stock available for issuance under the Plan shall automatically increase on the first trading day in January each calendar year during the term of the Plan, beginning with the 2015 calendar year, by an amount equal to one percent (1%) of the total

number of shares of Common Stock outstanding on the last trading day in the immediately preceding calendar month, but in no event shall any such annual increase exceed 428,572 shares.

3.3 Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction or other change affecting the outstanding Common Stock as a class without the Company’s receipt of consideration or should the value of outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, then equitable adjustments shall be made by the Plan Administrator to (i) the maximum number and class of securities issuable under the Plan; (ii) the maximum number and class of securities by which the share reserve is to increase automatically each calendar year pursuant to the provisions of Section 3.2 of this Article III; (iii) the maximum number and class of securities purchasable per Participant on any one Purchase Date during an offering period; (iv) the maximum number and class of securities purchasable in total by all Participants under the Plan on any one Purchase Date; and (v) the number and class of securities and the price per share in effect under each outstanding purchase right. The adjustments shall be made in such manner as the Plan Administrator deems appropriate, and such adjustments shall be final, binding and conclusive.

ARTICLE IV. OFFERING PERIODS

4.1 Shares of Common Stock shall be offered for purchase under the Plan through a series of successive offering periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.

4.2 Each offering period shall be of such duration not to exceed twenty-four (24) months, as determined by the Plan Administrator prior to the start of the applicable offering period. Until such time as the Plan Administrator specifies otherwise, offering periods shall be of a duration of approximately six (6) months and shall commence on the first Trading Day in the in the six (6)-month period commencing on May 20 and November 20 each year and end on the last Trading Day of such six (6)-month period, respectively.

4.3 Each offering period shall be comprised of one or more Purchase Intervals. Until such time as the Plan Administrator specifies otherwise, each offering period shall be comprised of one Purchase Interval.

4.4 The terms and conditions of each offering period may vary, and two or more offerings periods may run concurrently under the Plan, each with its own terms and conditions. In addition, special offering periods may be established with respect to entities that are acquired by the Company (or any subsidiary of the Company) or under such other circumstances as the Plan Administrator deems appropriate. In no event, however, shall the terms and conditions of any offering period contravene the express limitations and restrictions of the Plan, and the participants in each separate offering period conducted by one or more Participating Companies in the United States shall have equal rights and privileges under that offering in accordance with the requirements of Section 423(b)(5) of the Code and the applicable Treasury Regulations thereunder.

4.5 The following provision may, at the discretion of the Plan Administrator, apply with respect to offering periods comprised of two (2) or more Purchase Intervals. Should the Fair Market Value per share of Common Stock on any Purchase Date within such an offering period be less than the Fair Market Value per share of Common Stock on the start date of that offering period, then the individuals participating in that offering period shall, immediately after the purchase of shares of Common Stock on their behalf on such Purchase Date, be transferred from that offering period and

automatically enrolled in the offering period commencing on the next business day following such Purchase Date, provided and only if the Fair Market Value per share of Common Stock on the start date of that new offering period is lower than the Fair Market Value per share of Common Stock on the start date of the offering period in which they were currently enrolled.

ARTICLE V. ELIGIBILITY

5.1 Purchase rights may be granted under the Plan only to Employees of the Company or an Affiliate. Unless otherwise determined by the Plan Administrator for an offering, each individual who is an Eligible Employee on the start date of the offering period under the Plan may enter that offering period on such start date. However, an Eligible Employee may participate in only one offering period at a time.

5.2 The date an individual enters an offering period shall be designated his or her Entry

Date for purposes of that offering period.

5.3 An Affiliate shall become a Participating Company when authorized by the Plan

Administrator to extend the benefits of the Plan to its Eligible Employees.

5.4 Except as otherwise provided in Sections 4.5, the Eligible Employee must, in order to participate in the Plan for a particular offering period, complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization or other authorization form for any other form of contribution permitted for that offering period) and file or submit such forms in accordance with procedures established by the Plan Administrator (or its designate) on or before his or her scheduled Entry Date. Unless otherwise specified by the Plan Administrator, once an Eligible Employee timely submits the properly completed enrollment forms, his or her enrollment in the Plan will automatically remain in effect from one offering period to the next in accordance with his or her payroll deduction authorization (including his or her designated rate of payroll deduction) unless and until such Eligible Employee withdraws from the Plan, changes the rate of his or her payroll deduction or his or her employment status changes.

ARTICLE VI.

PAYROLL DEDUCTIONS/OTHER FORMS OF CONTRIBUTION

6.1 For each offering period, the Plan Administrator may allow contributions to the Plan to be effected in the form of periodic payroll deductions or one or more other forms of permitted contribution specified by the Plan Administrator prior to the start date of the applicable offering period. However, all contributions, whether in the form of payroll deductions or other mode, shall be made solely on the basis of the Participant’s Base Salary for the offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period:

(a) Participant contributions for each offering period shall be solely in the form of payroll deductions; and

(b) the payroll deductions or other form of permitted contribution that each Participant may authorize for purposes of acquiring shares of Common Stock during an offering period may be in any multiple of one percent (1%) of the Base Salary paid to that Participant during each Purchase Interval within such offering period, up to a maximum of fifteen percent (15%).

6.2 Payroll deductions or other permitted forms of contribution collected in a currency other than U.S. Dollars shall be converted into U.S. Dollars on the last day of the Purchase Interval in which collected, with such conversion to be based on an exchange rate determined by the Plan Administration in its sole discretion.

6.3 The rate of payroll deduction or other permitted form of contribution shall continue in effect throughout the offering period, except for changes effected in accordance with the following guidelines:

(a) The Participant may, at any time during the offering period, reduce the rate of his or her payroll deduction or other permitted form of contribution to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such reduction per Purchase Interval.

(b) The Participant may, at any time during the offering period, increase the rate of his or her payroll deduction or other permitted form of contribution (up to the maximum percentage limit for that offering period) to become effective as soon as administratively possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one (1) such increase per Purchase Interval.

(c) The Participant may at any time reduce his or her rate of payroll deduction or other form of permitted contribution to 0%. Such reduction shall become effective as soon as administratively practicable following the filing of the appropriate form with the Plan Administrator. The Participant’s existing payroll deductions or other permitted form of contribution authorized for the Purchase Interval in which such reduction occurs shall be applied to the purchase of shares of Common Stock on the next scheduled Purchase Date.

6.4 Payroll deductions shall begin on the first pay day administratively feasible following the Participant’s Entry Date into the offering period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of that offering period. To the extent the Plan Administrator permits other forms of contribution for an offering period, those permitted contributions at the level authorized by each affected Participant shall be collected in the manner specified by the Plan Administrator for that offering period. The payroll deductions or other permitted forms of contribution so collected shall be credited to the Participant’s book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account, unless otherwise required by the terms of that offering period. Unless the Plan Administrator determines otherwise prior to the start of the applicable offering period, the amounts collected from the Participant shall not be required to be held in any segregated account or trust fund and may be commingled with the general assets of the Company and used for any corporate purpose.

6.5 Payroll deductions or other permitted form of contribution authorized by the Participant shall automatically cease upon the termination of the Participant’s purchase right in accordance with the provisions of the Plan.

6.6 The Participant’s acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant’s acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different offering period.

ARTICLE VII. PURCHASE RIGHTS

7.1 Grant of Purchase Right. A Participant shall be granted a separate purchase right for each offering period in which he or she participates. The purchase right shall be granted on the Participant’s Entry Date into the offering period. Unless the Plan Administrator determines otherwise prior to the start date of the applicable offering period and subject to the limitations of Article VIII below, each purchase right granted for an offering period shall provide the Participant with the right to purchase up to 1,000 shares of Common Stock on each Purchase Date within that offering period subject to (i) periodic adjustments in the event of certain changes in the Company’s capitalization and/or (ii) adjustment by the Plan Administrator as provided in Section 7.4 of this Article VII. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.

Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Affiliate.

7.2 Exercise of the Purchase Right. Each purchase right shall be automatically exercised in installments on each successive Purchase Date within the offering period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant (other than Participants whose payroll deductions or other authorized contributions have previously been refunded pursuant to the Termination of Purchase Right provisions below) on each such Purchase Date. The purchase shall be effected by applying the Participant’s authorized payroll deductions or other form of permitted contribution for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock at the purchase price in effect for the Participant for that Purchase Date.

7.3 Purchase Price. The purchase price per share at which Common Stock will be purchased on the Participant’s behalf on each Purchase Date within the offering period will be established by the Plan Administrator prior to the start of that offering period, but in no event shall such purchase price be less than eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common Stock on the Participant’s Entry Date into that offering period; or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.

7.4 Number of Purchasable Shares. The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the offering period shall be the number of whole shares obtained by dividing the amount collected from the Participant through his or her authorized payroll deductions or other permitted form of contribution during the Purchase Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall be governed by the limitation set forth in Section 7.1, as adjusted periodically in the event of certain changes in the Company’s capitalization. In addition, the maximum number of shares of Common Stock purchasable in total by all Participants on any one Purchase Date shall not exceed 312,500 shares, subject to periodic adjustments in the event of certain changes in the Company’s capitalization. However, the Plan Administrator shall have the discretionary authority, exercisable prior to the start of any offering period under the Plan, to increase or decrease the limitations to be in effect for the number of shares purchasable per Participant (and the corresponding maximum number of shares purchasable per Participant for that offering period) and in total by all Participants on each Purchase Date within that offering period.

7.5 Excess Payroll Deductions/Contributions. Any authorized payroll deductions or other permitted form of contribution not applied to the purchase of shares of Common Stock on any Purchase Date because they are not sufficient to purchase a whole share of Common Stock shall be

held for the purchase of Common Stock on the next Purchase Date. However, any authorized payroll deductions or other permitted form of contribution not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable per Participant or in the aggregate on the Purchase Date shall be promptly refunded.

7.6 Suspension of Payroll Deductions/Contributions. In the event that a Participant is, by reason of the accrual limitations in Article VIII, precluded from purchasing additional shares of Common Stock on one or more Purchase Dates during the offering period in which he or she is enrolled, then no further payroll deductions or other permitted form of contribution authorized by the Participant for that offering period shall be collected from such Participant with respect to those Purchase Dates. The suspension of such deductions or contributions shall not terminate the Participant’s purchase right for the offering period in which he or she is enrolled, and the Participant’s authorized payroll deductions or other permitted form of contribution shall automatically resume on behalf of such Participant once he or she is again able to purchase shares during that offering period in compliance with the accrual limitations of Article VIII.

7.7 Termination of Purchase Right. The following provisions shall govern the termination of outstanding purchase rights:

(a) A Participant may withdraw from the offering period in which he or she is enrolled by filing the appropriate form with the Plan Administrator (or its designate) at any time prior to the next scheduled Purchase Date in that offering period, and no further payroll deductions or other permitted form of contribution shall be collected from the Participant with respect to the offering period. Any payroll deductions or other permitted form of contribution authorized by the Participant and collected during the Purchase Interval in which such withdrawal occurs shall, at the Participant’s election, be immediately refunded or held for the purchase of shares on the next Purchase Date. If no such election is made at the time of such withdrawal, then the payroll deductions or other permitted form of contribution authorized by the Participant and collected with respect to the Purchase Interval in which such withdrawal occurs shall be refunded to the Participant as soon as possible.

(b) The Participant’s withdrawal from the offering period shall be irrevocable, and the Participant may not subsequently rejoin that offering period at a later date. In order to resume participation in any subsequent offering period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into that offering period.

(c) Should the Participant cease to remain an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that purchase right shall immediately terminate, and all of the Participant’s authorized payroll deductions or other permitted contributions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, should the Participant cease to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (i) withdraw all the payroll deductions or other permitted contributions authorized by the Participant and collected to date on his or her behalf for that Purchase Interval or (ii) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. Unless otherwise determined by the Plan Administrator for one or more offerings, in no event, however, shall any further payroll deductions or other permitted form of contribution be collected on the Participant’s behalf during such leave. Upon the Participant’s return to active service (x) within three (3) months following the commencement of such leave; or (y) prior to the expiration of any longer period for which such Participant is provided with reemployment rights by statute or

contract, his or her authorized payroll deductions or other permitted form of contribution under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant withdraws from the Plan prior to his or her return. Unless otherwise determined by the Plan Administrator for one or more offerings, an individual who returns to active employment following a leave of absence which exceeds in duration the applicable (x) or (y) time period above will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordingly re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before his or her scheduled Entry Date into the offering period.

7.8 Change in Control. Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the authorized payroll deductions or other permitted contributions of each Participant for the Purchase Interval in which such Change in Control occurs to the purchase of whole shares of Common Stock at the purchase price per share in effect for that Purchase Interval pursuant to the Purchase Price provisions of Section 7.3 of this Article VII. However, the applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase, but not the limitation applicable to the maximum number of shares of Common Stock purchasable in total by all Participants.

The Company shall use reasonable efforts to provide at least ten (10)-days prior written notice of the occurrence of any Change in Control, and the Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Change in Control.

7.9 Proration of Purchase Rights. Should the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the authorized payroll deductions or other permitted form of contribution of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded.

7.10 ESPP Broker Account. The shares purchased on behalf of each Participant shall be deposited directly into a brokerage account which the Company shall establish for the Participant at a Company-designated brokerage firm. The account will be known as the ESPP Broker Account. Except as otherwise provided below, the deposited shares may not be transferred (either electronically or in certificate form) from the ESPP Broker Account until the later of the following two periods: (i) the end of the two (2)-year period measured from the Participant’s Entry Date into the offering period in which the shares were purchased; and (ii) the end of the one (1)- year measured from the actual purchase date of those shares. Such limitation shall apply both to transfers to different accounts with the same ESPP broker and to transfers to other brokerage firms. Any shares held for the required holding period may thereafter be transferred (either electronically or in certificate form) to other accounts or to other brokerage firms.

The foregoing procedures shall not in any way limit when the Participant may sell his or her shares. Those procedures are designed solely to assure that any sale of shares prior to the satisfaction of the required holding period is made through the ESPP Broker Account. In addition, the Participant may request a stock certificate or share transfer from his or her ESPP Broker Account prior to the satisfaction of the required holding period should the Participant wish to make a gift of any shares held in that account. However, shares may not be transferred (either electronically or in certificate form) from the ESPP Broker Account for use as collateral for a loan, unless those shares have been held for the required holding period.

The foregoing procedures shall apply to all shares purchased by each Participant, whether or not that Participant continues in Employee status.

7.11 Assignability. The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant.

7.12 Stockholder Rights. A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until the shares are purchased on the Participant’s behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares.

ARTICLE VIII.

ACCRUAL LIMITATIONS

8.1 No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under the Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under the Plan; and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Company or any Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000.00) worth of stock of the Company or any Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.

8.2 For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect:

(a) The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the offering period on which such right remains outstanding.

(b) No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000.00) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding.

8.3 If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the authorized payroll deductions or other permitted form of contribution which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded.

8.4 In the event there is any conflict between the provisions of this Article VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIIIshall be controlling.

ARTICLE IX.

EFFECTIVE DATE AND TERM OF THE PLAN

9.1 The Plan shall become effective for the offering period commencing at the Effective Time; provided, however, that (i) the Plan shall have been approved by the stockholders of the Company; and (ii) no purchase rights granted under the Plan shall be exercised, and no shares of

Common Stock shall be issued hereunder, until the Company shall have complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing requirements of any Stock Exchange (or the Nasdaq Stock Market, if applicable) on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation.

9.2 Unless sooner terminated by the Board, the Plan shall terminate upon the earliest of (i) November 19, 2024; (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan; or (iii) the date on which all purchase rights are exercised in connection with a Change in Control. No further purchase rights shall be granted or exercised, and no further payroll deductions or other forms of contribution shall be collected, under the Plan following such termination.

ARTICLE X.

AMENDMENT OF THE PLAN

10.1 The Board may alter or amend the Plan at any time to become effective as of the start date of the next offering period thereafter under the Plan. In addition, the Board may suspend or terminate the Plan at any time to become effective immediately following the close of any subsequent Purchase Interval.

10.2 In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Company’s stockholders: (i) increase the number of shares of Common Stock issuable under the Plan, except for permissible adjustments in the event of certain changes in the Company’s capitalization or (ii) modify the eligibility requirements for participation in the Plan.

ARTICLE XI.

GENERAL PROVISIONS

11.1 All costs and expenses incurred in the administration of the Plan shall be paid by the Company; provided, however, each Plan Participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan.

11.2 Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Company or any Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause.

11.3 The provisions of the Plan shall be governed by the laws of the State of Delaware without resort to that State’s conflict-of-laws rules.

Schedule A

Companies Participating in the Mavenir Systems, Inc. 2013

Employee Stock Purchase Plan

As of the Effective Time

MAVENIR SYSTEMS, INC.

APPENDIX

The following definitions shall be in effect under the Plan:

1.1 “Affiliate” shall mean any parent or subsidiary corporation of the Company (as determined in accordance with Code Section 424), whether now existing or subsequently established.

1.2 “Base Salary” shall, unless otherwise specified by the Plan Administrator prior to the start of an offering period, mean the regular base salary paid to a Participant by one or more Participating Companies during such individual's period of participation in one or more offering periods under the Plan. Base Salary shall be calculated before deduction of (A) any income or employment tax or other withholdings or (B) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established by the Company or any Affiliate. Base Salary shall not include (i) any overtime payments, bonuses, commissions, profit-sharing distributions or other incentive-type payments received during the Participant's period of participation or (ii) any contributions made on the Participant's behalf by the Company or any Affiliate to any employee benefit or welfare plan now or hereafter established (other than Code Section 401(k) or Code Section 125 contributions deducted from his or her Base Salary). The Plan Administrator may make modifications to the definition of Base Salary for one or more offerings as decided appropriate.

1.3 “Board” shall mean the Company’s Board of Directors.

1.4 “Change in Control” shall mean a change in ownership of the Company pursuant to any of the following transactions:

(a) the closing of a merger, consolidation or other reorganization approved by the Company’s stockholders in which a change in ownership or control of the Company is effected through the acquisition by any person or group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Company or a person that, prior to such transaction, directly or indirectly controls, is controlled by or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities (as measured in terms of the power to vote with respect to the election of Board members);

(b) the closing of a sale, transfer or other disposition of all or substantially all of the Company’s assets;

(c) the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-

5(b)(1) of the 1934 Act (other than the Company or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Company) acquires directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of

securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities (as measured in terms of the power to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Company or the

acquisition of outstanding securities held by one or more of the Company’s existing stockholders; or

(d) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases by reason of one or more contested elections for Board membership to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.

1.5 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.6 “Common Stock” shall mean the Company’s common stock.

1.7 “Company” shall mean Mavenir Systems, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of Mavenir Systems, Inc. that shall assume the Plan.

1.8 “Compensation Committee” shall mean the Compensation Committee of the Board.

1.9 “Effective Time” shall mean November 20, 2014. Any Affiliate that becomes a Participating Company after such Effective Time shall have a subsequent Effective Time with respect to its employee-Participants that is determined in accordance with Section 5.3 of the Plan.

1.10 “Eligible Employee” shall mean any person who is employed by a Participating Company on a basis under which he or she is regularly expected to render more than twenty (20) hours of service per week for more than five (5) months per calendar year for earnings that are considered wages under Code Section 3401 (a); provided, however, that the Plan Administrator may, prior to the start of the applicable offering period, waive one or both of the twenty (20) hour and five (5) month service requirements.

1.11 “Entry Date” shall mean the date an Eligible Employee first commences participation in the offering period in effect under the Plan. The earliest Entry Date under the Plan shall be the Effective Time.

1.12 “Fair Market Value” per share of Common Stock on any relevant date shall be the closing price per share of Common Stock at the close of regular trading hours (i.e., before after- hours trading begins) on the date in question on the Stock Exchange serving as the primary market for the Common Stock, as such price is reported by the National Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global Select Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange on which the Common Stock is then primarily traded. If there is no closing selling price for the Common Stock on the date in question,

then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

1.13 “1933 Act” shall mean the Securities Act of 1933, as amended.

1.14 “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

1.15 “Participant” shall mean any Eligible Employee of a Participating Company who is actively participating in the Plan.

1.16 “Participating Company” shall mean the Company and such Affiliate or Affiliates as may be authorized, in accordance with Section 5.3 of the Plan, to extend the benefits of the Plan to their Eligible Employees. The Participating Companies in the Plan as of the Effective Time are listed in attached Schedule A.

1.17 “Plan” shall mean the Mavenir Systems, Inc. 2013 Employee Stock Purchase Plan, as set forth in this document.

1.18 “Plan Administrator” means the particular entity, whether one or more Committees or the Board, which is authorized to administer the Plan with respect to one or more classes of eligible persons, to the extent such entity is carrying out its administrative functions under the Plan with respect to the persons under its jurisdiction. Unless otherwise determined by the Board, the Compensation Committee shall serve as the Plan Administrator.

1.19 “Purchase Date” shall mean the last business day of each Purchase Interval.

1.20 “Purchase Interval” shall mean each successive purchase interval within an offering period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant.

1.21 “Stock Exchange” shall mean the Nasdaq Global Market, the Nasdaq Global Select

Market, the Nasdaq Capital Market, the New York Stock Exchange or the NYSE MKT.

1.22 “Trading Day” shall mean a day on which the Stock Exchange on which the

Common Stock is listed is open for trading.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Pardeep Kohli, certify that:

1 I have reviewed this report on Form 10-Q of Mavenir Systems, Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4 The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b [Intentionally omitted];

c Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: October 27, 2014

/s/ Pardeep Kohli

Pardeep Kohli

Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Terry Hungle, certify that:

1 I have reviewed this report on Form 10-Q of Mavenir Systems, Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4 The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b [Intentionally omitted];

c Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5 The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: October 27, 2014

/s/ Terry Hungle

Terry Hungle

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to

18 U.S.C. Section 1350

and Securities Exchange Act Rule 13a-14(b)

In connection with the Quarterly Report of Mavenir Systems, Inc. (“Mavenir”) on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Pardeep Kohli, Chief Executive Officer and Director of Mavenir, hereby certify, pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b), that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Mavenir.

Dated: October 27, 2014

By	/s/ Pardeep Kohli
	Pardeep Kohli
	Chief Executive Officer and
	Director

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed to be filed by Mavenir for purposes of Section 18 of the Securities Exchange Act of 1934. This certification is not to be incorporated by reference into any filing of Mavenir under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this report), except to the extent that the Company specifically incorporates it by reference, irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to

18 U.S.C. Section 1350

and Securities Exchange Act Rule 13a-14(b)

In connection with the Quarterly Report of Mavenir Systems, Inc. (“Mavenir”) on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry Hungle, as Chief Financial Officer of Mavenir, hereby certify, pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b), that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Mavenir.

Dated: October 27, 2014

By	/s/ Terry Hungle
	Terry Hungle
	Chief Financial Officer

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed to be filed by Mavenir for purposes of Section 18 of the Securities Exchange Act of 1934. This certification is not to be incorporated by reference into any filing of Mavenir under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this report), except to the extent that the Company specifically incorporates it by reference, irrespective of any general incorporation language contained in such filing.

XML

Net Loss per Share - Summary of Anti-dilutive Shares Excluded from Computation of Diluted Net (Loss) per Share (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Convertible preferred stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	0	16,452,467	0	16,452,467
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	1,027,462	2,042,036	1,685,499	1,919,410
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	0	1,235,633	0	1,235,633

XML

Long term Debt - Silicon Lake Waterman - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 05, 2014 Silver Lake Waterman [Member]	Sep. 30, 2014 Silver Lake Waterman [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 15,000,000	$ 0	$ 15,000,000
Unamortized discount on debt					1,300,000
Unamortized deferred financing costs					200,000
Loss on early extinguishment of debt	$ 0	$ 0	$ 1,783,000	$ 0		$ 1,500,000

XML

Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Schedule of Revenues and Long-Lived Assets by Geographic Region

The following tables present our revenues and long-lived assets by geographic region (in thousands):

Revenues

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Americas	$	16,215	$	15,678	$	49,526	$	37,041
EMEA	12,242		7,325		34,039		24,994
APAC	5,595		2,968		12,503		12,126
Total	$	34,052	$	25,971	$	96,068	$	74,161

Long-Lived Assets

	September 30, 2014		December 31, 2013
Americas	$	9,081	$	8,475
EMEA	1,482		1,888
APAC	897		759
Total	$	11,460	$	11,122

XML

Segment and Geographic Information - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2014 Segment
Segment Reporting [Abstract]
Number of operating segments	1

XML

Stockholders' Equity - Summary of Share-Based Compensation Resulting from Equity Awards (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,357	$ 861	$ 3,071	$ 1,161
Cost of revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	221	131	431	131
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	218	209	536	209
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	285	400	692	400
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 633	$ 121	$ 1,412	$ 421

XML

Property and Equipment

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consists of the following (in thousands):

	Estimated Useful Life	September 30, 2014			December 31, 2013
Computer software	3 years	$	5,095		$	5,046
Computer and lab equipment	3 years	11,448			8,917
Other equipment	2-5 years	2,546			1,468
Property and equipment, gross		19,089			15,431
Less: accumulated depreciation and amortization		(12,811		)	(10,377		)
Property and equipment, net		$	6,278		$	5,054

Depreciation expense of property and equipment totaled $0.8 million and $2.4 million for the three and nine months endedSeptember 30, 2014, compared to $0.7 million and $1.8 million for the same periods in 2013.

XML

Segment and Geographic Information - Schedule of Revenues and Long-Lived Assets by Geographic Region (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	$ 34,052	$ 25,971	$ 96,068	$ 74,161
Long-Lived Assets	11,460		11,460		11,122
Americas
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	16,215	15,678	49,526	37,041
Long-Lived Assets	9,081		9,081		8,475
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	12,242	7,325	34,039	24,994
Long-Lived Assets	1,482		1,482		1,888
APAC
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	5,595	2,968	12,503	12,126
Long-Lived Assets	$ 897		$ 897		$ 759

XML

Property and Equipment - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 800	$ 700	$ 2,442	$ 1,769

XML

Property and Equipment - Schedule of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 19,089	$ 15,431
Less: accumulated depreciation and amortization	(12,811)	(10,377)
Property and equipment, net	6,278	5,054
Computer software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Estimated Useful Life	3 years
Property and equipment, gross	5,095	5,046
Computer and lab equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Estimated Useful Life	3 years
Property and equipment, gross	11,448	8,917
Other equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,546	$ 1,468
Other equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Estimated Useful Life	2 years
Other equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Estimated Useful Life	5 years

XML

Accrued liabilities - Schedule of Accrued liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Payables and Accruals [Abstract]
Accrued payroll	$ 7,005	$ 7,221
Accrued expenses on contracts	3,813	1,446
Accrued professional fees	216	136
Other	2,088	3,136
Total accrued liabilities	$ 13,122	$ 11,939

XML

Long term Debt - Schedule of Long term debt (Detail) (USD $)	Sep. 30, 2014	Mar. 05, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Total debt	$ 24,934,000		$ 23,423,000
Less: current portion	3,125,000		0
Long-term portion	21,809,000		23,423,000
Warrants [Member]
Debt Instrument [Line Items]
Discount related to issuance of warrants	(66,000)		(1,577,000)
Silicon Valley Bank [Member]
Debt Instrument [Line Items]
Senior loan	25,000,000		0
Subordinated loan	0		10,000,000
Discount related to issuance of warrants		(200,000)
Silver Lake Waterman [Member]
Debt Instrument [Line Items]
Subordinated loan	0		15,000,000
Discount related to issuance of warrants		$ (1,300,000)

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value.

The hierarchy can be described 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, or

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 us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. We evaluate transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between Level 1 and Level 2 during the three and nine months ended September 30, 2014 and 2013 or for the year ended December 31, 2013.

Our financial instruments consist primarily of cash and cash equivalents, billed accounts receivable, accounts payable and debt. The carrying amounts of financial instruments, other than the debt instruments, are representative of their fair values due to their short maturities. Our debt agreements are considered level 2 instruments and bear interest at market rates and thus management believes their carrying amounts approximate fair value.

We do not have any other financial or non-financial assets or liabilities that would be characterized as Level 2 or Level 3 instruments.

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Long term Debt - Silicon Valley Bank - Additional Information (Detail) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended		0 Months Ended		0 Months Ended							0 Months Ended		0 Months Ended						0 Months Ended
	Mar. 06, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Mar. 06, 2014 Revolving Credit Facility [Member]	Sep. 30, 2014 Revolving Credit Facility [Member]	Mar. 06, 2014 Revolving Credit Facility [Member] Domestic Trade Receivables [Member]	Mar. 06, 2014 Revolving Credit Facility [Member] Foreign Trade Receivables [Member]	Mar. 06, 2014 Revolving Credit Facility [Member] Maximum [Member]	Mar. 05, 2014 Silicon Valley Bank [Member]	Sep. 30, 2014 Silicon Valley Bank [Member]	Dec. 31, 2013 Silicon Valley Bank [Member]	Oct. 18, 2012 Silicon Valley Bank [Member] Agreement	Mar. 06, 2014 Silicon Valley Bank [Member] Amended and Restated Agreement [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Letter of Credit [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] First Performance Trigger [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Second Performance Trigger [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Second Performance Trigger [Member] Minimum [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Senior Loan [Member]	Oct. 18, 2012 Silicon Valley Bank [Member] Senior Loan [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Senior Loan [Member]	Oct. 18, 2012 Silicon Valley Bank [Member] Subordinated loan [Member]	Mar. 06, 2014 Silicon Valley Bank [Member] Term Loan [Member] Amended and Restated Agreement [Member]	Sep. 30, 2014 Silicon Valley Bank [Member] Term Loan [Member] Amended and Restated Agreement [Member]
Debt Instrument [Line Items]
Number of loan agreements														2
Maximum borrowing capacity														$ 32,500,000.0		$ 5,000,000					$ 22,500,000.0
Debt instrument term						3 years															3 years		3 years	5 years
Floating rate	2.75%					1.00%											2.25%	1.75%			1.00%
Variable rate basis						U.S. prime rate											U.S. prime rate	U.S. prime rate			U.S. prime rate			U.S. prime rate
Minimum interest rate	4.25%																				4.25%
Percentage of eligible trade receivables								80.00%	70.00%												80.00%
Borrowing capacity based upon eligible trade receivables																				15,000,000.0	15,000,000.0
Credit facility available for specific purpose other than for trade purchase																					7,500,000.0
Subordinated debt												0	10,000,000										10,000,000.0
Debt instrument interest rate state percentage																							11.00%
Term Loan												25,000,000	0									25,000,000.0
Interest rate																									6.00%
Proceeds from equity offering																			50,000,000
Number of installment payments																								48 months
Period subject to prepayment premium																								1 year
Loan prepayment premium amount																								250,000
Percentage of eligible accrued but unbilled accounts						35.00%
Borrowing capacity based upon accrued but unbilled accounts										15,000,000.0
Unused credit facility fee						0.25%
Available amount							15,000,000
Debt instrument unamortized discount											200,000
Unamortized deferred financing costs											300,000
Loss on early extinguishment of debt		$ 0	$ 0	$ 1,783,000	$ 0						$ 300,000
Additional interest imposed in event of default															5.00%

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Income tax (benefit) expense	$ (657,000)	$ 354,000	$ (157,000)	$ 1,972,000
Increase (decrease) to income tax expense in the current period			200,000
Total deferred tax asset	2,800,000		2,800,000
Additional interest and penalties for uncertain tax positions	1,600,000		1,600,000
Uncertain tax position liability, net	2,932,000		2,932,000		3,153,000
Foreign tax benefit recognized	1,136,000
Undistributed earnings of certain non-U.S. subsidiaries	$ 14,800,000		$ 14,800,000

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Condensed Consolidated Balance Sheets (unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 64,367	$ 38,930
Accounts receivable, net of allowance of $253 and $587 at September 30, 2014 and December 31, 2013, respectively	33,831	23,641
Unbilled revenue	14,713	11,213
Inventories	2,924	7,109
Prepaid expenses and other current assets	2,335	3,614
Deferred contract costs	5,098	9,313
Total current assets	123,268	93,820
Non-current assets:
Property and equipment, net	6,278	5,054
Intangible assets, net	4,350	5,202
Deposits and other assets	1,865	1,657
Deferred tax assets	1,136	0
Goodwill	832	866
Total assets	137,729	106,599
Current liabilities:
Trade accounts payable	7,571	7,152
Accrued liabilities	13,122	11,939
Deferred revenue	11,487	15,785
Income tax payable	466	765
Current portion of long-term debt	3,125	0
Total current liabilities	35,771	35,641
Non-current liabilities:
Uncertain tax positions	2,932	3,153
Other long-term liabilities	416	351
Long-term debt	21,809	23,423
Total liabilities	60,928	62,568
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.001 par value. 300,000,000 shares authorized; 28,854,603 and 23,420,759 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	28	23
Additional paid-in capital	200,964	155,198
Accumulated deficit	(125,928)	(112,187)
Accumulated other comprehensive income	1,737	997
Total shareholders’ equity	76,801	44,031
Total liabilities and shareholders’ equity	$ 137,729	$ 106,599

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Description of the Business and Basis of Presentation

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Description of the Business and Basis of Presentation

Description of the Business and Basis of Presentation

Throughout these condensed consolidated financial statements, Mavenir Systems, Inc. is referred to as “Mavenir,” the “Company,” “we,” “us” and “our.”

Description of Business

Mavenir was originally formed as a limited liability company on April 26, 2005. We were incorporated under the laws of Texas in August 2005, and subsequently incorporated under the laws of Delaware in March 2006.

We are a leading provider of software-based telecommunications networking solutions that enable mobile service providers to deliver internet protocol (IP)-based voice, video, rich communication and enhanced messaging services to their subscribers globally. Our solutions deliver Rich Communication Suite (“RCS”)-based services, which enable enhanced mobile communications such as group text messaging, multi-party voice or video calling and live video streaming as well as the exchange of files or images, over existing 2G and 3G networks as well as next generation 4G Long Term Evolution (“LTE”) networks. Our solutions also deliver voice services over LTE technology and wireless (“Wi-Fi”) networks known respectively as Voice over LTE (“VoLTE”) and Voice over Wi-Fi (“VoWi-Fi”).

We are headquartered in Richardson, Texas, and have research and development personnel located at our wholly-owned subsidiaries in China and India. Additionally, we have a sales and operations presence in the Asia Pacific (“APAC”) and the Europe, Middle East and Africa (“EMEA”) regions.

Basis of Presentation and Consolidation

The unaudited interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our consolidated financial position as of September 30, 2014, and our results of operations and cash flows for the three and nine months endedSeptember 30, 2014 and 2013. We have omitted certain information and disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) pursuant to those rules and regulations, although we believe that the disclosures we have made are adequate to make the information presented not misleading. The results of operations for the three and nine months endedSeptember 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014, or for any other future annual or interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission on February 21, 2014.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation. Specifically, the beginning balance of our uncertain tax positions presented in Note 10 is now presented gross, per Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. There was no change to the presentation on the condensed consolidated balance sheet.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates.

Revision of Prior Period Financial Statements and Out-of-Period Adjustment

During our review of the three months ended March 31, 2014, we identified a non-cash error that originated in prior periods. The error related to performance-based warrants issued to a channel partner in 2008, earned in 2011 and exercised in April of 2014. The achievement of the performance milestone occurred in 2011 and would have resulted in a reduction to revenue of $1.3 million in 2011. We assessed the materiality of this error in accordance with the SEC guidance on considering the effects of prior period misstatements based on an analysis of quantitative and qualitative factors. Based on this analysis, we determined that the error was immaterial to the prior reporting periods affected and, therefore, amendments of reports previously filed with the SEC were not required. However, we have concluded that correcting the error in our 2014 financial statements would materially impact our results for the quarter ended March 31, 2014 and the year ending December 31, 2014. Accordingly, we have reflected the correction of this prior period error in the period in which it originated and revised our consolidated balance sheet as of December 31, 2013, as presented in this Quarterly Report on Form 10-Q. In addition, a reduction to accumulated deficit will be reflected as an adjustment to the beginning balance for the earliest year presented in the financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2014.

The effect of the immaterial correction on the consolidated balance sheet as of December 31, 2013 is as follows (in thousands):

	As Reported			Correction			As Revised
Other shareholders’ equity	$	1,020		$	—		$	1,020
Additional paid-in capital	153,878			1,320			155,198
Accumulated deficit	(110,867		)	(1,320		)	$	(112,187	)
Total shareholders’ equity	$	44,031		$	—		$	44,031

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Stockholder's Equity - Summary of Weighted Average Assumptions Used in Calculating Fair Value of Stock Options (Detail) (Options [Member])	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Risk-free interest rate (U.S. Treasury)	1.90%	1.70%	2.00%	1.70%
Expected term	6 years 4 months	6 years	6 years 4 months	6 years
Expected volatility	61.50%	57.00%	60.90%	57.00%

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Summary of Weighted Average Assumptions Used in Calculating Fair Value of Stock Options

To determine the weighted-average fair value of stock options granted, we used the Black-Scholes option pricing model with the following weighted-average assumptions during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected dividend yield	—	%	—	%	—	%	—	%
Risk-free interest rate (U.S. Treasury)	1.9	%	1.7	%	2.0	%	1.7	%
Expected term	6.3 years		6.0 years		6.3 years		6.0 years
Expected volatility	61.5	%	57.0	%	60.9	%	57.0	%

Summary of Stock Option Activity

The following table summarizes the stock option activity for the nine months endedSeptember 30, 2014:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic  Value
					(years)	(in thousands)
Outstanding as of January 1, 2014	3,287,272		$	3.86
Granted	1,259,767		16.02
Exercised	(498,109	)	1.89
Forfeited or expired	(178,441	)	11.31
Outstanding as of September 30, 2014	3,870,489		$	7.80	7.5	$	22,943
Exercisable as of September 30, 2014	1,978,922		$	3.13	6.0	$	19,149

Summary of Share-Based Compensation Resulting from Equity Awards

The following table presents our share-based compensation resulting from equity awards that we recorded in our condensed consolidated statements of operations and comprehensive loss (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenues	$	221	$	131	$	431	$	131
Research and development	218		209		536		209
Sales and marketing	285		400		692		400
General and administrative	633		121		1,412		421
Total	$	1,357	$	861	$	3,071	$	1,161

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Stockholders' Equity - Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Shares
Outstanding- beginning balance, Shares	3,287,272
Granted, Shares	1,259,767
Exercised, Shares	(498,109)
Forfeited or expired, Shares	(178,441)
Outstanding - ending balance, Shares	3,870,489
Exercisable - ending balance, Shares	1,978,922
Weighted-Average Exercise Price (in dollars per share)
Outstanding - beginning balance, Weighted Average Exercise Price	$ 3.86
Granted, Weighted Average Exercise Price	$ 16.02
Exercised, Weighted Average Exercise Price	$ 1.89
Forfeited or expired, Weighted Average Exercise Price	$ 11.31
Outstanding - ending balance, Weighted Average Exercise Price	$ 7.80
Exercisable - ending balance, Weighted Average Exercise Price	$ 3.13
Outstanding - ending balance, Weighted Average Remaining Contractual Term	7 years 6 months
Exercisable - ending balance, Weighted Average Remaining Contractual Term	6 years
Outstanding - ending balance, Aggregate Intrinsic Value	$ 22,943
Exercisable - ending balance, Aggregate Intrinsic Value	$ 19,149

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Schedule of Uncertain Tax Positions on Gross Basis

The resulting balance of our uncertain tax positions is depicted in the table below, on a gross basis, as of September 30, 2014 (in thousands):

Balance as of January 1, 2014	$	4,207
Additions to unrecognized tax benefits taken during the period	—
Additions to unrecognized tax benefits as a result of positions taken in prior periods	2,189
Decrease in unrecognized tax benefits relating to settlements with taxing authorities	—
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	—
Reduction to unrecognized tax benefits as a result of positions taken during the period	(2,302		)
Balance as of September 30, 2014	$	4,094

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Summary of Significant Accounting Policies and New Accounting Pronouncements

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and New Accounting Pronouncements

Summary of Significant Accounting Policies and New Accounting Pronouncements

Significant Accounting Policies

Our significant accounting policies and others are presented in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 21, 2014. The policies include significant estimates made by management using information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers: Topic 606” (“ASU 2014-9”). ASU 2014-9 is intended to enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, improve disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized, and provide guidance for transactions that are not currently addressed comprehensively. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods therein, and does not allow for early adoption. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company has begun the evaluation of the impact that the standard will have on its consolidated financial statements but has not yet selected a transition method.

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Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Allowance for accounts receivable	$ 253	$ 587
Common stock, par value (In dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	28,854,603	23,420,759
Common stock, shares outstanding	28,854,603	23,420,759

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Description of the Business and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The unaudited interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our consolidated financial position as of September 30, 2014, and our results of operations and cash flows for the three and nine months endedSeptember 30, 2014 and 2013. We have omitted certain information and disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) pursuant to those rules and regulations, although we believe that the disclosures we have made are adequate to make the information presented not misleading. The results of operations for the three and nine months endedSeptember 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014, or for any other future annual or interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the Securities and Exchange Commission on February 21, 2014.

Use of Estimates

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates.

Revision of Prior Period Financial Statements and Out-Of-Period Adjustment

Revision of Prior Period Financial Statements and Out-of-Period Adjustment

During our review of the three months ended March 31, 2014, we identified a non-cash error that originated in prior periods. The error related to performance-based warrants issued to a channel partner in 2008, earned in 2011 and exercised in April of 2014. The achievement of the performance milestone occurred in 2011 and would have resulted in a reduction to revenue of $1.3 million in 2011. We assessed the materiality of this error in accordance with the SEC guidance on considering the effects of prior period misstatements based on an analysis of quantitative and qualitative factors. Based on this analysis, we determined that the error was immaterial to the prior reporting periods affected and, therefore, amendments of reports previously filed with the SEC were not required. However, we have concluded that correcting the error in our 2014 financial statements would materially impact our results for the quarter ended March 31, 2014 and the year ending December 31, 2014. Accordingly, we have reflected the correction of this prior period error in the period in which it originated and revised our consolidated balance sheet as of December 31, 2013, as presented in this Quarterly Report on Form 10-Q. In addition, a reduction to accumulated deficit will be reflected as an adjustment to the beginning balance for the earliest year presented in the financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2014.

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-9, “Revenue from Contracts with Customers: Topic 606” (“ASU 2014-9”). ASU 2014-9 is intended to enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, improve disclosure to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized, and provide guidance for transactions that are not currently addressed comprehensively. The standard is effective for fiscal years beginning after December 15, 2016, and interim periods therein, and does not allow for early adoption. Entities have the option of using either a full retrospective or modified retrospective approach for the adoption of the standard. The Company has begun the evaluation of the impact that the standard will have on its consolidated financial statements but has not yet selected a transition method.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 24, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	MVNR
Entity Registrant Name	MAVENIR SYSTEMS INC
Entity Central Index Key	0001361470
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		28,855,211

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Description of the Business and Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Schedule of Immaterial Correction on Consolidated Balance Sheet

The effect of the immaterial correction on the consolidated balance sheet as of December 31, 2013 is as follows (in thousands):

	As Reported			Correction			As Revised
Other shareholders’ equity	$	1,020		$	—		$	1,020
Additional paid-in capital	153,878			1,320			155,198
Accumulated deficit	(110,867		)	(1,320		)	$	(112,187	)
Total shareholders’ equity	$	44,031		$	—		$	44,031

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Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues
Software products	$ 27,311	$ 20,788	$ 77,503	$ 58,052
Maintenance	6,741	5,183	18,565	16,109
Total revenues	34,052	25,971	96,068	74,161
Cost of revenues
Software products	12,393	10,806	34,258	28,220
Maintenance	3,677	2,716	9,364	5,543
Total Cost of revenues	16,070	13,522	43,622	33,763
Gross profit	17,982	12,449	52,446	40,398
Operating expenses:
Research and development	7,958	5,436	21,281	16,934
Sales and marketing	8,124	4,675	23,223	14,331
General and administrative	5,737	5,745	16,231	15,106
Total operating expenses	21,819	15,856	60,735	46,371
Operating loss	(3,837)	(3,407)	(8,289)	(5,973)
Other expense (income):
Interest and other income	(26)	(4)	(87)	(12)
Interest and other expense	430	1,072	1,638	2,187
Loss on early extinguishment of debt	0	0	1,783	0
Foreign exchange loss (gain)	2,221	(316)	2,275	2,328
Total other expense (income), net	2,625	752	5,609	4,503
Loss before income tax	(6,462)	(4,159)	(13,898)	(10,476)
Income tax (benefit) expense	(657)	354	(157)	1,972
Net loss	(5,805)	(4,513)	(13,741)	(12,448)
Other comprehensive income (loss)
Foreign currency translation adjustments	779	52	740	(50)
Total comprehensive loss	$ (5,026)	$ (4,461)	$ (13,001)	$ (12,498)
Net loss per common share:
Basic (in dollars per share)	$ (0.21)	$ (3.35)	$ (0.55)	$ (9.28)
Diluted (in dollars per share)	$ (0.21)	$ (3.35)	$ (0.55)	$ (9.28)
Weighted-average common shares outstanding:
Basic and diluted	27,392	1,348	25,012	1,342

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Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Legal Proceedings

From time to time, we, our customers and our competitors are subject to various litigation and claims arising in the ordinary course of business. The software and communications infrastructure industries are characterized by frequent litigation and claims, including claims regarding patent and other intellectual property rights, claims for damages or indemnification for alleged breach under commercial supply or service contracts and claims regarding alleged improper hiring practices.

We are not aware of any pending or threatened legal proceeding against us that could have a material adverse effect on our business, operating results or financial condition.

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Long term Debt

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Long term Debt

Long-Term Debt

Long-term debt consists of the following (in thousands):

	September 30, 2014			December 31, 2013
Silicon Valley Bank senior loan	$	25,000		$	—
Silicon Valley Bank subordinated loan	—			10,000
Silver Lake Waterman subordinated loan	—			15,000
Discount related to issuance of warrants	(66		)	(1,577		)
Total debt	24,934			23,423
Less: current portion	3,125			—
Long-term portion	$	21,809		$	23,423

Silicon Valley Bank Subordinated and Senior Loans

On October 18, 2012, we entered into loan agreements with Silicon Valley Bank (“SVB”). Under the agreements, we obtained two loans totaling $32.5 million (the “Old SVB Loans”). In February 2013, we amended the Old SVB Loans to join certain of our subsidiaries, including our non-U.S. subsidiaries, as co-borrowers. We also amended our minimum tangible net worth covenant. The Old SVB Loans included a $22.5 million Senior Loan (“Senior Loan”) secured by substantially all of our assets, including intellectual property. The Senior Loan had a term of three years at a floating rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25%. Under the terms of the agreement, we could draw up to 80% of eligible trade receivables up to $15.0 million, with the remaining $7.5 million generally available for working capital and cash management purposes. We also obtained a $10.0 million Subordinated Loan, also secured by substantially all of our assets including intellectual property that had a three years term at a fixed rate of 11%. The Old SVB Loans were replaced by an amended and restated loan and security agreement (“Amended and Restated Agreement”) that we entered into with SVB on March 6, 2014, as discussed below.

On March 6, 2014, we entered into an Amended and Restated Agreement with SVB to replace our $22.5 million Senior Loan facility with SVB. The Amended and Restated Agreement includes a five-year term loan of $25.0 million (“Term Loan”), a $15.0 million secured revolving line of credit (“Revolver”) and a $5 million secured line for letters of credit, foreign exchange and cash management services. The Term Loan has an initial floating interest rate of 2.75% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. At September 30, 2014, the interest rate was 6.0%. After the achievement of the one of the two performance triggers described in the following sentence, the interest rate will be reduced to 2.25% above the U.S. prime rate; after the achievement of the second performance trigger the interest rate will be further reduced to 1.75% above the U.S. prime rate. The performance triggers are the following: (i) our achievement, on a consolidated basis, of positive EBITDA (as defined in the loan agreement) for two consecutive fiscal quarters, and (ii) the completion of an equity offering resulting in net proceeds to the Company of at least $50 million. The Term Loan provides for monthly payments of interest only until April 1, 2015; thereafter we are required to repay the outstanding principal amount in 48 monthly installments. The Term Loan has a maturity of March 1, 2019. If we prepay the Term Loan within one year of the Amended and Restated Loan Agreement, we will have to pay a prepayment premium of $250,000; thereafter, the Term Loan may be prepaid without penalty.

Under the Revolver, we may draw up to 80% of eligible domestic trade receivables, 70% of eligible foreign trade receivables and 35% of eligible accrued but unbilled accounts up to a maximum of $15.0 million. The Revolver has a three-year term and bears interest at a floating interest rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25% and is secured by substantially all of our assets, including intellectual property. We are also required to pay an unused facility fee, monthly in arrears, of 0.25% per annum of the unused amount of the Revolver. The Revolver may be prepaid at any time without penalty. As of September 30, 2014, we had no borrowings outstanding on the Revolver and had $15.0 million available.

As of March 5, 2014, we had approximately $0.3 million in deferred costs and $0.2 million in debt discount related to the Old SVB Loans on our condensed consolidated balance sheet. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470, Debt (“ASC 470”), we recorded a $0.3 million loss on early extinguishment of debt related to the Amended and Restated Agreement.

The Amended and Restated Agreement contains certain restrictive covenants, and requires us to maintain a minimum liquidity ratio and other earnings related amounts as defined in the Amended and Restated Agreement. The Amended and Restated Agreement also contains usual and customary events of default, the occurrence of which may result in all outstanding amounts under the loan agreements becoming due and payable immediately, and they also impose an interest penalty of an additional 5% above the otherwise applicable interest rate at any time when an event of default is continuing. As of September 30, 2014, we were in compliance with all covenants under the Amended and Restated Agreement.

Silver Lake Waterman Growth Capital Loan

On March 5, 2014, we repaid the balance of our $15.0 million subordinated term loan (“Silver Lake Loan”) with Silver Lake Waterman Fund (“Silver Lake”) using funds from our initial public offering.

As of March 5, 2014, we had approximately $0.2 million in deferred costs and $1.3 million in debt discount related to the Silver Lake Loan on our condensed consolidated balance sheet. The entire $1.5 million was recognized during the nine months endedSeptember 30, 2014, as a loss on early extinguishment of debt related to the payoff of the Silver Lake Loan on March 5, 2014.

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Net Loss per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Net (Loss) per Share

The computation of basic and diluted net loss per share is as follows (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(5,805	)	$	(4,513	)	$	(13,741	)	$	(12,448	)
Basic common shares:
Weighted-average number of shares outstanding	27,392			1,348			25,012			1,342
Diluted common shares:
Weighted-average shares used to compute diluted net loss per share	27,392			1,348			25,012			1,342
Net loss per share attributable to common stockholders:
Basic	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)
Diluted	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)

Summary of Anti-dilutive Shares Excluded from Computation of Diluted Net (Loss) per Share

We excluded certain shares from the computation of diluted net loss per share because the effect of these shares would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Convertible preferred stock	—	16,452,467	—	16,452,467
Stock options	1,027,462	2,042,036	1,685,499	1,919,410
Warrants	—	1,235,633	—	1,235,633

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consists of the following (in thousands):

	Estimated Useful Life	September 30, 2014			December 31, 2013
Computer software	3 years	$	5,095		$	5,046
Computer and lab equipment	3 years	11,448			8,917
Other equipment	2-5 years	2,546			1,468
Property and equipment, gross		19,089			15,431
Less: accumulated depreciation and amortization		(12,811		)	(10,377		)
Property and equipment, net		$	6,278		$	5,054

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We base our provision for income taxes in our interim condensed consolidated financial statements on estimated annual effective tax rates in the tax jurisdictions where we operate. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective income tax rate, future income tax expense could be materially affected. For the three and nine months ended September 30, 2014, total income tax benefit is approximately $0.7 million and $0.2 million on a worldwide basis compared with total income tax expense of approximately $0.4 million and $2.0 million for the three and nine months ended September 30, 2013. The difference is due primarily to discrete items recognized in the current quarter related to foreign taxes and the benefit realized from changes in our uncertain tax positions as described below.

We apply a two-step process for the evaluation of uncertain income tax positions based on a “more likely than not” threshold to determine if a tax position will be sustained upon examination by the taxing authorities. The recognition threshold in step one permits the benefit from an uncertain position to be recognized only if it is more likely than not, or 50% assured that the tax position will be sustained upon examination by the taxing authorities. The measurement methodology in step two is based on “cumulative probability,” resulting in the recognition of the largest amount that is greater than 50% likely of being realized upon settlement with the taxing authority.

During the nine months endedSeptember 30, 2014, we completed a review of certain of our internal accounts and pricing and determined that it has reduced tax exposures, on an overall basis, primarily related to the way we account for certain intercompany transactions relating to management fees, sales support services, research and development services, license fees, or other development costs. These services are offered to and received from various related companies resulting in payables and receivables which are disregarded for our GAAP financial reporting but are recognized for tax purposes in several jurisdictions. Therefore, the tax treatment of the intercompany transactions has been analyzed in each entity’s jurisdiction and exposures were identified and quantified by jurisdiction. The net effect of the adjustment is approximately $0.2 million and is recorded as a decrease to income tax expense in the nine months endedSeptember 30, 2014.

The resulting balance of our uncertain tax positions is depicted in the table below, on a gross basis, as of September 30, 2014 (in thousands):

Balance as of January 1, 2014	$	4,207
Additions to unrecognized tax benefits taken during the period	—
Additions to unrecognized tax benefits as a result of positions taken in prior periods	2,189
Decrease in unrecognized tax benefits relating to settlements with taxing authorities	—
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	—
Reduction to unrecognized tax benefits as a result of positions taken during the period	(2,302		)
Balance as of September 30, 2014	$	4,094

Total deferred tax assets of approximately $2.8 million were available for offset on identified uncertain tax positions. Additional interest and penalties of approximately $1.6 million are not reflected on the above roll forward are recorded as a component of the total liability for uncertain tax positions. The net impact of the deferred tax asset offsets and interest and penalties result in a net uncertain tax position liability of approximately $2.9 million on our balance sheet.

The Company believes that deferred tax assets in China and Canada related to net operating losses and tax credits, respectively, will more-likely-than-not be realized in the current and future years in these jurisdictions. An income tax benefit of approximately $1.1 million has been recognized during the quarter. The deferred tax assets in jurisdictions outside of China and Canada are not considered realizable on a more-likely-than-not basis and continue to be offset with a valuation allowance. We have not accrued a provision for income taxes on undistributed earnings of approximately $14.8 million of certain non-U.S. subsidiaries, as of September 30, 2014 since such earnings are considered to be reinvested indefinitely. If the earnings were distributed, we would be subject to U.S. federal income and foreign withholding taxes. Determination of an unrecognized deferred income tax liability with respect to such earnings is not practicable.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2014

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Follow-on Public Offering

On August 6, 2014, we closed a follow-on public offering, in which we sold 4,090,000 shares of common stock at a price to the public of $11.00 per share, before underwriting discounts and commissions. We raised approximately $41.7 million in net proceeds after deducting underwriting discounts and commissions of approximately $2.5 million and other estimated offering costs of approximately $0.8 million.

Equity Compensation Plans

We have two stock option plans: the Amended and Restated 2005 Stock Plan (the “2005 Plan”), and the Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”). In January 2013, we terminated the 2005 Plan and provided that no further stock awards were to be granted under the 2005 Plan and adopted the 2013 Plan as a continuation of and successor to the 2005 Plan. Upon our initial public offering (“IPO”), all shares that were reserved under the 2005 Plan but not issued were assumed by the 2013 Plan. All outstanding stock awards under the 2005 Plan continue to be governed by the existing terms. Under the 2013 Plan, we have the ability to issue incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and/or performance shares. Additionally, the 2013 Plan provides for the grant of performance cash awards to employees, directors and consultants. Stock options are granted at a price per common share not less than the fair value at date of grant. Stock options granted to date generally vest over a four-year period with 25% vesting at the end of one year and the remaining vesting monthly thereafter. Stock options granted generally are exercisable up to 10 years from the date of grant.

At September 30, 2014, there were 1,088,349 common shares available for future grants under the 2013 Plan.

To determine the weighted-average fair value of stock options granted, we used the Black-Scholes option pricing model with the following weighted-average assumptions during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Expected dividend yield	—	%	—	%	—	%	—	%
Risk-free interest rate (U.S. Treasury)	1.9	%	1.7	%	2.0	%	1.7	%
Expected term	6.3 years		6.0 years		6.3 years		6.0 years
Expected volatility	61.5	%	57.0	%	60.9	%	57.0	%

The fair value of all the awards granted is amortized to expense on a straight-line basis over the requisite service periods, which are generally the vesting periods. We granted stock options with a weighted-average grant date fair value during the nine months endedSeptember 30, 2014 of $9.33 per share.

The following table summarizes the stock option activity for the nine months endedSeptember 30, 2014:

	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic  Value
					(years)	(in thousands)
Outstanding as of January 1, 2014	3,287,272		$	3.86
Granted	1,259,767		16.02
Exercised	(498,109	)	1.89
Forfeited or expired	(178,441	)	11.31
Outstanding as of September 30, 2014	3,870,489		$	7.80	7.5	$	22,943
Exercisable as of September 30, 2014	1,978,922		$	3.13	6.0	$	19,149

The following table presents our share-based compensation resulting from equity awards that we recorded in our condensed consolidated statements of operations and comprehensive loss (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Cost of revenues	$	221	$	131	$	431	$	131
Research and development	218		209		536		209
Sales and marketing	285		400		692		400
General and administrative	633		121		1,412		421
Total	$	1,357	$	861	$	3,071	$	1,161

Warrant Exercises

In March of 2014, we issued 44,340 shares of our common stock to SVB upon the exercise in full of a warrant held by SVB. The warrant gave SVB the right to purchase up to 64,286 shares of our common stock at $5.11 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with SVB.

In April 2014, we issued 555,034 shares of our common stock to Cisco Systems, Inc. (“Cisco”) upon the exercise in full of a warrant held by Cisco. The warrant gave Cisco the right to purchase up to 898,294 shares of our common stock at $6.6794 per share on the achievement of certain bookings milestones. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with Cisco.

In May 2014, we issued 40,871 shares of our common stock to WestRiver Mezzanine Loans, LLC (“WestRiver”) upon the exercise in full of a warrant held by WestRiver. The warrant gave WestRiver the right to purchase up to 64,285 shares of our common stock at $5.11 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with WestRiver.

In June 2014, we issued 194,606 shares of our common stock to Silver Lake Waterman Fund, L.P. (“Silver Lake”) upon the exercise in full of a warrant held by Silver Lake. The warrant gave Silver Lake the right to purchase up to 194,694 shares of our common stock at $0.007 per share. The warrant was fully exercised on a “cashless” basis pursuant to the terms of the agreement with Silver Lake.

In June 2014, we issued 11,228 shares of our common stock to Comerica Ventures Incorporated (“Comerica”) upon the exercise in full of a warrant held by Comerica. The exercise price was $6.6794 per share, which resulted in proceeds of approximately $0.1 million.

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Net Loss per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Net Loss per Share

Net Loss per Share

We calculate basic net loss per share by dividing net loss attributable for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted, net loss per share is computed by giving effect to all potential weighted-average diluted common stock, including options and warrants, using the treasury stock method.

The computation of basic and diluted net loss per share is as follows (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net loss	$	(5,805	)	$	(4,513	)	$	(13,741	)	$	(12,448	)
Basic common shares:
Weighted-average number of shares outstanding	27,392			1,348			25,012			1,342
Diluted common shares:
Weighted-average shares used to compute diluted net loss per share	27,392			1,348			25,012			1,342
Net loss per share attributable to common stockholders:
Basic	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)
Diluted	$	(0.21	)	$	(3.35	)	$	(0.55	)	$	(9.28	)

We excluded certain shares from the computation of diluted net loss per share because the effect of these shares would have been anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Convertible preferred stock	—	16,452,467	—	16,452,467
Stock options	1,027,462	2,042,036	1,685,499	1,919,410
Warrants	—	1,235,633	—	1,235,633

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Segment and Geographic Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment and Geographic Information

Segment and Geographic Information

Operating segments are defined as components of an enterprise in which separate financial information is available that is evaluated regularly by the chief operating decision makers, in deciding how to allocate resources and in assessing performance. Our chief operating decision-makers (i.e., our chief executive officer and his direct reports) review financial information presented on a condensed consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of allocating resources and evaluating financial performance. We have concluded that we operate in one segment and have provided the required enterprise-wide disclosures.

Revenues by geographic area are based on the deployment site location of the end customers. The following tables present our revenues and long-lived assets by geographic region (in thousands):

Revenues

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Americas	$	16,215	$	15,678	$	49,526	$	37,041
EMEA	12,242		7,325		34,039		24,994
APAC	5,595		2,968		12,503		12,126
Total	$	34,052	$	25,971	$	96,068	$	74,161

Long-Lived Assets

	September 30, 2014		December 31, 2013
Americas	$	9,081	$	8,475
EMEA	1,482		1,888
APAC	897		759
Total	$	11,460	$	11,122

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Stockholders' Equity (Detail) (USD $)	9 Months Ended		1 Months Ended					9 Months Ended	0 Months Ended
	Sep. 30, 2014 Stock_Plan	Sep. 30, 2013	May 31, 2014 WestRiver [Member] Warrants [Member]	Jun. 30, 2014 Silver Lake Waterman [Member] Warrants [Member]	Mar. 31, 2014 Silicon Valley Bank [Member] Warrants [Member]	Jun. 30, 2014 Comerica [Member] Warrants [Member]	Apr. 30, 2014 Cisco [Member] Warrants [Member]	Sep. 30, 2014 Options [Member]	Aug. 06, 2014 Common Stock [Member] Follow-on Public Offering [Member]	Aug. 06, 2014 Common Stock [Member] Follow-on Public Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued									4,090,000
Shares issued, price per share (in dollar per share)										$ 11.00
Proceeds from follow-on public offering, net of offering costs	$ 41,686,000	$ 0							$ 41,700,000
Underwriting discounts and commissions										2,500,000
Estimated offering expenses										800,000
Number of stock option plans	2
Vesting period								4 years
Percentage vested at the end of year one								25.00%
Exercise period								10 years
Shares available for future grants	1,088,349
Weighted-average grant date fair value per share	$ 9.33
Common stock issued			40,871	194,606	44,340	11,228	555,034
Right to purchase common stock			64,285	194,694	64,286		898,294
Common stock purchase price per share (in dollars per share)			$ 5.11	$ 0.007	$ 5.11	$ 6.6794	$ 6.6794
Proceeds from exercise of warrant						$ 100,000

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Long term Debt (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Schedule of Long term debt

Long-term debt consists of the following (in thousands):

	September 30, 2014			December 31, 2013
Silicon Valley Bank senior loan	$	25,000		$	—
Silicon Valley Bank subordinated loan	—			10,000
Silver Lake Waterman subordinated loan	—			15,000
Discount related to issuance of warrants	(66		)	(1,577		)
Total debt	24,934			23,423
Less: current portion	3,125			—
Long-term portion	$	21,809		$	23,423

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Description of the Business and Basis of Presentation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2011 Adjustments for Immaterial Errors [Member]
Entity incorporated state name	Delaware
Impact on revenue		$ 1.3

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Income Taxes - Schedule of Uncertain Tax Positions on Gross Basis (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance as of January 1, 2014	$ 4,207
Additions to unrecognized tax benefits taken during the period	0
Additions to unrecognized tax benefits as a result of positions taken in prior periods	2,189
Decrease in unrecognized tax benefits relating to settlements with taxing authorities	0
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations	0
Reduction to unrecognized tax benefits as a result of positions taken during the period	(2,302)
Balance as of September 30, 2014	$ 4,094

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Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating activities:
Net loss	$ (13,741)	$ (12,448)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	2,442	1,769
Amortization of intangible assets	1,504	1,080
Amortization of debt discount	115	216
Provision for bad debt	(302)	388
Stock-based compensation expense	3,071	1,161
Unrealized foreign currency loss	1,073	663
Loss on early extinguishment of debt	1,783	0
Changes in operating assets and liabilities:
Accounts receivable	(10,420)	(1,686)
Unbilled revenue	(3,641)	925
Deposits and other current assets	(1,919)	(465)
Inventories	4,185	(2,592)
Prepaid expenses	1,487	(527)
Deferred contract costs	4,125	(1,399)
Deferred revenue	(4,180)	(3,325)
Accounts payable and accrued liabilities	1,447	(738)
Net cash used in operating activities	(12,971)	(16,978)
Investing activities:
Purchases of property and equipment	(4,334)	(1,962)
Net cash used in investing activities	(4,334)	(1,962)
Financing activities:
Proceeds from follow-on public offering, net of offering costs	41,686	0
Borrowings from long-term debt	25,000	15,000
Borrowings from line of credit	0	12,000
Repayments of long-term debt	(15,000)	0
Repayments of line of credit borrowing	(10,000)	(7,000)
Exercise of options and warrants to purchase common stock	1,014	17
Net cash provided by financing activities	42,700	20,017
Effect of foreign currency exchange rate changes on cash and cash equivalents	42	(511)
Net increase in cash and cash equivalents	25,437	566
Cash and cash equivalents at beginning of period	38,930	7,402
Cash and cash equivalents at end of period	64,367	7,968
Supplemental cash flow information:
Cash paid for interest	1,454	1,627
Income tax payments, net	$ 707	$ 254

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Accrued liabilities

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Accrued liabilities

Accrued Liabilities

The following table presents the detail of accrued liabilities as of the periods ending (in thousands):

	September 30, 2014		December 31, 2013
Accrued payroll	$	7,005	$	7,221
Accrued expenses on contracts	3,813		1,446
Accrued professional fees	216		136
Other	2,088		3,136
Total accrued liabilities	$	13,122	$	11,939

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Description of the Business and Basis of Presentation - Schedule of Immaterial Correction on Consolidated Balance Sheet (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other shareholders’ equity		$ 1,020
Additional paid-in capital	200,964	155,198
Accumulated deficit	(125,928)	(112,187)
Total shareholders’ equity	76,801	44,031
As Reported [Member]
Other shareholders’ equity		1,020
Additional paid-in capital		153,878
Accumulated deficit		(110,867)
Total shareholders’ equity		44,031
Correction [Member]
Other shareholders’ equity		0
Additional paid-in capital		1,320
Accumulated deficit		(1,320)
Total shareholders’ equity		$ 0

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Net Loss per Share - Summary of Computation of Basic and Diluted Net (Loss) per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Net loss	$ (5,805)	$ (4,513)	$ (13,741)	$ (12,448)
Basic common shares:
Weighted average number of shares outstanding	27,392	1,348	25,012	1,342
Diluted common shares:
Weighted average shares used to compute diluted net loss per share	27,392	1,348	25,012	1,342
Net loss per share attributable to common stockholders:
Basic (in dollars per share)	$ (0.21)	$ (3.35)	$ (0.55)	$ (9.28)
Diluted (in dollars per share)	$ (0.21)	$ (3.35)	$ (0.55)	$ (9.28)

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Accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Schedule of Accrued liabilities

The following table presents the detail of accrued liabilities as of the periods ending (in thousands):

	September 30, 2014		December 31, 2013
Accrued payroll	$	7,005	$	7,221
Accrued expenses on contracts	3,813		1,446
Accrued professional fees	216		136
Other	2,088		3,136
Total accrued liabilities	$	13,122	$	11,939