x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 27-0291921 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ (Do not check if a small reporting company) | Small reporting company | ☐ | ||
Emerging growth company | ☐ |
Page | ||||
EX-31.1 | (CERTIFICATION OF THE CEO PURSUANT TO SECTION 302) | |||
EX-31.2 | (CERTIFICATION OF THE CFO PURSUANT TO SECTION 302) | |||
EX-32.1 | (CERTIFICATION OF THE CEO PURSUANT TO SECTION 906) | |||
EX-32.2 | (CERTIFICATION OF THE CFO PURSUANT TO SECTION 906) |
• | our ability to sustain or increase revenue from our larger customers, generate revenues from new customers, or offset the discontinuation of concentrated purchases by our larger customers with purchases by new or existing customers; |
• | our expectations regarding our expenses and revenue, our ability to maintain and expand gross profit, the sufficiency of our cash resources and needs for additional financing; |
• | our ability to produce products free of problems, defects, errors and vulnerabilities; |
• | our anticipated growth strategies; |
• | our expectations regarding competition; |
• | the anticipated trends and challenges in our business and the market in which we operate; |
• | our expectations regarding, and the capacity and stability of, our supply chain and manufacturing; |
• | the size and growth of the potential markets for our products and the ability to serve those markets; |
• | the scope, progress, expansion, and costs of developing and commercializing our products; |
• | the timing, rate and degree of introducing any of our products into the market and the market acceptance of any of our products; |
• | our ability to establish and maintain development partnerships; |
• | our ability to attract or retain key personnel; |
• | our expectations regarding federal, state and foreign regulatory requirements, including export controls, tax law changes and interpretations, economic sanctions and anti-corruption regulations; |
• | regulatory developments in the United States and foreign countries, including under export control laws or regulations that could continue to impede our ability to sell our products to our customer ZTE Kangxun Telecom Co. Ltd. or any of its affiliates or that could impede our ability to sell our products to other customers in certain foreign jurisdictions, particularly in China; |
• | our ability to obtain and maintain intellectual property protection for our products; and |
• | the pending purported securities class action and derivative lawsuits and our ability to defend against them. |
March 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 85,135 | $ | 67,495 | |||
Marketable securities - short-term | 222,540 | 211,933 | |||||
Accounts receivable | 74,765 | 86,602 | |||||
Inventory | 57,156 | 62,232 | |||||
Prepaid expenses and other current assets | 19,481 | 18,985 | |||||
Total current assets | 459,077 | 447,247 | |||||
Marketable securities - long-term | 59,831 | 85,182 | |||||
Property and equipment, net | 30,426 | 28,175 | |||||
Deferred tax asset | 45,089 | 41,901 | |||||
Other assets | 8,517 | 8,745 | |||||
Total assets | $ | 602,940 | $ | 611,250 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 34,527 | $ | 47,819 | |||
Accrued liabilities | 42,782 | 37,234 | |||||
Deferred revenue | 1,360 | 573 | |||||
Total current liabilities | 78,669 | 85,626 | |||||
Income taxes payable | 19,205 | 21,034 | |||||
Other long-term liabilities | 4,857 | 2,540 | |||||
Total liabilities | 102,731 | 109,200 | |||||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and outstanding at March 31, 2018 and December 31, 2017 | — | — | |||||
Common stock, $0.0001 par value; 150,000 shares authorized; 40,061 and 39,606 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 4 | 4 | |||||
Additional paid-in capital | 332,426 | 324,944 | |||||
Accumulated other comprehensive loss | (722 | ) | (320 | ) | |||
Retained earnings | 168,501 | 177,422 | |||||
Total stockholders’ equity | 500,209 | 502,050 | |||||
Total liabilities and stockholders’ equity | $ | 602,940 | $ | 611,250 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | 72,941 | $ | 114,667 | |||
Cost of revenue | 48,870 | 58,367 | |||||
Gross profit | 24,071 | 56,300 | |||||
Operating expenses: | |||||||
Research and development | 24,445 | 17,728 | |||||
Sales, general and administrative | 14,288 | 8,691 | |||||
Total operating expenses | 38,733 | 26,419 | |||||
(Loss) income from operations | (14,662 | ) | 29,881 | ||||
Other income, net: | |||||||
Interest income, net | 1,354 | 445 | |||||
Other expense, net | (71 | ) | (38 | ) | |||
Total other income, net | 1,283 | 407 | |||||
(Loss) income before benefit from income taxes | (13,379 | ) | 30,288 | ||||
Benefit from income taxes | (4,301 | ) | (5,421 | ) | |||
Net (loss) income | $ | (9,078 | ) | $ | 35,709 | ||
(Loss) earnings per share: | |||||||
Basic | $ | (0.23 | ) | $ | 0.93 | ||
Diluted | $ | (0.23 | ) | $ | 0.86 | ||
Weighted-average shares used to compute (loss) earnings per share: | |||||||
Basic | 39,836 | 38,308 | |||||
Diluted | 39,836 | 41,654 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net (loss) income | $ | (9,078 | ) | $ | 35,709 | ||
Other comprehensive loss: | |||||||
Changes in unrealized loss on marketable securities, net of income taxes of $88 and $15 for the three months ended March 31, 2018 and 2017, respectively | (402 | ) | (36 | ) | |||
Comprehensive (loss) income | $ | (9,480 | ) | $ | 35,673 |
Additional Paid-in Capital | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||
Common Stock | Retained Earnings | ||||||||||||||||||||||
Shares | Amount | Total | |||||||||||||||||||||
Balance at December 31, 2016 | 37,998 | $ | 4 | $ | 295,893 | $ | (16 | ) | $ | 138,914 | $ | 434,795 | |||||||||||
Vesting of restricted common stock | 28 | — | |||||||||||||||||||||
Exercise of common stock options | 341 | — | 883 | 883 | |||||||||||||||||||
Vesting of restricted stock units | 149 | — | — | — | |||||||||||||||||||
Stock-based compensation expense | 4,632 | 4,632 | |||||||||||||||||||||
Unrealized losses on marketable securities, net of tax of $15 | (36 | ) | (36 | ) | |||||||||||||||||||
Net income | 35,709 | 35,709 | |||||||||||||||||||||
Balance at March 31, 2017 | 38,516 | $ | 4 | $ | 301,408 | $ | (52 | ) | $ | 174,623 | $ | 475,983 | |||||||||||
Balance at December 31, 2017 | 39,606 | $ | 4 | $ | 324,944 | $ | (320 | ) | $ | 177,422 | $ | 502,050 | |||||||||||
Adoption of ASU 2014-09, net of tax of $51 (see Note 2) | 157 | 157 | |||||||||||||||||||||
Vesting of restricted common stock | 21 | — | |||||||||||||||||||||
Exercise of common stock options | 220 | — | 968 | 968 | |||||||||||||||||||
Vesting of restricted stock units | 214 | — | — | — | |||||||||||||||||||
Stock-based compensation expense | 6,514 | 6,514 | |||||||||||||||||||||
Unrealized losses on marketable securities, net of tax of $88 | (402 | ) | (402 | ) | |||||||||||||||||||
Net loss | (9,078 | ) | (9,078 | ) | |||||||||||||||||||
Balance at March 31, 2018 | 40,061 | $ | 4 | $ | 332,426 | $ | (722 | ) | $ | 168,501 | $ | 500,209 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income | $ | (9,078 | ) | $ | 35,709 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation | 3,266 | 2,877 | |||||
Stock-based compensation | 6,538 | 4,632 | |||||
Deferred income taxes | (3,239 | ) | (1,490 | ) | |||
Other non-cash charges | 45 | 76 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 11,837 | (6,764 | ) | ||||
Inventory | 5,076 | (2,003 | ) | ||||
Prepaid expenses and other current assets | (665 | ) | (5,435 | ) | |||
Other assets | 208 | (3,566 | ) | ||||
Accounts payable | (12,105 | ) | (11,533 | ) | |||
Accrued liabilities | 5,527 | 1,790 | |||||
Deferred revenue | 3,358 | 211 | |||||
Income taxes payable | (1,829 | ) | — | ||||
Other long-term liabilities | 121 | 356 | |||||
Net cash provided by operating activities | 9,060 | 14,860 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (6,704 | ) | (5,608 | ) | |||
Purchases of marketable securities | (73,534 | ) | (116,652 | ) | |||
Sales and maturities of marketable securities | 87,830 | 38,900 | |||||
Deposits | 20 | — | |||||
Net cash provided by (used in) investing activities | 7,612 | (83,360 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Payment of public offering costs | — | (188 | ) | ||||
Proceeds from the issuance of common stock under stock-based compensation plans | 968 | 883 | |||||
Net cash provided by financing activities | 968 | 695 | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 17,640 | (67,805 | ) | ||||
Cash, cash equivalents and restricted cash—Beginning of period | 67,495 | 208,032 | |||||
Cash, cash equivalents and restricted cash—End of period | $ | 85,135 | $ | 140,227 | |||
Supplemental cash flow disclosures: | |||||||
Refunds received for income taxes, net | $ | (72 | ) | $ | (134 | ) | |
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Capital expenditures incurred but not yet paid | $ | 1,555 | $ | 1,147 | |||
Public offering costs incurred but not yet paid | $ | — | $ | 13 |
Balance at Beginning of Period (1/1/18) | (Decrease) / Increase | Balance at End of Period | ||||||||
Three Months Ended March 31, 2018 | ||||||||||
Accounts Receivable | $ | 86,602 | (11,837 | ) | $ | 74,765 | ||||
Deferred Revenue (Current) | $ | 197 | 1,163 | $ | 1,360 | |||||
Deferred Revenue (Non-current) | $ | 254 | 2,196 | $ | 2,450 |
Three Months Ended | As a % of | |||||
March 31, 2018 | Total Revenue | |||||
(dollars in thousands) | ||||||
Americas | $ | 9,725 | 13 | % | ||
EMEA | 27,644 | 38 | % | |||
APAC | 35,572 | 49 | % | |||
Total revenue | $ | 72,941 | 100 | % |
March 31, 2018 | |||||||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||||||
Losses | |||||||||||||||||||||||||||
Amortized Cost | Gains | Less than One Year | Greater than One Year | Estimated Fair Value | Cash and Cash Equivalents | Marketable Securities | |||||||||||||||||||||
Cash | $ | 52,831 | $ | — | $ | — | $ | — | $ | 52,831 | $ | 52,831 | $ | — | |||||||||||||
Money market funds | 8,907 | — | — | — | 8,907 | 8,907 | — | ||||||||||||||||||||
Repurchase agreements | 13,700 | — | — | — | 13,700 | 13,700 | — | ||||||||||||||||||||
U.S. treasury bonds | 31,346 | — | (99 | ) | — | 31,247 | 4,999 | 26,248 | |||||||||||||||||||
Commercial paper | 49,141 | — | (29 | ) | — | 49,112 | — | 49,112 | |||||||||||||||||||
Certificates of deposit | 49,524 | 6 | (107 | ) | — | 49,423 | 1,700 | 47,723 | |||||||||||||||||||
Asset-backed securities | 40,896 | 1 | (151 | ) | — | 40,746 | 2,998 | 37,748 | |||||||||||||||||||
Corporate debt securities | 122,100 | 5 | (560 | ) | (5 | ) | 121,540 | — | 121,540 | ||||||||||||||||||
Total | $ | 368,445 | $ | 12 | $ | (946 | ) | $ | (5 | ) | $ | 367,506 | $ | 85,135 | $ | 282,371 |
December 31, 2017 | |||||||||||||||||||||||
Gross Unrealized | Estimated | Cash and Cash | Marketable | ||||||||||||||||||||
Amortized Cost | Gains | Losses(1) | Fair Value | Equivalents | Securities | ||||||||||||||||||
Cash | $ | 43,223 | $ | — | $ | — | $ | 43,223 | $ | 43,223 | $ | — | |||||||||||
Money market funds | 11,070 | — | — | 11,070 | 11,070 | — | |||||||||||||||||
Repurchase agreements | 12,500 | — | — | 12,500 | 12,500 | — | |||||||||||||||||
U.S. treasury bonds | 26,316 | — | (80 | ) | 26,236 | — | 26,236 | ||||||||||||||||
Commercial paper | 60,623 | — | (9 | ) | 60,614 | — | 60,614 | ||||||||||||||||
Certificates of deposit | 34,993 | 6 | (33 | ) | 34,966 | — | 34,966 | ||||||||||||||||
Asset-backed securities | 33,374 | 1 | (53 | ) | 33,322 | 702 | 32,620 | ||||||||||||||||
Corporate debt securities | 142,960 | 9 | (290 | ) | 142,679 | — | 142,679 | ||||||||||||||||
Total | $ | 365,059 | $ | 16 | $ | (465 | ) | $ | 364,610 | $ | 67,495 | $ | 297,115 |
(1) | Losses represent marketable securities that were in loss positions for less than one year. |
Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | ||||||
Proceeds from the sales and maturities of marketable securities | $ | 87,830 | $ | 38,900 | |||
Realized gains | $ | 4 | $ | 1 | |||
Realized losses | $ | (2 | ) | $ | — |
March 31, 2018 | December 31, 2017 | ||||||||||||||
Amortized Cost Basis | Aggregate Fair Value | Amortized Cost Basis | Aggregate Fair Value | ||||||||||||
Due within one year | $ | 223,179 | $ | 222,540 | $ | 212,137 | $ | 211,933 | |||||||
Due after one year through three years | 60,131 | 59,831 | 85,426 | 85,182 | |||||||||||
Total | $ | 283,310 | $ | 282,371 | $ | 297,563 | $ | 297,115 |
March 31, 2018 | December 31, 2017 | ||||||
Raw materials | $ | 37,195 | $ | 32,599 | |||
Work-in-process | 663 | 965 | |||||
Finished goods | 19,298 | 28,668 | |||||
Inventory | $ | 57,156 | $ | 62,232 |
March 31, 2018 | December 31, 2017 | ||||||
Engineering laboratory equipment | $ | 42,763 | $ | 39,433 | |||
Computer software | 2,565 | 2,281 | |||||
Computer equipment | 4,636 | 4,380 | |||||
Furniture and fixtures | 3,201 | 3,041 | |||||
Leasehold improvements | 3,015 | 2,282 | |||||
Construction in progress | 5,345 | 4,591 | |||||
Total property and equipment | 61,525 | 56,008 | |||||
Less: Accumulated depreciation | (31,099 | ) | (27,833 | ) | |||
Property and equipment, net | $ | 30,426 | $ | 28,175 |
March 31, 2018 | December 31, 2017 | ||||||
Employee-related liabilities | $ | 8,095 | $ | 5,233 | |||
Outsourced foundry services | 1,345 | 95 | |||||
Goods and services received not invoiced | 8,815 | 12,827 | |||||
Accrued manufacturing related expenses | 7,648 | 4,007 | |||||
Warranty reserve | 7,418 | 8,306 | |||||
Other accrued liabilities | 9,461 | 6,766 | |||||
Accrued liabilities | $ | 42,782 | $ | 37,234 |
March 31, 2018 | |||||||||||||||
Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
Assets: | |||||||||||||||
Money market funds | $ | — | $ | 8,907 | $ | — | $ | 8,907 | |||||||
Repurchase agreements | — | 13,700 | — | 13,700 | |||||||||||
U.S. treasury bonds | — | 31,247 | — | 31,247 | |||||||||||
Commercial paper | — | 49,112 | — | 49,112 | |||||||||||
Certificates of deposit | — | 49,423 | — | 49,423 | |||||||||||
Asset-backed securities | — | 40,746 | — | 40,746 | |||||||||||
Corporate debt securities | — | 121,540 | — | 121,540 | |||||||||||
Total | $ | — | $ | 314,675 | $ | — | $ | 314,675 |
December 31, 2017 | |||||||||||||||
Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
Assets: | |||||||||||||||
Money market funds | $ | — | $ | 11,070 | $ | — | $ | 11,070 | |||||||
Repurchase agreements | — | 12,500 | — | 12,500 | |||||||||||
U.S. treasury bonds | — | 26,236 | — | 26,236 | |||||||||||
Commercial paper | — | 60,614 | — | 60,614 | |||||||||||
Certificates of deposit | — | 34,966 | — | 34,966 | |||||||||||
Asset-backed securities | — | 33,322 | — | 33,322 | |||||||||||
Corporate debt securities | — | 142,679 | — | 142,679 | |||||||||||
Total | $ | — | $ | 321,387 | $ | — | $ | 321,387 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cost of revenue | $ | 521 | $ | 442 | |||
Research and development | 3,788 | 2,992 | |||||
Sales, general and administrative | 2,229 | 1,198 | |||||
Total stock-based compensation | $ | 6,538 | $ | 4,632 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Stock options | $ | 601 | $ | 666 | |||
Restricted stock units | 5,595 | 3,686 | |||||
Employee stock purchase plan | 298 | 251 | |||||
Other awards | 44 | 29 | |||||
Total stock-based compensation | $ | 6,538 | $ | 4,632 |
Number of Options (in thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding at December 31, 2017 | 1,634 | $ | 8.34 | 6.6 | $ | 47,356 | ||||||
Granted | — | $ | — | |||||||||
Exercised | (220 | ) | $ | 4.40 | $ | 7,660 | ||||||
Cancelled | (25 | ) | $ | 11.95 | ||||||||
Outstanding at March 31, 2018 | 1,389 | $ | 8.90 | 6.4 | $ | 42,655 | ||||||
Vested at: | ||||||||||||
March 31, 2018 | 1,389 | $ | 8.90 | 6.4 | $ | 42,655 | ||||||
December 31, 2017 | 1,634 | $ | 8.34 | 6.6 | $ | 47,356 | ||||||
Exercisable at: | ||||||||||||
March 31, 2018 | 808 | $ | 5.91 | 5.8 | $ | 26,919 | ||||||
December 31, 2017 | 907 | $ | 5.28 | 5.9 | $ | 28,634 |
Risk-free interest rate | 2.3% |
Expected dividend yield | None |
Expected volatility | 51.4% |
Expected term (in years) | 2.9 |
Grant date fair value of underlying shares | $39.02 |
RSUs (in thousands) | Weighted-Average Grant Date Fair Value | |||||
Outstanding at December 31, 2017 | 2,288 | $ | 36.08 | |||
Granted | 588 | $ | 43.20 | |||
Vested | (214 | ) | $ | 34.69 | ||
Cancelled | (11 | ) | $ | 25.92 | ||
Outstanding at March 31, 2018 | 2,651 | $ | 37.81 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Numerator: | |||||||
Net (loss) income | $ | (9,078 | ) | $ | 35,709 | ||
Denominator: | |||||||
Weighted-average shares used to compute net (loss) income per share - basic | 39,836 | 38,308 | |||||
Dilutive effect of stock options, unvested restricted stock and restricted stock units and employee stock purchase plan | — | 3,346 | |||||
Weighted-average shares used to compute net (loss) income per share - diluted | 39,836 | 41,654 | |||||
Net (loss) income per share | |||||||
Basic | $ | (0.23 | ) | $ | 0.93 | ||
Diluted | $ | (0.23 | ) | $ | 0.86 |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
Options to purchase common stock | 1,218 | 49 | |||
Unvested restricted stock units and awards | 1,445 | 152 | |||
Employee stock purchase plan | 3 | — |
Amounts | |||
Remaining 2018 | $ | 2,481 | |
2019 | 3,311 | ||
2020 | 3,339 | ||
2021 | 3,235 | ||
2022 | 2,415 | ||
Thereafter | 5,393 | ||
Total | $ | 20,174 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Warranty reserve, beginning of period | $ | 8,306 | $ | 2,158 | |||
Provisions made to warranty reserve during the period | 3,463 | 1,138 | |||||
Charges against warranty reserve during the period | (4,351 | ) | (1,183 | ) | |||
Warranty reserve, end of period | $ | 7,418 | $ | 2,113 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
United States | $ | 9,427 | $ | 12,414 | |||
China | 22,083 | 56,982 | |||||
Germany | 19,746 | 12,966 | |||||
Thailand | 7,119 | 11,604 | |||||
Other | 14,566 | 20,701 | |||||
Total revenue | $ | 72,941 | $ | 114,667 |
March 31, 2018 | December 31, 2017 | ||||||
United States | $ | 20,866 | $ | 19,065 | |||
China | 1,204 | 1,165 | |||||
Thailand | 6,271 | 7,065 | |||||
Other | 2,085 | 880 | |||||
Total long-lived assets | $ | 30,426 | $ | 28,175 |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
A(1) | 20 | % | 41 | % | |
B | 17 | % | 11 | % | |
C | 20 | % | * |
* | Less than 10% of revenue in the period indicated |
(1) | Customer A is currently subject to U.S. Department of Commerce restrictions that prevent sales to this customer after April 15, 2018. Refer to Note 16 for additional information. |
March 31, 2018 | December 31, 2017 | ||||
A(1) | 24 | % | 15 | % | |
B | * | 10 | % | ||
C | 21 | % | 19 | % |
* | Less than 10% of accounts receivable at the date indicated |
(1) | Customer A is currently subject to U.S. Department of Commerce restrictions that prevent sales to this customer after April 15, 2018. To date, the Company has concluded that Customer A’s receivable balances as of March 31, 2018 are collectible. The Company will continue to evaluate collectibility of Customer A’s receivable balances. Refer to Note 16 for additional information. |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
W | * | 40 | % | ||
X | 22 | % | * | ||
Y | 48 | % | 41 | % | |
Z | * | 10 | % |
* | Less than 10% of total purchases in the period indicated |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Consolidated Statement of Operation Data: | |||||||
Revenue | $ | 72,941 | $ | 114,667 | |||
Cost of revenue(1) | 48,870 | 58,367 | |||||
Gross profit | 24,071 | 56,300 | |||||
Operating expenses: | |||||||
Research and development(1) | 24,445 | 17,728 | |||||
Sales, general and administrative(1) | 14,288 | 8,691 | |||||
Total operating expenses | 38,733 | 26,419 | |||||
(Loss) income from operations | (14,662 | ) | 29,881 | ||||
Total other income, net | 1,283 | 407 | |||||
(Loss) income before benefit from income taxes | (13,379 | ) | 30,288 | ||||
Benefit from income taxes | (4,301 | ) | (5,421 | ) | |||
Net (loss) income | $ | (9,078 | ) | $ | 35,709 |
(1) | Stock-based compensation included in the condensed consolidated statements of operations data was as follows (in thousands): |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Cost of revenue | $ | 521 | $ | 442 | |||
Research and development | 3,788 | 2,992 | |||||
Sales, general and administrative | 2,229 | 1,198 | |||||
Total stock-based compensation | $ | 6,538 | $ | 4,632 |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
Revenue | 100 | % | 100 | % | |
Cost of revenue | 67 | % | 51 | % | |
Gross profit | 33 | % | 49 | % | |
Operating expenses: | |||||
Research and development | 34 | % | 15 | % | |
Sales, general and administrative | 20 | % | 8 | % | |
Total operating expenses | 53 | % | 23 | % | |
(Loss) income from operations | (20 | )% | 26 | % | |
Total other income, net | 2 | % | — | % | |
(Loss) income before benefit from income taxes | (18 | )% | 26 | % | |
Benefit from income taxes | (6 | )% | (5 | )% | |
Net (loss) income | (12 | )% | 31 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Revenue | $ | 72,941 | $ | 114,667 | $ | (41,726 | ) | (36 | )% |
Three Months Ended | As a % of | Three Months Ended | As a % of | Change in | ||||||||||||||||
March 31, 2018 | Total Revenue | March 31, 2017 | Total Revenue | $ | % | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Americas | $ | 9,725 | 13 | % | $ | 13,650 | 12 | % | $ | (3,925 | ) | (29 | )% | |||||||
EMEA | 27,644 | 38 | % | 26,107 | 23 | % | 1,537 | 6 | % | |||||||||||
APAC | 35,572 | 49 | % | 74,910 | 65 | % | (39,338 | ) | (53 | )% | ||||||||||
Total revenue | $ | 72,941 | 100 | % | $ | 114,667 | 100 | % | $ | (41,726 | ) | (36 | )% |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Cost of revenue | $ | 48,870 | $ | 58,367 | $ | (9,497 | ) | (16 | )% | |||||
Gross profit percentage | 33.0 | % | 49.1 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Research and development | $ | 24,445 | $ | 17,728 | $ | 6,717 | 38 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Sales, general and administrative | $ | 14,288 | $ | 8,691 | $ | 5,597 | 64 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Total other income, net | $ | 1,283 | $ | 407 | $ | 876 | 215 | % |
Three Months Ended March 31, | Change in | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
(dollars in thousands) | ||||||||||||||
Benefit from income taxes | $ | (4,301 | ) | $ | (5,421 | ) | $ | 1,120 | (21 | )% | ||||
Effective tax rate | 32 | % | (18 | )% | 50 | % |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Cash and cash equivalents | $ | 85,135 | $ | 139,641 | |||
Marketable securities | 282,371 | 181,644 | |||||
Working capital | 380,408 | 367,112 | |||||
Net cash provided by operating activities | 9,060 | 14,860 | |||||
Net cash provided by (used in) investing activities | 7,612 | (83,360 | ) | ||||
Net cash provided by financing activities | 968 | 695 |
Payments due by period | |||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | |||||||||||||||
(in thousands) | |||||||||||||||||||
Operating leases (1) | $ | 20,174 | $ | 2,481 | $ | 6,650 | $ | 5,650 | $ | 5,393 | |||||||||
Purchase obligations (2) | 56,180 | 56,180 | — | — | — | ||||||||||||||
Income taxes payable (3) | 19,205 | — | 1,827 | 3,656 | 13,722 | ||||||||||||||
Unrecognized tax benefits (4) | 2,394 | — | — | — | — | ||||||||||||||
Total | $ | 97,953 | $ | 58,661 | $ | 8,477 | $ | 9,306 | $ | 19,115 |
(1) | Our principal facilities are located in Maynard, Massachusetts and Holmdel, New Jersey and are leased under non-cancelable operating leases that expire in February 2025, with respect to the Massachusetts facility, and January 2022, with respect to the New Jersey facility. We also lease office space in various locations with expiration dates between 2018 and 2021. Several of the lease agreements include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require us to pay taxes, insurance, maintenance costs or defined rent increases. All of our facility leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense for the three months ended March 31, 2018 and 2017 was $1.2 million and $1.5 million, respectively. |
Amounts | |||
Remaining 2018 | $ | 2,481 | |
2019 | 3,311 | ||
2020 | 3,339 | ||
2021 | 3,235 | ||
2022 | 2,415 | ||
Thereafter | 5,393 | ||
Total | $ | 20,174 |
(2) | Our purchase obligations primarily consist of outstanding purchase orders with our contract manufacturers for inventory and other third parties for the manufacturing of our wafers. Our relationships with these vendors typically allow for the cancellation of outstanding purchase orders, but require payments of all expenses incurred through the date of cancellation. Other obligations include future non-inventory purchases and commitments related to future fixed asset purchases. |
(3) | Income taxes payable relates to taxes owed as a result of the one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred upon enactment of the U.S. Tax Cuts and Jobs Act, or the Act, in December 2017. The Act allows the tax liability to be paid on an installment basis over eight years. |
(4) | We had $4.8 million of uncertain tax positions as of March 31, 2018. Included in the balance of unrecognized tax benefits as of March 31, 2018 were $2.4 million of tax benefits that, if recognized, would impact the effective tax rate, which have been accrued for as a long-term liability on our condensed consolidated balance sheet. |
• | the accurate prediction of market requirements, changes in technology and evolving standards; |
• | the availability of qualified product designers and technologies needed to solve difficult design challenges in a cost-effective, reliable manner; |
• | our ability to design products that meet customers’ cost, size, acceptance and specification criteria and performance requirements; |
• | our ability to manufacture new products with acceptable quality and manufacturing yields in a sufficient quantity to meet customer demand and according to customer needs; |
• | our ability to offer new products at competitive prices; |
• | our dependence on suppliers to deliver in a timely manner materials that are critical components of our products; |
• | our dependence on third-party manufacturers to successfully manufacture our products in accordance with the specifications that we and our customers require; |
• | the identification of and entry into new markets for our products; |
• | the acceptance of our customers’ products by the market and the lifecycle of such products; and |
• | our ability to deliver products in a timely manner within our customers’ product planning and deployment cycle. |
• | U.S. or foreign governmental action, such as export control or import restrictions, that could prevent or significantly hinder our ability to sell our products to certain customers or customers in certain foreign jurisdictions or build our products internationally; |
• | greater difficulty in enforcing contracts and accounts receivable obligations and longer collection periods; |
• | difficulties in managing and staffing international offices, and the increased travel, infrastructure and legal compliance costs associated with multiple international locations; |
• | the impact of general economic and political conditions in economies outside the United States, including the uncertainty arising from the June 2016 referendum vote in the United Kingdom in favor of exiting the European Union and the subsequent formal notification by the United Kingdom of its intention to withdraw from the European Union, and heightened economic and political uncertainty within and among other European Union member states; |
• | tariff and trade barriers, changes in custom and duties requirements or compliance interpretations and other regulatory requirements or contractual limitations on our ability to sell or develop our products in certain foreign markets; |
• | heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; |
• | certification requirements; |
• | greater difficulty documenting and testing our internal controls; |
• | reduced protection for intellectual property rights in some countries; |
• | potentially adverse tax consequences, including further reform to the U.S. tax code and international tax rules such as the base erosion and profit shifting initiative; |
• | the effects of changes in currency exchange rates; |
• | changes in service provider and government spending patterns; |
• | social, political and economic instability; |
• | higher incidence of corruption or unethical business practices that could expose us to liability or damage our reputation; and |
• | natural disasters, health epidemics and acts of war or terrorism. |
• | a lack of guaranteed supply of manufactured wafers and other raw and finished components and potential higher wafer and component prices due to supply constraints; |
• | the limited availability of, or potential delays in obtaining access to, key process technologies; |
• | the location of contract manufacturers and foundries in regions that are subject to earthquakes, typhoons, tsunamis and other natural disasters; |
• | competition with our contract manufacturers’ or foundries’ other customers when contract manufacturers or foundries allocate capacity or supply during periods of capacity constraint or supply shortages; and |
• | potential regulatory changes, including in the United States, that could in the future prohibit, or increase our costs relating to, the use of contract manufacturers and foundries in certain regions. |
• | develop or respond either directly or in partnership with other market participants to new technologies or technical standards; |
• | react to changing customer requirements and expectations; |
• | devote needed resources to the development, production, promotion and sale of products; |
• | attain high manufacturing yields on new product designs; |
• | establish and take advantage of operations in lower-cost regions; |
• | bring relevant products to the market or enable their customers to bring relevant products to the market through a faster integration cycle; and |
• | deliver competitive products at lower prices, with lower gross margins or at lower costs than our products. |
• | sensitive data regarding our employees or business, including intellectual property and other proprietary data, could be stolen; |
• | our electronic communications systems, including email and other methods, could be disrupted, and our ability to conduct our business operations could be seriously damaged until such systems can be restored; |
• | our ability to process customer orders and deliver products could be degraded or disrupted, resulting in delays in revenue recognition; and |
• | defects and security vulnerabilities could be introduced into the software embedded in or used in the development of our products, thereby damaging the reputation and perceived reliability and security of our products. |
• | price and volume fluctuations in the overall stock market from time to time; |
• | volatility in the market price and trading volume of comparable companies, in particular optical industry peer companies; |
• | actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts covering our industry or issuing market projection reports; |
• | announcements of technological innovations, new products, strategic alliances or other transactions, or significant agreements by us or by our competitors; |
• | announcements by our customers regarding significant increases or decreases in capital expenditures and their results of operations; |
• | departure of key personnel; |
• | litigation involving us or that may be perceived as having an impact on our business; |
• | changes in general economic, industry and market conditions and trends, including the economic slowdown and delayed deployment and network expansion in China and the uncertainty arising from the June 2016 referendum vote in the United Kingdom in favor of exiting the European Union and the subsequent formal notification by the United Kingdom of its intention to withdraw from the European Union; |
• | investors’ general perception of us; |
• | significant short interest in our stock; |
• | sales of large blocks of our stock; |
• | announcements regarding further industry consolidation; |
• | changes in regulations in the United States and other jurisdictions in which we do business, including domestic and international tax reform; and |
• | actions or announcements by activist shareholders or others. |
• | the level of demand for our products and our ability to maintain and increase our customer base; |
• | the timing and success of new product introductions by us or our competitors or any other change in the competitive landscape of our market; |
• | the mix of products sold in a quarter; |
• | export control laws or regulations that could impede our ability to sell our products to certain customers or other customers in certain foreign jurisdictions; |
• | pricing pressure as a result of competition or otherwise or price discounts negotiated by our customers; |
• | our ability to ramp production of new products with our contract manufacturers; |
• | delays or disruptions in our supply or manufacturing chain; |
• | our ability to reduce manufacturing costs; |
• | errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs; |
• | seasonal and period-over-period buying patterns of some of our customers; |
• | introduction of new products, with initial sales at relatively small volumes with resulting higher product costs; |
• | increases in and timing of sales and marketing, research and development and other operating expenses that we may incur to grow and expand our operations and to remain competitive; |
• | insolvency, credit, or other difficulties faced by our customers, affecting their ability to purchase or pay for our products; |
• | insolvency, consolidation credit, or other difficulties confronting our suppliers and contract manufacturers leading to disruptions in our supply or distribution chain; |
• | levels of product order rescheduling, cancellations, returns and contractual price protection rights, including the impact of product quality problems on our reputation; |
• | adverse litigation judgments, settlements or other litigation-related costs, including with respect to the pending purported securities class action and derivative lawsuits; |
• | product recalls, regulatory proceedings or other adverse publicity about our products; |
• | fluctuations in foreign exchange rates; |
• | the impact of the U.S. Tax Cuts and Jobs Act and other legislative and regulatory proposals to reform U.S. taxation of international business activities; |
• | costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; and |
• | general economic conditions in either domestic or international markets, particularly the impact of any economic slowdown in China. |
• | establishing a classified board of directors with staggered three-year terms so that not all members of our board are elected at one time; |
• | providing that directors may be removed by stockholders only for cause and only with a vote of the holders of at least 75% of the issued and outstanding shares of voting stock; |
• | limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; |
• | requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; |
• | authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and |
• | limiting the liability of, and providing indemnification to, our directors and officers. |
Exhibit Number | Description | |
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
** | Furnished herewith. |
Acacia Communications, Inc. | |||
Date: May 3, 2018 | By: | /s/ Murugesan Shanmugaraj | |
Murugesan Shanmugaraj | |||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, 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(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(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 (the Registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 control over financial reporting. |
Acacia Communications, Inc. | |||
Date: May 3, 2018 | By: | /s/ Murugesan Shanmugaraj | |
Murugesan Shanmugaraj | |||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, 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(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(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 (the Registrant's fourth fiscal quarter in the case of an annual report) 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(s) 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 control over financial reporting. |
Acacia Communications, Inc. | |||
Date: May 3, 2018 | By: | /s/ John F. Gavin | |
John F. Gavin | |||
Chief Financial Officer |
Acacia Communications, Inc. | |||
Date: May 3, 2018 | By: | /s/ Murugesan Shanmugaraj | |
Murugesan Shanmugaraj | |||
President and Chief Executive Officer |
Acacia Communications, Inc. | |||
Date: May 3, 2018 | By: | /s/ John F. Gavin | |
John F. Gavin | |||
Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Apr. 27, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Acacia Communications, Inc. | |
Trading Symbol | ACIA | |
Entity Central Index Key | 0001651235 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 40,149,541 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 40,061,000 | 39,606,000 |
Common stock, shares outstanding (in shares) | 40,061,000 | 39,606,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Statement [Abstract] | ||
Revenue | $ 72,941 | $ 114,667 |
Cost of revenue | 48,870 | 58,367 |
Gross profit | 24,071 | 56,300 |
Operating expenses: | ||
Research and development | 24,445 | 17,728 |
Sales, general and administrative | 14,288 | 8,691 |
Total operating expenses | 38,733 | 26,419 |
(Loss) income from operations | (14,662) | 29,881 |
Other income, net: | ||
Interest income, net | 1,354 | 445 |
Other expense, net | (71) | (38) |
Total other income, net | 1,283 | 407 |
(Loss) income before benefit from income taxes | (13,379) | 30,288 |
Benefit from income taxes | (4,301) | (5,421) |
Net (loss) income | $ (9,078) | $ 35,709 |
(Loss) earnings per share: | ||
Basic (in USD per share) | $ (0.23) | $ 0.93 |
Diluted (in USD per share) | $ (0.23) | $ 0.86 |
Weighted-average shares used to compute (loss) earnings per share: | ||
Basic (in shares) | 39,836 | 38,308 |
Diluted (in shares) | 39,836 | 41,654 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (9,078) | $ 35,709 |
Other comprehensive loss: | ||
Changes in unrealized loss on marketable securities, net of income taxes of $88 and $15 for the three months ended March 31, 2018 and 2017, respectively | (402) | (36) |
Comprehensive (loss) income | $ (9,480) | $ 35,673 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||
Changes in unrealized loss on marketable securities, tax | $ 88 | $ 15 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Statement of Stockholders' Equity [Abstract] | |
Changes in unrealized loss on marketable securities, tax | $ 88 |
Adoption of ASU 2014-09, tax | $ 51 |
NATURE OF THE BUSINESS AND OPERATIONS |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE BUSINESS AND OPERATIONS | NATURE OF THE BUSINESS AND OPERATIONS Acacia Communications, Inc. was incorporated on June 2, 2009, as a Delaware corporation. Acacia Communications, Inc. and its wholly-owned subsidiaries (the “Subsidiaries”) are collectively referred to as the Company. The Company is a leading provider of high-speed coherent optical interconnect products that transform communications networks, relied upon by cloud infrastructure operators and content and communication service providers, through improvements in performance and capacity and reductions in associated costs. The Company’s products include a family of low-power coherent digital signal processors and silicon photonic integrated circuits that it has integrated into families of optical interconnect modules with transmission speeds ranging from 100 to 400 gigabits per second for use in long-haul, metro and inter-data center markets. The Company is also developing its AC1200 module that will enable, across dual wavelengths, transmission capacity of 1.2 terabits (1,200 gigabits) per second and above. The Company is headquartered in Maynard, Massachusetts, and has established wholly-owned subsidiaries in North America, Europe and Asia as part of the Company’s global expansion. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The unaudited condensed consolidated financial statements include the accounts of Acacia Communications, Inc. and its Subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. For further information, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on February 22, 2018. There have been no significant changes in the Company’s accounting policies from those disclosed in the Annual Report on Form 10-K that have had a material impact on the Company’s condensed consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2017, and in management’s opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s condensed consolidated balance sheet as of March 31, 2018, its condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017, its condensed consolidated statements of comprehensive (loss) income for the three months ended March 31, 2018 and 2017, its condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2018 and 2017, and its condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2017. All intercompany balances and transactions have been eliminated in consolidation. The financial data and the other financial information disclosed in the notes to these condensed consolidated financial statements related to these three-month periods are also unaudited. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. Use of Estimates The preparation of unaudited 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 unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, as of December 31, 2017, $0.2 million of deferred product costs have now been included within “Prepaid expenses and other current assets” on the condensed consolidated balance sheet, and for the three months ended March 31, 2017, the $0.2 million increase in deferred product costs has now been included within the increase in “Prepaid expenses and other current assets” on the condensed consolidated statement of cash flows. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) which supersedes the revenue recognition requirements in Accounting Standard Codification 605, Revenue Recognition (“ASC 605”) and affects any entity that enters into contracts with customers to transfer goods and services. On January 1, 2018, the Company adopted ASC 606 and all related amendments for all contracts not completed as of the adoption date using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In accordance with ASC 606, the Company recognizes revenue under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Revenue for product sales is recognized at the point in time when control transfers to the Company’s customers, which is generally when products are shipped from the Company’s manufacturing facilities or when delivered to the customer’s named location. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered to be fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. See Note 3 for further disclosures and detail regarding revenue. As the impact of ASC 606 is not material to the Company, there is no pro-forma disclosure presented as of and for the quarter ended March 31, 2018. The Company expects the impact of the adoption of the new standard to be immaterial to its results of operations on an ongoing basis. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in ASU 2016-16 are effective for fiscal years beginning after December 15, 2017, and were adopted by the Company in the first quarter of 2018. The amendments in ASU 2016-16 have been applied using a modified retrospective approach. As the Company has not had any intra-entity transfers of assets in such period other than inventory, there is no impact from the adoption of this standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (“ASU 2016-18”). The amendments in ASU 2016-18 require that the statement of cash flows explain the change in total cash, cash equivalents and restricted cash. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has adopted the amendments in ASU 2016-18 in the first quarter of 2018 using a retrospective transition method. Other than the revised statement of cash flows presentation of restricted cash in the prior period presented, which was immaterial, the adoption of ASU 2016-18 did not have a material impact on the Company’s condensed consolidated financial statements for the three months ended March 31, 2017. There is no impact to the cash flow statement for the three months ended March 31, 2018 as there was no restricted cash balance as of the beginning or end of the period. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The main provisions include presenting financial assets measured at amortized cost at the amount expected to be collected, which is net of an allowance for credit losses, and recording credit losses related to available-for-sale securities through an allowance for credit losses. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, and must be applied using a modified retrospective approach with earlier adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 will require lessees to recognize a right-of-use asset and lease liability on the balance sheet for virtually all leases. For the statement of operations, ASU 2016-02 retains a dual model requiring leases to be classified as either operating or financing leases. Operating leases will result in straight-line expense, and financing leases will have a front-loaded expense pattern with an interest expense component. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, and must be applied using a modified retrospective approach with earlier adoption permitted. The Company expects the adoption of ASU 2016-02 will increase both its assets and liabilities presented on its condensed consolidated balance sheets to reflect the right-of-use assets and corresponding lease liabilities, as well as increase its leasing disclosures. The Company is continuing its assessment and review of existing leases, as well as policy and process changes to support the new standard. |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE The Company adopted ASC 606 effective January 1, 2018 using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information is accounted for in accordance with the previous revenue guidance, ASC 605, and has not been restated. Revenue recognized prior to the effective date is accounted for in accordance with the accounting policies disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The following are the policies the Company has applied beginning January 1, 2018. The Company generates all of its revenue from contracts with customers. The Company considers customer purchase orders, which in many cases are governed by master purchasing agreements, to be contracts with customers. The Company’s contracts with customers are generally for product only, and do not include other performance obligations such as services, extended warranties or other material rights. As part of its assessment of each contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. In determining the transaction price, the price stated on the purchase order is typically fixed and represents the net consideration to which the Company expects to be entitled, and therefore there is no variable consideration. As the Company’s standard payment terms are less than one year, the Company has elected, as a practical expedient, to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on its relative standalone selling price. The product price as specified on the purchase order is considered the standalone selling price as it is an observable source that depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs upon shipment from the Company’s manufacturing site or delivery to the customer’s named location. In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer. The Company also considered certain customer contracts that include acceptance clauses, but has concluded that delivery to the customer’s named location is the point at which the customer is able to direct the use of and obtain substantially all of the remaining benefits from the asset, and therefore the acceptance is considered a formality that does not impact the timing of revenue recognition. At times, the Company receives orders for products that may be delivered over multiple dates that may extend across reporting periods. The Company invoices for each delivery upon shipment and recognizes revenues for each distinct product delivered, assuming transfer of control has occurred. As scheduled delivery dates are within one year, the Company has elected to use the optional exemption whereby revenues allocated to future shipments of partially completed contracts are not disclosed. The Company generally provides an assurance warranty that its products will substantially conform to the agreed-upon specifications for 12 to 24 months from the date of shipment. The Company’s liability is limited to the cost of repair or replacement of the defective part. The Company does not consider activities related to such warranties to be a separate performance obligation. The terms and conditions of sale generally do not allow for refunds or product returns other than for warranty repairs. The Company has a limited number of customer contracts that provide for the performance of services or include multiple performance obligations. Once the Company determines the performance obligations, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company then allocates the transaction price to each performance obligation in the contract based on a relative stand-alone selling price method or using the variable consideration allocation exception if the required criteria are met. The corresponding revenues are recognized as the related performance obligations are satisfied. A receivable is recognized in the period the Company ships the product. Payment terms on invoiced amounts are typically 30-60 days. In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is classified as “deferred revenue.” The opening and closing balances of the Company’s deferred revenue and accounts receivable are as follows (in thousands):
The amounts of revenue recognized in the period that were included in the opening deferred revenue balance was immaterial for the three months ended March 31, 2018. The increase in current and non-current deferred revenue is related to billings to, or advance payments from, customers for which the Company has not yet fulfilled its performance obligations. Deferred revenue not expected to be recognized within the Company’s operating cycle of one year is presented as a component of “Other long-term liabilities” on the condensed consolidated balance sheet. The Company has concluded that none of the costs it has incurred to obtain and fulfill its ASC 606 contracts meet the capitalization criteria, and as such, there are no costs deferred and recognized as assets on the condensed consolidated balance sheet. Disaggregation of Revenue The following table provides information about disaggregated revenue based on the geographic region of the Company’s customers’ ship-to destinations, which in certain instances may be the location of a contract manufacturer rather than the Company’s end customer. Further disaggregation of revenue by geographic country can be found in Note 12.
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FINANCIAL INSTRUMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The following tables set forth the Company’s cash, cash equivalents and short- and long-term marketable securities as of March 31, 2018 and December 31, 2017 (in thousands):
The proceeds from the sales and maturities of marketable securities, which were primarily reinvested and resulted in realized gains and losses, were as follows (in thousands):
The contractual maturities of short-term and long-term marketable securities held at March 31, 2018 and December 31, 2017 are as follows (in thousands):
At March 31, 2018, the Company believed that the unrealized losses on its available-for-sale investments were temporary. The investments with unrealized losses consisted primarily of corporate debt securities. In making the determination that the decline in fair value of these securities was temporary, the Company considered various factors, including, but not limited to: the length of time each security was in an unrealized loss position; the extent to which fair value was less than cost; the financial condition and near-term prospects of the issuers; and the Company’s intent not to sell these securities and the assessment that it is more likely than not that the Company would not be required to sell these securities before the recovery of their amortized cost basis. |
INVENTORY |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY Inventory consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
On April 15, 2018, the U.S. Department of Commerce imposed a seven-year denial of export privileges that restricts sales to ZTE Kangxun Telecom Co. Ltd., or ZTE, the Company’s largest customer. As a result, the Company recorded inventory write-offs of $3.9 million in the three months ended March 31, 2018 related to finished goods inventory that had either been designed specifically for ZTE, or had been intended for consumption by ZTE and is now excess inventory due to the Company’s current suspension of sales to ZTE or ZTE’s future demand for product. |
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
Depreciation expense was $3.3 million and $2.9 million for the three months ended March 31, 2018 and 2017, respectively. |
ACCRUED LIABILITIES |
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ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
Due to the denial order against ZTE discussed in Note 5, the Company recorded $3.2 million of accrued manufacturing reserves as of March 31, 2018 related to non-cancellable commitments to purchase inventory that was either designed specifically for ZTE, or had been intended for consumption by ZTE and is now excess inventory due to the Company’s current suspension of sales to ZTE or ZTE’s future demand for product. Certain prior period amounts have been reclassified to conform to the current period presentation. Specifically, as of December 31, 2017, $0.4 million of accrued income taxes have now been reclassified to be included within “Other accrued liabilities” in conformity with the current period presentation. |
FAIR VALUE MEASUREMENT |
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FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash equivalents consist of money market funds, repurchase agreements, U.S. government agency debt securities, certificates of deposit and asset-backed securities with an original maturity of three months or less. The Company’s investments in money market funds, repurchase agreements, U.S. government agency debt securities, commercial paper, certificates of deposit, asset-backed securities and corporate debt securities, which are classified as Level 2 within the fair value hierarchy, were initially valued at the transaction price and subsequently valued at each reporting date utilizing market-observable data. The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The fair value of these assets measured on a recurring basis was determined using the following inputs as of March 31, 2018 and December 31, 2017 (in thousands):
There were no transfers between fair value measurement levels during the three months ended March 31, 2018 or 2017. For certain other financial instruments, including accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate their fair value due to the relatively short maturity of these balances. |
STOCK COMPENSATION PLANS |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK COMPENSATION PLANS | STOCK COMPENSATION PLANS The following table summarizes the classification of stock-based compensation in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):
The following table summarizes stock-based compensation expense by award type for the three months ended March 31, 2018 and 2017 (in thousands):
Stock Options A summary of stock option activity under the Company’s equity incentive plans for the three months ended March 31, 2018 is as follows:
As of March 31, 2018 and December 31, 2017, there was $4.1 million and $4.8 million, respectively, of unrecognized compensation cost related to unvested common stock options which is expected to be recognized over weighted-average periods of 1.9 years and 2.2 years, respectively. No stock option awards were issued by the Company during the three months ended March 31, 2018 or 2017. Restricted Stock Units During the three months ended March 31, 2018, the Company granted approximately 497,000 restricted stock units (“RSUs”) to employees and executives under the 2016 Equity Incentive Plan that vest upon the satisfaction of a service condition, generally over four years. The cost of any RSUs with only a service condition is determined using the fair value of the Company’s common stock on the date of grant, and compensation is recognized on a straight-line basis over the requisite vesting period. During the three months ended March 31, 2018, the Company granted awards covering up to a maximum of 90,808 performance-based RSUs to executive officers that include a market condition in addition to a service condition (“performance-based RSUs” or “PRSUs”). Each PRSU represents the right to receive one share of the Company’s common stock when and if the applicable vesting conditions are satisfied. The PRSUs are subject to performance-based vesting. The number of PRSUs that vest is measured based on the level of achievement of a performance objective over a three-year period (the “Performance Period”) running from January 1, 2018 through December 31, 2020, as determined and certified by the Compensation Committee of the Board of Directors following the end of the Performance Period. The level of achievement will be determined based on the Company’s percentile achievement of relative total shareholder returns against an external comparator group during the Performance Period (the “Relative TSR Objective”). Vesting of the PRSUs is also subject to the applicable officer’s continued provision of services to the Company through the vesting date, except in the case of death or disability where vesting will be pro rated for time worked during the Performance Period. No PRSUs will vest unless a threshold level of achievement of the Relative TSR Objective is achieved. The Company estimated the fair value of the PRSUs using a Monte Carlo valuation model on the date of grant, using the following assumptions:
As soon as practicable following each vesting date of RSUs, including PRSUs, the Company will issue to the holder of the RSUs the number of shares of common stock equal to the aggregate number of RSUs that have vested. Notwithstanding the foregoing, the Company may, in its sole discretion, in lieu of issuing shares of common stock to the holder of the RSUs, pay the holder an amount in cash equal to the fair market value of such shares of common stock. To date, the Company has not settled any vested RSUs with cash. A summary of the changes in the Company’s RSUs during the three months ended March 31, 2018 is as follows:
The granted amount includes the 90,808 PRSUs which is the maximum number that were granted to executives during the three months ended March 31, 2018. As of March 31, 2018 and December 31, 2017, there was $64.8 million and $47.8 million, respectively, of total unrecognized compensation cost related to unvested RSUs which is expected to be recognized over weighted-average periods of 3.1 years and 2.9 years, respectively. |
NET (LOSS) INCOME PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET (LOSS) INCOME PER SHARE | NET (LOSS) INCOME PER SHARE The following table sets forth the computation of the Company’s basic and diluted net (loss) income per share (in thousands, except per share amounts):
The following common stock equivalents (in thousands) were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:
As discussed further in Note 9, in February 2018, the Company granted a maximum of 90,808 PRSUs to executives that include a market condition and service conditions. An estimate of the number of shares contingently issuable based on average market prices through March 31, 2018 has been included in the antidilutive table above. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases The Company’s principal facilities are located in Maynard, Massachusetts and Holmdel, New Jersey and are leased by the Company under non-cancelable operating leases that expire in February 2025, with respect to the Massachusetts facility, and January 2022, with respect to the New Jersey facility. The Company also leases office space in various locations with expiration dates between 2018 and 2021. Several of the lease agreements include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance and maintenance costs. All of the Company’s facility leases are accounted for as operating leases. Rent expense is recorded over each respective lease term on a straight-line basis. Rent expense was $1.2 million and $1.5 million for the three months ended March 31, 2018 and 2017, respectively. Future minimum lease payments due under these non-cancelable lease agreements as of March 31, 2018, are as follows (in thousands):
Warranties The Company’s standard warranty obligation to its customers provides for repair or replacement of a defective product at the Company’s discretion for a period of time following purchase, generally between 12 and 24 months. Factors that affect the warranty obligation include product failure rates, material usage and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. The estimated cost associated with fulfilling the Company’s warranty obligation to customers is recorded in cost of revenue. In May 2017, the Company announced a quality issue at one of its three contract manufacturers (the “Quality Issue”) that affected a portion of the units manufactured by the contract manufacturer over an approximate four month period, which is estimated at approximately 1,300 AC400 units and 5,100 CFP units under warranty. Based on the ongoing evaluation of such units, the Company established reserves to cover anticipated costs, including cost estimates for product repairs, rework of component inventory with the contract manufacturer and rescreening costs associated with this Quality Issue. These costs are estimated based on the results of testing performed to date, which is ongoing, in addition to yield, fall-out rates and component part recovery cost estimates based on the Company’s historical experience. The Company’s estimates of the Quality Issue costs are subject to further change as customers continue to return potentially impacted units and final testing is performed. Changes in the Company’s warranty liability, which is included as a component of accrued liabilities on the condensed consolidated balance sheets, are set forth in the table below (in thousands):
Legal Contingencies On January 21, 2016, ViaSat, Inc. filed a suit against the Company alleging, among other things, breach of contract, breach of the implied covenant of good faith and fair dealing and misappropriation of trade secrets. On February 19, 2016, the Company responded to ViaSat’s suit and alleged counterclaims against ViaSat including, among other things, patent misappropriation, breach of contract, breach of the implied covenant of good faith and fair dealing, misappropriation of trade secrets and unfair competition, which ViaSat denied in its response filed March 16, 2016. The Company is continuing to evaluate ViaSat’s claims, but based on the information available to the Company today, the Company currently believes that this suit will not have a material adverse effect on the Company’s business or its consolidated financial position, results of operations or cash flows. On July 28, 2017, the Company filed a suit against ViaSat asserting commercial disparagement, libel, slander of title, unfair competition, intentional interference with advantageous relations and intentional interference with contractual relations. Both lawsuits are still pending, and discovery is closed in the 2016 action filed by ViaSat and ongoing in the 2017 action. In August and September 2017, three purported securities class action complaints were filed in the United States District Court for the District of Massachusetts against the Company and certain of its executive officers (Murugesan Shanmugaraj and John Gavin). The complaints are captioned Tharp v. Acacia Communications, Inc., et al., Case No. 1:17-cv-11504 (D. Mass.), filed August 14, 2017; Zhang v. Acacia Communications, Inc., et al., Case No. 1:17-cv-11518 (D. Mass.), filed August 16, 2017; and Kebler v. Acacia Communications, Inc., et al., Case No. 1:17-cv-11695 (D. Mass.), filed September 7, 2017. Each complaint purports to be brought on behalf of an alleged class of those who purchased the Company’s securities between August 11, 2016 and July 13, 2017, and alleges that the defendants violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements regarding, among other matters, demand for the Company’s products, the Company’s financial guidance, and/or the Company’s quality control process as it relates to the Quality Issue. Each complaint seeks, among other relief, unspecified compensatory damages, attorneys’ fees, and costs. On October 13, 2017, a fourth purported securities class action complaint was filed in the United States District Court for the District of Massachusetts against the Company, certain of its directors and executive officers (Murugesan Shanmugaraj, John Gavin, Francis Murphy, Eric Swanson, Peter Chung, Benny Mikkelsen, Stan Reiss, John Ritchie, Vincent Roche, Mehrdad Givehchi, John LoMedico, Bhupendra Shah and Christian Rasmussen), certain persons or entities that sold the Company’s common stock in the Company’s October 2016 follow-on public offering, and the underwriters of such offering, captioned Rollhaus v. Acacia Communications, Inc., et al., Case No. 17-cv-11988 (D. Mass). The complaint purports to be brought on behalf of an alleged class of those who purchased the Company’s common stock pursuant to or traceable to the follow-on offering, and alleges that the defendants violated Sections 11, 12(a)(2) and/or 15 of the Securities Act of 1933 by making allegedly false and/or misleading statements regarding, among other matters, demand for the Company’s products, the Company’s financial guidance, and/or the Company’s quality control process as it relates to the Quality Issue. The complaint seeks, among other relief, unspecified compensatory damages, rescission, attorneys’ fees, and costs. On November 7, 2017, the court consolidated these four securities class actions (under docket number 1:17-cv-11504). On November 9, 2017, the court appointed lead plaintiffs for the consolidated action. Lead plaintiffs filed a consolidated amended class action complaint on January 8, 2018. The amended complaint makes allegations similar to those in the original four complaints, against the same defendants, and alleges that some or all of the defendants violated Sections 11, 12(a)(2) and/or 15 of the Securities Act of 1933 and Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. All defendants filed motions to dismiss the consolidated amended complaint on February 9, 2018. The court held a hearing on the motions to dismiss on March 29, 2018, afforded the plaintiffs an additional 30 days to file a motion for leave to file a further amended complaint, and took the motions to dismiss under advisement. On April 30, 2018, plaintiffs filed a motion for leave to amend the complaint. The proposed amended complaint makes allegations similar to those in the consolidated amended complaint, asserts claims against the Company, certain of its directors and executive officers (Murugesan Shanmugaraj, John Gavin, Francis Murphy, Eric Swanson, Peter Chung, Benny Mikkelsen, Stan Reiss, John Ritchie and Vincent Roche), certain entities that sold the Company’s common stock in its October 2016 follow-on public offering, and the underwriters of such offering, and alleges that some or all of the defendants violated Sections 11, 12(a)(2) and/or 15 of the Securities Act of 1933 and Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Defendants’ responses to plaintiffs’ motion for leave to amend are due on May 14, 2018. In November and December 2017, three purported shareholder derivative lawsuits were filed in the United States District Court for the District of Massachusetts against certain of the Company’s directors and executive officers (Murugesan Shanmugaraj, John Gavin, Francis Murphy, Eric Swanson, Peter Chung, Benny Mikkelsen, Stan Reiss, John Ritchie, Vincent Roche, Mehrdad Givehchi, Bhupendra Shah and Christian Rasmussen) and the Company as a nominal defendant. A fourth purported shareholder derivative lawsuit was filed against the same defendants in the same court on March 13, 2018. The complaints are captioned Colgan v. Shanmugaraj et al., Case No. 1:17-cv-12350 (D. Mass.), filed November 29, 2017; Wong v. Shanmugaraj et al., Case No. 1:17-cv-12550 (D. Mass.), filed December 22, 2017; Dennis v. Shanmugaraj et al., Case No. 1:17-cv-12571 (D. Mass.), filed December 28, 2017; and Farah-Franco et al. v. Shanmugaraj et al., Case No. 1:18-cv-10465 (D. Mass), filed March 13, 2018. The court has consolidated these complaints with the class actions (under docket number 1:17-cv-11504). Each complaint generally alleges that the individual defendants breached fiduciary duties owed to the Company by making or causing the Company to make allegedly false and/or misleading statements regarding, among other matters, demand for the Company’s products, the Company’s financial guidance, and/or the Company’s quality control process as it relates to the Quality Issue. The complaints also allege that certain individual defendants caused the Company to issue an allegedly false and/or misleading proxy statement on or about April 6, 2017 regarding, among other matters, the reelection of certain directors. The complaints purport to assert derivative claims for violation of Sections 14(a) and 29(b) of the Securities Exchange Act of 1934, breach of fiduciary duty, waste of corporate assets, unjust enrichment, abuse of control and/or gross mismanagement, and seek to recover on behalf of the Company for any liability it incurs as a result of the individual defendants’ alleged misconduct. The complaints seek declaratory, equitable and monetary relief, restitution, and attorneys’ fees and costs. The plaintiffs in these actions have filed motions for appointment of lead plaintiff and/or lead counsel. On April 20, 2018, the plaintiffs submitted a stipulation (subject to court approval) regarding the appointment of lead plaintiffs and lead counsel and proposing a schedule for the submission of a consolidated amended complaint and defendants’ response thereto. On April 9, 2018, a purported shareholder filed a complaint against the Company in the Court of Chancery of the State of Delaware seeking to inspect certain books and records of the Company pursuant to 8 Del. C. §220. The complaint is captioned Silberberg v. Acacia Communications, Inc., Case No. 2018-0262-TMR (Del. Ch.). The plaintiff seeks production of documents regarding, among other matters, demand for the Company’s products, its financial guidance, its quality control process as it relates to the Quality Issue, and the Company’s October 2016 follow-on public offering. The plaintiff filed a motion for expedited proceedings, and the parties reached agreement on a case schedule. The Company filed its answer on April 27, 2018. The plaintiff filed his motion for judgment on the pleadings on May 1, 2018, the Company’s cross-motion for judgment on the pleadings and opposition is due May 11, 2018, and any reply is due May 16, 2018. The Court will hold a telephonic hearing on these motions on May 29, 2018. The Company intends to engage in a vigorous defense of the litigation described above. However, the Company is unable to predict the ultimate outcome of these proceedings, and, therefore cannot estimate possible losses or ranges of losses, if any, or the materiality of any such losses. An unfavorable resolution of these matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period. In addition, the timing of the final resolution of these proceedings is uncertain. The Company will incur litigation and other expenses as a result of these proceedings, which could have a material impact on the Company’s business, consolidated financial position, results of operations and cash flows. In addition, from time to time the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on the Company’s business or on its consolidated financial position, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Indemnification In the ordinary course of business, the Company enters into various agreements containing standard indemnification provisions. The Company’s indemnification obligations under such provisions are typically in effect from the date of execution of the applicable agreement through the end of the applicable statute of limitations. During the three months ended March 31, 2018 and 2017, the Company did not experience any losses related to these indemnification obligations. The Company does not expect significant claims related to these indemnification obligations, and consequently, has concluded that the fair value of these obligations is not material. Accordingly, as of March 31, 2018 and December 31, 2017, no amounts have been accrued related to such indemnification provisions. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Among other changes, this legislation: (1) reduces the U.S. federal corporate tax rate from 35% to 21%; (2) requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred; (3) creates new taxes on certain foreign sourced earnings; (4) provides a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (5) includes a new provision designed to currently tax certain global intangible low-taxed income (“GILTI”) of controlled foreign corporations, which allows for the possibility of using foreign tax credits (“FTCs”) and a deduction of up to 50 percent to reduce this income tax liability (subject to some limitations); (6) provides limitations on the use of FTCs to reduce the U.S. income tax liability from GILTI; and (7) provides limitations on net operating losses generated in the taxable years beginning after December 31, 2017, to 80 percent of taxable income. Accounting Standard Codification (“ASC”) 740 requires filers to record the effect of tax law changes in the period enacted. However, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), that permits filers to record provisional amounts during a measurement period ending no later than one year from the date of the Act’s enactment. As of March 31, 2018, the Company has not completed the accounting for the tax effects of enactment of this legislation; however, the Company has made a reasonable estimate of the effects on its existing deferred tax balances, the one-time transition tax and provisional state taxes on future repatriations. For the items for which the Company was able to determine a reasonable estimate, the Company recognized a provisional amount of $31.4 million under SAB 118 as a component of income tax expense in the year ended December 31, 2017. The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. As a result of the “deemed distributions” under the Act, the impact of GILTI on the Company’s future foreign earnings and lack of certain foreign governments’ withholding tax imposed on dividends, the Company no longer takes the position that its foreign earnings are permanently reinvested except for limited cases where foreign earnings are required to meet working capital needs. The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter. The Company’s quarterly tax provision, and its quarterly estimate of its annual effective tax rate, are subject to significant volatility due to several factors, including the Company’s ability to accurately predict its pre-tax income and loss in multiple jurisdictions, as well as the portions of stock-based compensation that will either not generate tax benefits or the tax benefit is unpredictable and reflected when realized by employees. For the three months ended March 31, 2018, the Company recorded a benefit from income taxes of $4.3 million as compared to $5.4 million for the three months ended March 31, 2017, resulting in an effective tax rate of 32.1% and (17.9)% for the three months ended March 31, 2018 and 2017, respectively. The benefit from income taxes recorded in the three months ended March 31, 2018 is primarily a result of the recognition of excess tax benefits from the taxable compensation on share-based awards recognized in the three months ended March 31, 2018 and federal and state research and development credits. The benefit from income taxes recorded in the three months ended March 31, 2017 was primarily a result of the recognition of excess tax benefits from the taxable compensation on share-based awards recognized in the three months ended March 31, 2017 and the favorable effect of foreign statutory tax rates applicable to income earned outside the United States under the Company’s corporate structure. The Company’s historical (benefit) provision for income taxes is not necessarily reflective of its future results of operations. As of March 31, 2018 and December 31, 2017, the Company identified $4.8 million and $4.5 million, respectively, of gross uncertain tax positions. Included in those balances as of March 31, 2018 and December 31, 2017 are $2.4 million and $2.3 million, respectively, of tax benefits that, if recognized, would impact the effective tax rate. These have been accrued for as long-term liabilities on the Company’s condensed consolidated balance sheets. The Company’s existing tax positions will continue to generate an increase in unrecognized tax benefits in subsequent periods. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. During the three months ended March 31, 2018 and 2017, the amounts recorded related to the accrual of interest and penalties were immaterial in each period. |
SEGMENT INFORMATION AND GEOGRAPHIC DATA |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION AND GEOGRAPHIC DATA | SEGMENT INFORMATION AND GEOGRAPHIC DATA The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s president and chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements. Revenue by geographic region, based on ship-to destinations, which in certain instances may be the location of a contract manufacturer rather than the Company’s end customer, was as follows (in thousands):
Total long-lived assets by geographic region consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
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CONCENTRATIONS OF RISK | CONCENTRATIONS OF RISK Customer Concentration Customers with revenue equal to or greater than 10% of total revenue for the three months ended March 31, 2018 and 2017 were as follows:
Customers that accounted for equal to or greater than 10% of accounts receivable at March 31, 2018 and December 31, 2017 were as follows:
Supplier Concentration The Company’s most significant vendor spending is related to purchases from contract manufacturers and component suppliers located in Japan, China, Thailand and the United States, from which the Company purchases a substantial portion of its inventory. For the three months ended March 31, 2018 and 2017, total purchases from each of the suppliers were as follows:
The Company also outsources certain engineering projects to vendors located throughout the world. During the three months ended March 31, 2018 the Company incurred 12% of its total research and development costs with Vendor A. During the three months ended March 31, 2017 the Company incurred less than 10% of its total research and development costs with Vendor A. |
RELATED PARTIES |
3 Months Ended |
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Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES One of the members of the Company’s Board of Directors, Vincent Roche, is also the President and Chief Executive Officer and a member of the board of directors of Analog Devices, Inc. (“ADI”). The Company, through its contract manufacturers, periodically purchases supplies from ADI pursuant to purchase orders negotiated on an arm’s length basis between ADI and the Company’s contract manufacturers at prevailing prices. These purchased supplies are used as content in certain of the Company’s manufactured products. During the three months ended March 31, 2018 and 2017, the Company’s contract manufacturers made purchases from ADI of approximately $0.7 million and $1.2 million, respectively. In February 2018, the Company entered into a product development agreement with ADI related to the development of integrated circuits for approximately $2.0 million, of which approximately $0.5 million of costs were incurred during the three months ended March 31, 2018. One of the members of the Company’s Board of Directors, Peter Y. Chung, is also a member of the board of directors of M/A-COM Technology Solutions, Inc. (“MACOM”). The Company, through its contract manufacturers, periodically purchases supplies from MACOM. These purchased supplies are used as content in certain of the Company’s manufactured products. Based on shipments, the Company’s contract manufacturers made purchases from MACOM of approximately $0.3 million for the three months ended March 31, 2018. The amount of purchases made by the Company from MACOM were immaterial in the three months ended March 31, 2017. |
SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS ZTE On April 15, 2018, the U.S. Department of Commerce imposed a seven-year denial of export privileges that restricts sales to ZTE, the Company’s largest customer, which comprised 20% of revenues during the three months ended March 31, 2018. The Company considered this to be a recognized subsequent event that provided additional evidence about conditions that existed as of March 31, 2018. Accordingly, the Company recorded inventory write-offs and reserves of $7.1 million in the three months ended March 31, 2018 related to inventory that had either been designed specifically for ZTE, or had been intended for consumption by ZTE and is now excess inventory due to the Company’s current suspension of sales to ZTE or ZTE’s future demand for product. Further, as of March 31, 2018, ZTE had a receivable balance of $17.6 million, which has been partially paid to date. Additional payments are expected during the three month period ended June 30, 2018, however the Company is continuing to monitor the collectibility of the receivable balance for any changes in facts or circumstances. Stock Repurchase Program On April 30, 2018, the Company’s Board of Directors authorized the repurchase of up to $60.0 million of the Company’s common stock. Unless terminated earlier by resolution of the Board of Directors, the stock repurchase program will expire on December 31, 2018. The timing and amount of any shares repurchased will be determined by the Company in its discretion and will depend on a number of factors, including market conditions, applicable legal requirements, the Company’s capital needs and alternative uses of capital, among others. The program does not obligate the Company to acquire any specific number of shares. Under the program, shares may be repurchased in open market and/or privately negotiated transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of unaudited 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 unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recently Adopted and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) which supersedes the revenue recognition requirements in Accounting Standard Codification 605, Revenue Recognition (“ASC 605”) and affects any entity that enters into contracts with customers to transfer goods and services. On January 1, 2018, the Company adopted ASC 606 and all related amendments for all contracts not completed as of the adoption date using the modified retrospective method. The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In accordance with ASC 606, the Company recognizes revenue under the core principle to depict the transfer of control to the Company’s customers in an amount reflecting the consideration the Company expects to be entitled. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Revenue for product sales is recognized at the point in time when control transfers to the Company’s customers, which is generally when products are shipped from the Company’s manufacturing facilities or when delivered to the customer’s named location. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g., when control transfers prior to delivery), they are considered to be fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. See Note 3 for further disclosures and detail regarding revenue. As the impact of ASC 606 is not material to the Company, there is no pro-forma disclosure presented as of and for the quarter ended March 31, 2018. The Company expects the impact of the adoption of the new standard to be immaterial to its results of operations on an ongoing basis. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”). ASU 2016-16 requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in ASU 2016-16 are effective for fiscal years beginning after December 15, 2017, and were adopted by the Company in the first quarter of 2018. The amendments in ASU 2016-16 have been applied using a modified retrospective approach. As the Company has not had any intra-entity transfers of assets in such period other than inventory, there is no impact from the adoption of this standard. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (“ASU 2016-18”). The amendments in ASU 2016-18 require that the statement of cash flows explain the change in total cash, cash equivalents and restricted cash. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has adopted the amendments in ASU 2016-18 in the first quarter of 2018 using a retrospective transition method. Other than the revised statement of cash flows presentation of restricted cash in the prior period presented, which was immaterial, the adoption of ASU 2016-18 did not have a material impact on the Company’s condensed consolidated financial statements for the three months ended March 31, 2017. There is no impact to the cash flow statement for the three months ended March 31, 2018 as there was no restricted cash balance as of the beginning or end of the period. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The main provisions include presenting financial assets measured at amortized cost at the amount expected to be collected, which is net of an allowance for credit losses, and recording credit losses related to available-for-sale securities through an allowance for credit losses. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, and must be applied using a modified retrospective approach with earlier adoption permitted for fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 will require lessees to recognize a right-of-use asset and lease liability on the balance sheet for virtually all leases. For the statement of operations, ASU 2016-02 retains a dual model requiring leases to be classified as either operating or financing leases. Operating leases will result in straight-line expense, and financing leases will have a front-loaded expense pattern with an interest expense component. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, and must be applied using a modified retrospective approach with earlier adoption permitted. The Company expects the adoption of ASU 2016-02 will increase both its assets and liabilities presented on its condensed consolidated balance sheets to reflect the right-of-use assets and corresponding lease liabilities, as well as increase its leasing disclosures. The Company is continuing its assessment and review of existing leases, as well as policy and process changes to support the new standard. |
REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Revenue and Accounts Receivable | The opening and closing balances of the Company’s deferred revenue and accounts receivable are as follows (in thousands):
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Schedule of Disaggregation of Revenue | Further disaggregation of revenue by geographic country can be found in Note 12.
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FINANCIAL INSTRUMENTS (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Short- and Long-term Marketable Securities | The following tables set forth the Company’s cash, cash equivalents and short- and long-term marketable securities as of March 31, 2018 and December 31, 2017 (in thousands):
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Proceeds from Sales and Maturities of Marketable Securities | The proceeds from the sales and maturities of marketable securities, which were primarily reinvested and resulted in realized gains and losses, were as follows (in thousands):
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Contractual Maturities of Short-term and Long-Term Marketable Securities Held | The contractual maturities of short-term and long-term marketable securities held at March 31, 2018 and December 31, 2017 are as follows (in thousands):
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INVENTORY (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
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ACCRUED LIABILITIES (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
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FAIR VALUE MEASUREMENT (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Measured at Fair Value on Recurring Basis | The fair value of these assets measured on a recurring basis was determined using the following inputs as of March 31, 2018 and December 31, 2017 (in thousands):
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STOCK COMPENSATION PLANS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Classification of Stock-based Compensation | The following table summarizes the classification of stock-based compensation in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Expense by Award Type | The following table summarizes stock-based compensation expense by award type for the three months ended March 31, 2018 and 2017 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | A summary of stock option activity under the Company’s equity incentive plans for the three months ended March 31, 2018 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-Average Assumptions Used to Estimate Fair Value | The Company estimated the fair value of the PRSUs using a Monte Carlo valuation model on the date of grant, using the following assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Company's RSU | A summary of the changes in the Company’s RSUs during the three months ended March 31, 2018 is as follows:
|
NET (LOSS) INCOME PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Net (Loss) Income Per Share | The following table sets forth the computation of the Company’s basic and diluted net (loss) income per share (in thousands, except per share amounts):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Common Stock Equivalents Excluded from Computation of Diluted Net Income (Loss) Per Share | The following common stock equivalents (in thousands) were excluded from the computation of diluted net (loss) income per share for the periods presented because including them would have been antidilutive:
|
COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Annual Minimum Lease Payments | Future minimum lease payments due under these non-cancelable lease agreements as of March 31, 2018, are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Product Warrant Liability | Changes in the Company’s warranty liability, which is included as a component of accrued liabilities on the condensed consolidated balance sheets, are set forth in the table below (in thousands):
|
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Revenue by Geographic Region | Revenue by geographic region, based on ship-to destinations, which in certain instances may be the location of a contract manufacturer rather than the Company’s end customer, was as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Long-Lived Assets by Geographic Region | Total long-lived assets by geographic region consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):
|
CONCENTRATIONS OF RISK (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer Concentration Risk | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Concentrations of Risk | Customers with revenue equal to or greater than 10% of total revenue for the three months ended March 31, 2018 and 2017 were as follows:
Customers that accounted for equal to or greater than 10% of accounts receivable at March 31, 2018 and December 31, 2017 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplier Concentration Risk | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Concentrations of Risk | For the three months ended March 31, 2018 and 2017, total purchases from each of the suppliers were as follows:
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Prepaid expenses and other current assets | $ 19,481 | $ 18,985 | |
Increase in prepaid expenses and other current assets | $ 665 | $ 5,435 | |
Reclassifications | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Prepaid expenses and other current assets | 200 | ||
Deferred product costs | $ (200) | ||
Increase in prepaid expenses and other current assets | 200 | ||
Increase in deferred product costs | $ (200) |
REVENUE - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Disaggregation Of Revenue [Line Items] | |
Capitalized contracts | $ 0 |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Standard warranty period | 12 months |
Payment terms on invoiced amounts | 30 days |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Standard warranty period | 24 months |
Payment terms on invoiced amounts | 60 days |
REVENUE - Deferred Revenue and Accounts Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Revenue from Contract with Customer [Abstract] | ||||
Deferred Revenue (Current) | $ 1,360 | $ 197 | ||
Deferred Revenue (Non-current) | 2,450 | 254 | ||
Accounts receivable | 74,765 | $ 86,602 | $ 86,602 | |
Increase / (Decrease), Deferred Revenue (Current) | 1,163 | |||
Deferred revenue | 1,360 | $ 573 | ||
Increase / (Decrease), Deferred Revenue (Non-current) | 2,196 | |||
Increase / (Decrease), Accounts Receivable | $ (11,837) | $ 6,764 |
REVENUE - Disaggregation of Revenue (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Disaggregation Of Revenue [Line Items] | |
Revenue | $ 72,941 |
Revenue, as a % of Total Revenue | 100.00% |
Americas | |
Disaggregation Of Revenue [Line Items] | |
Revenue | $ 9,725 |
Revenue, as a % of Total Revenue | 13.00% |
EMEA | |
Disaggregation Of Revenue [Line Items] | |
Revenue | $ 27,644 |
Revenue, as a % of Total Revenue | 38.00% |
APAC | |
Disaggregation Of Revenue [Line Items] | |
Revenue | $ 35,572 |
Revenue, as a % of Total Revenue | 49.00% |
FINANCIAL INSTRUMENTS - Proceeds from Sales and Maturities of Marketable Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from the sales and maturities of marketable securities | $ 87,830 | $ 38,900 |
Realized gains | 4 | 1 |
Realized losses | $ (2) | $ 0 |
FINANCIAL INSTRUMENTS - Contractual Maturities of Short-term and Long-term Marketable Securities Held (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Due within one year, Amortized Cost Basis | $ 223,179 | $ 212,137 |
Due within one year, Aggregate Fair Value | 222,540 | 211,933 |
Due after one year through three years, Amortized Cost Basis | 60,131 | 85,426 |
Due after one year through three years, Aggregate Fair Value | 59,831 | 85,182 |
Amortized Cost Basis | 283,310 | 297,563 |
Aggregate Fair Value | $ 282,371 | $ 297,115 |
INVENTORY - Schedule of Inventory (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 37,195 | $ 32,599 |
Work-in-process | 663 | 965 |
Finished goods | 19,298 | 28,668 |
Inventory | 57,156 | $ 62,232 |
Inventory write-offs | $ 3,900 |
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 61,525 | $ 56,008 |
Less: Accumulated depreciation | (31,099) | (27,833) |
Property and equipment, net | 30,426 | 28,175 |
Engineering laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 42,763 | 39,433 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,565 | 2,281 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 4,636 | 4,380 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,201 | 3,041 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,015 | 2,282 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 5,345 | $ 4,591 |
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 3,266 | $ 2,877 |
ACCRUED LIABILITIES - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Employee-related liabilities | $ 8,095 | $ 5,233 | ||
Outsourced foundry services | 1,345 | 95 | ||
Goods and services received not invoiced | 8,815 | 12,827 | ||
Accrued manufacturing related expenses | 7,648 | 4,007 | ||
Warranty reserve | 7,418 | 8,306 | $ 2,113 | $ 2,158 |
Other accrued liabilities | 9,461 | 6,766 | ||
Accrued liabilities | 42,782 | 37,234 | ||
Reclassifications | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other accrued liabilities | 400 | |||
Accrued income taxes | $ 400 | |||
ZTE Kangxun Telecom Co. Ltd | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Accrued manufacturing related expenses | $ 3,200 |
FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Fair Value Disclosures [Abstract] | ||
Transfers between fair value measurement levels | $ 0 | $ 0 |
STOCK COMPENSATION PLANS - Classification of Stock-based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 6,538 | $ 4,632 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 521 | 442 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 3,788 | 2,992 |
Sales, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 2,229 | $ 1,198 |
STOCK COMPENSATION PLANS - Schedule of Stock-Based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 6,538 | $ 4,632 |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 298 | 251 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 601 | 666 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 5,595 | 3,686 |
Other awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 44 | $ 29 |
STOCK COMPENSATION PLANS - Weighted-Average Assumptions Used to Estimate Fair Value (Details) - Performance-Based RSUs |
3 Months Ended |
---|---|
Mar. 31, 2018
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.30% |
Expected dividend yield | 0.00% |
Expected volatility | 51.40% |
Expected term (in years) | 2 years 10 months 24 days |
Grant date fair value of underlying shares (in USD per share) | $ 39.02 |
NET (LOSS) INCOME PER SHARE - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Numerator: | ||
Net (loss) income | $ (9,078) | $ 35,709 |
Denominator: | ||
Weighted-average shares used to compute net (loss) income per share - basic (in shares) | 39,836 | 38,308 |
Dilutive effect of stock options, unvested restricted stock and restricted stock units and employee stock purchase plan (in shares) | 0 | 3,346 |
Weighted-average shares used to compute net (loss) income per share - diluted (in shares) | 39,836 | 41,654 |
Net (loss) income per share | ||
Basic (in USD per share) | $ (0.23) | $ 0.93 |
Diluted (in USD per share) | $ (0.23) | $ 0.86 |
NET (LOSS) INCOME PER SHARE - Summary of Common Stock Equivalents Excluded from Computation of Diluted Net Income Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 1,218 | 49 |
Unvested restricted stock units and awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 1,445 | 152 |
Employee stock purchase plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares excluded from computation of earnings per share (in shares) | 3 | 0 |
NET (LOSS) INCOME PER SHARE - Narrative (Details) - shares |
1 Months Ended | 3 Months Ended |
---|---|---|
Feb. 28, 2018 |
Mar. 31, 2018 |
|
Performance-Based RSUs | Executive | ||
Earnings Per Share [Line Items] | ||
Restricted stock units granted (in shares) | 90,808 | 90,808 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
May 31, 2017
contract_manufacturer
AC400_Unit
CFP_Unit
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2017
USD ($)
|
|
Loss Contingencies [Line Items] | |||
Operating leases rent expense | $ | $ 1.2 | $ 1.5 | |
Minimum | |||
Loss Contingencies [Line Items] | |||
Standard warranty period on repair or replacement of defective products | 12 months | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Standard warranty period on repair or replacement of defective products | 24 months | ||
Contract manufacturer quality issue | |||
Loss Contingencies [Line Items] | |||
Number of contract manufacturers with quality issue | 1 | ||
Number of contract manufacturers | 3 | ||
Contract manufacturer quality issue | AC400 Unit | |||
Loss Contingencies [Line Items] | |||
Defective units | AC400_Unit | 1,300 | ||
Contract manufacturer quality issue | CFP Unit | |||
Loss Contingencies [Line Items] | |||
Defective units | CFP_Unit | 5,100 |
COMMITMENTS AND CONTINGENCIES - Future Annual Minimum Lease Payments (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Remaining 2018 | $ 2,481 |
2019 | 3,311 |
2020 | 3,339 |
2021 | 3,235 |
2022 | 2,415 |
Thereafter | 5,393 |
Total | $ 20,174 |
COMMITMENTS AND CONTINGENCIES - Schedule of Changes in Product Warrant Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Warranty reserve, beginning of period | $ 8,306 | $ 2,158 |
Provisions made to warranty reserve during the period | 3,463 | 1,138 |
Charges against warranty reserve during the period | (4,351) | (1,183) |
Warranty reserve, end of period | $ 7,418 | $ 2,113 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Provisional income tax expense under SAB 118 | $ 31,400 | ||
Benefit from income taxes | $ 4,301 | $ 5,421 | |
Effective income tax rate | 32.10% | (17.90%) | |
Uncertain tax positions | $ 4,800 | 4,500 | |
Unrecognized tax benefits that, if recognized, would favorably impact effective tax rate | $ 2,400 | $ 2,300 |
SEGMENT INFORMATION AND GEOGRAPHIC DATA - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
SEGMENT INFORMATION AND GEOGRAPHIC DATA - Summary of Revenue by Geographic Region (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 72,941 | $ 114,667 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenue | 9,427 | 12,414 |
China | ||
Segment Reporting Information [Line Items] | ||
Revenue | 22,083 | 56,982 |
Germany | ||
Segment Reporting Information [Line Items] | ||
Revenue | 19,746 | 12,966 |
Thailand | ||
Segment Reporting Information [Line Items] | ||
Revenue | 7,119 | 11,604 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 14,566 | $ 20,701 |
SEGMENT INFORMATION AND GEOGRAPHIC DATA - Summary of Total Long-Lived Assets by Geographic Region (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 30,426 | $ 28,175 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 20,866 | 19,065 |
China | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 1,204 | 1,165 |
Thailand | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 6,271 | 7,065 |
Other | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 2,085 | $ 880 |
CONCENTRATIONS OF RISK - Summary of Customer Concentration of Total Revenue (Details) - Customer Concentration Risk - Revenue |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% | 41.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.00% | 11.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 20.00% |
CONCENTRATIONS OF RISK - Summary of Customer Concentration of Accounts Receivable (Details) - Customer Concentration Risk - Accounts Receivable |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.00% | 15.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 21.00% | 19.00% |
CONCENTRATIONS OF RISK - Summary of Supplier Concentration (Details) - Supplier Concentration Risk - Purchases |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Supplier W | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 40.00% | |
Supplier X | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.00% | |
Supplier Y | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 48.00% | 41.00% |
Supplier Z | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% |
CONCENTRATIONS OF RISK - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Vendor A | Supplier Concentration Risk | Research and development | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 12.00% |
RELATED PARTIES - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 22, 2018 |
Mar. 31, 2018 |
Mar. 31, 2017 |
|
ADI | |||
Related Party Transaction [Line Items] | |||
Purchase from related party | $ 0.7 | $ 1.2 | |
Product development agreement | $ 2.0 | ||
Product development agreement costs incurred | 0.5 | ||
M/A-COM | |||
Related Party Transaction [Line Items] | |||
Purchase from related party | $ 0.3 |
SUBSEQUENT EVENTS (Details) - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Apr. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Subsequent Event [Line Items] | |||||
Inventory write-off and increase in reserves | $ 7,100,000 | ||||
Accounts receivable | 74,765,000 | $ 86,602,000 | $ 86,602,000 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Authorized stock repurchase amount | $ 60,000,000 | ||||
ZTE | |||||
Subsequent Event [Line Items] | |||||
Accounts receivable | $ 17,600,000 | ||||
Revenue | Customer Concentration Risk | ZTE | |||||
Subsequent Event [Line Items] | |||||
Concentration risk, percentage | 20.00% | 41.00% |
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