ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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77-0201147
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.001 per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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ITEM 1
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ITEM 1A
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ITEM 1B
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ITEM 2
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ITEM 3
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ITEM 4
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ITEM 5
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ITEM 6
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ITEM 7
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ITEM 7A
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ITEM 8
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ITEM 9
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ITEM 9A
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ITEM 9B
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ITEM 10
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ITEM 11
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ITEM 12
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ITEM 13
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ITEM 14
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ITEM 15
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ITEM 16
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•
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developing trends and demands in the markets we address, particularly emerging markets;
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•
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economic conditions, particularly in certain geographies, and in financial markets;
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•
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new and future products and services;
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•
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capital spending of our customers;
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our strategic direction, future business plans and growth strategy;
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•
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industry and customer consolidation;
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•
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expected demand for and benefits of our products and services;
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•
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seasonality of revenue and concentration of revenue sources;
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•
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expectations regarding the impact of our acquisition of Thomson Video Networks (“TVN”);
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•
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expectations regarding our CableOS software-based CCAP solutions;
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•
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expectations regarding the impact of the Warrant issued to Comcast on our business;
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•
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potential future acquisitions and dispositions;
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•
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anticipated results of potential or actual litigation;
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•
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our competitive environment;
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•
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the impact of our restructuring plans;
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•
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the impact of governmental regulation;
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•
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anticipated revenue and expenses, including the sources of such revenue and expenses;
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•
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expected impacts of changes in accounting rules;
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•
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expectations regarding the usability of our inventory and the risk that inventory will exceed forecasted demand;
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•
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expectations and estimates related to goodwill and intangible assets and their associated carrying value;
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•
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use of cash, cash needs and ability to raise capital; and
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Item 1.
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BUSINESS
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▪
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Demand for Video Services Anytime, Anywhere, on any Device.
In our ubiquitous multiscreen video environment, video programming and content needs to be transformed into multiple formats, bit rates and resolutions for display on a broad range of devices.
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▪
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Demand for High Quality Video
. Consumer demand for high quality video anytime, anywhere and on any device requires ever-increasing bandwidth capacity in service providers’ networks, as well as technology that maximizes network bandwidth efficiency. With the advent of Ultra High Definition (Ultra HD) televisions and OTT services increasingly being rendered in “4K” high resolution and consuming approximately four times the bandwidth of traditional HD channels, we believe next generation compression technologies, such as High Efficiency VideoCompression (HEVC) or advances in H.264/AVC codecs, as well as increasing requirements for HDR encoding, will continue to remain a high priority for distributors of video.
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▪
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Streaming Video Service
. Consumer demand for video download and streaming services from new media companies such as Netflix, Hulu, Google (YouTube), Amazon (Prime Video) and Apple (iTunes) continue to experience significant global growth. These and other similar services aggregate third-party and original content and stream video “over-the-top” (OTT) to any Internet-connected device utilizing Internet service providers’ networks at no incremental infrastructure cost to the consumer.
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▪
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Time-Shifted Viewing.
“Time-shifting” technologies include digital video recorders (DVRs), cloud and network DVRs (cDVR and nDVR) that allow a subscriber to store programming on the service provider’s servers or in the cloud, and video-on-demand (VOD) services.
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•
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service providers and broadcast and media companies continue to provide more of their own OTT streaming video services, including OTT streaming of live (or “linear”) television programming;
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•
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service providers are competing to offer higher quality video signals in HD, including evolving initiatives to deliver video in 4K Ultra HD resolution;
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•
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service providers are developing and expanding their content delivery and Internet Protocol (IP) networks, and increasing the capacity and efficiency of their networks with investments in various delivery infrastructure technologies to, among other things, maximize video quality and minimize bandwidth utilization;
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•
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service providers continue to consolidate to achieve greater economies of scale and subscriber concentration, and acquire media companies to expand their content libraries and capabilities to develop original content;
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•
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service providers continue to enhance and differentiate their content offerings, either through in-house development of new content or through acquisitions of existing content brands; and
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•
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service providers have an ongoing need, despite the migration of traffic to OTT, to provide services over their existing broadcast distribution infrastructures.
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•
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Cable Operators
. Cable operators continue to focus on various initiatives to improve and differentiate their service offerings from competing service providers, including: bundled digital video, voice and high speed data services; expansion of VOD libraries and on-demand and streaming service offerings; upgraded consumer-facing applications; video delivery over IP to broadband enabled consumer devices; and capacity enhancement of high-speed data services.
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•
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Satellite Operators
. Satellite operators around the world have established digital television services that serve tens of millions of subscribers, with the ability to provide tens of thousands of linear channels. We believe these linear services will continue to grow, particularly in emerging markets, while, in parallel, satellite operators launch new streaming services, such as Sling TV and DirecTV Now, to address younger generation viewers and new consumption habits.
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•
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Telcos
. Telcos have established video offerings to successfully compete in the video marketplace, including high-quality HD content, larger VOD libraries, time-shifting television services, bundled voice, data and video packages and, more recently, streaming services. In many cases, telcos are making significant infrastructure investments to expand their video offerings into IP services and gain market share, while certain telcos are also acquiring satellite and/or cable companies to achieve market reach and scale.
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•
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Network broadcasters, programmers and content owners require video contribution and distribution solutions to transmit live programming of news and sports to their studios for subsequent broadcast, and deliver the same programming and content to service providers for distribution to their subscribers. Broadcasters generally produce their own news and sports highlight content, along with hundreds of channels of network programming that is played-to-air under strict reliability requirements using playout servers and software.
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•
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With broadcast and media companies continuing to expand their offerings to support a wide range of live and linear content and making content available in higher quality video formats and on-demand, we believe these trends are accelerating demand for functionally collapsed playout systems with integrated media orchestration software, as well as increasing demand for media servers and video-optimized storage solutions equipped to support higher resolution formats. In addition, in order to achieve faster time-to-market and reduce operational costs, we believe content providers are adopting cloud-based technologies and transitioning portions of their operations into public cloud environments, thereby enabling expanded services at a more rapid pace, the distribution of video directly to consumers or to distributors over IP and public networks, and more efficient and scalable global operations.
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•
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In the terrestrial broadcasting market, while broadcasters in various countries that have not yet completed converting from analog to digital transmission continue with change-over efforts, operators in numerous other
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•
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According to a recent Cisco study, IP video traffic accounts for a significant majority of Internet traffic globally, and video traffic will only continue to increase for the foreseeable future. We believe service providers and broadcast and media companies with OTT services and offerings will continue to require high-quality video processing solutions and new technologies in order to process and distribute large amounts of live and VOD content from a wide variety of sources to a broad array of consumer devices, and to optimize adaptive bitrate video streaming quality and bandwidth utilization.
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•
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With the continued proliferation of OTT streaming content and program channels similar to channels currently available from service providers, monetizing this content through the use of national, regionalized and personalized advertising delivered to the varied devices of individual viewers has become a key area of focus for companies with OTT offerings. We believe OTT ad insertion and other related content customization solutions will continue to attract increased investments from OTT companies.
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•
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With a growing middle class across emerging markets, we believe the Pay-TV business is poised for growth over the coming decade in the Asia Pacific region, South Asia, the Middle East, Africa and Central and South America. We currently derive a meaningful portion of our revenue from countries in emerging markets.
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•
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Many consumers who are entering the middle class are now able to afford a monthly video service to gain access to their favorite programs and movies. We believe some of the leading video service providers serving emerging markets will experience high subscriber growth rates and may become worldwide industry leaders.
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•
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We believe subscribers in these markets will demand increasingly sophisticated video services over time as consumer consumption trends in these markets track to those in more developed markets. As a result, we believe that the infrastructure and technology investments of these service providers and new market entrants are likely to grow significantly for the foreseeable future.
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•
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Media companies addressing emerging markets are aggressively investing in the creation of new content, particularly content that is localized and responsive to consumer demands, with the goal of creating strong brands and a growing, loyal customer base. We believe that this growth in content creation will require these media companies to significantly increase their investments in video storage, processing and related technologies.
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•
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Network Function Virtualization
. We believe there is industry momentum towards network function virtualization, whereby core video chain functions are being re-engineered and collapsed to run on the latest Intel processors in order to leverage high-performance and scalable appliance-based hardware, and as software-only virtual instances designed to run on private or public cloud environments.
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•
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Unified Video Playout & Processing Systems
. In light of more complicated workflows inherent in managing the delivery of greater quantities of content across multiple formats to a growing population of set-top-boxes and consumer electronic devices, we believe the industry is moving towards unified video processing systems. These systems integrate what had been historically discrete hardware video processing functions into software, enabling significant cost efficiencies, greater flexibility and improved business agility across the entire video workplace. A unified video processing system also requires software-based channel origination and playout capabilities, with integrated functionality such as graphics and branding insertion and media orchestration, and an integrated control system that streamlines playout processes, improves video quality, enables time-shift and cDVR functionality, while reducing server overhead. Also, when playout functionality is deployed to the cloud, the compression and OTT packaging and origin functionality (in addition to the capability to distribute over traditional broadcast distribution networks) associated with the playout will necessarily also need to be deployed in the cloud.
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•
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By combining historically discrete video chain functions into a unified playout and distribution system where content can be ingested, formatted, stored, played-to-air and compressed, packaged and delivered, we believe functionally collapsed video playout infrastructures with integrated control systems will enable content providers
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•
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more users with more connected devices and applications;
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•
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bundled digital video, voice and high speed data services; and
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•
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bandwidth-intensive VOD and OTT streaming video services, and cloud applications.
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•
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CCAP
. In order to deliver gigabit data rates, cable operators are aggressively driving broadband access technologies such as the Converged Cable Access Platform (CCAP) architecture. The CCAP architecture combines edge “quadrature amplitude modulation” (QAM) and “cable modem termination system” (CMTS) functions in a single solution in order to combine resources for video and data services.
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•
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DOCSIS 3.1
. We believe the cable industry will move rapidly to DOCSIS 3.1, which enables increased bandwidth data transfer over existing broadband infrastructure.
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•
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Virtualization
. We believe cable operators are moving toward more software-driven architectures. Virtualized software solutions that are decoupled from underlying hardware and run on commercial off-the-shelf (COTS) servers allow for significantly increased efficiencies, upgradability, configuration flexibility, service agility and scalability not feasible with hardware-centric approaches. We believe a software-based, centralized CCAP-based system can significantly reduce cable headend costs, especially costs related to physical space and power consumption, and increase operational efficiency, and that the deployment of these systems will be an important step in cable operators’ transition to all-IP networks.
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•
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Distributed Architecture
. In addition to centralized CCAP systems, we believe there is growing interest in distributed Remote PHY solutions, particularly in competitive gigabit service markets where cable operators are competing with fiber-to-the-home (FTTH) services and are extending fiber networks deeper into their access networks. A Remote PHY architecture, which involves COTS servers running virtualized CCAP core software at a headend and the distribution of Remote PHY nodes closer to end users, alleviates the power and space requirements of centralized systems at headend sites due to the fact that the RF processing is distributed into the field outside of the headend. We believe this distributed architecture will enable service providers to efficiently scale to support data and IP video growth.
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United States
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International
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AT&T
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Accenture BV
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Charter Communications
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Bell Expressvu Inc.
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Comcast
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Com Hem
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Cox Communication
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Groupe Canal +SA
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DigitalGlue
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Huawei Technnologies Co. Ltd.
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Dish Network
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M7 Group SA
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Heartland Video Systems
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Nagravision SA Kudelski Group
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Ion Media Networks
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Netorium GMBH
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Turner Broadcasting
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SCSK Corp.
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Univision
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Sky Servicos De Banda Larga LTDA
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Item 1A.
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RISK FACTORS
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Item 1B.
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UNRESOLVED STAFF COMMENTS
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Item 2.
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PROPERTIES
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Item 3.
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LEGAL PROCEEDINGS
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Item 4.
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MINE SAFETY DISCLOSURE
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Item 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
2017
|
|
2016
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||||||||||||
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Sales Price
|
|
Sales Price
|
||||||||||||
Quarter ended
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First quarter
|
$
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6.10
|
|
|
$
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4.90
|
|
|
$
|
4.04
|
|
|
$
|
2.85
|
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Second quarter
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6.00
|
|
|
4.90
|
|
|
3.64
|
|
|
2.51
|
|
||||
Third quarter
|
5.35
|
|
|
2.80
|
|
|
5.99
|
|
|
2.72
|
|
||||
Fourth quarter
|
4.55
|
|
|
2.85
|
|
|
6.13
|
|
|
3.80
|
|
|
|
12/12
|
|
12/13
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
||||||
Harmonic Inc.
|
|
100.00
|
|
|
145.56
|
|
|
138.26
|
|
|
80.28
|
|
|
98.62
|
|
|
82.84
|
|
S&P 500
|
|
100.00
|
|
|
132.39
|
|
|
150.51
|
|
|
152.59
|
|
|
170.84
|
|
|
208.14
|
|
NASDAQ Telecom
|
|
100.00
|
|
|
141.28
|
|
|
145.43
|
|
|
140.97
|
|
|
150.94
|
|
|
184.81
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Year ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Consolidated Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
358,246
|
|
|
$
|
405,911
|
|
|
$
|
377,027
|
|
|
$
|
433,557
|
|
|
$
|
461,940
|
|
Cost of revenue
|
188,426
|
|
|
205,161
|
|
|
174,315
|
|
|
221,209
|
|
|
241,495
|
|
|||||
Gross profit
|
169,820
|
|
|
200,750
|
|
|
202,712
|
|
|
212,348
|
|
|
220,445
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
95,978
|
|
|
98,401
|
|
|
87,545
|
|
|
93,061
|
|
|
99,938
|
|
|||||
Selling, general and administrative
|
136,270
|
|
|
144,381
|
|
|
120,960
|
|
|
131,322
|
|
|
134,014
|
|
|||||
Amortization of intangibles
|
3,142
|
|
|
10,402
|
|
|
5,783
|
|
|
6,775
|
|
|
8,096
|
|
|||||
Restructuring and related charges
|
5,307
|
|
|
14,602
|
|
|
1,372
|
|
|
2,761
|
|
|
1,421
|
|
|||||
Total operating expenses
|
240,697
|
|
|
267,786
|
|
|
215,660
|
|
|
233,919
|
|
|
243,469
|
|
|||||
Loss from operations
|
(70,877
|
)
|
|
(67,036
|
)
|
|
(12,948
|
)
|
|
(21,571
|
)
|
|
(23,024
|
)
|
|||||
Interest income (expense), net
|
(11,078
|
)
|
|
(10,628
|
)
|
|
(333
|
)
|
|
132
|
|
|
219
|
|
|||||
Other expense, net
|
(2,222
|
)
|
|
(31
|
)
|
|
(282
|
)
|
|
(356
|
)
|
|
(347
|
)
|
|||||
Loss on impairment of long-term investment
|
(530
|
)
|
|
(2,735
|
)
|
|
(2,505
|
)
|
|
—
|
|
|
—
|
|
|||||
Loss from continuing operations before income taxes
|
(84,707
|
)
|
|
(80,430
|
)
|
|
(16,068
|
)
|
|
(21,795
|
)
|
|
(23,152
|
)
|
|||||
Provision for (benefit from) income taxes
|
(1,752
|
)
|
|
(8,116
|
)
|
|
(407
|
)
|
|
24,453
|
|
|
(44,741
|
)
|
|||||
Income (loss) from continuing operations
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
|
(46,248
|
)
|
|
$
|
21,589
|
|
|
Net income (loss) per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(1.02
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.20
|
|
Diluted
|
$
|
(1.02
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.20
|
|
Shares used in per share calculation:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
80,974
|
|
|
77,705
|
|
|
87,514
|
|
|
92,508
|
|
|
106,529
|
|
|||||
Diluted
|
80,974
|
|
|
77,705
|
|
|
87,514
|
|
|
92,508
|
|
|
107,808
|
|
|||||
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short-term investments
|
$
|
57,024
|
|
|
$
|
62,558
|
|
|
$
|
152,794
|
|
|
$
|
104,879
|
|
|
$
|
170,581
|
|
Working capital
|
$
|
29,686
|
|
|
$
|
71,938
|
|
|
$
|
201,250
|
|
|
$
|
142,754
|
|
|
$
|
243,650
|
|
Total assets
|
$
|
508,059
|
|
|
$
|
554,069
|
|
|
$
|
524,957
|
|
|
$
|
480,518
|
|
|
$
|
606,084
|
|
Convertible debt, long-term
|
$
|
108,748
|
|
|
$
|
103,259
|
|
|
$
|
98,295
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stockholders’ equity
|
$
|
218,343
|
|
|
$
|
270,641
|
|
|
$
|
328,168
|
|
|
$
|
371,813
|
|
|
$
|
494,166
|
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Revenue recognition;
|
•
|
Valuation of inventories;
|
•
|
Business combination;
|
•
|
Impairment of goodwill or long-lived assets;
|
•
|
Assessment of the probability of the outcome of current litigation;
|
•
|
Accounting for income taxes; and
|
•
|
Stock-based compensation.
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Americas
|
$
|
171,736
|
|
|
$
|
207,249
|
|
|
$
|
212,568
|
|
|
$
|
(35,513
|
)
|
(17
|
)%
|
|
$
|
(5,319
|
)
|
(3
|
)%
|
EMEA
|
117,129
|
|
|
126,752
|
|
|
92,422
|
|
|
(9,623
|
)
|
(8
|
)%
|
|
34,330
|
|
37
|
%
|
|||||
APAC
|
69,381
|
|
|
71,910
|
|
|
72,037
|
|
|
(2,529
|
)
|
(4
|
)%
|
|
(127
|
)
|
—
|
%
|
|||||
Total net revenue
|
$
|
358,246
|
|
|
$
|
405,911
|
|
|
$
|
377,027
|
|
|
$
|
(47,665
|
)
|
(12
|
)%
|
|
$
|
28,884
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Regional revenue as a % of total net revenue:
|
|
|
|
|
|
|
|
|
|||||||||||||||
Americas
|
48
|
%
|
|
51
|
%
|
|
56
|
%
|
|
|
|
|
|
|
|||||||||
EMEA
|
33
|
%
|
|
31
|
%
|
|
25
|
%
|
|
|
|
|
|
|
|||||||||
APAC
|
19
|
%
|
|
18
|
%
|
|
19
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Gross profit
|
$
|
169,820
|
|
|
$
|
200,750
|
|
|
$
|
202,712
|
|
|
$
|
(30,930
|
)
|
(15
|
)%
|
|
$
|
(1,962
|
)
|
(1
|
)%
|
As a percentage of net revenue (“gross margin”)
|
47.4
|
%
|
|
49.5
|
%
|
|
53.8
|
%
|
|
(2.1
|
)%
|
|
|
(4.3
|
)%
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Research and development
|
$
|
95,978
|
|
|
$
|
98,401
|
|
|
$
|
87,545
|
|
|
$
|
(2,423
|
)
|
(2
|
)%
|
|
$
|
10,856
|
|
12
|
%
|
As a percentage of net revenue
|
26.8
|
%
|
|
24.2
|
%
|
|
23.2
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Selling, general and administrative
|
$
|
136,270
|
|
|
$
|
144,381
|
|
|
$
|
120,960
|
|
|
$
|
(8,111
|
)
|
(6
|
)%
|
|
$
|
23,421
|
|
19
|
%
|
As a percentage of net revenue
|
38.0
|
%
|
|
35.6
|
%
|
|
32.1
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
(1)
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Video
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
319,473
|
|
|
$
|
351,489
|
|
|
$
|
291,779
|
|
|
$
|
(32,016
|
)
|
(9
|
)%
|
|
$
|
59,710
|
|
20
|
%
|
Gross profit
|
173,414
|
|
|
194,044
|
|
|
167,573
|
|
|
(20,630
|
)
|
(11
|
)%
|
|
26,471
|
|
16
|
%
|
|||||
Operating income (loss)
|
(2,024
|
)
|
|
11,963
|
|
|
13,529
|
|
|
(13,987
|
)
|
(117
|
)%
|
|
(1,566
|
)
|
(12
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment revenue as % of total revenue
|
89.2
|
%
|
|
86.6
|
%
|
|
77.4
|
%
|
|
2.6
|
%
|
|
|
9.2
|
%
|
|
|||||||
Gross margin %
|
54.3
|
%
|
|
55.2
|
%
|
|
57.4
|
%
|
|
(0.9
|
)%
|
|
|
(2.2
|
)%
|
|
|||||||
Operating margin %
|
(0.6
|
)%
|
|
3.4
|
%
|
|
4.6
|
%
|
|
(4.0
|
)%
|
|
|
(1.2
|
)%
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cable Edge
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
38,773
|
|
|
$
|
54,422
|
|
|
$
|
85,248
|
|
|
$
|
(15,649
|
)
|
(29
|
)%
|
|
$
|
(30,826
|
)
|
(36
|
)%
|
Gross profit
|
8,892
|
|
|
21,174
|
|
|
37,832
|
|
|
(12,282
|
)
|
(58
|
)%
|
|
(16,658
|
)
|
(44
|
)%
|
|||||
Operating loss
|
(23,154
|
)
|
|
(12,131
|
)
|
|
(1,599
|
)
|
|
(11,023
|
)
|
91
|
%
|
|
(10,532
|
)
|
659
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment revenue as % of total revenue
|
10.8
|
%
|
|
13.4
|
%
|
|
22.6
|
%
|
|
(2.6
|
)%
|
|
|
(9.2
|
)%
|
|
|||||||
Gross margin %
|
22.9
|
%
|
|
38.9
|
%
|
|
44.4
|
%
|
|
(16.0
|
)%
|
|
|
(5.5
|
)%
|
|
|||||||
Operating margin %
|
(59.7
|
)%
|
|
(22.3
|
)%
|
|
(1.9
|
)%
|
|
(37.4
|
)%
|
|
|
(20.4
|
)%
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
358,246
|
|
|
$
|
405,911
|
|
|
$
|
377,027
|
|
|
$
|
(47,665
|
)
|
(12
|
)%
|
|
$
|
28,884
|
|
8
|
%
|
Gross profit
|
182,306
|
|
|
215,218
|
|
|
205,405
|
|
|
(32,912
|
)
|
(15
|
)%
|
|
9,813
|
|
5
|
%
|
|||||
Operating income (loss)
|
(25,178
|
)
|
|
(168
|
)
|
|
11,930
|
|
|
(25,010
|
)
|
14,887
|
%
|
|
(12,098
|
)
|
(101
|
)%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total segment operating income (loss)
|
$
|
(25,178
|
)
|
|
$
|
(168
|
)
|
|
$
|
11,930
|
|
Unallocated corporate expenses
(1)
|
(20,767
|
)
|
|
(38,972
|
)
|
|
(2,794
|
)
|
|||
Stock-based compensation
|
(16,610
|
)
|
|
(13,060
|
)
|
|
(15,582
|
)
|
|||
Amortization of intangibles
|
(8,322
|
)
|
|
(14,836
|
)
|
|
(6,502
|
)
|
|||
Consolidated loss from operations
|
(70,877
|
)
|
|
(67,036
|
)
|
|
(12,948
|
)
|
|||
Non-operating expense, net
|
(13,830
|
)
|
|
(13,394
|
)
|
|
(3,120
|
)
|
|||
Loss before income taxes
|
$
|
(84,707
|
)
|
|
$
|
(80,430
|
)
|
|
$
|
(16,068
|
)
|
|
Year ended December 31,
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||
Amortization of intangibles
|
$
|
3,142
|
|
|
$
|
10,402
|
|
|
$
|
5,783
|
|
|
$
|
(7,260
|
)
|
(70
|
)%
|
|
$
|
4,619
|
|
80
|
%
|
As a percentage of net revenue
|
0.9
|
%
|
|
2.6
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
Product cost of revenue
|
$
|
1,279
|
|
|
$
|
3,400
|
|
|
$
|
113
|
|
|
$
|
(2,121
|
)
|
|
(62
|
)%
|
|
$
|
3,287
|
|
|
2,909
|
%
|
Operating expenses-Restructuring and related charges
|
5,307
|
|
|
14,602
|
|
|
1,372
|
|
|
(9,295
|
)
|
|
(64
|
)%
|
|
13,230
|
|
|
964
|
%
|
|||||
Total
|
$
|
6,586
|
|
|
$
|
18,002
|
|
|
$
|
1,485
|
|
|
$
|
(11,416
|
)
|
|
(63
|
)%
|
|
$
|
16,517
|
|
|
1,112
|
%
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Loss before income taxes
|
(84,707
|
)
|
|
(80,430
|
)
|
|
(16,068
|
)
|
Benefit from income taxes
|
(1,752
|
)
|
|
(8,116
|
)
|
|
(407
|
)
|
Effective income tax rate
|
2
|
%
|
|
10
|
%
|
|
3
|
%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net cash provided by operating activities
|
$
|
3,064
|
|
|
$
|
438
|
|
|
$
|
6,351
|
|
Net cash used in investing activities
|
(4,213
|
)
|
|
(70,478
|
)
|
|
(10,414
|
)
|
|||
Net cash provided by (used in) financing activities
|
895
|
|
|
(152
|
)
|
|
57,533
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1,643
|
|
|
(363
|
)
|
|
(312
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
1,389
|
|
|
$
|
(70,555
|
)
|
|
$
|
53,158
|
|
|
Payments due in each fiscal year
|
||||||||||||||||||
|
Total
Amounts Committed |
|
Less than 1 year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
More than 5 years
|
||||||||||
Convertible debt
|
$
|
128,250
|
|
|
$
|
—
|
|
|
$
|
128,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest on convertible debt
|
15,390
|
|
|
5,130
|
|
|
10,260
|
|
|
—
|
|
|
—
|
|
|||||
Other debts
|
21,847
|
|
|
6,674
|
|
|
14,083
|
|
|
989
|
|
|
101
|
|
|||||
Capital Lease
|
1,099
|
|
|
930
|
|
|
146
|
|
|
23
|
|
|
—
|
|
|||||
Operating leases
(1)
|
48,982
|
|
|
13,534
|
|
|
20,848
|
|
|
5,455
|
|
|
9,145
|
|
|||||
Purchase commitments
(2)
|
40,226
|
|
|
30,711
|
|
|
7,596
|
|
|
1,919
|
|
|
—
|
|
|||||
TVN VDP obligations
(3)
|
5,128
|
|
|
3,186
|
|
|
1,942
|
|
|
—
|
|
|
—
|
|
|||||
Avid litigation settlement fees
|
3,500
|
|
|
—
|
|
|
3,500
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
264,422
|
|
|
$
|
60,165
|
|
|
$
|
186,625
|
|
|
$
|
8,386
|
|
|
$
|
9,246
|
|
Other commercial commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
$
|
265
|
|
|
$
|
198
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Indemnification obligations
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total commercial commitments
|
$
|
265
|
|
|
$
|
198
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Purchase
|
|
$
|
12,875
|
|
|
$
|
4,056
|
|
Sell
|
|
$
|
1,509
|
|
|
$
|
11,157
|
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
/s/PricewaterhouseCoopers LLP
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
57,024
|
|
|
$
|
55,635
|
|
Short-term investments
|
—
|
|
|
6,923
|
|
||
Accounts receivable, net
|
69,844
|
|
|
86,765
|
|
||
Inventories
|
25,976
|
|
|
41,193
|
|
||
Prepaid expenses and other current assets
|
18,931
|
|
|
26,319
|
|
||
Total current assets
|
171,775
|
|
|
216,835
|
|
||
Property and equipment, net
|
29,265
|
|
|
32,164
|
|
||
Goodwill
|
242,827
|
|
|
237,279
|
|
||
Intangibles, net
|
21,279
|
|
|
29,231
|
|
||
Other long-term assets
|
42,913
|
|
|
38,560
|
|
||
Total assets
|
$
|
508,059
|
|
|
$
|
554,069
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Other debts and capital lease obligations, current
|
$
|
7,610
|
|
|
$
|
7,275
|
|
Accounts payable
|
33,112
|
|
|
28,892
|
|
||
Income taxes payable
|
233
|
|
|
1,166
|
|
||
Deferred revenue
|
52,429
|
|
|
52,414
|
|
||
Accrued and other current liabilities
|
48,705
|
|
|
55,150
|
|
||
Total current liabilities
|
142,089
|
|
|
144,897
|
|
||
Convertible notes, long-term
|
108,748
|
|
|
103,259
|
|
||
Other debts and capital lease obligations, long-term
|
15,336
|
|
|
13,915
|
|
||
Income taxes payable, long-term
|
917
|
|
|
2,926
|
|
||
Other non-current liabilities
|
22,626
|
|
|
18,431
|
|
||
Total liabilities
|
289,716
|
|
|
283,428
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 150,000 shares authorized; 82,554 and 78,456 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
83
|
|
|
78
|
|
||
Additional paid-in capital
|
2,272,690
|
|
|
2,254,055
|
|
||
Accumulated deficit
|
(2,057,812
|
)
|
|
(1,976,222
|
)
|
||
Accumulated other comprehensive income (loss)
|
3,382
|
|
|
(7,270
|
)
|
||
Total stockholders’ equity
|
218,343
|
|
|
270,641
|
|
||
Total liabilities and stockholders’ equity
|
$
|
508,059
|
|
|
$
|
554,069
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Product
|
$
|
224,645
|
|
|
$
|
285,260
|
|
|
$
|
276,876
|
|
Service
|
133,601
|
|
|
120,651
|
|
|
100,151
|
|
|||
Total net revenue
|
358,246
|
|
|
405,911
|
|
|
377,027
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Product
|
119,802
|
|
|
145,714
|
|
|
121,988
|
|
|||
Service
|
68,624
|
|
|
59,447
|
|
|
52,327
|
|
|||
Total cost of revenue
|
188,426
|
|
|
205,161
|
|
|
174,315
|
|
|||
Total gross profit
|
169,820
|
|
|
200,750
|
|
|
202,712
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
95,978
|
|
|
98,401
|
|
|
87,545
|
|
|||
Selling, general and administrative
|
136,270
|
|
|
144,381
|
|
|
120,960
|
|
|||
Amortization of intangibles
|
3,142
|
|
|
10,402
|
|
|
5,783
|
|
|||
Restructuring and related charges
|
5,307
|
|
|
14,602
|
|
|
1,372
|
|
|||
Total operating expenses
|
240,697
|
|
|
267,786
|
|
|
215,660
|
|
|||
Loss from operations
|
(70,877
|
)
|
|
(67,036
|
)
|
|
(12,948
|
)
|
|||
Interest expense, net
|
(11,078
|
)
|
|
(10,628
|
)
|
|
(333
|
)
|
|||
Other expense, net
|
(2,222
|
)
|
|
(31
|
)
|
|
(282
|
)
|
|||
Loss on impairment of long-term investment
|
(530
|
)
|
|
(2,735
|
)
|
|
(2,505
|
)
|
|||
Loss before income taxes
|
(84,707
|
)
|
|
(80,430
|
)
|
|
(16,068
|
)
|
|||
Benefit from income taxes
|
(1,752
|
)
|
|
(8,116
|
)
|
|
(407
|
)
|
|||
Net loss
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
|
|
|
|
|
|
||||||
Net loss per share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(1.02
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(0.18
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic and diluted
|
80,974
|
|
|
77,705
|
|
|
87,514
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Change in unrealized gain (loss) on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Unrealized gain (loss), net arising during the period
|
—
|
|
|
202
|
|
|
(133
|
)
|
|||
Loss (gain) reclassified into earnings
|
—
|
|
|
44
|
|
|
(424
|
)
|
|||
|
—
|
|
|
246
|
|
|
(557
|
)
|
|||
Change in unrealized gain (loss) on available-for-sale securities:
|
|
|
|
|
|
||||||
Unrealized loss, net arising during the period
|
(658
|
)
|
|
(903
|
)
|
|
(785
|
)
|
|||
Loss reclassified into earnings
|
384
|
|
|
2,735
|
|
|
—
|
|
|||
|
(274
|
)
|
|
1,832
|
|
|
(785
|
)
|
|||
|
|
|
|
|
|
||||||
Adjustment to pension benefit plan
|
528
|
|
|
(279
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Unrealized foreign exchange loss, net on intercompany long-term loans arising during the period
|
(1,705
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Change in foreign currency translation adjustments:
|
|
|
|
|
|
||||||
Translation gain (loss) arising during the period
|
11,471
|
|
|
(4,633
|
)
|
|
(1,111
|
)
|
|||
Loss reclassified into earnings
|
106
|
|
|
—
|
|
|
—
|
|
|||
|
11,577
|
|
|
(4,633
|
)
|
|
(1,111
|
)
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before tax
|
10,126
|
|
|
(2,834
|
)
|
|
(2,453
|
)
|
|||
Provision for (benefit from) income taxes
|
(526
|
)
|
|
18
|
|
|
(15
|
)
|
|||
Other comprehensive income (loss), net of tax
|
10,652
|
|
|
(2,852
|
)
|
|
(2,438
|
)
|
|||
Total comprehensive loss
|
$
|
(72,303
|
)
|
|
$
|
(75,166
|
)
|
|
$
|
(18,099
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2014
|
87,700
|
|
|
$
|
88
|
|
|
$
|
2,261,952
|
|
|
$
|
(1,888,247
|
)
|
|
$
|
(1,980
|
)
|
|
$
|
371,813
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,661
|
)
|
|
—
|
|
|
(15,661
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,438
|
)
|
|
(2,438
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
2,855
|
|
|
3
|
|
|
5,670
|
|
|
—
|
|
|
—
|
|
|
5,673
|
|
|||||
Repurchase of common stock
|
(14,540
|
)
|
|
(15
|
)
|
|
(72,848
|
)
|
|
—
|
|
|
—
|
|
|
(72,863
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15,582
|
|
|
—
|
|
|
—
|
|
|
15,582
|
|
|||||
Conversion feature of convertible notes due 2020
|
—
|
|
|
—
|
|
|
26,062
|
|
|
—
|
|
|
—
|
|
|
26,062
|
|
|||||
Balance at December 31, 2015
|
76,015
|
|
|
76
|
|
|
2,236,418
|
|
|
(1,903,908
|
)
|
|
(4,418
|
)
|
|
328,168
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(72,314
|
)
|
|
—
|
|
|
(72,314
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,852
|
)
|
|
(2,852
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
2,441
|
|
|
2
|
|
|
2,798
|
|
|
—
|
|
|
—
|
|
|
2,800
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,242
|
|
|
—
|
|
|
—
|
|
|
13,242
|
|
|||||
Issuance of warrant
|
—
|
|
|
—
|
|
|
1,597
|
|
|
—
|
|
|
—
|
|
|
1,597
|
|
|||||
Balance at December 31, 2016
|
78,456
|
|
|
78
|
|
|
2,254,055
|
|
|
(1,976,222
|
)
|
|
(7,270
|
)
|
|
270,641
|
|
|||||
Cumulative effect to retained earnings related to adoption of ASU 2016-09
(1)
|
—
|
|
|
—
|
|
|
69
|
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|||||
Cumulative effect to retained earnings related to adoption of ASU 2016-16
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,434
|
|
|
—
|
|
|
1,434
|
|
|||||
Balance at January 1, 2017
|
78,456
|
|
|
78
|
|
|
2,254,124
|
|
|
(1,974,857
|
)
|
|
(7,270
|
)
|
|
272,075
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,955
|
)
|
|
—
|
|
|
(82,955
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,652
|
|
|
10,652
|
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
4,098
|
|
|
5
|
|
|
1,954
|
|
|
—
|
|
|
—
|
|
|
1,959
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
16,612
|
|
|
—
|
|
|
—
|
|
|
16,612
|
|
|||||
Balance at December 31, 2017
|
82,554
|
|
|
$
|
83
|
|
|
$
|
2,272,690
|
|
|
$
|
(2,057,812
|
)
|
|
$
|
3,382
|
|
|
$
|
218,343
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization of intangibles
|
8,322
|
|
|
14,836
|
|
|
6,502
|
|
|||
Depreciation
|
14,599
|
|
|
18,819
|
|
|
13,241
|
|
|||
Stock-based compensation
|
16,610
|
|
|
13,060
|
|
|
15,582
|
|
|||
Amortization of discount on convertible debt
|
5,489
|
|
|
4,964
|
|
|
216
|
|
|||
Provision for non-cash warrant
|
153
|
|
|
434
|
|
|
—
|
|
|||
Restructuring, asset impairment and loss on retirement of fixed assets
|
1,906
|
|
|
2,305
|
|
|
641
|
|
|||
Loss on impairment of long-term investment
|
530
|
|
|
2,735
|
|
|
2,505
|
|
|||
Unrealized foreign exchange (gain) loss
|
2,369
|
|
|
(856
|
)
|
|
(1,047
|
)
|
|||
Gain on pension curtailment
|
—
|
|
|
(1,955
|
)
|
|
—
|
|
|||
Deferred income taxes, net
|
2,189
|
|
|
(10,085
|
)
|
|
(512
|
)
|
|||
Provision for doubtful accounts, returns and discounts
|
4,912
|
|
|
2,589
|
|
|
2,034
|
|
|||
Provision for excess and obsolete inventories
|
6,005
|
|
|
6,871
|
|
|
1,585
|
|
|||
Other non-cash adjustments, net
|
445
|
|
|
408
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisition:
|
|
|
|
|
|
||||||
Accounts receivable
|
12,598
|
|
|
(2,563
|
)
|
|
2,595
|
|
|||
Inventories
|
11,687
|
|
|
(4,107
|
)
|
|
(5,954
|
)
|
|||
Prepaid expenses and other assets
|
6,642
|
|
|
(1,892
|
)
|
|
(8,206
|
)
|
|||
Accounts payable
|
3,432
|
|
|
5,793
|
|
|
4,683
|
|
|||
Deferred revenues
|
(392
|
)
|
|
18,106
|
|
|
(4,541
|
)
|
|||
Income taxes payable
|
(2,978
|
)
|
|
(133
|
)
|
|
(1,637
|
)
|
|||
Accrued and other liabilities
|
(8,499
|
)
|
|
3,423
|
|
|
(5,675
|
)
|
|||
Net cash provided by operating activities
|
3,064
|
|
|
438
|
|
|
6,351
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition of business, net of cash acquired
|
—
|
|
|
(75,669
|
)
|
|
—
|
|
|||
Purchases of investments
|
—
|
|
|
—
|
|
|
(25,261
|
)
|
|||
Proceeds from maturities of investments
|
3,106
|
|
|
19,707
|
|
|
30,379
|
|
|||
Proceeds from sales of investments
|
3,792
|
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(11,399
|
)
|
|
(15,107
|
)
|
|
(14,356
|
)
|
|||
Purchases of long-term investments
|
—
|
|
|
—
|
|
|
(85
|
)
|
|||
Decrease (increase) in restricted cash
|
288
|
|
|
591
|
|
|
(1,091
|
)
|
|||
Net cash used in investing activities
|
(4,213
|
)
|
|
(70,478
|
)
|
|
(10,414
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from convertible debt
|
—
|
|
|
—
|
|
|
128,250
|
|
|||
Payment of convertible debt issuance cost
|
—
|
|
|
(582
|
)
|
|
(3,527
|
)
|
|||
Proceeds from other debts
|
6,344
|
|
|
5,968
|
|
|
—
|
|
|||
Repayment of other debts and capital leases
|
(7,408
|
)
|
|
(8,338
|
)
|
|
—
|
|
|||
Proceeds from common stock issued to employees
|
4,716
|
|
|
4,444
|
|
|
9,222
|
|
|||
Payment of tax withholding obligations related to net share settlements of restricted stock units
|
(2,757
|
)
|
|
(1,644
|
)
|
|
(3,549
|
)
|
|||
Payments for repurchases of common stock
|
—
|
|
|
—
|
|
|
(72,863
|
)
|
|||
Net cash provided by (used in) financing activities
|
895
|
|
|
(152
|
)
|
|
57,533
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1,643
|
|
|
(363
|
)
|
|
(312
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
1,389
|
|
|
(70,555
|
)
|
|
53,158
|
|
|||
Cash and cash equivalents at beginning of period
|
55,635
|
|
|
126,190
|
|
|
73,032
|
|
|||
Cash and cash equivalents at end of period
|
$
|
57,024
|
|
|
$
|
55,635
|
|
|
$
|
126,190
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Income tax payments (refunds), net
|
$
|
2,141
|
|
|
$
|
(54
|
)
|
|
$
|
952
|
|
Interest payments, net
|
5,515
|
|
|
5,275
|
|
|
—
|
|
|||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital expenditures incurred but not yet paid
|
$
|
337
|
|
|
$
|
394
|
|
|
$
|
235
|
|
Debt issuance costs incurred but not yet paid
|
—
|
|
|
—
|
|
|
582
|
|
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
Financial Statement Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Gains recognized in income
|
|
Other income (expense), net
|
|
$
|
155
|
|
|
$
|
343
|
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives designated as hedging instruments
(1)
:
|
|
|
|
|
|
|
|
|
||||||
Gains (losses) in AOCI on derivatives (effective portion)
|
|
AOCI
|
|
$
|
—
|
|
|
$
|
202
|
|
|
$
|
(133
|
)
|
Gains (losses) reclassified from AOCI into income (effective portion)
|
|
Cost of Revenue
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
59
|
|
|
|
Operating Expense
|
|
—
|
|
|
(38
|
)
|
|
365
|
|
|||
|
|
Total
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
|
$
|
424
|
|
(Losses) recognized in income on derivatives (ineffectiveness portion and amount excluded from effectiveness testing)
|
|
Other income (expense), net
|
|
$
|
—
|
|
|
$
|
(63
|
)
|
|
$
|
(87
|
)
|
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Purchase
|
|
$
|
12,875
|
|
|
$
|
4,056
|
|
Sell
|
|
$
|
1,509
|
|
|
$
|
11,157
|
|
|
|
|
|
Asset Derivatives
|
|
|
|
Liability Derivatives
|
||||||||||||
|
|
Balance Sheet Location
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Balance Sheet Location
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
33
|
|
|
$
|
54
|
|
|
Accrued and other current Liabilities
|
|
$
|
4
|
|
|
$
|
40
|
|
|
|
|
|
$
|
33
|
|
|
$
|
54
|
|
|
|
|
$
|
4
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets
|
|
|
||||||||||||||
|
|
Gross Amounts of Derivatives
|
|
Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets
|
|
Net Amounts of Derivatives Presented in the Consolidated Balance Sheets
|
|
Financial Instrument
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||
Derivative Assets
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
29
|
|
Derivative Liabilities
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company primarily uses broker quotes for valuation of its short-term investments. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market.
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Level 1
|
|
Level 2
|
|
Level 3
(1)
|
|
Total
|
||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
Prepaids and other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Total assets measured and recorded at fair value
|
$
|
22
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
55
|
|
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
(1)
|
|
Total
|
||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
8,301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,301
|
|
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
—
|
|
|
6,923
|
|
|
—
|
|
|
6,923
|
|
||||
Prepaids and other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
—
|
|
|
54
|
|
|
—
|
|
|
54
|
|
||||
Other assets
|
|
|
|
|
|
|
|
||||||||
Long-term investment
|
809
|
|
|
—
|
|
|
—
|
|
|
809
|
|
||||
Total assets measured and recorded at fair value
|
$
|
9,110
|
|
|
$
|
6,977
|
|
|
$
|
—
|
|
|
$
|
16,087
|
|
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
40
|
|
Accrued TVN VDP, current portion
|
—
|
|
|
—
|
|
|
6,597
|
|
|
6,597
|
|
||||
Other non-current liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued TVN VDP, long-term portion
|
—
|
|
|
—
|
|
|
3,053
|
|
|
3,053
|
|
||||
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
9,650
|
|
|
$
|
9,690
|
|
Assets:
|
|
||
Cash and cash equivalents
|
$
|
6,843
|
|
Accounts receivable, net
|
14,933
|
|
|
Inventories
|
3,462
|
|
|
Prepaid expenses and other current assets
|
2,412
|
|
|
Property and equipment, net
|
9,942
|
|
|
French R&D tax credit receivables
(1)
|
26,421
|
|
|
Other long-term assets
|
2,134
|
|
|
Total assets
|
$
|
66,147
|
|
Liabilities:
|
|
||
Other debts and capital lease obligations, current
|
8,362
|
|
|
Accounts payable
|
12,494
|
|
|
Deferred revenue
|
2,504
|
|
|
Accrued and other current liabilities
|
18,365
|
|
|
Other debts and capital lease obligations, long-term
|
16,087
|
|
|
Other non-current liabilities
|
6,467
|
|
|
Deferred tax liabilities
|
2,126
|
|
|
Total liabilities
|
$
|
66,405
|
|
|
|
||
Goodwill
|
41,670
|
|
|
Intangibles
|
41,100
|
|
|
Total purchase consideration
|
$
|
82,512
|
|
|
Estimated Useful Life
|
|
Fair Value
|
||
Backlog
|
6 months
|
|
$
|
3,600
|
|
Developed technology
|
4 years
|
|
21,700
|
|
|
Customer relationships
|
5 years
|
|
15,200
|
|
|
Trade name
|
4 years
|
|
600
|
|
|
|
|
|
$
|
41,100
|
|
|
Acquisition-related
|
Integration-related
(1)
|
|||||||||
|
Year ended December 31, 2016
|
|
Year ended December 31, 2017 (unaudited)
|
|
Year ended December 31, 2016 (unaudited)
|
||||||
Product cost of revenue
|
$
|
—
|
|
|
$
|
342
|
|
|
$
|
1,049
|
|
Research and development
|
—
|
|
|
7
|
|
|
974
|
|
|||
Selling, general and administrative
|
3,855
|
|
|
2,469
|
|
|
11,058
|
|
|||
Total acquisition- and integration-related expenses
|
$
|
3,855
|
|
|
$
|
2,818
|
|
|
$
|
13,081
|
|
|
|
Video
|
|
Cable Edge
|
|
Total
|
||||||
Balance as of December 31, 2015
|
|
$
|
136,904
|
|
|
$
|
60,877
|
|
|
$
|
197,781
|
|
Goodwill from TVN acquisition
(1)
|
|
41,670
|
|
|
—
|
|
|
41,670
|
|
|||
Foreign currency translation adjustment
|
|
(2,055
|
)
|
|
(117
|
)
|
|
(2,172
|
)
|
|||
Balance as of December 31, 2016
|
|
$
|
176,519
|
|
|
$
|
60,760
|
|
|
$
|
237,279
|
|
Foreign currency translation adjustment
|
|
5,493
|
|
|
55
|
|
|
5,548
|
|
|||
Balance as of December 31, 2017
|
|
$
|
182,012
|
|
|
$
|
60,815
|
|
|
$
|
242,827
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Weighted Average Remaining Life (Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Developed core technology
|
2.2
|
|
$
|
31,707
|
|
|
$
|
(20,396
|
)
|
|
$
|
11,311
|
|
|
$
|
31,707
|
|
|
$
|
(15,216
|
)
|
|
$
|
16,491
|
|
Customer relationships/contracts
|
3.2
|
|
44,819
|
|
|
(35,205
|
)
|
|
9,614
|
|
|
44,384
|
|
|
(32,098
|
)
|
|
12,286
|
|
||||||
Trademarks and tradenames
|
2.2
|
|
654
|
|
|
(300
|
)
|
|
354
|
|
|
573
|
|
|
(119
|
)
|
|
454
|
|
||||||
Maintenance agreements and related relationships
|
N/A
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
||||||
Order Backlog
|
N/A
|
|
3,177
|
|
|
(3,177
|
)
|
|
—
|
|
|
3,011
|
|
|
(3,011
|
)
|
|
—
|
|
||||||
Total identifiable intangibles
|
|
|
$
|
85,857
|
|
|
$
|
(64,578
|
)
|
|
$
|
21,279
|
|
|
$
|
85,175
|
|
|
$
|
(55,944
|
)
|
|
$
|
29,231
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Included in cost of revenue
|
$
|
5,180
|
|
|
$
|
4,434
|
|
|
$
|
719
|
|
Included in operating expenses
|
3,142
|
|
|
10,402
|
|
|
5,783
|
|
|||
Total amortization expense
|
$
|
8,322
|
|
|
$
|
14,836
|
|
|
$
|
6,502
|
|
|
Cost of Revenue
|
|
Operating
Expenses
|
|
Total
|
||||||
Year ended December 31,
|
|
|
|
|
|
||||||
2018
|
$
|
5,180
|
|
|
$
|
3,199
|
|
|
$
|
8,379
|
|
2019
|
5,180
|
|
|
3,199
|
|
|
8,379
|
|
|||
2020
|
951
|
|
|
3,063
|
|
|
4,014
|
|
|||
2021
|
—
|
|
|
507
|
|
|
507
|
|
|||
Total future amortization expense
|
$
|
11,311
|
|
|
$
|
9,968
|
|
|
$
|
21,279
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
74,475
|
|
|
$
|
91,596
|
|
Less: allowance for doubtful accounts and sales returns
|
(4,631
|
)
|
|
(4,831
|
)
|
||
Total
|
$
|
69,844
|
|
|
$
|
86,765
|
|
|
Balance at
Beginning of
Period
|
|
Charges to
Revenue
|
|
Charges
(Credits) to
Expense
|
|
Additions to
(Deductions
from) Reserves
|
|
Balance at End
of Period
|
||||||||||
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
$
|
4,831
|
|
|
$
|
4,030
|
|
|
$
|
881
|
|
|
$
|
(5,111
|
)
|
|
$
|
4,631
|
|
2016
|
$
|
4,340
|
|
|
$
|
1,488
|
|
|
$
|
1,100
|
|
|
$
|
(2,097
|
)
|
|
$
|
4,831
|
|
2015
|
$
|
7,057
|
|
|
$
|
1,826
|
|
|
$
|
208
|
|
|
$
|
(4,751
|
)
|
|
$
|
4,340
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Prepaid expenses and other current assets:
|
|
|
|
||||
French R&D tax credits receivables
(1)
|
6,609
|
|
|
5,895
|
|
||
Deferred cost of revenue
|
4,440
|
|
|
6,856
|
|
||
Prepaid maintenance, royalty, rent, property taxes and value added tax
|
3,867
|
|
|
5,526
|
|
||
Restricted cash
(2)
|
530
|
|
|
731
|
|
||
Other
|
3,485
|
|
|
7,311
|
|
||
Total
|
$
|
18,931
|
|
|
$
|
26,319
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Inventories:
|
|
|
|
||||
Raw materials
|
$
|
2,881
|
|
|
$
|
9,889
|
|
Work-in-process
|
933
|
|
|
2,318
|
|
||
Finished goods
|
10,130
|
|
|
17,776
|
|
||
Service-related spares
|
12,032
|
|
|
11,210
|
|
||
Total
|
$
|
25,976
|
|
|
$
|
41,193
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Property and equipment, net:
|
|
|
|
||||
Machinery and equipment
(1)
|
$
|
87,121
|
|
|
$
|
97,989
|
|
Capitalized software
|
35,139
|
|
|
34,519
|
|
||
Leasehold improvements
|
15,051
|
|
|
14,455
|
|
||
Furniture and fixtures
(1)
|
6,534
|
|
|
8,993
|
|
||
Property and equipment, gross
|
143,845
|
|
|
155,956
|
|
||
Less: accumulated depreciation and amortization
(1)
|
(114,580
|
)
|
|
(123,792
|
)
|
||
Total
|
$
|
29,265
|
|
|
$
|
32,164
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accrued and other current liabilities:
|
|
|
|
||||
Accrued employee compensation and related expenses
|
$
|
16,414
|
|
|
$
|
19,377
|
|
Customer deposits
|
5,020
|
|
|
4,537
|
|
||
Accrued warranty
|
4,381
|
|
|
4,862
|
|
||
Contingent inventory reserves
|
3,806
|
|
|
2,210
|
|
||
Accrued TVN VDP, current
(1)
|
3,186
|
|
|
6,597
|
|
||
Accrued royalty payments
|
2,195
|
|
|
1,912
|
|
||
Other
|
13,703
|
|
|
15,655
|
|
||
Total
|
$
|
48,705
|
|
|
$
|
55,150
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
(1)
|
|
2015
|
||||||
Product cost of revenue
|
$
|
1,279
|
|
|
$
|
3,400
|
|
|
$
|
113
|
|
Operating expenses-Restructuring and related charges
|
5,307
|
|
|
14,602
|
|
|
1,372
|
|
|||
Total
|
$
|
6,586
|
|
|
$
|
18,002
|
|
|
$
|
1,485
|
|
|
Excess facilities
|
|
VDP
|
|
Non-VDP Severance and benefits
|
|
Other charges
|
|
Total
|
||||||||||
Charges for 2016 Restructuring Plan
|
$
|
1,655
|
|
|
$
|
13,175
|
|
|
$
|
4,702
|
|
|
$
|
247
|
|
|
$
|
19,779
|
|
Adjustments to restructuring provisions
|
582
|
|
|
—
|
|
|
(88
|
)
|
|
(247
|
)
|
|
247
|
|
|||||
Reclassification of deferred rent
|
1,087
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,087
|
|
|||||
Cash payments
|
(948
|
)
|
|
(3,484
|
)
|
|
(3,075
|
)
|
|
—
|
|
|
(7,507
|
)
|
|||||
Foreign exchange loss
|
(1
|
)
|
|
(41
|
)
|
|
(20
|
)
|
|
—
|
|
|
(62
|
)
|
|||||
Balance at December 31, 2016
|
2,375
|
|
|
9,650
|
|
|
1,519
|
|
|
—
|
|
|
13,544
|
|
|||||
Adjustments to restructuring provisions
|
1,223
|
|
|
1,766
|
|
|
1,134
|
|
|
—
|
|
|
4,123
|
|
|||||
Cash payments
|
(1,172
|
)
|
|
(7,203
|
)
|
|
(2,690
|
)
|
|
—
|
|
|
(11,065
|
)
|
|||||
Foreign exchange gain
|
—
|
|
|
915
|
|
|
37
|
|
|
—
|
|
|
952
|
|
|||||
Balance at December 31, 2017
|
2,426
|
|
|
5,128
|
|
|
—
|
|
|
—
|
|
|
7,554
|
|
|||||
Less: current portion
(1)
|
(645
|
)
|
|
(3,186
|
)
|
|
—
|
|
|
—
|
|
|
(3,831
|
)
|
|||||
Long-term portion
(1)
|
$
|
1,781
|
|
|
$
|
1,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,723
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Liability:
|
|
|
|
||||
Principal amount
|
$
|
128,250
|
|
|
128,250
|
|
|
Less: Debt discount, net of amortization
|
(17,404
|
)
|
|
(22,302
|
)
|
||
Less: Debt issuance costs, net of amortization
|
(2,098
|
)
|
|
(2,689
|
)
|
||
Carrying amount
|
$
|
108,748
|
|
|
103,259
|
|
|
Remaining amortization period (years)
|
2.9 years
|
|
|
3.9 years
|
|
||
Effective interest rate on liability component
|
9.94
|
%
|
|
9.94
|
%
|
||
Carrying amount of equity component
|
$
|
26,062
|
|
|
$
|
26,062
|
|
|
Year ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
||||
Contractual interest expense
|
$
|
5,130
|
|
|
5,130
|
|
|
240
|
|
Amortization of debt discount
|
4,898
|
|
|
4,430
|
|
|
193
|
|
|
Amortization of debt issuance costs
|
591
|
|
|
534
|
|
|
23
|
|
|
Total interest expense recognized
|
$
|
10,619
|
|
|
10,094
|
|
|
456
|
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||
Financing from French government agencies related to various government incentive programs
(1)
|
20,565
|
|
|
17,930
|
|
Term loans
|
1,282
|
|
|
1,400
|
|
Obligations under capital leases
|
1,099
|
|
|
1,860
|
|
Total debt obligations
|
22,946
|
|
|
21,190
|
|
Less: current portion
|
(7,610
|
)
|
|
(7,275
|
)
|
Long-term portion
|
15,336
|
|
|
13,915
|
|
Years ending December 31,
|
Capital lease obligations
|
|
Other Debt obligations
|
||||
2018
|
930
|
|
|
6,674
|
|
||
2019
|
95
|
|
|
7,141
|
|
||
2020
|
51
|
|
|
6,942
|
|
||
2021
|
23
|
|
|
515
|
|
||
2022
|
—
|
|
|
474
|
|
||
Thereafter
|
—
|
|
|
101
|
|
||
Total
|
$
|
1,099
|
|
|
$
|
21,847
|
|
|
|
|
Stock Options
Outstanding
|
|
Restricted Stock Units
Outstanding
|
|||||||||||
|
Shares
Available
for Grant
|
|
Number
of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Number
of
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Balance at December 31, 2016
|
3,912
|
|
|
5,019
|
|
|
$
|
6.01
|
|
|
3,864
|
|
|
$
|
4.26
|
|
Authorized
|
7,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
Granted
|
(5,351
|
)
|
|
30
|
|
|
5.10
|
|
|
3,546
|
|
|
5.12
|
|
||
Options exercised
|
—
|
|
|
(106
|
)
|
|
2.97
|
|
|
—
|
|
|
|
|
||
Shares released
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,184
|
)
|
|
4.10
|
|
||
Forfeited or canceled
|
3,043
|
|
|
(1,063
|
)
|
|
6.18
|
|
|
(1,322
|
)
|
|
5.14
|
|
||
Balance at December 31, 2017
|
9,004
|
|
|
3,880
|
|
|
$
|
6.04
|
|
|
2,904
|
|
|
$
|
5.09
|
|
|
Number
of
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Vested and expected to vest
|
3,845
|
|
|
$
|
6.06
|
|
|
2.8
|
|
$
|
946
|
|
Exercisable
|
3,367
|
|
|
6.21
|
|
|
2.6
|
|
664
|
|
|
Number of
Shares
Underlying
Restricted
Stock Units
|
|
Weighted
Average
Remaining
Vesting Period
(Years)
|
|
Aggregate
Fair
Value
|
|||
Vested and expected to vest
|
2,402
|
|
|
0.6
|
|
$
|
10,088
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Projected benefit obligation:
|
|
|
|
||||
Balance at January 1
|
$
|
4,264
|
|
|
$
|
—
|
|
Acquired from TVN acquisition
|
—
|
|
|
5,907
|
|
||
Service cost
|
259
|
|
|
217
|
|
||
Interest cost
|
71
|
|
|
87
|
|
||
Actuarial (gains) losses
|
(528
|
)
|
|
279
|
|
||
Curtailment
(1)
|
—
|
|
|
(1,955
|
)
|
||
Adjustment for prior year balance
|
343
|
|
|
—
|
|
||
Foreign currency translation adjustment
|
624
|
|
|
(271
|
)
|
||
Balance at December 31
|
$
|
5,033
|
|
|
$
|
4,264
|
|
|
|
|
|
||||
Presented on the Consolidated Balance Sheets under:
|
|
|
|
||||
Current portion (presented under “Accrued and other current liabilities”)
|
$
|
34
|
|
|
27
|
|
|
Long-term portion (presented under “Other non-current liabilities”)
|
$
|
4,999
|
|
|
4,237
|
|
|
Year ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Service cost
|
$
|
259
|
|
|
$
|
217
|
|
Interest cost
|
71
|
|
|
87
|
|
||
Amortization of net actuarial loss (gain)
(1)
|
—
|
|
|
—
|
|
||
Net periodic benefit cost included in operating loss
|
$
|
330
|
|
|
$
|
304
|
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||
Discount rate
|
1.5
|
%
|
|
1.5
|
%
|
Mobility rate
|
6.0
|
%
|
|
3.0
|
%
|
Salary progression rate
|
2.0
|
%
|
|
2.0
|
%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation in:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
2,370
|
|
|
$
|
1,554
|
|
|
$
|
1,862
|
|
Research and development expense
|
5,313
|
|
|
3,711
|
|
|
4,435
|
|
|||
Selling, general and administrative expense
|
8,927
|
|
|
7,795
|
|
|
9,285
|
|
|||
Total stock-based compensation in operating expense
|
14,240
|
|
|
11,506
|
|
|
13,720
|
|
|||
Total stock-based compensation recognized in net loss
|
$
|
16,610
|
|
|
$
|
13,060
|
|
|
$
|
15,582
|
|
|
Employee Stock Options
|
|
ESPP
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||
Expected term (in years)
|
4.30
|
|
|
4.30
|
|
|
4.65
|
|
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
Volatility
|
42
|
%
|
|
36
|
%
|
|
38
|
%
|
|
48
|
%
|
|
70
|
%
|
|
34
|
%
|
Risk-free interest rate
|
1.8
|
%
|
|
1.4
|
%
|
|
1.5
|
%
|
|
1.2
|
%
|
|
0.6
|
%
|
|
0.3
|
%
|
Expected dividends
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Foreign currency translation adjustments
|
$
|
4,310
|
|
|
$
|
(7,267
|
)
|
Unrealized foreign exchange loss on intercompany long-term loans, net of taxes
|
(1,177
|
)
|
|
—
|
|
||
Gain on investments, net of taxes
(1)
|
—
|
|
|
276
|
|
||
Actuarial gain (loss)
|
249
|
|
|
(279
|
)
|
||
Total accumulated other comprehensive income (loss)
|
$
|
3,382
|
|
|
$
|
(7,270
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
(50,041
|
)
|
|
$
|
(53,833
|
)
|
|
$
|
(16,826
|
)
|
International
|
(34,666
|
)
|
|
(26,597
|
)
|
|
758
|
|
|||
Loss before income taxes
|
$
|
(84,707
|
)
|
|
$
|
(80,430
|
)
|
|
$
|
(16,068
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(4,530
|
)
|
|
$
|
(950
|
)
|
|
$
|
(1,981
|
)
|
State
|
129
|
|
|
181
|
|
|
120
|
|
|||
International
|
273
|
|
|
2,738
|
|
|
1,966
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
—
|
|
|
(713
|
)
|
|
—
|
|
|||
State
|
—
|
|
|
—
|
|
|
—
|
|
|||
International
|
2,376
|
|
|
(9,372
|
)
|
|
(512
|
)
|
|||
Total benefit from income taxes
|
$
|
(1,752
|
)
|
|
$
|
(8,116
|
)
|
|
$
|
(407
|
)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Benefit from for income taxes at U.S. Federal statutory rate
|
$
|
(29,648
|
)
|
|
$
|
(28,150
|
)
|
|
$
|
(5,624
|
)
|
Differential in rates on foreign earnings
|
15,920
|
|
|
11,741
|
|
|
1,584
|
|
|||
Non-deductible amortization expense
|
—
|
|
|
617
|
|
|
947
|
|
|||
Tax Reform Tax rate reduction
|
14,527
|
|
|
—
|
|
|
—
|
|
|||
Change in valuation allowance
|
(2,834
|
)
|
|
4,465
|
|
|
2,230
|
|
|||
Change in liabilities for uncertain tax positions
|
(2,009
|
)
|
|
(960
|
)
|
|
(1,083
|
)
|
|||
Non-deductible stock-based compensation
|
1,934
|
|
|
1,480
|
|
|
1,398
|
|
|||
Non-deductible meals and entertainment
|
380
|
|
|
441
|
|
|
395
|
|
|||
Non-deductible acquisition cost
|
—
|
|
|
—
|
|
|
457
|
|
|||
Adjustments related to tax positions taken during prior years
|
(473
|
)
|
|
(163
|
)
|
|
(781
|
)
|
|||
Adjustments made under intercompany transactions
|
—
|
|
|
1,779
|
|
|
—
|
|
|||
Tax Refund
|
(834
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
1,285
|
|
|
634
|
|
|
70
|
|
|||
Total benefit from income taxes
|
$
|
(1,752
|
)
|
|
$
|
(8,116
|
)
|
|
$
|
(407
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Reserves and accruals
|
$
|
17,247
|
|
|
$
|
25,527
|
|
Net operating loss carryforwards
|
34,915
|
|
|
33,321
|
|
||
Research and development credit carryforwards
|
34,419
|
|
|
28,759
|
|
||
Deferred stock-based compensation
|
2,677
|
|
|
4,292
|
|
||
Depreciation and amortization
|
—
|
|
|
554
|
|
||
Intangibles
|
2,062
|
|
|
—
|
|
||
Other tax credits
|
—
|
|
|
2,738
|
|
||
Other
|
1,441
|
|
|
—
|
|
||
Gross deferred tax assets
|
92,761
|
|
|
95,191
|
|
||
Valuation allowance
|
(77,756
|
)
|
|
(74,480
|
)
|
||
Gross deferred tax assets after valuation allowance
|
15,005
|
|
|
20,711
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(259
|
)
|
|
—
|
|
||
Intangibles
|
—
|
|
|
(1,417
|
)
|
||
Convertible notes
|
(4,284
|
)
|
|
(8,603
|
)
|
||
Other
|
—
|
|
|
(510
|
)
|
||
Gross deferred tax liabilities
|
(4,543
|
)
|
|
(10,530
|
)
|
||
Net deferred tax assets
|
$
|
10,462
|
|
|
$
|
10,181
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
74,480
|
|
|
$
|
64,545
|
|
|
$
|
75,199
|
|
Additions
|
9,028
|
|
|
18,291
|
|
|
3,068
|
|
|||
Deductions
|
(5,752
|
)
|
|
(8,356
|
)
|
|
(13,722
|
)
|
|||
Balance at end of period
|
$
|
77,756
|
|
|
$
|
74,480
|
|
|
$
|
64,545
|
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
19.2
|
|
|
$
|
15.6
|
|
|
$
|
15.7
|
|
Increase in balance related to tax positions taken during current year
|
1.4
|
|
|
4.6
|
|
|
0.7
|
|
|||
Decrease in balance as a result of a lapse of the applicable statues of limitations
|
(2.2
|
)
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|||
Increase in balance related to tax positions taken during prior years
|
1.8
|
|
|
—
|
|
|
0.3
|
|
|||
Decrease in balance related to tax positions taken during prior years
|
(1.4
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||
Balance at end of period
|
$
|
18.8
|
|
|
$
|
19.2
|
|
|
$
|
15.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(82,955
|
)
|
|
$
|
(72,314
|
)
|
|
$
|
(15,661
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted
|
80,974
|
|
|
77,705
|
|
|
87,514
|
|
|||
Net loss per share:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(1.02
|
)
|
|
$
|
(0.93
|
)
|
|
$
|
(0.18
|
)
|
|
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Stock options
|
4,470
|
|
|
5,295
|
|
|
6,460
|
|
Restricted stock units
|
3,059
|
|
|
2,536
|
|
|
2,178
|
|
Stock purchase rights under the ESPP
|
620
|
|
|
659
|
|
|
518
|
|
Warrants
(1)
|
782
|
|
|
206
|
|
|
—
|
|
Total
(2)
|
8,931
|
|
|
8,696
|
|
|
9,156
|
|
|
Year ended December 31,
|
||||||||||
|
2017
(1)
|
|
2016
|
|
2015
|
||||||
Video
|
|
|
|
|
|
||||||
Revenue
|
$
|
319,473
|
|
|
$
|
351,489
|
|
|
$
|
291,779
|
|
Gross profit
|
173,414
|
|
|
194,044
|
|
|
167,573
|
|
|||
Operating income (loss)
|
(2,024
|
)
|
|
11,963
|
|
|
13,529
|
|
|||
Cable Edge
|
|
|
|
|
|
||||||
Revenue
|
$
|
38,773
|
|
|
$
|
54,422
|
|
|
$
|
85,248
|
|
Gross profit
|
8,892
|
|
|
21,174
|
|
|
37,832
|
|
|||
Operating loss
|
(23,154
|
)
|
|
(12,131
|
)
|
|
(1,599
|
)
|
|||
Total
|
|
|
|
|
|
||||||
Revenue
|
$
|
358,246
|
|
|
$
|
405,911
|
|
|
$
|
377,027
|
|
Gross profit
|
182,306
|
|
|
215,218
|
|
|
205,405
|
|
|||
Operating income (loss)
|
(25,178
|
)
|
|
(168
|
)
|
|
11,930
|
|
|
Year ended December 31,
|
||||||||||
|
2017
(1)
|
|
2016
|
|
2015
|
||||||
Total segment operating income (loss)
|
$
|
(25,178
|
)
|
|
$
|
(168
|
)
|
|
$
|
11,930
|
|
Unallocated corporate expenses
(1)
|
(20,767
|
)
|
|
(38,972
|
)
|
|
(2,794
|
)
|
|||
Stock-based compensation
|
(16,610
|
)
|
|
(13,060
|
)
|
|
(15,582
|
)
|
|||
Amortization of intangibles
|
(8,322
|
)
|
|
(14,836
|
)
|
|
(6,502
|
)
|
|||
Consolidated loss from operations
|
(70,877
|
)
|
|
(67,036
|
)
|
|
(12,948
|
)
|
|||
Non-operating expense, net
|
(13,830
|
)
|
|
(13,394
|
)
|
|
(3,120
|
)
|
|||
Loss before income taxes
|
$
|
(84,707
|
)
|
|
$
|
(80,430
|
)
|
|
$
|
(16,068
|
)
|
|
As of December 31,
|
||||||
|
2017
|
|
2016
|
||||
Property and equipment, net:
|
|
|
|
||||
United States
|
$
|
13,786
|
|
|
$
|
15,197
|
|
Israel
|
8,904
|
|
|
9,966
|
|
||
France
|
4,573
|
|
|
4,872
|
|
||
Other countries
|
2,002
|
|
|
2,129
|
|
||
Total
|
$
|
29,265
|
|
|
$
|
32,164
|
|
|
Operating Leases
|
||
Year ending December 31,
|
|
||
2018
|
$
|
13,534
|
|
2019
|
12,132
|
|
|
2020
|
8,716
|
|
|
2021
|
2,958
|
|
|
2022
|
2,497
|
|
|
Thereafter
|
9,145
|
|
|
Total minimum payments
|
$
|
48,982
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
4,862
|
|
|
$
|
3,913
|
|
|
$
|
4,242
|
|
Accrual for current period warranties
|
5,117
|
|
|
5,482
|
|
|
5,378
|
|
|||
Balance assumed from TVN acquisition
|
—
|
|
|
1,012
|
|
|
—
|
|
|||
Warranty costs incurred
|
(5,598
|
)
|
|
(5,545
|
)
|
|
(5,707
|
)
|
|||
Balance at end of period
|
$
|
4,381
|
|
|
$
|
4,862
|
|
|
$
|
3,913
|
|
|
Fiscal 2017
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Quarterly Data:
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
82,943
|
|
|
$
|
82,315
|
|
|
$
|
92,014
|
|
|
$
|
100,974
|
|
Gross profit
(4)
|
40,408
|
|
|
33,815
|
|
|
47,025
|
|
|
48,572
|
|
||||
Net loss
(2) (5) (6)
|
$
|
(24,027
|
)
|
|
$
|
(31,500
|
)
|
|
$
|
(15,583
|
)
|
|
$
|
(11,516
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
$
|
(0.30
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.14
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
79,810
|
|
|
80,590
|
|
|
81,445
|
|
|
82,014
|
|
||||
|
Fiscal 2016
(1)
|
||||||||||||||
|
1st Quarter
(6)
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
(3)
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
Quarterly Data:
|
|
|
|
|
|
|
|
||||||||
Net revenue
|
$
|
81,832
|
|
|
$
|
109,571
|
|
|
$
|
101,406
|
|
|
$
|
113,102
|
|
Gross profit
|
40,654
|
|
|
51,040
|
|
|
51,363
|
|
|
57,693
|
|
||||
Net loss
(2) (5) (6)
|
$
|
(25,180
|
)
|
|
$
|
(20,679
|
)
|
|
$
|
(16,012
|
)
|
|
$
|
(10,443
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted
|
$
|
(0.33
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.13
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
76,996
|
|
|
77,342
|
|
|
78,092
|
|
|
78,389
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
*
|
Indicates a management contract or compensatory plan or arrangement relating to executive officers or directors of the Company.
|
†
|
Registrant has omitted portions of this exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a grant of confidential treatment under Rule 406 promulgated under the Securities Act.
|
(i)
|
Previously filed as an Exhibit to the Company’s Registration Statement on Form S-1 No. 33-90752.
|
(ii)
|
Previously filed as an Exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.
|
(iii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated July 25, 2002.
|
(iv)
|
Previously filed as an Exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.
|
(v)
|
Previously filed as an Exhibit to the Company’s Current Annual Report on Form 10-K for the year ended December 31, 2008.
|
(vi)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 18, 2009.
|
(vii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 21, 2017.
|
(viii)
|
Previously filed as an Exhibit to the Company’s Registration Statement on Form S-8, dated June 22, 2017.
|
(x)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated December 14, 2015.
|
(xi)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated September 26, 2016.
|
(xii)
|
Previously filed as an Exhibit to the Company’s Current Report on Form 8-K dated September 26, 2016.
|
Item 16.
|
FORM 10-K SUMMARY
|
HARMONIC INC.
|
|
|
|
By:
|
/s/ PATRICK J. HARSHMAN
|
|
Patrick J. Harshman
|
|
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ PATRICK J. HARSHMAN
|
President & Chief Executive Officer (Principal Executive Officer)
|
March 5, 2018
|
(Patrick J. Harshman)
|
|
|
|
|
|
/s/ SANJAY KALRA
|
Chief Financial Officer
|
March 5, 2018
|
(Sanjay Kalra)
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
/s/ PATRICK GALLAGHER
|
Chairman
|
March 5, 2018
|
(Patrick Gallagher)
|
|
|
|
|
|
/s/ E. FLOYD KVAMME
|
Director
|
March 5, 2018
|
(E. Floyd Kvamme)
|
|
|
|
|
|
/s/ WILLIAM REDDERSEN
|
Director
|
March 5, 2018
|
(William Reddersen)
|
|
|
|
|
|
/s/ SUSAN G. SWENSON
|
Director
|
March 5, 2018
|
(Susan G. Swenson )
|
|
|
|
|
|
/s/ MITZI REAUGH
|
Director
|
March 5, 2018
|
(Mitzi Reaugh)
|
|
|
|
|
|
/s/ NIKOS THEODOSOPOULOS
|
Director
|
March 5, 2018
|
(Nikos Theodosopoulos)
|
|
|
|
|
|
/s/ DAVID KRALL
|
Director
|
March 5, 2018
|
(David Krall)
|
|
|
|
|
Page
|
|
ARTICLE I CORPORATE OFFICES
|
1
|
|
|
1.1
|
REGISTERED OFFICE
|
1
|
|
1.2
|
OTHER OFFICES
|
1
|
|
ARTICLE II MEETINGS OF STOCKHOLDERS
|
1
|
|
|
2.1
|
PLACE OF MEETINGS
|
1
|
|
2.2
|
ANNUAL MEETING
|
1
|
|
2.3
|
SPECIAL MEETING
|
2
|
|
2.4
|
NOTICE OF STOCKHOLDERS’ MEETINGS
|
2
|
|
2.5
|
ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
|
2
|
|
2.6
|
MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
|
5
|
|
2.7
|
QUORUM
|
6
|
|
2.8
|
ADJOURNED MEETING; NOTICE
|
6
|
|
2.9
|
VOTING
|
7
|
|
2.10
|
VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT
|
7
|
|
2.11
|
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
7
|
|
2.12
|
RECORD DATE FOR STOCKHOLDER NOTICE; VOTING
|
8
|
|
2.13
|
PROXIES
|
8
|
|
2.14
|
ORGANIZATION
|
9
|
|
2.15
|
LIST OF STOCKHOLDERS ENTITLED TO VOTE
|
9
|
|
2.16
|
INSPECTORS OF ELECTION
|
9
|
|
ARTICLE III DIRECTORS
|
10
|
|
|
3.1
|
POWERS
|
10
|
|
3.2
|
NUMBER OF DIRECTORS
|
10
|
|
3.3
|
ELECTION AND TERM OF OFFICE OF DIRECTORS
|
10
|
|
3.4
|
RESIGNATION AND VACANCIES
|
11
|
|
3.5
|
REMOVAL OF DIRECTORS
|
12
|
|
3.6
|
PLACE OF MEETINGS; MEETINGS BY TELEPHONE
|
12
|
|
3.7
|
FIRST MEETINGS
|
12
|
|
3.8
|
REGULAR MEETINGS
|
12
|
|
3.9
|
SPECIAL MEETINGS; NOTICE
|
13
|
|
3.10
|
QUORUM
|
13
|
|
3.11
|
WAIVER OF NOTICE
|
13
|
|
3.12
|
ADJOURNMENT
|
14
|
|
3.13
|
NOTICE OF ADJOURNMENT
|
14
|
|
3.14
|
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
|
14
|
|
3.15
|
FEES AND COMPENSATION OF DIRECTORS
|
14
|
|
3.16
|
APPROVAL OF LOANS TO OFFICERS
|
14
|
|
3.17
|
SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION
|
14
|
|
ARTICLE IV COMMITTEES
|
15
|
|
|
4.1
|
COMMITTEES OF DIRECTORS
|
15
|
|
4.2
|
MEETINGS AND ACTION OF COMMITTEES
|
15
|
|
4.3
|
COMMITTEE MINUTES
|
16
|
|
ARTICLE V OFFICERS
|
16
|
|
|
5.1
|
OFFICERS
|
16
|
|
5.2
|
ELECTION OF OFFICERS
|
16
|
|
5.3
|
SUBORDINATE OFFICERS
|
16
|
|
5.4
|
REMOVAL AND RESIGNATION OF OFFICERS
|
17
|
|
5.5
|
VACANCIES IN OFFICES
|
17
|
|
5.6
|
CHAIRMAN OF THE BOARD
|
17
|
|
5.7
|
PRESIDENT
|
17
|
|
5.8
|
VICE PRESIDENTS
|
18
|
|
5.9
|
SECRETARY
|
18
|
|
5.10
|
CHIEF FINANCIAL OFFICER
|
18
|
|
5.11
|
ASSISTANT SECRETARY
|
19
|
|
5.12
|
ADMINISTRATIVE OFFICERS
|
19
|
|
5.13
|
AUTHORITY AND DUTIES OF OFFICERS
|
19
|
|
ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS
|
19
|
|
|
6.1
|
INDEMNIFICATION OF DIRECTORS AND OFFICERS
|
19
|
|
6.2
|
INDEMNIFICATION OF OTHERS
|
20
|
|
6.3
|
INSURANCE
|
21
|
|
ARTICLE VII RECORDS AND REPORTS
|
21
|
|
|
7.1
|
MAINTENANCE AND INSPECTION OF RECORDS
|
21
|
|
7.2
|
INSPECTION BY DIRECTORS
|
21
|
|
7.3
|
ANNUAL STATEMENT TO STOCKHOLDERS
|
21
|
|
7.4
|
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
|
22
|
|
7.5
|
CERTIFICATION AND INSPECTION OF BYLAWS
|
22
|
|
ARTICLE VIII GENERAL MATTERS
|
22
|
|
|
8.1
|
RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING
|
22
|
|
8.2
|
CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS
|
22
|
|
8.3
|
CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED
|
23
|
|
8.4
|
STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES
|
23
|
|
8.5
|
SPECIAL DESIGNATION ON CERTIFICATES
|
24
|
|
8.6
|
LOST CERTIFICATES
|
24
|
|
8.7
|
TRANSFER AGENTS AND REGISTRARS
|
24
|
|
8.8
|
CONSTRUCTION; DEFINITIONS
|
24
|
|
ARTICLE IX AMENDMENTS
|
25
|
|
|
ARTICLE X DISSOLUTION
|
25
|
|
|
ARTICLE XI CUSTODIAN
|
26
|
|
|
11.1
|
APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
|
26
|
|
11.2
|
DUTIES OF CUSTODIAN
|
26
|
|
|
/s/ Timothy C. Chu
|
|
Secretary
|
Name
|
|
State or Other Jurisdiction
of Incorporation or Organization
|
Harmonic Delaware, L.L.C.
|
|
U.S.A.
|
Harmonic Germany GmbH
|
|
Germany
|
Harmonic Global Limited
|
|
Cayman Islands
|
Harmonic Japan GK
|
|
Japan
|
Harmonic India Private Limited
|
|
India
|
Harmonic International A.G.
|
|
Switzerland
|
Harmonic International Inc.
|
|
U.S.A.
|
Harmonic International Limited
|
|
Bermuda
|
Harmonic Lightwaves (Israel) Ltd.
|
|
Israel
|
Harmonic Poland Sp. Z.o.o
|
|
Poland
|
Harmonic Singapore P.T.E. Ltd.
|
|
Singapore
|
Harmonic Spain SL
|
|
Spain
|
Harmonic Technologies (HK) Limited
|
|
Hong Kong
|
Harmonic (UK) Limited
|
|
United Kingdom
|
Harmonic Video Networks Ltd.
|
|
Israel
|
Horizon Acquisition Ltd.
|
|
Israel
|
Harmonic Brasil LTDA
|
|
Brazil
|
Harmonic S.R.I.
|
|
Argentina
|
Harmonic Mexico International
|
|
Mexico
|
Harmonic Video Networks Malaysia Sdn Bhd
|
|
Malaysia
|
Harmonic International Australia Pty Ltd
|
|
Australia
|
Harmonic Italia Srl
|
|
Italy
|
Harmonic Tecnologies (Beijing) Co. Ltd
|
|
China
|
Kepler M2 SAS
|
|
France
|
Financiere Kepler SAS
|
|
France
|
Kepler SAS
|
|
France
|
Harmonic SAS
|
|
France
|
Thomson Video Networks Asia Pacific Pte. Ltd.
|
|
Singapore
|
Thomson Video Networks India Private Ltd
|
|
India
|
Thomson Video Networks Technology (Beijing) Co., Ltd.
|
|
China
|
Thomson Video Networks (UK) Limited
|
|
United Kingdom
|
Thomson Video Networks Do Brazil LTDA
|
|
Brazil
|
|
/s/ PricewaterhouseCoopers LLP
|
PricewaterhouseCoopers LLP
|
1.
|
I have reviewed this Annual Report on Form 10-K of Harmonic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 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 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.
|
Date: March 5, 2018
|
By:
|
/s/ Patrick J. Harshman
|
|
|
Patrick J. Harshman
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Harmonic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 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 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.
|
Date: March 5, 2018
|
By:
|
/s/ Sanjay Kalra
|
|
|
Sanjay Kalra
|
|
|
Chief Financial Officer
|
/s/ Patrick J. Harshman
|
Patrick J. Harshman
President and Chief Executive Officer
|
/s/ Sanjay Kalra
|
Sanjay Kalra
Chief Financial Officer
|