☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
|
94-3354663
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification No.)
|
Securities registered pursuant to Section 12(b) of the Act:
|
||
(Title of each class)
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(Trading Symbol)
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(Name of each exchange on which registered)
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Common Stock, $0.0003 par value
|
VCRA
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
|
☐
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Non-accelerated filer
|
☐
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Smaller reporting company
|
☐
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Emerging growth company
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☐
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Class
|
|
Outstanding as of April 30, 2020
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Common Stock, $0.0003 par value per share
|
|
32,025,518
|
|
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Page No.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II: OTHER INFORMATION
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Item 1.
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Item 1A.
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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 1.
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Financial Statements (Unaudited)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
31,136
|
|
|
$
|
25,704
|
|
Short-term investments
|
202,632
|
|
|
204,164
|
|
||
Accounts receivable, net of allowance
|
26,283
|
|
|
42,547
|
|
||
Other receivables
|
6,374
|
|
|
6,312
|
|
||
Inventories
|
6,027
|
|
|
4,576
|
|
||
Prepaid expenses and other current assets
|
5,694
|
|
|
5,149
|
|
||
Total current assets
|
278,146
|
|
|
288,452
|
|
||
Property and equipment, net
|
8,251
|
|
|
8,661
|
|
||
Intangible assets, net
|
5,141
|
|
|
5,461
|
|
||
Goodwill
|
49,246
|
|
|
49,246
|
|
||
Deferred commissions
|
10,307
|
|
|
10,477
|
|
||
Other long-term assets
|
7,368
|
|
|
8,158
|
|
||
Total assets
|
$
|
358,459
|
|
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$
|
370,455
|
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Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities
|
|
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|
||||
Accounts payable
|
$
|
3,142
|
|
|
$
|
6,036
|
|
Accrued payroll and other current liabilities
|
15,311
|
|
|
14,757
|
|
||
Deferred revenue, current
|
45,987
|
|
|
50,033
|
|
||
Total current liabilities
|
64,440
|
|
|
70,826
|
|
||
Deferred revenue, long-term
|
10,689
|
|
|
11,442
|
|
||
Convertible senior notes, net
|
118,913
|
|
|
117,178
|
|
||
Other long-term liabilities
|
6,310
|
|
|
7,184
|
|
||
Total liabilities
|
200,352
|
|
|
206,630
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of March 31, 2020 and December 31, 2019; zero shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.0003 par value - 100,000,000 shares authorized as of March 31, 2020 and December 31, 2019; 31,802,779 and 31,660,709 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
319,671
|
|
|
313,963
|
|
||
Accumulated other comprehensive income (loss)
|
(777
|
)
|
|
179
|
|
||
Accumulated deficit
|
(160,796
|
)
|
|
(150,326
|
)
|
||
Total stockholders’ equity
|
158,107
|
|
|
163,825
|
|
||
Total liabilities and stockholders’ equity
|
$
|
358,459
|
|
|
$
|
370,455
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenue
|
|
|
|
||||
Product
|
$
|
17,850
|
|
|
$
|
14,003
|
|
Service
|
22,823
|
|
|
21,306
|
|
||
Total revenue
|
40,673
|
|
|
35,309
|
|
||
Cost of revenue
|
|
|
|
||||
Product
|
6,364
|
|
|
5,334
|
|
||
Service
|
10,523
|
|
|
10,290
|
|
||
Total cost of revenue
|
16,887
|
|
|
15,624
|
|
||
Gross profit
|
23,786
|
|
|
19,685
|
|
||
Operating expenses
|
|
|
|
||||
Research and development
|
9,032
|
|
|
8,146
|
|
||
Sales and marketing
|
16,963
|
|
|
16,019
|
|
||
General and administrative
|
6,391
|
|
|
6,580
|
|
||
Total operating expenses
|
32,386
|
|
|
30,745
|
|
||
Loss from operations
|
(8,600
|
)
|
|
(11,060
|
)
|
||
Interest income
|
1,120
|
|
|
1,279
|
|
||
Interest expense
|
(2,274
|
)
|
|
(2,121
|
)
|
||
Other income (expense), net
|
(591
|
)
|
|
131
|
|
||
Loss before income taxes
|
(10,345
|
)
|
|
(11,771
|
)
|
||
Benefit from (provision for) income taxes
|
(125
|
)
|
|
36
|
|
||
Net loss
|
$
|
(10,470
|
)
|
|
$
|
(11,735
|
)
|
|
|
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|
||||
Loss per share
|
|
|
|
||||
Basic
|
$
|
(0.33
|
)
|
|
$
|
(0.38
|
)
|
Diluted
|
$
|
(0.33
|
)
|
|
$
|
(0.38
|
)
|
Weighted average shares used to compute net loss per share
|
|
|
|
||||
Basic
|
31,738
|
|
|
30,800
|
|
||
Diluted
|
31,738
|
|
|
30,800
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(10,470
|
)
|
|
$
|
(11,735
|
)
|
Other comprehensive income (loss), net:
|
|
|
|
||||
Change in unrealized gain (loss) on investments, net of tax
|
(956
|
)
|
|
425
|
|
||
Comprehensive loss
|
$
|
(11,426
|
)
|
|
$
|
(11,310
|
)
|
|
|
||||||||||||||||
|
Common stock
|
Additional
paid-in capital |
Accum. other
comprehensive income (loss) |
Accumulated
deficit |
Total
stockholders’ equity |
||||||||||||
|
Shares
|
Amount
|
|||||||||||||||
Balance at December 31, 2018
|
30,708,138
|
|
$
|
9
|
|
$
|
295,647
|
|
$
|
(443
|
)
|
$
|
(132,346
|
)
|
$
|
162,867
|
|
Exercise of stock options
|
122,376
|
|
—
|
|
1,564
|
|
—
|
|
—
|
|
1,564
|
|
|||||
RSUs released net of shares withheld for tax settlement
|
60,603
|
|
—
|
|
(1,271
|
)
|
—
|
|
—
|
|
(1,271
|
)
|
|||||
Employee stock-based compensation expense
|
—
|
|
—
|
|
5,544
|
|
—
|
|
—
|
|
5,544
|
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,735
|
)
|
(11,735
|
)
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
425
|
|
—
|
|
425
|
|
|||||
Balance at March 31, 2019
|
30,891,117
|
|
9
|
|
301,484
|
|
(18
|
)
|
(144,081
|
)
|
157,394
|
|
Balance at December 31, 2019
|
31,660,709
|
|
$
|
9
|
|
$
|
313,963
|
|
$
|
179
|
|
$
|
(150,326
|
)
|
$
|
163,825
|
|
Exercise of stock options
|
77,909
|
|
—
|
|
731
|
|
—
|
|
—
|
|
731
|
|
|||||
RSUs released net of shares withheld for tax settlement
|
64,161
|
|
—
|
|
(864
|
)
|
—
|
|
—
|
|
(864
|
)
|
|||||
Employee stock-based compensation expense
|
—
|
|
—
|
|
5,841
|
|
—
|
|
—
|
|
5,841
|
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,470
|
)
|
(10,470
|
)
|
|||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
(956
|
)
|
—
|
|
(956
|
)
|
|||||
Balance at March 31, 2020
|
31,802,779
|
|
$
|
9
|
|
$
|
319,671
|
|
$
|
(777
|
)
|
$
|
(160,796
|
)
|
$
|
158,107
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(10,470
|
)
|
|
$
|
(11,735
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,333
|
|
|
1,890
|
|
||
Inventory provision
|
42
|
|
|
—
|
|
||
Change in lease-related performance obligations
|
(346
|
)
|
|
(266
|
)
|
||
Stock-based compensation expense
|
5,841
|
|
|
5,544
|
|
||
Amortization of debt discount and issuance costs
|
1,735
|
|
|
1,582
|
|
||
Other
|
729
|
|
|
24
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
16,264
|
|
|
15,681
|
|
||
Other receivables
|
(102
|
)
|
|
(1,156
|
)
|
||
Inventories
|
(1,494
|
)
|
|
(1,637
|
)
|
||
Prepaid expenses and other assets
|
(417
|
)
|
|
(414
|
)
|
||
Deferred commissions
|
171
|
|
|
(19
|
)
|
||
Accounts payable
|
(2,826
|
)
|
|
(1,173
|
)
|
||
Accrued payroll and other liabilities
|
(17
|
)
|
|
(1,689
|
)
|
||
Deferred revenue
|
(4,799
|
)
|
|
(5,687
|
)
|
||
Net cash provided by operating activities
|
5,644
|
|
|
945
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchase of property and equipment
|
(682
|
)
|
|
(853
|
)
|
||
Purchase of short-term investments
|
(28,009
|
)
|
|
(31,349
|
)
|
||
Maturities of short-term investments
|
28,569
|
|
|
29,624
|
|
||
Net cash used in investing activities
|
(122
|
)
|
|
(2,578
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Cash from lease-related performance obligations
|
43
|
|
|
—
|
|
||
Proceeds from exercise of stock options
|
731
|
|
|
1,564
|
|
||
Tax withholdings paid on behalf of employees for net share settlement
|
(864
|
)
|
|
(1,271
|
)
|
||
Net cash provided by (used in) financing activities
|
(90
|
)
|
|
293
|
|
||
Net increase in cash and cash equivalents
|
5,432
|
|
|
(1,340
|
)
|
||
Cash and cash equivalents at beginning of period
|
25,704
|
|
|
34,276
|
|
||
Cash and cash equivalents at end of period
|
$
|
31,136
|
|
|
$
|
32,936
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Property and equipment in accounts payable and accrued liabilities
|
$
|
390
|
|
|
$
|
161
|
|
1.
|
The Company and Summary of Significant Accounting Policies
|
2.
|
Revenue, deferred revenue and deferred commissions
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Product revenue
|
|
|
|
||||
Device
|
$
|
13,903
|
|
|
$
|
10,060
|
|
Software
|
3,947
|
|
|
3,943
|
|
||
Total product
|
17,850
|
|
|
14,003
|
|
||
|
|
|
|
||||
Service revenue
|
|
|
|
||||
Maintenance and support
|
18,069
|
|
|
16,393
|
|
||
Professional services and training
|
4,754
|
|
|
4,913
|
|
||
Total service
|
22,823
|
|
|
21,306
|
|
||
Total revenue
|
$
|
40,673
|
|
|
$
|
35,309
|
|
(in thousands)
|
December 31, 2019
|
|
Additions
|
|
Commissions Recognized
|
|
March 31, 2020
|
||||||||
Deferred commissions
|
$
|
10,477
|
|
|
$
|
2,489
|
|
|
$
|
(2,659
|
)
|
|
$
|
10,307
|
|
(in thousands)
|
December 31, 2019
|
|
Additions
|
|
Revenue Recognized
|
|
March 31, 2020
|
||||||||
Deferred revenue
|
$
|
61,475
|
|
|
$
|
14,945
|
|
|
$
|
(19,744
|
)
|
|
$
|
56,676
|
|
3.
|
Fair Value of Financial Instruments
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
||||||
Assets
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
3,855
|
|
$
|
—
|
|
$
|
3,855
|
|
|
$
|
4,086
|
|
$
|
—
|
|
$
|
4,086
|
|
Commercial paper
|
—
|
|
17,899
|
|
17,899
|
|
|
—
|
|
12,854
|
|
12,854
|
|
||||||
U.S. government agency securities
|
—
|
|
—
|
|
—
|
|
|
—
|
|
3,000
|
|
3,000
|
|
||||||
Corporate debt securities
|
—
|
|
186,725
|
|
186,725
|
|
|
—
|
|
188,310
|
|
188,310
|
|
||||||
Total assets measured at fair value
|
$
|
3,855
|
|
$
|
204,624
|
|
$
|
208,479
|
|
|
$
|
4,086
|
|
$
|
204,164
|
|
$
|
208,250
|
|
4.
|
Cash, Cash Equivalents and Short-Term Investments
|
|
As of March 31, 2020
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Demand deposits and other cash
|
$
|
25,289
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,289
|
|
Money market funds
|
3,855
|
|
|
—
|
|
|
—
|
|
|
3,855
|
|
||||
Commercial paper
|
1,994
|
|
|
—
|
|
|
(2
|
)
|
|
1,992
|
|
||||
Total cash and cash equivalents
|
31,138
|
|
|
—
|
|
|
(2
|
)
|
|
31,136
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Short-Term Investments:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
15,911
|
|
|
10
|
|
|
(14
|
)
|
|
15,907
|
|
||||
Corporate debt securities
|
187,238
|
|
|
296
|
|
|
(809
|
)
|
|
186,725
|
|
||||
Total short-term investments
|
203,149
|
|
|
306
|
|
|
(823
|
)
|
|
202,632
|
|
||||
Total cash, cash equivalents and short-term investments
|
$
|
234,287
|
|
|
$
|
306
|
|
|
$
|
(825
|
)
|
|
$
|
233,768
|
|
|
As of December 31, 2019
|
||||||||||||||
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Demand deposits and other cash
|
$
|
21,618
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,618
|
|
Money market funds
|
4,086
|
|
|
—
|
|
|
—
|
|
|
4,086
|
|
||||
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total cash and cash equivalents
|
25,704
|
|
|
—
|
|
|
—
|
|
|
25,704
|
|
||||
Short-Term Investments:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
12,861
|
|
|
—
|
|
|
(7
|
)
|
|
12,854
|
|
||||
U.S. government agency securities
|
3,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
||||
U.S. Treasury securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate debt securities
|
187,866
|
|
|
499
|
|
|
(55
|
)
|
|
188,310
|
|
||||
Total short-term investments
|
203,727
|
|
|
499
|
|
|
(62
|
)
|
|
204,164
|
|
||||
Total cash, cash equivalents and short-term investments
|
$
|
229,431
|
|
|
$
|
499
|
|
|
$
|
(62
|
)
|
|
$
|
229,868
|
|
|
|
|
|
|
|
|
|
5.
|
Loss Per Share
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(10,470
|
)
|
|
$
|
(11,735
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted average shares used to compute net loss per common share - basic
|
31,738
|
|
|
30,800
|
|
||
Weighted-average shares used to compute net loss per common share - diluted
|
31,738
|
|
|
30,800
|
|
||
|
|
|
|
||||
Net loss per share
|
|
|
|
||||
Basic
|
$
|
(0.33
|
)
|
|
$
|
(0.38
|
)
|
Diluted
|
$
|
(0.33
|
)
|
|
$
|
(0.38
|
)
|
|
Three months ended March 31,
|
||||
(in thousands)
|
2020
|
|
2019
|
||
Options to purchase common stock, including ESPP
|
620
|
|
|
724
|
|
Restricted stock units
|
1,635
|
|
|
1,850
|
|
6.
|
Goodwill and Intangible Assets
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
(in thousands)
|
Range of
Useful Life
(years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Developed technology
|
3 to 7
|
|
$
|
10,050
|
|
|
$
|
9,854
|
|
|
$
|
196
|
|
|
$
|
10,050
|
|
|
$
|
9,803
|
|
|
$
|
247
|
|
Customer relationships
|
7 to 9
|
|
10,920
|
|
|
6,088
|
|
|
4,832
|
|
|
10,920
|
|
|
5,819
|
|
|
5,101
|
|
||||||
Backlog
|
3
|
|
1,400
|
|
|
1,287
|
|
|
113
|
|
|
1,400
|
|
|
1,287
|
|
|
113
|
|
||||||
Non-compete agreements
|
2 to 4
|
|
460
|
|
|
460
|
|
|
—
|
|
|
460
|
|
|
460
|
|
|
—
|
|
||||||
Trademarks
|
3 to 7
|
|
1,110
|
|
|
1,110
|
|
|
—
|
|
|
1,110
|
|
|
1,110
|
|
|
—
|
|
||||||
Intangible assets, net book value
|
|
|
$
|
23,940
|
|
|
$
|
18,799
|
|
|
$
|
5,141
|
|
|
$
|
23,940
|
|
|
$
|
18,479
|
|
|
$
|
5,461
|
|
(in thousands)
|
|
Future amortization
|
||
2020 (remaining nine months)
|
|
$
|
1,036
|
|
2021
|
|
1,130
|
|
|
2022
|
|
1,050
|
|
|
2023
|
|
1,050
|
|
|
2024
|
|
875
|
|
|
Future amortization expense
|
|
$
|
5,141
|
|
7.
|
Balance Sheet Components
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Raw materials
|
$
|
962
|
|
|
$
|
831
|
|
Finished goods
|
5,065
|
|
|
3,745
|
|
||
Total inventories
|
$
|
6,027
|
|
|
$
|
4,576
|
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Computer equipment and software
|
$
|
14,088
|
|
|
$
|
13,596
|
|
Furniture, fixtures and equipment
|
2,554
|
|
|
2,430
|
|
||
Leasehold improvements
|
5,351
|
|
|
5,283
|
|
||
Manufacturing tools and equipment
|
2,476
|
|
|
2,435
|
|
||
Construction in process
|
131
|
|
|
582
|
|
||
Property and equipment, at cost
|
24,600
|
|
|
24,326
|
|
||
Less: Accumulated depreciation
|
(16,349
|
)
|
|
(15,665
|
)
|
||
Property and equipment, net
|
$
|
8,251
|
|
|
$
|
8,661
|
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Minimum payments to be received on sales-type leases
|
$
|
1,796
|
|
|
$
|
2,078
|
|
Less: Unearned interest income and executory revenue portion
|
(1,097
|
)
|
|
(1,190
|
)
|
||
Net investment in sales-type leases
|
699
|
|
|
888
|
|
||
Less: Current portion
|
(346
|
)
|
|
(452
|
)
|
||
Non-current net investment in sales-type leases
|
$
|
353
|
|
|
$
|
436
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Lease revenue
|
$
|
435
|
|
|
$
|
661
|
|
Less: Cost of lease shipments
|
(10
|
)
|
|
(52
|
)
|
||
Gross profit
|
425
|
|
|
609
|
|
||
|
|
|
|
||||
Interest income (expense), net on lease receivable
|
$
|
(6
|
)
|
|
$
|
(3
|
)
|
Initial direct cost incurred
|
$
|
23
|
|
|
$
|
31
|
|
(in thousands)
|
Future lease payments
|
||
2020 (remaining nine months)
|
$
|
716
|
|
2021
|
615
|
|
|
2022
|
387
|
|
|
2023
|
78
|
|
|
Total
|
$
|
1,796
|
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Payroll and related expenses
|
$
|
7,276
|
|
|
$
|
6,053
|
|
Accrued payables
|
1,707
|
|
|
2,674
|
|
||
Operating lease liabilities, current portion
|
2,336
|
|
|
2,323
|
|
||
Lease financing, current portion
|
898
|
|
|
1,033
|
|
||
Product warranty
|
440
|
|
|
420
|
|
||
Customer prepayments
|
665
|
|
|
631
|
|
||
Sales and use tax payable
|
469
|
|
|
599
|
|
||
Other
|
1,520
|
|
|
1,024
|
|
||
Total accrued payroll and other current liabilities
|
$
|
15,311
|
|
|
$
|
14,757
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Warranty balance at the beginning of the period
|
$
|
420
|
|
|
$
|
376
|
|
Warranty expense accrued for shipments during the period
|
108
|
|
|
77
|
|
||
Changes in estimate related to pre-existing warranties
|
(31
|
)
|
|
(31
|
)
|
||
Warranty settlements made
|
(57
|
)
|
|
(48
|
)
|
||
Total product warranty
|
$
|
440
|
|
|
$
|
374
|
|
(in thousands)
|
March 31,
2020 |
||
Other long-term assets
|
$
|
5,590
|
|
|
|
||
Accrued payroll and other current liabilities
|
2,336
|
|
|
Other long-term liabilities
|
4,116
|
|
|
Total operating lease liabilities
|
$
|
6,452
|
|
|
Three months ended March 31,
|
Three months ended March 31,
|
||||
(in thousands)
|
2020
|
2019
|
||||
Supplemental Cash Flow Information
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
712
|
|
$
|
630
|
|
Right-of-use assets obtained in exchange for lease obligations
|
$
|
—
|
|
$
|
689
|
|
Weighted average remaining lease term
|
2.39 years
|
|
3.11 years
|
|
||
Weighted average discount rate
|
8
|
%
|
8
|
%
|
(in thousands)
|
Operating leases
|
||
2020 (remaining nine months)
|
$
|
2,191
|
|
2021
|
2,960
|
|
|
2022
|
1,326
|
|
|
2023
|
403
|
|
|
2024
|
319
|
|
|
Total maturities of lease liabilities
|
7,199
|
|
|
Less imputed interest
|
$
|
(747
|
)
|
Total
|
$
|
6,452
|
|
8.
|
Convertible Senior Notes
|
(in thousands)
|
March 31,
2020 |
|
December 31,
2019 |
||||
Liability:
|
|
|
|
||||
Principal
|
$
|
143,750
|
|
|
$
|
143,750
|
|
Unamortized debt discount
|
(22,321
|
)
|
|
(23,880
|
)
|
||
Unamortized issuance costs
|
(2,516
|
)
|
|
(2,692
|
)
|
||
Net carrying amount
|
$
|
118,913
|
|
|
$
|
117,178
|
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Debt discount for conversion option
|
$
|
33,350
|
|
|
$
|
33,350
|
|
Issuance costs
|
$
|
(1,136
|
)
|
|
$
|
(1,136
|
)
|
Net carrying amount
|
$
|
32,214
|
|
|
$
|
32,214
|
|
|
Three months ended March 31,
|
|||||
(in thousands)
|
2020
|
2019
|
||||
Contractual interest expense
|
$
|
539
|
|
$
|
539
|
|
Amortization of debt discount
|
1,559
|
|
1,422
|
|
||
Amortization of issuance costs
|
176
|
|
160
|
|
||
Total interest expense
|
$
|
2,274
|
|
$
|
2,121
|
|
(in thousands)
|
March 31,
2020 |
||
Conversion option
|
$
|
33,350
|
|
Purchase of capped calls
|
$
|
(8,907
|
)
|
Issuance costs
|
$
|
(1,136
|
)
|
Total
|
$
|
23,307
|
|
9.
|
Commitments and Contingencies
|
10.
|
Stock-based Compensation and Awards
|
|
Options Outstanding
|
|||||||||
|
Number of options
|
|
Weighted average exercise price
|
Weighted average remaining contractual term
|
Aggregate intrinsic value
|
|||||
|
|
(in years)
|
(in thousands)
|
|||||||
Outstanding at December 31, 2019
|
606,327
|
|
|
$
|
13.41
|
|
3.62
|
$
|
4,566
|
|
Options granted
|
—
|
|
|
—
|
|
|
|
|||
Options exercised
|
(77,909
|
)
|
|
9.38
|
|
|
|
|||
Options canceled
|
—
|
|
|
—
|
|
|
|
|||
Outstanding at March 31, 2020
|
528,418
|
|
|
$
|
14.01
|
|
3.38
|
$
|
3,974
|
|
|
Three months ended March 31,
|
||
|
2020
|
|
2019
|
Expected term (in years)
|
0.50
|
|
0.50
|
Volatility
|
50.0%
|
|
33.0%
|
Risk-free interest rate
|
1.59%
|
|
2.51%
|
Dividend yield
|
0%
|
|
0%
|
|
Restricted Stock Units
|
|||||
|
Number of shares
|
|
Weighted Average Grant Date Fair Value per Share
|
|||
Outstanding at December 31, 2019
|
1,550,646
|
|
|
$
|
28.94
|
|
Granted
|
203,971
|
|
|
22.84
|
|
|
Vested
|
(101,431
|
)
|
|
31.08
|
|
|
Forfeited
|
(17,868
|
)
|
|
28.11
|
|
|
Outstanding at March 31, 2020
|
1,635,318
|
|
|
$
|
28.06
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Cost of revenue
|
$
|
973
|
|
|
$
|
978
|
|
Research and development
|
966
|
|
|
822
|
|
||
Sales and marketing
|
1,860
|
|
|
1,720
|
|
||
General and administrative
|
2,042
|
|
|
2,024
|
|
||
Total stock-based compensation
|
$
|
5,841
|
|
|
$
|
5,544
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
(in thousands)
|
|
|
|
||||
Revenue
|
|
|
|
||||
Product
|
$
|
17,850
|
|
|
$
|
14,003
|
|
Service
|
22,823
|
|
|
21,306
|
|
||
Total revenue
|
40,673
|
|
|
35,309
|
|
||
|
|
|
|
||||
Cost of revenue
|
|
|
|
||||
Product
|
6,364
|
|
|
5,334
|
|
||
Service
|
10,523
|
|
|
10,290
|
|
||
Total cost of revenue
|
16,887
|
|
|
15,624
|
|
||
|
|
|
|
||||
Gross profit
|
|
|
|
||||
Product
|
11,486
|
|
|
8,669
|
|
||
Service
|
12,300
|
|
|
11,016
|
|
||
Total gross profit
|
23,786
|
|
|
19,685
|
|
||
|
|
|
|
||||
Operating expenses
|
32,386
|
|
|
30,745
|
|
||
Interest expense, net and other
|
(1,745
|
)
|
|
(711
|
)
|
||
Loss before income taxes
|
$
|
(10,345
|
)
|
|
$
|
(11,771
|
)
|
12.
|
Income Taxes
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
We have taken measures to protect the health and safety of our employees by shifting the majority of our employees to remote work.
|
•
|
We booked some urgent orders in the first quarter to serve hospitals focused on preparations for COVID-19.
|
•
|
We issued some free “surge” software licenses to our customers that they can use for a limited time while they are responding to the pandemic.
|
•
|
Our access to our healthcare customers’ locations for sales and implementation activities has been limited in many cases. The sales cycle and implementation timeline for broader strategic deals was elongated as they shifted their primary focus to preparing for and responding to the pandemic.
|
•
|
We have experienced some delays in receiving parts due to supplier and shipping issues.
|
|
Three months ended March 31,
|
||||||||||||
|
2020
|
|
2019
|
|
Change
|
||||||||
(in thousands)
|
Amount
|
|
Amount
|
|
Amount
|
%
|
|||||||
Product revenue
|
|
|
|
|
|
|
|||||||
Device
|
$
|
13,903
|
|
|
$
|
10,060
|
|
|
$
|
3,843
|
|
38.2
|
%
|
Software
|
3,947
|
|
|
3,943
|
|
|
4
|
|
0.1
|
|
|||
Total product
|
17,850
|
|
|
14,003
|
|
|
3,847
|
|
27.5
|
|
|||
|
|
|
|
|
|
|
|||||||
Service revenue
|
|
|
|
|
|
|
|||||||
Maintenance and support
|
18,069
|
|
|
16,393
|
|
|
1,676
|
|
10.2
|
|
|||
Professional services and training
|
4,754
|
|
|
4,913
|
|
|
(159
|
)
|
(3.2
|
)
|
|||
Total service
|
22,823
|
|
|
21,306
|
|
|
1,517
|
|
7.1
|
|
|||
Total revenue
|
$
|
40,673
|
|
|
$
|
35,309
|
|
|
$
|
5,364
|
|
15.2
|
%
|
|
Three months ended March 31,
|
||||||||||||
|
2020
|
|
2019
|
|
Change
|
||||||||
(in thousands)
|
Amount
|
|
Amount
|
|
Amount
|
%
|
|||||||
Cost of revenue
|
|
|
|
|
|
|
|||||||
Product
|
$
|
6,364
|
|
|
$
|
5,334
|
|
|
$
|
1,030
|
|
19.3
|
%
|
Service
|
10,523
|
|
|
10,290
|
|
|
233
|
|
2.3
|
|
|||
Total cost of revenue
|
$
|
16,887
|
|
|
$
|
15,624
|
|
|
$
|
1,263
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|||||||
Gross margin
|
|
|
|
|
|
|
|||||||
Product
|
64.3
|
%
|
|
61.9
|
%
|
|
2.4
|
%
|
|
||||
Service
|
53.9
|
%
|
|
51.7
|
%
|
|
2.2
|
%
|
|
||||
Total gross margin
|
58.5
|
%
|
|
55.8
|
%
|
|
2.7
|
%
|
|
|
Three months ended March 31,
|
||||||||||||
|
2020
|
|
2019
|
|
Change
|
||||||||
(in thousands)
|
Amount
|
|
Amount
|
|
Amount
|
%
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|||||||
Research and development
|
$
|
9,032
|
|
|
$
|
8,146
|
|
|
$
|
886
|
|
10.9
|
%
|
Sales and marketing
|
16,963
|
|
|
16,019
|
|
|
944
|
|
5.9
|
|
|||
General and administrative
|
6,391
|
|
|
6,580
|
|
|
(189
|
)
|
(2.9
|
)
|
|||
Total operating expenses
|
$
|
32,386
|
|
|
$
|
30,745
|
|
|
$
|
1,641
|
|
5.3
|
%
|
|
Three months ended March 31,
|
||||||||||
(in thousands)
|
2020
|
|
2019
|
|
Change
|
|
|||||
Interest income
|
$
|
1,120
|
|
|
$
|
1,279
|
|
|
$
|
(159
|
)
|
Interest expense
|
(2,274
|
)
|
|
(2,121
|
)
|
|
(153
|
)
|
|||
Other income (expense), net
|
(591
|
)
|
|
131
|
|
|
(722
|
)
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Consolidated Statements of Cash Flow Data:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
5,644
|
|
|
$
|
945
|
|
Net cash used in investing activities
|
(122
|
)
|
|
(2,578
|
)
|
||
Net cash provided by (used in) financing activities
|
(90
|
)
|
|
293
|
|
||
Net increase in cash and cash equivalents
|
$
|
5,432
|
|
|
$
|
(1,340
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
manage our expenses in line with our operating plans and current business environment;
|
•
|
maintain and enhance our operational, financial and management controls, reporting systems and procedures;
|
•
|
integrate acquired businesses, technologies or assets;
|
•
|
manage operations in multiple locations and time zones; and
|
•
|
develop and deliver new solutions and enhancements to existing solutions efficiently and reliably.
|
•
|
the ongoing impact of the COVID-19 pandemic;
|
•
|
the financial health of our healthcare customers and budgetary constraints on their ability to upgrade their communications, particularly in light of the pandemic;
|
•
|
the availability of government funding for healthcare facilities operated by the United States federal, state and local governments;
|
•
|
changes in customer purchasing patterns or sales cycles;
|
•
|
market acceptance of our Smartbadge and its impact on orders for our existing Badge and related software;
|
•
|
changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services;
|
•
|
our ability to expand our sales and marketing operations;
|
•
|
our ability to successfully integrate acquired businesses, technologies or assets;
|
•
|
the announcement of new significant contracts or relationships;
|
•
|
the procurement and deployment cycles of our healthcare customers and the length of our sales cycles;
|
•
|
changes in how healthcare operating and capital budgets are administered within the enterprise;
|
•
|
changes in customer deployment timelines;
|
•
|
variations in the amount of orders booked in a prior quarter but not delivered until later quarters;
|
•
|
our mix of solutions and the varying revenue recognition rules that apply;
|
•
|
pricing, including discounts by us or our competitors;
|
•
|
our ability to expand into non-healthcare markets;
|
•
|
our ability to develop significant new reseller relationships and maintain existing reseller relationships;
|
•
|
the financial health of our resellers;
|
•
|
our ability to successfully deploy our solutions in a timely manner;
|
•
|
our ability to sell and integrate third-party products and services, and our customer’s satisfaction with those third-party products and services;
|
•
|
our ability to forecast demand and manage lead times for the manufacture of our solutions;
|
•
|
our ability to develop and introduce new solutions and features to existing solutions that achieve market acceptance;
|
•
|
the announcement of a new product, which may cause sales cycles to lengthen;
|
•
|
federal government shutdowns;
|
•
|
occurrence of health epidemics or contagious diseases and potential effects on our business and manufacturing operations;
|
•
|
fluctuations in foreign currencies in the international markets in which we operate; and
|
•
|
future accounting pronouncements and changes in accounting policies.
|
•
|
experience technical issues as we integrate acquired businesses, technologies or assets into our existing solutions;
|
•
|
encounter difficulties leveraging our existing sales and marketing organizations, and direct sales channels, to increase our revenue from acquired businesses, technologies or assets;
|
•
|
find that the acquisition does not further our business strategy, we overpaid for the acquisition or the economic conditions underlying our acquisition decision have changed;
|
•
|
have difficulty retaining key personnel of acquired businesses;
|
•
|
suffer disruption to our ongoing business and diversion of our management’s attention as a result of transition or integration issues and the challenges of managing geographically or culturally diverse enterprises;
|
•
|
experience unforeseen and significant problems or liabilities associated with quality, technology and legal contingencies relating to the acquisition, such as intellectual property or employment matters; and
|
•
|
incur substantial costs to integrate the acquired business.
|
•
|
challenges incorporating non-English speech recognition capabilities into our solutions as we expand into non-English speaking jurisdictions;
|
•
|
difficulties integrating our solutions with wireless infrastructures with which we do not have experience;
|
•
|
difficulties integrating local dialing plans and applicable PBX standards;
|
•
|
challenges associated with delivering support, training and documentation in several languages;
|
•
|
difficulties in staffing and managing personnel and resellers;
|
•
|
the need to comply with a wide variety of foreign laws and regulations, including increasingly stringent data privacy regulations, requirements for export controls for encryption technology, employment laws, changes in tax laws and tax audits by government agencies;
|
•
|
political and economic instability in, or foreign conflicts that involve or affect, the countries of our customers;
|
•
|
the impacts associated with epidemics or contagious diseases;
|
•
|
adverse effects on us directly, or on our customers and suppliers, of changes in trade, fiscal or tax policies, including the imposition of tariffs;
|
•
|
difficulties in collecting accounts receivable and longer accounts receivable payment cycles;
|
•
|
exposure to competitors who are more familiar with local markets;
|
•
|
risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance;
|
•
|
difficulties associated with resolving contract disputes in foreign countries with varied legal systems;
|
•
|
limited or unfavorable intellectual property protection in some countries; and
|
•
|
currency exchange rate fluctuations, which could affect the price of our solutions relative to locally produced solutions.
|
•
|
delayed market acceptance of our affected solutions;
|
•
|
loss of revenue or delay in revenue recognition;
|
•
|
loss of customers or inability to attract new customers;
|
•
|
diversion of engineering or other resources for remedying the defect or error;
|
•
|
damage to our brand and reputation;
|
•
|
delay in delivery of information;
|
•
|
increased service and warranty costs, including potential replacement costs for product recalls or returns; and
|
•
|
legal actions by our customers and hospital patients, including product liability claims.
|
•
|
current or future U.S. or foreign patent applications will be approved;
|
•
|
our issued patents will protect our intellectual property and not be held invalid or unenforceable if challenged by third parties;
|
•
|
we will succeed in protecting our technology adequately in all key jurisdictions in which we develop technology, or we or our competitors operate; or
|
•
|
others will not independently develop similar or competing products or methods or design around any patents that may be issued to us.
|
•
|
heighten our vulnerability to adverse general economic conditions and heightened competitive pressures;
|
•
|
require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and industry; and
|
•
|
impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes.
|
•
|
actual or anticipated variation in anticipated operating results of us or our competitors;
|
•
|
the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
|
•
|
announcements by us or our competitors of new solutions, new or terminated significant contracts, commercial relationships or capital commitments;
|
•
|
changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services, and other actual or anticipated legal or regulatory developments in the United States or foreign countries;
|
•
|
actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;
|
•
|
failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
•
|
developments or disputes concerning our intellectual property or other proprietary rights;
|
•
|
commencement of, or our involvement in, litigation;
|
•
|
announced or completed acquisitions of businesses, technologies or assets by us or our competitor;
|
•
|
changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
|
•
|
price and volume fluctuations attributable to inconsistent trading volume levels of our common stock;
|
•
|
our decision to seek additional equity or debt financing;
|
•
|
our public float relative to the total number of shares of our common stock that are issued and outstanding;
|
•
|
price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
|
•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
the dissemination of adverse or misleading reports or opinions about our business;
|
•
|
any major change in our management;
|
•
|
unfavorable economic conditions and slow or negative growth of our markets; and
|
•
|
other events or factors, including those resulting from war, incidents of terrorism or health epidemics or contagious diseases.
|
•
|
authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt;
|
•
|
prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a meeting of stockholders;
|
•
|
establish advance notice procedures for nominating candidates to our board of directors or proposing matters that can be acted upon by stockholders at stockholder meetings;
|
•
|
limit the ability of our stockholders to call special meetings of stockholders;
|
•
|
prohibit stockholders from cumulating their votes for the election of directors;
|
•
|
permit newly created directorships resulting from an increase in the authorized number of directors or vacancies on our board of directors to be filled only by majority vote of our remaining directors, even if less than a quorum is then in office;
|
•
|
provide that our board of directors is expressly authorized to make, alter or repeal our bylaws;
|
•
|
establish a classified board of directors so that not all members of our board are elected at one time;
|
•
|
provide that our directors may be removed only for “cause” and only with the approval of the holders of at least 66 2/3rds percent of our outstanding stock; and
|
•
|
require super-majority voting to amend certain provisions in our certificate of incorporation and bylaws.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
|
Exhibit title
|
|
|
|
|
31.01
|
|
|
|
|
|
31.02
|
|
|
|
|
|
32.01+
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Schema Linkbase Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Labels Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File - (formatted in Inline XBRL and contained in Exhibit 101).
|
+
|
This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
VOCERA COMMUNICATIONS, INC.
|
Date: May 4, 2020
|
By:
|
/S/ Brent D. Lang
|
|
|
Brent D. Lang
Chief Executive Officer
|
|
|
|
Date: May 4, 2020
|
By:
|
/S/ Justin R. Spencer
|
|
|
Justin R. Spencer
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: May 4, 2020
|
|
/s/ Brent D. Lang
|
|
|
Brent D. Lang
|
|
|
Chief Executive Officer
|
Date: May 4, 2020
|
|
/s/ Justin R. Spencer
|
|
|
Justin R. Spencer
|
|
|
Chief Financial Officer
|
|
|
|
|
|
/s/ Brent D. Lang
|
|
|
|
/s/ Justin R. Spencer
|
Brent D. Lang
|
|
|
|
Justin R. Spencer
|
Chief Executive Officer
|
|
|
|
Chief Financial Officer
|