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x
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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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|
20-1446869
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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3 West Plumeria Drive, San Jose, California 95134
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||
(Address of Principal Executive Offices, including zip code)
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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, $.00001 Par Value
|
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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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x
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|
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|
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|
||||
Non-accelerated filer
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¨
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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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|
A10 NETWORKS, INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS
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||
|
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Page
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PART I
|
||
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
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||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
PART III
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
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||
Item 13.
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Item 14.
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||
PART IV
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||
Item 15.
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||
|
•
|
our ability to maintain an adequate rate of revenue growth;
|
•
|
our ability to successfully anticipate market needs and opportunities;
|
•
|
our business plan and our ability to effectively manage our growth;
|
•
|
costs associated with defending intellectual property infringement and other claims;
|
•
|
loss or delay of expected purchases by our largest end-customers;
|
•
|
our ability to attract and retain end-customers;
|
•
|
our ability to further penetrate our existing customer base;
|
•
|
our ability to displace existing products in established markets;
|
•
|
our ability to expand our leadership position in next-generation application delivery and server load balancing solutions;
|
•
|
continued growth in markets relating to network security;
|
•
|
our ability to timely and effectively scale and adapt our existing technology;
|
•
|
our ability to innovate new products and bring them to market in a timely manner;
|
•
|
our ability to expand internationally;
|
•
|
the effects of increased competition in our market and our ability to compete effectively;
|
•
|
the effects of seasonal trends on our results of operations;
|
•
|
our expectations concerning relationships with third parties;
|
•
|
the attraction and retention of qualified employees and key personnel;
|
•
|
our ability to achieve or maintain profitability while continuing to invest in our sales, marketing and research and development teams;
|
•
|
variations in product mix or geographic locations of our sales;
|
•
|
fluctuations in currency exchange rates;
|
•
|
increased cost requirements of being a public company and future sales of substantial amounts of our common stock in the public markets;
|
•
|
the cost and potential outcomes of existing and future litigation;
|
•
|
our ability to maintain, protect, and enhance our brand and intellectual property; and
|
•
|
future acquisitions of or investments in complementary companies, products, services or technologies.
|
•
|
A High-performance Secure Web Gateway with integrated explicit proxy, URL filtering and SSL visibility. It enables security policy enforcement for client outbound HTTP/HTTPS traffic.
|
•
|
A High-performance Data Center firewall with integrated network denial-of-service protection and server load balancing. It provides a Layer4 state-ful firewall and Layer 7 application-level gateway for protecting data center applications for emerging network and DDoS threats.
|
•
|
A High-performance Gi/sGi firewall with integrated network DDoS and Carrier Grade NAT (CGN). The Gi/sGi firewall protects the mobile infrastructure of operators from internet based DDoS and other security threats.
|
•
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A High-performance IPSec site-to-site VPN that helps enterprises to secure application traffic between sites and global enterprises to use public networks to transport application traffic securely.
|
•
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Delivering unprecedented performance and scale in a small form factor.
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•
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Lowering CAPEX and OPEX by consolidating multiple security and networking functions in a single appliance.
|
•
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Streamlining operations with a truly cloud-ready programmable platform.
|
•
|
Companies that sell products in the traditional ADC market which includes companies that are well established in this market, such as F5 Networks, Inc. and Citrix Systems, Inc.
|
•
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Companies that sell CGN products, products originally designed for other networking purposes, such as edge routers and security appliances from vendors such as Alcatel-Lucent USA Inc., Cisco Systems, Inc. and Juniper Networks, Inc.
|
•
|
Companies that sell traditional DDoS protection products. We are a relatively new entrant into the DDoS market and first publicly launched our DDoS protection detection, and mitigation solution, TPS, in January 2014. We believe our principal competitors in this market are Arbor Networks, Inc., a subsidiary of NetScout Systems, Inc. and Radware, Ltd.
|
•
|
Companies that sell certain network security products, including Secure Web Gateways, SSL Insight/SSL Intercept, datacenter firewalls and Gi/SGi firewalls. We are a new entrant into most of these network security markets and first publicly announced this network security solution, CFW in November 2015 and we expect to start shipping in the first quarter of 2016. We believe our principal competitors in these markets are Blue Coat Systems, Juniper Networks, F5 Networks and Fortinet.
|
•
|
Ability to innovate and respond to customer needs rapidly;
|
•
|
Breadth and depth of product features and functionality;
|
•
|
Price performance and efficiency;
|
•
|
Ability for products to scale with high speed network traffic;
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•
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Flexible and agile design of products;
|
•
|
Ability to detect and mitigate large-scale cyber security threats;
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•
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Ability to accommodate any IT delivery model or combination of models, regardless of form factor;
|
•
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Brand awareness and reputation; and
|
•
|
Strength of sales and marketing effort
s.
|
•
|
fluctuations in and timing of purchases from, or loss of, large customers;
|
•
|
the budgeting cycles and purchasing practices of end-customers;
|
•
|
our ability to attract and retain new end-customers;
|
•
|
changes in demand for our products and services, including seasonal variations in customer spending patterns or cyclical fluctuations in our markets;
|
•
|
our reliance on shipments at the end of our quarters;
|
•
|
variations in product mix or geographic locations of our sales, which can affect the revenue we realize for those sales;
|
•
|
the timing and success of new product and service introductions by us or our competitors;
|
•
|
our ability to increase the size of our distribution channel and to maintain relationships with important distribution channel partners;
|
•
|
our ability to improve our overall sales productivity, and successfully execute our marketing strategies;
|
•
|
the effect of currency exchange rates on our revenue and expenses;
|
•
|
the cost and potential outcomes of existing and future litigation;
|
•
|
the effect of discounts negotiated by our largest end-customers for sales or pricing pressure from our competitors;
|
•
|
changes in the growth rate of the application networking market or changes in market needs;
|
•
|
inventory write downs, which may be necessary for our older products when our new products are launched and adopted by our end-customers; and
|
•
|
our third-party manufacturers’ and component suppliers’ capacity to meet our product demand forecasts on a timely basis, or at all.
|
•
|
Companies that sell products in the traditional ADC market which includes companies that are well established in this market, such as F5 Networks, Inc., and Citrix Systems, Inc.
|
•
|
Companies that sell CGN products, products originally designed for other networking purposes, such as edge routers and security appliances from vendors such as Alcatel-Lucent USA Inc., Cisco Systems, Inc. and Juniper Networks, Inc.
|
•
|
Companies that sell traditional DDoS mitigation products. We are a relatively new entrant into the DDoS market and first publicly launched our DDoS protection detection, and mitigation solution, TPS, in January 2014. We believe our principal competitors in this market are Arbor Networks, Inc., a subsidiary of NetScout Systems, Inc., and Radware, Ltd.
|
•
|
Companies that sell certain network security products, including Secure Web Gateways, SSL Insight/SSL Intercept, datacenter firewalls, and Gi/SGi firewalls. We are a new entrant into most of these network security markets and first publicly announced this network security solution, CFW, in our fourth quarter of 2015, which will start shipping in our first quarter of 2016. We believe our principal competitors in these markets are Blue Coat Systems, Juniper Networks, F5 Networks, and Fortinet.
|
•
|
longer operating histories;
|
•
|
the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services at a greater range of prices;
|
•
|
the ability to incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our products, including through selling at zero or negative margins, product bundling or closed technology platforms;
|
•
|
broader distribution and established relationships with distribution channel partners in a greater number of worldwide locations;
|
•
|
access to larger end-customer bases;
|
•
|
the ability to use their greater financial resources to attract our research and development engineers as well as other employees of ours;
|
•
|
larger intellectual property portfolios; and
|
•
|
the ability to bundle competitive offerings with other products and services.
|
•
|
greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
|
•
|
increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
|
•
|
greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;
|
•
|
general economic and political conditions in these foreign markets;
|
•
|
economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe;
|
•
|
management communication and integration problems resulting from cultural and geographic dispersion;
|
•
|
risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
|
•
|
greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
|
•
|
the uncertainty of protection for intellectual property rights in some countries;
|
•
|
greater risk of a failure of foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices; and
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements.
|
•
|
the expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work around errors or defects, to address and eliminate vulnerabilities, or to identify and ramp up production with third-party providers;
|
•
|
an increase in warranty claims, or an increase in the cost of servicing warranty claims, either of which would adversely affect our gross margins;
|
•
|
expenditures of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors and defects or to address and eliminate vulnerabilities;
|
•
|
loss of existing or potential end-customers or distribution channel partners;
|
•
|
delayed or lost revenue;
|
•
|
delay or failure to attain market acceptance;
|
•
|
indemnification obligations under our agreements with resellers, distributors and/or end-customers;
|
•
|
an increase in warranty claims compared with our historical experience or an increased cost of servicing warranty claims, either of which would adversely affect our gross margin; and
|
•
|
litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
|
•
|
changes in the valuation of our deferred tax assets and liabilities;
|
•
|
expected timing and amount of the release of tax valuation allowances;
|
•
|
expiration of, or detrimental changes in, research and development tax credit laws;
|
•
|
tax effects of stock-based compensation;
|
•
|
costs related to intercompany restructurings;
|
•
|
changes in tax laws, regulations, accounting principles or interpretations thereof;
|
•
|
future earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated earnings in countries where we have higher statutory tax rates; or
|
•
|
examinations by US federal, state or foreign jurisdictions that disagree with interpretations of tax rules and regulations in regards to positions taken on tax filings .
|
•
|
announcements of new products, services or technologies, commercial relationships, acquisitions or other events by us or our competitors;
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;
|
•
|
fluctuations in the trading volume of our shares or the size of our public float;
|
•
|
actual or anticipated changes or fluctuations in our results of operations;
|
•
|
whether our results of operations meet the expectations of securities analysts or investors;
|
•
|
actual or anticipated changes in the expectations of investors or securities analysts;
|
•
|
litigation or investigations involving us, our industry, or both;
|
•
|
regulatory developments in the United States, foreign countries or both;
|
•
|
general economic conditions and trends;
|
•
|
major catastrophic events;
|
•
|
sales of large blocks of our common stock; or
|
•
|
departures of key personnel.
|
•
|
a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
|
•
|
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preference and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
•
|
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
|
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
|
the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our Chief Executive Officer, our secretary, or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
|
•
|
the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;
|
•
|
the ability of our board of directors, by majority vote, to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and
|
•
|
advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or not to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
|
|
Fiscal Year 2015 Quarter Ended
|
|
Fiscal Year 2014 Quarter Ended
|
||||||||||||||||||||||||||||
|
March 31, 2015
|
|
June 30, 2015
|
|
September 30,
2015 |
|
December 31,
2015 |
|
March 31, 2014
|
|
June 30, 2014
|
|
September 30,
2014 |
|
December 31,
2014 |
||||||||||||||||
Low
|
$
|
3.96
|
|
|
$
|
4.18
|
|
|
$
|
4.98
|
|
|
$
|
5.68
|
|
|
$
|
14.01
|
|
|
$
|
10.63
|
|
|
$
|
9.11
|
|
|
$
|
3.93
|
|
High
|
$
|
5.58
|
|
|
$
|
7.38
|
|
|
$
|
7.40
|
|
|
$
|
8.30
|
|
|
$
|
16.21
|
|
|
$
|
15.22
|
|
|
$
|
13.70
|
|
|
$
|
8.66
|
|
|
March 21, 2014
|
|
March 31, 2014
|
|
June 30, 2014
|
|
September 30, 2014
|
|
December 31, 2014
|
|
March 31, 2015
|
|
June 30, 2015
|
|
September 30, 2015
|
|
December 31, 2015
|
A10 Networks., Inc.
|
100.00
|
|
92.78
|
|
82.05
|
|
56.20
|
|
26.90
|
|
26.71
|
|
39.73
|
|
36.95
|
|
40.47
|
NASDAQ Composite
|
100.00
|
|
98.18
|
|
103.07
|
|
105.06
|
|
110.74
|
|
114.59
|
|
116.6
|
|
108.03
|
|
117.08
|
Russell 3000
|
100.00
|
|
100.07
|
|
104.44
|
|
103.96
|
|
108.89
|
|
110.33
|
|
109.96
|
|
101.48
|
|
108.29
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
198,955
|
|
|
$
|
179,507
|
|
|
$
|
141,738
|
|
|
$
|
120,066
|
|
|
$
|
91,278
|
|
Cost of revenue
|
|
$
|
48,768
|
|
|
$
|
42,937
|
|
|
$
|
33,396
|
|
|
$
|
24,510
|
|
|
$
|
18,475
|
|
Gross profit
|
|
$
|
150,187
|
|
|
$
|
136,570
|
|
|
$
|
108,342
|
|
|
$
|
95,556
|
|
|
$
|
72,803
|
|
Income (loss) from operations
|
|
$
|
(38,446
|
)
|
|
$
|
(30,271
|
)
|
|
$
|
(22,843
|
)
|
|
$
|
(87,020
|
)
|
|
$
|
9,013
|
|
Net income (loss) attributable to common stockholders
|
|
$
|
(40,034
|
)
|
|
$
|
(35,870
|
)
|
|
$
|
(29,078
|
)
|
|
$
|
(90,150
|
)
|
|
$
|
7,304
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
98,117
|
|
|
$
|
91,905
|
|
|
$
|
20,793
|
|
|
$
|
23,867
|
|
|
$
|
19,048
|
|
Working capital (deficit)
|
|
$
|
91,413
|
|
|
$
|
100,656
|
|
|
$
|
15,122
|
|
|
$
|
(61,460
|
)
|
|
$
|
19,064
|
|
Total assets
|
|
$
|
192,551
|
|
|
$
|
186,980
|
|
|
$
|
93,794
|
|
|
$
|
76,794
|
|
|
$
|
55,433
|
|
Total debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
5,631
|
|
|
$
|
1,654
|
|
Deferred revenue, net-current and long-term
|
|
$
|
72,804
|
|
|
$
|
57,220
|
|
|
$
|
41,232
|
|
|
$
|
27,707
|
|
|
$
|
18,050
|
|
Redeemable convertible preferred stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible preferred stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,749
|
|
|
$
|
41,737
|
|
|
$
|
41,665
|
|
Total stockholders' equity (deficit)
|
|
$
|
80,068
|
|
|
$
|
96,565
|
|
|
$
|
(134,880
|
)
|
|
$
|
(111,892
|
)
|
|
$
|
(25,590
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
|
Years Ended December 31,
|
|
|
|
|
|||||||||||||||
|
2015
|
|
2014
|
|
Net Change
|
|||||||||||||||
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent
|
|||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
138,301
|
|
|
69.5
|
%
|
|
$
|
134,486
|
|
|
74.9
|
%
|
|
$
|
3,815
|
|
|
2.8
|
%
|
Services
|
60,654
|
|
|
30.5
|
%
|
|
45,021
|
|
|
25.1
|
%
|
|
15,633
|
|
|
34.7
|
%
|
|||
Total revenue
|
198,955
|
|
|
100.0
|
%
|
|
179,507
|
|
|
100.0
|
%
|
|
19,448
|
|
|
10.8
|
%
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Products
|
33,096
|
|
|
16.6
|
%
|
|
31,084
|
|
|
17.4
|
%
|
|
2,012
|
|
|
6.5
|
%
|
|||
Services
|
15,672
|
|
|
7.9
|
%
|
|
11,853
|
|
|
6.6
|
%
|
|
3,819
|
|
|
32.2
|
%
|
|||
Total cost of revenue
|
48,768
|
|
|
24.5
|
%
|
|
42,937
|
|
|
23.9
|
%
|
|
5,831
|
|
|
13.6
|
%
|
|||
Gross profit
|
150,187
|
|
|
75.5
|
%
|
|
136,570
|
|
|
76.1
|
%
|
|
13,617
|
|
|
10.0
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
104,531
|
|
|
52.5
|
%
|
|
96,837
|
|
|
53.9
|
%
|
|
7,694
|
|
|
7.9
|
%
|
|||
Research and development
|
54,843
|
|
|
27.6
|
%
|
|
49,903
|
|
|
27.8
|
%
|
|
4,940
|
|
|
9.9
|
%
|
|||
General and administrative
|
27,055
|
|
|
13.6
|
%
|
|
22,938
|
|
|
12.8
|
%
|
|
4,117
|
|
|
17.9
|
%
|
|||
Litigation expense (benefit)
|
2,204
|
|
|
1.1
|
%
|
|
(2,837
|
)
|
|
(1.6
|
)%
|
|
5,041
|
|
|
(177.7
|
)%
|
|||
Total operating expenses
|
188,633
|
|
|
94.8
|
%
|
|
166,841
|
|
|
92.8
|
%
|
|
21,792
|
|
|
13.1
|
%
|
|||
Loss from operations
|
(38,446
|
)
|
|
(19.3
|
)%
|
|
(30,271
|
)
|
|
(16.9
|
)%
|
|
(8,175
|
)
|
|
(27.0
|
)%
|
|||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(509
|
)
|
|
(0.3
|
)%
|
|
(1,028
|
)
|
|
(0.6
|
)%
|
|
519
|
|
|
50.5
|
%
|
|||
Interest income and other income (expense), net
|
(332
|
)
|
|
(0.2
|
)%
|
|
(1,914
|
)
|
|
(1.1
|
)%
|
|
1,582
|
|
|
82.7
|
%
|
|||
Total other expense, net
|
(841
|
)
|
|
(0.4
|
)%
|
|
(2,942
|
)
|
|
(1.6
|
)%
|
|
2,101
|
|
|
71.4
|
%
|
|||
Loss before provision for income taxes
|
(39,287
|
)
|
|
(19.7
|
)%
|
|
(33,213
|
)
|
|
(18.5
|
)%
|
|
(6,074
|
)
|
|
(18.3
|
)%
|
|||
Provision for income taxes
|
747
|
|
|
0.4
|
%
|
|
1,507
|
|
|
0.8
|
%
|
|
(760
|
)
|
|
(50.4
|
)%
|
|||
Net loss
|
$
|
(40,034
|
)
|
|
(20.1
|
)%
|
|
$
|
(34,720
|
)
|
|
(19.3
|
)%
|
|
$
|
(5,314
|
)
|
|
(15.3
|
)%
|
|
Years Ended December 31,
|
|
|
|
|
||||||||||||
|
2014
|
|
2013
|
|
Net Change
|
||||||||||||
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent of Total Revenue
|
|
Amount
|
|
Percent
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
$
|
134,486
|
|
|
74.9%
|
|
$
|
112,045
|
|
|
79.1%
|
|
$
|
22,441
|
|
|
20.0%
|
Services
|
45,021
|
|
|
25.1%
|
|
29,693
|
|
|
20.9%
|
|
15,328
|
|
|
51.6%
|
|||
Total revenue
|
179,507
|
|
|
100.0%
|
|
141,738
|
|
|
100.0%
|
|
37,769
|
|
|
26.6%
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
31,084
|
|
|
17.4%
|
|
25,284
|
|
|
17.8%
|
|
5,800
|
|
|
22.9%
|
|||
Services
|
11,853
|
|
|
6.6%
|
|
8,112
|
|
|
5.7%
|
|
3,741
|
|
|
46.1%
|
|||
Total cost of revenue
|
42,937
|
|
|
23.9%
|
|
33,396
|
|
|
23.6%
|
|
9,541
|
|
|
28.6%
|
|||
Gross profit
|
136,570
|
|
|
76.1%
|
|
108,342
|
|
|
76.4%
|
|
28,228
|
|
|
26.1%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
96,837
|
|
|
53.9%
|
|
70,756
|
|
|
49.9%
|
|
26,081
|
|
|
36.9%
|
|||
Research and development
|
49,903
|
|
|
27.8%
|
|
33,348
|
|
|
23.5%
|
|
16,555
|
|
|
49.6%
|
|||
General and administrative
|
22,938
|
|
|
12.8%
|
|
15,556
|
|
|
11.0%
|
|
7,382
|
|
|
47.5%
|
|||
Litigation expense (benefit)
|
(2,837
|
)
|
|
(1.6)%
|
|
11,525
|
|
|
8.1%
|
|
(14,362
|
)
|
|
(124.6)%
|
|||
Total operating expenses
|
166,841
|
|
|
92.8%
|
|
131,185
|
|
|
92.6%
|
|
35,656
|
|
|
27.2%
|
|||
Loss from operations
|
(30,271
|
)
|
|
(16.9)%
|
|
(22,843
|
)
|
|
(16.1)%
|
|
(7,428
|
)
|
|
(32.5)%
|
|||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(1,028
|
)
|
|
(0.6)%
|
|
(1,495
|
)
|
|
(1.1)%
|
|
467
|
|
|
31.2%
|
|||
Interest income and other income (expense), net
|
(1,914
|
)
|
|
(1.1)%
|
|
(2,118
|
)
|
|
(1.5)%
|
|
204
|
|
|
9.6%
|
|||
Total other expense, net
|
(2,942
|
)
|
|
(1.6)%
|
|
(3,613
|
)
|
|
(2.5)%
|
|
671
|
|
|
18.6%
|
|||
Loss before provision for income taxes
|
(33,213
|
)
|
|
(18.5)%
|
|
(26,456
|
)
|
|
(18.7)%
|
|
(6,757
|
)
|
|
(25.5)%
|
|||
Provision for income taxes
|
1,507
|
|
|
0.8%
|
|
640
|
|
|
0.5%
|
|
867
|
|
|
135.5%
|
|||
Net loss
|
$
|
(34,720
|
)
|
|
(19.3)%
|
|
$
|
(27,096
|
)
|
|
(19.1)
|
|
$
|
(7,624
|
)
|
|
(28.1)%
|
|
Years Ended December 31,
|
|
Net Change
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
138,301
|
|
|
$
|
134,486
|
|
|
$
|
3,815
|
|
|
2.8%
|
Services
|
60,654
|
|
|
45,021
|
|
|
15,633
|
|
|
34.7%
|
|||
Total revenue
|
$
|
198,955
|
|
|
$
|
179,507
|
|
|
$
|
19,448
|
|
|
10.8%
|
Revenue by geographic location:
|
|
|
|
|
|
|
|
|
|
||||
United States
|
$
|
106,842
|
|
|
$
|
85,325
|
|
|
$
|
21,517
|
|
|
25.2%
|
Japan
|
35,636
|
|
|
45,787
|
|
|
(10,151
|
)
|
|
(22.2)%
|
|||
Asia Pacific, excluding Japan
|
23,847
|
|
|
20,434
|
|
|
3,413
|
|
|
16.7%
|
|||
EMEA
|
27,193
|
|
|
19,254
|
|
|
7,939
|
|
|
41.2%
|
|||
Other
|
5,437
|
|
|
8,707
|
|
|
(3,270
|
)
|
|
(37.6)%
|
|||
Total revenue
|
$
|
198,955
|
|
|
$
|
179,507
|
|
|
$
|
19,448
|
|
|
10.8%
|
|
Years Ended December 31,
|
|
Net Change
|
||||||||||
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
||||||
Revenue:
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
134,486
|
|
|
$
|
112,045
|
|
|
$
|
22,441
|
|
|
20.0%
|
Services
|
45,021
|
|
|
29,693
|
|
|
15,328
|
|
|
51.6%
|
|||
Total revenue
|
$
|
179,507
|
|
|
141,738
|
|
|
$
|
37,769
|
|
|
26.6%
|
|
Revenue by geographic location:
|
|
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
85,325
|
|
|
$
|
68,127
|
|
|
$
|
17,198
|
|
|
25.2%
|
Japan
|
45,787
|
|
|
39,581
|
|
|
6,206
|
|
|
15.7%
|
|||
Asia Pacific, excluding Japan
|
20,434
|
|
|
15,052
|
|
|
5,382
|
|
|
35.8%
|
|||
EMEA
|
19,254
|
|
|
12,087
|
|
|
7,167
|
|
|
59.3%
|
|||
Other
|
8,707
|
|
|
6,891
|
|
|
1,816
|
|
|
26.4%
|
|||
Total revenue
|
$
|
179,507
|
|
|
$
|
141,738
|
|
|
$
|
37,769
|
|
|
26.6%
|
|
Years Ended December 31,
|
|
Net Change
|
|||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
|||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
33,096
|
|
|
$
|
31,084
|
|
|
$
|
2,012
|
|
|
6.5
|
%
|
Services
|
15,672
|
|
|
11,853
|
|
|
3,819
|
|
|
32.2
|
%
|
|||
Total cost of revenue
|
$
|
48,768
|
|
|
$
|
42,937
|
|
|
$
|
5,831
|
|
|
13.6
|
%
|
|
Years Ended December 31,
|
|
Net Change
|
|||||||||||
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
|||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Products
|
$
|
31,084
|
|
|
$
|
25,284
|
|
|
$
|
5,800
|
|
|
22.9
|
%
|
Services
|
11,853
|
|
|
8,112
|
|
|
3,741
|
|
|
46.1
|
%
|
|||
Total cost of revenue
|
$
|
42,937
|
|
|
$
|
33,396
|
|
|
$
|
9,541
|
|
|
28.6
|
%
|
|
Years Ended December 31,
|
|
|
||||||||||||||
|
2015
|
|
2014
|
|
Net Change
|
||||||||||||
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
105,205
|
|
|
76.1%
|
|
$
|
103,402
|
|
|
76.9%
|
|
$
|
1,803
|
|
|
(0.8)%
|
Services
|
44,982
|
|
|
74.2%
|
|
33,168
|
|
|
73.7%
|
|
11,814
|
|
|
0.5%
|
|||
Total gross profit
|
$
|
150,187
|
|
|
75.5%
|
|
$
|
136,570
|
|
|
76.1%
|
|
$
|
13,617
|
|
|
(0.6)%
|
|
Years Ended December 31,
|
|
|
||||||||||||||
|
2014
|
|
2013
|
|
Net Change
|
||||||||||||
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
|
Amount
|
|
Gross Margin
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
103,402
|
|
|
76.9%
|
|
$
|
86,761
|
|
|
77.4%
|
|
$
|
16,641
|
|
|
(0.5)%
|
Services
|
33,168
|
|
|
73.7%
|
|
21,581
|
|
|
72.7%
|
|
11,587
|
|
|
1.0%
|
|||
Total gross profit
|
$
|
136,570
|
|
|
76.1%
|
|
$
|
108,342
|
|
|
76.4%
|
|
$
|
28,228
|
|
|
(0.5)%
|
|
Years Ended December 31,
|
|
Net Change
|
||||||||||
|
2015
|
|
2014
|
|
Amount
|
|
Percent
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
$
|
104,531
|
|
|
$
|
96,837
|
|
|
$
|
7,694
|
|
|
7.9%
|
Research and development
|
54,843
|
|
|
49,903
|
|
|
4,940
|
|
|
9.9%
|
|||
General and administrative
|
27,055
|
|
|
22,938
|
|
|
4,117
|
|
|
17.9%
|
|||
Litigation expense (benefit)
|
2,204
|
|
|
(2,837
|
)
|
|
5,041
|
|
|
(177.7)%
|
|||
Total operating expenses
|
$
|
188,633
|
|
|
$
|
166,841
|
|
|
$
|
21,792
|
|
|
13.1%
|
|
Years Ended December 31,
|
|
Net Change
|
||||||||||
|
2014
|
|
2013
|
|
Amount
|
|
Percent
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
$
|
96,837
|
|
|
$
|
70,756
|
|
|
$
|
26,081
|
|
|
36.9%
|
Research and development
|
49,903
|
|
|
33,348
|
|
|
16,555
|
|
|
49.6%
|
|||
General and administrative
|
22,938
|
|
|
15,556
|
|
|
7,382
|
|
|
47.5%
|
|||
Litigation expense (benefit)
|
(2,837
|
)
|
|
11,525
|
|
|
(14,362
|
)
|
|
(124.6)%
|
|||
Total operating expenses
|
$
|
166,841
|
|
|
$
|
131,185
|
|
|
$
|
35,656
|
|
|
27.2%
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities
|
$
|
3,391
|
|
|
$
|
(30,538
|
)
|
|
$
|
(25,133
|
)
|
Investing activities
|
(3,477
|
)
|
|
(6,100
|
)
|
|
(2,993
|
)
|
|||
Financing activities
|
6,298
|
|
|
107,750
|
|
|
25,052
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
6,212
|
|
|
$
|
71,112
|
|
|
$
|
(3,074
|
)
|
|
Total
|
|
Less Than
1 Year
|
|
1 to 3 Years
|
|
3 to 5 Years
|
||||||||
Operating lease obligations
|
$
|
8,371
|
|
|
$
|
2,525
|
|
|
$
|
3,874
|
|
|
$
|
1,972
|
|
Minimum purchase obligations
|
6,113
|
|
|
6,113
|
|
|
—
|
|
|
—
|
|
||||
Technology licensing agreement
|
560
|
|
|
140
|
|
|
280
|
|
|
$
|
140
|
|
|||
Capital lease obligations
|
287
|
|
|
105
|
|
|
182
|
|
|
—
|
|
||||
Total
|
$
|
15,331
|
|
|
$
|
8,883
|
|
|
$
|
4,336
|
|
|
$
|
2,112
|
|
•
|
Persuasive evidence of an arrangement exists.
Evidence of an arrangement consists of a purchase order issued pursuant to the terms and conditions of a master sales agreement.
|
•
|
Delivery or performance has occurred.
We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We do not have significant obligations for future performance, such as customer acceptance provisions, rights of return, or pricing credits, associated with our sales.
|
•
|
The sales price is fixed or determinable.
We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. Standard payment terms to customers range from 30 to 90 days.
|
•
|
Collection is reasonably assured.
We assess probability of collection on a customer-by-customer basis. Our customers are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services.
|
|
For the Three Months Ended
|
||||||||||||||
|
March 31,
2015
|
|
June 30,
2015
|
|
September 30, 2015
|
|
December 31, 2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
$
|
30,516
|
|
|
$
|
33,331
|
|
|
$
|
34,990
|
|
|
$
|
39,464
|
|
Services
|
13,501
|
|
|
14,205
|
|
|
15,788
|
|
|
17,160
|
|
||||
Total revenue
|
44,017
|
|
|
47,536
|
|
|
50,778
|
|
|
56,624
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
7,063
|
|
|
7,909
|
|
|
8,529
|
|
|
9,595
|
|
||||
Services
|
3,723
|
|
|
3,692
|
|
|
4,186
|
|
|
4,071
|
|
||||
Total cost of revenue
|
10,786
|
|
|
11,601
|
|
|
12,715
|
|
|
13,666
|
|
||||
Gross profit
|
33,231
|
|
|
35,935
|
|
|
38,063
|
|
|
42,958
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
24,522
|
|
|
24,962
|
|
|
25,774
|
|
|
29,273
|
|
||||
Research and development
|
14,309
|
|
|
13,671
|
|
|
13,562
|
|
|
13,301
|
|
||||
General and administrative
|
7,527
|
|
|
5,703
|
|
|
6,892
|
|
|
6,933
|
|
||||
Litigation expense
|
445
|
|
|
1,025
|
|
|
469
|
|
|
265
|
|
||||
Total operating expenses
|
46,803
|
|
|
45,361
|
|
|
46,697
|
|
|
49,772
|
|
||||
Loss from operations
|
(13,572
|
)
|
|
(9,426
|
)
|
|
(8,634
|
)
|
|
(6,814
|
)
|
||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(127
|
)
|
|
(104
|
)
|
|
(151
|
)
|
|
(127
|
)
|
||||
Interest income and other income (expense), net
|
27
|
|
|
(216
|
)
|
|
22
|
|
|
(165
|
)
|
||||
Total other expense, net
|
(100
|
)
|
|
(320
|
)
|
|
(129
|
)
|
|
(292
|
)
|
||||
Loss before provision for income taxes
|
(13,672
|
)
|
|
(9,746
|
)
|
|
(8,763
|
)
|
|
(7,106
|
)
|
||||
Provision for income taxes
|
62
|
|
|
231
|
|
|
204
|
|
|
250
|
|
||||
Net loss
|
$
|
(13,734
|
)
|
|
$
|
(9,977
|
)
|
|
$
|
(8,967
|
)
|
|
$
|
(7,356
|
)
|
|
For the Three Months Ended
|
||||||||||||||
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30, 2014
|
|
December 31, 2014
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
$
|
36,417
|
|
|
$
|
34,122
|
|
|
$
|
31,601
|
|
|
$
|
32,346
|
|
Services
|
9,328
|
|
|
11,010
|
|
|
11,827
|
|
|
12,856
|
|
||||
Total revenue
|
45,745
|
|
|
45,132
|
|
|
43,428
|
|
|
45,202
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Products
|
7,427
|
|
|
7,410
|
|
|
8,818
|
|
|
7,429
|
|
||||
Services
|
2,626
|
|
|
2,930
|
|
|
2,935
|
|
|
3,362
|
|
||||
Total cost of revenue
|
10,053
|
|
|
10,340
|
|
|
11,753
|
|
|
10,791
|
|
||||
Gross profit
|
35,692
|
|
|
34,792
|
|
|
31,675
|
|
|
34,411
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
21,563
|
|
|
23,975
|
|
|
24,651
|
|
|
26,648
|
|
||||
Research and development
|
11,205
|
|
|
11,869
|
|
|
12,342
|
|
|
14,487
|
|
||||
General and administrative
|
5,363
|
|
|
5,531
|
|
|
5,141
|
|
|
6,903
|
|
||||
Litigation expense (benefit)
|
1,846
|
|
|
(5,859
|
)
|
|
910
|
|
|
266
|
|
||||
Total operating expenses
|
39,977
|
|
|
35,516
|
|
|
43,044
|
|
|
48,304
|
|
||||
Loss from operations
|
(4,285
|
)
|
|
(724
|
)
|
|
(11,369
|
)
|
|
(13,893
|
)
|
||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(587
|
)
|
|
(125
|
)
|
|
(192
|
)
|
|
(124
|
)
|
||||
Interest income and other income (expense), net
|
(25
|
)
|
|
(138
|
)
|
|
(510
|
)
|
|
(1,241
|
)
|
||||
Total other expense, net
|
(612
|
)
|
|
(263
|
)
|
|
(702
|
)
|
|
(1,365
|
)
|
||||
Loss before provision for income taxes
|
(4,897
|
)
|
|
(987
|
)
|
|
(12,071
|
)
|
|
(15,258
|
)
|
||||
Provision for income taxes
|
205
|
|
|
309
|
|
|
233
|
|
|
760
|
|
||||
Net loss
|
(5,102
|
)
|
|
(1,296
|
)
|
|
(12,304
|
)
|
|
(16,018
|
)
|
||||
Accretion of redeemable convertible preferred stock dividend
|
(1,150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss attributable to common stockholders
|
$
|
(6,252
|
)
|
|
$
|
(1,296
|
)
|
|
$
|
(12,304
|
)
|
|
$
|
(16,018
|
)
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
98,117
|
|
|
$
|
91,905
|
|
Accounts receivable, net of allowances of $4,067 and $3,246 as of December 31, 2015 and December 31, 2014
|
57,778
|
|
|
54,003
|
|
||
Inventory
|
18,291
|
|
|
20,701
|
|
||
Prepaid expenses and other current assets
|
5,064
|
|
|
4,732
|
|
||
Total current assets
|
179,250
|
|
|
171,341
|
|
||
Property and equipment, net
|
8,903
|
|
|
10,780
|
|
||
Other non-current assets
|
4,398
|
|
|
4,859
|
|
||
Total Assets
|
$
|
192,551
|
|
|
$
|
186,980
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
10,508
|
|
|
$
|
8,994
|
|
Accrued liabilities
|
27,757
|
|
|
22,435
|
|
||
Deferred revenue, current
|
49,572
|
|
|
39,256
|
|
||
Total current liabilities
|
87,837
|
|
|
70,685
|
|
||
Deferred revenue, non-current
|
23,232
|
|
|
17,964
|
|
||
Other non-current liabilities
|
1,414
|
|
|
1,766
|
|
||
Total Liabilities
|
112,483
|
|
|
90,415
|
|
||
Commitments and contingencies (Note 5)
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|||||||
Common stock, par value $0.00001 — 500,000 shares authorized as of December 31, 2015 and December 31, 2014; 64,172 and 61,377 shares issued and outstanding as of December 31, 2015 and December 31, 2014
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
301,886
|
|
|
278,349
|
|
||
Accumulated deficit
|
(221,819
|
)
|
|
(181,785
|
)
|
||
Total Stockholders' Equity
|
80,068
|
|
|
96,565
|
|
||
Total Liabilities And Stockholders' Equity
|
$
|
192,551
|
|
|
$
|
186,980
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||
Products
|
$
|
138,301
|
|
|
$
|
134,486
|
|
|
$
|
112,045
|
|
Services
|
60,654
|
|
|
45,021
|
|
|
29,693
|
|
|||
Total revenue
|
198,955
|
|
|
179,507
|
|
|
141,738
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|||
Products
|
33,096
|
|
|
31,084
|
|
|
25,284
|
|
|||
Services
|
15,672
|
|
|
11,853
|
|
|
8,112
|
|
|||
Total cost of revenue
|
48,768
|
|
|
42,937
|
|
|
33,396
|
|
|||
Gross profit
|
150,187
|
|
|
136,570
|
|
|
108,342
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
104,531
|
|
|
96,837
|
|
|
70,756
|
|
|||
Research and development
|
54,843
|
|
|
49,903
|
|
|
33,348
|
|
|||
General and administrative
|
27,055
|
|
|
22,938
|
|
|
15,556
|
|
|||
Litigation expense (benefit)
|
2,204
|
|
|
(2,837
|
)
|
|
11,525
|
|
|||
Total operating expenses
|
188,633
|
|
|
166,841
|
|
|
131,185
|
|
|||
Loss from operations
|
(38,446
|
)
|
|
(30,271
|
)
|
|
(22,843
|
)
|
|||
Other expense, net:
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
(509
|
)
|
|
(1,028
|
)
|
|
(1,495
|
)
|
|||
Interest income and other income (expense), net
|
(332
|
)
|
|
(1,914
|
)
|
|
(2,118
|
)
|
|||
Total other expense, net
|
(841
|
)
|
|
(2,942
|
)
|
|
(3,613
|
)
|
|||
Loss before provision for income taxes
|
(39,287
|
)
|
|
(33,213
|
)
|
|
(26,456
|
)
|
|||
Provision for income taxes
|
747
|
|
|
1,507
|
|
|
640
|
|
|||
Net loss
|
$
|
(40,034
|
)
|
|
$
|
(34,720
|
)
|
|
$
|
(27,096
|
)
|
Accretion of redeemable convertible preferred stock dividend
|
—
|
|
|
(1,150
|
)
|
|
(1,982
|
)
|
|||
Net loss attributable to common stockholders
|
$
|
(40,034
|
)
|
|
$
|
(35,870
|
)
|
|
$
|
(29,078
|
)
|
Net loss per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|||
Basic and Diluted
|
$
|
(0.64
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(3.14
|
)
|
Weighted-average shares used in computing net loss per share attributable to common stockholders
|
|
|
|
|
|
|
|
|
|||
Basic and diluted
|
62,428
|
|
|
48,682
|
|
|
9,262
|
|
|
Redeemable Convertible Preferred Stock
|
|
Convertible
Preferred Stock
|
|
Common Stock
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity (Deficit)
|
||||||||||||
Balance at January 1, 2013
|
—
|
|
|
—
|
|
|
30,122
|
|
|
41,737
|
|
|
9,246
|
|
|
—
|
|
|
$
|
8,077
|
|
|
$
|
(119,969
|
)
|
|
$
|
(111,892
|
)
|
Stock based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,282
|
|
|
—
|
|
|
4,282
|
|
|||
Issuance of Series D redeemable convertible preferred stock, net of issuance costs
of $556 |
80
|
|
|
79,444
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Accretion of Series D redeemable convertible preferred stock dividend
|
—
|
|
|
1,982
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,982
|
)
|
|
—
|
|
|
(1,982
|
)
|
|||
Issuance of Series C convertible preferred stock upon exercise of Series C convertible preferred stock warrants for cash
|
—
|
|
|
—
|
|
|
447
|
|
|
3,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock issued under employee equity incentive plans, net of unvested portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
822
|
|
|
—
|
|
|
1,174
|
|
|
—
|
|
|
1,174
|
|
|||
Vesting of early exercise stock options, net of repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
634
|
|
|
—
|
|
|
634
|
|
|||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,096
|
)
|
|
(27,096
|
)
|
|||
Balance at December 31, 2013
|
80
|
|
|
81,426
|
|
|
30,569
|
|
|
44,749
|
|
|
10,032
|
|
|
—
|
|
|
$
|
12,185
|
|
|
$
|
(147,065
|
)
|
|
$
|
(134,880
|
)
|
Stock based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,359
|
|
|
|
|
12,359
|
|
||||
Accretion of Series D redeemable convertible preferred stock dividend
|
—
|
|
|
1,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,150
|
)
|
|
—
|
|
|
(1,150
|
)
|
|||
Issuance of common stock in connection with initial public offering net of offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,000
|
|
|
—
|
|
|
120,286
|
|
|
—
|
|
|
120,286
|
|
|||
Conversion of preferred stock to common stock in connection with initial public offering
|
(80
|
)
|
|
(82,576
|
)
|
|
(30,569
|
)
|
|
(44,749
|
)
|
|
39,997
|
|
|
1
|
|
|
127,324
|
|
|
—
|
|
|
127,325
|
|
|||
Common stock issued under employee equity incentive plans, net of unvested portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,352
|
|
|
—
|
|
|
6,574
|
|
|
—
|
|
|
6,574
|
|
|||
Vesting of early exercise stock options, net of repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
771
|
|
|
—
|
|
|
771
|
|
|||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,720
|
)
|
|
(34,720
|
)
|
|||
Balance at December 31, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,377
|
|
|
1
|
|
|
$
|
278,349
|
|
|
$
|
(181,785
|
)
|
|
$
|
96,565
|
|
Stock based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,861
|
|
|
—
|
|
|
16,861
|
|
|||
Common stock issued under employee equity incentive plans, net of unvested portion
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,700
|
|
|
—
|
|
|
6,232
|
|
|
—
|
|
|
6,232
|
|
|||
Vesting of early exercise stock options, net of repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
444
|
|
|
—
|
|
|
444
|
|
|||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,034
|
)
|
|
(40,034
|
)
|
|||
Balance at December 31, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,172
|
|
|
1
|
|
|
$
|
301,886
|
|
|
$
|
(221,819
|
)
|
|
$
|
80,068
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(40,034
|
)
|
|
$
|
(34,720
|
)
|
|
$
|
(27,096
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
8,716
|
|
|
10,121
|
|
|
7,080
|
|
|||
Stock-based compensation
|
16,861
|
|
|
12,359
|
|
|
4,282
|
|
|||
Gain on settlement of contractual liability (Note 5)
|
—
|
|
|
(6,993
|
)
|
|
—
|
|
|||
Provision for doubtful accounts and sales returns
|
2,531
|
|
|
935
|
|
|
1,788
|
|
|||
Other non cash items
|
(82
|
)
|
|
32
|
|
|
2
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(5,977
|
)
|
|
(17,281
|
)
|
|
(15,549
|
)
|
|||
Inventory
|
(430
|
)
|
|
(8,914
|
)
|
|
(8,489
|
)
|
|||
Prepaid expenses and other assets
|
(405
|
)
|
|
(3,017
|
)
|
|
1,588
|
|
|||
Accounts payable
|
1,109
|
|
|
903
|
|
|
2,495
|
|
|||
Accrued liabilities
|
5,345
|
|
|
6,724
|
|
|
2,133
|
|
|||
Accrued litigation expenses
|
6
|
|
|
(6,066
|
)
|
|
(6,797
|
)
|
|||
Deferred revenue
|
15,584
|
|
|
15,989
|
|
|
13,525
|
|
|||
Other
|
167
|
|
|
(610
|
)
|
|
(95
|
)
|
|||
Net cash provided by (used in) operating activities
|
3,391
|
|
|
(30,538
|
)
|
|
(25,133
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(3,477
|
)
|
|
(6,100
|
)
|
|
(2,993
|
)
|
|||
Net cash used in investing activities
|
(3,477
|
)
|
|
(6,100
|
)
|
|
(2,993
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock under employee equity incentive plans, net of repurchases
|
6,019
|
|
|
7,030
|
|
|
2,392
|
|
|||
Proceeds from initial public offering, net of offering costs
|
—
|
|
|
121,017
|
|
|
(656
|
)
|
|||
Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs
|
—
|
|
|
—
|
|
|
79,444
|
|
|||
Principal payments on convertible promissory note in relation to settlement of litigation
|
—
|
|
|
—
|
|
|
(70,000
|
)
|
|||
Proceeds from revolving credit facility
|
—
|
|
|
—
|
|
|
33,988
|
|
|||
Principal payments on revolving credit facility
|
—
|
|
|
(20,000
|
)
|
|
(20,000
|
)
|
|||
Principal payments on term loan
|
—
|
|
|
—
|
|
|
(631
|
)
|
|||
Proceeds from exercise of convertible preferred stock warrants
|
—
|
|
|
—
|
|
|
813
|
|
|||
Other
|
279
|
|
|
(297
|
)
|
|
(298
|
)
|
|||
Net cash provided by financing activities
|
6,298
|
|
|
107,750
|
|
|
25,052
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
6,212
|
|
|
71,112
|
|
|
(3,074
|
)
|
|||
Cash and cash equivalents—beginning of period
|
91,905
|
|
|
20,793
|
|
|
23,867
|
|
|||
Cash and cash equivalents—end of period
|
$
|
98,117
|
|
|
$
|
91,905
|
|
|
$
|
20,793
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for income taxes, net of refunds
|
$
|
980
|
|
|
$
|
1,108
|
|
|
$
|
698
|
|
Cash paid for interest
|
$
|
170
|
|
|
$
|
503
|
|
|
$
|
1,208
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Inventory transfers to property and equipment
|
$
|
2,840
|
|
|
$
|
5,379
|
|
|
$
|
5,638
|
|
Vesting of early exercised stock options
|
$
|
444
|
|
|
$
|
771
|
|
|
$
|
654
|
|
Purchases of property and equipment included in accounts payable and accrued liabilities
|
$
|
486
|
|
|
$
|
78
|
|
|
$
|
167
|
|
Conversion of preferred stock into common stock
|
$
|
—
|
|
|
$
|
127,325
|
|
|
$
|
—
|
|
Accretion of Series D redeemable convertible preferred stock
|
$
|
—
|
|
|
$
|
1,150
|
|
|
$
|
1,982
|
|
Costs related to the initial public offering included in accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
1,776
|
|
Issuance of convertible promissory note in relation to settlement of litigation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,000
|
|
Reclassification of the convertible preferred stock warrant liability to additional paid-in
capital upon the exercise of the convertible preferred stock warrants |
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,199
|
|
|
•
|
Persuasive evidence of an arrangement exists.
Evidence of an arrangement consists of a purchase order issued pursuant to the terms and conditions of a master sales agreement.
|
•
|
Delivery or performance has occurred.
We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We do not have significant obligations for future performance, such as customer acceptance provisions, rights of return, or pricing credits, associated with our sales.
|
•
|
The sales price is fixed or determinable.
We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. Standard payment terms to customers range from 30 to 90 days.
|
•
|
Collection is reasonably assured.
We assess probability of collection on a customer-by-customer basis. Our customers are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services.
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
71,081
|
|
|
$
|
71,081
|
|
|
$
|
51,047
|
|
|
$
|
51,047
|
|
|
December 31, 2015
|
December 31, 2014
|
|
December 31, 2013
|
|||||||
Allowance for doubtful accounts, beginning balance
|
$
|
1,904
|
|
|
$
|
1,836
|
|
|
$
|
1,494
|
|
Charged to expenses
|
1,590
|
|
|
76
|
|
|
1,068
|
|
|||
Write-offs
|
(607
|
)
|
|
(8
|
)
|
|
(726
|
)
|
|||
Allowance for doubtful accounts, ending balance
|
$
|
2,887
|
|
|
$
|
1,904
|
|
|
$
|
1,836
|
|
|
December 31, 2015
|
December 31, 2014
|
December 31, 2013
|
||||||||
Sales return reserve, beginning balance
|
$
|
1,342
|
|
|
$
|
902
|
|
|
$
|
500
|
|
Charged to revenue
|
940
|
|
|
858
|
|
|
720
|
|
|||
Utilization
|
(1,102
|
)
|
|
(418
|
)
|
|
(318
|
)
|
|||
Sales return reserve, ending balance
|
$
|
1,180
|
|
|
$
|
1,342
|
|
|
$
|
902
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Raw materials
|
$
|
9,418
|
|
|
$
|
9,922
|
|
Finished goods
|
8,873
|
|
|
10,779
|
|
||
Total inventory
|
$
|
18,291
|
|
|
$
|
20,701
|
|
|
Estimated Useful Life
(in Years)
|
December 31,
2015 |
|
December 31,
2014 |
||||
Equipment
|
1-3
|
$
|
35,836
|
|
|
$
|
30,486
|
|
Software
|
1-3
|
3,548
|
|
|
3,197
|
|
||
Leasehold improvements
|
Lesser of the term of the lease or the estimated useful life
|
2,492
|
|
|
1,780
|
|
||
Furniture and fixtures
|
3
|
864
|
|
|
860
|
|
||
Construction in progress
|
—
|
83
|
|
|
201
|
|
||
Property and equipment, gross
|
|
42,823
|
|
|
36,524
|
|
||
Less: accumulated depreciation and amortization
|
|
(33,920
|
)
|
|
(25,744
|
)
|
||
Total property and equipment, net
|
|
$
|
8,903
|
|
|
$
|
10,780
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Deferred revenue:
|
|
|
|
||||
Products
|
$
|
3,233
|
|
|
$
|
2,379
|
|
Services
|
69,571
|
|
|
54,841
|
|
||
Total deferred revenue
|
72,804
|
|
|
57,220
|
|
||
Less: current portion
|
(49,572
|
)
|
|
(39,256
|
)
|
||
Non-current portion
|
$
|
23,232
|
|
|
$
|
17,964
|
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
Accrued compensation and benefits
|
$
|
18,134
|
|
|
$
|
14,447
|
|
Accrued tax liabilities
|
4,520
|
|
|
2,554
|
|
||
Other
|
5,103
|
|
|
5,434
|
|
||
Total accrued liabilities
|
$
|
27,757
|
|
|
$
|
22,435
|
|
Year Ending December 31,
|
|
Minimum Future Lease Payments For Operating Lease
|
|
Capital Lease Obligations
|
|
Purchase Commitments
|
|
Technology Licensing Agreements
|
|
Total
|
||||||||||
2016
|
|
$
|
2,525
|
|
|
$
|
105
|
|
|
$
|
6,113
|
|
|
$
|
140
|
|
|
$
|
8,883
|
|
2017
|
|
2,033
|
|
|
105
|
|
|
—
|
|
|
140
|
|
|
2,278
|
|
|||||
2018
|
|
1,841
|
|
|
77
|
|
|
—
|
|
|
140
|
|
|
2,058
|
|
|||||
2019
|
|
1,684
|
|
|
|
|
—
|
|
|
140
|
|
|
1,824
|
|
||||||
2020
|
|
288
|
|
|
|
|
—
|
|
|
—
|
|
|
288
|
|
||||||
|
|
$
|
8,371
|
|
|
$
|
287
|
|
|
$
|
6,113
|
|
|
$
|
560
|
|
|
$
|
15,331
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Stock-based compensation by type of award:
|
|
|
|
|
|
||||||
Stock options
|
$
|
5,565
|
|
|
$
|
5,852
|
|
|
$
|
4,282
|
|
Restricted stock units
|
8,871
|
|
|
3,217
|
|
|
—
|
|
|||
Employee stock purchase plan
|
2,425
|
|
|
3,290
|
|
|
—
|
|
|||
|
$
|
16,861
|
|
|
$
|
12,359
|
|
|
$
|
4,282
|
|
|
|
|
|
|
|
||||||
Stock-based compensation by category of expense:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
1,533
|
|
|
$
|
1,063
|
|
|
$
|
162
|
|
Sales and marketing
|
7,735
|
|
|
5,829
|
|
|
2,228
|
|
|||
Research and development
|
5,437
|
|
|
3,932
|
|
|
1,356
|
|
|||
General and administrative
|
2,156
|
|
|
1,535
|
|
|
536
|
|
|||
Total stock-based compensation
|
$
|
16,861
|
|
|
$
|
12,359
|
|
|
$
|
4,282
|
|
•
|
Expected Term
.
We estimate the expected life of options based on an analysis of our historical experience of employee exercise and post-vesting termination behavior considered in relation to the contractual life of the option. The expected term for the 2014 Purchase Plan is based on the term of the purchase period.
|
•
|
Risk-Free Interest Rate
.
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected terms of stock options and shares to be issued under the 2014 Purchase Plan.
|
•
|
Expected Volatility
.
Due to the limited trading history of our own common stock, we determined the share price volatility factor based on a combination of the historical volatility of our own common stock and the historical volatility of our peer group.
|
•
|
Dividend Rate
.
The expected dividend was assumed to be zero as we have never paid dividends and have no current plans to do so.
|
|
|
Number of Shares Underlying Outstanding Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding as of December 31, 2014
|
|
11,084
|
|
|
5.18
|
|
|
7.9
|
|
|
|||
Granted
|
|
409
|
|
|
$
|
4.84
|
|
|
|
|
|
|
|
Exercised
|
|
(752
|
)
|
|
$
|
3.07
|
|
|
|
|
|
|
|
Canceled (1)
|
|
(1,450
|
)
|
|
$
|
8.76
|
|
|
|
|
|
|
|
Outstanding as of December 31, 2015
|
|
9,291
|
|
|
$
|
4.78
|
|
|
7.0
|
|
$
|
20,975
|
|
Vested and expected to vest as of December 31, 2015
|
|
8,989
|
|
|
$
|
4.76
|
|
|
6.9
|
|
$
|
20,464
|
|
Vested and exercisable as of December 31, 2015
|
|
5,676
|
|
|
$
|
4.19
|
|
|
6.1
|
|
$
|
15,727
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Total fair value of options granted
|
$
|
869
|
|
|
$
|
11,683
|
|
|
$
|
13,866
|
|
Weighted average fair value of options granted
|
$
|
2.13
|
|
|
$
|
2.79
|
|
|
$
|
3.28
|
|
Intrinsic value of options exercised
|
$
|
2,299
|
|
|
$
|
14,863
|
|
|
$
|
3,390
|
|
|
Years Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Expected term (in years)
|
4.80
|
|
4.82
|
|
6.02-6.08
|
Risk-free interest rate
|
1.60%
|
|
1.80%
|
|
1.12%-1.76%
|
Expected volatility
|
50%
|
|
41%
|
|
46%
|
Dividend rate
|
—%
|
|
—%
|
|
—%
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Remaining Service Period (Years)
|
|
Aggregated Intrinsic Value
|
|||||
Outstanding as of December 31, 2014
|
2,388
|
|
|
$
|
8.97
|
|
|
|
|
|
||
Granted
|
1,758
|
|
|
$
|
5.95
|
|
|
|
|
|
||
Released
|
(845
|
)
|
|
$
|
9.78
|
|
|
|
|
|
||
Canceled
|
(429
|
)
|
|
$
|
8.98
|
|
|
|
|
|
||
Outstanding as of December 31, 2015
|
2,872
|
|
|
$
|
6.88
|
|
|
1.6
|
|
$
|
18,840
|
|
|
Years Ended December 31,
|
||
|
2015
|
|
2014
|
Expected term (in years)
|
2.72
|
|
2.82
|
Risk-free interest rate
|
1.17%
|
|
1.40%
|
Expected volatility
|
35.2%
|
|
36.2%
|
Dividend rate
|
—%
|
|
—%
|
|
Years Ended December 31,
|
||
|
2015
|
|
2014
|
Expected term (in years)
|
1.3
|
|
1.3
|
Risk-free interest rate
|
0.48%
|
|
0.26%
|
Expected volatility
|
40.7%
|
|
27.4%
|
Dividend rate
|
—%
|
|
—%
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Basic and diluted net loss per share attributable to common stockholders
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss attributable to common stockholders
|
$
|
(40,034
|
)
|
|
$
|
(35,870
|
)
|
|
$
|
(29,078
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares outstanding - basic
|
62,428
|
|
|
48,682
|
|
|
9,262
|
|
|||
Effect of dilutive potential common shares
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted-average shares outstanding - diluted
|
62,428
|
|
|
48,682
|
|
|
9,262
|
|
|||
Net loss per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic and diluted
|
$
|
(0.64
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(3.14
|
)
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Redeemable convertible preferred stock and convertible preferred stock (on an as if converted basis)
|
—
|
|
|
—
|
|
|
34,462
|
|
Stock options, restricted stock units and employee stock purchase plan awards
|
10,124
|
|
|
6,415
|
|
|
8,498
|
|
Common stock subject to repurchase
|
52
|
|
|
196
|
|
|
341
|
|
Convertible preferred stock warrants
|
—
|
|
|
—
|
|
|
44
|
|
|
10,176
|
|
|
6,611
|
|
|
43,345
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Domestic loss
|
$
|
(41,677
|
)
|
|
$
|
(35,593
|
)
|
|
$
|
(28,313
|
)
|
Foreign income
|
2,390
|
|
|
2,380
|
|
|
1,857
|
|
|||
Loss before provisions for income taxes
|
$
|
(39,287
|
)
|
|
$
|
(33,213
|
)
|
|
$
|
(26,456
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current provision for income taxes:
|
|
|
|
|
|
||||||
State
|
$
|
55
|
|
|
$
|
24
|
|
|
$
|
33
|
|
Foreign
|
675
|
|
|
1,054
|
|
|
599
|
|
|||
Total current
|
730
|
|
|
1,078
|
|
|
632
|
|
|||
Deferred tax benefits:
|
|
|
|
|
|
||||||
Foreign
|
17
|
|
|
429
|
|
|
8
|
|
|||
Total deferred
|
17
|
|
|
429
|
|
|
8
|
|
|||
Provision for income taxes
|
$
|
747
|
|
|
$
|
1,507
|
|
|
$
|
640
|
|
|
Years Ended December 31,
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
Amount
|
Percentage
|
|
Amount
|
Percentage
|
|
Amount
|
Percentage
|
|||||||||
Tax at statutory rate
|
$
|
(13,358
|
)
|
34.0
|
%
|
|
$
|
(11,292
|
)
|
34.0
|
%
|
|
$
|
(8,995
|
)
|
34.0
|
%
|
State tax - net of federal benefits
|
36
|
|
(0.1
|
)%
|
|
16
|
|
(0.1
|
)%
|
|
22
|
|
(0.1
|
)%
|
|||
Foreign rate differential
|
(422
|
)
|
1.1
|
%
|
|
231
|
|
(0.7
|
)%
|
|
(115
|
)
|
0.4
|
%
|
|||
Changes in federal valuation allowance
|
11,926
|
|
(30.4
|
)%
|
|
10,547
|
|
(31.8
|
)%
|
|
8,051
|
|
(30.4
|
)%
|
|||
Stock-based compensation
|
1,845
|
|
(4.7
|
)%
|
|
1,041
|
|
(3.1
|
)%
|
|
1,230
|
|
(4.7
|
)%
|
|||
Other permanent items
|
415
|
|
(1.1
|
)%
|
|
513
|
|
(1.5
|
)%
|
|
346
|
|
(1.3
|
)%
|
|||
Expenses for uncertain tax positions
|
227
|
|
(0.6
|
)%
|
|
330
|
|
(1.0
|
)%
|
|
90
|
|
(0.3
|
)%
|
|||
Other
|
78
|
|
(0.1
|
)%
|
|
121
|
|
(0.4
|
)%
|
|
11
|
|
—
|
%
|
|||
Provision for income taxes
|
$
|
747
|
|
(1.9
|
)%
|
|
$
|
1,507
|
|
(4.6
|
)%
|
|
$
|
640
|
|
(2.4
|
)%
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
46,317
|
|
|
$
|
41,941
|
|
Research and development credits, net of uncertain tax positions
|
9,517
|
|
|
7,064
|
|
||
Accruals, reserves, and other
|
17,904
|
|
|
12,526
|
|
||
Stock-based compensation
|
2,700
|
|
|
1,585
|
|
||
Depreciation and amortization
|
2,735
|
|
|
2,379
|
|
||
Gross deferred tax assets
|
79,173
|
|
|
65,495
|
|
||
Valuation allowance
|
(77,643
|
)
|
|
(63,620
|
)
|
||
Total deferred tax assets
|
1,530
|
|
|
1,875
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Others
|
(805
|
)
|
|
(1,167
|
)
|
||
Total deferred tax liabilities
|
(805
|
)
|
|
(1,167
|
)
|
||
Net deferred tax assets
|
$
|
725
|
|
|
$
|
708
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Gross unrecognized tax benefits—beginning balance
|
$
|
2,195
|
|
|
$
|
1,846
|
|
|
$
|
1,463
|
|
Increases (decrease) related to tax positions from prior years
|
(4
|
)
|
|
340
|
|
|
—
|
|
|||
Increases related to tax positions taken during current year
|
361
|
|
|
278
|
|
|
383
|
|
|||
Decreases related to tax positions taken during the current year
|
—
|
|
|
(269
|
)
|
|
—
|
|
|||
Gross unrecognized tax benefits—ending balance
|
$
|
2,552
|
|
|
$
|
2,195
|
|
|
$
|
1,846
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
106,842
|
|
|
$
|
85,325
|
|
|
$
|
68,127
|
|
Japan
|
35,636
|
|
|
45,787
|
|
|
39,581
|
|
|||
Asia Pacific, excluding Japan
|
23,847
|
|
|
20,434
|
|
|
15,052
|
|
|||
EMEA
|
27,193
|
|
|
19,254
|
|
|
12,087
|
|
|||
Other
|
5,437
|
|
|
8,707
|
|
|
6,891
|
|
|||
Total revenue
|
$
|
198,955
|
|
|
$
|
179,507
|
|
|
$
|
141,738
|
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
|
||||
United States
|
$
|
8,062
|
|
|
$
|
9,702
|
|
Other
|
1,708
|
|
|
2,075
|
|
||
Total property and equipment, net and intangible assets, net
|
$
|
9,770
|
|
|
$
|
11,777
|
|
•
|
We added a control activity where we will consult with technical accounting experts to review and analyze the impact of new or unusual accounting transactions and the adoption of new accounting standards that may have a material impact on our consolidated financial statements.
|
•
|
We strengthened our processes in the area of equity administration and equity accounting, which included the review, redesign and documentation of our policies and procedures; implementation of additional review and reconciliation controls, and expanded the use of software based solutions to handle certain aspects of accounting for stock-based compensation related to the 2014 Purchase Plan.
|
1.
|
Consolidated Financial Statements:
|
|
Our Consolidated Financial Statements are listed in the
Index to Consolidated Financial Statements
in Part II, Item 8 of this Annual Report on Form 10-K.
|
|
All other schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.
|
2.
|
Exhibits:
|
|
The documents listed in the Exhibit Index of this Annual Report on Form 10-K are incorporated by reference or are filed with this report, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).
|
|
A10 NETWORKS, INC.
|
|
By: /s/ Lee Chen
|
|
Lee Chen
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
/s/ Lee Chen
|
|
Chief Executive Officer, President and Director
|
|
February 29, 2016
|
Lee Chen
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Greg Straughn
|
|
Chief Financial Officer
|
|
February 29, 2016
|
Greg Straughn
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/ Robert Cochran
|
|
Vice President, Legal and Corporate Collaboration
|
|
February 29, 2016
|
Robert Cochran
|
|
and Secretary and Director
|
|
|
|
|
|
|
|
/s/ Peter Y. Chung
|
|
Director
|
|
February 29, 2016
|
Peter Y. Chung
|
|
|
|
|
|
|
|
|
|
/s/ Alan S. Henricks
|
|
Director
|
|
February 29, 2016
|
Alan S. Henricks
|
|
|
|
|
|
|
|
|
|
/s/ Phillip J. Salsbury
|
|
Director
|
|
February 29, 2016
|
Phillip J. Salsbury
|
|
|
|
|
Exhibit
Number |
|
|
|
Incorporated By Reference
|
||||||
|
Description
|
|
Form
|
|
File No,
|
|
Exhibit
|
|
File Date
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant
|
|
S-1/A
|
|
333-194015
|
|
3.1
|
|
March 10, 2014
|
3.2
|
|
Amended and Restated Bylaws of the Registrant
|
|
S-1/A
|
|
333-194015
|
|
3.2
|
|
March 10, 2014
|
4.1
|
|
Form of common stock certificate of the Registrant.
|
|
S-1/A
|
|
333-194015
|
|
4.1
|
|
March 10, 2014
|
4.2
|
|
Amended and Restated Investors’ Rights Agreement among the Registrant and certain holders of its capital stock, amended as of October 4, 2013.
|
|
S-1/A
|
|
333-194015
|
|
4.2
|
|
March 10, 2014
|
10.1*
|
|
Form of Indemnification Agreement between the Registrant and each of its directors and executive officers
|
|
S-1/A
|
|
333-194015
|
|
10.1
|
|
March 10, 2014
|
10.2*
|
|
2004 Stock Plan and forms of agreements thereunder
|
|
10-Q
|
|
001-36343
|
|
10.1
|
|
May 13, 2014
|
10.3*
|
|
2008 Stock Plan and forms of agreements thereunder
|
|
10-Q
|
|
001-36343
|
|
10.2
|
|
May 13, 2014
|
10.4*
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
2014 Employee Stock Purchase Plan and forms of agreements thereunder
|
|
S-1/A
|
|
333-194015
|
|
10.5
|
|
March 10, 2014
|
10.6*
|
|
Form of Stock Option Agreement pursuant to the 2008 Stock Plan
|
|
10-Q
|
|
001-36343
|
|
10.2
|
|
August 4, 2014
|
10.7*
|
|
Form of Stock Option Agreement- Early Exercise pursuant to the 2008 Stock Plan
|
|
10-Q
|
|
001-36343
|
|
10.3
|
|
August 4, 2014
|
10.8*
|
|
Form of Stock Option Agreement pursuant to the Amended and Restated 2014 Equity Incentive Plan
|
|
10-Q
|
|
001-36343
|
|
10.4
|
|
August 4, 2014
|
10.9*
|
|
Form of Restricted Stock Unit Agreement pursuant to the Amended and Restated 2014 Equity Incentive Plan
|
|
10-Q
|
|
001-36343
|
|
10.5
|
|
August 4, 2014
|
10.10*
|
|
Offer Letter, dated July 30, 2004, by and between the Registrant and Lee Chen.
|
|
S-1/A
|
|
333-194015
|
|
10.6
|
|
March 10, 2014
|
10.11*
|
|
Offer Letter, dated November 3, 2008, by and between the Registrant and Rajkumar Jalan.
|
|
S-1/A
|
|
333-194015
|
|
10.7
|
|
March 10, 2014
|
10.12*
|
|
Offer Letter, dated May 31, 2011, by and between the Registrant and Greg Straughn.
|
|
S-1/A
|
|
333-194015
|
|
10.8
|
|
March 10, 2014
|
10.13*
|
|
Offer Letter, dated January 4, 2012, by and between the Registrant and Robert Cochran.
|
|
S-1/A
|
|
333-194015
|
|
10.9
|
|
March 10, 2014
|
10.14*
|
|
Offer Letter, dated July 18, 2013, by and between the Registrant and Ray Smets.
|
|
S-1/A
|
|
333-194015
|
|
10.10
|
|
March 10, 2014
|
10.15*
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Reseller Agreement, dated April 2, 2009, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.12
|
|
February 18, 2014
|
10.17
|
|
First Amendment to Reseller Agreement, dated May 19, 2011, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.13
|
|
February 18, 2014
|
10.18
|
|
Second Amendment to Reseller Agreement, dated April 1, 2011, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.14
|
|
February 18, 2014
|
10.19
|
|
Third Amendment to Reseller Agreement, dated April 1, 2011, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.15
|
|
February 18, 2014
|
10.20
|
|
Fourth Amendment to Reseller Agreement, dated October 3, 2011, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.16
|
|
February 18, 2014
|
10.21
|
|
Fifth Amendment to Reseller Agreement, dated April 2, 2012, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.17
|
|
February 18, 2014
|
Exhibit
Number |
|
|
|
Incorporated By Reference
|
||||||
|
Description
|
|
Form
|
|
File No,
|
|
Exhibit
|
|
File Date
|
|
10.22
|
|
Sixth Amendment to Reseller Agreement, dated November 29, 2012, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.18
|
|
February 18, 2014
|
10.23
|
|
Seventh Amendment to Reseller Agreement, dated April 9, 2013, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.19
|
|
February 18, 2014
|
10.24
|
|
Eighth Amendment to Reseller Agreement, dated October 22, 2013, by and between the Registrant and NEC Corporation.
|
|
S-1/A
|
|
333-194015
|
|
10.20
|
|
February 18, 2014
|
10.25
|
|
Ninth Amendment to Reseller Agreement, executed on April 22, 2014, by and between the Registrant and NEC Corporation
|
|
10-Q
|
|
001-36343
|
|
10.1
|
|
August 4, 2014
|
10.26
|
|
Manufacturing Services Agreement, dated December 8, 2006, by and between the Registrant and Lanner Electronics (USA).
|
|
S-1/A
|
|
333-194015
|
|
10.21
|
|
February 18, 2014
|
10.27
|
|
Amendment No. 1 to Manufacturing Services Agreement, dated June 27, 2013, by and between the Registrant and Lanner Electronics (USA).
|
|
S-1/A
|
|
333-194015
|
|
10.22
|
|
February 18, 2014
|
10.28
|
|
Contract Manufacturer Agreement, dated July 1, 2008, by and between the Registrant and AEWIN Technologies, Inc.
|
|
S-1/A
|
|
333-194015
|
|
10.23
|
|
February 18, 2014
|
10.29
|
|
Amendment No. 1 to Contract Manufacturer Agreement, dated July 1, 2008, by and between the Registrant and AEWIN Technologies, Inc.
|
|
10-K
|
|
001-36343
|
|
10.31
|
|
March 11, 2015
|
10.30
|
|
Credit Agreement, dated as of September 30, 2013, among the Registrant, Royal Bank of Canada, as lender and administrative agent, and JPMorgan Chase Bank, N.A., and Bank of America, N.A., as lenders.
|
|
S-1/A
|
|
333-194015
|
|
10.24
|
|
March 10, 2014
|
10.31*
|
|
Form of Change in Control and Severance Agreement.
|
|
S-1/A
|
|
333-194015
|
|
10.25
|
|
March 10, 2014
|
10.32*
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
32.1 **
|
|
|
|
|
|
|
|
|
|
|
32.2 **
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
*
|
Indicates a management contract or compensatory plan.
|
**
|
The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10‑K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of A10 Networks, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
|
|
Exhibit 10.15
|
|
March 15, 2015
|
|
Sincerely,
|
|
/s/ Ruth Welch
|
|
Ruth Welch
|
Senior Director Human Resources
|
Acknowledged and accepted:
|
|
/s/ Sanjay Kapoor
|
Sanjay Kapoor
|
|
|
|
|
|
|
Date:
|
|
3/15/2015
|
|
|
|
|
|
|
Start Date:
|
|
3/30/2015
|
Legal Name
|
|
State or Jurisdiction of Incorporation or Organization
|
|
|
|
A10 Networks, Anguilla, Ltd.
|
|
Anguilla
|
A10 Networks (Australia) Pty Ltd.
|
|
Australia
|
A10 Networks Government, Inc.
|
|
Delaware
|
A10 Networks Inc. (Beijing)
|
|
China
|
A10 Networks, Inc. - Taiwan
|
|
Taiwan, Republic of China
|
A10 Networks India Private Limited
|
|
India
|
A10 Networks Israel Ltd.
|
|
Israel
|
A10 Networks, KK
|
|
Japan
|
A10 Networks Limited
|
|
United Kingdom
|
A10 Networks Singapore Pte. Ltd.
|
|
Singapore
|
Shanghai A10 Networks Technology Co., Ltd.
|
|
China
|
1.
|
I have reviewed this Annual Report on Form 10-K of A10 Networks, Inc. for the year ended December 31, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) a
nd internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 29, 2016
|
By: /s/ Lee Chen
|
|
|
Lee Chen
|
||
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of A10 Networks, Inc. for the year ended December 31, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)
for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 29, 2016
|
By: /s/ Greg Straughn
|
|
|
Greg Straughn
|
||
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 29, 2016
|
By: /s/ Lee Chen
|
|
|
Lee Chen
|
||
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 29, 2016
|
By: /s/ Greg Straughn
|
|
|
Greg Straughn
|
||
|
Chief Financial Officer
|