|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
27-0291921
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
☐
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐ (Do not check if a small reporting company)
|
|
Small reporting company
|
☐
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
||||
|
|
|
||
EX-31.1
|
|
(CERTIFICATION OF THE CEO PURSUANT TO SECTION 302)
|
|
|
EX-31.2
|
|
(CERTIFICATION OF THE CFO PURSUANT TO SECTION 302)
|
|
|
EX-32.1
|
|
(CERTIFICATION OF THE CEO PURSUANT TO SECTION 906)
|
|
|
EX-32.2
|
|
(CERTIFICATION OF THE CFO PURSUANT TO SECTION 906)
|
|
|
•
|
our ability to sustain or increase revenue from our larger customers, generate revenues from new customers, or offset the discontinuation of concentrated purchases by our larger customers with purchases by new or existing customers;
|
•
|
our expectations regarding our expenses and revenue, our ability to maintain and expand gross profit, the sufficiency of our cash resources and needs for additional financing;
|
•
|
our ability to produce products free of problems, defects, errors and vulnerabilities;
|
•
|
our anticipated growth strategies;
|
•
|
our expectations regarding competition;
|
•
|
the anticipated trends and challenges in our business and the market in which we operate;
|
•
|
our expectations regarding, and the capacity and stability of, our supply chain and manufacturing;
|
•
|
the size and growth of the potential markets for our products and the ability to serve those markets;
|
•
|
the scope, progress, expansion, and costs of developing and commercializing our products;
|
•
|
the timing, rate and degree of introducing any of our products into the market and the market acceptance of any of our products;
|
•
|
our ability to establish and maintain development partnerships;
|
•
|
our ability to attract or retain key personnel;
|
•
|
our expectations regarding federal, state and foreign regulatory requirements, including export controls, tax law changes and interpretations, economic sanctions and anti-corruption regulations;
|
•
|
regulatory or legislative developments in the United States and foreign countries, including trade policy and tariffs and export control laws or regulations that could impede our ability to sell our products to our customer ZTE Kangxun Telecom Co. Ltd. or any of its affiliates, together ZTE, or that could impede our ability to sell our products to other customers in certain foreign jurisdictions, particularly in China;
|
•
|
our ability to obtain and maintain intellectual property protection for our products;
|
•
|
our ability to anticipate the timing and scale of ZTE’s demand for our products; and
|
•
|
the pending purported securities class action and derivative lawsuits and our ability to defend against them.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
100,656
|
|
|
$
|
67,495
|
|
Marketable securities - short-term
|
202,759
|
|
|
211,933
|
|
||
Accounts receivable
|
56,399
|
|
|
86,602
|
|
||
Inventory
|
50,650
|
|
|
62,232
|
|
||
Prepaid expenses and other current assets
|
21,053
|
|
|
18,985
|
|
||
Total current assets
|
431,517
|
|
|
447,247
|
|
||
Marketable securities - long-term
|
71,363
|
|
|
85,182
|
|
||
Property and equipment, net
|
29,507
|
|
|
28,175
|
|
||
Deferred tax asset
|
51,670
|
|
|
41,901
|
|
||
Other assets
|
8,112
|
|
|
8,745
|
|
||
Total assets
|
$
|
592,169
|
|
|
$
|
611,250
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
28,663
|
|
|
$
|
47,819
|
|
Accrued liabilities
|
33,230
|
|
|
37,234
|
|
||
Deferred revenue
|
336
|
|
|
573
|
|
||
Total current liabilities
|
62,229
|
|
|
85,626
|
|
||
Income taxes payable
|
19,205
|
|
|
21,034
|
|
||
Other long-term liabilities
|
4,808
|
|
|
2,540
|
|
||
Total liabilities
|
86,242
|
|
|
109,200
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and outstanding at June 30, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value; 150,000 shares authorized; 40,517 and 39,606 shares issued at June 30, 2018 and December 31, 2017, respectively
|
4
|
|
|
4
|
|
||
Treasury stock, at cost; 24 shares and none at June 30, 2018 and December 31, 2017, respectively
|
(771
|
)
|
|
—
|
|
||
Additional paid-in capital
|
341,908
|
|
|
324,944
|
|
||
Accumulated other comprehensive loss
|
(515
|
)
|
|
(320
|
)
|
||
Retained earnings
|
165,301
|
|
|
177,422
|
|
||
Total stockholders’ equity
|
505,927
|
|
|
502,050
|
|
||
Total liabilities and stockholders’ equity
|
$
|
592,169
|
|
|
$
|
611,250
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
65,003
|
|
|
$
|
78,898
|
|
|
$
|
137,944
|
|
|
$
|
193,565
|
|
Cost of revenue
|
39,798
|
|
|
53,516
|
|
|
88,668
|
|
|
111,883
|
|
||||
Gross profit
|
25,205
|
|
|
25,382
|
|
|
49,276
|
|
|
81,682
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
24,340
|
|
|
22,734
|
|
|
48,785
|
|
|
40,462
|
|
||||
Sales, general and administrative
|
12,984
|
|
|
9,368
|
|
|
27,272
|
|
|
18,059
|
|
||||
Gain on disposal of property and equipment
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
||||
Total operating expenses
|
37,324
|
|
|
32,055
|
|
|
76,057
|
|
|
58,474
|
|
||||
(Loss) income from operations
|
(12,119
|
)
|
|
(6,673
|
)
|
|
(26,781
|
)
|
|
23,208
|
|
||||
Other income, net:
|
|
|
|
|
|
|
|
|
|
||||||
Interest income, net
|
1,491
|
|
|
827
|
|
|
2,845
|
|
|
1,272
|
|
||||
Other expense, net
|
(191
|
)
|
|
(1
|
)
|
|
(262
|
)
|
|
(39
|
)
|
||||
Total other income, net
|
1,300
|
|
|
826
|
|
|
2,583
|
|
|
1,233
|
|
||||
(Loss) income before benefit from income taxes
|
(10,819
|
)
|
|
(5,847
|
)
|
|
(24,198
|
)
|
|
24,441
|
|
||||
Benefit from income taxes
|
(7,574
|
)
|
|
(10,511
|
)
|
|
(11,875
|
)
|
|
(15,932
|
)
|
||||
Net (loss) income
|
$
|
(3,245
|
)
|
|
$
|
4,664
|
|
|
$
|
(12,323
|
)
|
|
$
|
40,373
|
|
(Loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.08
|
)
|
|
$
|
0.12
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.05
|
|
Diluted
|
$
|
(0.08
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.97
|
|
Weighted-average shares used to compute (loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
40,307
|
|
|
38,756
|
|
|
40,074
|
|
|
38,546
|
|
||||
Diluted
|
40,307
|
|
|
41,582
|
|
|
40,074
|
|
|
41,639
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) income
|
$
|
(3,245
|
)
|
|
$
|
4,664
|
|
|
$
|
(12,323
|
)
|
|
$
|
40,373
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||
Changes in unrealized loss on marketable securities, net of income taxes of $(54), $33, $13 and $(2) for the three and six months ended June 30, 2018 and 2017, respectively
|
253
|
|
|
22
|
|
|
(150
|
)
|
|
(14
|
)
|
||||
Comprehensive (loss) income
|
$
|
(2,992
|
)
|
|
$
|
4,686
|
|
|
$
|
(12,473
|
)
|
|
$
|
40,359
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Loss
|
|
|
|
|
||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
Retained Earnings
|
|
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
Balance at December 31, 2016
|
|
37,998
|
|
|
$
|
4
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
295,893
|
|
|
$
|
(16
|
)
|
|
$
|
138,914
|
|
|
$
|
434,795
|
|
Vesting of restricted common stock
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Exercise of common stock options
|
|
523
|
|
|
—
|
|
|
|
|
|
|
1,903
|
|
|
|
|
|
|
|
|
1,903
|
|
||||||||
Vesting of restricted stock units
|
|
457
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||||
Common stock issued under employee stock purchase plan
|
|
30
|
|
|
—
|
|
|
|
|
|
|
1,179
|
|
|
|
|
|
|
1,179
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
10,742
|
|
|
|
|
|
|
|
|
10,742
|
|
||||||||
Unrealized losses on marketable securities, net of tax of $(2)
|
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
(14
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,373
|
|
|
40,373
|
|
||||||||
Balance at June 30, 2017
|
|
39,059
|
|
|
$
|
4
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
309,717
|
|
|
$
|
(30
|
)
|
|
$
|
179,287
|
|
|
$
|
488,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
|
39,606
|
|
|
$
|
4
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
324,944
|
|
|
$
|
(320
|
)
|
|
$
|
177,422
|
|
|
$
|
502,050
|
|
Effect of adopted accounting standards (see Note 2)
|
|
|
|
|
|
|
|
|
|
|
|
(45
|
)
|
|
202
|
|
|
157
|
|
|||||||||||
Treasury stock acquired
|
|
|
|
|
|
24
|
|
|
(771
|
)
|
|
|
|
|
|
|
|
(771
|
)
|
|||||||||||
Vesting of restricted common stock
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Exercise of common stock options
|
|
348
|
|
|
—
|
|
|
|
|
|
|
1,520
|
|
|
|
|
|
|
|
|
1,520
|
|
||||||||
Vesting of restricted stock units
|
|
485
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Common stock issued under employee stock purchase plan
|
|
57
|
|
|
—
|
|
|
|
|
|
|
1,367
|
|
|
|
|
|
|
1,367
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
14,077
|
|
|
|
|
|
|
|
|
14,077
|
|
||||||||
Unrealized losses on marketable securities, net of tax of $33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(150
|
)
|
|
|
|
|
(150
|
)
|
||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,323
|
)
|
|
(12,323
|
)
|
||||||||
Balance at June 30, 2018
|
|
40,517
|
|
|
$
|
4
|
|
|
24
|
|
|
$
|
(771
|
)
|
|
$
|
341,908
|
|
|
$
|
(515
|
)
|
|
$
|
165,301
|
|
|
$
|
505,927
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net (loss) income
|
$
|
(12,323
|
)
|
|
$
|
40,373
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
6,634
|
|
|
5,841
|
|
||
Gain on disposal of property and equipment
|
—
|
|
|
(47
|
)
|
||
Stock-based compensation
|
14,126
|
|
|
10,742
|
|
||
Deferred income taxes
|
(9,823
|
)
|
|
(13,939
|
)
|
||
Other non-cash (benefits) charges
|
(47
|
)
|
|
158
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
30,203
|
|
|
25,216
|
|
||
Inventory
|
11,582
|
|
|
(10,005
|
)
|
||
Prepaid expenses and other current assets
|
(2,236
|
)
|
|
(6,721
|
)
|
||
Other assets
|
613
|
|
|
(4,560
|
)
|
||
Accounts payable
|
(17,439
|
)
|
|
(12,364
|
)
|
||
Accrued liabilities
|
(4,053
|
)
|
|
925
|
|
||
Deferred revenue
|
2,826
|
|
|
155
|
|
||
Income taxes payable
|
(1,829
|
)
|
|
—
|
|
||
Other long-term liabilities
|
(420
|
)
|
|
459
|
|
||
Net cash provided by operating activities
|
17,814
|
|
|
36,233
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(9,683
|
)
|
|
(8,006
|
)
|
||
Purchases of marketable securities
|
(142,614
|
)
|
|
(233,246
|
)
|
||
Sales and maturities of marketable securities
|
165,508
|
|
|
100,300
|
|
||
Deposits
|
20
|
|
|
(30
|
)
|
||
Net cash provided by (used in) investing activities
|
13,231
|
|
|
(140,982
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Treasury stock acquired
|
(771
|
)
|
|
—
|
|
||
Payment of public offering costs
|
—
|
|
|
(201
|
)
|
||
Proceeds from the issuance of common stock under stock-based compensation plans
|
2,887
|
|
|
3,082
|
|
||
Net cash provided by financing activities
|
2,116
|
|
|
2,881
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
33,161
|
|
|
(101,868
|
)
|
||
Cash, cash equivalents and restricted cash—Beginning of period
|
67,495
|
|
|
208,032
|
|
||
Cash, cash equivalents and restricted cash—End of period
|
$
|
100,656
|
|
|
$
|
106,164
|
|
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||
Cash paid for income taxes, net of refunds
|
$
|
659
|
|
|
$
|
833
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|||
Capital expenditures incurred but not yet paid
|
$
|
1,025
|
|
|
$
|
140
|
|
|
Balance at Beginning of Period (1/1/18)
|
|
(Decrease) / Increase
|
|
Balance at End of Period
|
|||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|||||
Accounts Receivable
|
$
|
86,602
|
|
|
(30,203
|
)
|
|
$
|
56,399
|
|
Deferred Revenue (Current)
|
$
|
197
|
|
|
139
|
|
|
$
|
336
|
|
Deferred Revenue (Non-current)
|
$
|
254
|
|
|
2,688
|
|
|
$
|
2,942
|
|
|
Three Months Ended
|
|
As a % of
|
|
Six Months Ended
|
|
As a % of
|
||||||
|
June 30, 2018
|
|
Total Revenue
|
|
June 30, 2018
|
|
Total Revenue
|
||||||
|
(dollars in thousands)
|
||||||||||||
Americas
|
$
|
24,012
|
|
|
37
|
%
|
|
$
|
33,738
|
|
|
24
|
%
|
EMEA
|
20,255
|
|
|
31
|
%
|
|
47,899
|
|
|
35
|
%
|
||
APAC
|
20,736
|
|
|
32
|
%
|
|
56,307
|
|
|
41
|
%
|
||
Total revenue
|
$
|
65,003
|
|
|
100
|
%
|
|
$
|
137,944
|
|
|
100
|
%
|
|
June 30, 2018
|
||||||||||||||||||||||||||
|
|
|
Gross Unrealized
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
Losses
|
|
|
|
|
|
|
||||||||||||||||
|
Amortized Cost
|
|
Gains
|
|
Less than One Year
|
|
Greater than One Year
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||||
Cash
|
$
|
73,507
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73,507
|
|
|
$
|
73,507
|
|
|
$
|
—
|
|
Money market funds
|
20,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,180
|
|
|
20,180
|
|
|
—
|
|
|||||||
U.S. treasury bonds
|
26,509
|
|
|
—
|
|
|
(72
|
)
|
|
—
|
|
|
26,437
|
|
|
—
|
|
|
26,437
|
|
|||||||
Commercial paper
|
44,011
|
|
|
1
|
|
|
(13
|
)
|
|
—
|
|
|
43,999
|
|
|
6,969
|
|
|
37,030
|
|
|||||||
Certificates of deposit
|
48,418
|
|
|
18
|
|
|
(44
|
)
|
|
—
|
|
|
48,392
|
|
|
—
|
|
|
48,392
|
|
|||||||
Asset-backed securities
|
38,708
|
|
|
1
|
|
|
(112
|
)
|
|
—
|
|
|
38,597
|
|
|
—
|
|
|
38,597
|
|
|||||||
Corporate debt securities
|
124,077
|
|
|
9
|
|
|
(416
|
)
|
|
(4
|
)
|
|
123,666
|
|
|
—
|
|
|
123,666
|
|
|||||||
Total
|
$
|
375,410
|
|
|
$
|
29
|
|
|
$
|
(657
|
)
|
|
$
|
(4
|
)
|
|
$
|
374,778
|
|
|
$
|
100,656
|
|
|
$
|
274,122
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
|
|
Gross Unrealized
|
|
Estimated
|
|
Cash and Cash
|
|
Marketable
|
||||||||||||||
|
Amortized Cost
|
|
Gains
|
|
Losses
(1)
|
|
Fair Value
|
|
Equivalents
|
|
Securities
|
||||||||||||
Cash
|
$
|
43,223
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,223
|
|
|
$
|
43,223
|
|
|
$
|
—
|
|
Money market funds
|
11,070
|
|
|
—
|
|
|
—
|
|
|
11,070
|
|
|
11,070
|
|
|
—
|
|
||||||
Repurchase agreements
|
12,500
|
|
|
—
|
|
|
—
|
|
|
12,500
|
|
|
12,500
|
|
|
—
|
|
||||||
U.S. treasury bonds
|
26,316
|
|
|
—
|
|
|
(80
|
)
|
|
26,236
|
|
|
—
|
|
|
26,236
|
|
||||||
Commercial paper
|
60,623
|
|
|
—
|
|
|
(9
|
)
|
|
60,614
|
|
|
—
|
|
|
60,614
|
|
||||||
Certificates of deposit
|
34,993
|
|
|
6
|
|
|
(33
|
)
|
|
34,966
|
|
|
—
|
|
|
34,966
|
|
||||||
Asset-backed securities
|
33,374
|
|
|
1
|
|
|
(53
|
)
|
|
33,322
|
|
|
702
|
|
|
32,620
|
|
||||||
Corporate debt securities
|
142,960
|
|
|
9
|
|
|
(290
|
)
|
|
142,679
|
|
|
—
|
|
|
142,679
|
|
||||||
Total
|
$
|
365,059
|
|
|
$
|
16
|
|
|
$
|
(465
|
)
|
|
$
|
364,610
|
|
|
$
|
67,495
|
|
|
$
|
297,115
|
|
(1)
|
Losses represent marketable securities that were in loss positions for less than one year.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Proceeds from the sales and maturities of marketable securities
|
$
|
77,678
|
|
|
$
|
61,400
|
|
|
$
|
165,508
|
|
|
$
|
100,300
|
|
Realized gains
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Realized losses
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
—
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Amortized Cost Basis
|
|
Aggregate Fair Value
|
|
Amortized Cost Basis
|
|
Aggregate Fair Value
|
||||||||
Due within one year
|
$
|
203,190
|
|
|
$
|
202,759
|
|
|
$
|
212,137
|
|
|
$
|
211,933
|
|
Due after one year through three years
|
71,564
|
|
|
71,363
|
|
|
85,426
|
|
|
85,182
|
|
||||
Total
|
$
|
274,754
|
|
|
$
|
274,122
|
|
|
$
|
297,563
|
|
|
$
|
297,115
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Raw materials
|
$
|
36,033
|
|
|
$
|
32,599
|
|
Work-in-process
|
388
|
|
|
965
|
|
||
Finished goods
|
14,229
|
|
|
28,668
|
|
||
Inventory
|
$
|
50,650
|
|
|
$
|
62,232
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Engineering laboratory equipment
|
$
|
46,851
|
|
|
$
|
39,433
|
|
Computer software
|
2,782
|
|
|
2,281
|
|
||
Computer equipment
|
5,025
|
|
|
4,380
|
|
||
Furniture and fixtures
|
3,219
|
|
|
3,041
|
|
||
Leasehold improvements
|
3,547
|
|
|
2,282
|
|
||
Construction in progress
|
2,499
|
|
|
4,591
|
|
||
Total property and equipment
|
63,923
|
|
|
56,008
|
|
||
Less: Accumulated depreciation
|
(34,416
|
)
|
|
(27,833
|
)
|
||
Property and equipment, net
|
$
|
29,507
|
|
|
$
|
28,175
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Employee-related liabilities
|
$
|
6,800
|
|
|
$
|
5,233
|
|
Goods and services received not invoiced
|
6,285
|
|
|
12,827
|
|
||
Accrued manufacturing related expenses
|
3,951
|
|
|
4,007
|
|
||
Warranty reserve
|
7,077
|
|
|
8,306
|
|
||
Other accrued liabilities
|
9,117
|
|
|
6,861
|
|
||
Accrued liabilities
|
$
|
33,230
|
|
|
$
|
37,234
|
|
|
June 30, 2018
|
||||||||||||||
|
Quoted Prices in Active Markets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
—
|
|
|
$
|
20,180
|
|
|
$
|
—
|
|
|
$
|
20,180
|
|
U.S. treasury bonds
|
—
|
|
|
26,437
|
|
|
—
|
|
|
26,437
|
|
||||
Commercial paper
|
—
|
|
|
43,999
|
|
|
—
|
|
|
43,999
|
|
||||
Certificates of deposit
|
—
|
|
|
48,392
|
|
|
—
|
|
|
48,392
|
|
||||
Asset-backed securities
|
—
|
|
|
38,597
|
|
|
—
|
|
|
38,597
|
|
||||
Corporate debt securities
|
—
|
|
|
123,666
|
|
|
—
|
|
|
123,666
|
|
||||
Total
|
$
|
—
|
|
|
$
|
301,271
|
|
|
$
|
—
|
|
|
$
|
301,271
|
|
|
December 31, 2017
|
||||||||||||||
|
Quoted Prices in Active Markets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
—
|
|
|
$
|
11,070
|
|
|
$
|
—
|
|
|
$
|
11,070
|
|
Repurchase agreements
|
—
|
|
|
12,500
|
|
|
—
|
|
|
12,500
|
|
||||
U.S. treasury bonds
|
—
|
|
|
26,236
|
|
|
—
|
|
|
26,236
|
|
||||
Commercial paper
|
—
|
|
|
60,614
|
|
|
—
|
|
|
60,614
|
|
||||
Certificates of deposit
|
—
|
|
|
34,966
|
|
|
—
|
|
|
34,966
|
|
||||
Asset-backed securities
|
—
|
|
|
33,322
|
|
|
—
|
|
|
33,322
|
|
||||
Corporate debt securities
|
—
|
|
|
142,679
|
|
|
—
|
|
|
142,679
|
|
||||
Total
|
$
|
—
|
|
|
$
|
321,387
|
|
|
$
|
—
|
|
|
$
|
321,387
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cost of revenue
|
$
|
572
|
|
|
$
|
511
|
|
|
$
|
1,093
|
|
|
$
|
953
|
|
Research and development
|
4,467
|
|
|
3,779
|
|
|
8,255
|
|
|
6,771
|
|
||||
Sales, general and administrative
|
2,549
|
|
|
1,820
|
|
|
4,778
|
|
|
3,018
|
|
||||
Total stock-based compensation
|
$
|
7,588
|
|
|
$
|
6,110
|
|
|
$
|
14,126
|
|
|
$
|
10,742
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Stock options
|
$
|
588
|
|
|
$
|
655
|
|
|
$
|
1,189
|
|
|
$
|
1,321
|
|
Restricted stock units
|
6,690
|
|
|
5,126
|
|
|
12,285
|
|
|
8,812
|
|
||||
Employee stock purchase plan
|
285
|
|
|
300
|
|
|
583
|
|
|
551
|
|
||||
Other awards
|
25
|
|
|
29
|
|
|
69
|
|
|
58
|
|
||||
Total stock-based compensation
|
$
|
7,588
|
|
|
$
|
6,110
|
|
|
$
|
14,126
|
|
|
$
|
10,742
|
|
|
Number of Options
(in thousands)
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at December 31, 2017
|
1,634
|
|
|
$
|
8.34
|
|
|
6.6
|
|
$
|
47,356
|
|
Granted
|
10
|
|
|
$
|
28.77
|
|
|
|
|
|
|
|
Exercised
|
(348
|
)
|
|
$
|
4.37
|
|
|
|
|
$
|
11,103
|
|
Cancelled
|
(31
|
)
|
|
$
|
11.47
|
|
|
|
|
|
|
|
Outstanding at June 30, 2018
|
1,265
|
|
|
$
|
9.52
|
|
|
6.2
|
|
$
|
33,915
|
|
Vested and expected to vest at:
|
|
|
|
|
|
|
|
|
|
|
||
June 30, 2018
|
1,265
|
|
|
$
|
9.52
|
|
|
6.2
|
|
$
|
33,915
|
|
December 31, 2017
|
1,634
|
|
|
$
|
8.34
|
|
|
6.6
|
|
$
|
47,356
|
|
Exercisable at:
|
|
|
|
|
|
|
|
|
|
|
||
June 30, 2018
|
785
|
|
|
$
|
6.65
|
|
|
5.6
|
|
$
|
22,953
|
|
December 31, 2017
|
907
|
|
|
$
|
5.28
|
|
|
5.9
|
|
$
|
28,634
|
|
|
RSUs
(in thousands)
|
|
Weighted-Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2017
|
2,288
|
|
|
$
|
36.08
|
|
Granted
|
704
|
|
|
$
|
41.51
|
|
Vested
|
(485
|
)
|
|
$
|
29.29
|
|
Cancelled
|
(12
|
)
|
|
$
|
26.76
|
|
Outstanding at June 30, 2018
|
2,495
|
|
|
$
|
38.98
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(3,245
|
)
|
|
$
|
4,664
|
|
|
$
|
(12,323
|
)
|
|
$
|
40,373
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used to compute net (loss) income per share - basic
|
40,307
|
|
|
38,756
|
|
|
40,074
|
|
|
38,546
|
|
||||
Dilutive effect of stock options, unvested restricted stock and restricted stock units and employee stock purchase plan
|
—
|
|
|
2,826
|
|
|
—
|
|
|
3,093
|
|
||||
Weighted-average shares used to compute net (loss) income per share - diluted
|
40,307
|
|
|
41,582
|
|
|
40,074
|
|
|
41,639
|
|
||||
Net (loss) income per share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(0.08
|
)
|
|
$
|
0.12
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.05
|
|
Diluted
|
$
|
(0.08
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.31
|
)
|
|
$
|
0.97
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Options to purchase common stock
|
1,030
|
|
|
90
|
|
|
1,126
|
|
|
90
|
|
Unvested restricted stock units and awards
|
1,699
|
|
|
562
|
|
|
1,665
|
|
|
381
|
|
Employee stock purchase plan
|
72
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
Amounts
|
||
Remaining 2018
|
$
|
1,687
|
|
2019
|
3,423
|
|
|
2020
|
3,452
|
|
|
2021
|
3,294
|
|
|
2022
|
2,410
|
|
|
Thereafter
|
5,546
|
|
|
Total
|
$
|
19,812
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Warranty reserve, beginning of period
|
$
|
7,418
|
|
|
$
|
2,113
|
|
|
$
|
8,306
|
|
|
$
|
2,158
|
|
Provisions made to warranty reserve during the period
|
2,561
|
|
|
4,771
|
|
|
6,024
|
|
|
5,971
|
|
||||
Charges against warranty reserve during the period
|
(2,902
|
)
|
|
(2,025
|
)
|
|
(7,253
|
)
|
|
(3,270
|
)
|
||||
Warranty reserve, end of period
|
$
|
7,077
|
|
|
$
|
4,859
|
|
|
$
|
7,077
|
|
|
$
|
4,859
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
23,159
|
|
|
$
|
23,814
|
|
|
$
|
32,586
|
|
|
$
|
36,227
|
|
China
|
12,909
|
|
|
29,367
|
|
|
34,993
|
|
|
86,349
|
|
||||
Germany
|
10,086
|
|
|
9,649
|
|
|
29,832
|
|
|
22,615
|
|
||||
Thailand
|
4,853
|
|
|
5,115
|
|
|
11,972
|
|
|
16,719
|
|
||||
Other
|
13,996
|
|
|
10,953
|
|
|
28,561
|
|
|
31,655
|
|
||||
Total revenue
|
$
|
65,003
|
|
|
$
|
78,898
|
|
|
$
|
137,944
|
|
|
$
|
193,565
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
United States
|
$
|
19,969
|
|
|
$
|
19,065
|
|
China
|
1,740
|
|
|
1,165
|
|
||
Thailand
|
5,409
|
|
|
7,065
|
|
||
Other
|
2,389
|
|
|
880
|
|
||
Total long-lived assets
|
$
|
29,507
|
|
|
$
|
28,175
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
A
(1)
|
*
|
|
|
28
|
%
|
|
14
|
%
|
|
36
|
%
|
B
|
18
|
%
|
|
19
|
%
|
|
18
|
%
|
|
14
|
%
|
C
|
14
|
%
|
|
15
|
%
|
|
17
|
%
|
|
*
|
|
D
|
12
|
%
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
Less than 10% of revenue in the period indicated
|
(1)
|
Customer A was subject to U.S. Department of Commerce restrictions that prevented sales to this customer from April 15, 2018 through July 13, 2018.
|
|
June 30, 2018
|
|
December 31, 2017
|
||
A
(1)
|
*
|
|
|
15
|
%
|
B
|
14
|
%
|
|
10
|
%
|
C
|
16
|
%
|
|
19
|
%
|
|
*
|
Less than 10% of accounts receivable at the date indicated
|
(1)
|
Customer A was subject to U.S. Department of Commerce restrictions that prevented sales to this customer from April 15, 2018 through July 13, 2018.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
W
|
*
|
|
|
11
|
%
|
|
*
|
|
|
30
|
%
|
X
|
12
|
%
|
|
20
|
%
|
|
15
|
%
|
|
23
|
%
|
Y
|
47
|
%
|
|
*
|
|
|
44
|
%
|
|
28
|
%
|
Z
|
*
|
|
|
12
|
%
|
|
*
|
|
|
17
|
%
|
|
*
|
Less than 10% of total purchases in the period indicated
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Consolidated Statement of Operation Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$
|
65,003
|
|
|
$
|
78,898
|
|
|
$
|
137,944
|
|
|
$
|
193,565
|
|
Cost of revenue(1)
|
39,798
|
|
|
53,516
|
|
|
88,668
|
|
|
111,883
|
|
||||
Gross profit
|
25,205
|
|
|
25,382
|
|
|
49,276
|
|
|
81,682
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development(1)
|
24,340
|
|
|
22,734
|
|
|
48,785
|
|
|
40,462
|
|
||||
Sales, general and administrative(1)
|
12,984
|
|
|
9,368
|
|
|
27,272
|
|
|
18,059
|
|
||||
Gain on disposal of property and equipment
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
||||
Total operating expenses
|
37,324
|
|
|
32,055
|
|
|
76,057
|
|
|
58,474
|
|
||||
(Loss) income from operations
|
(12,119
|
)
|
|
(6,673
|
)
|
|
(26,781
|
)
|
|
23,208
|
|
||||
Total other income, net
|
1,300
|
|
|
826
|
|
|
2,583
|
|
|
1,233
|
|
||||
(Loss) income before benefit from income taxes
|
(10,819
|
)
|
|
(5,847
|
)
|
|
(24,198
|
)
|
|
24,441
|
|
||||
Benefit from income taxes
|
(7,574
|
)
|
|
(10,511
|
)
|
|
(11,875
|
)
|
|
(15,932
|
)
|
||||
Net (loss) income
|
$
|
(3,245
|
)
|
|
$
|
4,664
|
|
|
$
|
(12,323
|
)
|
|
$
|
40,373
|
|
|
(1)
|
Stock-based compensation included in the condensed consolidated statements of operations data was as follows (in thousands):
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
572
|
|
|
$
|
511
|
|
|
$
|
1,093
|
|
|
$
|
953
|
|
Research and development
|
4,467
|
|
|
3,779
|
|
|
8,255
|
|
|
6,771
|
|
||||
Sales, general and administrative
|
2,549
|
|
|
1,820
|
|
|
4,778
|
|
|
3,018
|
|
||||
Total stock-based compensation
|
$
|
7,588
|
|
|
$
|
6,110
|
|
|
$
|
14,126
|
|
|
$
|
10,742
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
61
|
%
|
|
68
|
%
|
|
64
|
%
|
|
58
|
%
|
Gross profit
|
39
|
%
|
|
32
|
%
|
|
36
|
%
|
|
42
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
37
|
%
|
|
29
|
%
|
|
35
|
%
|
|
21
|
%
|
Sales, general and administrative
|
20
|
%
|
|
12
|
%
|
|
20
|
%
|
|
9
|
%
|
Gain on disposal of property and equipment
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Total operating expenses
|
57
|
%
|
|
41
|
%
|
|
55
|
%
|
|
30
|
%
|
(Loss) income from operations
|
(19
|
)%
|
|
(8
|
)%
|
|
(19
|
)%
|
|
12
|
%
|
Total other income, net
|
2
|
%
|
|
1
|
%
|
|
2
|
%
|
|
1
|
%
|
(Loss) income before benefit from income taxes
|
(17
|
)%
|
|
(7
|
)%
|
|
(18
|
)%
|
|
13
|
%
|
Benefit from income taxes
|
(12
|
)%
|
|
(13
|
)%
|
|
(9
|
)%
|
|
(8
|
)%
|
Net (loss) income
|
(5
|
)%
|
|
6
|
%
|
|
(9
|
)%
|
|
21
|
%
|
|
Three Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue
|
$
|
65,003
|
|
|
$
|
78,898
|
|
|
$
|
(13,895
|
)
|
|
(18
|
)%
|
|
Three Months Ended
|
|
As a % of
|
|
Three Months Ended
|
|
As a % of
|
|
Change in
|
|||||||||||
|
June 30, 2018
|
|
Total Revenue
|
|
June 30, 2017
|
|
Total Revenue
|
|
$
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Americas
|
$
|
24,012
|
|
|
37
|
%
|
|
$
|
24,132
|
|
|
31
|
%
|
|
$
|
(120
|
)
|
|
—
|
%
|
EMEA
|
20,255
|
|
|
31
|
%
|
|
18,188
|
|
|
23
|
%
|
|
2,067
|
|
|
11
|
%
|
|||
APAC
|
20,736
|
|
|
32
|
%
|
|
36,578
|
|
|
46
|
%
|
|
(15,842
|
)
|
|
(43
|
)%
|
|||
Total revenue
|
$
|
65,003
|
|
|
100
|
%
|
|
$
|
78,898
|
|
|
100
|
%
|
|
$
|
(13,895
|
)
|
|
(18
|
)%
|
|
Three Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
39,798
|
|
|
$
|
53,516
|
|
|
$
|
(13,718
|
)
|
|
(26
|
)%
|
Gross profit percentage
|
38.8
|
%
|
|
32.2
|
%
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
24,340
|
|
|
$
|
22,734
|
|
|
$
|
1,606
|
|
|
7
|
%
|
|
Three Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Benefit from income taxes
|
$
|
(7,574
|
)
|
|
$
|
(10,511
|
)
|
|
$
|
2,937
|
|
|
(28
|
)%
|
Effective tax rate
|
70
|
%
|
|
180
|
%
|
|
|
|
|
(110
|
)%
|
|
Six Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue
|
$
|
137,944
|
|
|
$
|
193,565
|
|
|
$
|
(55,621
|
)
|
|
(29
|
)%
|
|
Six Months Ended
|
|
As a % of
|
|
Six Months Ended
|
|
As a % of
|
|
Change in
|
|||||||||||
|
June 30, 2018
|
|
Total Revenue
|
|
June 30, 2017
|
|
Total Revenue
|
|
$
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Americas
|
$
|
33,738
|
|
|
24
|
%
|
|
$
|
37,782
|
|
|
19
|
%
|
|
$
|
(4,044
|
)
|
|
(11
|
)%
|
EMEA
|
47,899
|
|
|
35
|
%
|
|
44,295
|
|
|
23
|
%
|
|
3,604
|
|
|
8
|
%
|
|||
APAC
|
56,307
|
|
|
41
|
%
|
|
111,488
|
|
|
58
|
%
|
|
(55,181
|
)
|
|
(49
|
)%
|
|||
Total revenue
|
$
|
137,944
|
|
|
100
|
%
|
|
$
|
193,565
|
|
|
100
|
%
|
|
$
|
(55,621
|
)
|
|
(29
|
)%
|
|
Six Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
88,668
|
|
|
$
|
111,883
|
|
|
$
|
(23,215
|
)
|
|
(21
|
)%
|
Gross profit percentage
|
35.7
|
%
|
|
42.2
|
%
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
48,785
|
|
|
$
|
40,462
|
|
|
$
|
8,323
|
|
|
21
|
%
|
|
Six Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales, general and administrative
|
$
|
27,272
|
|
|
$
|
18,059
|
|
|
$
|
9,213
|
|
|
51
|
%
|
|
Six Months Ended June 30,
|
|
Change in
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Benefit from income taxes
|
$
|
(11,875
|
)
|
|
$
|
(15,932
|
)
|
|
$
|
4,057
|
|
|
(25
|
)%
|
Effective tax rate
|
49
|
%
|
|
(65
|
)%
|
|
|
|
|
114
|
%
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
100,656
|
|
|
$
|
106,127
|
|
Marketable securities
|
274,122
|
|
|
236,779
|
|
||
Working capital
|
369,288
|
|
|
358,286
|
|
||
Net cash provided by operating activities
|
17,814
|
|
|
36,233
|
|
||
Net cash provided by (used in) investing activities
|
13,231
|
|
|
(140,982
|
)
|
||
Net cash provided by financing activities
|
2,116
|
|
|
2,881
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years |
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating leases (1)
|
$
|
19,812
|
|
|
$
|
1,687
|
|
|
$
|
6,875
|
|
|
$
|
5,704
|
|
|
$
|
5,546
|
|
Purchase obligations (2)
|
47,560
|
|
|
47,560
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Income taxes payable (3)
|
19,205
|
|
|
—
|
|
|
1,829
|
|
|
3,658
|
|
|
13,718
|
|
|||||
Unrecognized tax benefits (4)
|
1,866
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
88,443
|
|
|
$
|
49,247
|
|
|
$
|
8,704
|
|
|
$
|
9,362
|
|
|
$
|
19,264
|
|
|
(1)
|
Our principal facilities are located in Maynard, Massachusetts and Holmdel, New Jersey and are leased under non-cancelable operating leases that expire in February 2025, with respect to the Massachusetts facility, and January 2022, with respect to the New Jersey facility. We also lease office space in various locations with expiration dates between 2018 and 2021. Several of the lease agreements include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require us to pay taxes, insurance, maintenance costs or defined rent increases. All of our facility leases are accounted for as operating leases. Rent expense is recorded over the lease terms on a straight-line basis. Rent expense was
$1.2 million
for the three months ended
June 30, 2018
and
2017
, and
$2.4 million
and
$2.7 million
for the
six
months ended
June 30, 2018
and
2017
, respectively.
|
|
Amounts
|
||
Remaining 2018
|
$
|
1,687
|
|
2019
|
3,423
|
|
|
2020
|
3,452
|
|
|
2021
|
3,294
|
|
|
2022
|
2,410
|
|
|
Thereafter
|
5,546
|
|
|
Total
|
$
|
19,812
|
|
(2)
|
Our purchase obligations primarily consist of outstanding purchase orders with our contract manufacturers for inventory and other third parties for the manufacturing of our wafers. Our relationships with these vendors typically allow for the cancellation of outstanding purchase orders, but require payments of all expenses incurred through the date of cancellation. Other obligations include future non-inventory purchases and commitments related to future fixed asset purchases.
|
(3)
|
Income taxes payable relates to taxes owed as a result of the one-time transition tax on earnings of certain foreign subsidiaries that were previously tax-deferred upon enactment of the U.S. Tax Cuts and Jobs Act, or the Act, in December 2017. The Act allows the tax liability to be paid on an installment basis over eight years.
|
(4)
|
We had
$4.7 million
of uncertain tax positions as of
June 30, 2018
. Included in the balance of unrecognized tax benefits as of
June 30, 2018
were
$1.9 million
of tax benefits that, if recognized, would impact the effective tax rate, which have been accrued for as a long-term liability on our condensed consolidated balance sheet.
|
•
|
the accurate prediction of market requirements, changes in technology and evolving standards;
|
•
|
the availability of qualified product designers and technologies needed to solve difficult design challenges in a cost-effective, reliable manner;
|
•
|
our ability to design products that meet customers’ cost, size, acceptance and specification criteria and performance requirements;
|
•
|
our ability to manufacture new products with acceptable quality and manufacturing yields in a sufficient quantity to meet customer demand and according to customer needs;
|
•
|
our ability to offer new products at competitive prices;
|
•
|
our dependence on suppliers to deliver in a timely manner materials that are critical components of our products;
|
•
|
our dependence on third-party manufacturers to successfully manufacture our products in accordance with the specifications that we and our customers require;
|
•
|
the identification of and entry into new markets for our products;
|
•
|
the acceptance of our customers’ products by the market and the lifecycle of such products; and
|
•
|
our ability to deliver products in a timely manner within our customers’ product planning and deployment cycle.
|
•
|
U.S. or foreign governmental action, such as export control or import restrictions, that could prevent or significantly hinder our ability to sell our products to certain customers or customers in certain foreign jurisdictions or build our products internationally;
|
•
|
greater difficulty in enforcing contracts and accounts receivable obligations and longer collection periods;
|
•
|
difficulties in managing and staffing international offices, and the increased travel, infrastructure and legal compliance costs associated with multiple international locations;
|
•
|
the impact of general economic and political conditions in economies outside the United States, including the uncertainty arising from the June 2016 referendum vote in the United Kingdom in favor of exiting the European Union and the subsequent formal notification by the United Kingdom of its intention to withdraw from the European Union, and heightened economic and political uncertainty within and among other European Union member states;
|
•
|
tariff and trade barriers, changes in custom and duties requirements or compliance interpretations and other regulatory requirements or contractual limitations on our ability to sell or develop our products in certain foreign markets;
|
•
|
heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
|
•
|
certification requirements;
|
•
|
greater difficulty documenting and testing our internal controls;
|
•
|
reduced protection for intellectual property rights in some countries;
|
•
|
potentially adverse tax consequences, including further reform to the U.S. tax code and international tax rules such as the base erosion and profit shifting initiative;
|
•
|
the effects of changes in currency exchange rates;
|
•
|
changes in service provider and government spending patterns;
|
•
|
social, political and economic instability;
|
•
|
higher incidence of corruption or unethical business practices that could expose us to liability or damage our reputation; and
|
•
|
natural disasters, health epidemics and acts of war or terrorism.
|
•
|
a lack of guaranteed supply of manufactured wafers and other raw and finished components and potential higher wafer and component prices due to supply constraints;
|
•
|
the limited availability of, or potential delays in obtaining access to, key process technologies;
|
•
|
the location of contract manufacturers and foundries in regions that are subject to earthquakes, typhoons, tsunamis and other natural disasters;
|
•
|
competition with our contract manufacturers’ or foundries’ other customers when contract manufacturers or foundries allocate capacity or supply during periods of capacity constraint or supply shortages; and
|
•
|
potential regulatory changes, including in the United States, that could in the future prohibit, or increase our costs relating to, the use of contract manufacturers and foundries in certain regions.
|
•
|
develop or respond either directly or in partnership with other market participants to new technologies or technical standards;
|
•
|
react to changing customer requirements and expectations;
|
•
|
devote needed resources to the development, production, promotion and sale of products;
|
•
|
attain high manufacturing yields on new product designs;
|
•
|
establish and take advantage of operations in lower-cost regions;
|
•
|
bring relevant products to the market or enable their customers to bring relevant products to the market through a faster integration cycle; and
|
•
|
deliver competitive products at lower prices, with lower gross margins or at lower costs than our products.
|
•
|
sensitive data regarding our employees or business, including intellectual property and other proprietary data, could be stolen;
|
•
|
our electronic communications systems, including email and other methods, could be disrupted, and our ability to conduct our business operations could be seriously damaged until such systems can be restored;
|
•
|
our ability to process customer orders and deliver products could be degraded or disrupted, resulting in delays in revenue recognition; and
|
•
|
defects and security vulnerabilities could be introduced into the software embedded in or used in the development of our products, thereby damaging the reputation and perceived reliability and security of our products.
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
volatility in the market price and trading volume of comparable companies, in particular optical industry peer companies;
|
•
|
actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts covering our industry or issuing market projection reports;
|
•
|
announcements of technological innovations, new products, strategic alliances or other transactions, or significant agreements by us or by our competitors;
|
•
|
announcements by our customers regarding significant increases or decreases in capital expenditures and their results of operations;
|
•
|
departure of key personnel;
|
•
|
litigation involving us or that may be perceived as having an impact on our business;
|
•
|
changes in general economic, industry and market conditions and trends, including the economic slowdown and delayed deployment and network expansion in China and the uncertainty arising from the June 2016 referendum vote in the United Kingdom in favor of exiting the European Union and the subsequent formal notification by the United Kingdom of its intention to withdraw from the European Union;
|
•
|
investors’ general perception of us;
|
•
|
significant short interest in our stock;
|
•
|
sales of large blocks of our stock;
|
•
|
announcements regarding further industry consolidation;
|
•
|
changes in regulations or legislation in the United States and other jurisdictions in which we do business, including domestic and international tax reform, trade policy and tariffs and export controls that could impede our ability to sell our products to our customers in certain foreign jurisdictions, particularly in China; and
|
•
|
actions or announcements by activist shareholders or others.
|
•
|
the level of demand for our products and our ability to maintain and increase our customer base;
|
•
|
the timing and success of new product introductions by us or our competitors or any other change in the competitive landscape of our market;
|
•
|
the mix of products sold in a quarter;
|
•
|
export control laws or regulations that could impede our ability to sell our products to certain customers or other customers in certain foreign jurisdictions;
|
•
|
pricing pressure as a result of competition or otherwise or price discounts negotiated by our customers;
|
•
|
our ability to ramp production of new products with our contract manufacturers;
|
•
|
delays or disruptions in our supply or manufacturing chain;
|
•
|
our ability to reduce manufacturing costs;
|
•
|
errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs;
|
•
|
seasonal and period-over-period buying patterns of some of our customers;
|
•
|
introduction of new products, with initial sales at relatively small volumes with resulting higher product costs;
|
•
|
increases in and timing of sales and marketing, research and development and other operating expenses that we may incur to grow and expand our operations and to remain competitive;
|
•
|
insolvency, credit, or other difficulties faced by our customers, affecting their ability to purchase or pay for our products;
|
•
|
insolvency, consolidation credit, or other difficulties confronting our suppliers and contract manufacturers leading to disruptions in our supply or distribution chain;
|
•
|
levels of product order rescheduling, cancellations, returns and contractual price protection rights, including the impact of product quality problems on our reputation;
|
•
|
adverse litigation judgments, settlements or other litigation-related costs, including with respect to the pending purported securities class action and derivative lawsuits;
|
•
|
product recalls, regulatory proceedings or other adverse publicity about our products;
|
•
|
fluctuations in foreign exchange rates;
|
•
|
the impact of the U.S. Tax Cuts and Jobs Act and other legislative and regulatory proposals to reform U.S. taxation of international business activities;
|
•
|
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; and
|
•
|
general economic conditions in either domestic or international markets, particularly the impact of any economic slowdown in China.
|
•
|
establishing a classified board of directors with staggered three-year terms so that not all members of our board are elected at one time;
|
•
|
providing that directors may be removed by stockholders only for cause and only with a vote of the holders of at least 75% of the issued and outstanding shares of voting stock;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
April 1 - 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
60,000,000
|
|
May 1 - 31, 2018
|
|
24,143
|
|
|
31.95
|
|
|
24,143
|
|
|
59,228,603
|
|
||
June 1 - 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59,228,603
|
|
||
Total
|
|
24,143
|
|
|
$
|
31.95
|
|
|
24,143
|
|
|
$
|
59,228,603
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1*, **
|
|
|
|
|
|
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 management contract or compensatory plan or arrangement.
|
**
|
Filed herewith.
|
***
|
Furnished herewith.
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: August 2, 2018
|
|
By:
|
/s/ Murugesan Shanmugaraj
|
|
|
|
Murugesan Shanmugaraj
|
|
|
|
President and Chief Executive Officer
|
Title of Participant
|
Severance Period
|
|
Chief Executive Officer
|
Twelve (12) months
|
|
All other Participants
|
Nine (9) months
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: August 2, 2018
|
|
By:
|
/s/ Murugesan Shanmugaraj
|
|
|
|
Murugesan Shanmugaraj
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: August 2, 2018
|
|
By:
|
/s/ John F. Gavin
|
|
|
|
John F. Gavin
|
|
|
|
Chief Financial Officer
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: August 2, 2018
|
|
By:
|
/s/ Murugesan Shanmugaraj
|
|
|
|
Murugesan Shanmugaraj
|
|
|
|
President and Chief Executive Officer
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: August 2, 2018
|
|
By:
|
/s/ John F. Gavin
|
|
|
|
John F. Gavin
|
|
|
|
Chief Financial Officer
|