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☒
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QUARTERLY 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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27-0291921
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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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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.0001 par value per share
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ACIA
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The Nasdaq Global Select Market
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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EX-31.1
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(CERTIFICATION OF THE CEO PURSUANT TO SECTION 302)
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EX-31.2
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(CERTIFICATION OF THE CFO PURSUANT TO SECTION 302)
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EX-32.1
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(CERTIFICATION OF THE CEO PURSUANT TO SECTION 906)
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EX-32.2
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(CERTIFICATION OF THE CFO PURSUANT TO SECTION 906)
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•
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the occurrence of any event, change or other circumstances that could give rise to the termination of the Agreement and Plan of Merger we have entered into with Cisco Systems, Inc. and Amarone Acquisition Corp. and any inability to complete the proposed merger due to the failure to satisfy conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the proposed merger;
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•
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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;
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•
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our ability to anticipate the timing and scale of demand for our products, including from our largest customers;
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•
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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;
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•
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our ability to produce products free of problems, defects, errors and vulnerabilities;
|
•
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our anticipated growth strategies;
|
•
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our expectations regarding competition;
|
•
|
the anticipated trends and challenges in our business and the markets 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, or that could impede our ability to sell our products to other customers in certain foreign jurisdictions, particularly in China, or that could impede sales by such customers in the United States; and
|
•
|
our ability to obtain and maintain intellectual property protection for our products.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
64,468
|
|
|
$
|
60,444
|
|
Marketable securities - short-term
|
257,881
|
|
|
264,660
|
|
||
Accounts receivable
|
99,744
|
|
|
90,831
|
|
||
Inventory
|
37,307
|
|
|
25,511
|
|
||
Prepaid expenses and other current assets
|
8,277
|
|
|
12,598
|
|
||
Total current assets
|
467,677
|
|
|
454,044
|
|
||
Marketable securities - long-term
|
136,559
|
|
|
74,764
|
|
||
Property and equipment, net
|
26,647
|
|
|
26,643
|
|
||
Operating lease right-of-use assets
|
26,235
|
|
|
—
|
|
||
Deferred tax asset
|
47,011
|
|
|
38,717
|
|
||
Other assets
|
916
|
|
|
7,691
|
|
||
Total assets
|
$
|
705,045
|
|
|
$
|
601,859
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
45,850
|
|
|
$
|
46,650
|
|
Accrued liabilities
|
62,580
|
|
|
31,848
|
|
||
Deferred revenue
|
11,158
|
|
|
5,101
|
|
||
Total current liabilities
|
119,588
|
|
|
83,599
|
|
||
Income taxes payable
|
7,117
|
|
|
8,791
|
|
||
Non-current operating lease liabilities
|
16,573
|
|
|
—
|
|
||
Other long-term liabilities
|
7,846
|
|
|
6,742
|
|
||
Total liabilities
|
151,124
|
|
|
99,132
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 5,000 shares authorized; none issued and outstanding at September 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 par value; 150,000 shares authorized; 42,213 and 41,024 shares issued at September 30, 2019 and December 31, 2018, respectively
|
4
|
|
|
4
|
|
||
Treasury stock, at cost; 974 shares at September 30, 2019 and December 31, 2018
|
(39,712
|
)
|
|
(39,712
|
)
|
||
Additional paid-in capital
|
390,270
|
|
|
360,267
|
|
||
Accumulated other comprehensive income (loss)
|
762
|
|
|
(372
|
)
|
||
Retained earnings
|
202,597
|
|
|
182,540
|
|
||
Total stockholders’ equity
|
553,921
|
|
|
502,727
|
|
||
Total liabilities and stockholders’ equity
|
$
|
705,045
|
|
|
$
|
601,859
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
$
|
119,591
|
|
|
$
|
94,814
|
|
|
$
|
335,990
|
|
|
$
|
232,758
|
|
Cost of revenue
|
60,512
|
|
|
49,981
|
|
|
175,982
|
|
|
138,649
|
|
||||
Gross profit
|
59,079
|
|
|
44,833
|
|
|
160,008
|
|
|
94,109
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
28,649
|
|
|
24,696
|
|
|
88,578
|
|
|
73,481
|
|
||||
Sales, general and administrative
|
20,457
|
|
|
12,134
|
|
|
66,143
|
|
|
39,406
|
|
||||
Total operating expenses
|
49,106
|
|
|
36,830
|
|
|
154,721
|
|
|
112,887
|
|
||||
Income (loss) from operations
|
9,973
|
|
|
8,003
|
|
|
5,287
|
|
|
(18,778
|
)
|
||||
Other income, net:
|
|
|
|
|
|
|
|
|
|
||||||
Interest income, net
|
2,592
|
|
|
2,074
|
|
|
7,940
|
|
|
4,919
|
|
||||
Other expense, net
|
(102
|
)
|
|
(63
|
)
|
|
(209
|
)
|
|
(325
|
)
|
||||
Total other income, net
|
2,490
|
|
|
2,011
|
|
|
7,731
|
|
|
4,594
|
|
||||
Income (loss) before (benefit) expense for income taxes
|
12,463
|
|
|
10,014
|
|
|
13,018
|
|
|
(14,184
|
)
|
||||
(Benefit) expense for income taxes
|
(2,642
|
)
|
|
1,863
|
|
|
(7,039
|
)
|
|
(10,012
|
)
|
||||
Net income (loss)
|
$
|
15,105
|
|
|
$
|
8,151
|
|
|
$
|
20,057
|
|
|
$
|
(4,172
|
)
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.37
|
|
|
$
|
0.20
|
|
|
$
|
0.49
|
|
|
$
|
(0.10
|
)
|
Diluted
|
$
|
0.35
|
|
|
$
|
0.19
|
|
|
$
|
0.47
|
|
|
$
|
(0.10
|
)
|
Weighted-average shares used to compute earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
41,119
|
|
|
40,495
|
|
|
40,730
|
|
|
40,217
|
|
||||
Diluted
|
42,667
|
|
|
42,060
|
|
|
42,404
|
|
|
40,217
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
15,105
|
|
|
$
|
8,151
|
|
|
$
|
20,057
|
|
|
$
|
(4,172
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||
Changes in unrealized income on marketable securities, net of income taxes of $(12), $(172), $(52) and $(19) for the three and nine months ended September 30, 2019 and 2018, respectively
|
101
|
|
|
231
|
|
|
1,134
|
|
|
81
|
|
||||
Comprehensive income (loss)
|
$
|
15,206
|
|
|
$
|
8,382
|
|
|
$
|
21,191
|
|
|
$
|
(4,091
|
)
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Retained Earnings
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
Balance at December 31, 2017
|
|
39,606
|
|
|
$
|
4
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
324,944
|
|
|
$
|
(320
|
)
|
|
$
|
177,422
|
|
|
$
|
502,050
|
|
Adoption of ASU 2014-09, net of tax of $51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
157
|
|
|
157
|
|
||||||||||||
Vesting of restricted common stock
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Exercise of common stock options
|
|
220
|
|
|
—
|
|
|
|
|
|
|
968
|
|
|
|
|
|
|
|
|
968
|
|
||||||||
Vesting of restricted stock units
|
|
214
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
6,514
|
|
|
|
|
|
|
|
|
6,514
|
|
||||||||
Unrealized losses on marketable securities, net of tax of $88
|
|
|
|
|
|
|
|
|
|
|
|
(402
|
)
|
|
|
|
(402
|
)
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,078
|
)
|
|
(9,078
|
)
|
||||||||
Balance at March 31, 2018
|
|
40,061
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
332,426
|
|
|
(722
|
)
|
|
168,501
|
|
|
500,209
|
|
||||||
Adoption of ASU 2018-02
|
|
|
|
|
|
|
|
|
|
|
|
(45
|
)
|
|
45
|
|
|
—
|
|
|||||||||||
Treasury stock acquired
|
|
|
|
|
|
24
|
|
|
(771
|
)
|
|
|
|
|
|
|
|
(771
|
)
|
|||||||||||
Exercise of common stock options
|
|
128
|
|
|
—
|
|
|
|
|
|
|
552
|
|
|
|
|
|
|
552
|
|
||||||||||
Vesting of restricted stock units
|
|
271
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||||
Common stock issued under employee stock purchase plan
|
|
57
|
|
|
—
|
|
|
|
|
|
|
1,367
|
|
|
|
|
|
|
1,367
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
7,563
|
|
|
|
|
|
|
7,563
|
|
||||||||||||
Unrealized gains on marketable securities, net of tax of $(54)
|
|
|
|
|
|
|
|
|
|
|
|
252
|
|
|
|
|
252
|
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,245
|
)
|
|
(3,245
|
)
|
||||||||||||
Balance at June 30, 2018
|
|
40,517
|
|
|
4
|
|
|
24
|
|
|
(771
|
)
|
|
341,908
|
|
|
(515
|
)
|
|
165,301
|
|
|
505,927
|
|
||||||
Treasury stock acquired
|
|
|
|
|
|
310
|
|
|
(11,928
|
)
|
|
|
|
|
|
|
|
(11,928
|
)
|
|||||||||||
Exercise of common stock options
|
|
63
|
|
|
—
|
|
|
|
|
|
|
434
|
|
|
|
|
|
|
434
|
|
||||||||||
Vesting of restricted stock units
|
|
159
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
7,713
|
|
|
|
|
|
|
7,713
|
|
||||||||||||
Unrealized gains on marketable securities, net of tax of $(52)
|
|
|
|
|
|
|
|
|
|
|
|
231
|
|
|
|
|
231
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,151
|
|
|
8,151
|
|
||||||||||||
Balance at September 30, 2018
|
|
40,739
|
|
|
$
|
4
|
|
|
334
|
|
|
$
|
(12,699
|
)
|
|
$
|
350,055
|
|
|
$
|
(284
|
)
|
|
$
|
173,452
|
|
|
$
|
510,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2018
|
|
41,024
|
|
|
$
|
4
|
|
|
974
|
|
|
$
|
(39,712
|
)
|
|
$
|
360,267
|
|
|
$
|
(372
|
)
|
|
$
|
182,540
|
|
|
$
|
502,727
|
|
Exercise of common stock options
|
|
190
|
|
|
—
|
|
|
|
|
|
|
1,400
|
|
|
|
|
|
|
|
|
1,400
|
|
||||||||
Vesting of restricted stock units
|
|
316
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
7,967
|
|
|
|
|
|
|
|
|
7,967
|
|
||||||||
Unrealized gains on marketable securities, net of tax of $(88)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
555
|
|
|
|
|
|
555
|
|
||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,977
|
|
|
6,977
|
|
||||||||
Balance at March 31, 2019
|
|
41,530
|
|
|
4
|
|
|
974
|
|
|
(39,712
|
)
|
|
369,634
|
|
|
183
|
|
|
189,517
|
|
|
519,626
|
|
||||||
Exercise of common stock options
|
|
72
|
|
|
—
|
|
|
|
|
|
|
413
|
|
|
|
|
|
|
413
|
|
||||||||||
Vesting of restricted stock units
|
|
297
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Common stock issued under employee stock purchase plan
|
|
56
|
|
|
—
|
|
|
|
|
|
|
2,131
|
|
|
|
|
|
|
2,131
|
|
||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
8,927
|
|
|
|
|
|
|
8,927
|
|
||||||||||||
Unrealized gains on marketable securities, net of tax of $(72)
|
|
|
|
|
|
|
|
|
|
|
|
478
|
|
|
|
|
478
|
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,025
|
)
|
|
(2,025
|
)
|
||||||||||||
Balance at June 30, 2019
|
|
41,955
|
|
|
4
|
|
|
974
|
|
|
(39,712
|
)
|
|
381,105
|
|
|
661
|
|
|
187,492
|
|
|
529,550
|
|
||||||
Exercise of common stock options
|
|
89
|
|
|
—
|
|
|
|
|
|
|
560
|
|
|
|
|
|
|
560
|
|
||||||||||
Vesting of restricted stock units
|
|
169
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
8,605
|
|
|
|
|
|
|
8,605
|
|
||||||||||||
Unrealized gains on marketable securities, net of tax of $(12)
|
|
|
|
|
|
|
|
|
|
|
|
101
|
|
|
|
|
101
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,105
|
|
|
15,105
|
|
||||||||||||
Balance at September 30, 2019
|
|
42,213
|
|
|
$
|
4
|
|
|
974
|
|
|
$
|
(39,712
|
)
|
|
$
|
390,270
|
|
|
$
|
762
|
|
|
$
|
202,597
|
|
|
$
|
553,921
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
20,057
|
|
|
$
|
(4,172
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
9,274
|
|
|
10,132
|
|
||
Stock-based compensation
|
25,717
|
|
|
21,865
|
|
||
Deferred income taxes
|
(8,294
|
)
|
|
(8,781
|
)
|
||
Non-cash lease expense
|
3,667
|
|
|
—
|
|
||
Other non-cash benefits
|
(1,970
|
)
|
|
(356
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(8,913
|
)
|
|
5,137
|
|
||
Inventory
|
(11,796
|
)
|
|
27,533
|
|
||
Prepaid expenses and other current assets
|
4,321
|
|
|
8,615
|
|
||
Other assets
|
(112
|
)
|
|
737
|
|
||
Accounts payable
|
(1,227
|
)
|
|
(14,075
|
)
|
||
Accrued liabilities
|
27,814
|
|
|
(2,463
|
)
|
||
Deferred revenue
|
6,703
|
|
|
5,710
|
|
||
Income taxes payable
|
(1,674
|
)
|
|
(1,829
|
)
|
||
Lease liabilities
|
(3,741
|
)
|
|
—
|
|
||
Other long-term liabilities
|
458
|
|
|
(376
|
)
|
||
Net cash provided by operating activities
|
60,284
|
|
|
47,677
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(9,111
|
)
|
|
(11,287
|
)
|
||
Purchases of marketable securities
|
(359,578
|
)
|
|
(249,727
|
)
|
||
Sales and maturities of marketable securities
|
307,927
|
|
|
225,589
|
|
||
Deposits
|
(2
|
)
|
|
(7
|
)
|
||
Net cash used in investing activities
|
(60,764
|
)
|
|
(35,432
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Treasury stock acquired
|
—
|
|
|
(12,699
|
)
|
||
Proceeds from the issuance of common stock under stock-based compensation plans
|
4,504
|
|
|
3,320
|
|
||
Net cash provided by (used in) financing activities
|
4,504
|
|
|
(9,379
|
)
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
4,024
|
|
|
2,866
|
|
||
Cash and cash equivalents—Beginning of period
|
60,444
|
|
|
67,495
|
|
||
Cash and cash equivalents—End of period
|
$
|
64,468
|
|
|
$
|
70,361
|
|
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||
Refunds received for income taxes, net
|
$
|
(972
|
)
|
|
$
|
(6,874
|
)
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Right of use assets acquired under operating leases
|
$
|
7,084
|
|
|
$
|
—
|
|
Capital expenditures incurred but not yet paid
|
$
|
623
|
|
|
$
|
1,726
|
|
|
Balance at Beginning of Period
|
|
Increase
|
|
Balance at End of Period
|
|||||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|||||
Accounts receivable
|
$
|
90,831
|
|
|
8,913
|
|
|
$
|
99,744
|
|
Deferred revenue (current)
|
$
|
5,101
|
|
|
6,057
|
|
|
$
|
11,158
|
|
Deferred revenue (non-current)
|
$
|
3,707
|
|
|
647
|
|
|
$
|
4,354
|
|
|
Three Months Ended September 30, 2019
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
|
Revenue ($)
|
|
Revenue (%)
|
|
Revenue ($)
|
|
Revenue (%)
|
|
Revenue ($)
|
|
Revenue (%)
|
|
Revenue ($)
|
|
Revenue (%)
|
||||||||||||
Embedded modules
|
$
|
27,218
|
|
|
23
|
%
|
|
$
|
23,181
|
|
|
25
|
%
|
|
$
|
66,488
|
|
|
20
|
%
|
|
$
|
55,693
|
|
|
24
|
%
|
Pluggable modules
|
57,526
|
|
|
48
|
%
|
|
51,509
|
|
|
54
|
%
|
|
167,948
|
|
|
50
|
%
|
|
125,502
|
|
|
54
|
%
|
||||
Semiconductors
|
34,847
|
|
|
29
|
%
|
|
20,124
|
|
|
21
|
%
|
|
101,554
|
|
|
30
|
%
|
|
51,563
|
|
|
22
|
%
|
||||
Total revenue
|
$
|
119,591
|
|
|
100
|
%
|
|
$
|
94,814
|
|
|
100
|
%
|
|
$
|
335,990
|
|
|
100
|
%
|
|
$
|
232,758
|
|
|
100
|
%
|
|
As of September 30, 2019
|
||||||||||||||||||||||
|
|
|
Gross Unrealized
|
|
|
|
|
|
|||||||||||||||
|
Amortized Cost
|
|
Gains
|
|
Losses(1)
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||
Cash
|
$
|
53,582
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,582
|
|
|
$
|
53,582
|
|
|
$
|
—
|
|
Money market funds
|
9,486
|
|
|
—
|
|
|
—
|
|
|
9,486
|
|
|
9,486
|
|
|
—
|
|
||||||
U.S. treasury bonds
|
77,604
|
|
|
117
|
|
|
(8
|
)
|
|
77,713
|
|
|
—
|
|
|
77,713
|
|
||||||
Commercial paper
|
44,629
|
|
|
2
|
|
|
—
|
|
|
44,631
|
|
|
—
|
|
|
44,631
|
|
||||||
Certificates of deposit
|
25,084
|
|
|
29
|
|
|
(1
|
)
|
|
25,112
|
|
|
1,400
|
|
|
23,712
|
|
||||||
Asset-backed securities
|
58,954
|
|
|
185
|
|
|
—
|
|
|
59,139
|
|
|
—
|
|
|
59,139
|
|
||||||
Corporate debt securities
|
188,701
|
|
|
553
|
|
|
(9
|
)
|
|
189,245
|
|
|
—
|
|
|
189,245
|
|
||||||
Total
|
$
|
458,040
|
|
|
$
|
886
|
|
|
$
|
(18
|
)
|
|
$
|
458,908
|
|
|
$
|
64,468
|
|
|
$
|
394,440
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||||||
|
|
|
Gross Unrealized
|
|
|
|
|
|
|
||||||||||||||||||
|
Amortized Cost
|
|
|
|
Losses
|
|
Estimated Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||||||
|
|
Gains
|
|
Less than One Year
|
|
Greater than One Year
|
|
|
|
||||||||||||||||||
Cash
|
$
|
49,650
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,650
|
|
|
$
|
49,650
|
|
|
$
|
—
|
|
Money market funds
|
1,563
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,563
|
|
|
1,563
|
|
|
—
|
|
|||||||
U.S. treasury bonds
|
40,367
|
|
|
—
|
|
|
(9
|
)
|
|
(3
|
)
|
|
40,355
|
|
|
—
|
|
|
40,355
|
|
|||||||
Commercial paper
|
60,435
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
60,422
|
|
|
6,668
|
|
|
53,754
|
|
|||||||
Certificates of deposit
|
36,839
|
|
|
13
|
|
|
(12
|
)
|
|
—
|
|
|
36,840
|
|
|
—
|
|
|
36,840
|
|
|||||||
Asset-backed securities
|
47,798
|
|
|
1
|
|
|
(63
|
)
|
|
(22
|
)
|
|
47,714
|
|
|
—
|
|
|
47,714
|
|
|||||||
Corporate debt securities
|
163,654
|
|
|
9
|
|
|
(239
|
)
|
|
(100
|
)
|
|
163,324
|
|
|
2,563
|
|
|
160,761
|
|
|||||||
Total
|
$
|
400,306
|
|
|
$
|
23
|
|
|
$
|
(336
|
)
|
|
$
|
(125
|
)
|
|
$
|
399,868
|
|
|
$
|
60,444
|
|
|
$
|
339,424
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Proceeds from the sales and maturities of marketable securities
|
$
|
124,439
|
|
|
$
|
60,081
|
|
|
$
|
307,927
|
|
|
$
|
225,589
|
|
Realized gains
|
$
|
36
|
|
|
$
|
6
|
|
|
$
|
42
|
|
|
$
|
11
|
|
Realized losses
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
$
|
(37
|
)
|
|
As of September 30, 2019
|
|
As of December 31, 2018
|
||||||||||||
|
Amortized Cost Basis
|
|
Aggregate Fair Value
|
|
Amortized Cost Basis
|
|
Aggregate Fair Value
|
||||||||
Due within one year
|
$
|
257,445
|
|
|
$
|
257,881
|
|
|
$
|
264,959
|
|
|
$
|
264,660
|
|
Due after one year through four years
|
136,125
|
|
|
136,559
|
|
|
74,902
|
|
|
74,764
|
|
||||
Total
|
$
|
393,570
|
|
|
$
|
394,440
|
|
|
$
|
339,861
|
|
|
$
|
339,424
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
25,475
|
|
|
$
|
18,420
|
|
Work-in-process
|
981
|
|
|
218
|
|
||
Finished goods
|
10,851
|
|
|
6,873
|
|
||
Inventory
|
$
|
37,307
|
|
|
$
|
25,511
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Engineering laboratory equipment
|
$
|
55,531
|
|
|
$
|
50,590
|
|
Computer software
|
3,618
|
|
|
3,132
|
|
||
Computer equipment
|
7,009
|
|
|
6,018
|
|
||
Furniture and fixtures
|
3,635
|
|
|
3,227
|
|
||
Leasehold improvements
|
3,978
|
|
|
3,581
|
|
||
Construction in progress
|
2,765
|
|
|
1,279
|
|
||
Total property and equipment
|
76,536
|
|
|
67,827
|
|
||
Less: Accumulated depreciation
|
(49,889
|
)
|
|
(41,184
|
)
|
||
Property and equipment, net
|
$
|
26,647
|
|
|
$
|
26,643
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Employee-related liabilities
|
$
|
11,548
|
|
|
$
|
8,509
|
|
Current maturities of operating leases
|
4,164
|
|
|
—
|
|
||
Goods and services received not invoiced
|
3,390
|
|
|
3,592
|
|
||
Accrued manufacturing related expenses
|
2,580
|
|
|
2,342
|
|
||
Warranty reserve
|
10,534
|
|
|
8,220
|
|
||
Litigation and settlement accrual
|
20,000
|
|
|
2,500
|
|
||
Other accrued liabilities
|
10,364
|
|
|
6,685
|
|
||
Accrued liabilities
|
$
|
62,580
|
|
|
$
|
31,848
|
|
|
|
Classification on the Balance Sheet
|
|
September 30, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
26,235
|
|
Liabilities
|
|
|
|
|
||
Current - operating
|
|
Accrued liabilities
|
|
4,164
|
|
|
Noncurrent - operating
|
|
Noncurrent operating lease liabilities
|
|
16,573
|
|
|
Total lease liabilities
|
|
|
|
$
|
20,737
|
|
Weighted-average remaining lease term - operating leases
|
|
5.4 years
|
|
||
Weighted-average discount rate - operating leases(1)
|
|
4.79
|
%
|
|
(1)
|
Upon adoption of ASC 842, discount rates used for existing leases were established at January 1, 2019, which was the date of initial application of ASC 842.
|
|
|
Operating Leases
|
||
Remaining 2019
|
|
$
|
1,034
|
|
2020
|
|
4,315
|
|
|
2021
|
|
4,381
|
|
|
2022
|
|
4,261
|
|
|
2023
|
|
4,414
|
|
|
Thereafter
|
|
5,302
|
|
|
Total minimum lease payments
|
|
23,707
|
|
|
Less: amount of lease payments representing interest
|
|
(2,970
|
)
|
|
Present value of future minimum lease payments
|
|
20,737
|
|
|
Less: current obligation under leases
|
|
4,164
|
|
|
Long-term lease obligations
|
|
$
|
16,573
|
|
|
|
Amounts
|
||
2019
|
|
$
|
3,888
|
|
2020
|
|
4,280
|
|
|
2021
|
|
4,394
|
|
|
2022
|
|
4,248
|
|
|
2023
|
|
4,401
|
|
|
Thereafter
|
|
5,252
|
|
|
Total
|
|
$
|
26,463
|
|
|
September 30, 2019
|
||||||||||||||
|
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
|
$
|
—
|
|
|
$
|
9,486
|
|
|
$
|
—
|
|
|
$
|
9,486
|
|
U.S. treasury bonds
|
—
|
|
|
77,713
|
|
|
—
|
|
|
77,713
|
|
||||
Commercial paper
|
—
|
|
|
44,631
|
|
|
—
|
|
|
44,631
|
|
||||
Certificates of deposit
|
—
|
|
|
25,112
|
|
|
—
|
|
|
25,112
|
|
||||
Asset-backed securities
|
—
|
|
|
59,139
|
|
|
—
|
|
|
59,139
|
|
||||
Corporate debt securities
|
—
|
|
|
189,245
|
|
|
—
|
|
|
189,245
|
|
||||
Total
|
$
|
—
|
|
|
$
|
405,326
|
|
|
$
|
—
|
|
|
$
|
405,326
|
|
|
December 31, 2018
|
||||||||||||||
|
Quoted Prices in Active Markets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
$
|
—
|
|
|
$
|
1,563
|
|
|
$
|
—
|
|
|
$
|
1,563
|
|
U.S. treasury bonds
|
—
|
|
|
40,355
|
|
|
—
|
|
|
40,355
|
|
||||
Commercial paper
|
—
|
|
|
60,422
|
|
|
—
|
|
|
60,422
|
|
||||
Certificates of deposit
|
—
|
|
|
36,840
|
|
|
—
|
|
|
36,840
|
|
||||
Asset-backed securities
|
—
|
|
|
47,714
|
|
|
—
|
|
|
47,714
|
|
||||
Corporate debt securities
|
—
|
|
|
163,324
|
|
|
—
|
|
|
163,324
|
|
||||
Total
|
$
|
—
|
|
|
$
|
350,218
|
|
|
$
|
—
|
|
|
$
|
350,218
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of revenue
|
$
|
481
|
|
|
$
|
508
|
|
|
$
|
1,572
|
|
|
$
|
1,601
|
|
Research and development
|
5,330
|
|
|
4,654
|
|
|
15,401
|
|
|
12,909
|
|
||||
Sales, general and administrative
|
2,899
|
|
|
2,577
|
|
|
8,744
|
|
|
7,355
|
|
||||
Total stock-based compensation
|
$
|
8,710
|
|
|
$
|
7,739
|
|
|
$
|
25,717
|
|
|
$
|
21,865
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
$
|
340
|
|
|
$
|
577
|
|
|
$
|
1,544
|
|
|
$
|
1,766
|
|
Restricted stock units
|
7,936
|
|
|
6,768
|
|
|
22,994
|
|
|
19,053
|
|
||||
Employee stock purchase plan
|
330
|
|
|
368
|
|
|
961
|
|
|
951
|
|
||||
Other awards
|
104
|
|
|
26
|
|
|
218
|
|
|
95
|
|
||||
Total stock-based compensation
|
$
|
8,710
|
|
|
$
|
7,739
|
|
|
$
|
25,717
|
|
|
$
|
21,865
|
|
|
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, 2018
|
1,116
|
|
|
$
|
9.78
|
|
|
5.7
|
|
$
|
33,113
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(351
|
)
|
|
$
|
6.76
|
|
|
|
|
$
|
16,790
|
|
Canceled
|
(11
|
)
|
|
$
|
19.44
|
|
|
|
|
|
|
|
Outstanding at September 30, 2019
|
754
|
|
|
$
|
11.06
|
|
|
4.8
|
|
$
|
41,525
|
|
Vested and expected to vest at:
|
|
|
|
|
|
|
|
|
|
|
||
September 30, 2019
|
754
|
|
|
$
|
11.06
|
|
|
4.8
|
|
$
|
41,525
|
|
December 31, 2018
|
1,116
|
|
|
$
|
9.78
|
|
|
5.7
|
|
$
|
33,113
|
|
Exercisable at:
|
|
|
|
|
|
|
|
|
|
|
||
September 30, 2019
|
676
|
|
|
$
|
9.51
|
|
|
4.6
|
|
$
|
38,159
|
|
December 31, 2018
|
837
|
|
|
$
|
7.38
|
|
|
5.3
|
|
$
|
26,544
|
|
Risk-free interest rate
|
2.5%
|
Expected dividend yield
|
None
|
Expected volatility
|
57.3%
|
Expected term (in years)
|
2.9
|
Grant date fair value of underlying shares
|
$44.43
|
|
RSUs
(in thousands)
|
|
Weighted-Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2018
|
2,325
|
|
|
$
|
40.55
|
|
Granted
|
736
|
|
|
$
|
52.11
|
|
Vested
|
(782
|
)
|
|
$
|
30.66
|
|
Canceled
|
(489
|
)
|
|
$
|
56.37
|
|
Outstanding at September 30, 2019
|
1,790
|
|
|
$
|
45.30
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
15,105
|
|
|
$
|
8,151
|
|
|
$
|
20,057
|
|
|
$
|
(4,172
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used to compute net income (loss) per share - basic
|
41,119
|
|
|
40,495
|
|
|
40,730
|
|
|
40,217
|
|
||||
Dilutive effect of stock options, unvested restricted stock and restricted stock units and employee stock purchase plan
|
1,548
|
|
|
1,565
|
|
|
1,674
|
|
|
—
|
|
||||
Weighted-average shares used to compute net income (loss) per share - diluted
|
42,667
|
|
|
42,060
|
|
|
42,404
|
|
|
40,217
|
|
||||
Net income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.37
|
|
|
$
|
0.20
|
|
|
$
|
0.49
|
|
|
$
|
(0.10
|
)
|
Diluted
|
$
|
0.35
|
|
|
$
|
0.19
|
|
|
$
|
0.47
|
|
|
$
|
(0.10
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Options to purchase common stock
|
38
|
|
|
95
|
|
|
38
|
|
|
1,087
|
|
Unvested restricted stock units and awards
|
33
|
|
|
692
|
|
|
31
|
|
|
1,436
|
|
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Warranty reserve, beginning of period
|
$
|
10,833
|
|
|
$
|
7,077
|
|
|
$
|
8,220
|
|
|
$
|
8,306
|
|
Provisions made to warranty reserve during the period
|
2,431
|
|
|
3,521
|
|
|
12,067
|
|
|
9,545
|
|
||||
Charges against warranty reserve during the period
|
(2,730
|
)
|
|
(2,889
|
)
|
|
(9,753
|
)
|
|
(10,142
|
)
|
||||
Warranty reserve, end of period
|
$
|
10,534
|
|
|
$
|
7,709
|
|
|
$
|
10,534
|
|
|
$
|
7,709
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
United States
|
$
|
23,113
|
|
|
$
|
15,857
|
|
|
$
|
50,829
|
|
|
$
|
48,443
|
|
China
|
33,364
|
|
|
27,392
|
|
|
114,206
|
|
|
62,385
|
|
||||
Germany
|
15,200
|
|
|
13,292
|
|
|
38,946
|
|
|
43,124
|
|
||||
Thailand
|
20,329
|
|
|
20,759
|
|
|
66,061
|
|
|
32,731
|
|
||||
Other
|
27,585
|
|
|
17,514
|
|
|
65,948
|
|
|
46,075
|
|
||||
Total revenue
|
$
|
119,591
|
|
|
$
|
94,814
|
|
|
$
|
335,990
|
|
|
$
|
232,758
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
United States
|
$
|
17,928
|
|
|
$
|
18,123
|
|
Thailand
|
4,046
|
|
|
4,147
|
|
||
China
|
1,798
|
|
|
1,703
|
|
||
Other
|
2,875
|
|
|
2,670
|
|
||
Total long-lived assets
|
$
|
26,647
|
|
|
$
|
26,643
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
A(1)
|
20
|
%
|
|
21
|
%
|
|
|
27
|
%
|
|
17
|
%
|
|
B
|
16
|
%
|
|
14
|
%
|
|
|
13
|
%
|
|
16
|
%
|
|
C
|
17
|
%
|
|
16
|
%
|
(2)
|
|
15
|
%
|
|
17
|
%
|
(2)
|
E
|
19
|
%
|
|
16
|
%
|
|
|
18
|
%
|
|
10
|
%
|
|
|
(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.
|
(2)
|
Customer C was acquired by one of the Company’s other customers on October 1, 2018. Pro forma revenue for the combined customer would have been 18% and 20% for the three and nine months ended September 30, 2018, respectively.
|
|
September 30, 2019
|
|
December 31, 2018
|
||
A
|
23
|
%
|
|
30
|
%
|
B
|
14
|
%
|
|
13
|
%
|
C
|
14
|
%
|
|
*
|
|
D
|
*
|
|
|
10
|
%
|
F
|
10
|
%
|
|
17
|
%
|
|
*
|
Less than 10% of accounts receivable at the date indicated
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
X
|
23
|
%
|
|
16
|
%
|
|
21
|
%
|
|
16
|
%
|
Y
|
52
|
%
|
|
56
|
%
|
|
53
|
%
|
|
48
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Consolidated Statement of Operation Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue
|
$
|
119,591
|
|
|
$
|
94,814
|
|
|
$
|
335,990
|
|
|
$
|
232,758
|
|
Cost of revenue
|
60,512
|
|
|
49,981
|
|
|
175,982
|
|
|
138,649
|
|
||||
Gross profit
|
59,079
|
|
|
44,833
|
|
|
160,008
|
|
|
94,109
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
28,649
|
|
|
24,696
|
|
|
88,578
|
|
|
73,481
|
|
||||
Sales, general and administrative
|
20,457
|
|
|
12,134
|
|
|
66,143
|
|
|
39,406
|
|
||||
Total operating expenses
|
49,106
|
|
|
36,830
|
|
|
154,721
|
|
|
112,887
|
|
||||
Income (loss) from operations
|
9,973
|
|
|
8,003
|
|
|
5,287
|
|
|
(18,778
|
)
|
||||
Total other income, net
|
2,490
|
|
|
2,011
|
|
|
7,731
|
|
|
4,594
|
|
||||
Income (loss) before (benefit) expense for income taxes
|
12,463
|
|
|
10,014
|
|
|
13,018
|
|
|
(14,184
|
)
|
||||
(Benefit) expense for income taxes
|
(2,642
|
)
|
|
1,863
|
|
|
(7,039
|
)
|
|
(10,012
|
)
|
||||
Net income (loss)
|
$
|
15,105
|
|
|
$
|
8,151
|
|
|
$
|
20,057
|
|
|
$
|
(4,172
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
51
|
%
|
|
53
|
%
|
|
52
|
%
|
|
60
|
%
|
Gross profit
|
49
|
%
|
|
47
|
%
|
|
48
|
%
|
|
40
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
24
|
%
|
|
26
|
%
|
|
26
|
%
|
|
32
|
%
|
Sales, general and administrative
|
17
|
%
|
|
13
|
%
|
|
20
|
%
|
|
17
|
%
|
Total operating expenses
|
41
|
%
|
|
39
|
%
|
|
46
|
%
|
|
48
|
%
|
Income (loss) from operations
|
8
|
%
|
|
8
|
%
|
|
2
|
%
|
|
(8
|
)%
|
Total other income, net
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
|
2
|
%
|
Income (loss) before (benefit) expense for income taxes
|
10
|
%
|
|
11
|
%
|
|
4
|
%
|
|
(6
|
)%
|
(Benefit) expense for income taxes
|
(2
|
)%
|
|
2
|
%
|
|
(2
|
)%
|
|
(4
|
)%
|
Net income (loss)
|
13
|
%
|
|
9
|
%
|
|
6
|
%
|
|
(2
|
)%
|
|
Three Months Ended
|
|
As a % of
|
|
Three Months Ended
|
|
As a % of
|
|
Change in
|
|||||||||||
|
September 30, 2019
|
|
Total Revenue
|
|
September 30, 2018
|
|
Total Revenue
|
|
$
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Embedded modules
|
$
|
27,218
|
|
|
23
|
%
|
|
$
|
23,181
|
|
|
25
|
%
|
|
$
|
4,037
|
|
|
17
|
%
|
Pluggable modules
|
57,526
|
|
|
48
|
%
|
|
51,509
|
|
|
54
|
%
|
|
6,017
|
|
|
12
|
%
|
|||
Semiconductors
|
34,847
|
|
|
29
|
%
|
|
20,124
|
|
|
21
|
%
|
|
14,723
|
|
|
73
|
%
|
|||
Total revenue
|
$
|
119,591
|
|
|
100
|
%
|
|
$
|
94,814
|
|
|
100
|
%
|
|
$
|
24,777
|
|
|
26
|
%
|
|
Three Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
60,512
|
|
|
$
|
49,981
|
|
|
$
|
10,531
|
|
|
21
|
%
|
Gross profit percentage
|
49.4
|
%
|
|
47.3
|
%
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales, general and administrative
|
$
|
20,457
|
|
|
$
|
12,134
|
|
|
$
|
8,323
|
|
|
69
|
%
|
|
Three Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
(Benefit) expense from income taxes
|
$
|
(2,642
|
)
|
|
$
|
1,863
|
|
|
$
|
(4,505
|
)
|
|
(242
|
)%
|
Effective tax rate
|
(21
|
)%
|
|
19
|
%
|
|
|
|
|
(40
|
)%
|
|
Nine Months Ended
|
|
As a % of
|
|
Nine Months Ended
|
|
As a % of
|
|
Change in
|
|||||||||||
|
September 30, 2019
|
|
Total Revenue
|
|
September 30, 2018
|
|
Total Revenue
|
|
$
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Embedded modules
|
$
|
66,488
|
|
|
20
|
%
|
|
$
|
55,693
|
|
|
24
|
%
|
|
$
|
10,795
|
|
|
19
|
%
|
Pluggable modules
|
167,948
|
|
|
50
|
%
|
|
125,502
|
|
|
54
|
%
|
|
42,446
|
|
|
34
|
%
|
|||
Semiconductors
|
101,554
|
|
|
30
|
%
|
|
51,563
|
|
|
22
|
%
|
|
49,991
|
|
|
97
|
%
|
|||
Total revenue
|
$
|
335,990
|
|
|
100
|
%
|
|
$
|
232,758
|
|
|
100
|
%
|
|
$
|
103,232
|
|
|
44
|
%
|
|
Nine Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
175,982
|
|
|
$
|
138,649
|
|
|
$
|
37,333
|
|
|
27
|
%
|
Gross profit percentage
|
47.6
|
%
|
|
40.4
|
%
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Sales, general and administrative
|
$
|
66,143
|
|
|
$
|
39,406
|
|
|
$
|
26,737
|
|
|
68
|
%
|
|
Nine Months Ended September 30,
|
|
Change in
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Benefit from income taxes
|
$
|
(7,039
|
)
|
|
$
|
(10,012
|
)
|
|
$
|
2,973
|
|
|
(30
|
)%
|
Effective tax rate
|
(54
|
)%
|
|
71
|
%
|
|
|
|
|
(125
|
)%
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
64,468
|
|
|
$
|
70,361
|
|
Marketable securities
|
394,440
|
|
|
321,690
|
|
||
Working capital
|
348,089
|
|
|
379,207
|
|
||
Net cash provided by operating activities
|
60,284
|
|
|
47,677
|
|
||
Net cash used in investing activities
|
(60,764
|
)
|
|
(35,432
|
)
|
||
Net cash provided by (used in) financing activities
|
4,504
|
|
|
(9,379
|
)
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Purchase obligations (1)
|
$
|
67,677
|
|
|
$
|
67,677
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes payable (2)
|
7,117
|
|
|
—
|
|
|
2,407
|
|
|
4,710
|
|
|
—
|
|
|||||
Unrecognized tax benefits (3)
|
3,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
78,286
|
|
|
$
|
67,677
|
|
|
$
|
2,407
|
|
|
$
|
4,710
|
|
|
$
|
—
|
|
|
(1)
|
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.
|
(2)
|
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 until the enactment of the Tax Act in December 2017. The Tax Act allows the tax liability to be paid on an installment basis over eight years.
|
(3)
|
We had $6.2 million of uncertain tax positions as of September 30, 2019. Included in the balance of unrecognized tax benefits as of September 30, 2019 were $3.5 million of tax benefits that, if recognized, would impact the effective tax
|
•
|
the market price of our common stock may decline to the extent that the current market price reflects an assumption that the Merger will be consummated;
|
•
|
if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, we would be required to pay the Parent a termination fee of $120 million (including under specified circumstances in connection with an alternative acquisition proposal);
|
•
|
we have incurred, and will continue to incur, significant expenses for professional services in connection with the Merger for which we will have received little or no benefit if the Merger is not consummated; and
|
•
|
a failed Merger may result in negative publicity and/or give a negative impression of us in the investment community or business community generally.
|
•
|
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, as well as requirements and specifications established by industry groups or standards bodies;
|
•
|
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 single-source supplier and the impact of industry-wide component constraints;
|
•
|
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 related to the pending withdrawal of the United Kingdom from the European Union, commonly known as Brexit, 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 and our ability to pass through to our customers any tariff or trade costs imposed on our products;
|
•
|
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.
|
•
|
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, including products incorporating our DSP ASICs and PICs, at lower prices, with lower gross margins or at lower costs than our products.
|
•
|
a lack of guaranteed supply of manufactured wafers and other raw and finished components and incorporated products and potential higher wafer, component and incorporated product prices due to limited and, at times, single-source, suppliers and industry-wide component constraints;
|
•
|
the limited availability of, or potential delays in obtaining access to, key process and leading edge 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.
|
•
|
sensitive data regarding our related parties 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 regarding the pending Merger;
|
•
|
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;
|
•
|
failure to accurately predict and interpret market requirements or market demand for our products;
|
•
|
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 related to Brexit;
|
•
|
investors’ general perception of us;
|
•
|
significant short interest in our stock;
|
•
|
sales of large blocks of our stock;
|
•
|
loss of any of our key customers;
|
•
|
a lack of guaranteed supply of manufactured wafers and other raw and finished components and incorporated products;
|
•
|
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, or that could impede sales by such customers in the United States; 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, tariffs, developments in trade policy 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 consolidation or other difficulties faced by our customers, affecting their ability to purchase or pay for our products;
|
•
|
insolvency, credit consolidation 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;
|
•
|
the pending Merger;
|
•
|
product recalls, regulatory proceedings or other adverse publicity about our products;
|
•
|
fluctuations in foreign exchange rates;
|
•
|
the impact of the Tax Act and other legislative and regulatory proposals to reform U.S. taxation of international business activities;
|
•
|
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; and
|
•
|
general economic conditions in either domestic or international markets, particularly the impact of any economic slowdown in China.
|
•
|
establishing a classified board of directors with staggered three-year terms so that not all members of our board are elected at one time;
|
•
|
providing that directors may be removed by stockholders only for cause and only with a vote of the holders of at least 75% of the issued and outstanding shares of voting stock;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
•
|
authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock; and
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers.
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1*
|
|
|
|
|
|
3.1
|
|
|
|
|
|
10.1**, †
|
|
|
|
|
|
10.2**, †
|
|
|
|
|
|
10.3**, †
|
|
|
|
|
|
31.1**
|
|
|
|
|
|
31.2**
|
|
|
|
|
|
32.1***
|
|
|
|
|
|
32.2***
|
|
|
|
|
|
101.INS**
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH**
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL**
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF**
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB**
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE**
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
104**
|
|
Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).
|
|
*
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
|
**
|
Filed herewith.
|
***
|
Furnished herewith.
|
†
|
Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.
|
|
|
Acacia Communications, Inc.
|
|
|
|
|
|
Date: October 30, 2019
|
|
By:
|
/s/ Murugesan Shanmugaraj
|
|
|
|
Murugesan Shanmugaraj
|
|
|
|
President and Chief Executive Officer
|
•
|
Standard Terms and Conditions
|
•
|
Lean VMI Agreement: Representative Sample
|
•
|
WSA: Representative Sample
|
•
|
Insurance Coverage Limits
|
•
|
Manufacturing Escrow Agreement
|
•
|
Development Standard Terms and Conditions
|
Cisco Systems, Inc.
|
Acacia Communications, Inc.
|
170 West Tasman Drive
|
3 Mill and Main Place, Suite 400
|
Attn: V.P., Supply Chain Operations
|
Attn: John LoMedico, VP Sales and
Business Development |
Cisco Systems, Inc.
By: _/s/ John O’Connor_____________
Name: John O’Connor
Its: VP, Supply Chain
November 23, 2016
|
Acacia Communications, Inc.
By: __/s/ John LoMedico_____________
Name: John LoMedico
Its: Vice President of Sales and
Business Development
|
|
Acacia Communications (Ireland) Limited, solely with respect to rights and obligations arising outside North America
By: _/s/ Colm Cryan___________________
Name: Colm Cryan
Its: Managing Director, Ireland
|
•
|
Standard Terms and Conditions
|
•
|
Lean VMI Agreement: Representative Sample
|
•
|
WSA: Representative Sample
|
•
|
Insurance Coverage Limits
|
•
|
Manufacturing Escrow Agreement
|
•
|
Development Standard Terms and Conditions
|
Cisco Systems International B.V.
|
Acacia Communications, Inc.
|
Haarlerbergpark
|
3 Mill and Main Place, Suite 400
|
1101 CH Amsterdam
|
Attn: John LoMedico, VP Sales and
|
The Netherlands
|
Business Development
|
Cisco SystemsInternational B.V.
By: ___/s Annemieke de Groot ____________
Name: Annemieke de Groot
Its: Managing Director
|
Acacia Communications, Inc.
By: _/s/ John LoMedico__________________
Name: John LoMedico
Its: Vice President of Sales and
Business Development
|
|
Acacia Communications (Ireland) Limited, solely with respect to rights and obligations arising outside North America
By: _/s/ Colm Cryan__________________
Name: Colm Cryan
Its: Managing Director, Ireland
|
1.
|
“Change in Control” means (i) the closing of a merger, consolidation, liquidation or reorganization of Acacia into or with another company or other legal entity, after which merger, consolidation, liquidation or reorganization the capital stock of Acacia outstanding prior to consummation of the transaction is not converted into or exchanged for or does not represent more than 50% of the aggregate voting power of the surviving or resulting entity; (ii) the direct or indirect acquisition by any person (as the term “person” is used in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of more than 50% of the voting capital stock of Acacia, in a single or series of related transactions; or (iii) the sale, exchange, or transfer of all or substantially all of the Acacia’s assets (other than a sale, exchange, or transfer to one or more entities where the stockholders of Acacia immediately before such sale, exchange or transfer retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the entities to which the assets were transferred).
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2.
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Acacia shall provide Cisco notice of any proposed Change in Control transaction described in clause (i) or clause (iii) of such definition, including the identity of the potential acquiror, no later than [**] prior to the close of the Change in Control transaction, or in the case of a Change in Control transaction described in clause (ii) of such definition promptly after Acacia has knowledge of such transaction and identity of the potential acquirer.
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3.
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Subject to Cisco’s Forecast as set forth in Section 3.2 of the Agreement and Acacia’s performance under the Agreement (including, without limitation, Lead Times), Cisco shall purchase Acacia’s [**] Product at the prices and minimum guaranteed share (“Share”) of Cisco’s total supply requirements for such products as set forth in the table below through [**] of Cisco’s [**] fiscal year (Cisco’s fiscal year is from August -July “FY”).
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a.
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If (1) the Merger Agreement is terminated by Cisco or Acacia pursuant to Section 7.1(b) or Section 7.1(c) thereof (to the extent such Order relates to Antitrust Laws), (2) at the time of such termination, any of the conditions set forth in Section 6.1(b), Section 6.1(c), Section 6.1(d) or Section 6.3(c) thereof were not satisfied or waived by Parent and (3) at the time of such termination, each of the other conditions in Section 6.1 and Section 6.3 thereof was satisfied or waived (other than conditions that by their nature are only to be satisfied at the Closing; provided that such conditions were then capable of being satisfied), then Cisco shall, within [**] after the date of such termination, pay to Acacia a non-refundable fee in the amount of $120,000,000 (the “Special Payment”); provided, further, that Cisco shall not be obligated to pay the Special Payment if (x) Acacia’s breach of any of its representations, warranties, covenants or agreements under the Merger Agreement principally caused the failure to satisfy the conditions set forth in Section 6.1(b), Section 6.1(c), Section 6.1(d) or Section 6.3(c) thereof or (y) at the time of such termination, Cisco was entitled to terminate the Merger Agreement pursuant to Section 7.1(f) or Section 7.1(g) thereof.
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b.
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Cisco acknowledges that (i) the agreements contained in Section 7(a) are an integral part of the transactions contemplated by this Addendum and the Merger Agreement, (ii) the amount of, and the basis for payment of, the Special Payment is reasonable and appropriate in all respects and (iii) without this agreement, Acacia would not enter into this Addendum or the Merger Agreement. Accordingly, if Cisco fails to pay in a timely manner the Special Payment due pursuant to Section 7(a), and, in order to obtain such payment, Acacia makes a claim that results in a judgment for the amount set forth in Section 7(a), Cisco shall pay to Acacia its reasonable costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on the amount set forth in Section 7(a) at the prime rate of Bank of America, N.A. in effect from time to time from the date such payment was required to be made hereunder. Payment under Section 7(a) shall be made by wire transfer of immediately available funds to an account designated by Acacia. Payment of the Special Payment (and any additional amounts required under this Section 7) to Acacia by Cisco in accordance with this Addendum shall be the sole and exclusive remedy of Acacia and shall be deemed to be liquidated damages for any actual or purported breach of this Agreement or the Merger Agreement by Cisco or any of its Affiliates (including Sub), and for any and all losses or damages suffered or incurred by Acacia or any of its Affiliates in connection with this Addendum and the Merger Agreement (and the termination thereof), the transactions contemplated by this Addendum and the Merger Agreement (and the abandonment thereof) or any matter forming the basis for such termination and, after such payment has been made, Cisco and its Affiliates shall have no further liability for any such actual or purported breach or for any and all losses or damages suffered or incurred by Acacia or any of its Affiliates in connection with this Addendum or the Merger Agreement (and the termination of the Merger Agreement), the transactions contemplated by this Addendum and the Merger Agreement (and the abandonment thereof) or any matter forming the basis for such termination.
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c.
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The parties hereto acknowledge and agree that in no event shall Cisco be required to pay the Special Payment on more than one occasion, whether or not the Special Payment may be payable under more than one provision of this Addendum at the same or at different times and the occurrence of different events.
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d.
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For purposes of this Section 7, Cisco refers to Cisco Systems, Inc. and Acacia refers to Acacia Communications, Inc. All other capitalized terms used in this Section 7 and not defined in this Addendum shall have the meanings ascribed to them in the Merger Agreement.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Acacia Communications, Inc.
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Date: October 30, 2019
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By:
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/s/ Murugesan Shanmugaraj
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Murugesan Shanmugaraj
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Acacia Communications, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Acacia Communications, Inc.
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Date: October 30, 2019
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By:
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/s/ John F. Gavin
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John F. Gavin
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Chief Financial Officer
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Acacia Communications, Inc.
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Date: October 30, 2019
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By:
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/s/ Murugesan Shanmugaraj
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Murugesan Shanmugaraj
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President and Chief Executive Officer
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Acacia Communications, Inc.
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Date: October 30, 2019
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By:
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/s/ John F. Gavin
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John F. Gavin
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Chief Financial Officer
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