Loading...
Docoh

DZS (DZSI)

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Jun. 30, 2018Aug. 06, 2018
Document and Entity Information [Abstract]
Entity Registrant NameDASAN ZHONE SOLUTIONS INC
Trading SymbolDZSI
Entity Central Index Key1101680
Current Fiscal Year End Date--12-31
Entity Filer CategorySmaller Reporting Company
Document Type10-Q
Document Period End DateJun. 30,
2018
Document Fiscal Year Focus2018
Document Fiscal Period FocusQ2
Amendment Flagfalse
Entity Common Stock, Shares Outstanding16,497,948

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsJun. 30, 2018Dec. 31, 2017
Current assets:
Cash and cash equivalents $ 27,308 $ 17,475
Restricted cash10,426 12,425
Accounts receivable, net, trade receivables65,939 48,257
Accounts receivable, net, related parties1,224 13,498
Other receivables, others25,192 12,494
Other receivables, related parties65 164
Inventories38,187 25,344
Prepaid expenses and other current assets4,137 3,652
Total current assets172,478 133,309
Property and equipment, net5,432 5,873
Goodwill3,977 3,977
Intangible assets, net6,217 6,785
Non-current deferred taxes2,925 2,954
Long-term restricted cash1,136 1,512
Other assets4,751 4,717
Total assets196,916 159,127
Current liabilities:
Accounts payable, trade49,414 31,441
Accounts payable, related parties1,385 1,351
Short-term debt, bank and trade facilities39,874 19,790
Short-term debts, related parties5,795 0
Other payables, others1,426 2,032
Other payables, related parties1,449 1,956
Contract liabilities - current2,600 3,279
Accrued and other liabilities9,431 11,174
Total current liabilities111,374 71,023
Long-term debt, others0 2,987
Long-term debt, related parties6,800 6,800
Contract liabilities - non-current1,773 1,883
Other long-term liabilities2,699 2,667
Total liabilities122,646 85,360
Commitments and contingencies (Note 11)
Stockholders’ equity and non-controlling interest:
Common stock, authorized 36,000 shares, 16,431 shares and 16,410 shares outstanding as of March 31, 2018 and December 31, 2017 at $0.001 par value16 16
Additional paid-in capital91,126 90,198
Other comprehensive income (loss)(399)1,871
Accumulated deficit(16,988)(18,852)
Total stockholders’ equity73,755 73,233
Non-controlling interest515 534
Total stockholders’ equity and non-controlling interest74,270 73,767
Total liabilities, stockholders’ equity and non-controlling interest $ 196,916 $ 159,127

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / sharesJun. 30, 2018Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, authorized (in shares)36,000,000 36,000,000
Common stock, outstanding (in shares)16,450,000 16,410,000
Common stock, par value (in dollars per share) $ 0.001 $ 0.001

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Income Statement [Abstract]
Third parties $ 75,187 $ 49,080 $ 133,093 $ 90,321
Related parties1,070 10,861 2,668 21,732
Total net revenue76,257 59,941 135,761 112,053
Products and services - third parties51,844 31,781 87,697 56,802
Products and services - related parties1,095 8,574 2,858 17,282
Amortization of intangible assets153 153 306 306
Total cost of revenue53,092 40,508 90,861 74,390
Gross profit23,165 19,433 44,900 37,663
Operating expenses:
Research and product development8,714 9,141 17,691 18,523
Selling, marketing, general and administrative11,712 10,551 24,106 21,435
Amortization of intangible assets131 544 262 1,037
Total operating expenses20,557 20,236 42,059 40,995
Operating income (loss)2,608 (803)2,841 (3,332)
Interest income75 20 161 46
Interest expense(560)(256)(883)(530)
Other income (loss), net(427)264 (287)(17)
Income (loss) before income taxes1,696 (775)1,832 (3,833)
Income tax expense341 99 336 539
Net income (loss)1,355 (874)1,496 (4,372)
Net income (loss) attributable to non-controlling interest(61)(65)(27)184
Net income (loss) attributable to DASAN Zhone Solutions, Inc.1,416 (809)1,523 (4,556)
Foreign currency translation adjustments(2,548)(824)(2,230)2,066
Comprehensive loss(1,193)(1,698)(734)(2,306)
Comprehensive loss attributable to non-controlling interest(83)(64)(19)205
Comprehensive loss attributable to DASAN Zhone Solutions, Inc. $ (1,110) $ (1,634) $ (715) $ (2,511)
Basic (in dollars per share) $ 0.09 $ (0.05) $ 0.09 $ (0.28)
Diluted (in dollars per share) $ 0.08 $ (0.05) $ 0.09 $ (0.28)
Weighted average shares outstanding used to compute basic net income (loss) per share (in shares)16,438 16,380 16,425 16,380
Weighted average shares outstanding used to compute diluted net income (loss) per share (in shares)16,672 16,380 16,645 16,380

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2018Jun. 30, 2017
Cash flows from operating activities:
Net income (loss) $ 1,496 $ (4,372)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization1,381 2,353
Stock-based compensation740 475
Valuation allowance on inventories411 626
Unrealized (gain) loss on foreign currency transactions(141)240
Deferred taxes(82)0
Changes in operating assets and liabilities:
Accounts receivable(18,843)(8,659)
Inventories(14,641)(4,346)
Prepaid expenses and other assets219 (936)
Accounts payable18,498 3,689
Accrued and other liabilities(4,448)4,118
Net cash used in operating activities(15,410)(6,812)
Cash flows from investing activities:
Proceeds from sale of short-term investments0 1,463
Purchase of short-term investments0 (430)
Proceeds from disposal of property and equipment and other assets1 6
Purchase of property and equipment(415)(663)
Purchase of intangible asset0 (31)
Net cash (used in) provided by investing activities(414)345
Cash flows from financing activities:
Proceeds from short-term borrowings from bank and trade facilities44,368 8,679
Proceeds from long-term borrowings from related party6,064 0
Repayments of borrowings(26,455)(9,581)
Proceeds from issuance of common stock188 1
Net cash provided by (used in) financing activities24,165 (901)
Effect of exchange rate changes on cash and restricted cash(883)1,067
Net increase (decrease) in cash and cash equivalents7,458 (6,301)
Cash, cash equivalents and restricted cash at beginning of period31,412 24,543
Cash, cash equivalents and restricted cash at end of period38,870 18,242
Cash and cash equivalents27,308 9,902
Restricted cash10,426 8,340
Long-term restricted cash $ 1,136 $ 0

Organization and Summary of Sig

Organization and Summary of Significant Accounting Policies6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]
Organization and Summary of Significant Accounting PoliciesOrganization and Summary of Significant Accounting Policies (a) Description of Business DASAN Zhone Solutions, Inc. (referred to, collectively with its subsidiaries, as "DZS" or the "Company") is a global provider of network access solutions and communications equipment for service provider and enterprise networks. The Company provides a wide array of reliable, cost-effective networking technologies, including broadband access, Ethernet switching, mobile backhaul, Passive Optical LAN and software-defined networks, to a diverse customer base that includes more than 1,000 customers in more than 50 countries worldwide. DZS was incorporated under the laws of the state of Delaware in June 1999, under the name Zhone Technologies, Inc. On September 9, 2016, the Company acquired Dasan Network Solutions, Inc. ("DNS"), a California corporation through the merger of a wholly owned subsidiary of the Company with and into DNS, with DNS surviving as a wholly owned subsidiary of the Company (the "Merger"). At the effective time of the Merger, all issued and outstanding shares of capital stock of DNS held by DASAN Networks, Inc. ("DNI") were canceled and converted into the right to receive shares of the Company's common stock in an amount equal to 57.7% of the issued and outstanding shares of the Company's common stock immediately following the Merger. In connection with the Merger, the Company changed its name from Zhone Technologies, Inc. to DASAN Zhone Solutions, Inc. The Company is headquartered in Oakland, California and has flexible in-house production facilities in Seminole, Florida and with contract manufacturers located in China, India, Korea and Vietnam. The Company also maintains offices to provide sales and customer support at various domestic and international locations. (b) Risks and Uncertainties Liquidity The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States ("U.S. GAAP"), assuming the Company will continue as a going concern. The Company had net income of $1.5 million for the six months ended June 30, 2018 and $1.2 million for the year ended December 31, 2017. As of June 30, 2018, the Company had an accumulated deficit of $17.0 million and working capital of $61.1 million . In addition, the Company had a net cash outflow from operations of $15.4 million for the six months ended June 30, 2018. As of June 30, 2018, the Company had $27.3 million in cash and cash equivalents, which included $12.5 million in cash balances held by its Korean subsidiary, and $52.5 million in aggregate principal debt of which $45.7 million was in current liabilities. Also, as of June 30, 2018, the Company had $3.2 million committed as security for letters of credit under its revolving credit facilities, and $8.0 million outstanding indebtedness under those facilities, leaving $5.6 million in aggregate financing availability under the facilities. On July 6, 2018 , the Company repaid the $8.0 million borrowings under its Wells Fargo Bank ("WFB") Facility. The Company’s current lack of liquidity could harm it by: • increasing its vulnerability to adverse economic conditions in its industry or the economy in general; • requiring substantial amounts of cash to be used for debt servicing, rather than other purposes, including operations; • limiting its ability to plan for, or react to, changes in its business and industry; and • influencing investor and customer perceptions about its financial stability and limiting its ability to obtain financing or acquire customers. These factors indicate that cash flows might not be sufficient for the Company to meet its obligations as they come due in the ordinary course of business for a period of 12 months from the date of this interim report on Form 10-Q. The Company’s ability to meet its obligations as they become due in the ordinary course of business for the next 12 months will depend on its ability to achieve forecasted results and its ability to access funds approved under existing facilities. Management’s belief that it will achieve these results assumes that, among other things, the Company will continue to be successful in implementing its business strategy and that there will be no material adverse development in its business, liquidity or capital requirements. If one or more of these factors do not occur as expected, it could cause the Company to fail to meet its obligations as they come due. The Company plans to focus on cost management, operating efficiency and restrictions on discretionary spending. In addition, if necessary, the Company may sell assets, issue or enter into amendments of its debt or equity securities, or purchase credit insurance. The Company may also reduce the scope of its planned product development, reduce sales and marketing efforts and reduce its operations in low margin regions, including reductions in headcount. In fact, subsequent to the end of the quarter, on July 12, 2018, the Company entered into an Amended and Restated Credit and Security Agreement (the “A&R Domestic Credit Agreement”) and an Amended and Restated Credit and Security Agreement ("Ex-Im Subfacility") (the “A&R Ex-Im Credit Agreement”) with WFB, which amended and replaced the Company’s existing senior secured revolving line of credit and letter of credit facilities with WFB and revised certain reporting and compliance provisions, as described more fully in Note 7 to the unaudited condensed consolidated financial statements. Based on the Company's current plans and current business conditions, the Company believes that these measures along with its existing cash, cash equivalents and available credit facilities will be sufficient to satisfy its anticipated cash requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q. Other Uncertainties DNI owned approximately 57.7% of the outstanding shares of the Company's common stock as of June 30, 2018 . For so long as DNI and its affiliates hold shares of the Company's common stock representing at least a majority of the votes, DNI will be able to freely nominate and elect all the members of the Company's board of directors, subject to the provisions of the Company's bylaws and applicable requirements under Nasdaq listing rules and applicable laws. The directors elected by DNI will have the authority to make decisions affecting the Company's capital structure, including the issuance of additional capital stock or options, the incurrence of additional indebtedness, the implementation of stock repurchase programs, and the declaration of dividends. The interests of DNI may not coincide with the interests of the Company's other stockholders or with holders of the Company's indebtedness. DNI’s ability to control all matters submitted to the Company's stockholders for approval limits the ability of other stockholders to influence corporate matters and, as a result, the Company may take actions that the Company's other stockholders or holders of the Company's indebtedness do not view as beneficial. See Notes 9 and 11 to the unaudited condensed consolidated financial statements for additional information. (c) Reclassifications For the three months ended June 30, 2017 , certain prior period statement of comprehensive income (loss) items have been reclassified to correctly reflect research and product development expenses and selling, marketing, general and administrative expenses of $0.1 million and $0.1 million , respectively, which were previously incorrectly classified as cost of revenue-products and services. For the six months ended June 30, 2017 certain prior period statement of comprehensive loss items have been reclassified to correctly reflect research and product development expenses and selling, marketing, general and administrative expenses of $0.3 million and $0.4 million , respectively, which were previously incorrectly classified as cost of revenue-products and services. (d) Basis of Presentation For a description of what the Company believes to be the critical accounting policies and estimates used in the preparation of the Company's unaudited condensed consolidated financial statements, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the Company does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair statement of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission. (e) Reverse Stock Split On February 28, 2017, the Company filed a Certificate of Amendment with the Delaware Secretary of State to amend the Company's Restated Certificate of Incorporation, which amendment effected a one-for-five reverse stock split of the Company's common stock and reduced the authorized shares of the Company's common stock from 180 million to 36 million . As a result of the reverse stock split, the number of shares of the Company’s common stock then issued and outstanding was reduced from approximately 81.9 million to approximately 16.4 million . References to shares of the Company's common stock, stock options (and associated exercise price) and restricted stock units in this Quarterly Report on Form 10-Q are provided on a post-reverse stock split basis. (f) Concentration of Risk The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three and six months ended June 30, 2018 , one customer accounted for 22% and 15% of net revenue, respectively. For the three months ended June 30, 2017 , two customers represented 11% and 14% (a related party) of net revenue, respectively. For the six months ended June 30, 2017 , one customer represented 12% (a related party) of net revenue. As of June 30, 2018 , two customers represented 23% and 11% of net accounts receivable, respectively. As of December 31, 2017, two customers represented 20% (a related party) and 11% of net accounts receivable, respectively. As of June 30, 2018 and December 31, 2017, receivables from customers in countries other than the United States represented 80% and 84% , respectively, of net accounts receivable. (g) Recent Accounting Pronouncements Recent Accounting Pronouncements Adopted In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers” (“Topic 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Topic 606 replaced most existing revenue recognition standards under U.S. GAAP, including ASC 605, Revenue Recognition ("Topic 605"). On January 1, 2018 , the Company adopted Topic 606 and applied this guidance to all open contracts at the date of adoption using the modified retrospective method. The Company recognized the cumulative effect of initially applying Topic 606 as an adjustment to the balance of accumulated deficit at January 1, 2018. The comparative information has not been restated and continues to be reported under Topic 605. The Company’s adoption of Topic 606 primarily impacted the following: • Topic 606 requires an allocation of revenue between deliverables (performance obligations) within an arrangement. Topic 605 restricted the allocation of revenue that is contingent on future deliverables to current deliverables, however, Topic 606 removes this restriction, to the extent that the future deliverables represent performance obligations that are distinct. Under Topic 606, the nature of the performance obligations identified within a contract impacts the allocation of the transaction price between deliverables. • Some of the Company’s contracts include customer acceptance terms, which provides protection to the customer by allowing it to either cancel a contract or force the Company to take corrective actions if products or services do not meet the requirements in the contract. Under Topic 606, customer acceptance that is considered a “formality”, would result in revenue recognized when control of the product or service is transferred to customer, which is typically upon shipment or delivery dependent upon the terms of the underlying contract. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at January 1, 2018 (in thousands): As of January 1, 2018 Balance after adoption of ASC 606 Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 62,099 $ 344 (1) $ 61,755 Inventories 25,239 (105 ) (2) 25,344 Liabilities Contract liabilities - current 2,866 (413 ) (2) 3,279 Accrued and other liabilities 11,518 344 (1) 11,174 Stockholders’ equity Accumulated deficit (18,544 ) 308 (18,852 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of the adoption date on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at June 30, 2018 (in thousands): As of June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 67,163 $ 512 (1) $ 66,651 Inventories 38,187 66 (2) 38,121 Liabilities Contract liabilities - current 2,600 347 (2) 2,253 Accrued and other liabilities 9,431 512 (1) 8,919 Stockholders’ equity Accumulated deficit (16,988 ) (281 ) (16,707 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of June 30, 2018 on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated statement of operations for the three and six months ended June 30, 201 8 (in thousands): Three Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 76,257 $ (152 ) $ 76,409 Cost of revenue - products and services 53,092 (5 ) 53,097 Gross profit 23,165 (147 ) 23,312 Provision for income taxes (341 ) — (341 ) Net income 1,355 (147 ) 1,502 Six Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 135,761 $ (347 ) $ 136,108 Cost of revenue - products and services 90,861 (66 ) 90,927 Gross profit 44,900 (281 ) 45,181 Provision for income taxes (336 ) — (336 ) Net income 1,496 (281 ) 1,777 During the three and six months ended June 30, 2018, $0.3 million and $0.6 million respectively, was recognized as revenue from the opening contract liabilities balance. There was no impact on net revenue from related parties as a result of Topic 606. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance became effective for the Company on January 1, 2018 and was adopted accordingly. The adoption of this standard did not have any effect on the Company's condensed consolidated statement of cash flows for the three and six months ended June 31, 2018 or 2017. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash , which requires that a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The updated guidance became effective for the Company beginning on January 1, 2018 and was adopted accordingly, using the retrospective approach. As a result, the Company no longer presents transfers between cash and cash equivalents and restricted cash in the consolidated cash flow statements. The condensed consolidated statement of cash flows for the six months ended June 30, 2017 was revised to exclude the $1.3 million change in restricted cash from net cash used in investing activities and to include $6.7 million and $8.3 million in cash, cash equivalents and restricted cash, beginning of period and cash, cash equivalents and restricted cash, end of period, respectively. Other Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company does not plan to early adopt this guidance. The Company expects its assets and liabilities to increase as a result of the adoption of this standard. In July 2018, the FASB issued ASU 2018-18-11, Leases (Topic 842): Targeted Improvements , ASU 2018-11 states that, separating components of a contract affect the amendments in Update 2016-02, which are not yet effective but can be early adopted. All entities, including early adopters, that elect the practical expedient related to separating components of a contract in this Update must apply the expedient, by class of underlying asset, to all existing lease transactions that qualify for the expedient at the date elected. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairment. The updated guidance is effective for the Company on January 1, 2020, and will be adopted accordingly. Early adoption is permitted. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Act. Because the amendments only relate to the reclassification of the income rate tax effect of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018 and interim periods in those years. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its consolidated financial statements at this time. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . The amendments add various Securities and Exchange Commission (“SEC) paragraphs pursuant to the issuance of SEC Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“Act”) (“SAB 118”). The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company has provided a reasonable estimate of the tax reform in the notes to the consolidated financial statements.

Fair Value Measurement

Fair Value Measurement6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]
Fair Value MeasurementFair Value Measurement The Company utilizes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. The following financial instruments are not measured at fair value on the Company’s condensed consolidated balance sheet as of June 30, 2018 and the consolidated balance sheet as of December 31, 2017, but require disclosure of their fair values: cash and cash equivalents, short-term investments, accounts receivable, accounts payable and debt. The carrying values of financial instruments such as cash and cash equivalents, accounts receivable and accounts payable approximate their fair values based on their short-term nature. The carrying value of the Company's debt approximates their fair values based on the current rates available to the Company for debt of similar terms and maturities To manage certain exposures to currency fluctuations, the Company started a limited hedging program during the three months ended June 30, 2018 by entering into foreign currency forward contracts with maturities of one month to hedge a portion of its net outstanding foreign currency monetary assets and liabilities. These derivatives are recorded at fair value on the condensed consolidated balance sheet under "Other Current Assets" or "Accounts Payable - Trade" with changes in the fair value being recorded in "Other income (loss), net". These derivative contracts are entered into with a single counterparty, and are not designated as hedging instruments under applicable accounting guidance. As such, all changes in the fair value of these derivative contracts are recorded in other income (loss), net on the condensed consolidated statements of comprehensive income (loss). These derivative contracts are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities, and changes in the related derivative assets and liabilities balances are classified outside of operating income (loss), consistent with the related underlying foreign currency gain or loss. These derivative contracts expose the Company to credit risk to the extent that the counterparty may be unable to meet the terms of the arrangement. The Company mitigates this credit risk by transacting with reputable financial institutions and entering into master netting arrangements, which permit net settlement of transactions with the same counterparty. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. The Company is not required to pledge, and is not entitled to receive, cash collateral related to these derivative instruments. The Company does not enter into derivative contracts for trading or speculative purposes. As of June 30, 2018, the Company had derivative contracts with total notional values of $20.1 million . The Company's foreign currency contracts are classified within Level 2 because the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. The fair values of these outstanding derivative contracts as of June 30, 2018 was a $1.0 million liability, included in accounts payable - trade.

Cash, Cash Equivalents and Rest

Cash, Cash Equivalents and Restricted Cash6 Months Ended
Jun. 30, 2018
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents and Restricted CashCash, Cash Equivalents and Restricted Cash As of June 30, 2018 and December 31, 2017, the Company's cash and cash equivalents comprised financial deposits. Restricted cash consisted primarily of cash restricted for performance bonds, warranty bonds and collateral for borrowings. Current and long-term restricted cash was $11.6 million at June 30, 2018 and $13.9 million at December 31, 2017.

Balance Sheet Detail

Balance Sheet Detail6 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]
Balance Sheet DetailBalance Sheet Detail Accounts Receivable Accounts receivable, net as of June 30, 2018 and December 31, 2017 was as follows (in thousands): June 30, December 31, Gross accounts receivable $ 67,531 $ 63,446 Allowance for doubtful accounts (368 ) (922 ) Allowance for sales returns — (1) (769 ) Total allowances (368 ) (1,691 ) Accounts receivable, net $ 67,163 $ 61,755 (1) Upon adoption of ASC 606, allowances for sales returns were reclassified to accrued and other liabilities as these reserve balances are considered estimated refund liabilities. Refer to footnote 1(g) for additional information about the adoption impact. Inventories Inventories as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, December 31, Raw materials $ 16,730 $ 12,671 Work in process 2,030 2,150 Finished goods 19,427 10,523 Total inventories $ 38,187 $ 25,344 Inventories provided as collateral for borrowings from Export-Import Bank of Korea amounted to $23.4 million and $11.4 million as of June 30, 2018 and December 31, 2017, respectively.

Property and Equipment

Property and Equipment6 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Property and EquipmentProperty and Equipment Property and equipment as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, December 31, Furniture and fixtures $ 22,066 $ 22,988 Machinery and equipment 5,557 5,455 Leasehold improvements 3,613 3,647 Computers and software 682 621 Others 975 1,007 32,893 33,718 Less: accumulated depreciation and amortization (27,260 ) (27,584 ) Less: government grants (201 ) (261 ) Property and equipment, net $ 5,432 $ 5,873 Depreciation expense associated with property and equipment for the three and six months ended June 30, 2018 was $0.4 million and $0.8 million respectively. Depreciation expense for the three and six months ended June 30, 2017 was $0.5 million and $1.0 million , respectively. The Company receives grants from various government entities, mainly to support capital expenditures. Such grants are deferred and are generally refundable to the extent the Company does not utilize the funds for qualifying expenditures. Once earned, the Company records the grants as a contra amount to the assets and amortizes such amount over the useful lives of the related assets as a reduction to depreciation expense.

Goodwill and Intangible Assets

Goodwill and Intangible Assets6 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible AssetsGoodwill and Intangible Assets Goodwill as of June 30, 2018 and December 31, 2017 was as follows (in thousands): June 30, December 31, Beginning balance $ 3,977 $ 3,977 Less: accumulated impairment — — Ending balance $ 3,977 $ 3,977 The Company did not recognize impairment loss on goodwill during the six months ended June 30, 2018 and 2017. Intangible assets as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (1,122 ) $ 1,938 Customer relationships 5,240 (961 ) 4,279 Backlog 2,179 (2,179 ) — Total intangible assets $ 10,479 $ (4,262 ) $ 6,217 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (816 ) $ 2,244 Customer relationships 5,240 (699 ) 4,541 Backlog 2,179 (2,179 ) — Total intangible assets $ 10,479 $ (3,694 ) $ 6,785 Amortization expense associated with intangible assets for the three and six months ended June 30, 2018 was $0.3 million and $0.6 million , respectively. Amortization expense associated with intangible assets for the three and six months ended June 30, 2017 was $0.7 million and $1.4 million , respectively.

Debts

Debts6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]
DebtsDebts Wells Fargo Bank Facility As of June 30, 2018 , the Company had a $25.0 million revolving line of credit and letter of credit facility (then and as subsequently amended and replaced) with WFB, (the "WFB Facility"). Under the WFB Facility, the Company has the option of borrowing funds at agreed upon interest rates. The amount that the Company is able to borrow under the WFB Facility varies based on eligible accounts receivable and inventory, as defined in the WFB Facility, as long as the aggregate amount outstanding does not exceed $25.0 million less the amount committed as security for letters of credit. To maintain availability of funds under the WFB Facility, the Company pays a commitment fee on the unused portion. The commitment fee is 0.25% per annum and is recorded as interest expense. As of June 30, 2018 , the Company had $8.0 million in outstanding borrowings under its WFB Facility (included in short-term debts), and $ 2.1 million was committed as security for letters of credit. Subsequent to the end of the quarter, on July 6, 2018 , the Company repaid the $8.0 million borrowings under the WFB Facility. Based on the Company's eligible accounts receivable and inventory, the Company had $ 2.2 million of financing availability under the WFB Facility as of June 30, 2018 . The interest rate on the WFB Facility was 4.59 % at June 30, 2018 . Subsequent to the end of the quarter, on July 12, 2018, the Company entered into an Amended and Restated Credit and Security Agreement (the “A&R Domestic Credit Agreement”) and an Amended and Restated Credit and Security Agreement ("Ex-Im Subfacility") (the “A&R Ex-Im Credit Agreement”) with WFB, which amended and replaced the Company’s existing senior secured revolving line of credit and letter of credit facilities with WFB and revised certain reporting and compliance provisions. The A&R Domestic Credit Agreement and the A&R Ex-Im Credit Agreement provide for a revolving line of credit of $25.0 million (including up to $5.0 million of letters of credit), with the amount that the Company is able to borrow based on eligible accounts receivable and inventory, less the amount committed as security for letters of credit. To maintain availability of funds under the A&R Domestic Credit Agreement and the A&R Ex-Im Credit Agreement, the Company will continue to pay a commitment fee of 0.25% per annum on the unused portion. The amounts borrowed under the amended WFB Facility continue to bear interest, payable monthly, at a floating rate equal to the three-month LIBOR plus a margin based on the Company's average excess availability (as calculated under the WFB Facility). The new maturity date under the WFB Facility is also extended from July 15, 2019 to July 12, 2021. The Company’s obligations under the WFB Facility are secured by substantially all of its assets and those of its subsidiaries that guarantee the WFB Facility, including their intellectual property. The WFB Facility contains certain financial covenants, and customary affirmative and negative covenants. If the Company defaults under the WFB Facility due to a covenant breach or otherwise, WFB may be entitled to, among other things, require the immediate repayment of all outstanding amounts and sell the Company’s assets to satisfy the obligations under the WFB Facility. As of June 30, 2018 , the Company was in compliance with the covenants under the WFB Facility. Bank and Trade Facilities - Foreign Operations Certain of the Company's foreign subsidiaries have entered into various financing arrangements with foreign banks and other lending institutions consisting primarily of revolving lines of credit, trade facilities, term loans and export development loans. These facilities are renewed as they mature and are generally secured by a security interest in certain assets of the applicable foreign subsidiaries and supported by guarantees given by DNI or third parties. Payments under such facilities are made in accordance with the given lender’s amortization schedules. As of June 30, 2018 and December 31, 2017, the Company had an aggregate outstanding balance of $31.9 million (included in short-term debts) and $22.8 million ( $19.8 million included in short-term debts), respectively, under such financing arrangements, and the interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below (amount in thousands). As of June 30, 2018 Interest rate (%) Amount Industrial Bank of Korea Credit facility 3.48-4.02 $ 4,515 Industrial Bank of Korea Trade finance 4.47-5.25 2,427 Shinhan Bank General loan 6.06 2,853 Shinhan Bank Trade finance 4.16 1,200 NongHyup Bank Credit facility 3.90-4.10 2,569 The Export-Import Bank of Korea Export development loan 3.20-3.28 7,270 LGUPlus General loan 0 1,782 JECC Factoring AR Factoring 1.58 6,362 Shinhan Bank (India) General loan 8.70-8.90 2,896 $ 31,874 As of December 31, 2017 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.89 - 3.26 $ 2,328 Industrial Bank of Korea Trade Finance 4.47 - 5.97 2,401 Shinhan Bank General loan 5.91 2,987 Shinhan Bank Trade finance 3.90 - 4.14 3,050 NongHyup Bank (Korea) Credit facility 2.83 - 3.42 860 The Export-Import Bank of Korea Export development loan 3.20 - 3.28 7,570 Mitsubishi Bank (Japan) AR factoring 1.58 1,872 Shinhan Bank (India) General loan 8.70 - 8.90 1,709 $ 22,777 As of June 30, 2018 , the Company had $7.1 million in outstanding borrowings and $1.1 million committed as security for letters of credit under the Company's $12.0 million credit facility with certain foreign banks. On June 18, 2018, the Company's Korean subsidiary received a mutual cooperation capital loan of $1.8 million from LGUPlus and provided a letter of guarantee of the same amount from Seoul Guarantee Insurance as collateral. See Note 9 for a discussion of related-party debt.

Non-Controlling Interests

Non-Controlling Interests6 Months Ended
Jun. 30, 2018
Noncontrolling Interest [Abstract]
Non-Controlling InterestsNon-Controlling Interests Non-controlling interests for the six months ended June 30, 2018 and 2017 were as follows (in thousands): Six Months Ended June 30, 2018 2017 Beginning non-controlling interests $ 534 $ 416 Net income (loss) attributable to non-controlling interests (27 ) 184 Foreign currency translation adjustments 8 21 Ending non-controlling interests $ 515 $ 621

Related-Party Transactions

Related-Party Transactions6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]
Related-Party TransactionsRelated-Party Transactions Related-Party Acquisitions On December 31, 2017, DNS acquired 100% and 99.99% of the common stock of D-Mobile Limited (“D-Mobile”) and DASAN India Private Limited ("DASAN India"), respectively, from DNI. D-Mobile and DASAN India are resellers of the Company's products in Taiwan and India, respectively. The consideration payable by the Company to DNI for the common stock of the two subsidiaries is the net book value of D-Mobile and DASAN India at December 31, 2017, subject to final adjustments. The net book value of D-Mobile and DASAN India was an aggregate of $0.8 million . These transactions were accounted for by the Company as common control transactions, with the net assets transferred recorded at historical cost. The transactions did not result in a change in reporting entity and hence were accounted for prospectively. Related-Party Debt In connection with the Merger, on September 9, 2016, the Company entered into a loan agreement with DNI for a $5.0 million unsecured subordinated term loan facility. Under the loan agreement, the Company was permitted to request drawdowns of one or more term loans in an aggregate principal amount not to exceed $5.0 million . As of June 30, 2018 , $5.0 million in term loans was outstanding under the facility. Such term loans mature in September 2021 and are pre-payable at any time by the Company without premium or penalty. The interest rate as of June 30, 2018 under this facility was 4.6% per annum. Also, the Company borrowed $1.8 million from DNI for capital investment in February 2016, which amount was outstanding as of June 30, 2018 . This loan matures in July 2019 and bears interest at a rate of 4.6% per annum, payable annually. On March 21, 2018, DNS borrowed KRW 6.5 billion ( $5.8 million ) from DNI, which remained outstanding at June 30, 2018. The loan bears interest at a rate of 4.6% and matures on June 27, 2019, and is secured by certain accounts receivable of DNS Korea. Other Related-Party Transactions Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties for the three and six months ended June 30, 2018 and 2017 were as follows (in thousands): Three Months Ended June 30, 2018 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI (Parent Company) N/A $ 962 $ 750 $ — $ — $ 1,144 $ 69 $ 79 Tomato Soft Ltd. 100% — — 38 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 123 — — — Chasan Networks Co., Ltd. 100% — — 268 18 — — — Dasan France 100% — — — — — — — Handysoft, Inc. 17.63% 108 39 — — 2 — — $ 1,070 $ 789 $ 306 $ 141 $ 1,146 $ 69 $ 79 Three Months Ended June 30, 2017 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, Other expenses DNI (Parent Company) N/A $ 8,480 $ 7,095 $ — $ — $ 1,326 $ 57 Chasan Networks Co., Ltd. 100% — — 187 32 — — Dasan France 100% 556 549 — — 300 — D-Mobile 100% 1,811 741 — — 94 — Fine Solution 100% — — — — 1 — HandySoft, Inc. 17.64% 14 2 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 133 37 — Solueta 27.21% — — — — — 3 $ 10,861 $ 8,387 $ 187 $ 165 $ 1,758 $ 60 Six Months Ended June 30, 2018 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI (Parent Company) N/A $ 2,210 $ 1,873 $ — $ — $ 2,166 $ 71 $ 145 Tomato Soft Ltd. 100% — — 57 — — — — Tomato Soft (Xi'an) Ltd. 100% — — 10 2,777 — — — Chasan Networks Co., Ltd. 100% — — 592 36 — — — Dasan France 100% 202 177 — — — — — HandySoft, Inc. 17.63% 256 149 — — 2 — — $ 2,668 $ 2,199 $ 659 $ 2,813 $ 2,168 $ 71 $ 145 Six Months Ended June 30, 2017 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, Other expenses DNI (Parent Company) N/A $ 12,631 $ 10,416 $ — $ — $ 2,200 $ 120 Chasan Networks Co., Ltd. 100 % — — 382 59 — — Dasan France 100 % 950 936 — — 300 — Dasan India Private Limited (1) 100 % 6,287 4,783 — — — — D-Mobile (1) 100 % 1,822 754 — — 196 — Fine Solution 100 % — — — — 4 — HandySoft, Inc. 17.64 % 34 11 — — — — J-Mobile Corporation 68.56 % 8 — — — 132 — Tomato Soft (Xi'an) Ltd. 100 % — — — 304 37 — Solueta 27.21 % — — — — — 3 $ 21,732 $ 16,900 $ 382 $ 363 $ 2,869 $ 123 (1) As discussed above, on December 31, 2017 DNS acquired DASAN India and D-Mobile from DNI. The Company has entered into sales agreements with DNI and certain of its subsidiaries. Sales and cost of revenue to DNI and DASAN France (and with respect to the first and second quarters of 2017, DASAN India and D-Mobile) represent finished goods produced by the Company that are sold to these related parties who sell the Company's products in Korea, France, India and Taiwan, respectively. The Company has entered into an agreement with Chasan Networks Co., Ltd. to provide manufacturing and research and development services for the Company. Under the agreement with Chasan Networks., Ltd., the Company is charged a cost plus 7% fee for the manufacturing and development of certain deliverables. The Company has entered into an agreement with Tomato Soft Ltd., a wholly owned subsidiary of DNI, to provide manufacturing and research and development services for the Company. The Company has entered into an agreement with Tomato Soft (Xi'an) Ltd. to provide research and development services for the Company. Under the agreement with Tomato Soft (Xi'an) Ltd., the Company is charged an expected annual fee of $0.8 million for the development of certain deliverables. Prior to the Merger, as DNS was then a wholly owned subsidiary of DNI, DNI had sales agreements with certain customers on DNS' behalf. Since the Merger, due to these prior sales agreements, the Company has entered into an agreement with DNI in which DNI acts as a sales channel to these customers. Sales to DNI necessary for DNI to fulfill agreements with its customers are recorded net of royalty fees in related-party revenue. The Company shares office space with DNI and certain of DNI's subsidiaries. Prior to the Merger, DNS, then a wholly owned subsidiary of DNI, shared human resources, treasury and other administrative support with DNI. As such, the Company entered into certain service sharing agreements with DNI and certain of its subsidiaries for the office space and administrative services. Expenses related to leases and administrative services are allocated and billed to the Company based on square footage occupied and headcount, respectively. Other expenses to related parties represent payment to DNI for its guarantees relating to the Company's borrowings. The Company pays DNI a guarantee fee which is calculated as 0.9% of the guaranteed amount. Balances of Receivables and Payables with Related Parties Balances of receivables and payables arising from sales and purchases of goods and services with related parties as of June 30, 2018 and December 31, 2017 were as follows (in thousands): As of June 30, 2018 Counterparty DNI ownership Interest Account receivables Other receivables Deposits for lease * Short-term debt Long-term debt Accounts payable Other Payables DNI (parent company) N/A $ 565 $ — $ 751 $ 5,795 $ 6,800 $ 1,253 $ 1,399 Tomato Soft Ltd. 100% — — — — — — 9 Tomato Soft (Xi'an) Ltd. 100% — — — — — — 41 Dasan France 100% 461 65 — — — — — HandySoft, Inc. 17.63% 198 — — — — 28 — Chasan Networks Co., Ltd. 100% — — — — — 104 — $ 1,224 $ 65 $ 751 $ 5,795 $ 6,800 $ 1,385 $ 1,449 As of December 31, 2017 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease * Long-term debt Accounts payable Other Payables Accrued and other liabilities** DNI (parent company) N/A $ 12,576 $ 93 $ 786 $ 6,800 $ 1,264 $ 1,859 $ 59 Tomato Soft Ltd. 100% — — — — — 18 — Tomato Soft (Xi'an) Ltd. 100% — — — — — 54 — Dasan France 100% 870 71 — — — — — HandySoft, Inc. 17.63% 52 — — — — — — Chasan Networks Co., Ltd. 100% — — — — 87 — — Solueta 100% — — — — — 25 — $ 13,498 $ 164 $ 786 $ 6,800 $ 1,351 $ 1,956 $ 59 * Included in other assets in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017. **Included in accrued and other liabilities in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017.

Net Income (Loss) Per Share Att

Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc.6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]
Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc.Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. Basic net income (loss) per share attributable to DASAN Zhone Solutions, Inc. is computed by dividing the net income (loss) attributable to DASAN Zhone Solutions, Inc. for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net income (loss) per share attributable to DASAN Zhone Solutions, Inc. gives effect to common stock equivalents; however, potential common equivalent shares are excluded if their effect is antidilutive. Potential common equivalent shares are composed of incremental shares of common equivalent shares issuable upon the exercise of stock options and the vesting of restricted stock units. The following table is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per share calculation (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,416 $ (809 ) $ 1,523 $ (4,556 ) Weighted average number of shares outstanding: Basic 16,438 16,380 16,425 16,380 Effect of dilutive securities: Stock options, restricted stock units and share awards 234 — 220 — Diluted 16,672 16,380 16,645 16,380 Net income (loss) per share attributable to DASAN Zhone Solutions, Inc.: Basic $ 0.09 $ (0.05 ) $ 0.09 $ (0.28 ) Diluted $ 0.08 $ (0.05 ) $ 0.09 $ (0.28 ) During the three and six months ended June 30, 2018, the Company excluded 285 thousand , and 436 thousand stock options at a weighted average exercise price of $14.02 , and $12.35 , respectively, from diluted net income per share because their effect would have been antidilutive. Basic net income (loss) per share is the same as diluted net income (loss) per share for the three and six months ended June 30, 2017 because the effects of stock options and restricted stock units would have been anti-dilutive.

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesCommitments and Contingencies Operating Leases The Company has entered into operating leases for certain office space and equipment, some of which contain renewal options and escalation clauses. Estimated future lease payments under all non-cancellable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands): Operating Leases Year ending December 31: 2018 (remainder of the year) $ 2,043 2019 3,993 2020 2,998 2021 2,590 2022 2,664 Thereafter 8,423 Total minimum lease payments $ 22,711 Warranties The Company accrues warranty costs based on historical trends for the expected material and labor costs to provide warranty services. Warranty periods are generally one to five years from the date of shipment. The following table reconciles changes in the Company’s accrued warranties and related costs for the six months ended June 30, 2018 and 2017 (in thousands): Six Months Ended June 30, 2018 2017 Beginning balance $ 931 $ 878 Charged to cost of revenue 728 239 Claims and settlements (421 ) (381 ) Foreign exchange impact 9 15 Ending balance $ 1,247 $ 751 Performance Bonds In the normal course of operations, from time to time, the Company arranges for the issuance of various types of surety bonds, such as bid and performance bonds, which are agreements under which the surety company guarantees that the Company will perform in accordance with contractual or legal obligations. As of June 30, 2018 , the Company had $2.9 million of surety bonds guaranteed by third parties. Purchase Commitments The Company has agreements with various contract manufacturers which include non-cancellable inventory purchase commitments. The Company’s inventory purchase commitments typically allow for cancellation of orders 30 days in advance of the required inventory availability date as set by the Company at time of order. The amount of non-cancellable purchase commitments outstanding, net of reserve, was $4.3 million as of June 30, 2018 . Payment Guarantees provided by Third Parties and DNI The following table sets forth payment guarantees of the Company's indebtedness and other obligations as of June 30, 2018 (in thousands) that have been provided by third parties and DNI. DNI owns approximately 57.7% of the outstanding shares of the Company's common stock: Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 3,423 Borrowings from Shinhan Bank DNI 1,712 Purchasing card from Shinhan Bank DNI 12,355 Letter of credit from Industrial Bank of Korea DNI 2,140 Purchasing Card from Industrial Bank of Korea DNI 6,000 Letter of credit from NongHyup Bank DNI 535 Purchasing card from NongHyup Bank DNI 6,128 Borrowings from Export-Import Bank of Korea DNI 6,000 Letter of credit from KookMin Bank Industrial Bank of Korea 8,232 Letter of credit NongHyup Bank 3,685 Letter of credit Kookmin Bank 4,999 Letter of credit Shinhan Bank 242 Purchasing card Industrial Bank of Korea 1,556 Performance bonds Industrial Bank of Korea 810 Purchasing Card State Bank of India 38 Performance bonds Seoul Guarantee Insurance Co. 3,961 Performance payment guarantee* $ 61,816 *The Company is responsible for the warranty liabilities generally for the period of two years regarding major product sales and has contracted surety insurance over part of the warranty liabilities. Royalties The Company has certain royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a dollar amount per unit shipped or a percentage of the underlying revenue and is recorded in cost of revenue. Legal Proceedings The Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company records an accrual for legal contingencies that it has determined to be probable to the extent the amount of the loss can be reasonably estimated. The Company does not expect that the ultimate costs to resolve these matters will have a material adverse effect on its consolidated financial position or results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs, or future periods.

Stock Option and Other Benefit

Stock Option and Other Benefit Plans6 Months Ended
Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Option and Other Benefit PlansStock Option and Other Benefit Plans 2018 Employee Stock Purchase Plan On May 22, 2018, the stockholders of the Company approved the adoption of the DASAN Zhone Solutions, Inc. 2018 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective upon stockholder approval and replaced the Company’s existing DASAN Zhone Solutions, Inc. 2002 Employee Stock Purchase Plan. The ESPP authorizes the issuance of up to 250,000 shares of the Company’s common stock. In addition, the ESPP provides for an annual increase on the first day of each calendar year beginning on January 1, 2019 and ending on and including January 1, 2028 equal to the lesser of (1) 1% of the shares outstanding on the last day of the immediately preceding calendar year and (2) such smaller number of shares as may be determined by the Board in its sole discretion. Notwithstanding the foregoing, the number of shares of stock that may be issued or transferred pursuant to awards under the ESPP may not exceed an aggregate of 2,000,000 shares.

Enterprise-Wide Information

Enterprise-Wide Information6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]
Enterprise-Wide InformationEnterprise-Wide Information The Company is a global provider of network access solutions and communications equipment for service provider and enterprise networks. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure. The Company’s chief operating decision maker is the Company’s Chief Executive Officer, who reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geographic region for purposes of making operating decisions and assessing financial performance. The Company attributes revenue from customers to individual bill to countries. The following summarizes required disclosures about geographical concentrations and revenue by products and services (in thousands): Three Months Ended Six months ended June 30, June 30, 2018 2017 2018 2017 Revenue by geography: United States $ 13,630 $ 11,961 $ 30,179 $ 24,108 Canada 1,321 1,422 2,293 2,614 Total North America 14,951 13,383 32,472 26,722 Latin America 7,312 7,075 15,269 11,945 Europe, Middle East, Africa 9,475 6,253 16,963 11,756 Korea 19,111 32,197 31,235 48,513 Other Asia Pacific 25,408 1,033 39,822 13,117 Total International 61,306 46,558 103,289 85,331 Total $ 76,257 $ 59,941 $ 135,761 $ 112,053 Three Months Ended Six months ended June 30, June 30, 2018 2017 2018 2017 Revenue by classification: Products $ 73,317 $ 57,278 $ 130,043 $ 107,003 Services 2,940 2,663 5,718 5,050 Total $ 76,257 $ 59,941 $ 135,761 $ 112,053 The Company's property and equipment, net of accumulated depreciation, were located in the following geographical areas as of June 30, 2018 and December 31, 2017 (in thousands): As of June 30, 2018 As of December 31, 2017 United States $ 3,238 $ 3,393 Korea 1,382 1,633 Other Asia Pacific 812 847 $ 5,432 $ 5,873

Income Taxes

Income Taxes6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income TaxesIncome Taxes Income tax expense for the three and six months ended June 30, 2018 was $0.3 million for each period, on pre-tax income of $1.7 million and $1.8 million , respectively. For the t hree and six months ended June 30, 2017 , income tax expense was $0.1 million and $0.5 million , respectively, on pre-tax losses of $0.8 million and $3.8 million , respectively. As of June 30, 2018 , the income tax rate varied from the United States statutory income tax rate primarily due to valuation allowances in the United States, income attributable to foreign jurisdictions taxed at rates different from the United States federal statutory rate, and tax credits. The total amount of unrecognized tax benefits, including interest and penalties, at June 30, 2018 was $0.5 million . The amount of tax benefits that would impact the effective income tax rate, if recognized, is $0.1 million . There were no significant changes to unrecognized tax benefits during the quarters ended June 30, 2017 and June 30, 2018. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months. The Company has recognized the provisional tax impacts related to the Tax Act in the Company’s consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act. The Company has not yet determined its policy election with respect to whether to record deferred taxes for basis differences expected to reverse as a result of the global intangible low-taxed income (“GILTI”) provisions in future periods or use the period cost method. The Company has, however, included an estimate of the current GILTI impact in its tax provision for 2018. The Company continues to evaluate the impact of the tax reform and the accounting is expected to be completed when the Company's 2017 U.S. corporate income tax return is filed in 2018.

Organization and Summary of S20

Organization and Summary of Significant Accounting Policies (Policies)6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]
ReclassificationsReclassifications For the three months ended June 30, 2017 , certain prior period statement of comprehensive income (loss) items have been reclassified to correctly reflect research and product development expenses and selling, marketing, general and administrative expenses of $0.1 million and $0.1 million , respectively, which were previously incorrectly classified as cost of revenue-products and services. For the six months ended June 30, 2017 certain prior period statement of comprehensive loss items have been reclassified to correctly reflect research and product development expenses and selling, marketing, general and administrative expenses of $0.3 million and $0.4 million , respectively, which were previously incorrectly classified as cost of revenue-products and services.
Basis of PresentationBasis of Presentation For a description of what the Company believes to be the critical accounting policies and estimates used in the preparation of the Company's unaudited condensed consolidated financial statements, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the Company does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary for a fair statement of the results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission.
Concentration of Risk basis. (f) Concentration of Risk The Company’s customers include competitive and incumbent local exchange carriers, competitive access providers, internet service providers, wireless carriers and resellers serving these markets. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Allowances are maintained for potential doubtful accounts. For the three and six months ended June 30, 2018 , one customer accounted for 22% and 15% of net revenue, respectively. For the three months ended June 30, 2017 , two customers represented 11% and 14% (a related party) of net revenue, respectively. For the six months ended June 30, 2017 , one customer represented 12% (a related party) of net revenue. As of June 30, 2018 , two customers represented 23% and 11% of net accounts receivable, respectively. As of December 31, 2017, two customers represented 20% (a related party) and 11% of net accounts receivable, respectively. As of June 30, 2018 and December 31, 2017, receivables from customers in countries other than the United States represented 80% and 84% , respectively, of net accounts receivable.
Recent Accounting PronouncementsRecent Accounting Pronouncements Recent Accounting Pronouncements Adopted In May 2014, the FASB issued ASU No. 2014-09 “Revenue from Contracts with Customers” (“Topic 606”), which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Topic 606 replaced most existing revenue recognition standards under U.S. GAAP, including ASC 605, Revenue Recognition ("Topic 605"). On January 1, 2018 , the Company adopted Topic 606 and applied this guidance to all open contracts at the date of adoption using the modified retrospective method. The Company recognized the cumulative effect of initially applying Topic 606 as an adjustment to the balance of accumulated deficit at January 1, 2018. The comparative information has not been restated and continues to be reported under Topic 605. The Company’s adoption of Topic 606 primarily impacted the following: • Topic 606 requires an allocation of revenue between deliverables (performance obligations) within an arrangement. Topic 605 restricted the allocation of revenue that is contingent on future deliverables to current deliverables, however, Topic 606 removes this restriction, to the extent that the future deliverables represent performance obligations that are distinct. Under Topic 606, the nature of the performance obligations identified within a contract impacts the allocation of the transaction price between deliverables. • Some of the Company’s contracts include customer acceptance terms, which provides protection to the customer by allowing it to either cancel a contract or force the Company to take corrective actions if products or services do not meet the requirements in the contract. Under Topic 606, customer acceptance that is considered a “formality”, would result in revenue recognized when control of the product or service is transferred to customer, which is typically upon shipment or delivery dependent upon the terms of the underlying contract. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at January 1, 2018 (in thousands): As of January 1, 2018 Balance after adoption of ASC 606 Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 62,099 $ 344 (1) $ 61,755 Inventories 25,239 (105 ) (2) 25,344 Liabilities Contract liabilities - current 2,866 (413 ) (2) 3,279 Accrued and other liabilities 11,518 344 (1) 11,174 Stockholders’ equity Accumulated deficit (18,544 ) 308 (18,852 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of the adoption date on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at June 30, 2018 (in thousands): As of June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 67,163 $ 512 (1) $ 66,651 Inventories 38,187 66 (2) 38,121 Liabilities Contract liabilities - current 2,600 347 (2) 2,253 Accrued and other liabilities 9,431 512 (1) 8,919 Stockholders’ equity Accumulated deficit (16,988 ) (281 ) (16,707 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of June 30, 2018 on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated statement of operations for the three and six months ended June 30, 201 8 (in thousands): Three Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 76,257 $ (152 ) $ 76,409 Cost of revenue - products and services 53,092 (5 ) 53,097 Gross profit 23,165 (147 ) 23,312 Provision for income taxes (341 ) — (341 ) Net income 1,355 (147 ) 1,502 Six Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 135,761 $ (347 ) $ 136,108 Cost of revenue - products and services 90,861 (66 ) 90,927 Gross profit 44,900 (281 ) 45,181 Provision for income taxes (336 ) — (336 ) Net income 1,496 (281 ) 1,777 During the three and six months ended June 30, 2018, $0.3 million and $0.6 million respectively, was recognized as revenue from the opening contract liabilities balance. There was no impact on net revenue from related parties as a result of Topic 606. In August 2016, FASB issued ASU 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The updated guidance became effective for the Company on January 1, 2018 and was adopted accordingly. The adoption of this standard did not have any effect on the Company's condensed consolidated statement of cash flows for the three and six months ended June 31, 2018 or 2017. In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows, Restricted Cash , which requires that a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The updated guidance became effective for the Company beginning on January 1, 2018 and was adopted accordingly, using the retrospective approach. As a result, the Company no longer presents transfers between cash and cash equivalents and restricted cash in the consolidated cash flow statements. The condensed consolidated statement of cash flows for the six months ended June 30, 2017 was revised to exclude the $1.3 million change in restricted cash from net cash used in investing activities and to include $6.7 million and $8.3 million in cash, cash equivalents and restricted cash, beginning of period and cash, cash equivalents and restricted cash, end of period, respectively. Other Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. The updated guidance is effective for the Company on January 1, 2019, and early adoption is permitted. The Company does not plan to early adopt this guidance. The Company expects its assets and liabilities to increase as a result of the adoption of this standard. In July 2018, the FASB issued ASU 2018-18-11, Leases (Topic 842): Targeted Improvements , ASU 2018-11 states that, separating components of a contract affect the amendments in Update 2016-02, which are not yet effective but can be early adopted. All entities, including early adopters, that elect the practical expedient related to separating components of a contract in this Update must apply the expedient, by class of underlying asset, to all existing lease transactions that qualify for the expedient at the date elected. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In January 2017, FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairment. The updated guidance is effective for the Company on January 1, 2020, and will be adopted accordingly. Early adoption is permitted. The Company is currently assessing the potential impact of adopting this new guidance on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Act. Because the amendments only relate to the reclassification of the income rate tax effect of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018 and interim periods in those years. The Company is not able to quantify or cannot reasonably estimate quantitative information related to the impact of the new standard on its consolidated financial statements at this time. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . The amendments add various Securities and Exchange Commission (“SEC) paragraphs pursuant to the issuance of SEC Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“Act”) (“SAB 118”). The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company has provided a reasonable estimate of the tax reform in the notes to the consolidated financial statements.

Organization and Summary of S21

Organization and Summary of Significant Accounting Policies (Tables)6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]
Schedule of the Effects of Topic 606The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at January 1, 2018 (in thousands): As of January 1, 2018 Balance after adoption of ASC 606 Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 62,099 $ 344 (1) $ 61,755 Inventories 25,239 (105 ) (2) 25,344 Liabilities Contract liabilities - current 2,866 (413 ) (2) 3,279 Accrued and other liabilities 11,518 344 (1) 11,174 Stockholders’ equity Accumulated deficit (18,544 ) 308 (18,852 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of the adoption date on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated balance sheet at June 30, 2018 (in thousands): As of June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Assets Accounts receivable, net $ 67,163 $ 512 (1) $ 66,651 Inventories 38,187 66 (2) 38,121 Liabilities Contract liabilities - current 2,600 347 (2) 2,253 Accrued and other liabilities 9,431 512 (1) 8,919 Stockholders’ equity Accumulated deficit (16,988 ) (281 ) (16,707 ) (1) Allowance for sales returns was historically presented as a contra-asset within accounts receivable on the Company's consolidated balance sheets. Upon the adoption of Topic 606, the Company presents the allowance for sales returns in Accrued and other liabilities (current). (2) Represents the impact of allocation of transaction price to separate performance obligations in open contracts as of June 30, 2018 on a relative standalone selling price basis and acceleration of revenue (and related costs) for contracts for which acceptance clauses are a formality. The following table summarizes the effects of Topic 606 on the Company’s unaudited condensed consolidated statement of operations for the three and six months ended June 30, 201 8 (in thousands): Three Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 76,257 $ (152 ) $ 76,409 Cost of revenue - products and services 53,092 (5 ) 53,097 Gross profit 23,165 (147 ) 23,312 Provision for income taxes (341 ) — (341 ) Net income 1,355 (147 ) 1,502 Six Months Ended June 30, 2018 As reported Adjustments Balance without adoption of ASC 606 Net revenue $ 135,761 $ (347 ) $ 136,108 Cost of revenue - products and services 90,861 (66 ) 90,927 Gross profit 44,900 (281 ) 45,181 Provision for income taxes (336 ) — (336 ) Net income 1,496 (281 ) 1,777

Balance Sheet Detail (Tables)

Balance Sheet Detail (Tables)6 Months Ended
Jun. 30, 2018
Inventory Disclosure [Abstract]
Accounts receivable, netAccounts receivable, net as of June 30, 2018 and December 31, 2017 was as follows (in thousands): June 30, December 31, Gross accounts receivable $ 67,531 $ 63,446 Allowance for doubtful accounts (368 ) (922 ) Allowance for sales returns — (1) (769 ) Total allowances (368 ) (1,691 ) Accounts receivable, net $ 67,163 $ 61,755 (1) Upon adoption of ASC 606, allowances for sales returns were reclassified to accrued and other liabilities as these reserve balances are considered estimated refund liabilities. Refer to footnote 1(g) for additional information about the adoption impact.
InventoriesInventories as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, December 31, Raw materials $ 16,730 $ 12,671 Work in process 2,030 2,150 Finished goods 19,427 10,523 Total inventories $ 38,187 $ 25,344

Property and Equipment (Tables)

Property and Equipment (Tables)6 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Property and Equipment, NetProperty and equipment as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, December 31, Furniture and fixtures $ 22,066 $ 22,988 Machinery and equipment 5,557 5,455 Leasehold improvements 3,613 3,647 Computers and software 682 621 Others 975 1,007 32,893 33,718 Less: accumulated depreciation and amortization (27,260 ) (27,584 ) Less: government grants (201 ) (261 ) Property and equipment, net $ 5,432 $ 5,873

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)6 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of GoodwillGoodwill as of June 30, 2018 and December 31, 2017 was as follows (in thousands): June 30, December 31, Beginning balance $ 3,977 $ 3,977 Less: accumulated impairment — — Ending balance $ 3,977 $ 3,977
Schedule of Intangible AssetsIntangible assets as of June 30, 2018 and December 31, 2017 were as follows (in thousands): June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (1,122 ) $ 1,938 Customer relationships 5,240 (961 ) 4,279 Backlog 2,179 (2,179 ) — Total intangible assets $ 10,479 $ (4,262 ) $ 6,217 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Developed technology $ 3,060 $ (816 ) $ 2,244 Customer relationships 5,240 (699 ) 4,541 Backlog 2,179 (2,179 ) — Total intangible assets $ 10,479 $ (3,694 ) $ 6,785

Debts (Tables)

Debts (Tables)6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]
Schedule of DebtAs of June 30, 2018 and December 31, 2017, the Company had an aggregate outstanding balance of $31.9 million (included in short-term debts) and $22.8 million ( $19.8 million included in short-term debts), respectively, under such financing arrangements, and the interest rates per annum applicable to outstanding borrowings under these financing arrangements were as listed in the tables below (amount in thousands). As of June 30, 2018 Interest rate (%) Amount Industrial Bank of Korea Credit facility 3.48-4.02 $ 4,515 Industrial Bank of Korea Trade finance 4.47-5.25 2,427 Shinhan Bank General loan 6.06 2,853 Shinhan Bank Trade finance 4.16 1,200 NongHyup Bank Credit facility 3.90-4.10 2,569 The Export-Import Bank of Korea Export development loan 3.20-3.28 7,270 LGUPlus General loan 0 1,782 JECC Factoring AR Factoring 1.58 6,362 Shinhan Bank (India) General loan 8.70-8.90 2,896 $ 31,874 As of December 31, 2017 Interest rate (%) Amount Industrial Bank of Korea Credit facility 2.89 - 3.26 $ 2,328 Industrial Bank of Korea Trade Finance 4.47 - 5.97 2,401 Shinhan Bank General loan 5.91 2,987 Shinhan Bank Trade finance 3.90 - 4.14 3,050 NongHyup Bank (Korea) Credit facility 2.83 - 3.42 860 The Export-Import Bank of Korea Export development loan 3.20 - 3.28 7,570 Mitsubishi Bank (Japan) AR factoring 1.58 1,872 Shinhan Bank (India) General loan 8.70 - 8.90 1,709 $ 22,777

Non-Controlling Interests (Tabl

Non-Controlling Interests (Tables)6 Months Ended
Jun. 30, 2018
Noncontrolling Interest [Abstract]
Non-controlling interestsNon-controlling interests for the six months ended June 30, 2018 and 2017 were as follows (in thousands): Six Months Ended June 30, 2018 2017 Beginning non-controlling interests $ 534 $ 416 Net income (loss) attributable to non-controlling interests (27 ) 184 Foreign currency translation adjustments 8 21 Ending non-controlling interests $ 515 $ 621

Related-Party Transactions (Tab

Related-Party Transactions (Tables)6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]
Schedule of Related Party TransactionsBalances of receivables and payables arising from sales and purchases of goods and services with related parties as of June 30, 2018 and December 31, 2017 were as follows (in thousands): As of June 30, 2018 Counterparty DNI ownership Interest Account receivables Other receivables Deposits for lease * Short-term debt Long-term debt Accounts payable Other Payables DNI (parent company) N/A $ 565 $ — $ 751 $ 5,795 $ 6,800 $ 1,253 $ 1,399 Tomato Soft Ltd. 100% — — — — — — 9 Tomato Soft (Xi'an) Ltd. 100% — — — — — — 41 Dasan France 100% 461 65 — — — — — HandySoft, Inc. 17.63% 198 — — — — 28 — Chasan Networks Co., Ltd. 100% — — — — — 104 — $ 1,224 $ 65 $ 751 $ 5,795 $ 6,800 $ 1,385 $ 1,449 As of December 31, 2017 Counterparty DNI Ownership Interest Account receivables Other receivables Deposits for lease * Long-term debt Accounts payable Other Payables Accrued and other liabilities** DNI (parent company) N/A $ 12,576 $ 93 $ 786 $ 6,800 $ 1,264 $ 1,859 $ 59 Tomato Soft Ltd. 100% — — — — — 18 — Tomato Soft (Xi'an) Ltd. 100% — — — — — 54 — Dasan France 100% 870 71 — — — — — HandySoft, Inc. 17.63% 52 — — — — — — Chasan Networks Co., Ltd. 100% — — — — 87 — — Solueta 100% — — — — — 25 — $ 13,498 $ 164 $ 786 $ 6,800 $ 1,351 $ 1,956 $ 59 * Included in other assets in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017. **Included in accrued and other liabilities in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017. Sales and purchases, cost of revenue, research and product development, selling, marketing, general and administrative, interest expense and other expenses to and from related parties for the three and six months ended June 30, 2018 and 2017 were as follows (in thousands): Three Months Ended June 30, 2018 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI (Parent Company) N/A $ 962 $ 750 $ — $ — $ 1,144 $ 69 $ 79 Tomato Soft Ltd. 100% — — 38 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 123 — — — Chasan Networks Co., Ltd. 100% — — 268 18 — — — Dasan France 100% — — — — — — — Handysoft, Inc. 17.63% 108 39 — — 2 — — $ 1,070 $ 789 $ 306 $ 141 $ 1,146 $ 69 $ 79 Three Months Ended June 30, 2017 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, Other expenses DNI (Parent Company) N/A $ 8,480 $ 7,095 $ — $ — $ 1,326 $ 57 Chasan Networks Co., Ltd. 100% — — 187 32 — — Dasan France 100% 556 549 — — 300 — D-Mobile 100% 1,811 741 — — 94 — Fine Solution 100% — — — — 1 — HandySoft, Inc. 17.64% 14 2 — — — — Tomato Soft (Xi'an) Ltd. 100% — — — 133 37 — Solueta 27.21% — — — — — 3 $ 10,861 $ 8,387 $ 187 $ 165 $ 1,758 $ 60 Six Months Ended June 30, 2018 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, general and administrative Interest expense Other expenses DNI (Parent Company) N/A $ 2,210 $ 1,873 $ — $ — $ 2,166 $ 71 $ 145 Tomato Soft Ltd. 100% — — 57 — — — — Tomato Soft (Xi'an) Ltd. 100% — — 10 2,777 — — — Chasan Networks Co., Ltd. 100% — — 592 36 — — — Dasan France 100% 202 177 — — — — — HandySoft, Inc. 17.63% 256 149 — — 2 — — $ 2,668 $ 2,199 $ 659 $ 2,813 $ 2,168 $ 71 $ 145 Six Months Ended June 30, 2017 Counterparty DNI ownership Interest Sales Cost of revenue Manufacturing (cost of revenue) Research and product development Selling, marketing, Other expenses DNI (Parent Company) N/A $ 12,631 $ 10,416 $ — $ — $ 2,200 $ 120 Chasan Networks Co., Ltd. 100 % — — 382 59 — — Dasan France 100 % 950 936 — — 300 — Dasan India Private Limited (1) 100 % 6,287 4,783 — — — — D-Mobile (1) 100 % 1,822 754 — — 196 — Fine Solution 100 % — — — — 4 — HandySoft, Inc. 17.64 % 34 11 — — — — J-Mobile Corporation 68.56 % 8 — — — 132 — Tomato Soft (Xi'an) Ltd. 100 % — — — 304 37 — Solueta 27.21 % — — — — — 3 $ 21,732 $ 16,900 $ 382 $ 363 $ 2,869 $ 123 (1) As discussed above, on December 31, 2017 DNS acquired DASAN India and D-Mobile from DNI.

Net Income (Loss) Per Share A28

Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. (Tables)6 Months Ended
Jun. 30, 2018
Earnings Per Share [Abstract]
Schedule of earnings per share, basic and dilutedThe following table is a reconciliation of the numerator and denominator in the basic and diluted net income (loss) per share calculation (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,416 $ (809 ) $ 1,523 $ (4,556 ) Weighted average number of shares outstanding: Basic 16,438 16,380 16,425 16,380 Effect of dilutive securities: Stock options, restricted stock units and share awards 234 — 220 — Diluted 16,672 16,380 16,645 16,380 Net income (loss) per share attributable to DASAN Zhone Solutions, Inc.: Basic $ 0.09 $ (0.05 ) $ 0.09 $ (0.28 ) Diluted $ 0.08 $ (0.05 ) $ 0.09 $ (0.28 )

Commitments and Contingencies (

Commitments and Contingencies (Tables)6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Estimated Future Lease Payments under All Non Cancelable Operating LeasesThe Company has entered into operating leases for certain office space and equipment, some of which contain renewal options and escalation clauses. Estimated future lease payments under all non-cancellable operating leases with terms in excess of one year, including taxes and service fees, are as follows (in thousands): Operating Leases Year ending December 31: 2018 (remainder of the year) $ 2,043 2019 3,993 2020 2,998 2021 2,590 2022 2,664 Thereafter 8,423 Total minimum lease payments $ 22,711
Reconciliation of Changes in Accrued Warranties and Related CostsThe following table reconciles changes in the Company’s accrued warranties and related costs for the six months ended June 30, 2018 and 2017 (in thousands): Six Months Ended June 30, 2018 2017 Beginning balance $ 931 $ 878 Charged to cost of revenue 728 239 Claims and settlements (421 ) (381 ) Foreign exchange impact 9 15 Ending balance $ 1,247 $ 751
Payment Guarantees Provided by Third PartiesThe following table sets forth payment guarantees of the Company's indebtedness and other obligations as of June 30, 2018 (in thousands) that have been provided by third parties and DNI. DNI owns approximately 57.7% of the outstanding shares of the Company's common stock: Guarantor Amount Guaranteed (in thousands) Description of Obligations Guaranteed DNI $ 3,423 Borrowings from Shinhan Bank DNI 1,712 Purchasing card from Shinhan Bank DNI 12,355 Letter of credit from Industrial Bank of Korea DNI 2,140 Purchasing Card from Industrial Bank of Korea DNI 6,000 Letter of credit from NongHyup Bank DNI 535 Purchasing card from NongHyup Bank DNI 6,128 Borrowings from Export-Import Bank of Korea DNI 6,000 Letter of credit from KookMin Bank Industrial Bank of Korea 8,232 Letter of credit NongHyup Bank 3,685 Letter of credit Kookmin Bank 4,999 Letter of credit Shinhan Bank 242 Purchasing card Industrial Bank of Korea 1,556 Performance bonds Industrial Bank of Korea 810 Purchasing Card State Bank of India 38 Performance bonds Seoul Guarantee Insurance Co. 3,961 Performance payment guarantee* $ 61,816 *The Company is responsible for the warranty liabilities generally for the period of two years regarding major product sales and has contracted surety insurance over part of the warranty liabilities.

Enterprise-Wide Information (Ta

Enterprise-Wide Information (Tables)6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]
Revenue by GeographyThe following summarizes required disclosures about geographical concentrations and revenue by products and services (in thousands): Three Months Ended Six months ended June 30, June 30, 2018 2017 2018 2017 Revenue by geography: United States $ 13,630 $ 11,961 $ 30,179 $ 24,108 Canada 1,321 1,422 2,293 2,614 Total North America 14,951 13,383 32,472 26,722 Latin America 7,312 7,075 15,269 11,945 Europe, Middle East, Africa 9,475 6,253 16,963 11,756 Korea 19,111 32,197 31,235 48,513 Other Asia Pacific 25,408 1,033 39,822 13,117 Total International 61,306 46,558 103,289 85,331 Total $ 76,257 $ 59,941 $ 135,761 $ 112,053
Revenue by Products and Services Three Months Ended Six months ended June 30, June 30, 2018 2017 2018 2017 Revenue by classification: Products $ 73,317 $ 57,278 $ 130,043 $ 107,003 Services 2,940 2,663 5,718 5,050 Total $ 76,257 $ 59,941 $ 135,761 $ 112,053
Revenue by Geographical AreaThe Company's property and equipment, net of accumulated depreciation, were located in the following geographical areas as of June 30, 2018 and December 31, 2017 (in thousands): As of June 30, 2018 As of December 31, 2017 United States $ 3,238 $ 3,393 Korea 1,382 1,633 Other Asia Pacific 812 847 $ 5,432 $ 5,873

Organization and Summary of S31

Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in ThousandsFeb. 28, 2017Jun. 30, 2018USD ($)customercountrysharesJun. 30, 2017USD ($)customerJun. 30, 2018USD ($)customercountrysharesJun. 30, 2017USD ($)customerDec. 31, 2017USD ($)customersharesJan. 01, 2018USD ($)Feb. 27, 2017shares
Significant Accounting Policies [Line Items]
Number of customers | customer1,000 1,000
Number of countries in which entity operates | country50 50
Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,416 $ (809) $ 1,523 $ (4,556) $ 1,200
Accumulated deficit16,988 16,988 18,852 $ 18,544
Working Capital61,100 61,100
Net cash used in operating activities(15,410)(6,812)
Cash and cash equivalents27,308 $ 9,902 27,308 $ 9,902 $ 17,475
Debt52,500 52,500
Debt, current45,700 45,700
Credit facility, remaining borrowing capacity $ 5,600 $ 5,600
Common stock, authorized (in shares) | shares36,000,000 36,000,000 36,000,000 180,000,000
Common stock, issued (in shares) | shares16,400,000 16,400,000 81,900,000
Stock split, conversion ratio0.2
Contract liability, revenue recognized $ 300 $ 600
Net Revenue | One major customer
Significant Accounting Policies [Line Items]
Number of customers | customer1 1 1
Net Revenue | Two major customers
Significant Accounting Policies [Line Items]
Number of customers | customer2
Net Revenue | Customer concentration risk | One major customer
Significant Accounting Policies [Line Items]
Concentration risk, percentage22.00%15.00%12.00%
Net Revenue | Customer concentration risk | Two major customers, customer one
Significant Accounting Policies [Line Items]
Concentration risk, percentage11.00%
Net Revenue | Customer concentration risk | Two major customers, customer two
Significant Accounting Policies [Line Items]
Concentration risk, percentage14.00%
Accounts receivable | Two major customers
Significant Accounting Policies [Line Items]
Number of customers | customer2 2
Accounts receivable | Customer concentration risk | Two major customers, customer one
Significant Accounting Policies [Line Items]
Concentration risk, percentage23.00%20.00%
Accounts receivable | Customer concentration risk | Two major customers, customer two
Significant Accounting Policies [Line Items]
Concentration risk, percentage11.00%11.00%
Accounts receivable | Geographic concentration risk | Other than the United States
Significant Accounting Policies [Line Items]
Concentration risk, percentage80.00%84.00%
WFB Facility
Significant Accounting Policies [Line Items]
Credit facility, remaining borrowing capacity $ 2,200 $ 2,200
Credit facility, outstanding $ 8,000 $ 8,000
Merger Agreement with Dragon Acquisition Company
Significant Accounting Policies [Line Items]
Percent of voting interest acquired57.70%57.70%
Dasan Network Solutions, Inc (DNS Korea) [Member]
Significant Accounting Policies [Line Items]
Cash and cash equivalents $ 12,500 $ 12,500
Revolving Credit Facility
Significant Accounting Policies [Line Items]
Credit facility, remaining borrowing capacity $ 3,200 3,200
Research and product development expense
Significant Accounting Policies [Line Items]
Error correction, amount $ 100 $ 300
Selling, general and administrative expenses
Significant Accounting Policies [Line Items]
Error correction, amount $ 100 400
Accounting Standards Update 2016-18
Significant Accounting Policies [Line Items]
Cash, cash equivalents and restricted cash, increase (decrease) $ 8,300 $ (1,300) $ 6,700

Organization and Summary of S32

Organization and Summary of Significant Accounting Policies - Topic 606 Adoption (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017Jan. 01, 2018Dec. 31, 2017
Consolidated Balance Balance Sheet
Accounts receivable, net $ 67,163 $ 67,163 $ 62,099 $ 61,755
Inventories38,187 38,187 25,239 25,344
Contract liabilities - current2,600 2,600 2,866 3,279
Accrued and other liabilities9,431 9,431 11,518 11,174
Accumulated deficit(16,988)(16,988)(18,544)(18,852)
Consolidated Statement of Operations
Net revenue76,257 $ 59,941 135,761 $ 112,053
Cost of revenue - products and services53,092 40,508 90,861 74,390
Gross profit23,165 19,433 44,900 37,663
Income tax expense(341)(99)(336)(539)
Net income (loss)1,355 $ (874)1,496 $ (4,372)
Difference between revenue guidance in effect before and after Topic 606 | Accounting Standards Update 2014-09
Consolidated Balance Balance Sheet
Accounts receivable, net512 512 344
Inventories66 66 (105)
Contract liabilities - current347 347 (413)
Accrued and other liabilities512 512 344
Accumulated deficit(281)(281) $ 308
Consolidated Statement of Operations
Net revenue(152)(347)
Cost of revenue - products and services(5)(66)
Gross profit(147)(281)
Income tax expense0 0
Net income (loss)(147)(281)
Calculated under revenue guidance in effect before Topic 606
Consolidated Balance Balance Sheet
Accounts receivable, net66,651 66,651 61,755
Inventories38,121 38,121 25,344
Contract liabilities - current2,253 2,253 3,279
Accrued and other liabilities8,919 8,919 11,174
Accumulated deficit(16,707)(16,707) $ (18,852)
Consolidated Statement of Operations
Net revenue76,409 136,108
Cost of revenue - products and services53,097 90,927
Gross profit23,312 45,181
Income tax expense(341)(336)
Net income (loss) $ 1,502 $ 1,777

Fair Value Measurement (Details

Fair Value Measurement (Details) - Foreign currency contracts $ in MillionsJun. 30, 2018USD ($)
Derivative [Line Items]
Derivative, notional amount $ 20.1
Derivative, fair value $ (1)

Cash, Cash Equivalents and Re34

Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in MillionsJun. 30, 2018Dec. 31, 2017
Cash and Cash Equivalents [Abstract]
Restricted cash $ 11.6 $ 13.9

Balance Sheet Detail - Accounts

Balance Sheet Detail - Accounts Receivable (Details) - USD ($) $ in ThousandsJun. 30, 2018Jan. 01, 2018Dec. 31, 2017
Inventory Disclosure [Abstract]
Gross accounts receivable $ 67,531 $ 63,446
Allowance for doubtful accounts(368)(922)
Allowance for sales returns0 (769)
Total allowances(368)(1,691)
Accounts receivable, net $ 67,163 $ 62,099 $ 61,755

Balance Sheet Detail - Inventor

Balance Sheet Detail - Inventories (Detail) - USD ($) $ in ThousandsJun. 30, 2018Jan. 01, 2018Dec. 31, 2017
Inventory [Line Items]
Raw materials $ 16,730 $ 12,671
Work in process2,030 2,150
Finished goods19,427 10,523
Inventories38,187 $ 25,239 25,344
Collateral pledged
Inventory [Line Items]
Inventories $ 23,400 $ 11,400

Property and Equipment (Detail)

Property and Equipment (Detail) - USD ($) $ in ThousandsJun. 30, 2018Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross $ 32,893 $ 33,718
Less: accumulated depreciation and amortization(27,260)(27,584)
Less: government grants(201)(261)
Property and equipment, net5,432 5,873
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross22,066 22,988
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross5,557 5,455
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross3,613 3,647
Computers and software
Property, Plant and Equipment [Line Items]
Property and equipment, gross682 621
Others
Property, Plant and Equipment [Line Items]
Property and equipment, gross $ 975 $ 1,007

Property and Equipment - Addit

Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Depreciation and amortization associated with property and equipment $ 0.4 $ 0.5 $ 0.8 $ 1

Goodwill and Intangible Asset39

Goodwill and Intangible Assets (Details) - USD ($)3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017Dec. 31, 2017
Goodwill [Roll Forward]
Beginning balance, Goodwill $ 3,977,000 $ 3,977,000
Less: accumulated impairment $ 0 0 $ 0
Ending balance, Goodwill3,977,000 3,977,000
Goodwill, impairment loss0 0
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross10,479,000 10,479,000 10,479,000
Accumulated Amortization(4,262,000)(4,262,000)(3,694,000)
Intangible assets, net6,217,000 6,217,000 6,785,000
Amortization of intangible assets300,000 $ 700,000 600,000 $ 1,400,000
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross3,060,000 3,060,000 3,060,000
Accumulated Amortization(1,122,000)(1,122,000)(816,000)
Intangible assets, net1,938,000 1,938,000 2,244,000
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross5,240,000 5,240,000 5,240,000
Accumulated Amortization(961,000)(961,000)(699,000)
Intangible assets, net4,279,000 4,279,000 4,541,000
Backlog
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross2,179,000 2,179,000 2,179,000
Accumulated Amortization(2,179,000)(2,179,000)(2,179,000)
Intangible assets, net $ 0 $ 0 $ 0

Debts - Additional Information

Debts - Additional Information (Detail) - USD ($)6 Months Ended
Jun. 30, 2018Jul. 12, 2018Dec. 31, 2017
Line of Credit Facility [Line Items]
Letters of credit outstanding $ 7,100,000
Credit facility, remaining borrowing capacity5,600,000
Debt31,900,000 $ 22,777,000
Short-term debt $ 19,800,000
WFB Facility
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity $ 25,000,000
Credit facility, commitment fee on unused capacity, percentage0.25%
Credit facility, outstanding $ 8,000,000
Letters of credit outstanding2,100,000
Credit facility, remaining borrowing capacity $ 2,200,000
Credit facility, interest rate459.00%
A&R Domestic Credit Agreement
Line of Credit Facility [Line Items]
Credit facility, commitment fee on unused capacity, percentage0.25%
LGUPlus, General Loan
Line of Credit Facility [Line Items]
Debt $ 1,782,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Credit facility, remaining borrowing capacity3,200,000
Letter of Credit | Letter of Credit
Line of Credit Facility [Line Items]
Letters of credit outstanding1,100,000
Foreign Line of Credit | Foreign Line of Credit
Line of Credit Facility [Line Items]
Letters of credit outstanding $ 12,000,000
Subsequent Event | Revolving Credit Facility | A&R Domestic Credit Agreement
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity $ 25,000,000
Subsequent Event | Letter of Credit | A&R Domestic Credit Agreement
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity $ 5,000,000

Debts - Schedule of Short-Term

Debts - Schedule of Short-Term Debt (Details) - USD ($) $ in ThousandsJun. 30, 2018Dec. 31, 2017
Short-term Debt [Line Items]
Debt $ 31,900 $ 22,777
Letter of credit from Industrial Bank of Korea
Short-term Debt [Line Items]
Debt4,515 2,328
Industrial Bank of Korean, Trade Finance
Short-term Debt [Line Items]
Debt $ 2,427 $ 2,401
Borrowings from Shinhan Bank
Short-term Debt [Line Items]
Stated interest rate6.06%5.91%
Debt $ 2,853 $ 2,987
Shinhan Bank, Trade Finance
Short-term Debt [Line Items]
Stated interest rate4.16%
Debt $ 1,200 3,050
Nonghyup Bank, Credit Facility
Short-term Debt [Line Items]
Debt2,569 860
The Export-Import Bank of Korea, Export Development Loan
Short-term Debt [Line Items]
Debt $ 7,270 7,570
LGUPlus, General Loan
Short-term Debt [Line Items]
Stated interest rate0.00%
Debt $ 1,782
JECC Factoring, AR Factoring
Short-term Debt [Line Items]
Stated interest rate1.58%
Debt $ 6,362
Mitsubishi Bank, SoftBank AR Factoring
Short-term Debt [Line Items]
Stated interest rate1.58%
Debt1,872
Shinhan Bank (India), General Loan
Short-term Debt [Line Items]
Debt $ 2,896 $ 1,709
Minimum | Letter of credit from Industrial Bank of Korea
Short-term Debt [Line Items]
Stated interest rate3.48%2.89%
Minimum | Industrial Bank of Korean, Trade Finance
Short-term Debt [Line Items]
Stated interest rate4.47%4.47%
Minimum | Shinhan Bank, Trade Finance
Short-term Debt [Line Items]
Stated interest rate3.90%
Minimum | Nonghyup Bank, Credit Facility
Short-term Debt [Line Items]
Stated interest rate3.90%2.83%
Minimum | The Export-Import Bank of Korea, Export Development Loan
Short-term Debt [Line Items]
Stated interest rate3.20%3.20%
Minimum | Shinhan Bank (India), General Loan
Short-term Debt [Line Items]
Stated interest rate8.70%8.70%
Maximum | Letter of credit from Industrial Bank of Korea
Short-term Debt [Line Items]
Stated interest rate4.02%3.26%
Maximum | Industrial Bank of Korean, Trade Finance
Short-term Debt [Line Items]
Stated interest rate5.25%5.97%
Maximum | Shinhan Bank, Trade Finance
Short-term Debt [Line Items]
Stated interest rate4.14%
Maximum | Nonghyup Bank, Credit Facility
Short-term Debt [Line Items]
Stated interest rate4.10%3.42%
Maximum | The Export-Import Bank of Korea, Export Development Loan
Short-term Debt [Line Items]
Stated interest rate3.28%3.28%
Maximum | Shinhan Bank (India), General Loan
Short-term Debt [Line Items]
Stated interest rate8.90%8.90%

Non-Controlling Interests (Deta

Non-Controlling Interests (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning balance, non-controlling interest $ 534 $ 416
Net income (loss) attributable to non-controlling interests $ (61) $ (65)(27)184
Foreign currency translation adjustments8 21
Ending balance, non-controlling interest $ 515 $ 621 $ 515 $ 621

Related-Party Transactions (Det

Related-Party Transactions (Details) $ in Thousands, ₩ in BillionsMar. 21, 2018KRW (₩)Mar. 21, 2018USD ($)Jun. 30, 2018USD ($)Jun. 30, 2017USD ($)Jun. 30, 2018USD ($)Jun. 30, 2017USD ($)Dec. 31, 2017USD ($)Mar. 27, 2018Sep. 09, 2016
Related Party Transaction [Line Items]
Research and product development $ 8,714 $ 9,141 $ 17,691 $ 18,523
D-Mobile
Related Party Transaction [Line Items]
Percent of voting interest acquired100.00%
DASAN INDIA Private Limited
Related Party Transaction [Line Items]
Percent of voting interest acquired99.99%
D-Mobile and DASAN India
Related Party Transaction [Line Items]
Purchase consideration $ 800
DASAN | Loan Agreement | DNS US
Related Party Transaction [Line Items]
Stated interest rate4.60%
Origination of notes receivable from related parties ₩ 6.5 $ 5,800
DASAN | Majority Shareholder
Related Party Transaction [Line Items]
Guarantee fee, percent0.90%
Tomato Soft (Xi'an) Ltd.
Related Party Transaction [Line Items]
Research and product development $ 800
Junior lien | DASAN | Majority Shareholder | Loan Agreement | DNS US
Related Party Transaction [Line Items]
Origination of notes receivable from related parties $ 1,800
Junior lien | CHASAN Networks Co., Ltd. | Affiliated Entity | Loan Agreement | DNS US
Related Party Transaction [Line Items]
Manufacturing and development fee, percent7.00%7.00%
Unsecured debt | Junior lien | DASAN | Term Loan | Majority Shareholder | Loan Agreement
Related Party Transaction [Line Items]
Maximum borrowing amount $ 5,000 $ 5,000
Stated interest rate4.60%4.60%4.60%

Related-Party Transactions - Sa

Related-Party Transactions - Sales and Purchases to and from Related Parties (Details) - USD ($)3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Related Party Transaction [Line Items]
Sales $ 1,070,000 $ 10,861,000 $ 2,668,000 $ 21,732,000
Cost of revenue1,095,000 8,574,000 2,858,000 17,282,000
Interest expense69,000 71,000
Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Sales1,070,000 10,861,000 2,668,000 21,732,000
Cost of revenue789,000 8,387,000 2,199,000 16,900,000
Manufacturing (cost of revenue)306,000 187,000 659,000 382,000
Research and product development141,000 165,000 2,813,000 363,000
Selling, marketing, general and administrative1,146,000 1,758,000 2,168,000 2,869,000
Other expenses79,000 60,000 145,000 123,000
DASAN | Majority Shareholder | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Sales962,000 8,480,000 2,210,000 12,631,000
Cost of revenue750,000 7,095,000 1,873,000 10,416,000
Manufacturing (cost of revenue)0 0 0 0
Research and product development0 0 0 0
Selling, marketing, general and administrative1,144,000 1,326,000 2,166,000 2,200,000
Interest expense69,000 71,000
Other expenses $ 79,000 $ 57,000 $ 145,000 $ 120,000
Tomato Soft Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Sales $ 0 $ 0
Cost of revenue0 0
Manufacturing (cost of revenue)38,000 57,000
Research and product development0 0
Selling, marketing, general and administrative0 0
Interest expense0 0
Other expenses $ 0 $ 0
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%100.00%100.00%
Sales $ 0 $ 0 $ 0 $ 0
Cost of revenue0 0 0 0
Manufacturing (cost of revenue)0 0 10,000 0
Research and product development123,000 133,000 2,777,000 304,000
Selling, marketing, general and administrative0 37,000 0 37,000
Interest expense0 0
Other expenses $ 0 $ 0 $ 0 $ 0
CHASAN Networks Co., Ltd. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%100.00%100.00%
Sales $ 0 $ 0 $ 0 $ 0
Cost of revenue0 0 0 0
Manufacturing (cost of revenue)268,000 187,000 592,000 382,000
Research and product development18,000 32,000 36,000 59,000
Selling, marketing, general and administrative0 0 0 0
Interest expense0 0
Other expenses $ 0 $ 0 $ 0 $ 0
DASAN FRANCE | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%100.00%100.00%
Sales $ 0 $ 556,000 $ 202,000 $ 950,000
Cost of revenue0 549,000 177,000 936,000
Manufacturing (cost of revenue)0 0 0 0
Research and product development0 0 0 0
Selling, marketing, general and administrative0 300,000 0 300,000
Interest expense0 0
Other expenses $ 0 $ 0 $ 0 $ 0
HANDYSOFT, Inc. | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest17.63%17.64%17.63%17.64%
Sales $ 108,000 $ 14,000 $ 256,000 $ 34,000
Cost of revenue39,000 2,000 149,000 11,000
Manufacturing (cost of revenue)0 0 0 0
Research and product development0 0 0 0
Selling, marketing, general and administrative2,000 0 2,000 0
Interest expense0 0
Other expenses $ 0 $ 0 $ 0 $ 0
J-Mobile Corporation | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest68.56%68.56%
Sales $ 8,000
Cost of revenue0
Manufacturing (cost of revenue)0
Research and product development0
Selling, marketing, general and administrative132,000
Other expenses $ 0
Fine Solution | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Sales $ 0 $ 0
Cost of revenue0 0
Manufacturing (cost of revenue)0 0
Research and product development0 0
Selling, marketing, general and administrative1,000 4,000
Other expenses $ 0 $ 0
Solueta | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest27.21%27.21%
Sales $ 0 $ 0
Cost of revenue0 0
Manufacturing (cost of revenue)0 0
Research and product development0 0
Selling, marketing, general and administrative0 0
Other expenses $ 3,000 $ 3,000
DASAN INDIA Private Limited | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Sales $ 6,287,000
Cost of revenue4,783,000
Manufacturing (cost of revenue)0
Research and product development0
Selling, marketing, general and administrative0
Other expenses $ 0
D-Mobile | Affiliated Entity | Sales And Purchases To And From Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Sales $ 1,811,000 $ 1,822,000
Cost of revenue741,000 754,000
Manufacturing (cost of revenue)0 0
Research and product development0 0
Selling, marketing, general and administrative94,000 196,000
Other expenses $ 0 $ 0

Related-Party Transactions - Ba

Related-Party Transactions - Balances of Receivables and Payables with Related Parties (Details) - USD ($) $ in ThousandsJun. 30, 2018Dec. 31, 2017
Related Party Transaction [Line Items]
Long-term debt $ 52,500
Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Account receivables1,224 $ 13,498
Other receivables65 164
Deposits for lease751 786
Short-term debt5,795
Long-term debt6,800 6,800
Accounts payable1,385 1,351
Other Payables1,449 1,956
Accrued and other liabilities59
DASAN | Majority Shareholder | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Account receivables565 12,576
Other receivables0 93
Deposits for lease751 786
Short-term debt5,795
Long-term debt6,800 6,800
Accounts payable1,253 1,264
Other Payables $ 1,399 1,859
Accrued and other liabilities $ 59
Tomato Soft Ltd. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Account receivables $ 0 $ 0
Other receivables0 0
Deposits for lease0 0
Short-term debt0
Long-term debt0 0
Accounts payable0 0
Other Payables $ 9 18
Accrued and other liabilities $ 0
Tomato Soft (Xi'an) Ltd. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Account receivables $ 0 $ 0
Other receivables0 0
Deposits for lease0 0
Short-term debt0
Long-term debt0 0
Accounts payable0 0
Other Payables $ 41 54
Accrued and other liabilities $ 0
DASAN FRANCE | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Account receivables $ 461 $ 870
Other receivables65 71
Deposits for lease0 0
Short-term debt0
Long-term debt0 0
Accounts payable0 0
Other Payables $ 0 0
Accrued and other liabilities $ 0
HANDYSOFT, Inc. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest17.63%17.63%
Account receivables $ 198 $ 52
Other receivables0 0
Deposits for lease0 0
Short-term debt0
Long-term debt0 0
Accounts payable28 0
Other Payables $ 0 0
Accrued and other liabilities $ 0
CHASAN Networks Co., Ltd. | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%100.00%
Account receivables $ 0 $ 0
Other receivables0 0
Deposits for lease0 0
Short-term debt0
Long-term debt0 0
Accounts payable104 87
Other Payables $ 0 0
Accrued and other liabilities $ 0
Solueta | Affiliated Entity | Receivables And Payables With Related Parties
Related Party Transaction [Line Items]
Ownership interest100.00%
Account receivables $ 0
Other receivables0
Deposits for lease0
Long-term debt0
Accounts payable0
Other Payables25
Accrued and other liabilities $ 0

Net Income (Loss) Per Share A46

Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. - Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended6 Months Ended12 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017Dec. 31, 2017
Earnings Per Share [Abstract]
Net income (loss) attributable to DASAN Zhone Solutions, Inc. $ 1,416 $ (809) $ 1,523 $ (4,556) $ 1,200
Basic, weighted average number of shares outstanding (in shares)16,438 16,380 16,425 16,380
Dilutive effect of stock options and share awards (in shares)234 0 220 0
Diluted (in shares)16,672 16,380 16,645 16,380
Basic (in dollars per share) $ 0.09 $ (0.05) $ 0.09 $ (0.28)
Diluted (in dollars per share) $ 0.08 $ (0.05) $ 0.09 $ (0.28)

Net Income (Loss) Per Share A47

Net Income (Loss) Per Share Attributable to DASAN Zhone Solutions, Inc. - Antidilutive securities (Details) - Stock options - $ / shares shares in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)285 436
Weighted average exercise price (in dollars per share) $ 14.02 $ 12.35

Commitments and Contingencies -

Commitments and Contingencies - Estimated Future Lease Payments under All Non-Cancelable Operating Leases (Details) $ in ThousandsJun. 30, 2018USD ($)
Operating leases
2018 (remainder of the year) $ 2,043
2,019 3,993
2,020 2,998
2,021 2,590
2,022 2,664
Thereafter8,423
Total minimum lease payments $ 22,711

Commitments and Contingencies

Commitments and Contingencies - Additional Information (Detail) $ in Millions6 Months Ended
Jun. 30, 2018USD ($)
Purchase Commitment
Guarantor Obligations [Line Items]
Number of notice days required to notice in advance for cancellation of orders30 days
Amount of non-cancellable purchase commitments outstanding $ 4.3
Performance Bonds
Guarantor Obligations [Line Items]
Guarantor obligations $ 2.9
Minimum
Guarantor Obligations [Line Items]
Product warranty period from the date of shipment1 year
Maximum
Guarantor Obligations [Line Items]
Product warranty period from the date of shipment5 years

Commitments and Contingencies50

Commitments and Contingencies - Reconciliation of Changes in Accrued Warranties and Related Costs (Details) - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2018Jun. 30, 2017
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance $ 931 $ 878
Charged to cost of revenue728 239
Claims and settlements(421)(381)
Foreign exchange impact9 15
Ending balance $ 1,247 $ 751

Commitments and Contingencies51

Commitments and Contingencies - Payment Guarantees to Third Parties (Details)6 Months Ended
Jun. 30, 2018USD ($)
Guarantor Obligations [Line Items]
Product warranty term2 years
Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations $ 61,816,000
DNS US | Payment Guarantee
Guarantor Obligations [Line Items]
Ownership interest57.70%
DNS US | Borrowings from Shinhan Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations $ 3,423,000
DNS US | Purchasing card from Shinhan Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations1,712,000
DNS US | Letter of credit from Industrial Bank of Korea | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations12,355,000
DNS US | Purchasing Card from Industrial Bank of Korea | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations2,140,000
DNS US | Letter of credit from NongHyup Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations6,000,000
DNS US | Purchasing card from NongHyup Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations535,000
DNS US | Borrowings from Export-Import Bank of Korea | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations6,128,000
DNS US | Letter of credit from KookMin Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations6,000,000
Industrial Bank of Korea | Purchasing Card from Industrial Bank of Korea | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations810,000
Industrial Bank of Korea | Letter of credit | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations8,232,000
Industrial Bank of Korea | Performance bonds | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations1,556,000
NongHyup Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations3,685,000
Kookmin Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations4,999,000
Shinhan Bank | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations242,000
State Bank of India | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations38,000
Seoul Guarantee Insurance Co. | Payment Guarantee
Guarantor Obligations [Line Items]
Guarantor obligations $ 3,961,000

Stock Option and Other Benefi52

Stock Option and Other Benefit Plans (Details) - Employee Stock Purchase Plan (ESPP)May 22, 2018shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)250,000
Percent of shares outstanding maximum1.00%
Shares that amy be issued or transferred (in shares)2,000,000

Enterprise-Wide Information - R

Enterprise-Wide Information - Revenue by Geography (Detail) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Revenue from External Customer [Line Items]
Net revenue $ 76,257 $ 59,941 $ 135,761 $ 112,053
Total North America
Revenue from External Customer [Line Items]
Net revenue14,951 13,383 32,472 26,722
United States
Revenue from External Customer [Line Items]
Net revenue13,630 11,961 30,179 24,108
Canada
Revenue from External Customer [Line Items]
Net revenue1,321 1,422 2,293 2,614
Total International
Revenue from External Customer [Line Items]
Net revenue61,306 46,558 103,289 85,331
Latin America
Revenue from External Customer [Line Items]
Net revenue7,312 7,075 15,269 11,945
Europe, Middle East, Africa
Revenue from External Customer [Line Items]
Net revenue9,475 6,253 16,963 11,756
Korea
Revenue from External Customer [Line Items]
Net revenue19,111 32,197 31,235 48,513
Other Asia Pacific
Revenue from External Customer [Line Items]
Net revenue $ 25,408 $ 1,033 $ 39,822 $ 13,117

Enterprise-Wide Information -54

Enterprise-Wide Information - Revenue by Products and Services (Detail) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Revenue from External Customer [Line Items]
Net revenue $ 76,257 $ 59,941 $ 135,761 $ 112,053
Products
Revenue from External Customer [Line Items]
Net revenue73,317 57,278 130,043 107,003
Services
Revenue from External Customer [Line Items]
Net revenue $ 2,940 $ 2,663 $ 5,718 $ 5,050

Enterprise-Wide Information - P

Enterprise-Wide Information - Property and Equipment, Net of Accumulated Depreciation (Details) - USD ($) $ in ThousandsJun. 30, 2018Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, net $ 5,432 $ 5,873
United States
Property, Plant and Equipment [Line Items]
Property and equipment, net3,238 3,393
Korea
Property, Plant and Equipment [Line Items]
Property and equipment, net1,382 1,633
Other Asia Pacific
Property, Plant and Equipment [Line Items]
Property and equipment, net $ 812 $ 847

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2018Jun. 30, 2017Jun. 30, 2018Jun. 30, 2017
Income Tax Disclosure [Abstract]
Income tax expense $ 341 $ 99 $ 336 $ 539
Income (loss) before income taxes1,696 (775)1,832 $ (3,833)
Unrecognized tax benefits500 500
Unrecognized tax benefits that would impact effective tax rate100 $ 100
Unrecognized tax benefits, period increase (decrease) $ 0 $ 0