Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 22, 2016 | Jun. 30, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Mellanox Technologies, Ltd. | ||
Trading Symbol | MLNX | ||
Entity Central Index Key | 1,356,104 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2.3 | ||
Entity Common Stock, Shares Outstanding | 47,330,469 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other current assets: | ||
Cash and cash equivalents | $ 263,199 | $ 51,326 |
Short-term investments | 247,314 | 334,038 |
Restricted cash | 0 | 3,604 |
Accounts receivable, net | 84,273 | 64,922 |
Inventories | 62,473 | 44,470 |
Other current assets | 19,979 | 15,876 |
Total current assets | 677,238 | 514,236 |
Property and equipment, net | 100,018 | 78,827 |
Severance assets | 9,514 | 9,474 |
Intangible assets, net | 32,154 | 42,067 |
Goodwill | 200,743 | 200,743 |
Deferred taxes and other long-term assets | 33,715 | 17,871 |
Total assets | 1,053,382 | 863,218 |
Current liabilities: | ||
Accounts payable | 44,600 | 39,811 |
Accrued liabilities | 74,296 | 61,974 |
Deferred revenue | 17,743 | 14,758 |
Capital lease liabilities, current | 491 | 1,102 |
Total current liabilities | 137,130 | 117,645 |
Accrued severance | 12,464 | 11,850 |
Deferred revenue | 12,439 | 8,942 |
Capital lease liabilities | 0 | 494 |
Other long-term liabilities | 24,668 | 22,535 |
Total liabilities | 186,701 | 161,466 |
Shareholders' equity | ||
Ordinary shares: NIS 0.0175 par value, 137,143 shares authorized, 47,120 and 45,488 shares issued and outstanding at December 31, 2015 and 2014, respectively | 200 | 192 |
Additional paid-in capital | 684,824 | 615,148 |
Accumulated other comprehensive income (loss) | (1,669) | (4,020) |
Retained earnings | 183,326 | 90,432 |
Total shareholders’ equity | 866,681 | 701,752 |
Total liabilities and shareholders' equity | $ 1,053,382 | $ 863,218 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in NIS per share) | $ 0.0175 | $ 0.000175 |
Common stock, shares authorized | 200,000,000 | 137,143,000 |
Common stock, shares issued | 47,120,000 | 45,488,000 |
Common stock, shares outstanding | 47,120,000 | 45,488,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Total revenues | $ 658,140 | $ 463,649 | $ 390,436 |
Cost of revenues | 189,209 | 148,672 | 134,282 |
Gross profit | 468,931 | 314,977 | 256,154 |
Operating expenses: | |||
Research and development | 252,175 | 208,877 | 169,382 |
Sales and marketing | 97,438 | 76,860 | 70,544 |
General and administrative | 44,212 | 36,431 | 37,046 |
Total operating expenses | 393,825 | 322,168 | 276,972 |
Income (loss) from operations | 75,106 | (7,191) | (20,818) |
Other income (loss), net | (524) | 1,449 | 1,228 |
Income (loss) before taxes on income | 74,582 | (5,742) | (19,590) |
Benefit from (provision for) taxes on income | 18,312 | (18,267) | (3,752) |
Net income (loss) | $ 92,894 | $ (24,009) | $ (23,342) |
Net income (loss) per share - basic (in USD per share) | $ 2 | $ (0.54) | $ (0.54) |
Net income (loss) per share - diluted (in USD per share) | $ 1.94 | $ (0.54) | $ (0.54) |
Shares used in computing income (loss) per share: | |||
Basic (in shares) | 46,365 | 44,831 | 43,421 |
Diluted (in shares) | 47,778 | 44,831 | 43,421 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 92,894 | $ (24,009) | $ (23,342) |
Other comprehensive income (loss), net of tax: | |||
Unrealized gains (losses) on available-for-sale securities, net (net of tax effect of $0, $138, $2) | (204) | (368) | 142 |
Unrealized gains (losses) on derivative contracts, net (net of tax effect of $97, $0, $28) | 2,555 | (5,042) | (1,546) |
Other comprehensive income (loss) | 2,351 | (5,410) | (1,404) |
Total comprehensive income (loss), net of tax | $ 95,245 | $ (29,419) | $ (24,746) |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gains/losses on available-for-sale securities, tax effect | $ 0 | $ 138 | $ 2 |
Change in unrealized gains/losses on derivative contracts, tax effect | $ 97 | $ 0 | $ 28 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] |
Shares, outstanding, beginning balance at Dec. 31, 2012 | 42,596,262 | ||||
Common stock, value, outstanding, beginning balance at Dec. 31, 2012 | $ 178 | ||||
Balance at Dec. 31, 2012 | 629,120 | $ 488,365 | $ 2,794 | $ 137,783 | |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (23,342) | (23,342) | |||
Unrealized losses on available-for-sale securities, net of taxes | 142 | 142 | |||
Unrealized gains (losses) on derivative contracts, net of taxes | (1,546) | (1,546) | |||
Share-based compensation | 45,138 | 45,138 | |||
Exercise of share awards | $ 5,304 | $ 5 | 5,299 | ||
Exercise of share awards (in shares) | 1,154,672 | ||||
Issuance of shares pursuant to employee share purchase plan | $ 9,333 | 2 | 9,331 | ||
Issuance of shares pursuant to employee share purchase plan (in shares) | 248,486 | ||||
Income tax benefit from share options exercised | $ 2,662 | 2,662 | |||
Balance at Dec. 31, 2013 | 666,811 | 550,795 | 1,390 | 114,441 | |
Common stock, value, outstanding, ending balance at Dec. 31, 2013 | $ 185 | ||||
Shares, outstanding, ending balance at Dec. 31, 2013 | 43,999,420 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | $ (24,009) | (24,009) | |||
Unrealized losses on available-for-sale securities, net of taxes | (368) | (368) | |||
Unrealized gains (losses) on derivative contracts, net of taxes | (5,042) | (5,042) | |||
Share-based compensation | 47,235 | 47,235 | |||
Exercise of share awards | $ 4,847 | 5 | 4,842 | ||
Exercise of share awards (in shares) | 1,093,429 | ||||
Issuance of shares pursuant to employee share purchase plan | $ 11,936 | 2 | 11,934 | ||
Issuance of shares pursuant to employee share purchase plan (in shares) | 394,915 | ||||
Income tax benefit from share options exercised | $ 342 | 342 | |||
Balance at Dec. 31, 2014 | 701,752 | 615,148 | (4,020) | 90,432 | |
Common stock, value, outstanding, ending balance at Dec. 31, 2014 | $ 192 | ||||
Shares, outstanding, ending balance at Dec. 31, 2014 | 45,487,764 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | $ 92,894 | 92,894 | |||
Unrealized losses on available-for-sale securities, net of taxes | (204) | (204) | |||
Unrealized gains (losses) on derivative contracts, net of taxes | 2,555 | 2,555 | |||
Share-based compensation | 50,764 | 50,764 | |||
Exercise of share awards | $ 6,049 | 6 | 6,043 | ||
Exercise of share awards (in shares) | 1,267,244 | ||||
Issuance of shares pursuant to employee share purchase plan | $ 12,818 | $ 2 | 12,816 | ||
Issuance of shares pursuant to employee share purchase plan (in shares) | 364,746 | ||||
Income tax benefit from share options exercised | $ 53 | 53 | |||
Balance at Dec. 31, 2015 | 866,681 | $ 684,824 | $ (1,669) | $ 183,326 | |
Common stock, value, outstanding, ending balance at Dec. 31, 2015 | $ 200 | ||||
Shares, outstanding, ending balance at Dec. 31, 2015 | 47,119,754 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 92,894 | $ (24,009) | $ (23,342) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 41,372 | 38,671 | 35,646 |
Deferred income taxes | (22,607) | 13,832 | (1,240) |
Share-based compensation | 50,764 | 47,235 | 45,138 |
(Gain) loss on investments, net | (3,000) | 425 | (1,219) |
Excess tax benefit from share-based compensation | (53) | (342) | (2,662) |
Impairment of equity investment in a private company | 3,189 | ||
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (19,351) | 5,421 | (9,500) |
Inventories | (24,735) | (9,624) | 9,472 |
Prepaid expenses and other assets | (2,619) | (7,687) | 1,414 |
Accounts payable | 3,750 | 9,659 | (4,447) |
Accrued liabilities and other liabilities | 30,884 | 6,549 | 2,610 |
Net cash provided by operating activities | 150,488 | 80,130 | 51,870 |
Cash flows from investing activities: | |||
Acquisitions, net of cash acquired | 0 | (2,253) | (123,519) |
Purchase of severance-related insurance policies | (743) | (777) | (849) |
Purchase of short-term investments | (219,459) | (307,924) | (200,377) |
Proceeds from sales of short-term investments | 179,700 | 158,054 | 122,997 |
Proceeds from maturities of short-term investments | 129,279 | 78,567 | 117,806 |
Purchase of property and equipment | (48,601) | (29,924) | (30,911) |
Restricted cash | 3,604 | 0 | 3,468 |
Purchase of intangible assets | (210) | 0 | (7,440) |
Purchase of equity investments in private companies | 0 | (3,455) | (3,123) |
Net cash provided by (used) in investing activities | 43,570 | (107,712) | (121,948) |
Cash flows from financing activities: | |||
Principal payments on capital lease obligations | (1,105) | (1,381) | (1,111) |
Proceeds from exercise of share awards | 18,867 | 16,783 | 14,637 |
Excess tax benefit from share-based compensation | 53 | 342 | 2,662 |
Net cash provided by financing activities | 17,815 | 15,744 | 16,188 |
Net increase (decrease) in cash and cash equivalents | 211,873 | (11,838) | (53,890) |
Cash and cash equivalents at beginning of period | 51,326 | 63,164 | 117,054 |
Cash and cash equivalents at end of period | 263,199 | 51,326 | 63,164 |
Supplemental disclosures of cash flow information | |||
Interest paid | 27 | 31 | 57 |
Income taxes paid | 1,114 | 913 | 1,305 |
Supplemental disclosure of noncash investing and financing activities | |||
Unpaid property and equipment | 2,228 | 5,121 | 3,326 |
Transfer from inventory to property and equipment | $ 6,732 | $ 1,624 | $ 1,837 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Company Mellanox Technologies, Ltd., an Israeli corporation, (the "Company" or "Mellanox") was incorporated and commenced operations in March 1999. Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications. Principles of presentation The consolidated financial statements include the Company's accounts as well as those of its wholly owned subsidiaries after the elimination of all significant intercompany balances and transactions. On July 1, 2014, the Company completed its acquisition of Integrity Project, Ltd. ("Integrity"), a privately held company. The consolidated financial statements include the results of operations of Integrity commencing as of the acquisition date. Certain prior year amounts have been reclassified to conform to 2015 presentation. In November 2015, the Financial Accounting Standards Board (“FASB”) issued guidance requiring current deferred tax assets, current deferred tax liabilities and related current valuation allowances to be reclassified as non-current. For more information about the changes and reclassifications as a result of adoption of this guidance, see Note 1-The Company and Summary of Significant Accounting Policies, Adoption of new accounting principle. These changes and reclassifications did not impact net or comprehensive income. Risks and uncertainties The Company is subject to all of the risks inherent in a company which operates in the dynamic and competitive semiconductor industry. Significant changes in any of the following areas could have a materially adverse impact on the Company's financial position and results of operations; unpredictable volume or timing of customer orders; ordered product mix; the sales outlook and purchasing patterns of the Company's customers based on consumer demands and general economic conditions; loss of one or more of the Company's customers; decreases in the average selling prices of products or increases in the average cost of finished goods; the availability, pricing and timeliness of delivery of components used in the Company's products; reliance on a limited number of subcontractors to manufacture, assemble, package and production test the Company's products; the Company's ability to successfully develop, introduce and sell new or enhanced products in a timely manner; product obsolescence and the Company's ability to manage product transitions; the timing of announcements or introductions of new products by the Company's competitors, and the Company's ability to successfully integrate acquired businesses. Use of estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, sales returns and allowances, investment valuation, warranty reserves, inventory reserves, share-based compensation expense, long-term asset valuations, goodwill and purchased intangible asset valuation, hedge effectiveness, deferred income tax asset valuation, uncertain tax positions, litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results that the Company experiences may differ materially and adversely from the Company's original estimates. To the extent there are material differences between the estimates and actual results, the Company's future results of operations will be affected. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks, money market funds, U.S. government agency discount notes, municipal bonds, foreign government bonds, corporate bonds and commercial paper. Short-term investments The Company's short-term investments are classified as available-for-sale securities and are reported at fair value. Unrealized gains or losses are recorded in shareholders' equity and included in other comprehensive income ("OCI"). The Company views its available-for-sale portfolio as available for use in its current operations. Accordingly, the Company has classified all investments in available for sale securities with readily available markets as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because of the intent and ability to sell these securities prior to maturity to meet liquidity needs or as part of a risk management program. Restricted cash and deposits The Company maintains certain cash amounts restricted as to withdrawal or use. At December 31, 2015 , the restricted cash balance was $0 . At December 31, 2014 , the restricted cash balance was $3.6 million and was designated for contingent payments related to acquisitions. Fair value of financial instruments The Company's financial instruments consist of cash equivalents, short-term investments and foreign currency derivative contracts. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. The Company believes that the carrying amounts of the financial instruments approximate their respective fair values. The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the issuer; and whether it is more likely than not that the Company will be required to sell the security prior to any anticipated recovery in fair value. When there is no readily available market data, fair value estimates may be made by the Company, which may not necessarily represent the amounts that could be realized in a current or future sale of these assets. Derivatives The Company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company enters into derivative instruments designated as cash flow hedges. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of accumulated OCI, and subsequently reclassified into earnings when the hedged exposure affects earnings. Any gain or loss after a hedge is de-designated because it is no longer probable of occurring or related to an ineffective portion of a hedge, as well as any amount excluded from the Company's hedge effectiveness, is recognized as other income, net immediately. The Company uses derivative instruments primarily to manage exposures to foreign currency. The Company enters into derivative contracts to manage its exposure to changes in the exchange rate of the NIS against the U.S. dollar. The Company's primary objective in entering these arrangements is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The program is not designated for trading or speculative purposes. The Company's derivative instruments expose the Company to credit risk to the extent that the counter-parties may be unable to meet the terms of the agreement. The Company seeks to mitigate such risk by limiting its counter-parties to major financial institutions and by spreading the risk across a number of major financial institutions. In addition, the potential risk of loss with any one counter-party resulting from this type of credit risk is monitored on an ongoing basis. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, short-term investments and accounts receivable. Cash equivalents and short-term investments balances are maintained with high quality financial institutions, the composition and maturities of which are regularly monitored by management. The Company's accounts receivable are derived from revenue earned from customers located in North America, Europe and Asia. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The Company reviews its allowance for doubtful accounts quarterly by assessing individual accounts receivable over a specific aging and amount, and all other balances based on historical collection experience and an economic risk assessment. If the Company determines that a specific customer is unable to meet its financial obligations to the Company, the Company provides an allowance for credit losses to reduce the receivable to the amount management reasonably believes will be collected. The following table summarizes the revenues from customers (including original equipment manufacturers) in excess of 10% of the total revenues: Year Ended December 31, 2015 2014 2013 Hewlett-Packard 14 % 11 % 13 % Dell * 11 % * IBM * 10 % 17 % ____________________ * Less than 10% The following table summarizes accounts receivable balances in excess of 10% of total accounts receivable: December 31, 2015 December 31, 2014 Hewlett Packard 16 % 17 % Hon Hai Precision Ind. Co. Ltd. 11 % * IBM * 11 % Ingram Micro 15 % 10 % ____________________ * Less than 10% Inventory Inventory includes finished goods, work-in-process and raw materials. Inventory is stated at the lower of cost (principally standard cost which approximates actual cost on a first-in, first-out basis) or market value. Reserves for potentially excess and obsolete inventory are made based on management's analysis of inventory levels, future sales forecasts and market conditions. Once established, the original cost of the Company's inventory less the related inventory reserve represents the new cost basis of such products. Property and equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is generally calculated using the straight-line method over the estimated useful lives of the related assets, which is three to five years for computers, software license rights and other electronic equipment, and seven to fifteen years for office furniture and equipment. Leasehold improvements and assets acquired under capital leases are amortized on a straight-line basis over the term of the lease, or the useful lives of the assets, whichever is shorter. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is reflected in the results of operations in the period realized. The Company incurs costs for the fabrication of masks used by its contract manufacturers to manufacture wafers that incorporate its products. The Company capitalizes the costs of fabrication masks that are reasonably expected to be used during production manufacturing. These amounts are included within property and equipment and are generally depreciated over a period of 12 months to cost of revenue. If it does not reasonably expect to use the fabrication mask during production manufacturing, it expenses the related mask costs to research and development in the period in which the costs are incurred. The Company capitalizes certain costs incurred in connection with internal use of inventory items in the Company's data centers and laboratories. Capitalized inventory costs are included in Property and equipment, net and amortized on a straight-line basis over the estimated useful life of the asset. Business combinations The Company accounts for business combinations using the acquisition method of accounting. The Company determines the recognition of intangible assets based on the following criteria: (i) the intangible asset arises from contractual or other rights; or (ii) the intangible asset is separable or divisible from the acquired entity and capable of being sold, transferred, licensed, returned or exchanged. The Company allocates the purchase price of business combinations to the tangible assets, liabilities and intangible assets acquired, including in-process research and development ("IPR&D"), based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. The process of estimating the fair values requires significant estimates, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer contracts, customer lists and distribution agreements, acquired developed technologies, expected costs to develop IPR&D into commercially viable products, estimated cash flows from projects when completed and discount rates. The Company estimates fair value based upon assumptions that are believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Goodwill and intangible assets Goodwill represents the excess of the cost of acquired businesses over the fair market value of their identifiable net assets. The Company conducts a goodwill impairment qualitative assessment during the fourth quarter of each fiscal year or more frequently if facts and circumstances indicate that goodwill may be impaired. The goodwill impairment qualitative assessment requires the Company to perform an assessment to determine if it is more likely than not that the fair value of the business is less than its carrying amount. The qualitative assessment considers various factors, including the macroeconomic environment, industry and market specific conditions, market capitalization, stock price, financial performance, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flow from operating activities and issues or events specific to the business. If adverse qualitative trends are identified that could negatively impact the fair value of the business, the Company performs a "two step" goodwill impairment test. "Step one" of the goodwill impairment test requires the Company to estimate the fair value of the reporting unit "Step two" of the test is only performed if a potential impairment exists in "step one" and involves determining the difference between the fair value of the reporting unit's net assets other than goodwill to the fair value of the reporting unit. If the difference is less than the net book value of goodwill, an impairment exists and is recorded. As of December 31, 2015 , the Company's qualitative assessment of goodwill impairment indicated that goodwill was not impaired. Intangible assets primarily represent acquired intangible assets including developed technology, customer relationships and IPR&D. The Company amortizes its finite lived intangible assets over their useful lives using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used, or, if that pattern cannot be reliably determined, using a straight-line amortization method. The Company capitalizes IPR&D projects acquired as part of a business combination as intangible assets with indefinite lives. On completion of each project, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. If any of the IPR&D projects are abandoned, the Company would impair the related IPR&D asset. Indefinite-lived intangible assets are tested for impairment annually or more frequently when indicators of impairment exist. The Company first assesses qualitative factors to determine if it is more likely than not that an indefinite-lived intangible asset is impaired and whether it is necessary to perform a quantitative impairment test. The qualitative assessment considers various factors, including reductions in demand, the abandonment of IPR&D projects or significant economic slowdowns in the semiconductor industry and macroeconomic environment. If adverse qualitative trends are identified that could negatively impact the fair value of the asset, then quantitative impairment tests are performed to compare the carrying value of the asset to its undiscounted expected future cash flows. If this test indicates that there is impairment, the impaired asset is written down to fair value, which is typically calculated using: (i) quoted market prices or (ii) discounted expected future cash flows utilizing an appropriate discount rate. Impairment is based on the excess of the carrying amount over the fair value of those assets. As of December 31, 2015 , there were no indicators that impairment existed or assets were not recoverable. Intangible assets with finite lives are tested for impairment in accordance with our policy for long-lived assets. Investments The Company has equity investments in privately-held companies. These investments are recorded at cost reduced by any impairment write-downs because the Company does not have the ability to exercise significant influence over the operating and financial policies of the company. The investments are included in other long-term assets on the accompanying balance sheets. The Company monitors the investments and if facts and circumstances indicate an investment may be impaired, then it conducts an impairment test of its investment. To determine if the investment is recoverable, it reviews the privately-held company's revenue and earnings trends relative to pre-defined milestones and overall business prospects, the general market conditions in its industry and other factors related to its ability to remain in business, such as liquidity and receipt of additional funding. Impairment of long-lived assets Long-lived assets include equipment and furniture and fixtures and finite-lived intangible assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. If the sum of the expected future cash flows (undiscounted and without interest charges) from the long-lived assets is less than the carrying amount of such assets, an impairment loss would be recognized, and the assets would be written down to their estimated fair values. The Company reviews for possible impairment on a regular basis. Revenue recognition The Company recognizes revenue from the sales of products when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the price is fixed or determinable; and (4) collection is reasonably assured. The Company uses a binding purchase order or a signed agreement as evidence of an arrangement. Delivery occurs when goods are shipped and title and risk of loss transfer to the customer. The Company's standard arrangement with its customers typically includes freight-on-board shipping point, no right of return and no customer acceptance provisions. The customer's obligation to pay and the payment terms are set at the time of shipment and are not dependent on the subsequent resale of the product. The Company determines whether collectability is probable on a customer-by-customer basis. When assessing the probability of collection, the Company considers the number of years the customer has been in business and the history of the Company's collections. Customers are subject to a credit review process that evaluates the customers' financial positions and ultimately their ability to pay. If it is determined at the outset of an arrangement that collection is not probable, no product is shipped and no revenue is recognized unless cash is received in advance. The Company maintains inventory, or hub arrangements with certain customers. Pursuant to these arrangements the Company delivers products to a customer or a designated third party warehouse based upon the customer's projected needs, but does not recognize product revenue unless and until the customer reports it has removed the Company's product from the warehouse to be incorporated into its end products. Multiple Element Arrangements Excluding Software For revenue arrangements that contain multiple deliverables, judgment is required to properly identify the accounting units of the transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could impact the timing of revenue recognition, which could affect its results of operations. When the Company enters into an arrangement that includes multiple elements, the allocation of value to each element is derived based on management's best estimate of selling price when vendor specific evidence or third party evidence is unavailable. Multiple Element Arrangements Including Software For multiple element arrangements that include a combination of hardware, software and services, such as post-contract customer support, the arrangement consideration is first allocated among the accounting units before revenue recognition criteria are applied. If an arrangement includes undelivered elements that are not essential to the functionality of the delivered elements, the Company defers revenue for the undelivered elements based on their fair value. The fair value for undelivered software elements is based on vendor specific evidence. If the undelivered elements are essential to the functionality of the delivered elements, no revenue is recognized. The revenues from fixed-price support or maintenance contracts, including extended warranty contracts and software post-contract customer support agreements are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. Distributor Revenue A portion of the Company's sales are made to distributors under agreements which contain a limited right to return unsold product and price protection provisions. The Company recognizes revenue from these distributors based on the sell-through method using inventory and point of sale information provided by the distributor. Additionally, the Company maintains accruals and allowances for price protection and cooperative marketing programs. The Company classifies the costs of cooperative marketing programs based on the identifiable benefit received as either a reduction of revenue, a cost of revenues or an operating expense. Deferred Revenue and Income The Company defers revenue and income when advance payments are received from customers before performance obligations have been completed and/or services have been performed. Shipping and Handling Costs incurred for shipping and handling expenses to customers are recorded as cost of revenues. To the extent these amounts are billed to the customer in a sales transaction, the Company records the shipping and handling fees as revenue. Product warranty The Company typically offers a limited warranty for its products for periods up to three years . The Company accrues for estimated returns of defective products at the time revenue is recognized based on historical activity. The determination of these accruals requires the Company to make estimates of the frequency and extent of warranty activity and estimated future costs to either replace or repair the products under warranty. If the actual warranty activity and/or repair and replacement costs differ significantly from these estimates, adjustments to record additional cost of revenues may be required in future periods. Changes in the Company's liability for product warranty during the years ended are as follows: December 31, 2015 2014 (In thousands) Balance, beginning of the period $ 1,932 $ 3,633 New warranties issued during the period 2,529 3,072 Reversal of warranty reserves (480 ) (197 ) Settlements during the period (2,340 ) (4,576 ) Balance, end of the period 1,641 1,932 Less: long term portion of product warranty liability (435 ) (424 ) Balance, end of the period $ 1,206 $ 1,508 Research and development Costs incurred in research and development are charged to operations as incurred. The Company expenses all costs for internally developed patents as incurred. Advertising Costs related to advertising and promotion of products are charged to sales and marketing expense as incurred. Advertising expense was approximately $2.0 million , $0.7 million and $0.9 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Share-based compensation The Company accounts for share-based compensation expense based on the estimated fair value of the equity awards as of the grant dates. The fair value of restricted stock units, or RSUs, is based on the closing market price of our ordinary shares on the date of grant. The Company estimates the fair value of share options using the Black-Scholes option valuation model, which requires the input of subjective assumptions including the expected share price volatility and the calculation of expected term, as well as the fair value of the underlying ordinary share on the date of grant, among other inputs. The Company bases its estimate of expected volatility on the historical volatility of the Company's shares. The Company calculates the expected term of its option awards using the simplified method as prescribed by the authoritative guidance. The expected term for newly granted option awards in 2014 was approximately 5.77 years. The Company did not grant share options in 2015. Share compensation expense is recognized on a straight-line basis over each recipient's requisite service period, which is generally the vesting period. Share-based compensation expense is recorded net of estimated forfeitures. Forfeitures are estimated at the time of grant and this estimate is revised, if necessary, in subsequent periods. If the actual number of forfeitures differs from the estimate, adjustments may be required to share-based compensation expense in future periods. Comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax on the consolidated balance sheets at December 31, 2015 and 2014 , represents the accumulated unrealized gains (losses) on available-for-sale securities, and the accumulated unrealized gains (losses) related to derivative instruments accounted for as cash flow hedges. The amount of income tax expense allocated to unrealized gains (losses) on derivative instruments was $0.1 million and $ 0 , respectively at December 31, 2015 and 2014 . Foreign currency translation The Company uses the U.S. dollar as its functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Revenue and expenses are remeasured each day at the exchange rate in effect on the day the transaction occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency transactions are included in the Consolidated Statements of Operations as part of "Other income (loss), net." Net income per share Basic and diluted net income per share are computed by dividing the net income for the period by the weighted average number of ordinary shares outstanding during the period. The calculation of diluted net income per share excludes potential ordinary shares if the effect is anti-dilutive. Potential ordinary shares are comprised of incremental ordinary shares issuable upon the exercise of share options. The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Year Ended December 31, 2015 2014 2013 (In thousands, except per share data) Net income (loss) $ 92,894 $ (24,009 ) $ (23,342 ) Basic and diluted shares: Weighted average ordinary shares outstanding used to compute basic net income (loss) per share 46,365 44,831 43,421 Dilutive effect of employee share option and purchase plans 1,413 — — Shares used to compute diluted net income (loss) per share 47,778 $ 44,831 43,421 Net income (loss) per share—basic $ 2.00 $ (0.54 ) $ (0.54 ) Net income (loss) per share—diluted $ 1.94 $ (0.54 ) $ (0.54 ) The Company excluded 0.5 million , 0.7 million and 0.8 million outstanding shares for the years ended December 31, 2015, 2014 and 2013 , respectively, from the computation of diluted net income per share because including them would have had an anti-dilutive effect. Segment reporting The Company has one reportable segment: the development, manufacturing, marketing and sales of interconnect products. Income taxes To prepare the Company's consolidated financial statements, the Company estimates its income taxes in each of the jurisdictions in which it operates. This process involves estimating the Company's actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company's consolidated balance sheet. The Company must also make judgments regarding the realizability of deferred tax assets. The carrying value of the Company's net deferred tax assets is based on its belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the "more likely than not" criteria. The Company's judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company's assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. The Company's effective tax rate is highly dependent upon the geographic distribution of its worldwide earnings or losses, the tax regulations and tax holidays in each geographic region, the availability of tax credits and carryforwards, and the effectiveness of its tax planning strategies. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of income as income tax |
BALANCE SHEET COMPONENTS_
BALANCE SHEET COMPONENTS: | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET COMPONENTS: | BALANCE SHEET COMPONENTS: December 31, 2015 December 31, 2014 (In thousands) Accounts receivable, net: Accounts receivable $ 84,894 $ 65,594 Less: allowance for doubtful accounts (621 ) (672 ) $ 84,273 $ 64,922 Inventories: Raw materials $ 8,304 $ 5,725 Work-in-process 25,716 13,874 Finished goods 28,453 24,871 $ 62,473 $ 44,470 Other current assets: Prepaid expenses $ 9,948 $ 8,040 VAT receivable 7,946 6,117 Other 2,085 1,719 $ 19,979 $ 15,876 Property and equipment, net: Computer equipment and software $ 172,176 $ 124,370 Furniture and fixtures 3,886 3,256 Leasehold improvements 36,121 33,295 212,183 160,921 Less: Accumulated depreciation and amortization (112,165 ) (82,094 ) $ 100,018 $ 78,827 Deferred taxes and other long-term assets: Equity investments in private companies $ 7,739 $ 10,736 Deferred taxes 23,222 2,660 Other assets 2,754 4,475 $ 33,715 $ 17,871 Accrued liabilities: Payroll and related expenses $ 43,041 $ 31,254 Accrued expenses 26,431 21,171 Derivative contracts payable 1,157 3,562 Product warranty liability 1,206 1,508 Other 2,461 4,479 $ 74,296 $ 61,974 Other long-term liabilities: Income tax payable $ 20,023 $ 18,174 Deferred rent 1,950 2,337 Other 2,695 2,024 $ 24,668 $ 22,535 |
BUSINESS COMBINATION_
BUSINESS COMBINATION: | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION: | BUSINESS COMBINATION: On February 23, 2016 the Company completed the acquisition of EZchip for approximately $811.0 million . The Company is in the process of determining the allocation of the purchase price. For more information about the acquisition, see Note 15-Subsequent Events in the notes to the audited consolidated financial statements. On July 1, 2014, the Company completed its acquisition of Integrity Project, Ltd. ("Integrity"), a privately held company. Based in Ramat-Gan, Israel, Integrity specializes in the fields of connectivity, low-level development, real-time applications, and security. The Company's primary reason for the Integrity acquisition was for Integrity's software expertise, which further enhances the Company's commitment to provide superior solutions. The acquisition positions the Company to broaden its customer base by adding software solutions designed to enable customers to achieve optimal performance from all interconnect components. The Company accounted for this transaction using the acquisition method, and accordingly, the consideration has been allocated to tangible and intangible assets acquired and liabilities assumed on the basis of their respective estimated fair values on the acquisition date. The purchase consideration paid, assets acquired and liabilities assumed were immaterial to the Company's financial statements. There were no intangible assets identified in this transaction other than goodwill. The goodwill arising from this acquisition was primarily attributable to the assembled workforce. Goodwill is not deductible for tax purposes. Goodwill is not being amortized but is reviewed annually for impairment or more frequently if impairment indicators arise, in accordance with authoritative accounting guidance. |
FAIR VALUE MEASUREMENTS_
FAIR VALUE MEASUREMENTS: | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS: | FAIR VALUE MEASUREMENTS: Fair value hierarchy: The Company measures its cash equivalents and marketable securities at fair value. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. The Company's investments in debt securities and certificates of deposits are classified within Level 2 as the market inputs to value these instruments consist of market yields, reported trades and broker/dealer quotes. In addition, foreign currency contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Level 3 valuation inputs include the Company's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation. As of December 31, 2015 and December 31, 2014 , the Company did not have any assets or liabilities valued based on Level 3 valuations. The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value as of December 31, 2015 . Level 1 Level 2 Total (in thousands) Certificates of deposit $ — $ 110,423 $ 110,423 U.S. Government and agency securities — 131,722 131,722 Commercial paper — 57,214 57,214 Corporate bonds — 105,482 105,482 Municipal bonds — 26,208 26,208 Foreign government bonds — 13,940 13,940 Total financial assets $ — $ 444,989 $ 444,989 Derivative contracts $ — $ 1,157 $ 1,157 Total financial liabilities $ — $ 1,157 $ 1,157 The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value as of December 31, 2014 . Level 1 Level 2 Total (in thousands) Money market funds $ 4,426 $ — $ 4,426 Certificates of deposit — 80,275 80,275 U.S. Government and agency securities — 99,114 99,114 Commercial paper — 23,019 23,019 Corporate bonds — 111,736 111,736 Municipal bonds — 13,104 13,104 Foreign government bonds — 6,790 6,790 Total financial assets $ 4,426 $ 334,038 $ 338,464 Derivative contracts $ — $ 3,562 $ 3,562 Total financial liabilities $ — $ 3,562 $ 3,562 There were no transfers between Level 1 and Level 2 securities during the years ended December 31, 2015 and 2014 . |
INVESTMENTS_
INVESTMENTS: | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS: | INVESTMENTS: Cash, cash equivalents and short-term investments: At December 31, 2015 and 2014 , the Company held cash and short-term investments classified as available-for-sale securities as follows: December 31, 2015 Amortized Unrealized Unrealized Estimated (in thousands) Cash $ 65,524 $ — $ — $ 65,524 Certificates of deposit 110,427 3 (7 ) 110,423 U.S. Government and agency securities 131,755 5 (38 ) 131,722 Commercial paper 57,214 4 (4 ) 57,214 Corporate bonds 105,900 2 (420 ) 105,482 Municipal bonds 26,283 — (75 ) 26,208 Foreign government bonds 13,988 — (48 ) 13,940 Total 511,091 14 (592 ) 510,513 Less amounts classified as cash and cash equivalents (263,196 ) (5 ) 2 (263,199 ) $ 247,895 $ 9 $ (590 ) $ 247,314 December 31, 2014 Amortized Unrealized Unrealized Estimated (in thousands) Cash $ 46,900 $ — $ — $ 46,900 Money market funds 4,426 — — 4,426 Certificates of deposit 80,304 1 (30 ) 80,275 U.S. Government and agency securities 99,236 9 (131 ) 99,114 Commercial paper 23,017 3 (1 ) 23,019 Corporate bonds 112,033 16 (313 ) 111,736 Municipal bonds 13,151 — (47 ) 13,104 Foreign government bonds 6,809 — (19 ) 6,790 Total 385,876 29 (541 ) 385,364 Less amounts classified as cash and cash equivalents (51,326 ) — — (51,326 ) $ 334,550 $ 29 $ (541 ) $ 334,038 Realized gains (losses), net upon the sale of marketable securities were $3.0 million and $(0.4) million for the years ended December 31, 2015 and 2014 , respectively. At December 31, 2015 , gross unrealized losses on investments that were in a gross unrealized loss position for greater than 12 months were immaterial. These investments were not deemed to be other-than-temporarily impaired and the gross unrealized losses were recorded in OCI. The contractual maturities of short-term investments at December 31, 2015 and 2014 were as follows: December 31, 2015 December 31, 2014 Amortized Estimated Amortized Estimated (in thousands) Due in less than one year $ 148,041 $ 147,914 $ 129,150 $ 129,155 Due in one to three years 99,854 99,400 205,400 204,883 $ 247,895 $ 247,314 $ 334,550 $ 334,038 Investments in privately-held companies: As of December 31, 2015 and 2014 , the Company held a total of $7.7 million and $10.7 million in investments in privately-held companies. On April 27, 2015, the Company was informed that one of the privately-held companies intended to discontinue its operations. As a result, the Company concluded that its investment of $3.2 million in this privately-held company was fully impaired and the impairment of this investment was other than temporary. The impairment loss was included in other loss, net, on the audited consolidated statements of operations for the year ended December 31, 2015 . |
GOODWILL AND INTANGIBLE ASSETS_
GOODWILL AND INTANGIBLE ASSETS: | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS: | GOODWILL AND INTANGIBLE ASSETS: Carrying amount of goodwill at December 31, 2015 and December 31, 2014 (in thousands) $ 200,743 The carrying amounts of intangible assets as of December 31, 2015 were as follows: Gross Accumulated Net (in thousands) Licensed technology $ 2,554 $ (1,589 ) $ 965 Developed technology 69,828 (40,408 ) 29,420 Customer relationships 13,376 (11,607 ) 1,769 Total intangible assets $ 85,758 $ (53,604 ) $ 32,154 The carrying amounts of intangible assets as of December 31, 2014 were as follows: Gross Accumulated Net (in thousands) Licensed technology $ 2,344 $ (917 ) $ 1,427 Developed technology 56,064 (32,130 ) 23,934 Customer relationships 13,376 (10,434 ) 2,942 Total amortizable intangible assets 71,784 (43,481 ) 28,303 In-process research and development 13,764 — 13,764 Total intangible assets $ 85,548 $ (43,481 ) $ 42,067 The balance of IPR&D was transferred to developed technology during 2015. Amortization expense of intangible assets totaled approximately $10.1 million , $12.2 million and $14.0 million for the years ended December 31, 2015, 2014 and 2013 , respectively. The estimated future amortization expense from amortizable intangible assets is as follows: (in thousands) 2016 $ 9,991 2017 9,928 2018 6,967 2019 3,532 2020 and thereafter 1,736 Total $ 32,154 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES: | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES: | DERIVATIVES AND HEDGING ACTIVITIES: The notional amounts of outstanding forward contracts at December 31, 2015 and 2014 were as follows: Buy Contracts December 31, December 31, 2015 2014 (in thousands) Israeli shekel $ 98,744 $ 88,532 The Company does not use derivative financial instruments for purposes other than cash flow hedges. Fair Value of Derivative Contracts The fair value of derivative contracts as of December 31, 2015 and 2014 was as follows: Derivative Liabilities 2015 2014 (in thousands) Foreign exchange contracts designated as cash flow hedges $ 1,157 $ 3,562 Total derivatives designated as hedging instruments $ 1,157 $ 3,562 Effect of Designated Derivative Contracts on Accumulated Other Comprehensive Income The following table represents the balance of derivative contracts designated as cash flow hedges as of December 31, 2015 and 2014 , and their impact on OCI for the year ended December 31, 2015 (in thousands): December 31, 2014 $ (3,646 ) Amount of loss recognized in OCI (effective portion) (1,075 ) Amount of loss reclassified from OCI to income (effective portion) 3,630 December 31, 2015 $ (1,091 ) Foreign exchange contracts designated as cash flow hedges relate primarily to operating expenses and the associated gains and losses are expected to be recorded in operating expenses when reclassified out of OCI. The Company expects to realize the accumulated OCI balance related to foreign exchange contracts within the next twelve months . Effect of Derivative Contracts on the Condensed Consolidated Statement of Operations The impact of derivative contracts on total operating expenses in the years ended December 31, 2015 , 2014 , and 2013 was: Year Ended December 31, 2015 2014 2013 (in thousands) Gain (loss) on foreign exchange contracts designated as cash flow hedges $ (3,630 ) $ (1,239 ) $ 6,027 The net gains or losses relating to the ineffective portion of derivative contracts were not material in the years ended December 31, 2015 , 2014 and 2013 . |
EMPLOYEE BENEFIT PLANS_
EMPLOYEE BENEFIT PLANS: | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS: | EMPLOYEE BENEFIT PLANS: The Company has established a pretax savings plan under Section 401(k) of the Internal Revenue Code. The 401(k) Plan allows eligible employees in the United States to voluntarily contribute a portion of their pre-tax salary, subject to a maximum limit specified in the Internal Revenue Code. The Company matches employee contributions of up to 4% of their annual base salaries. The total expenses for these contributions were $1.2 million , $0.9 million and $0.8 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. Under Israeli law, the Company is required to make severance payments to certain of its retired or dismissed Israeli employees. For employees hired prior to January 1, 2007 the severance pay liability is calculated based on the last monthly salary of each employee multiplied by the number of years of such employee's employment and is presented in the Company's balance sheet in long-term liabilities, as if it was payable at each balance sheet date on an undiscounted basis. This liability is partially funded by the purchase of insurance policies or pension funds in the name of the employees. The surrender value of the insurance policies or pension funds is presented in long-term assets. The severance pay detail is as follows: December 31, 2015 2014 (in thousands) Accrued severance liability $ 12,464 $ 11,850 Severance assets 9,514 9,474 Unfunded portion $ 2,950 $ 2,376 For other Israeli employees, the Company's contributions for severance pay will replace its severance obligation. Upon a monthly contribution equal to 8.3% of the employee's monthly salary to an insurance policy or pension fund no additional calculations shall be conducted between the parties regarding the matter of severance pay and no additional payments will be made by the Company to the employee. Further, the related obligation and amounts deposited on behalf of the employee for such obligation are not stated on the balance sheet, as the Company is legally released from the obligation to employees once the deposit amounts have been paid. Severance expenses for the years ended December 31, 2015 , 2014 and 2013 were $7.6 million , $6.8 million and $6.1 million , respectively. In addition, the Company has established a pension contribution plan with respect to its employees in Israel. Under the plan, the Company contributes up to 6.0% of employee monthly salary toward the plan. Employees are entitled to amounts accumulated in the plan upon reaching retirement age, subject to any applicable law. Defined contribution pension plan expenses were $5.7 million , $4.9 million and $4.5 million in the years ended December 31, 2015 , 2014 and 2013 , respectively. |
COMMITMENTS AND CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES: | The Company leases office space and motor vehicles under operating leases with various expiration dates through 2021 . Rent expense was approximately $10.5 million , $9.9 million and $8.9 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The terms of the facility leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. The Company has entered into capital lease agreements for electronic design automation software. The total amount of assets under capital lease agreements within "Property and equipment, net" was approximately $0.5 million and $1.6 million for the years ended December 31, 2015 and 2014 , respectively. At December 31, 2015 , future minimum payments under non-cancelable operating and capital leases are as follows: Year Ended December 31, Capital Operating (in thousands) 2016 $ 502 $ 15,555 2017 — 12,390 2018 — 8,850 2019 — 9,367 2020 and thereafter — 3,068 Total minimum lease payments 502 $ 49,230 Less: Amount representing interest (11 ) Present value and current portion of capital lease obligations $ 491 Purchase commitments At December 31, 2015 , the Company had the following non-cancelable purchase commitments: (in thousands) Non-cancelable purchase obligations, due in the next twelve months $ 74,246 Non-cancelable purchase obligations, due in the next two to three years 3,855 Non-cancelable purchase obligations, due in the next four to five years 180 $ 78,281 Term Debt As disclosed in Note 15, the Company entered into a merger agreement on September 30, 2015 with EZchip, a publicly held company, for a purchase price of approximately $811.0 million. On February 23, 2016 we completed the acquisition of EZchip and financed the acquisition and related transaction expenses with cash on hand of the combined companies, and with $280.0 million in term debt. For more information about the term debt, see Note 15-Subsequent Events in the notes to the audited consolidated financial statements, included in Part IV, Item 15 of this report. Legal proceedings The Company is currently involved in various legal proceedings. Unless otherwise noted below, during the periods presented the Company did not record any accrual for loss contingencies associated with such legal proceedings, determine that an unfavorable outcome is probable or reasonably possible, or determine that the amount or range of any possible loss is reasonably estimable. The Company is engaged in other legal actions not described below arising in the ordinary course of its business and, while there can be no assurance, it believes that the ultimate outcome of these actions will not have a material adverse effect on its operating results, liquidity or financial position. Pending legal proceedings as of December 31, 2015 were as follows: Avago Technologies Fiber (IP) Singapore Pte. Ltd. vs. IPtronics, Inc. and IPtronics A/S. On September 29, 2010, Avago Technologies Fiber (IP) Singapore Pte. Ltd. (“Avago IP”) filed a complaint for patent infringement against IPtronics, Inc. and IPtronics A/S (now Mellanox Technologies Denmark Aps) (collectively, “IPtronics”) now pending in the United States District Court, Northern District of California, San Jose Division (Case No.: 5:10-cv-02863 EJD), asserting infringement of U.S. Patents Number 5,596,456 and 5,359,447. On September 11, 2012, Avago IP along with additional subsidiaries of Avago Technologies Limited (collectively, “Avago”) filed a Second Amended and Supplemental Complaint against IPtronics adding allegations that IPtronics engaged in violations of the Lanham Act, Section 43 (A); misappropriated Avago’s trade secrets; engaged in unfair competition against Avago; intentionally interfered with Avago’s contractual relations; and were unjustly enriched by and through the conduct complained of by Avago. A motion to file a third amended complaint was filed but never granted. Avago’s motion to file a Fourth Amended and Supplemental Complaint (the “Complaint”) to add the Company and a new claim for interference with prospective economic advantage against IPtronics was granted. The Company and IPtronics have answered the new complaint and the case is set for trial in May and June 2016. IPtronics’ motion to add an antitrust counterclaim against Avago for pursuing a sham action was denied. As explained below, that a similar claim is being pursued in a separate action. The parties have filed various motions for summary judgment. The Court’s resolution of these motions could affect the issues for trial. Pursuant to the Complaint, Avago seeks unspecified damages, treble damages, injunctive relief and any other relief deemed just and proper by the court. Neither the outcome of the proceeding nor the amount and range of potential damages or exposure associated with the proceeding can be assessed with certainty. In the event the Defendants are not successful in defending against the Complaint, the Company could be forced to license technology from Avago and be prevented from importing, selling, offering for sale, advertising, soliciting, using and/or warehousing for distribution the allegedly infringing products. Based on currently available information, the Company believes that the resolution of this proceeding is not likely to have a material adverse effect on the Company’s business, financial position, results of operations or cash flows. IPtronics, Inc. and Mellanox Technologies Denmark ApS vs. Avago Technologies, Inc., et al . IPtronics has filed an antitrust Complaint in the United States District Court, Northern District of California, San Jose Division (Case No.: 5:14-cv-05647-BLF (PSG)), against Avago for pursuing what the Company believes to be a baseless ITC action against IPtronics. The Complaint seeks unspecified damages in an amount to compensate IPtronics for the damages resulting from Avago’s conduct. In response to the Complaint Avago filed a motion to dismiss. The court denied that motion on August 25, 2015. Avago has since moved to stay the case pending resolution of the N.D.C patent litigation mentioned above. On December 15, 2015, the Court granted Avago’s motion in an order staying the case until June 17, 2016. The court has set a case calendar leading to a trial in June 2017. |
SHARE INCENTIVE PLANS_
SHARE INCENTIVE PLANS: | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE INCENTIVE PLANS: | SHARE INCENTIVE PLANS: The Company has seven option plans: the 1999 United States Equity Incentive Plan, 1999 Israeli Share Option Plan, 2003 Israeli Share Option Plan (collectively, the "Prior Plans"), the 2006 Global Share Incentive Plan (the "Global Plan"), the Global Share Incentive Assumption Plan 2010 (the "Assumption Plan"), the Kotura, Inc. Second Amended and Restated 2003 Stock Plan (the "Kotura Plan") and the IPtronics, Inc. 2013 Restricted Stock Unit Plan (the "IPtronics Plan"). The number of ordinary shares reserved for issuance under the Company's Global Plan will increase automatically on the first day of each fiscal year, by a number of ordinary shares equal to the lower of: (i) 2% of total number of ordinary shares outstanding on a fully diluted basis on the date of the increase, (ii) 685,714 ordinary shares, or (iii) a smaller number determined by the board of directors. In any event, the maximum aggregate number of ordinary shares that may be issued or transferred under the Global Plan during the term of the Global Plan may in no event exceed 15,474,018 ordinary shares. The Global Plan was automatically increased by 685,714 ordinary shares on January 1, 2016, 2015 and 2014 , respectively. The plan will expire in October 2016 and no additional shares are expected to be reserved under this plan. The number of ordinary shares reserved for issuance under the Company's Assumption Plan will increase automatically on the first day of each fiscal year, by a number of ordinary shares equal to the lower of: (i) 281,625 ordinary shares or (ii) an amount determined by the Board. The Assumption Plan was automatically increased by 281,625 ordinary shares on January 1, 2016, 2015 and 2014 , respectively. The plan will expire in July 2017. There were no ordinary shares reserved for future issuance under any of the other plans. The following table summarizes the share option activity under all equity incentive plans: Options Outstanding Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2013 2,806,224 $ 30.14 Options granted 50,000 $ 32.64 Options exercised (265,990 ) $ 18.23 Options canceled (122,711 ) $ 69.01 Outstanding at December 31, 2014 2,467,523 $ 29.55 Options exercised (381,708 ) $ 15.84 Options canceled (57,220 ) $ 76.33 Outstanding at December 31, 2015 2,028,595 $ 30.81 The weighted average fair value of options granted was approximately $0 , $17.22 and $8.91 for the years ended December 31, 2015 , 2014 and 2013 , respectively. The total pretax intrinsic value of options exercised in 2015 was $12.0 million . This intrinsic value represents the difference between the fair market value of the Company's ordinary shares on the date of exercise and the exercise price of each option. Based on the closing price of the Company's ordinary shares of $42.14 on December 31, 2015 , the total pretax intrinsic value of all outstanding options was $40.2 million . The total pretax intrinsic value of exercisable options at December 31, 2015 was $39.9 million . The total pretax intrinsic value of options exercised in 2014 was $6.0 million . Based on the closing price of the Company's ordinary shares of $42.73 on December 31, 2014 , the total pretax intrinsic value of all outstanding options was $51.4 million . The total pretax intrinsic value of exercisable options at December 31, 2014 was $50.1 million . The weighted average remaining contractual life of options outstanding at December 31, 2015 was 4.3 years. There were 1,938,383 options exercisable at December 31, 2015 with a weighted average exercise price $29.12 per share. The following table summarizes the restricted share unit activity under all equity incentive plans: Restricted Share Units Outstanding Number of Shares Weighted Average Grant Date Fair Value Non-vested restricted share units at December 31, 2013 1,974,454 $ 43.81 Restricted share units granted 970,970 $ 37.35 Restricted share units vested (827,396 ) $ 42.03 Restricted share units canceled (206,862 ) $ 40.91 Non-vested restricted share units at December 31, 2014 1,911,166 $ 41.61 Restricted share units granted 1,353,095 $ 45.98 Restricted share units vested (885,536 ) $ 41.00 Restricted share units canceled (173,642 ) $ 43.46 Non-vested restricted share units at December 31,2015 2,205,083 $ 44.39 The weighted average fair value of restricted share units granted was $45.98 , $37.35 and $49.05 for the years ended December 31, 2015, 2014 and 2013 , respectively. The total intrinsic value of all outstanding restricted share units was $92.9 million as of December 31, 2015 . The Employee Share Purchase Plan, ("ESPP"), is designed to allow eligible employees to purchase the Company's ordinary shares, at semi-annual intervals, with their accumulated payroll deductions. A participant may contribute up to 15% of his or her base compensation through payroll deductions, and the accumulated deductions will be applied to the purchase of shares on the purchase date, which is the last trading day of the offering period. The purchase price per share will be equal to 85% of the fair market value per share on the start date of the offering period in which the participant is enrolled or, if lower, 85% of the fair market value per share on the purchase date. In any event, the maximum aggregate number of ordinary shares that may be issued over the term of the ESPP may in no event exceed 2,585,712 shares. 1,085,712 shares were initially reserved for issuance pursuant to purchase rights under the ESPP. In August 2012, the Company reserved for issuance 1,500,000 additional shares under the ESPP. No participant in the ESPP may be issued or transferred more than $25,000 worth of ordinary shares pursuant to purchase rights under the ESPP per calendar year. During the year ended December 31, 2015 , and 2014 , 364,746 and 394,915 shares, respectively, were issued under the ESPP at weighted average per share prices of $35.15 and $30.22 , respectively. The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of December 31, 2015 : Number of Share options outstanding 2,028,595 Restricted share units outstanding 2,205,083 Shares authorized for future issuance 1,356,036 ESPP shares available for future issuance 486,313 Total shares reserved for future issuance as of December 31, 2015 6,076,027 Share-based compensation The Company accounts for share-based compensation expense based on the estimated fair value of the share option awards as of the grant dates. The following weighted average assumptions were used to value share options granted in connection with the Company's share incentive plans for the years ended December 31, 2015 , 2014 and 2013 : Employee Share Options Employee Share Purchase Plan Year ended December 31, Year ended December 31, 2015 (1) 2014 2013 2015 2014 2013 Dividend yield, % — — — — — — Expected volatility — 56.1 % 57.5 % 33.7 % 46.6 % 56.2 % Risk free interest rate — 1.98 % 1.54 % 0.10 % 0.05 % 0.07 % Expected life, years — 5.77 4.72 0.50 0.50 0.53 (1) There were no Employee Share Options granted in 2015. The following table summarizes the distribution of total share-based compensation expense in the Consolidated Statements of Operations: Year ended December 31, 2015 2014 2013 (in thousands) Share-based compensation expense by caption: Cost of goods sold $ 2,366 $ 2,162 $ 1,828 Research and development 28,821 26,979 25,956 Sales and marketing 10,309 9,755 9,198 General and administrative 9,268 8,339 8,156 Total share-based compensation expense $ 50,764 $ 47,235 $ 45,138 Share-based compensation expense by type of award: Share options $ 6,680 $ 8,974 $ 12,460 ESPP 4,007 3,976 3,938 RSU 40,077 34,285 28,740 Total share-based compensation expense $ 50,764 $ 47,235 $ 45,138 At December 31, 2015 , there was $79.6 million of total unrecognized share-based compensation costs related to non-vested share-based compensation arrangements. The costs are expected to be recognized over a weighted average period of approximately 2.3 years. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | 12 Months Ended |
Dec. 31, 2015 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the years ended December 31, 2015 and 2014 : Unrealized Gains / Losses on Available-for- Sale Securities Gains / Losses on Derivatives Total (in thousands) Balance at December 31, 2014 $ (374 ) $ (3,646 ) $ (4,020 ) Other comprehensive income/loss before reclassifications (220 ) (1,075 ) (1,295 ) Amounts reclassified from accumulated other comprehensive income/loss 16 3,630 3,646 Net current-period other comprehensive income/loss, net of taxes (204 ) 2,555 2,351 Balance at December 31, 2015 $ (578 ) $ (1,091 ) $ (1,669 ) Balance at December 31, 2013 $ (6 ) $ 1,396 $ 1,390 Other comprehensive income/loss before reclassifications (378 ) (6,281 ) (6,659 ) Amounts reclassified from accumulated other comprehensive income/loss 10 1,239 1,249 Net current-period other comprehensive income/loss, net of taxes (368 ) (5,042 ) (5,410 ) Balance at December 31, 2014 $ (374 ) $ (3,646 ) $ (4,020 ) The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the year ended December 31, 2015 and 2014 : Details about Accumulated Other Comprehensive Income / Loss Components Amount Reclassified from Other Comprehensive Income / Loss Affected Line Item in the Statement of Operations Year ended December 31, 2015 2014 (in thousands) Losses on Derivatives $ 3,630 $ 1,239 Cost of revenues and Operating expenses 182 87 Cost of revenues 2,974 969 Research and development 209 92 Sales and marketing 265 91 General and administrative 3,630 1,239 Unrealized gains (losses) on Available-for-Sale Securities 16 10 Other income, net Total reclassifications for the period $ 3,646 $ 1,249 Total |
INCOME TAXES_
INCOME TAXES: | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES: | INCOME TAXES: The components of income (loss) before (benefit from) provision for income taxes are as follows: Year ended December 31, 2015 2014 2013 (in thousands) United States $ (12,539 ) $ (10,260 ) $ (2,463 ) Foreign 87,121 4,518 (17,127 ) Income (loss) before income taxes $ 74,582 $ (5,742 ) $ (19,590 ) The components of the (benefit from) provision for income taxes are as follows: Year ended December 31, 2015 2014 2013 (in thousands) Current: U.S. federal $ (1,578 ) $ 162 $ 1,989 State and local 284 163 508 Foreign 5,737 4,683 3,110 4,443 5,008 5,607 Deferred: U.S. federal $ — $ 12,140 $ (1,174 ) State and local — 1,539 (219 ) Foreign (22,755 ) (420 ) (462 ) (22,755 ) 13,259 (1,855 ) (Benefit from) provision for taxes on income $ (18,312 ) $ 18,267 $ 3,752 At December 31, 2015 and 2014 , significant deferred tax assets and liabilities are as follows: December 31, 2015 2014 (1) (in thousands) Deferred tax assets: Net operating loss and credit carryforwards $ 39,200 $ 41,070 Reserves and accruals 10,691 7,633 Depreciation and amortization 441 1,030 Other 10,747 8,556 Gross deferred tax assets 61,079 58,289 Valuation allowance (28,999 ) (46,220 ) Total deferred tax assets 32,080 12,069 Intangible assets (8,858 ) (11,551 ) Total deferred tax liabilities (8,858 ) (11,551 ) Net deferred tax assets $ 23,222 $ 518 (1) In connection with the preparation of our consolidated financial statements for the year ended December 31, 2015, the Company identified and corrected classification errors of certain items within the details of the gross deferred tax asset for 2014, resulting in an increase in the deferred tax asset for net operating loss and credit carryforwards of $15.5 million , and a decrease in deferred tax asset for depreciation and amortization of $15.5 million . The Company assessed the materiality of the error and concluded that it was not material to 2014. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. As of December 31, 2015, primarily because in the current year, the Company achieved 3 years of cumulative pre-tax income for the related Israeli subsidiary, management determined that sufficient positive evidence exists as of December 31, 2015, to conclude that it is more likely than not that additional deferred taxes of $22.4 million are realizable, and therefore, reduced the valuation allowance accordingly. The Company has maintained a valuation allowance against the subsidiary’s capital loss credit carryforwards, as management has determined that these deferred tax assets are not more likely than not to be realized. On January 4, 2016 the Israeli Government legislated a reduction in corporate income tax rates from 26.5% to 25.0% , effective in 2016. Deferred tax assets and liabilities at December 31, 2015 were measured using the 26.5% tax rate. Deferred tax assets and liabilities to be measured in 2016 will be measured using the 25.0% tax rate. The Company believes the immediate change in the corporate income tax rates from 26.5% to 25.0% would result in a reduction of $1.3 million to the Company's deferred tax assets and a corresponding increase in the Company's income tax expense during the first quarter of 2016. At December 31, 2015 , the Company had net operating loss carryforwards ("NOLs") of approximately $55.0 million in Israel, $65.4 million in the United States ("U.S.") for federal tax purposes, $43.7 million in the U.S. for state tax purposes and $10.8 million in Denmark. The US net operating losses begin to expire in 2016 and the non-U.S. net operating losses have no expiration date. Included in the U.S. federal and state NOLs are $17.9 million of NOLs which have not been recognized for financial reporting purposes due to unrecognized tax benefits and excess tax benefits related to stock-based compensation. Excess tax benefits related to option exercises cannot be recognized until realized through a reduction of current taxes payable. The Company has not provided for Israeli income and foreign withholding taxes on $2.0 million of its non-Israeli subsidiaries' undistributed earnings as of December 31, 2015 . The Company currently has no plans to repatriate those funds and intends to indefinitely reinvest them in its non-Israeli operations. The Company cannot determine the impact of local taxes, withholding taxes and foreign tax credits associated with future repatriation of such earnings because the time or manner of the repatriation is uncertain and therefore, quantification of the related tax liability is impracticable. The reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: December 31, 2015 2014 2013 Tax at statutory rate 35.0 % 35.0 % 35.0 % State, net of federal benefit 0.2 (28.6 ) 2.9 Meals and entertainment 0.2 (1.3 ) (0.4 ) Tax at rates other than the statutory rate (42.5 ) 56.1 (35.7 ) Valuation allowance (22.0 ) (280.6 ) — Share-based compensation — (4.0 ) (4.6 ) Net change in tax reserves 6.0 (87.4 ) (15.9 ) Other, net (1.5 ) (7.3 ) (0.5 ) Provision for taxes (24.6 )% (318.1 )% (19.2 )% The Company calculates the pool of excess tax benefits resulting from share based compensation available to absorb tax deficiencies recognized using the method under which each award grant is tracked on an employee-by-employee basis and grant-by-grant basis to determine if there is a tax benefit situation or tax deficiency situation for such award. The Company then compares the fair value expense to the tax deduction received for each grant and aggregates the benefits and deficiencies to determine whether there is a hypothetical additional paid in capital ("APIC") pool. For the years ended December 31, 2015 and 2014 , the Company recognized a tax benefit to APIC of $0.1 million and $0.3 million , respectively. The Company's operations in Israel were granted "Approved Enterprise" status by the Investment Center in the Israeli Ministry of Economy (formerly, the Ministry of Industry Trade and Labor) and "Beneficiary Enterprise" status from the Israeli Income Tax Authority, which makes the Company eligible for tax benefits under the Israeli Law for Encouragement of Capital Investments, 1959. Under the terms of the Beneficiary Enterprise program, income that is attributable to the Company's operations in Yokneam, Israel, will be exempt from income tax for a period of ten years commencing 2011 . Income that is attributable to the Company's operations in Tel Aviv, Israel, was exempted from income tax for a period of two years commencing 2013 , and will be subject to a reduced income tax rate (generally between 10% and the current corporate tax rate, depending on the percentage of foreign investment in the Company) for five to eight years beginning fiscal year 2013 . The tax holiday for the Company's Yokneam operations will expire in 2021 and the tax holiday for the Company's Tel-Aviv operations will expire between the years 2017 and 2021 . The tax holiday has resulted in a cash tax savings of $33.0 million , $6.9 million and $6.4 million in 2015 , 2014 , and 2013 respectively, increasing diluted earnings per share by approximately $0.69 , $0.15 and $0.15 in the years ended December 31, 2015 , 2014 , and 2013 , respectively. The following summarizes the activity related to the Company's unrecognized tax benefits: December 31, 2015 2014 2013 (in thousands) Gross unrecognized tax benefits, beginning of the period $ 18,037 $ 23,585 $ 9,716 Increases in tax positions for prior years 1,153 299 444 Decreases in tax positions for prior years (131 ) (10,339 ) (11 ) Increases in tax positions for current year 7,908 5,170 3,029 Increases in tax positions acquired or assumed in a business combination — — 11,037 Decreases due to statute of limitations (1,585 ) (678 ) (630 ) Gross unrecognized tax benefits, end of the period $ 25,382 $ 18,037 $ 23,585 As of December 31, 2015 , 2014 and 2013 , the total amount of gross unrecognized tax benefits was $25.4 million , $18.0 million , and $23.6 million , respectively. Of these amounts as of December 31, 2015 , 2014 and 2013 , $18.9 million , $15.3 million , and $12.5 million , respectively would impact the effective tax rate if recognized. The remaining unrecognized tax benefits are associated with deferred tax assets subject to a full valuation allowance. It is the Company's policy to classify accrued interest and penalties as part of the accrued unrecognized tax benefits liability and record the expense in the provision for income taxes. For the years ended December 31, 2015 , 2014 and 2013 , the amount of accrued interest or penalties related to unrecognized tax benefit totaled $1.2 million , $1.0 million , and $0.6 million , respectively. For unrecognized tax benefits that existed at December 31, 2015 , the Company does not anticipate any significant changes within the next twelve months. As a multinational corporation, the Company conducts business in many countries and is subject to taxation in many jurisdictions. The taxation of the Company's business is subject to the application of multiple and sometimes conflicting tax laws and regulations as well as multinational tax conventions. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation and the evolution of regulations and court rulings. Consequently, taxing authorities may impose tax assessments or judgments against the Company that could materially impact its tax liability and/or its effective income tax rate. As of December 31, 2015 , the 2010 through 2014 tax years are open and may be subject to potential examinations in the United States and Denmark. As of December 31, 2015 the income tax returns of the Company and one of its subsidiaries in Israel are under examination by the Israeli Tax Authority for certain years from 2011 to 2014 . |
GEOGRAPHIC INFORMATION AND REVE
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: | GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: The Company operates in one reportable segment, the development, manufacturing, marketing and sales of interconnect products. The Company's chief operating decision maker is the chief executive officer. Since the Company operates in one segment, all financial segment information can be found in the accompanying Consolidated Financial Statements. Revenues by geographic region are as follows: Year ended December 31, 2015 2014 2013 (in thousands) United States $ 300,674 $ 202,921 $ 175,491 China 89,466 65,204 67,517 Europe 93,666 72,181 51,973 Other Americas 24,692 19,760 16,869 Other Asia 149,642 103,583 78,586 Total revenue $ 658,140 $ 463,649 $ 390,436 Revenues are attributed to countries based on the geographic location of the customers. Intercompany sales between geographic areas have been eliminated. Property and equipment, net by geographic location are as follows: December 31, 2015 2014 (in thousands) Israel $ 83,758 $ 69,004 United States 13,776 7,849 Other 2,484 1,974 Total property and equipment, net $ 100,018 $ 78,827 Property and equipment, net is attributed to the geographic location in which it is located. Revenues by product type and interconnect protocol are as follows: Year ended December 31, 2015 2014 2013 (in thousands) ICs $ 92,214 $ 70,840 $ 56,817 Boards 265,249 147,738 119,399 Switch systems 179,977 147,403 145,184 Cables, accessories and other 120,700 97,668 69,036 Total revenue $ 658,140 $ 463,649 $ 390,436 Year ended December 31, 2015 2014 2013 (in thousands) InfiniBand: EDR $ 39,009 $ — $ — FDR 347,760 264,785 200,300 QDR/DDR/SDR 63,745 72,890 107,995 Total 450,514 337,675 308,295 Ethernet 155,221 83,470 52,908 Other 52,405 42,504 29,233 Total revenue $ 658,140 $ 463,649 $ 390,436 |
OTHER INCOME(LOSS) , NET_
OTHER INCOME(LOSS) , NET: | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (LOSS), NET: | OTHER INCOME (LOSS), NET: Other income (loss), net, is summarized in the following table: Year ended December 31, 2015 2014 2013 (in thousands) Interest income and gain on sale of investments, net $ 2,998 $ 1,952 $ 1,738 Impairment loss on equity investment in a private company (3,189 ) — — Foreign exchange loss (186 ) (245 ) (309 ) Other (147 ) (258 ) (201 ) Total other income (loss), net $ (524 ) $ 1,449 $ 1,228 |
SUBSEQUENT EVENT_
SUBSEQUENT EVENT: | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT: In September 2015, the Company entered into an Agreement to acquire EZchip, a public company formed under the laws of the State of Israel and specializing in network-processing semiconductors, for approximately $811.0 million . The EZchip acquisition is a step in the Company's strategy to become the leading broad-line supplier of intelligent interconnect solutions for the software-defined data centers. The addition of EZchip’s products and expertise in security, deep packet inspection, video, and storage processing enhances the Company's leadership position, and ability to deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for advanced data center and edge platforms. The combined company will have diverse and robust solutions to enable customers to meet the growing demands of data-intensive applications used in high-performance computing, Web 2.0, cloud, secure data center, enterprise, telecom, database, financial services, and storage environments. The acquisition closed on February 23, 2016 , at which time EZchip became a wholly owned subsidiary of the Company. At the closing, the Company assumed each unvested option and RSU of EZchip on the same terms and conditions as were applicable to such EZchip option or RSU (including with respect to vesting), and converted to an equivalent equity award to receive the Company's ordinary shares appropriately adjusted to take into account the transaction consideration. All vested, in-the-money EZchip stock options and RSUs, after giving effect to any acceleration or vesting that occurs as a result of the transaction, were cashed out. Any vested out-of-the-money EZchip options were cancelled for no consideration. The Company is in the process of determining the allocation of the purchase price to assets acquired and liabilities assumed. The acquisition and related transaction expenses was financed with cash on hand and with $280 million in term debt. The Term Debt agreement includes customary liquidity covenants and consists of a variable interest rate senior secured loan for the term of three years. The Term Debt provides for an additional term loan borrowing of up to $100.0 million under certain conditions. Borrowings under the Term Debt bear interest through maturity at a variable rate based upon, at the Company’s option, either the Eurodollar rate or the base rate (which is the highest of (i) the administrative agent’s prime rate, (ii) one-half of 1.00% in excess of the overnight federal funds rate, and (iii) 1.00% in excess of the one-month Eurodollar rate), plus in each case, an applicable margin. The applicable margin for Eurodollar rate loans ranges, based on the applicable total net leverage ratio, from 1.25% to 2.00% per annum and the applicable margin for base rate loans ranges, based on the applicable total net leverage ratio, from 0.25% to 1.00% per annum. During the three years after the closing date, the Company will be required to make quarterly amortization payments on the term loans of: (i) 2.50% of the original principal amount for the four fiscal quarters beginning on June, 2016 and ending on March, 2017 , (ii) 3.75% of the original principal amount for the four fiscal quarters beginning on June, 2017 and ending on March, 2018 and (iii) 6.25% of the original principal amount for the three fiscal quarters beginning on June, 2018 and ending on December, 2018 . On the maturity date, the Company will be required to pay all remaining outstanding amounts under the term loans. The Company are also required to make mandatory prepayments of loans under the Term Debt, subject to specified exceptions, with the proceeds of asset sales, debt issuances and specified other events. The Company’ obligations under the Term Debt are guaranteed by all of their direct and indirect US and Israeli subsidiaries, other than EZchip and its subsidiaries and other immaterial subsidiaries (collectively, the “Loan Parties”). The obligations under the Term Debt and the guarantees are secured by a lien on substantially all of the Loan Parties’ tangible and intangible property and by a pledge of 100% of the equity interests in the Loan Parties’ US and Israeli subsidiaries, including EZchip but excluding any subsidiaries of EZchip and other immaterial subsidiaries. The Term Debt contains a number of covenants and restrictions that among other things, require the Company and its subsidiaries to satisfy certain financial covenants and restricts the ability of the Company and its subsidiaries’ ability to, incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales, declare dividends or redeem or repurchase capital stock, prepay, redeem or purchase subordinated debt and amend or otherwise alter debt agreements. A failure to comply with these covenants could permit the lenders under the Term Debt to declare all amounts borrowed under the Term Debt, together with accrued interest and fees, to be immediately due and payable. |
SCHEDULE II - CONSOLIDATED VALU
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS | Description: Balance at Beginning of Year Charged (Credited) to Costs and Expenses Deductions (Recovery) Balance at End of Year (in thousands) Year ended December 31, 2015: Deducted from asset accounts: Allowance for doubtful accounts $ 672 $ (51 ) $ — $ 621 Allowance for sales returns and adjustments — — — — Income tax valuation allowance 46,220 (16,440 ) (781 ) 28,999 Total $ 46,892 $ (16,491 ) $ (781 ) $ 29,620 Year ended December 31, 2014: Deducted from asset accounts: Allowance for doubtful accounts $ 639 $ 33 $ — $ 672 Allowance for sales returns and adjustments — — — — Income tax valuation allowance 27,365 18,855 — 46,220 Total $ 28,004 $ 18,888 $ — $ 46,892 Year ended December 31, 2013: Deducted from asset accounts: Allowance for doubtful accounts $ 639 $ — $ — $ 639 Allowance for sales returns and adjustments 79 (79 ) — — Income tax valuation allowance 28,039 — (674 ) 27,365 Total $ 28,757 $ (79 ) $ (674 ) $ 28,004 |
THE COMPANY AND SUMMARY OF SI25
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of presentation | Principles of presentation The consolidated financial statements include the Company's accounts as well as those of its wholly owned subsidiaries after the elimination of all significant intercompany balances and transactions. On July 1, 2014, the Company completed its acquisition of Integrity Project, Ltd. ("Integrity"), a privately held company. The consolidated financial statements include the results of operations of Integrity commencing as of the acquisition date. Certain prior year amounts have been reclassified to conform to 2015 presentation. In November 2015, the Financial Accounting Standards Board (“FASB”) issued guidance requiring current deferred tax assets, current deferred tax liabilities and related current valuation allowances to be reclassified as non-current. For more information about the changes and reclassifications as a result of adoption of this guidance, see Note 1-The Company and Summary of Significant Accounting Policies, Adoption of new accounting principle. These changes and reclassifications did not impact net or comprehensive income. |
Risks and uncertainties | Risks and uncertainties The Company is subject to all of the risks inherent in a company which operates in the dynamic and competitive semiconductor industry. Significant changes in any of the following areas could have a materially adverse impact on the Company's financial position and results of operations; unpredictable volume or timing of customer orders; ordered product mix; the sales outlook and purchasing patterns of the Company's customers based on consumer demands and general economic conditions; loss of one or more of the Company's customers; decreases in the average selling prices of products or increases in the average cost of finished goods; the availability, pricing and timeliness of delivery of components used in the Company's products; reliance on a limited number of subcontractors to manufacture, assemble, package and production test the Company's products; the Company's ability to successfully develop, introduce and sell new or enhanced products in a timely manner; product obsolescence and the Company's ability to manage product transitions; the timing of announcements or introductions of new products by the Company's competitors, and the Company's ability to successfully integrate acquired businesses. |
Use of estimates | Use of estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, sales returns and allowances, investment valuation, warranty reserves, inventory reserves, share-based compensation expense, long-term asset valuations, goodwill and purchased intangible asset valuation, hedge effectiveness, deferred income tax asset valuation, uncertain tax positions, litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results that the Company experiences may differ materially and adversely from the Company's original estimates. To the extent there are material differences between the estimates and actual results, the Company's future results of operations will be affected. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks, money market funds, U.S. government agency discount notes, municipal bonds, foreign government bonds, corporate bonds and commercial paper. |
Short-term investments | Short-term investments The Company's short-term investments are classified as available-for-sale securities and are reported at fair value. Unrealized gains or losses are recorded in shareholders' equity and included in other comprehensive income ("OCI"). The Company views its available-for-sale portfolio as available for use in its current operations. Accordingly, the Company has classified all investments in available for sale securities with readily available markets as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because of the intent and ability to sell these securities prior to maturity to meet liquidity needs or as part of a risk management program. |
Restricted cash and deposits | Restricted cash and deposits The Company maintains certain cash amounts restricted as to withdrawal or use. |
Fair value of financial instruments | Fair value of financial instruments The Company's financial instruments consist of cash equivalents, short-term investments and foreign currency derivative contracts. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. The Company believes that the carrying amounts of the financial instruments approximate their respective fair values. The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition, credit quality and near-term prospects of the issuer; and whether it is more likely than not that the Company will be required to sell the security prior to any anticipated recovery in fair value. When there is no readily available market data, fair value estimates may be made by the Company, which may not necessarily represent the amounts that could be realized in a current or future sale of these assets. |
Derivatives | Derivatives The Company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. The Company enters into derivative instruments designated as cash flow hedges. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of accumulated OCI, and subsequently reclassified into earnings when the hedged exposure affects earnings. Any gain or loss after a hedge is de-designated because it is no longer probable of occurring or related to an ineffective portion of a hedge, as well as any amount excluded from the Company's hedge effectiveness, is recognized as other income, net immediately. The Company uses derivative instruments primarily to manage exposures to foreign currency. The Company enters into derivative contracts to manage its exposure to changes in the exchange rate of the NIS against the U.S. dollar. The Company's primary objective in entering these arrangements is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The program is not designated for trading or speculative purposes. The Company's derivative instruments expose the Company to credit risk to the extent that the counter-parties may be unable to meet the terms of the agreement. The Company seeks to mitigate such risk by limiting its counter-parties to major financial institutions and by spreading the risk across a number of major financial institutions. In addition, the potential risk of loss with any one counter-party resulting from this type of credit risk is monitored on an ongoing basis. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, short-term investments and accounts receivable. Cash equivalents and short-term investments balances are maintained with high quality financial institutions, the composition and maturities of which are regularly monitored by management. The Company's accounts receivable are derived from revenue earned from customers located in North America, Europe and Asia. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The Company reviews its allowance for doubtful accounts quarterly by assessing individual accounts receivable over a specific aging and amount, and all other balances based on historical collection experience and an economic risk assessment. If the Company determines that a specific customer is unable to meet its financial obligations to the Company, the Company provides an allowance for credit losses to reduce the receivable to the amount management reasonably believes will be collected. |
Inventory | Inventory Inventory includes finished goods, work-in-process and raw materials. Inventory is stated at the lower of cost (principally standard cost which approximates actual cost on a first-in, first-out basis) or market value. Reserves for potentially excess and obsolete inventory are made based on management's analysis of inventory levels, future sales forecasts and market conditions. Once established, the original cost of the Company's inventory less the related inventory reserve represents the new cost basis of such products. |
Property and equipment | Property and equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is generally calculated using the straight-line method over the estimated useful lives of the related assets, which is three to five years for computers, software license rights and other electronic equipment, and seven to fifteen years for office furniture and equipment. Leasehold improvements and assets acquired under capital leases are amortized on a straight-line basis over the term of the lease, or the useful lives of the assets, whichever is shorter. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is reflected in the results of operations in the period realized. The Company incurs costs for the fabrication of masks used by its contract manufacturers to manufacture wafers that incorporate its products. The Company capitalizes the costs of fabrication masks that are reasonably expected to be used during production manufacturing. These amounts are included within property and equipment and are generally depreciated over a period of 12 months to cost of revenue. If it does not reasonably expect to use the fabrication mask during production manufacturing, it expenses the related mask costs to research and development in the period in which the costs are incurred. The Company capitalizes certain costs incurred in connection with internal use of inventory items in the Company's data centers and laboratories. Capitalized inventory costs are included in Property and equipment, net and amortized on a straight-line basis over the estimated useful life of the asset. |
Business combinations | Business combinations The Company accounts for business combinations using the acquisition method of accounting. The Company determines the recognition of intangible assets based on the following criteria: (i) the intangible asset arises from contractual or other rights; or (ii) the intangible asset is separable or divisible from the acquired entity and capable of being sold, transferred, licensed, returned or exchanged. The Company allocates the purchase price of business combinations to the tangible assets, liabilities and intangible assets acquired, including in-process research and development ("IPR&D"), based on their estimated fair values. The excess purchase price over those fair values is recorded as goodwill. The process of estimating the fair values requires significant estimates, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer contracts, customer lists and distribution agreements, acquired developed technologies, expected costs to develop IPR&D into commercially viable products, estimated cash flows from projects when completed and discount rates. The Company estimates fair value based upon assumptions that are believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. |
Goodwill and intangible assets | Goodwill and intangible assets Goodwill represents the excess of the cost of acquired businesses over the fair market value of their identifiable net assets. The Company conducts a goodwill impairment qualitative assessment during the fourth quarter of each fiscal year or more frequently if facts and circumstances indicate that goodwill may be impaired. The goodwill impairment qualitative assessment requires the Company to perform an assessment to determine if it is more likely than not that the fair value of the business is less than its carrying amount. The qualitative assessment considers various factors, including the macroeconomic environment, industry and market specific conditions, market capitalization, stock price, financial performance, earnings multiples, budgeted-to-actual revenue performance from prior year, gross margin and cash flow from operating activities and issues or events specific to the business. If adverse qualitative trends are identified that could negatively impact the fair value of the business, the Company performs a "two step" goodwill impairment test. "Step one" of the goodwill impairment test requires the Company to estimate the fair value of the reporting unit "Step two" of the test is only performed if a potential impairment exists in "step one" and involves determining the difference between the fair value of the reporting unit's net assets other than goodwill to the fair value of the reporting unit. If the difference is less than the net book value of goodwill, an impairment exists and is recorded. As of December 31, 2015 , the Company's qualitative assessment of goodwill impairment indicated that goodwill was not impaired. Intangible assets primarily represent acquired intangible assets including developed technology, customer relationships and IPR&D. The Company amortizes its finite lived intangible assets over their useful lives using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used, or, if that pattern cannot be reliably determined, using a straight-line amortization method. The Company capitalizes IPR&D projects acquired as part of a business combination as intangible assets with indefinite lives. On completion of each project, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. If any of the IPR&D projects are abandoned, the Company would impair the related IPR&D asset. Indefinite-lived intangible assets are tested for impairment annually or more frequently when indicators of impairment exist. The Company first assesses qualitative factors to determine if it is more likely than not that an indefinite-lived intangible asset is impaired and whether it is necessary to perform a quantitative impairment test. The qualitative assessment considers various factors, including reductions in demand, the abandonment of IPR&D projects or significant economic slowdowns in the semiconductor industry and macroeconomic environment. If adverse qualitative trends are identified that could negatively impact the fair value of the asset, then quantitative impairment tests are performed to compare the carrying value of the asset to its undiscounted expected future cash flows. If this test indicates that there is impairment, the impaired asset is written down to fair value, which is typically calculated using: (i) quoted market prices or (ii) discounted expected future cash flows utilizing an appropriate discount rate. Impairment is based on the excess of the carrying amount over the fair value of those assets. As of December 31, 2015 , there were no indicators that impairment existed or assets were not recoverable. Intangible assets with finite lives are tested for impairment in accordance with our policy for long-lived assets. |
Investments | Investments The Company has equity investments in privately-held companies. These investments are recorded at cost reduced by any impairment write-downs because the Company does not have the ability to exercise significant influence over the operating and financial policies of the company. The investments are included in other long-term assets on the accompanying balance sheets. The Company monitors the investments and if facts and circumstances indicate an investment may be impaired, then it conducts an impairment test of its investment. To determine if the investment is recoverable, it reviews the privately-held company's revenue and earnings trends relative to pre-defined milestones and overall business prospects, the general market conditions in its industry and other factors related to its ability to remain in business, such as liquidity and receipt of additional funding. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets include equipment and furniture and fixtures and finite-lived intangible assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. If the sum of the expected future cash flows (undiscounted and without interest charges) from the long-lived assets is less than the carrying amount of such assets, an impairment loss would be recognized, and the assets would be written down to their estimated fair values. The Company reviews for possible impairment on a regular basis. |
Revenue recognition | Revenue recognition The Company recognizes revenue from the sales of products when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the price is fixed or determinable; and (4) collection is reasonably assured. The Company uses a binding purchase order or a signed agreement as evidence of an arrangement. Delivery occurs when goods are shipped and title and risk of loss transfer to the customer. The Company's standard arrangement with its customers typically includes freight-on-board shipping point, no right of return and no customer acceptance provisions. The customer's obligation to pay and the payment terms are set at the time of shipment and are not dependent on the subsequent resale of the product. The Company determines whether collectability is probable on a customer-by-customer basis. When assessing the probability of collection, the Company considers the number of years the customer has been in business and the history of the Company's collections. Customers are subject to a credit review process that evaluates the customers' financial positions and ultimately their ability to pay. If it is determined at the outset of an arrangement that collection is not probable, no product is shipped and no revenue is recognized unless cash is received in advance. The Company maintains inventory, or hub arrangements with certain customers. Pursuant to these arrangements the Company delivers products to a customer or a designated third party warehouse based upon the customer's projected needs, but does not recognize product revenue unless and until the customer reports it has removed the Company's product from the warehouse to be incorporated into its end products. Multiple Element Arrangements Excluding Software For revenue arrangements that contain multiple deliverables, judgment is required to properly identify the accounting units of the transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could impact the timing of revenue recognition, which could affect its results of operations. When the Company enters into an arrangement that includes multiple elements, the allocation of value to each element is derived based on management's best estimate of selling price when vendor specific evidence or third party evidence is unavailable. Multiple Element Arrangements Including Software For multiple element arrangements that include a combination of hardware, software and services, such as post-contract customer support, the arrangement consideration is first allocated among the accounting units before revenue recognition criteria are applied. If an arrangement includes undelivered elements that are not essential to the functionality of the delivered elements, the Company defers revenue for the undelivered elements based on their fair value. The fair value for undelivered software elements is based on vendor specific evidence. If the undelivered elements are essential to the functionality of the delivered elements, no revenue is recognized. The revenues from fixed-price support or maintenance contracts, including extended warranty contracts and software post-contract customer support agreements are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. Distributor Revenue A portion of the Company's sales are made to distributors under agreements which contain a limited right to return unsold product and price protection provisions. The Company recognizes revenue from these distributors based on the sell-through method using inventory and point of sale information provided by the distributor. Additionally, the Company maintains accruals and allowances for price protection and cooperative marketing programs. The Company classifies the costs of cooperative marketing programs based on the identifiable benefit received as either a reduction of revenue, a cost of revenues or an operating expense. Deferred Revenue and Income The Company defers revenue and income when advance payments are received from customers before performance obligations have been completed and/or services have been performed. Shipping and Handling Costs incurred for shipping and handling expenses to customers are recorded as cost of revenues. To the extent these amounts are billed to the customer in a sales transaction, the Company records the shipping and handling fees as revenue. |
Product warranty | Product warranty The Company typically offers a limited warranty for its products for periods up to three years . The Company accrues for estimated returns of defective products at the time revenue is recognized based on historical activity. The determination of these accruals requires the Company to make estimates of the frequency and extent of warranty activity and estimated future costs to either replace or repair the products under warranty. If the actual warranty activity and/or repair and replacement costs differ significantly from these estimates, adjustments to record additional cost of revenues may be required in future periods. |
Research and development | Research and development Costs incurred in research and development are charged to operations as incurred. The Company expenses all costs for internally developed patents as incurred. |
Advertising | Advertising Costs related to advertising and promotion of products are charged to sales and marketing expense as incurred. |
Share-based compensation | Share-based compensation The Company accounts for share-based compensation expense based on the estimated fair value of the equity awards as of the grant dates. The fair value of restricted stock units, or RSUs, is based on the closing market price of our ordinary shares on the date of grant. The Company estimates the fair value of share options using the Black-Scholes option valuation model, which requires the input of subjective assumptions including the expected share price volatility and the calculation of expected term, as well as the fair value of the underlying ordinary share on the date of grant, among other inputs. The Company bases its estimate of expected volatility on the historical volatility of the Company's shares. The Company calculates the expected term of its option awards using the simplified method as prescribed by the authoritative guidance. The expected term for newly granted option awards in 2014 was approximately 5.77 years. The Company did not grant share options in 2015. Share compensation expense is recognized on a straight-line basis over each recipient's requisite service period, which is generally the vesting period. Share-based compensation expense is recorded net of estimated forfeitures. Forfeitures are estimated at the time of grant and this estimate is revised, if necessary, in subsequent periods. If the actual number of forfeitures differs from the estimate, adjustments may be required to share-based compensation expense in future periods. |
Comprehensive income (loss) | Comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax on the consolidated balance sheets at December 31, 2015 and 2014 , represents the accumulated unrealized gains (losses) on available-for-sale securities, and the accumulated unrealized gains (losses) related to derivative instruments accounted for as cash flow hedges. |
Foreign currency translation | Foreign currency translation The Company uses the U.S. dollar as its functional currency. Foreign currency assets and liabilities are remeasured into U.S. dollars at the end-of-period exchange rates except for non-monetary assets and liabilities, which are remeasured at historical exchange rates. Revenue and expenses are remeasured each day at the exchange rate in effect on the day the transaction occurred, except for those expenses related to balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency transactions are included in the Consolidated Statements of Operations as part of "Other income (loss), net." |
Net income per share | Net income per share Basic and diluted net income per share are computed by dividing the net income for the period by the weighted average number of ordinary shares outstanding during the period. The calculation of diluted net income per share excludes potential ordinary shares if the effect is anti-dilutive. Potential ordinary shares are comprised of incremental ordinary shares issuable upon the exercise of share options. |
Segment reporting | Segment reporting The Company has one reportable segment: the development, manufacturing, marketing and sales of interconnect products. |
Income taxes | Income taxes To prepare the Company's consolidated financial statements, the Company estimates its income taxes in each of the jurisdictions in which it operates. This process involves estimating the Company's actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the Company's consolidated balance sheet. The Company must also make judgments regarding the realizability of deferred tax assets. The carrying value of the Company's net deferred tax assets is based on its belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the "more likely than not" criteria. The Company's judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company's assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. The Company's effective tax rate is highly dependent upon the geographic distribution of its worldwide earnings or losses, the tax regulations and tax holidays in each geographic region, the availability of tax credits and carryforwards, and the effectiveness of its tax planning strategies. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of income as income tax expense. |
Recent accounting pronouncements | Adoption of new accounting principle In November 2015, the FASB issued Accounting Standards Updates (“ASU”) No. 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes , requiring all deferred tax assets (DTA) and deferred tax liabilities (DTL), and any related valuation allowance, to be classified as non-current on the balance sheet. The classification change for all deferred taxes as non-current eliminates the need to separately identify the net current and net non-current deferred tax asset or liability in each jurisdiction and allocate valuation allowances. The FASB allowed all entities to early adopt the ASU for financial statements that had not been issued. The Company elected to retrospectively adopt this accounting standard in the beginning of the Company's fourth quarter of fiscal 2015. As a result of the adoption, the Company made the following adjustments to the 2014 balance sheet: a $2.3 million decrease to current deferred tax assets and total current assets; and a $2.3 million increase to long-term deferred tax assets. Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASB issued an update to defer the effective date of this update by one year. The updated standard becomes effective for the Company in the first quarter of fiscal year 2018, but allows the Company to adopt the standard one year earlier if it so chooses. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its Consolidated Financial Statements and related disclosures. |
THE COMPANY AND SUMMARY OF SI26
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of revenues and accounts receivable from customers | The following table summarizes the revenues from customers (including original equipment manufacturers) in excess of 10% of the total revenues: Year Ended December 31, 2015 2014 2013 Hewlett-Packard 14 % 11 % 13 % Dell * 11 % * IBM * 10 % 17 % ____________________ * Less than 10% The following table summarizes accounts receivable balances in excess of 10% of total accounts receivable: December 31, 2015 December 31, 2014 Hewlett Packard 16 % 17 % Hon Hai Precision Ind. Co. Ltd. 11 % * IBM * 11 % Ingram Micro 15 % 10 % ____________________ * Less than 10% |
Schedule of changes in the entity's liability for product warranty | Changes in the Company's liability for product warranty during the years ended are as follows: December 31, 2015 2014 (In thousands) Balance, beginning of the period $ 1,932 $ 3,633 New warranties issued during the period 2,529 3,072 Reversal of warranty reserves (480 ) (197 ) Settlements during the period (2,340 ) (4,576 ) Balance, end of the period 1,641 1,932 Less: long term portion of product warranty liability (435 ) (424 ) Balance, end of the period $ 1,206 $ 1,508 |
Schedule of computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share for the periods indicated: Year Ended December 31, 2015 2014 2013 (In thousands, except per share data) Net income (loss) $ 92,894 $ (24,009 ) $ (23,342 ) Basic and diluted shares: Weighted average ordinary shares outstanding used to compute basic net income (loss) per share 46,365 44,831 43,421 Dilutive effect of employee share option and purchase plans 1,413 — — Shares used to compute diluted net income (loss) per share 47,778 $ 44,831 43,421 Net income (loss) per share—basic $ 2.00 $ (0.54 ) $ (0.54 ) Net income (loss) per share—diluted $ 1.94 $ (0.54 ) $ (0.54 ) |
BALANCE SHEET COMPONENTS_ (Tabl
BALANCE SHEET COMPONENTS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of balance sheet components | December 31, 2015 December 31, 2014 (In thousands) Accounts receivable, net: Accounts receivable $ 84,894 $ 65,594 Less: allowance for doubtful accounts (621 ) (672 ) $ 84,273 $ 64,922 Inventories: Raw materials $ 8,304 $ 5,725 Work-in-process 25,716 13,874 Finished goods 28,453 24,871 $ 62,473 $ 44,470 Other current assets: Prepaid expenses $ 9,948 $ 8,040 VAT receivable 7,946 6,117 Other 2,085 1,719 $ 19,979 $ 15,876 Property and equipment, net: Computer equipment and software $ 172,176 $ 124,370 Furniture and fixtures 3,886 3,256 Leasehold improvements 36,121 33,295 212,183 160,921 Less: Accumulated depreciation and amortization (112,165 ) (82,094 ) $ 100,018 $ 78,827 Deferred taxes and other long-term assets: Equity investments in private companies $ 7,739 $ 10,736 Deferred taxes 23,222 2,660 Other assets 2,754 4,475 $ 33,715 $ 17,871 Accrued liabilities: Payroll and related expenses $ 43,041 $ 31,254 Accrued expenses 26,431 21,171 Derivative contracts payable 1,157 3,562 Product warranty liability 1,206 1,508 Other 2,461 4,479 $ 74,296 $ 61,974 Other long-term liabilities: Income tax payable $ 20,023 $ 18,174 Deferred rent 1,950 2,337 Other 2,695 2,024 $ 24,668 $ 22,535 |
FAIR VALUE MEASUREMENTS_ (Table
FAIR VALUE MEASUREMENTS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of the fair value hierarchy of the Company's financial assets and liabilities measured at fair value | The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value as of December 31, 2015 . Level 1 Level 2 Total (in thousands) Certificates of deposit $ — $ 110,423 $ 110,423 U.S. Government and agency securities — 131,722 131,722 Commercial paper — 57,214 57,214 Corporate bonds — 105,482 105,482 Municipal bonds — 26,208 26,208 Foreign government bonds — 13,940 13,940 Total financial assets $ — $ 444,989 $ 444,989 Derivative contracts $ — $ 1,157 $ 1,157 Total financial liabilities $ — $ 1,157 $ 1,157 The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value as of December 31, 2014 . Level 1 Level 2 Total (in thousands) Money market funds $ 4,426 $ — $ 4,426 Certificates of deposit — 80,275 80,275 U.S. Government and agency securities — 99,114 99,114 Commercial paper — 23,019 23,019 Corporate bonds — 111,736 111,736 Municipal bonds — 13,104 13,104 Foreign government bonds — 6,790 6,790 Total financial assets $ 4,426 $ 334,038 $ 338,464 Derivative contracts $ — $ 3,562 $ 3,562 Total financial liabilities $ — $ 3,562 $ 3,562 |
INVESTMENTS_ (Tables)
INVESTMENTS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cash, cash equivalents and short-term investments | At December 31, 2015 and 2014 , the Company held cash and short-term investments classified as available-for-sale securities as follows: December 31, 2015 Amortized Unrealized Unrealized Estimated (in thousands) Cash $ 65,524 $ — $ — $ 65,524 Certificates of deposit 110,427 3 (7 ) 110,423 U.S. Government and agency securities 131,755 5 (38 ) 131,722 Commercial paper 57,214 4 (4 ) 57,214 Corporate bonds 105,900 2 (420 ) 105,482 Municipal bonds 26,283 — (75 ) 26,208 Foreign government bonds 13,988 — (48 ) 13,940 Total 511,091 14 (592 ) 510,513 Less amounts classified as cash and cash equivalents (263,196 ) (5 ) 2 (263,199 ) $ 247,895 $ 9 $ (590 ) $ 247,314 December 31, 2014 Amortized Unrealized Unrealized Estimated (in thousands) Cash $ 46,900 $ — $ — $ 46,900 Money market funds 4,426 — — 4,426 Certificates of deposit 80,304 1 (30 ) 80,275 U.S. Government and agency securities 99,236 9 (131 ) 99,114 Commercial paper 23,017 3 (1 ) 23,019 Corporate bonds 112,033 16 (313 ) 111,736 Municipal bonds 13,151 — (47 ) 13,104 Foreign government bonds 6,809 — (19 ) 6,790 Total 385,876 29 (541 ) 385,364 Less amounts classified as cash and cash equivalents (51,326 ) — — (51,326 ) $ 334,550 $ 29 $ (541 ) $ 334,038 |
Schedule of contractual maturities of short-term investments | The contractual maturities of short-term investments at December 31, 2015 and 2014 were as follows: December 31, 2015 December 31, 2014 Amortized Estimated Amortized Estimated (in thousands) Due in less than one year $ 148,041 $ 147,914 $ 129,150 $ 129,155 Due in one to three years 99,854 99,400 205,400 204,883 $ 247,895 $ 247,314 $ 334,550 $ 334,038 |
GOODWILL AND INTANGIBLE ASSET30
GOODWILL AND INTANGIBLE ASSETS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amounts of intangible assets | Carrying amount of goodwill at December 31, 2015 and December 31, 2014 (in thousands) $ 200,743 The carrying amounts of intangible assets as of December 31, 2015 were as follows: Gross Accumulated Net (in thousands) Licensed technology $ 2,554 $ (1,589 ) $ 965 Developed technology 69,828 (40,408 ) 29,420 Customer relationships 13,376 (11,607 ) 1,769 Total intangible assets $ 85,758 $ (53,604 ) $ 32,154 The carrying amounts of intangible assets as of December 31, 2014 were as follows: Gross Accumulated Net (in thousands) Licensed technology $ 2,344 $ (917 ) $ 1,427 Developed technology 56,064 (32,130 ) 23,934 Customer relationships 13,376 (10,434 ) 2,942 Total amortizable intangible assets 71,784 (43,481 ) 28,303 In-process research and development 13,764 — 13,764 Total intangible assets $ 85,548 $ (43,481 ) $ 42,067 |
Schedule of estimated future amortization expense from amortizable intangible assets | The estimated future amortization expense from amortizable intangible assets is as follows: (in thousands) 2016 $ 9,991 2017 9,928 2018 6,967 2019 3,532 2020 and thereafter 1,736 Total $ 32,154 |
DERIVATIVES AND HEDGING ACTIV31
DERIVATIVES AND HEDGING ACTIVITIES: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The notional amounts of outstanding forward contracts at December 31, 2015 and 2014 were as follows: Buy Contracts December 31, December 31, 2015 2014 (in thousands) Israeli shekel $ 98,744 $ 88,532 |
Schedule of fair value of derivative contracts | The fair value of derivative contracts as of December 31, 2015 and 2014 was as follows: Derivative Liabilities 2015 2014 (in thousands) Foreign exchange contracts designated as cash flow hedges $ 1,157 $ 3,562 Total derivatives designated as hedging instruments $ 1,157 $ 3,562 |
Schedule of designated derivative contracts as cash flow hedges and their impact on OCI | The following table represents the balance of derivative contracts designated as cash flow hedges as of December 31, 2015 and 2014 , and their impact on OCI for the year ended December 31, 2015 (in thousands): December 31, 2014 $ (3,646 ) Amount of loss recognized in OCI (effective portion) (1,075 ) Amount of loss reclassified from OCI to income (effective portion) 3,630 December 31, 2015 $ (1,091 ) |
Effect of derivative contracts on the condensed consolidated statement of operations | The impact of derivative contracts on total operating expenses in the years ended December 31, 2015 , 2014 , and 2013 was: Year Ended December 31, 2015 2014 2013 (in thousands) Gain (loss) on foreign exchange contracts designated as cash flow hedges $ (3,630 ) $ (1,239 ) $ 6,027 |
EMPLOYEE BENEFIT PLANS_ (Tables
EMPLOYEE BENEFIT PLANS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of severance pay details | The severance pay detail is as follows: December 31, 2015 2014 (in thousands) Accrued severance liability $ 12,464 $ 11,850 Severance assets 9,514 9,474 Unfunded portion $ 2,950 $ 2,376 |
COMMITMENTS AND CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under non-cancelable operating and capital leases | At December 31, 2015 , future minimum payments under non-cancelable operating and capital leases are as follows: Year Ended December 31, Capital Operating (in thousands) 2016 $ 502 $ 15,555 2017 — 12,390 2018 — 8,850 2019 — 9,367 2020 and thereafter — 3,068 Total minimum lease payments 502 $ 49,230 Less: Amount representing interest (11 ) Present value and current portion of capital lease obligations $ 491 |
Purchase Commitment, Excluding Long-term Commitment | At December 31, 2015 , the Company had the following non-cancelable purchase commitments: (in thousands) Non-cancelable purchase obligations, due in the next twelve months $ 74,246 Non-cancelable purchase obligations, due in the next two to three years 3,855 Non-cancelable purchase obligations, due in the next four to five years 180 $ 78,281 |
SHARE INCENTIVE PLANS_ (Tables)
SHARE INCENTIVE PLANS: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of share option awards activity under equity incentive plans | The following table summarizes the share option activity under all equity incentive plans: Options Outstanding Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2013 2,806,224 $ 30.14 Options granted 50,000 $ 32.64 Options exercised (265,990 ) $ 18.23 Options canceled (122,711 ) $ 69.01 Outstanding at December 31, 2014 2,467,523 $ 29.55 Options exercised (381,708 ) $ 15.84 Options canceled (57,220 ) $ 76.33 Outstanding at December 31, 2015 2,028,595 $ 30.81 |
Summary of restricted share units activity | The following table summarizes the restricted share unit activity under all equity incentive plans: Restricted Share Units Outstanding Number of Shares Weighted Average Grant Date Fair Value Non-vested restricted share units at December 31, 2013 1,974,454 $ 43.81 Restricted share units granted 970,970 $ 37.35 Restricted share units vested (827,396 ) $ 42.03 Restricted share units canceled (206,862 ) $ 40.91 Non-vested restricted share units at December 31, 2014 1,911,166 $ 41.61 Restricted share units granted 1,353,095 $ 45.98 Restricted share units vested (885,536 ) $ 41.00 Restricted share units canceled (173,642 ) $ 43.46 Non-vested restricted share units at December 31,2015 2,205,083 $ 44.39 |
Summary of ordinary shares reserved for future issuance under equity incentive plans | The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of December 31, 2015 : Number of Share options outstanding 2,028,595 Restricted share units outstanding 2,205,083 Shares authorized for future issuance 1,356,036 ESPP shares available for future issuance 486,313 Total shares reserved for future issuance as of December 31, 2015 6,076,027 |
Schedule of weighted average assumptions used to value share options granted | The following weighted average assumptions were used to value share options granted in connection with the Company's share incentive plans for the years ended December 31, 2015 , 2014 and 2013 : Employee Share Options Employee Share Purchase Plan Year ended December 31, Year ended December 31, 2015 (1) 2014 2013 2015 2014 2013 Dividend yield, % — — — — — — Expected volatility — 56.1 % 57.5 % 33.7 % 46.6 % 56.2 % Risk free interest rate — 1.98 % 1.54 % 0.10 % 0.05 % 0.07 % Expected life, years — 5.77 4.72 0.50 0.50 0.53 (1) There were no Employee Share Options granted in 2015. |
Summary of the distribution of total share-based compensation expense | The following table summarizes the distribution of total share-based compensation expense in the Consolidated Statements of Operations: Year ended December 31, 2015 2014 2013 (in thousands) Share-based compensation expense by caption: Cost of goods sold $ 2,366 $ 2,162 $ 1,828 Research and development 28,821 26,979 25,956 Sales and marketing 10,309 9,755 9,198 General and administrative 9,268 8,339 8,156 Total share-based compensation expense $ 50,764 $ 47,235 $ 45,138 Share-based compensation expense by type of award: Share options $ 6,680 $ 8,974 $ 12,460 ESPP 4,007 3,976 3,938 RSU 40,077 34,285 28,740 Total share-based compensation expense $ 50,764 $ 47,235 $ 45,138 |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of the changes in accumulated balances of other comprehensive income (loss) | The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the years ended December 31, 2015 and 2014 : Unrealized Gains / Losses on Available-for- Sale Securities Gains / Losses on Derivatives Total (in thousands) Balance at December 31, 2014 $ (374 ) $ (3,646 ) $ (4,020 ) Other comprehensive income/loss before reclassifications (220 ) (1,075 ) (1,295 ) Amounts reclassified from accumulated other comprehensive income/loss 16 3,630 3,646 Net current-period other comprehensive income/loss, net of taxes (204 ) 2,555 2,351 Balance at December 31, 2015 $ (578 ) $ (1,091 ) $ (1,669 ) Balance at December 31, 2013 $ (6 ) $ 1,396 $ 1,390 Other comprehensive income/loss before reclassifications (378 ) (6,281 ) (6,659 ) Amounts reclassified from accumulated other comprehensive income/loss 10 1,239 1,249 Net current-period other comprehensive income/loss, net of taxes (368 ) (5,042 ) (5,410 ) Balance at December 31, 2014 $ (374 ) $ (3,646 ) $ (4,020 ) |
Reclassification out of accumulated other comprehensive income | The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the year ended December 31, 2015 and 2014 : Details about Accumulated Other Comprehensive Income / Loss Components Amount Reclassified from Other Comprehensive Income / Loss Affected Line Item in the Statement of Operations Year ended December 31, 2015 2014 (in thousands) Losses on Derivatives $ 3,630 $ 1,239 Cost of revenues and Operating expenses 182 87 Cost of revenues 2,974 969 Research and development 209 92 Sales and marketing 265 91 General and administrative 3,630 1,239 Unrealized gains (losses) on Available-for-Sale Securities 16 10 Other income, net Total reclassifications for the period $ 3,646 $ 1,249 Total |
INCOME TAXES_ (Tables)
INCOME TAXES: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of income (loss) before income taxes | The components of income (loss) before (benefit from) provision for income taxes are as follows: Year ended December 31, 2015 2014 2013 (in thousands) United States $ (12,539 ) $ (10,260 ) $ (2,463 ) Foreign 87,121 4,518 (17,127 ) Income (loss) before income taxes $ 74,582 $ (5,742 ) $ (19,590 ) |
Schedule of the components of the provision for income taxes | The components of the (benefit from) provision for income taxes are as follows: Year ended December 31, 2015 2014 2013 (in thousands) Current: U.S. federal $ (1,578 ) $ 162 $ 1,989 State and local 284 163 508 Foreign 5,737 4,683 3,110 4,443 5,008 5,607 Deferred: U.S. federal $ — $ 12,140 $ (1,174 ) State and local — 1,539 (219 ) Foreign (22,755 ) (420 ) (462 ) (22,755 ) 13,259 (1,855 ) (Benefit from) provision for taxes on income $ (18,312 ) $ 18,267 $ 3,752 |
Schedule of significant deferred tax assets and liabilities | At December 31, 2015 and 2014 , significant deferred tax assets and liabilities are as follows: December 31, 2015 2014 (1) (in thousands) Deferred tax assets: Net operating loss and credit carryforwards $ 39,200 $ 41,070 Reserves and accruals 10,691 7,633 Depreciation and amortization 441 1,030 Other 10,747 8,556 Gross deferred tax assets 61,079 58,289 Valuation allowance (28,999 ) (46,220 ) Total deferred tax assets 32,080 12,069 Intangible assets (8,858 ) (11,551 ) Total deferred tax liabilities (8,858 ) (11,551 ) Net deferred tax assets $ 23,222 $ 518 (1) In connection with the preparation of our consolidated financial statements for the year ended December 31, 2015, the Company identified and corrected classification errors of certain items within the details of the gross deferred tax asset for 2014, resulting in an increase in the deferred tax asset for net operating loss and credit carryforwards of $15.5 million , and a decrease in deferred tax asset for depreciation and amortization of $15.5 million . The Company assessed the materiality of the error and concluded that it was not material to 2014. |
Schedule of reconciliation of the statutory federal income tax rate to the Company's effective tax rate | The reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: December 31, 2015 2014 2013 Tax at statutory rate 35.0 % 35.0 % 35.0 % State, net of federal benefit 0.2 (28.6 ) 2.9 Meals and entertainment 0.2 (1.3 ) (0.4 ) Tax at rates other than the statutory rate (42.5 ) 56.1 (35.7 ) Valuation allowance (22.0 ) (280.6 ) — Share-based compensation — (4.0 ) (4.6 ) Net change in tax reserves 6.0 (87.4 ) (15.9 ) Other, net (1.5 ) (7.3 ) (0.5 ) Provision for taxes (24.6 )% (318.1 )% (19.2 )% |
Schedule of reconciliation of unrecognized tax benefits, excluding penalties and interest | The following summarizes the activity related to the Company's unrecognized tax benefits: December 31, 2015 2014 2013 (in thousands) Gross unrecognized tax benefits, beginning of the period $ 18,037 $ 23,585 $ 9,716 Increases in tax positions for prior years 1,153 299 444 Decreases in tax positions for prior years (131 ) (10,339 ) (11 ) Increases in tax positions for current year 7,908 5,170 3,029 Increases in tax positions acquired or assumed in a business combination — — 11,037 Decreases due to statute of limitations (1,585 ) (678 ) (630 ) Gross unrecognized tax benefits, end of the period $ 25,382 $ 18,037 $ 23,585 |
GEOGRAPHIC INFORMATION AND RE37
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenues by geographic region | Revenues by geographic region are as follows: Year ended December 31, 2015 2014 2013 (in thousands) United States $ 300,674 $ 202,921 $ 175,491 China 89,466 65,204 67,517 Europe 93,666 72,181 51,973 Other Americas 24,692 19,760 16,869 Other Asia 149,642 103,583 78,586 Total revenue $ 658,140 $ 463,649 $ 390,436 |
Schedule of property and equipment, net by geographic location | Property and equipment, net by geographic location are as follows: December 31, 2015 2014 (in thousands) Israel $ 83,758 $ 69,004 United States 13,776 7,849 Other 2,484 1,974 Total property and equipment, net $ 100,018 $ 78,827 |
Schedule of revenues by product group and interconnect protocol | Revenues by product type and interconnect protocol are as follows: Year ended December 31, 2015 2014 2013 (in thousands) ICs $ 92,214 $ 70,840 $ 56,817 Boards 265,249 147,738 119,399 Switch systems 179,977 147,403 145,184 Cables, accessories and other 120,700 97,668 69,036 Total revenue $ 658,140 $ 463,649 $ 390,436 Year ended December 31, 2015 2014 2013 (in thousands) InfiniBand: EDR $ 39,009 $ — $ — FDR 347,760 264,785 200,300 QDR/DDR/SDR 63,745 72,890 107,995 Total 450,514 337,675 308,295 Ethernet 155,221 83,470 52,908 Other 52,405 42,504 29,233 Total revenue $ 658,140 $ 463,649 $ 390,436 |
OTHER INCOME (LOSS), NET_ (Tabl
OTHER INCOME (LOSS), NET: (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of other income, net | Other income (loss), net, is summarized in the following table: Year ended December 31, 2015 2014 2013 (in thousands) Interest income and gain on sale of investments, net $ 2,998 $ 1,952 $ 1,738 Impairment loss on equity investment in a private company (3,189 ) — — Foreign exchange loss (186 ) (245 ) (309 ) Other (147 ) (258 ) (201 ) Total other income (loss), net $ (524 ) $ 1,449 $ 1,228 |
THE COMPANY AND SUMMARY OF SI39
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Short-term investments, Restricted cash, Concentration of credit risk) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Short-term investments | |||
Minimum stated maturity period | 1 year | ||
Restricted cash and deposits | |||
Restricted cash | $ 0 | $ 3,604 | |
Hewlett Packard [Member] | Net sales revenue [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 14.00% | 11.00% | 13.00% |
Hewlett Packard [Member] | Accounts receivable [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 16.00% | 17.00% | |
Dell [Member] | Net sales revenue [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 11.00% | ||
I B M [Member] | Net sales revenue [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 10.00% | 17.00% | |
I B M [Member] | Accounts receivable [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 11.00% | ||
Ingram Micro | Accounts receivable [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 15.00% | 10.00% | |
Hon Hai Precision [Member] | Accounts receivable [Member] | |||
Concentration of credit risk | |||
Percentage of consolidated revenue by major customer | 11.00% |
THE COMPANY AND SUMMARY OF SI40
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Property and equipment) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Computers, software license rights and other electronic equipments [Member] | Minimum [Member] | |
Property and equipment, net: | |
Property, plant and equipment, useful life | 3 years |
Computers, software license rights and other electronic equipments [Member] | Maximum [Member] | |
Property and equipment, net: | |
Property, plant and equipment, useful life | 5 years |
Office equipment [Member] | Minimum [Member] | |
Property and equipment, net: | |
Property, plant and equipment, useful life | 7 years |
Office equipment [Member] | Maximum [Member] | |
Property and equipment, net: | |
Property, plant and equipment, useful life | 15 years |
Capitalized costs of fabrication masks [Member] | |
Property and equipment, net: | |
Property, plant and equipment, useful life | 12 months |
THE COMPANY AND SUMMARY OF SI41
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Product warranty, Advertising, AOCI, ESPP) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Product warranty | |||
Warranty period (up to) | 3 years | ||
Changes in the entity's liability for product warranty | |||
Balance, product warranty accrual | $ 1,932 | $ 3,633 | |
New warranties issued during the period | 2,529 | 3,072 | |
Reversal of warranty reserves | (480) | (197) | |
Settlements during the period | (2,340) | (4,576) | |
Balance, product warranty accrual | 1,641 | 1,932 | $ 3,633 |
Less: long term portion of product warranty liability | 435 | 424 | |
Product warranty liability | 1,206 | 1,508 | |
Advertising | |||
Advertising expense | 2,000 | 700 | 900 |
Accumulated other comprehensive income (loss) | |||
Change in unrealized gains/losses on derivative contracts, tax effect | $ 97 | $ 0 | $ 28 |
Employee stock option [Member] | |||
Accumulated other comprehensive income (loss) | |||
Expected term (in years) | 5 years 9 months 7 days | 4 years 8 months 19 days |
THE COMPANY AND SUMMARY OF SI42
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Basic and diluted earnings per share) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)segment$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net income (loss) | $ | $ 92,894 | $ (24,009) | $ (23,342) |
Basic and diluted shares: | |||
Weighted average ordinary shares outstanding used to compute basic net income (loss) per share | 46,365 | 44,831 | 43,421 |
Dilutive effect of employee share option and purchase plans | 1,413 | 0 | 0 |
Shares used to compute diluted net income (loss) per share | 47,778 | 44,831 | 43,421 |
Net income (loss) per share - basic (in USD per share) | $ / shares | $ 2 | $ (0.54) | $ (0.54) |
Net income (loss) per share - diluted (in USD per share) | $ / shares | $ 1.94 | $ (0.54) | $ (0.54) |
Segment reporting | |||
Number of reportable segments | segment | 1 | ||
Employee stock option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 500 | 700 | 800 |
THE COMPANY AND SUMMARY OF SI43
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Change in accounting principle) (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred Income Taxes and Other Assets, Current | $ 19,979 | $ 15,876 |
Deferred Income Taxes and Other Assets, Noncurrent | $ 33,715 | 17,871 |
New Accounting Pronouncement, Early Adoption, Effect [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred Income Taxes and Other Assets, Current | (2,300) | |
Deferred Income Taxes and Other Assets, Noncurrent | $ 2,300 |
BALANCE SHEET COMPONENTS_ (Deta
BALANCE SHEET COMPONENTS: (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable, net: | ||
Accounts receivable | $ 84,894 | $ 65,594 |
Less: allowance for doubtful accounts | (621) | (672) |
Accounts receivable, net | 84,273 | 64,922 |
Inventories: | ||
Raw materials | 8,304 | 5,725 |
Work-in-process | 25,716 | 13,874 |
Finished goods | 28,453 | 24,871 |
Inventories | 62,473 | 44,470 |
Other current assets: | ||
Prepaid expenses | 9,948 | 8,040 |
VAT receivable | 7,946 | 6,117 |
Other | 2,085 | 1,719 |
Other | 19,979 | 15,876 |
Property and equipment, net: | ||
Property and equipment, gross | 212,183 | 160,921 |
Less: Accumulated depreciation and amortization | (112,165) | (82,094) |
Property and equipment, net | 100,018 | 78,827 |
Deferred taxes and other long-term assets: | ||
Equity investments in private companies | 7,739 | 10,736 |
Deferred taxes | 23,222 | 2,660 |
Other assets | 2,754 | 4,475 |
Deferred taxes and other long-term assets | 33,715 | 17,871 |
Accrued liabilities: | ||
Payroll and related expenses | 43,041 | 31,254 |
Accrued expenses | 26,431 | 21,171 |
Derivative contracts payable | 1,157 | 3,562 |
Product warranty liability | 1,206 | 1,508 |
Other | 2,461 | 4,479 |
Accrued liabilities | 74,296 | 61,974 |
Other long-term liabilities: | ||
Income tax payable | 20,023 | 18,174 |
Deferred rent | 1,950 | 2,337 |
Other | 2,695 | 2,024 |
Other long-term liabilities | 24,668 | 22,535 |
Computers, software license rights and other electronic equipments [Member] | ||
Property and equipment, net: | ||
Property and equipment, gross | 172,176 | 124,370 |
Furniture and fixtures {Member] | ||
Property and equipment, net: | ||
Property and equipment, gross | 3,886 | 3,256 |
Leasehold improvements [Member] | ||
Property and equipment, net: | ||
Property and equipment, gross | $ 36,121 | $ 33,295 |
BUSINESS COMBINATION_ (Details)
BUSINESS COMBINATION: (Details) - USD ($) | Feb. 23, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Acquisition cost | $ 0 | $ 2,253,000 | $ 123,519,000 | |
Subsequent event [Member] | EZchip [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition cost | $ 811,000,000 |
FAIR VALUE MEASUREMENTS_ (Detai
FAIR VALUE MEASUREMENTS: (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Financial assets measured at fair value | ||
Fair value, assets, level 1 to level 2 transfers, amount | $ 0 | $ 0 |
Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Financial assets | 444,989,000 | 338,464,000 |
Financial liabilities | 1,157,000 | 3,562,000 |
Fair value, measurements, recurring basis | Money market funds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 4,426,000 | |
Fair value, measurements, recurring basis | Certificates of deposits [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 110,423,000 | 80,275,000 |
Fair value, measurements, recurring basis | U.S. Government and agency securities [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 131,722,000 | 99,114,000 |
Fair value, measurements, recurring basis | Commercial paper [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 57,214,000 | 23,019,000 |
Fair value, measurements, recurring basis | Corporate bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 105,482,000 | 111,736,000 |
Fair value, measurements, recurring basis | Municipal bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 26,208,000 | 13,104,000 |
Fair value, measurements, recurring basis | Foreign government bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 13,940,000 | 6,790,000 |
Fair value, measurements, recurring basis | Foreign exchange contract [Member] | ||
Financial assets measured at fair value | ||
Financial liabilities | 1,157,000 | 3,562,000 |
Fair value, measurements, recurring basis | Level 1 [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 4,426,000 | |
Fair value, measurements, recurring basis | Level 1 [Member] | Money market funds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 4,426,000 | |
Fair value, measurements, recurring basis | Level 2 [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 444,989,000 | 334,038,000 |
Financial liabilities | 1,157,000 | 3,562,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Money market funds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 0 | |
Fair value, measurements, recurring basis | Level 2 [Member] | Certificates of deposits [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 110,423,000 | 80,275,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | U.S. Government and agency securities [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 131,722,000 | 99,114,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Commercial paper [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 57,214,000 | 23,019,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Corporate bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 105,482,000 | 111,736,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Municipal bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 26,208,000 | 13,104,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Foreign government bonds [Member] | ||
Financial assets measured at fair value | ||
Financial assets | 13,940,000 | 6,790,000 |
Fair value, measurements, recurring basis | Level 2 [Member] | Foreign exchange contract [Member] | ||
Financial assets measured at fair value | ||
Financial liabilities | $ 1,157,000 | $ 3,562,000 |
INVESTMENTS_ (Details)
INVESTMENTS: (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortized Cost | ||
Amortized cost | $ 511,091 | $ 385,876 |
Less amounts classified as cash and cash equivalents | (263,199) | 51,326 |
Available-for-sale securities, amortized cost basis | 247,895 | 334,550 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 14 | 29 |
Available for sale securities accumulated gross unrealized gain before tax less cash and cash equivalents | 9 | 29 |
Unrealized losses | (592) | (541) |
Available for sale securities accumulated gross unrealized loss before tax less cash and cash equivalents | (590) | (541) |
Estimated Fair Value | ||
Short term investments, fair value | 510,513 | 385,364 |
Available-for-sale securities | 247,314 | 334,038 |
Realized gains (losses) on the sale of marketable securities | 3,000 | (400) |
Cash [Member] | ||
Amortized Cost | ||
Amortized cost | 65,524 | 46,900 |
Estimated Fair Value | ||
Short term investments, fair value | 65,524 | 46,900 |
Money market funds [Member] | ||
Amortized Cost | ||
Amortized cost | 4,426 | |
Estimated Fair Value | ||
Short term investments, fair value | 4,426 | |
Certificates of deposits [Member] | ||
Amortized Cost | ||
Amortized cost | 110,427 | 80,304 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 3 | 1 |
Unrealized losses | (7) | (30) |
Estimated Fair Value | ||
Short term investments, fair value | 110,423 | 80,275 |
U.S. Government and agency securities [Member] | ||
Amortized Cost | ||
Amortized cost | 131,755 | 99,236 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 5 | 9 |
Unrealized losses | (38) | (131) |
Estimated Fair Value | ||
Short term investments, fair value | 131,722 | 99,114 |
Commercial paper [Member] | ||
Amortized Cost | ||
Amortized cost | 57,214 | 23,017 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 4 | 3 |
Unrealized losses | (4) | (1) |
Estimated Fair Value | ||
Short term investments, fair value | 57,214 | 23,019 |
Corporate bonds [Member] | ||
Amortized Cost | ||
Amortized cost | 105,900 | 112,033 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 2 | 16 |
Unrealized losses | (420) | (313) |
Estimated Fair Value | ||
Short term investments, fair value | 105,482 | 111,736 |
Municipal bonds [Member] | ||
Amortized Cost | ||
Amortized cost | 26,283 | 13,151 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 0 | 0 |
Unrealized losses | (75) | (47) |
Estimated Fair Value | ||
Short term investments, fair value | 26,208 | 13,104 |
Foreign government bonds [Member] | ||
Amortized Cost | ||
Amortized cost | 13,988 | 6,809 |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 0 | 0 |
Unrealized losses | (48) | (19) |
Estimated Fair Value | ||
Short term investments, fair value | 13,940 | 6,790 |
Cash and cash equivalents [Member] | ||
Amortized Cost | ||
Less amounts classified as cash and cash equivalents | (263,196) | (51,326) |
Available-for-sale Securities, Gross Unrealized Gain (Loss) [Abstract] | ||
Unrealized gains | 5 | 0 |
Unrealized losses | $ (2) | $ 0 |
INVESTMENTS_ (Details 2)
INVESTMENTS: (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Amortized Cost | ||
Due in less than one year | $ 148,041 | $ 129,150 |
Due in one to three years | 99,854 | 205,400 |
Estimated Fair Value | ||
Due in less than one year | 147,914 | 129,155 |
Due in one to three years | 99,400 | 204,883 |
Available-for-sale securities, amortized cost basis | 247,895 | 334,550 |
Estimated fair value | 247,314 | 334,038 |
Investment in a privately-held companies accounted for under the cost method | 7,700 | $ 10,700 |
Impairment loss on equity investment in a private company | $ (3,189) |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Changes in the carrying amount of goodwill | ||
Goodwill | $ 200,743 | $ 200,743 |
INTANGIBLE ASSETS_ (Finite-live
INTANGIBLE ASSETS: (Finite-lived intangible assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | $ 85,758 | $ 85,548 | |
Accumulated amortization | (53,604) | (43,481) | |
Net carrying value of amortizable intangible assets | 32,154 | 42,067 | |
Amortization expense of intangible assets | 10,100 | 12,200 | $ 14,000 |
Licensing agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | 2,554 | 2,344 | |
Accumulated amortization | (1,589) | (917) | |
Net carrying value of amortizable intangible assets | 965 | 1,427 | |
Developed technology rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | 69,828 | 56,064 | |
Accumulated amortization | (40,408) | (32,130) | |
Net carrying value of amortizable intangible assets | 29,420 | 23,934 | |
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | 13,376 | 13,376 | |
Accumulated amortization | (11,607) | (10,434) | |
Net carrying value of amortizable intangible assets | $ 1,769 | 2,942 | |
In-process research and development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | 13,764 | ||
Accumulated amortization | 0 | ||
Net carrying value of amortizable intangible assets | 13,764 | ||
Finite lived intangible assets excluding in process research and development [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value of amortizable intangible assets | 71,784 | ||
Accumulated amortization | (43,481) | ||
Net carrying value of amortizable intangible assets | $ 28,303 |
INTANGIBLE ASSETS_ (Finite-li51
INTANGIBLE ASSETS: (Finite-lived intangible assets maturity) (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
2,016 | $ 9,991 |
2,017 | 9,928 |
2,018 | 6,967 |
2,019 | 3,532 |
2,020 | 1,736 |
Total | $ 32,154 |
DERIVATIVES AND HEDGING ACTIV52
DERIVATIVES AND HEDGING ACTIVITIES: (Details) - Foreign currency forward contract [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Buy Contracts | |||
Israeli shekel | $ 98,744 | $ 88,532 | |
Derivative Liabilities Reported in Accrued Liabilities | |||
Foreign exchange contracts designated as cash flow hedges | 1,157 | 3,562 | |
Total derivatives designated as hedging instruments | 1,157 | 3,562 | |
Balance of designated derivative contracts as cash flow hedges and their impact on OCI | |||
Balance at the beginning of the period | (3,646) | ||
Derivative instruments, loss recognized in OCI (effective portion) | (1,075) | ||
Derivative instruments, loss reclassified from accumulated OCI into income (effective portion) | 3,630 | ||
Balance at the end of the period | $ (1,091) | (3,646) | |
Expected time to realize the accumulated OCI balance related to foreign exchange contracts | 12 months | ||
Amount reclassified from other comprehensive income / loss [Member] | |||
Balance of designated derivative contracts as cash flow hedges and their impact on OCI | |||
Gain (loss) on foreign exchange contracts designated as cash flow hedges | $ (3,630) | $ (1,239) | $ 6,027 |
EMPLOYEE BENEFIT PLANS_ (Detail
EMPLOYEE BENEFIT PLANS: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Severance pay details | |||
Accrued severance liability | $ 12,464 | $ 11,850 | |
Severance assets | 9,514 | 9,474 | |
Unfunded portion | $ 2,950 | 2,376 | |
Company's contribution as a percentage of employee monthly salary to insurance policy or pension fund | 8.30% | ||
Payments from Company to employee | no | ||
Pretax savings plan under 401 (k) of the Internal Revenue Code [Member] | |||
Severance payments | |||
Employer contribution limit per calendar year (as a percent of base salary) | 4.00% | ||
Employee match contributions | $ 1,200 | 900 | $ 800 |
Israeli postemployment benefit plan [Member] | |||
Severance pay details | |||
Severance pay expenses | $ 7,600 | 6,800 | 6,100 |
Company's contribution as a percentage of employee monthly salary to pension contribution plan | 6.00% | ||
Defined pension contribution plan expenses | $ 5,700 | $ 4,900 | $ 4,500 |
COMMITMENTS AND CONTINGENCIES54
COMMITMENTS AND CONTINGENCIES: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases | |||
Lease expiration date | Dec. 31, 2021 | ||
Rent expense of office space and motor vehicles under operating leases | $ 10,500 | $ 9,900 | $ 8,900 |
Property and equipment, gross under capital lease agreements | 500 | $ 1,600 | |
Future minimum payments under non-cancelable capital leases | |||
2,016 | 502 | ||
2,017 | 0 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2020 and thereafter | 0 | ||
Total minimum lease payments | 502 | ||
Less: Amount representing interest | (11) | ||
Present value of capital lease obligations | 491 | ||
Future minimum payments under non-cancelable operating leases | |||
2,016 | 15,555 | ||
2,017 | 12,390 | ||
2,018 | 8,850 | ||
2,019 | 9,367 | ||
2020 and thereafter | 3,068 | ||
Total minimum lease payments | 49,230 | ||
Purchase commitments | |||
Amount of non-cancelable purchase commitments expected to be paid within one year | 74,246 | ||
Amount of non-cancelable purchase commitments expected to be paid within two to three years | 3,855 | ||
Amount of non-cancelable purchase commitments expected to be paid within four to five years | 180 | ||
Amount of non-cancelable purchase commitments | $ 78,281 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Subsequent event) (Details) - USD ($) | Feb. 23, 2016 | Sep. 30, 2015 |
Subsequent event [Member] | ||
Business Acquisition [Line Items] | ||
Payments to acquire business | $ 811,000,000 | |
Business Acquisition, Effective Date of Acquisition | Feb. 23, 2016 | |
EZchip [Member] | ||
Business Acquisition [Line Items] | ||
Payments to acquire business | $ 811,000,000 | |
EZchip [Member] | Subsequent event [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Date of Acquisition Agreement | Sep. 30, 2015 | |
Business Acquisition, Effective Date of Acquisition | Feb. 23, 2016 | |
Fully committed debt financing | $ 280,000,000 |
SHARE INCENTIVE PLANS_ (Details
SHARE INCENTIVE PLANS: (Details) $ / shares in Units, $ in Millions | Jan. 01, 2016shares | Jan. 01, 2015shares | Jan. 01, 2014shares | Dec. 31, 2015USD ($)plan$ / sharesshares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013$ / shares |
Share option plans | ||||||
Number of share option plans | plan | 7 | |||||
Global plan [Member] | ||||||
Share option plans | ||||||
Maximum annual percentage increase in ordinary shares reserved for issuance | 2.00% | |||||
Number of additional shares authorized | 685,714 | 685,714 | 658,714 | 685,714 | ||
Global Share Incentive Assumption Plan 2010 [Member] | ||||||
Share option plans | ||||||
Number of additional shares authorized | 281,625 | 281,625 | 281,625 | 281,625 | ||
Employee stock option [Member] | ||||||
Share option plans | ||||||
Weighted average fair value of options granted (in USD per share) | $ / shares | $ 0 | $ 17.22 | $ 8.91 | |||
Total pretax intrinsic value of options exercised (in USD per share) | $ | $ 12 | $ 6 | ||||
Share value (in USD per share) | $ / shares | $ 42.14 | $ 42.73 | ||||
Total pretax intrinsic value of all outstanding options | $ | $ 40.2 | $ 51.4 | ||||
Total pretax intrinsic value of all exercisable options | $ | $ 39.9 | $ 50.1 | ||||
Weighted average remaining contractual life, options outstanding (in years) | 4 years 4 months | |||||
Number of exercisable options outstanding (in shares) | 1,938,383 | |||||
Weighted average exercise price, options exercisable (in USD per share) | $ / shares | $ 29.12 | |||||
Maximum [Member] | Global plan [Member] | ||||||
Share option plans | ||||||
Number of additional shares authorized | 15,474,018 |
SHARE INCENTIVE PLANS_ (Detai57
SHARE INCENTIVE PLANS: (Details 2) - Employee stock option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||
Options outstanding at the beginning of the period (in shares) | 2,467,523 | 2,806,224 |
Options granted (in shares) | 0 | 50,000 |
Options vested (in shares) | (381,708) | (265,990) |
Options canceled (in shares) | (57,220) | (122,711) |
Options outstanding at the end of the period (in shares) | 2,028,595 | 2,467,523 |
Weighted Average Exercise Price | ||
Weighted-average exercise price, options outstanding at the beginning of the period (in USD per share) | $ 29.55 | $ 30.14 |
Weighted-average exercise price, options granted (in USD per share) | 32.64 | |
Weighted-average exercise price, options exercised (in USD per share) | 15.84 | 18.23 |
Weighted-average exercise price, options canceled (in USD per share) | 76.33 | 69.01 |
Weighted-average exercise price, options outstanding at the end of the period (in USD per share) | $ 30.81 | $ 29.55 |
SHARE INCENTIVE PLANS_ (Detai58
SHARE INCENTIVE PLANS: (Details 3) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares | |||
Non vested restricted share units at the beginning of the period (in shares) | 1,911,166 | 1,974,454 | |
Restricted share units granted (in shares) | 1,353,095 | 970,970 | |
Restricted share units vested (in shares) | (885,536) | (827,396) | |
Restricted share units canceled (in shares) | (173,642) | (206,862) | |
Non vested restricted share units at the end of the period (in shares) | 2,205,083 | 1,911,166 | 1,974,454 |
Weighted Average Grant Date Fair Value | |||
Non vested restricted share units at the beginning of the period (in USD per share) | $ 41.61 | $ 43.81 | |
Restricted share units granted (in USD per share) | 45.98 | 37.35 | $ 49.05 |
Restricted share units vested (in USD per share) | 41 | 42.03 | |
Restricted share units cancelled (in USD per share) | 43.46 | 40.91 | |
Non vested restricted share units at the end of the period (in USD per share) | $ 44.39 | $ 41.61 | $ 43.81 |
Total intrinsic value of all outstanding restricted share units | $ 92.9 |
SHARE INCENTIVE PLANS_ (Detai59
SHARE INCENTIVE PLANS: (Details 4) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2012 | |
Ordinary shares reserved for future issuance under equity incentive plans | ||||
Shares outstanding | 2,028,595 | |||
Total shares reserved for future issuance (in shares) | 6,076,027 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Ordinary shares reserved for future issuance under equity incentive plans | ||||
Restricted share units outstanding | 2,205,083 | 1,911,166 | 1,974,454 | |
ESPP [Member] | ||||
Share-based compensation | ||||
Maximum employee base compensation contribution | 15.00% | |||
ESPP purchase price percentage of market price | 85.00% | |||
Maximum shares that can be issued and transferred | 2,585,712 | |||
Shares reserved for issuance pursuant to purchase rights under the ESPP | 1,085,712 | 1,500,000 | ||
Maximum value of ordinary shares issued per employee pursuant to purchase rights under the ESPP per calendar year | $ 25,000 | |||
Shares issued under share-based compensation plan | 364,746 | 394,915 | ||
Weighted-average exercise price, options granted (in USD per share) | $ 35.15 | $ 30.22 | ||
Employee stock option [Member] | ||||
Share-based compensation | ||||
Weighted-average exercise price, options granted (in USD per share) | $ 32.64 | |||
Weighted average assumptions | ||||
Expected volatility (as a percent) | 56.10% | 57.50% | ||
Risk-free interest rate (as a percent) | 1.98% | 1.54% | ||
Expected life (in years) | 5 years 9 months 7 days | 4 years 8 months 19 days | ||
Global plan [Member] | ||||
Ordinary shares reserved for future issuance under equity incentive plans | ||||
Shares authorized for future issuance | 1,356,036 | |||
ESPP [Member] | ||||
Ordinary shares reserved for future issuance under equity incentive plans | ||||
Shares authorized for future issuance | 486,313 | |||
Weighted average assumptions | ||||
Expected volatility (as a percent) | 33.70% | 46.60% | 56.20% | |
Risk-free interest rate (as a percent) | 0.10% | 0.05% | 0.07% | |
Expected life (in years) | 6 months | 6 months | 6 months 10 days |
SHARE INCENTIVE PLANS_ (Detai60
SHARE INCENTIVE PLANS: (Details 5) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based compensation expense | |||
Total share-based compensation expense | $ 50,764 | $ 47,235 | $ 45,138 |
Total unrecognized share-based compensation costs related to non-vested awards | $ 79,600 | ||
Weighted average period for recognition of unrecognized share-based compensation costs (in years) | 2 years 3 months 18 days | ||
Employee stock option [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | $ 6,680 | 8,974 | 12,460 |
ESPP [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | 4,007 | 3,976 | 3,938 |
Restricted Stock Units (RSUs) [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | 40,077 | 34,285 | 28,740 |
Cost of sales [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | 2,366 | 2,162 | 1,828 |
Research and development expense [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | 28,821 | 26,979 | 25,956 |
Sales and marketing [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | 10,309 | 9,755 | 9,198 |
General and administrative expense [Member] | |||
Share-based compensation expense | |||
Total share-based compensation expense | $ 9,268 | $ 8,339 | $ 8,156 |
ACCUMULATED OTHER COMPREHENSI61
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | $ (4,020) | ||
Amounts reclassified from accumulated other comprehensive income/loss | (3,646) | $ (1,249) | |
Net current-period other comprehensive income/loss, net of taxes | 2,351 | (5,410) | $ (1,404) |
Balance at the end of the period | (1,669) | (4,020) | |
Unrealized gains / losses on available-for-sale securities [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | (374) | (6) | |
Other comprehensive income/loss before reclassifications | (220) | (378) | |
Amounts reclassified from accumulated other comprehensive income/loss | 16 | 10 | |
Net current-period other comprehensive income/loss, net of taxes | (204) | (368) | |
Balance at the end of the period | (578) | (374) | (6) |
Gains/Losses on Derivatives [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | (3,646) | 1,396 | |
Other comprehensive income/loss before reclassifications | (1,075) | (6,281) | |
Amounts reclassified from accumulated other comprehensive income/loss | 3,630 | 1,239 | |
Net current-period other comprehensive income/loss, net of taxes | 2,555 | (5,042) | |
Balance at the end of the period | (1,091) | (3,646) | 1,396 |
Total [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at the beginning of the period | (4,020) | 1,390 | |
Other comprehensive income/loss before reclassifications | (1,295) | (6,659) | |
Amounts reclassified from accumulated other comprehensive income/loss | 3,646 | 1,249 | |
Net current-period other comprehensive income/loss, net of taxes | 2,351 | (5,410) | |
Balance at the end of the period | $ (1,669) | $ (4,020) | $ 1,390 |
ACCUMULATED OTHER COMPREHENSI62
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | $ 3,630 | $ 1,239 |
Amounts reclassified from accumulated other comprehensive income/loss | 3,646 | 1,249 |
Cost of revenues and operating expenses [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | 3,630 | 1,239 |
Cost of revenues [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | 182 | 87 |
Research and development expense [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | 2,974 | 969 |
Sales and marketing [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | 209 | 92 |
General and administrative expense [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Losses on derivatives | 265 | 91 |
Other nonoperating income (expense) [Member] | ||
Reclassifications out of accumulated other comprehensive income | ||
Unrealized gains (losses) on available-for-sale securities | $ 16 | $ 10 |
INCOME TAXES_ INCOME (LOSS) BE
INCOME TAXES: INCOME (LOSS) BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (12,539) | $ (10,260) | $ (2,463) |
Foreign | 87,121 | 4,518 | (17,127) |
Income (loss) before income taxes | $ 74,582 | $ (5,742) | $ (19,590) |
INCOME TAXES_ PROVISION FOR IN
INCOME TAXES: PROVISION FOR INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
U.S. federal | $ (1,578) | $ 162 | $ 1,989 |
State and local | 284 | 163 | 508 |
Foreign | 5,737 | 4,683 | 3,110 |
Current income tax expense (benefit) | 4,443 | 5,008 | 5,607 |
Deferred: | |||
U.S. federal | 0 | 12,140 | (1,174) |
State and local | 0 | 1,539 | (219) |
Foreign | (22,755) | (420) | (462) |
Deferred income tax expense (benefit) | (22,755) | 13,259 | (1,855) |
(Benefit from) provision for taxes on income | $ (18,312) | $ 18,267 | $ 3,752 |
INCOME TAXES_ DEFERRED TAXES A
INCOME TAXES: DEFERRED TAXES AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 39,200 | $ 41,070 |
Reserves and accruals | 10,691 | 7,633 |
Depreciation and amortization | 441 | 1,030 |
Other | 10,747 | 8,556 |
Gross deferred tax assets | 61,079 | 58,289 |
Valuation allowance | (28,999) | (46,220) |
Total deferred tax assets | 32,080 | 12,069 |
Intangible assets | (8,858) | (11,551) |
Total deferred tax liabilities | (8,858) | (11,551) |
Net deferred tax assets | $ 23,222 | $ 518 |
INCOME TAXES_ ADDITIONAL INFORM
INCOME TAXES: ADDITIONAL INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | |||||
Valuation allowance | $ (28,999) | $ (46,220) | |||
Unrecognized operating loss carryforwards | 17,900 | ||||
Undistributed earnings of foreign subsidiaries | $ 2,000 | ||||
Israel Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Years of cumulative pre-tax income | 3 years | ||||
Domestic Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 65,400 | ||||
State and Local Jurisdiction [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | 43,700 | ||||
Scenario, forecast [Member] | Unfavorable regulatory action [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Reduction to deferred tax assets | $ 1,300 | ||||
Israel Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Valuation allowance | $ (22,400) | ||||
Corporate income tax rate | 26.50% | ||||
Operating loss carryforwards | $ 55,000 | ||||
Israel Tax Authority [Member] | Subsequent event [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Corporate income tax rate | 25.00% | ||||
Denmark [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforwards | $ 10,800 | ||||
Operating Income (Loss) [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Reduction to deferred tax assets | $ 15,500 | ||||
Reduced Depreciation [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Reduction to deferred tax assets | $ 15,500 |
INCOME TAXES_ EFFECTIVE RATE RE
INCOME TAXES: EFFECTIVE RATE RECONCILIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate | 35.00% | 35.00% | 35.00% |
State, net of federal benefit | 0.20% | (28.60%) | 2.90% |
Meals and entertainment | 0.20% | (1.30%) | (0.40%) |
Tax at rates other than the statutory rate | (42.50%) | 56.10% | (35.70%) |
Valuation allowance | (22.00%) | (280.60%) | 0.00% |
Share-based compensation | (0.00%) | (4.00%) | (4.60%) |
Net change in tax reserves | 6.00% | (87.40%) | (15.90%) |
Other, net | (1.50%) | (7.30%) | (0.50%) |
Provision for taxes | (24.60%) | (318.10%) | (19.20%) |
Tax benefit to APIC | $ 0.1 | $ 0.3 |
INCOME TAXES_ TAX HOLIDAY (Deta
INCOME TAXES: TAX HOLIDAY (Details) - Israel Tax Authority [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||||
Corporate income tax rate | 26.50% | |||
Income tax holiday, aggregate dollar amount | $ 33 | $ 6.9 | $ 6.4 | |
Income tax holiday, income tax benefits per share (in USD per share) | $ 0.69 | $ 0.15 | $ 0.15 | |
Subsequent event [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Corporate income tax rate | 25.00% | |||
Yokneam [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax holiday period | 10 years | |||
Tax holiday inception date | 2,011 | |||
Yokneam [Member] | Maximum [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax holiday, termination date | 2,021 | |||
Tel Aviv [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax holiday period | 2 years | |||
Tax holiday inception date | 2,013 | |||
Income tax holiday reduced income tax rate after second year of tax holiday | 10.00% | |||
Tel Aviv [Member] | Minimum [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax holiday period for which reduced income tax rate is applicable after second year of tax holiday | 5 years | |||
Income tax holiday, termination date | 2,017 | |||
Tel Aviv [Member] | Maximum [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax holiday period for which reduced income tax rate is applicable after second year of tax holiday | 8 years | |||
Income tax holiday, termination date | 2,021 |
INCOME TAXES_ UNRECOGNIZED TAX
INCOME TAXES: UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||
Unrecognized tax benefits, beginning of year | $ 25,382 | $ 18,037 | $ 23,585 | $ 9,716 |
Increases in tax positions for prior years | 1,153 | 299 | 444 | |
Decreases in tax positions for prior years | (131) | (10,339) | (11) | |
Increases in tax positions for current year | 7,908 | 5,170 | 3,029 | |
Increases in tax positions acquired or assumed in a business combination | 0 | 0 | 11,037 | |
Decreases due to statute of limitations | (1,585) | (678) | (630) | |
Unrecognized tax benefits, end of year | 25,382 | 18,037 | 23,585 | |
Unrecognized tax benefits that would impact effective tax rate | 18,900 | 15,300 | 12,500 | |
Unrecognized tax benefits, income tax penalties and interest accrued | $ 1,200 | $ 1,000 | $ 600 | |
Minimum [Member] | Tax Authority Foreign and Domestic [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax year | 2,010 | |||
Minimum [Member] | Israel Tax Authority [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax year | 2,011 | |||
Maximum [Member] | Tax Authority Foreign and Domestic [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax year | 2,014 | |||
Maximum [Member] | Israel Tax Authority [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Open tax year | 2,014 | |||
Israel Tax Authority [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Corporate income tax rate | 26.50% | |||
Subsequent event [Member] | Israel Tax Authority [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Corporate income tax rate | 25.00% |
GEOGRAPHIC INFORMATION AND RE70
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Revenues by geographic region | |||
Total revenue | $ 658,140 | $ 463,649 | $ 390,436 |
United States [Member] | |||
Revenues by geographic region | |||
Total revenue | 300,674 | 202,921 | 175,491 |
China [Member] | |||
Revenues by geographic region | |||
Total revenue | 89,466 | 65,204 | 67,517 |
Europe [Member] | |||
Revenues by geographic region | |||
Total revenue | 93,666 | 72,181 | 51,973 |
Other Americas [Member] | |||
Revenues by geographic region | |||
Total revenue | 24,692 | 19,760 | 16,869 |
Other Asia [Member] | |||
Revenues by geographic region | |||
Total revenue | $ 149,642 | $ 103,583 | $ 78,586 |
GEOGRAPHIC INFORMATION AND RE71
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property and equipment, net by geographic location | ||
Total property and equipment, net | $ 100,018 | $ 78,827 |
Israel [Member] | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | 83,758 | 69,004 |
United States [Member] | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | 13,776 | 7,849 |
Other [Member] | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | $ 2,484 | $ 1,974 |
GEOGRAPHIC INFORMATION AND RE72
GEOGRAPHIC INFORMATION AND REVENUES BY PRODUCT GROUP: (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues by product group | |||
Total revenue | $ 658,140 | $ 463,649 | $ 390,436 |
ICs [Member] | |||
Revenues by product group | |||
Total revenue | 92,214 | 70,840 | 56,817 |
Boards [Member] | |||
Revenues by product group | |||
Total revenue | 265,249 | 147,738 | 119,399 |
Switch systems [Member] | |||
Revenues by product group | |||
Total revenue | 179,977 | 147,403 | 145,184 |
Cables, accessories and other [Member] | |||
Revenues by product group | |||
Total revenue | 120,700 | 97,668 | 69,036 |
InfiniBand | |||
Revenues by product group | |||
Total revenue | 450,514 | 337,675 | 308,295 |
EDR [Member] | |||
Revenues by product group | |||
Total revenue | 39,009 | 0 | 0 |
FDR [Member] | |||
Revenues by product group | |||
Total revenue | 347,760 | 264,785 | 200,300 |
QDR/DDR/SDR [Member] | |||
Revenues by product group | |||
Total revenue | 63,745 | 72,890 | 107,995 |
Ethernet [Member] | |||
Revenues by product group | |||
Total revenue | 155,221 | 83,470 | 52,908 |
Other [Member] | |||
Revenues by product group | |||
Total revenue | $ 52,405 | $ 42,504 | $ 29,233 |
OTHER INCOME (LOSS), NET_ (Deta
OTHER INCOME (LOSS), NET: (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other income, net | |||
Interest income and gain on sale of investments, net | $ 2,998 | $ 1,952 | $ 1,738 |
Impairment loss on equity investment in a private company | (3,189) | ||
Foreign exchange loss | (186) | (245) | (309) |
Other | (147) | (258) | (201) |
Total other income (loss), net | $ (524) | $ 1,449 | $ 1,228 |
SUBSEQUENT EVENT_ (Details)
SUBSEQUENT EVENT: (Details) | Feb. 23, 2016USD ($) | Sep. 30, 2015USD ($) |
Subsequent event [Member] | ||
Subsequent Event [Line Items] | ||
Payments to acquire business | $ 811,000,000 | |
Business Acquisition, Effective Date of Acquisition | Feb. 23, 2016 | |
Fully committed debt financing | $ 280,000,000 | |
Additional borrowing capacity | $ 100,000,000 | |
Repayment period | 3 years | |
Pledge, percentage equity interest | 1 | |
Long-term Debt, Maturities, Repayment Terms | Quarterly amortization payments on the term loans of: (i) 2.50%% of the original principal amount for the four fiscal quarters beginning on June 2016 and ending on March 2017, (ii)3.75% of the original principal amount for the four fiscal quarters beginning on June 2017 and ending on March 2018 and (iii) 6.25% of the original principal amount for the three fiscal quarters beginning on June 2018 and ending on December 2018. On the maturity date, the Company will be required to pay all remaining outstanding amounts under the term loans. | |
Subsequent event [Member] | Base Rate [Member] | ||
Subsequent Event [Line Items] | ||
Description of variable rate basis | Base rate (which is the highest of (i) the administrative agent’s prime rate, (ii) one-half of 1.00% in excess of the overnight federal funds rate, and (iii) 1.00% in excess of the one-month Eurodollar rate), plus an applicable margin | |
Stated interest rate | 1.00% | |
Basis spread on variable rate | 0.50% | |
Subsequent event [Member] | Eurodollar [Member] | ||
Subsequent Event [Line Items] | ||
Description of variable rate basis | Eurodollar rate plus an applicable margin | |
Subsequent event [Member] | Minimum [Member] | Base Rate [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 0.25% | |
Subsequent event [Member] | Minimum [Member] | Eurodollar [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.25% | |
Subsequent event [Member] | Maximum [Member] | Base Rate [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Subsequent event [Member] | Maximum [Member] | Eurodollar [Member] | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 2.00% | |
June 2016 To March 2017 [Member] | ||
Subsequent Event [Line Items] | ||
Periodic quarterly principal payment rate | 0.0250 | |
Debt Instrument, Frequency of Periodic Payment | four fiscal quarters | |
Debt Instrument, Maturity Date Range, Start | Jun. 1, 2016 | |
Debt Instrument, Maturity Date Range, End | Mar. 31, 2017 | |
June 2017 To March 2018 [Member] | ||
Subsequent Event [Line Items] | ||
Periodic quarterly principal payment rate | 0.0375 | |
Debt Instrument, Frequency of Periodic Payment | four fiscal quarters | |
Debt Instrument, Maturity Date Range, Start | Jun. 1, 2017 | |
Debt Instrument, Maturity Date Range, End | Mar. 31, 2018 | |
June 2018 To December 2018 [Member] | ||
Subsequent Event [Line Items] | ||
Periodic quarterly principal payment rate | 0.0625 | |
Debt Instrument, Frequency of Periodic Payment | three fiscal quarters | |
Debt Instrument, Maturity Date Range, Start | Jun. 1, 2018 | |
Debt Instrument, Maturity Date Range, End | Dec. 31, 2018 | |
After December 2018 [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Frequency of Periodic Payment | On the maturity date, the Company will be required to pay all remaining outstanding amounts under the term loans. | |
EZchip [Member] | ||
Subsequent Event [Line Items] | ||
Payments to acquire business | $ 811,000,000 | |
EZchip [Member] | Subsequent event [Member] | ||
Subsequent Event [Line Items] | ||
Business Acquisition, Date of Acquisition Agreement | Sep. 30, 2015 | |
Business Acquisition, Effective Date of Acquisition | Feb. 23, 2016 |
SCHEDULE II - CONSOLIDATED VA75
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Activity in valuation and qualifying accounts | |||
Balance at beginning of year | $ 46,892 | $ 28,004 | $ 28,757 |
Charged (credited) to costs and expenses | (16,491) | 18,888 | (79) |
Deductions (recovery) | (781) | 0 | (674) |
Balance at end of year | 29,620 | 46,892 | 28,004 |
Allowance for doubtful accounts [Member] | |||
Activity in valuation and qualifying accounts | |||
Balance at beginning of year | 672 | 639 | 639 |
Charged (credited) to costs and expenses | (51) | 33 | |
Balance at end of year | 621 | 672 | 639 |
Allowance for sales returns and adjustments [Member] | |||
Activity in valuation and qualifying accounts | |||
Balance at beginning of year | 0 | 79 | |
Charged (credited) to costs and expenses | (79) | ||
Balance at end of year | 0 | ||
Income tax valuation allowance [Member] | |||
Activity in valuation and qualifying accounts | |||
Balance at beginning of year | 46,220 | 27,365 | 28,039 |
Charged (credited) to costs and expenses | (16,440) | 18,855 | |
Deductions (recovery) | (781) | (674) | |
Balance at end of year | $ 28,999 | $ 46,220 | $ 27,365 |