Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 14, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-33299 | ||
Entity Registrant Name | MELLANOX TECHNOLOGIES, LTD. | ||
Entity Incorporation, State or Country Code | L3 | ||
Entity Tax Identification Number | 98-0233400 | ||
Entity Address, Address Line One | Beit Mellanox | ||
Entity Address, City or Town | Yokneam | ||
Entity Address, Country | IL | ||
Entity Address, Postal Zip Code | 20692 | ||
City Area Code | 972-4 | ||
Local Phone Number | 909-7200 | ||
Title of 12(b) Security | Ordinary shares, nominal value NIS 0.0175 per share | ||
Trading Symbol | MLNX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6.1 | ||
Entity Common Stock, Shares Outstanding | 56,062,249 | ||
Documents Incorporated by Reference | Portions of the registrant’s Definitive Proxy Statement, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the 2020 Annual General Meeting of Shareholders of Mellanox Technologies, Ltd. (hereinafter referred to as the “Proxy Statement”) or amendment to this Form 10-K (hereinafter referred to as the “Amendment”) are incorporated by reference in Part III of this report. Such Proxy Statement or Amendment will be filed with the Securities and Exchange Commission not later than 120 days after the conclusion of the registrant's fiscal year ended December 31, 2019. | ||
Entity Central Index Key | 0001356104 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 77,579 | $ 56,766 |
Short-term investments | 798,318 | 381,724 |
Accounts receivable, net | 229,873 | 150,625 |
Inventories | 98,030 | 104,381 |
Other current assets | 17,430 | 16,942 |
Total current assets | 1,221,230 | 710,438 |
Property and equipment, net | 113,568 | 105,334 |
Intangible assets, net | 152,053 | 179,328 |
Goodwill | 473,916 | 473,916 |
Deferred taxes and other long-term assets | 159,022 | 118,182 |
Total assets | 2,119,789 | 1,587,198 |
Current liabilities: | ||
Accounts payable | 105,328 | 70,336 |
Accrued liabilities | 196,527 | 121,878 |
Deferred revenue | 24,962 | 20,558 |
Total current liabilities | 326,817 | 212,772 |
Deferred revenue | 27,481 | 18,665 |
Other long-term liabilities | 109,646 | 54,113 |
Total liabilities | 463,944 | 285,550 |
Commitments and Contingencies (Note 9) | ||
Shareholders’ equity | ||
Ordinary shares: NIS 0.0175 par value, 200,000 shares authorized, 55,764 and 53,918 shares issued and outstanding at December 31, 2019 and 2018, respectively | 242 | 233 |
Additional paid-in capital | 1,126,829 | 982,677 |
Accumulated other comprehensive income (loss) | 2,587 | (1,051) |
Retained earnings | 526,187 | 319,789 |
Total shareholders’ equity | 1,655,845 | 1,301,648 |
Total liabilities and shareholders' equity | $ 2,119,789 | $ 1,587,198 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in NIS per share) | ₪ 0.0175 | ₪ 0.0175 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 55,764,000 | 53,918,000 |
Common stock, shares outstanding (in shares) | 55,764,000 | 53,918,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Total revenues | $ 1,330,576 | $ 1,088,743 | $ 863,893 |
Cost of revenues | 464,125 | 388,573 | 300,450 |
Gross profit | 866,451 | 700,170 | 563,443 |
Operating expenses: | |||
Research and development | 414,875 | 360,344 | 365,878 |
Sales and marketing | 162,726 | 148,553 | 150,457 |
General and administrative | 79,473 | 68,870 | 52,170 |
Restructuring and impairment charges | 1,457 | 10,329 | 12,019 |
Total operating expenses | 658,531 | 588,096 | 580,524 |
Income (loss) from operations | 207,920 | 112,074 | (17,081) |
Interest and other, net | 16,009 | 137 | (4,822) |
Income (loss) before taxes on income | 223,929 | 112,211 | (21,903) |
Provision for (benefit from) taxes on income | 18,834 | (22,047) | (2,478) |
Net income (loss) | $ 205,095 | $ 134,258 | $ (19,425) |
Net income (loss) per share - basic (in USD per share) | $ 3.73 | $ 2.54 | $ (0.39) |
Net income (loss) per share - diluted (in USD per share) | $ 3.62 | $ 2.46 | $ (0.39) |
Shares used in computing net income (loss) per share: | |||
Basic (in shares) | 54,946 | 52,863 | 50,310 |
Diluted (in shares) | 56,662 | 54,646 | 50,310 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 205,095 | $ 134,258 | $ (19,425) |
Other comprehensive income (loss), net of tax: | |||
Change in unrealized gains on available-for-sale securities, net | 1,986 | 234 | 929 |
Change in unrealized gains (losses) on derivative contracts, net (net of tax effect of $79, ($171) and $105) | 2,955 | ||
Change in unrealized gains (losses) on derivative contracts, net (net of tax effect of $79, ($171) and $105) | 2,955 | (2,903) | 1,617 |
Other comprehensive income (loss) | 4,941 | (2,669) | 2,546 |
Total comprehensive income (loss), net of tax | $ 210,036 | $ 131,589 | $ (16,879) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gains/losses on derivative contracts, tax effect | $ 79 | ||
Change in unrealized gains/losses on derivative contracts, tax effect | $ (171) | $ 105 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2016 | 49,075,606 | ||||
Beginning balance at Dec. 31, 2016 | $ 975,730 | $ 209 | $ 774,605 | $ (928) | $ 201,844 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (19,425) | (19,425) | |||
Unrealized gains on available-for-sale securities, net of taxes | 929 | 929 | |||
Unrealized gains (losses) on derivative contracts, net of taxes | 1,617 | 1,617 | |||
Share-based compensation | 68,864 | 68,864 | |||
Issuances of shares through employee equity incentive plans (in shares) | 1,843,168 | ||||
Issuances of shares through employee equity incentive plans | 7,642 | $ 9 | 7,633 | ||
Issuance of shares through employee share purchase plan (in shares) | 568,876 | ||||
Issuance of shares through employee share purchase plan | 22,091 | $ 3 | 22,088 | ||
Ending balance (in shares) at Dec. 31, 2017 | 51,487,650 | ||||
Ending balance at Dec. 31, 2017 | 1,057,448 | $ 221 | 873,979 | 1,618 | 181,630 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 134,258 | 134,258 | |||
Unrealized gains on available-for-sale securities, net of taxes | 234 | 234 | |||
Unrealized gains (losses) on derivative contracts, net of taxes | (2,903) | (2,903) | |||
Share-based compensation | 71,342 | 71,342 | |||
Issuances of shares through employee equity incentive plans (in shares) | 1,940,435 | ||||
Issuances of shares through employee equity incentive plans | 14,518 | $ 10 | 14,508 | ||
Issuance of shares through employee share purchase plan (in shares) | 490,123 | ||||
Issuance of shares through employee share purchase plan | 22,850 | $ 2 | 22,848 | ||
Ending balance (in shares) at Dec. 31, 2018 | 53,918,208 | ||||
Ending balance at Dec. 31, 2018 | 1,301,648 | $ 233 | 982,677 | (1,051) | 319,789 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 205,095 | 205,095 | |||
Unrealized gains on available-for-sale securities, net of taxes | 1,986 | 683 | 1,303 | ||
Unrealized gains (losses) on derivative contracts, net of taxes | 2,955 | 2,955 | |||
Share-based compensation | 112,118 | 112,118 | |||
Issuances of shares through employee equity incentive plans (in shares) | 1,535,774 | ||||
Issuances of shares through employee equity incentive plans | 7,599 | $ 7 | 7,592 | ||
Issuance of shares through employee share purchase plan (in shares) | 309,723 | ||||
Issuance of shares through employee share purchase plan | 24,444 | $ 2 | 24,442 | ||
Ending balance (in shares) at Dec. 31, 2019 | 55,763,705 | ||||
Ending balance at Dec. 31, 2019 | $ 1,655,845 | $ 242 | $ 1,126,829 | $ 2,587 | $ 526,187 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands | Jan. 01, 2018USD ($) |
Retained Earnings | |
Cumulative, tax effect | $ 600 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 205,095 | $ 134,258 | $ (19,425) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 96,870 | 101,590 | 103,821 |
Deferred income taxes | 14,154 | (26,697) | (2,150) |
Share-based compensation | 112,118 | 71,342 | 68,864 |
Gains on short-term investments, net | (14,963) | (5,278) | (3,460) |
Gain on investments in privately-held companies | (9,569) | 0 | 0 |
Impairment charges and loss on disposal of property and equipment | 3,213 | 4,754 | 12,019 |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable, net | (79,248) | 3,588 | (12,175) |
Inventories | 1,297 | (43,301) | (887) |
Prepaid expenses and other assets | 17,281 | (2,650) | (681) |
Accounts payable | 33,812 | 10,486 | 170 |
Accrued liabilities and other liabilities | 44,730 | 16,765 | 15,216 |
Net cash provided by operating activities | 424,790 | 264,857 | 161,312 |
Cash flows from investing activities: | |||
Purchase of severance-related insurance policies | 0 | (1,203) | (1,312) |
Purchase of short-term investments | (890,545) | (395,560) | (188,745) |
Proceeds from sales and maturities of short-term investments | 490,900 | 230,629 | 252,211 |
Purchase of property and equipment, net of proceeds from sales | (37,791) | (33,099) | (41,376) |
Purchase of intangible assets | (4,920) | (6,535) | (2,843) |
Proceeds from sale of investments in privately-held companies | 16,887 | 0 | 0 |
Purchase of investments in privately-held companies | (8,057) | (12,500) | (15,021) |
Acquisitions, net of cash acquired | 0 | (7,379) | (872) |
Net cash provided by (used in) investing activities | (433,526) | (225,647) | 2,042 |
Cash flows from financing activities: | |||
Principal payments on term debt | 0 | (74,000) | (172,000) |
Principal payments on intangible assets obligations | (10,378) | (8,426) | (7,369) |
Proceeds from issuances of ordinary shares through employee equity incentive plans | 32,043 | 37,368 | 29,733 |
Net cash provided by (used in) financing activities | 21,665 | (45,058) | (149,636) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 12,929 | (5,848) | 13,718 |
Cash, cash equivalents, and restricted cash at beginning of period | 64,650 | 70,498 | 56,780 |
Cash, cash equivalents, and restricted cash at end of period | 77,579 | 64,650 | 70,498 |
Supplemental disclosures of cash flow information | |||
Interest paid | 0 | 577 | 5,384 |
Income taxes paid | 2,464 | 2,174 | 1,218 |
Supplemental disclosure of non-cash investing and financing activities | |||
Intangible assets financed with debt | 28,594 | 2,585 | 12,981 |
Unpaid property and equipment | 2,835 | 1,537 | 3,962 |
Transfer from inventory to property and equipment | $ 5,054 | $ 3,577 | $ 1,753 |
THE COMPANY AND SUMMARY OF SIGN
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
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. Pending Merger with NVIDIA Corporation On March 10, 2019, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with NVIDIA Corporation, a Delaware corporation ("NVIDIA"), NVIDIA International Holdings Inc., a Delaware corporation and wholly owned subsidiary of NVIDIA ("Parent") and Teal Barvaz Ltd., a wholly owned subsidiary of Parent organized under the laws of the State of Israel and wholly owned subsidiary of Parent ("Merger Sub"). NVIDIA has agreed to guarantee the payment and performance obligations of Parent under the Merger Agreement. The Merger Agreement and the Merger (as defined below) have been approved by the boards of directors of the Company, NVIDIA, Parent and Merger Sub. The Merger Agreement provides that, upon the terms and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into the Company (the "Merger") in accordance with Sections 314-327 of the Companies Law 5759-1999 of the State of Israel, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each ordinary share, par value NIS 0.0175 per share, of the Company (a "Company Share") issued and outstanding immediately prior to the Effective Time, other than any shares owned by the Company, Parent and their respective subsidiaries or any shares held in the Company’s treasury, will be deemed to have been transferred to the Parent in exchange for the right to receive $125.00 in cash, without interest and subject to applicable withholding taxes. The Merger Agreement contains customary representations, warranties and covenants. The consummation of the Merger is conditioned on the receipt of the approval of the Company’s shareholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. In June 2019, the Company’s shareholders approved the consummation of the Merger and the Company received regulatory approvals for the Merger from Mexico in July 2019 and from the European Commission in December 2019. In addition, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with the proposed acquisition expired in May 2019. Discussions with State Administration for Market Regulation, the China regulatory agency, are progressing and the Company believes the closing will likely occur in the early part of calendar 2020. The Merger Agreement contains certain customary termination rights by either the Company or Parent, including if the Merger is not consummated by December 10, 2019 (the "Outside Date"), subject to two three-month extensions in order to obtain required regulatory approvals. Pursuant to the first of those three-month extensions, the Outside Date has been extended to March 10, 2020. If the Merger Agreement is terminated under certain circumstances, including termination by the Company to enter into a superior proposal, a termination by Parent following a change of the Company’s board of directors’ recommendation or a termination by Parent as a result of a willful material breach of the Merger Agreement’s no-solicitation obligations by the Company, the Company will be obligated to pay to Parent a termination fee equal to $225.0 million in cash. If the Merger Agreement is terminated under certain circumstances involving the failure to obtain certain regulatory approvals, Parent will be obligated to pay the Company a termination fee equal to $350.0 million in cash. The Company recorded transaction-related costs of $15.5 million , principally for investment banking and legal fees associated with the pending acquisition, during the year ended December 31, 2019 under general and administrative expenses included in the consolidated statement of operations. Additional transaction-related costs are expected to be incurred through the closing of the Merger. 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 intercompany balances and transactions. Certain prior year amounts have been reclassified for consistency with the current year presentation. On the balance sheet, the severance assets were reclassified to deferred taxes and other long-term assets, and the accrued severance was reclassified to other long-term liabilities. 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 material 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, allowances for price adjustments, investment valuation, warranty reserves, inventory reserves, share-based compensation expense, long-term asset valuations, useful lives of property, equipment, and intangibles, right-of-use ("ROU") assets and liabilities, accounting for business combinations, goodwill and purchased intangible asset valuation, investments in privately-held companies, accounting and fair value of financial instruments and derivatives, 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 and money market funds. Restricted cash As of December 31, 2018 and 2017 , the Company maintained certain cash amounts that were restricted as to withdrawal or use over the long-term. The cash secured bank guarantees primarily issued against long-term tenancy agreements. The Company did not maintain any restricted cash amounts as of December 31, 2019 . The long-term restricted cash balances were reported in deferred taxes and other long-term assets on the balance sheets, and were included in the ending balance of cash, cash equivalents and restricted cash in the statement of cash flows for the years then ended. The following table provides a reconciliation of the cash and cash equivalents balances reported on the balance sheets and the cash, cash equivalents and restricted cash balances reported in the statements of cash flows: December 31, 2019 2018 2017 (In thousands) Cash and cash equivalents, as reported on the balance sheets $ 77,579 $ 56,766 $ 62,473 Restricted cash in deferred taxes and other long-term assets, as reported on the balance sheets — 7,884 8,025 Cash, cash equivalents, and restricted cash, as reported in the statements of cash flows $ 77,579 $ 64,650 $ 70,498 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. The Company regularly reviews its investment portfolio and charges unrealized losses against net income when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (1) the length of time a security is in an unrealized loss position, (2) the extent to which fair value is less than cost, (3) the financial condition and near term prospects of the issuer and (4) our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. 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. 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 enters into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks, mainly the exposure to changes in the exchange rate of the NIS against the U.S. dollar that are associated with forecasted future cash flows and certain existing assets and liabilities. The Company's primary objective in entering into 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. The Company accounts for its derivative instruments as either assets or liabilities and carries them 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. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the unrealized gains or losses on the derivative instruments is reported as a component of accumulated other comprehensive income ("AOCI") in shareholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gains or losses on the derivative instruments, if any, is recognized in earnings in the current period. The derivative instruments that hedge the exposure to variability in the fair value of assets or liabilities are not currently designated as hedges for financial reporting purposes, and thus the gains or losses on such derivative instruments are recognized in earnings in the current period. 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, cash equivalents and short-term investment 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 primarily 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. In addition, the Company maintains credit insurance for the majority of its accounts receivable balances. The following table summarizes the revenues from customers (including original equipment manufacturers) in excess of 10% of the total revenues: Year Ended December 31, 2019 2018 2017 HPE 11 % 12 % 13 % Dell 10 % 12 % 11 % ____________________ * Less than 10% There were no accounts receivable balances in excess of 10% of total accounts receivable for the years ended December 31, 2019 and 2018 . 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 net realizable 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 years for computer equipment and software, seven years for lab equipment, and seven years for office furniture and fixtures. 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 retires fully depreciated assets when they are no longer in use. As a result, $26.7 million and $16.6 million of cost and accumulated depreciation were removed from the accounts during the years ended December 31, 2019 and 2018 , respectively. No gain or loss was recognized. 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. 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" is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which the Company has determined to be the entity itself as one reporting unit, with its carrying amount including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is considered not impaired and "Step two" of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, "Step two" is performed. This involves comparing the carrying amount of goodwill to its implied fair value, which is determined to be the excess of the reporting unit's fair value over the fair value of its identifiable net assets other than goodwill. If the carrying amount of goodwill exceeds its implied fair value, an impairment exists and is recorded. As of December 31, 2019 , the Company's qualitative assessment of goodwill impairment indicated that goodwill was not impaired. Intangible assets represent acquired intangible assets including developed technology, customer relationships and IPR&D, as well as licensed technology. 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. Intangible assets with finite lives are tested for impairment in accordance with our policy for long-lived assets. 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. Equity investments in privately-held companies The Company has equity investments in privately-held companies. These investments are recorded at cost, less impairments, adjusted by observable price changes. The Company records gains or losses on the sale of these investments when the proceeds are greater than or less than cost, respectively. The investments are included in deferred taxes and 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. While performing its review for impairment for the first quarter of 2019 , the Company noted an observable price change related to one of its investments in a privately-held company. As a result, the Company recorded an impairment charge of $1.8 million in the first quarter of 2019 . While performing its review for impairment for the fourth quarter of 2018 , the Company noted an observable price change related to one of its investments in a privately-held company. As a result, the Company recorded an impairment charge of $1.5 million in the fourth quarter of 2018 . Impairment of long-lived assets Long-lived assets include equipment, furniture and fixtures, ROU assets, 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. While performing the review for impairment for 2017, the Company noted an impairment indicator associated with the potential sale or discontinuation of the 1550nm silicon photonics line of business. As a result, the Company recorded $12.0 million of impairment charges during the year ended December 31, 2017 . Also, in connection with the discontinuation of the 1550nm silicon photonics development activities, the Company recorded impairment charges and a net loss on disposal of assets of $2.4 million during the year ended December 31, 2018 . There was also a $0.9 million impairment charge on fixed assets not related to the 1550nm silicon photonics development activities recorded during the year ended December 31, 2018. During the year ended December 31, 2019 , the Company recorded impairment charges and a net loss on disposal of assets of $1.5 million . See Note 16, "Restructuring and Impairment Charges" for more details about the impairment charges. Revenue recognition The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer tangible products, extended warranty and post-contract customer support, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to rebates and adjustments to determine the net consideration to which the Company expects to receive. As the Company’s standard payment terms are less than one year, the contracts have no significant financing component. The Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. Revenue from tangible products is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment. The revenues from fixed-price support or maintenance contracts, including extended warranty contracts and post-contract customer support agreements, are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. The Company's standard arrangements with its customers do not allow for rights of return. 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. A portion of the Company's sales are made to distributors under agreements which contain price protection provisions. Revenue from sales to distributors is recognized upon shipment and transfer of control, net of estimated distribution price adjustments (“DPAs”). The Company calculates the estimated DPAs based on specific earned DPA claims and estimated unearned DPA claims based on an analysis of historical DPA claims, at the distributor level, over a period of time considered adequate to account for current pricing and business trends. The earned DPA claims are recorded as a reduction of revenue and a reduction of gross accounts receivable. The Company records the estimated unearned DPAs as a reduction of revenue and an increase in the allowance for unearned DPAs. In addition, the Company records revenue reserves for rebates as a reduction of revenue and a reduction of gross accounts receivable or as an increase in other current payables. The reserves are recorded in the same period that the related revenue is recorded, and are based on the amounts stated in the contracts. The Company reverses reserves for unclaimed rebates as specific rebate programs contractually end and when it believes unclaimed rebates are no longer subject to payment and will not be paid. As a result, the reversal of unclaimed rebates may have a positive impact on our net revenue and net income in subsequent periods. Most of the Company’s distributors are entitled to a limited right of return related to stock rotation. Distributors have the right to return a limited amount of product not to exceed a percentage of the distributor’s prior quarter's net purchases. However, a simultaneous, compensating order of equal or greater value must be placed by the distributor within the same quarter of the return. 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 were as follows: Year Ended December 31, 2019 2018 (In thousands) Balance, beginning of the period $ 1,375 $ 889 New warranties issued during the period 7,480 2,532 Settlements during the period (6,203 ) (2,046 ) Balance, end of the period 2,652 1,375 Less: long-term portion of product warranty liability (740 ) (285 ) Balance, end of the period $ 1,912 $ 1,090 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 $3.1 million , $2.6 million and $2.9 million for the years ended December 31, 2019 , 2018 and 2017 , 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 ("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 and the Employee Share Purchase Plan ("ESPP") 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 did not grant share options in 2019 , 2018 , and 2017 . Share-based 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 in full during the vesting period, and the effect of forfeitur |
REVENUE REVENUE
REVENUE REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenues by geographic region for the years ended December 31, 2019, 2018 and 2017 were as follows: Year ended December 31, 2019 2018 2017 (in thousands) United States $ 515,292 $ 402,840 $ 327,528 China 372,041 258,451 172,405 Europe 169,594 174,892 176,937 Other Americas 123,956 128,077 92,449 Other Asia 149,693 124,483 94,574 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 The following tables represent our total revenues by product type and interconnect protocol for the years ended December 31, 2019, 2018 and 2017 : Year ended December 31, 2019 2018 2017 (in thousands) ICs $ 216,726 $ 149,180 $ 161,216 Boards 532,584 495,753 325,845 Switch systems 329,529 247,478 222,836 Cables, accessories and other 251,737 196,332 153,996 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 Year ended December 31, 2019 2018 2017 (in thousands) InfiniBand: HDR $ 142,127 $ 10,177 $ — EDR 273,045 234,655 194,261 FDR 125,530 149,168 181,465 QDR/DDR/SDR 25,228 44,359 31,599 Total 565,930 438,359 407,325 Ethernet 743,899 618,471 401,005 Other 20,747 31,913 55,563 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 Contract balances The Company recognizes contract liabilities, or deferred revenues, when it receives advance payments from customers before performance obligations primarily related to extended warranty and post-contract customer support have been performed. Advance payments are received at the beginning of the service period and the related deferred revenues are reclassified to revenue ratably over the service period. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of reporting period. The Company expects to recognize the long-term portion of deferred revenue over the remaining service period of up to five years . The following table presents the significant changes in the deferred revenue balance during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 2018 (in thousands) Balance, beginning of the period $ 39,223 $ 36,804 New deferred revenue 49,514 29,604 Reclassification to revenue during the year (1) (36,294 ) (27,185 ) Balance, end of the period 52,443 39,223 Less: long-term portion of deferred revenue 27,481 18,665 Current portion, end of the period $ 24,962 $ 20,558 (1) Of the total reclassifications from deferred revenue to revenue, $20.6 million and $19.0 million were related to the beginning balance of 2019 and 2018 , respectively, and $15.7 million and $8.2 million were related to the new deferred revenue during the years ended December 31, 2019 and 2018 , respectively. Unsatisfied performance obligations, other than extended warranty and post-contract customer support, primarily represent contracts with future delivery dates. As of December 31, 2019 , the Company had $41.7 million of unbilled transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied related to contracts with an original duration over one year. The Company expects to invoice and recognize the revenue as it satisfies each performance obligation during a period of three years . The foregoing excludes the value of the remaining unsatisfied performance obligations related to contracts that have original durations of one year or less. The Company recognizes assets for the material incremental costs of obtaining contracts with customers if it expects the benefit of those costs to be longer than one year. The Company allocates these assets proportionally to the performance obligations in the contracts and amortizes them as the performance obligations are satisfied. During the year ended December 31, 2019 , the Company recognized $11.3 million of assets related to costs to obtain contracts, and amortized $7.5 million of these assets during the same period. The unamortized balance of the assets was $3.8 million as of December 31, 2019 . |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS: December 31, 2019 December 31, 2018 (In thousands) Accounts receivable, net: Accounts receivable $ 240,213 $ 156,525 Less: allowance for unearned DPA (9,900 ) (5,400 ) Less: allowance for doubtful accounts (440 ) (500 ) $ 229,873 $ 150,625 Inventories: Raw materials $ 14,018 $ 19,391 Work-in-process 39,744 39,425 Finished goods 44,268 45,565 $ 98,030 $ 104,381 Property and equipment, net: Computer, equipment, and software $ 227,725 $ 191,130 Furniture and fixtures 2,063 25,358 Leasehold improvements 57,176 49,950 286,964 266,438 Less: Accumulated depreciation and amortization (173,396 ) (161,104 ) $ 113,568 $ 105,334 Deferred taxes and other long-term assets: Right of use assets $ 72,451 $ — Deferred tax assets 36,506 50,660 Severance assets 5,776 17,043 Other assets 44,289 50,479 $ 159,022 $ 118,182 Accrued liabilities: Payroll and related expenses $ 95,904 $ 76,788 Accrued expenses 41,601 28,821 Lease liability, current 19,821 — Other 39,201 16,269 $ 196,527 $ 121,878 Other long-term liabilities: Lease liability, long-term $ 60,933 $ — Income tax payable 30,194 25,600 Accrued severance 7,019 21,645 Other 11,500 6,868 $ 109,646 $ 54,113 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS: Fair value hierarchy: The Company measures its cash equivalents, restricted cash, marketable securities, and foreign currency contracts at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. The Company's restricted cash, 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, 2019 and 2018 , the Company did not have any assets or liabilities valued based on Level 3 valuations. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis: The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 . Level 1 Level 2 Total (in thousands) Money market funds $ 1,058 $ — $ 1,058 Certificates of deposit — 198,663 198,663 Government debt securities — 232,604 232,604 Corporate debt securities — 367,051 367,051 Derivative contracts — 1,056 1,056 Total financial assets $ 1,058 $ 799,374 $ 800,432 The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 . Level 1 Level 2 Total (in thousands) Money market funds $ 1,265 $ — $ 1,265 Certificates of deposit — 95,038 95,038 Government debt securities — 100,478 100,478 Corporate debt securities — 186,208 186,208 1,265 381,724 382,989 Long-term restricted cash — 7,884 7,884 Derivative contracts — 96 96 Total financial assets $ 1,265 $ 389,704 $ 390,969 Derivative contracts $ — $ 2,536 $ 2,536 Total financial liabilities $ — $ 2,536 $ 2,536 There were no transfers between Level 1 and Level 2 securities during the years ended December 31, 2019 and 2018 . |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS: Cash, cash equivalents and short-term investments: At December 31, 2019 and 2018 , the Company held cash, cash equivalents and short-term investments classified as available-for-sale securities as follows: December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (in thousands) Cash and cash equivalents $ 76,521 $ 76,521 $ 55,501 $ 55,501 Money market funds 1,058 1,058 1,265 1,265 Certificates of deposit 198,561 198,663 95,080 95,038 Government debt securities 232,357 232,604 100,449 100,478 Corporate debt securities 365,792 367,051 186,571 186,208 Total 874,289 875,897 438,866 438,490 Less amounts classified as cash and cash equivalents (77,579 ) (77,579 ) (56,766 ) (56,766 ) Short-term investments $ 796,710 $ 798,318 $ 382,100 $ 381,724 The Company does not intend to sell the short-term investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be at maturity. Interest income and gains on short-term investments, net were $15.6 million and $5.6 million for the years ended December 31, 2019 and 2018 , respectively. At December 31, 2019 , the unrealized gains and unrealized losses were $1.9 million and $0.3 million , respectively. At December 31, 2018 , the unrealized gains and unrealized losses were $0.1 million and $0.5 million , respectively. At December 31, 2019 , 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, 2019 and 2018 were as follows: December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (in thousands) Due in less than one year $ 424,616 $ 425,053 $ 281,303 $ 280,959 Due in one to three years 372,094 373,265 100,797 100,765 $ 796,710 $ 798,318 $ 382,100 $ 381,724 Equity investments in privately-held companies: As of December 31, 2019 and 2018 , the Company held a total of $39.3 million and $40.3 million , respectively, in equity investments in privately-held companies. During the first quarter of 2019, one of the investees of the Company's equity investments in privately-held companies was acquired. As a result, the Company recorded a gain on sale of $9.1 million in the first quarter of 2019. In addition, $3.2 million of the consideration owed to the Company was held back in an escrow account as of December 31, 2019 . The final amount released from escrow, if any, will be recognized as an additional gain on sale when released. During the second quarter of 2019, the Company recorded a gain of $0.4 million from the conversion of a note receivable to equity in a privately-held company. While performing its review for impairment for the first quarter of 2019, the Company noted an observable price change related to one of its investments in a privately-held company; as a result, the Company recorded an impairment charge of $1.8 million . |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS: The following table represents changes in the carrying amount of goodwill: (in thousands) Balance as of December 31, 2018 $ 473,916 Acquisitions — Adjustments — Balance as of December 31, 2019 $ 473,916 The carrying amounts of intangible assets as of December 31, 2019 were as follows: Gross Accumulated Net Useful Life (in thousands) (in years) Licensed technology $ 82,673 $ (44,950 ) $ 37,723 1-9 Developed technology 285,443 (203,376 ) 82,067 4-7 Customer relationships 69,776 (37,513 ) 32,263 4-9 Trade names 5,600 (5,600 ) — 3 Total intangible assets $ 443,492 $ (291,439 ) $ 152,053 The carrying amounts of intangible assets as of December 31, 2018 were as follows: Gross Accumulated Net Useful Life (in thousands) (in years) Licensed technology $ 49,546 $ (30,062 ) $ 19,484 1-8 Developed technology 285,443 (164,406 ) 121,037 4-7 Customer relationships 69,776 (31,246 ) 38,530 4-9 Trade names 5,600 (5,323 ) 277 3 Total intangible assets $ 410,365 $ (231,037 ) $ 179,328 Amortization expense of intangible assets totaled approximately $60.4 million , $63.9 million and $61.3 million for the years ended December 31, 2019, 2018 and 2017 , respectively. The estimated future amortization expense is as follows: (in thousands) 2020 $ 55,857 2021 53,128 2022 18,010 2023 9,572 2024 8,521 Thereafter 6,965 Total $ 152,053 |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES: Fair Value of Derivative Contracts The fair value of derivative contracts as of December 31, 2019 and 2018 was as follows: Other current assets Other accrued liabilities Other current assets Other accrued liabilities December 31, 2019 December 31, 2018 (in thousands) Derivatives designated as hedging instruments Currency forward and option contracts $ 1,056 $ — $ 27 $ 2,122 Derivatives not designated as hedging instruments Currency forward and option contracts — — 69 414 Total derivatives $ 1,056 $ — $ 96 $ 2,536 The gross notional amounts of derivative contracts were NIS denominated. The notional amounts of outstanding derivative contracts in U.S. dollar at December 31, 2019 and 2018 were as follows: December 31, December 31, 2019 2018 (in thousands) Derivatives designated as hedging instruments Currency forward and option contracts $ 85,648 $ 92,956 Derivatives not designated as hedging instruments Currency forward and option contracts $ — $ 57,844 Effect of Derivatives Designated as Hedging Instruments on Accumulated Other Comprehensive Income (Loss) The following table represents the unrealized gains (losses) of derivatives designated as hedging instruments, net of tax effects, that were recorded in accumulated other comprehensive income (loss) as of December 31, 2019 and 2018 , and their effect on OCI for the year ended December 31, 2019 (in thousands): December 31, 2018 $ (1,978 ) Amount of gains recognized in OCI (effective portion) 5,027 Amount of gains reclassified from OCI to income (effective portion) (2,072 ) December 31, 2019 $ 977 Foreign exchange contracts designated as hedging instruments primarily relate to operating expenses and the associated gains and losses are expected to be recorded in operating expenses when reclassified out of OCI. See Note 11, "Accumulated Other Comprehensive Income (Loss)" for the amounts recorded in each operating expense account. 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 Consolidated Statement of Operations The effect of derivative contracts on the consolidated statement of operations in the years ended December 31, 2019 , 2018 , and 2017 was as follows: Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 (in thousands) Operating income (expenses) $ 2,072 $ (4,787 ) $ 7,034 $ — $ — $ — Other income (expenses) $ — $ — $ — $ 2,331 $ (4,553 ) $ 3,248 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [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 or after-tax salary, subject to a maximum limit specified in the Internal Revenue Code. The Company matches employee contributions up to 4% of their annual base salaries. The total expenses for these contributions were $1.8 million for both the years ended December 31, 2019 and 2018 , and $2.2 million for the year ended December 31, 2017 . As a general rule, under Israeli law, an employee whose employment has been terminated by an employer or an employee who has resigned under circumstances which entitle him/her to receive statutory severance, in each case after completing at least one year of service with a particular employer or in a particular workplace, is entitled to statutory severance. For Israeli employees hired prior to January 1, 2007 ("Group One"), 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 other long-term liabilities, as if it was payable at each balance sheet date on an undiscounted basis. This liability is partially funded by the amounts accrued in the severance component of the employees’ pension arrangements (the “Severance Fund”). The surrender value of the Severance Fund is presented in other long-term assets. The severance pay detail is as follows: December 31, 2019 2018 (in thousands) Accrued severance liability $ 7,019 $ 21,645 Severance assets 5,776 17,043 Unfunded portion $ 1,243 $ 4,602 As a general rule, Israeli employees who were hired on or after January 1, 2007 ("Group Two"), are subject to the arrangement pursuant to Section 14 of the Severance Pay Law, 1963 (“Section 14 Arrangement”). When the Company makes the full monthly contribution equal to 8.3% of the employee's salary towards the Severance Fund and undertakes that the amounts accumulated in the Severance Fund will be released to the employee in the event that the employment relationship comes to an end, 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 for the employee by the Company 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. During the first quarter of 2019, a significant portion of the employees in Group One elected to move to Group Two under settlement agreements with the Company, which were permitted by a formal approval obtained by the Company from the Israeli Ministry of Labor. In accordance with the Ministry of Labor’s approval (which applied to each of the relevant employees individually), the Company undertook to make the necessary contributions to ensure coverage of severance based on the employees' entire salary for the period during which the employees were not subject to the Section 14 Arrangement up to June 30, 2018. The Company reclassified the accumulated amount of severance assets and accrued severance liabilities as of June 30, 2018 related to these employees to accrued and other liabilities as of March 31, 2019. The Company paid the net severance liabilities (i.e., it made the necessary contributions to each of these employees’ Severance Fund) in April 2019. Severance expenses for the years ended December 31, 2019 , 2018 and 2017 were $16.2 million , $13.7 million and $12.6 million , respectively. In addition, the Company has established a pension contribution plan with respect to its employees in Israel. Under the plan, for the period from January 1 to June 30, 2016, the Company contributed up to 6.0% of employee monthly salary toward the plan. Effective July 1, 2016 the contribution percentage was increased to 6.25% and was further increased to 6.5% effective January 1, 2017. Employees are entitled to amounts accumulated in the plan upon reaching retirement age, subject to any applicable law. Defined contribution pension plan expenses were $11.5 million , $10.6 million and $10.4 million in the years ended December 31, 2019 , 2018 and 2017 , respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: Leases See Note 15, "Leases" for lease related commitments as of December 31, 2019 . Purchase commitments At December 31, 2019 , the Company had the following non-cancelable purchase commitments: Year Ended December 31, Purchase Commitments (in thousands) 2020 $ 400,260 2021 4,361 2022 2,440 2023 1,750 Total purchase commitments $ 408,811 Other Commitments Royalty-bearing grants In April 2018, the Company entered into a settlement agreement with the IIA, which eliminated the future contingent royalty payment obligations of the Company (approximately $36.4 million at March 31, 2018) and the associated future interest payments. These obligations were related to the funding the Company received from the IIA prior to the date of the agreement under approved plans in accordance with the R&D Law and the regulations and rules of the IIA. As part of the agreement, the Company paid approximately $9.3 million to the IIA and the expense was included in cost of revenues during the second quarter of 2018. The Company could be subject to the payment to the IIA of transfer fees or license fees, if the related know-how is transferred outside of Israel. Unrecognized tax benefits Due to the inherent uncertainty with respect to the timing of future cash outflows associated with the Company's unrecognized tax benefits, it is unable to reliably estimate the timing of cash settlement with the respective taxing authorities. As of December 31, 2019 , the Company's unrecognized tax benefits totaled $55.5 million , out of which an amount of $28.6 million would reduce the Company's income tax expense and effective tax rate, if recognized. Contingencies Legal proceedings The Company is involved in a variety of claims, suits, investigations and proceedings that arise from time to time in the ordinary course of its business, including actions with respect to contracts, intellectual property, taxation, employment, benefits, securities, personal injuries and other matters. The results of these proceedings in the ordinary course of business are not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations. The Company records a liability when it believes that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of liability that has been previously accrued and makes adjustments as appropriate. Significant judgment is required to determine both the probability and the estimated amount of a loss or potential loss. The Company may be unable to estimate the reasonably possible loss or range of loss for a particular legal contingency. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any. |
SHARE INCENTIVE PLANS
SHARE INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
SHARE INCENTIVE PLANS | SHARE INCENTIVE PLANS: Stock option plans During the 2016 annual shareholder meeting, the Company's shareholders approved the Mellanox Technologies, Ltd. Amended and Restated Global Share Incentive Plan (2006) (the "First Restated 2006 Plan"), which constituted an amendment and restatement of the Mellanox Technologies, Ltd. Global Share Incentive Plan (2006) and its appendices (the "2006 Plan"). The First Restated 2006 Plan became effective on March 14, 2016 ("Effective Date"). The approval of the First Restated 2006 Plan extended the term to February 2026. The First Restated 2006 Plan reserved 750,000 ordinary shares for issuance under new equity awards and reduced to zero the shares available for issuance under all of the Company's other equity incentive plans in effect, including the Voltaire Ltd. 2007 Incentive Compensation Plan, the Voltaire Ltd. 2003 Section 102 Stock Option/Stock Purchase Plan, the Voltaire Ltd. 2001 Section 102 Stock Option/Stock Purchase Plan, the Voltaire Ltd. 2001 Stock Option Plan, the Kotura, Inc. Second Amended and Restated 2003 Stock Plan, the IPtronics, Inc. 2013 Restricted Stock Unit Plan, the Global Share Incentive Assumption Plan (2010), the EZchip Semiconductor Ltd. 2003 Amended and Restated Equity Incentive Plan, the EZchip Semiconductor Ltd. 2007 U.S. Equity Incentive Plan, and the Amended and Restated EZchip Semiconductor Ltd. 2009 Equity Incentive Plan (collectively, the "Prior Plans"). As of the Effective Date of the First Restated 2006 Plan, the Company ceased granting awards under the Prior Plans, and began granting new awards only from the First Restated 2006 Plan. Any shares subject to issued and outstanding awards under the Prior Plans that expire, are canceled or otherwise terminate after the Effective Date of the First Restated 2006 Plan will be added back to share reserves under the First Restated 2006 Plan. The share reserve of the 2006 Plan is no longer available for issuance under the First Restated 2006 Plan. In addition, the First Restated 2006 Plan implemented additional amendments to reflect compensation and governance best practices. On April 25, 2017, the Company's shareholders approved the Mellanox Technologies, Ltd. Second Amended and Restated Global Share Incentive Plan (2006) (the “Second Restated 2006 Plan”), which constituted a second amendment and restatement of the 2006 Plan, as amended and restated by the First Restated 2006 Plan. The Second Restated 2006 Plan became effective on February 14, 2017. The Second Restated 2006 Plan increased the ordinary shares reserved for issuance under the First Restated 2006 Plan by 1,640,000 shares to 2,390,000 shares plus any shares subject to issued and outstanding awards under the other equity incentive plans that existed prior to the First Restated 2006 Plan that expire, are cancelled or otherwise terminated after the effective date of the First Restated 2006 Plan. The Second Restated Plan also extended the term of the First Restated 2006 Plan to February 14, 2027. In addition, the Second Restated Plan implemented additional amendments to reflect compensation and governance best practices. On July 25, 2018, the Company's shareholders approved the Mellanox Technologies, Ltd. Third Amended and Restated Global Share Incentive Plan (2006) (the “Third Restated Plan”), which constituted an amendment and restatement of the Second Restated 2006 Plan. The Third Restated Plan increased the ordinary shares reserved for issuance under the Second Restated 2006 Plan by 2,077,000 shares to 4,467,000 shares plus any shares subject to issued and outstanding awards under certain of the Company’s prior equity plans that expire, are cancelled or otherwise terminated after March 14, 2016, the effective date of the First Restated 2006 Plan. The Third Restated Plan also implemented certain additional amendments, including specifically providing for the granting of PSUs. On July 25, 2019, the Company's shareholders approved the Mellanox Technologies, Ltd. Fourth Amended and Restated Global Share Incentive Plan (2006) (the “Fourth Restated Plan”), which constitutes an amendment and restatement of the Third Restated Plan. The Fourth Restated Plan increased the ordinary shares reserved for issuance under the Third Restated Plan by 1,960,000 shares to 6,427,000 shares plus any shares subject to issued and outstanding awards under certain of the Company’s prior equity plans that expire, are cancelled or otherwise terminated after March 14, 2016, the effective date of the First Restated 2006 Plan. The Fourth Restated Plan also clarifies the treatment of PSU's upon the occurrence of a change in control of the Company. Share option activity 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, 2017 1,110,061 $ 38.35 Options exercised (586,076 ) $ 24.77 Options canceled (29,482 ) $ 100.81 Outstanding at December 31, 2018 494,503 $ 50.73 Options exercised (219,458 ) $ 34.63 Options canceled (1,040 ) $ 91.91 Outstanding at December 31, 2019 274,005 $ 63.46 There were no options granted in 2019, 2018 and 2017. The total pretax intrinsic value of options exercised in 2019 was $15.6 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 most recently available closing price of the Company's ordinary shares of $117.18 at December 31, 2019 , the total pretax intrinsic value of all outstanding options was $14.7 million . The total pretax intrinsic value of exercisable options at December 31, 2019 was $14.7 million . The total pretax intrinsic value of options exercised in 2018 was $33.5 million . Based on the most recently available closing price of the Company's ordinary shares of $92.38 prior to December 31, 2018 , the total pretax intrinsic value of all outstanding options was $21.8 million . The total pretax intrinsic value of exercisable options at December 31, 2018 was $21.7 million . The weighted average remaining contractual life of options outstanding at December 31, 2019 was 2.6 years . There were 273,963 options exercisable at December 31, 2019 with a weighted average exercise price $63.47 per share. Restricted share unit 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, 2017 3,414,705 $ 48.45 Restricted share units granted 1,773,217 $ 80.40 Restricted share units vested (1,354,359 ) $ 48.35 Restricted share units canceled (539,400 ) $ 52.29 Non-vested restricted share units at December 31, 2018 3,294,163 $ 65.05 Restricted share units granted 1,581,524 $ 105.42 Restricted share units vested (1,316,316 ) $ 60.63 Restricted share units canceled (244,023 ) $ 73.76 Non-vested restricted share units at December 31, 2019 3,315,348 $ 85.43 The weighted average fair value of restricted share units granted was $105.42 , $80.40 and $49.88 for the years ended December 31, 2019, 2018 and 2017 , respectively. The total intrinsic value of all outstanding restricted share units was $388.5 million as of December 31, 2019 . The non-vested restricted share units at December 31, 2019 included 36,000 PSUs. The PSUs will vest and be earned based on the Company’s achievement of relative total shareholder return and average non-GAAP net operating margin over a three-year performance period commencing on January 1, 2018 and ending on December 31, 2020, subject to the continued service to the Company through the end of the performance period. The number of shares that will actually vest range from zero to 175% of the target. Employee stock purchase plan activity The 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. 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 years ended December 31, 2019, 2018 and 2017 , 309,723 , 490,123 , and 568,876 shares, respectively, were issued under the ESPP at weighted average per share prices of $78.92 , $46.62 and $38.83 , respectively. Shares reserved for future issuance The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of December 31, 2019 : Number of Share options outstanding 274,005 Restricted share units outstanding 3,315,348 Shares authorized for future issuance 2,253,990 ESPP shares available for future issuance 2,625,623 Total shares reserved for future issuance as of December 31, 2019 8,468,966 Share-based compensation The Company accounts for share-based compensation expense for share option awards and ESPP based on the estimated fair value of the instruments as of the grant dates. There were no employee share options granted in 2019 , 2018 and 2017 . The following weighted average assumptions were used in the valuation of the ESPP for the years ended December 31, 2019 , 2018 and 2017 : Employee Share Purchase Plan Year ended December 31, 2019 2018 2017 Dividend yield, % — — — Expected volatility 27.1 % 31.0 % 24.6 % Risk free interest rate 2.14 % 1.78 % 1.20 % Expected life, years 0.50 0.50 0.50 The following table summarizes the distribution of total share-based compensation expense in the Consolidated Statements of Operations: Year ended December 31, 2019 2018 2017 (in thousands) Share-based compensation expense by caption: Cost of goods sold $ 3,493 $ 1,950 $ 2,000 Research and development 61,315 38,922 40,278 Sales and marketing 26,614 17,042 15,693 General and administrative 20,696 13,428 10,893 Total share-based compensation expense $ 112,118 $ 71,342 $ 68,864 Share-based compensation expense by type of award: Share options $ 8 $ 12 $ 115 ESPP 7,161 6,378 6,232 RSU 102,898 64,059 62,517 PSU 2,051 893 — Total share-based compensation expense $ 112,118 $ 71,342 $ 68,864 At December 31, 2019 , there was $235.4 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 2.69 years . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS): The following table summarizes the changes in accumulated other comprehensive income (loss) for the years ended December 31, 2019 and 2018 : Unrealized Gains (Losses) on Available-for-Sale Securities Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments Total (in thousands) Balance at December 31, 2018 $ 927 $ (1,978 ) $ (1,051 ) Other comprehensive income (loss) before reclassifications, net of taxes 737 5,027 5,764 Realized (gains)/losses reclassified from accumulated other comprehensive income (54 ) (2,072 ) (2,126 ) Net current-period other comprehensive income (loss), net of taxes 683 2,955 3,638 Balance at December 31, 2019 $ 1,610 $ 977 $ 2,587 Balance at December 31, 2017 $ 693 $ 925 $ 1,618 Other comprehensive income before reclassifications, net of taxes 218 (7,690 ) (7,472 ) Realized (gains)/losses reclassified from accumulated other comprehensive income 16 4,787 4,803 Net current-period other comprehensive income, net of taxes 234 (2,903 ) (2,669 ) Balance at December 31, 2018 $ 927 $ (1,978 ) $ (1,051 ) The following table provides details about the realized (gains)/losses reclassified from accumulated other comprehensive income for the years ended December 31, 2019 and 2018 : Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Operations Year ended December 31, 2019 2018 (in thousands) Realized (gains)/losses on derivatives designated as hedging instruments $ (2,072 ) $ 4,787 Cost of revenues and Operating expenses: (85 ) 206 Cost of revenues (161 ) 472 General and administrative (163 ) 384 Sales and marketing (1,663 ) 3,725 Research and development Realized losses on available-for-sale securities (54 ) 16 Interest and other, net Total reclassifications for the period $ (2,126 ) $ 4,803 Total |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: The components of income (loss) before taxes on income are as follows: Year ended December 31, 2019 2018 2017 (in thousands) United States $ 36,683 $ 19,526 $ (21,528 ) Foreign 187,246 92,685 (375 ) Income (loss) before taxes on income $ 223,929 $ 112,211 $ (21,903 ) The components of the provision for (benefit from) income taxes are as follows: Year ended December 31, 2019 2018 2017 (in thousands) Current: U.S. federal $ 4,009 $ 1,306 $ (617 ) State and local 571 512 632 Foreign 3,609 4,648 (261 ) Total current 8,189 6,466 (246 ) Deferred: U.S. federal 5,187 (17,487 ) — State and local 613 (12,283 ) — Foreign 4,845 1,257 (2,232 ) Total deferred 10,645 (28,513 ) (2,232 ) Provision for (benefit from) taxes on income $ 18,834 $ (22,047 ) $ (2,478 ) At December 31, 2019 and 2018 , significant deferred tax assets and liabilities are as follows: December 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss and credit carryforwards $ 28,936 $ 42,345 Share-based compensation 10,559 7,241 Lease liabilities 7,315 — Reserves and accruals 2,768 6,620 Other 4,030 7,069 Gross deferred tax assets 53,608 63,275 Valuation allowance (5,971 ) (8,152 ) Total deferred tax assets 47,637 55,123 Right of use assets (6,630 ) — Intangible assets (4,021 ) (4,463 ) Others (480 ) — Total deferred tax liabilities (11,131 ) (4,463 ) Net deferred tax assets $ 36,506 $ 50,660 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, management considers new evidence, both positive and negative, that could impact management’s view with regards to the future realization of deferred tax assets for each jurisdiction. During the year ended December 31, 2018 , the Company released $32.1 million of valuation allowance against the deferred tax assets primarily related to NOL carryforwards and tax credit carryforwards related to its U.S. subsidiaries. After the discontinuation of the Company’s 1550nm silicon photonics development activities in the first quarter of fiscal 2018, the Company expects its U.S. subsidiaries will have sufficient taxable income in the future to utilize the deferred tax assets before they expire. The Company continued to provide a valuation allowance against the deferred tax assets related to capital loss carryforwards on the consolidated balance sheet as of December 31, 2019 due to uncertainty concerning realization of these deferred tax assets. At December 31, 2019 , the Company had NOL carryforwards of approximately $138.4 million in Israel, $56.5 million in the U.S. for federal tax purposes, $46.2 million in the U.S. for state tax purposes and $5.7 million in Denmark. The U.S. NOL carryforwards for federal tax purposes will expire from 2024 to 2037, and the U.S. NOL carryforwards for state tax purposes will expire from 2020 to 2037. The non-U.S. NOL carryforwards have no expiration date. The Company has not provided for Israeli income and foreign withholding taxes on $40.4 million of its non-Israeli subsidiaries' undistributed earnings as of December 31, 2019 . The Company currently has no plans to repatriate those funds and intends to indefinitely reinvest them in its non-Israeli operations. The amount of the unrecognized deferred tax liability for temporary differences related to investments in non-Israeli subsidiaries that were essentially permanent in duration as of December 31, 2019 was $9.3 million . The reconciliation of the statutory federal income tax rate to the Company's effective tax rate is as follows: December 31, 2019 2018 2017 Tax at statutory rate 21.0 % 21.0 % 35.0 % Tax at rates other than the statutory rate (15.6 ) (14.2 ) (4.8 ) Valuation allowance — (29.1 ) 47.3 Net change in tax reserves 2.8 4.1 8.0 Adjustment of deferred tax balances following changes in tax rates — — (71.8 ) Other, net 0.2 (1.4 ) (2.4 ) Provision for (benefit from) taxes on income 8.4 % (19.6 )% 11.3 % The Company's operations in Israel were granted "Approved Enterprise" status by the Investment Center in the Israeli Ministry of Economy and Industry (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 Encouragement Law. Under the terms of the Approved and Beneficiary Enterprise programs, income that is attributable to the Company's operations in Yokneam, Israel, is exempt from income tax commencing fiscal year 2011 through 2021 . Income that is attributable to the Company's operations in Tel Aviv, Israel is 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) commencing fiscal year 2013 through 2021 . The tax holiday has resulted in a cash tax savings of approximately $53.7 million , $27.9 million and $11.6 million in 2019 , 2018 , and 2017 , respectively, increasing diluted earnings per share by approximately $0.95 , $0.49 and $0.23 in the years ended December 31, 2019 , 2018 , and 2017 , respectively. The following summarizes the activity related to the Company's unrecognized tax benefits: December 31, 2019 2018 2017 (in thousands) Gross unrecognized tax benefits, beginning of the period $ 46,541 $ 45,154 $ 41,460 Increases in tax positions for prior years 2,789 1,377 3,655 Decreases in tax positions for prior years — (1,860 ) — Increases in tax positions for current year 11,784 5,516 8,090 Increases in tax positions acquired or assumed in a business combination — — — Decreases due to lapses of statutes of limitations (5,642 ) (3,646 ) (8,051 ) Gross unrecognized tax benefits, end of the period $ 55,472 $ 46,541 $ 45,154 As of December 31, 2019 , 2018 and 2017 , the total amount of gross unrecognized tax benefits was $55.5 million , $46.5 million , and $45.2 million , respectively. Of these amounts as of December 31, 2019 , 2018 and 2017 , $28.6 million , $25.7 million , and $24.6 million , respectively, would reduce our income tax expense and effective tax rate, if recognized. 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. As of December 31, 2019 , 2018 and 2017 , the amount of accrued interest and penalties related to unrecognized tax benefits totaled $2.5 million , $2.6 million , and $2.9 million , respectively, which is not included in the table above. For unrecognized tax benefits that existed at December 31, 2019 , the Company does not anticipate any significant changes within the next twelve months. On December 29, 2016, the Israeli government amended the Encouragement Law and legislated a new tax regime - "Preferred Technological Enterprise" regime, under which a company that complies with the terms may be entitled to certain tax benefits. On June 14, 2017, the Israeli government legislated new regulations, stipulating the calculation method of the tax benefits under the Preferred Technological Enterprise regime. The Company expects that its operation in Israel will comply with the terms of the Preferred Technological Enterprise regime. Therefore, the Company may utilize the tax benefits under this regime after the end of the benefit period of its Approved and Beneficiary Enterprise statuses (i.e., prior to fiscal year 2022, based on the Company’s decision, and for fiscal year 2022 and onwards). Under the new legislation, the majority of the Company’s income from its operations in Yokneam, Israel, will be subject to a corporate rate of 7.5% , while the majority of the income from its operations in Tel-Aviv, Israel, will be subject to a corporate rate of 12% . As a result of the lower tax rates mentioned above, the Company recorded a decrease of approximately $0.2 million in deferred tax assets and a corresponding increase in tax expense during the second quarter of 2017. 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, 2019 , the 2015 through 2018 tax years are open and may be subject to potential examinations in the U.S. The Company has net operating losses in the U.S. from prior tax periods beginning in 2003 which may be subject to examination upon utilization in future tax periods. As of December 31, 2019 , the 2014 through 2018 tax years are open and may be subject to potential examinations in Denmark, and the 2015 through 2018 tax years are open and may be subject to potential examinations in Israel. As of December 31, 2019 , 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 2015 to 2018 . |
GEOGRAPHIC INFORMATION
GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC INFORMATION | GEOGRAPHIC INFORMATION: 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, 2019 2018 2017 (in thousands) United States $ 515,292 $ 402,840 $ 327,528 China 372,041 258,451 172,405 Europe 169,594 174,892 176,937 Other Americas 123,956 128,077 92,449 Other Asia 149,693 124,483 94,574 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 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, 2019 2018 (in thousands) Israel $ 109,375 $ 99,589 United States 1,815 3,495 Other 2,378 2,250 Total property and equipment, net $ 113,568 $ 105,334 Property and equipment, net is attributed to the geographic location in which it is located. |
INTEREST AND OTHER, NET
INTEREST AND OTHER, NET | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
INTEREST AND OTHER, NET | INTEREST AND OTHER, NET: Interest and other, net, is summarized in the following table: Year ended December 31, 2019 2018 2017 (in thousands) Interest expense $ (149 ) $ (2,185 ) $ (7,937 ) Interest income and gains on short-term investments, net 15,588 5,629 3,748 Foreign exchange loss, net (7,070 ) (1,256 ) (596 ) Gain on investments in privately-held companies 9,569 — — Impairment of investments in privately-held companies (1,755 ) (1,494 ) — Other (174 ) (557 ) (37 ) Interest and other, net $ 16,009 $ 137 $ (4,822 ) |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES: On January 1, 2019, the Company adopted Topic 842 and elected the available transition-related practical expedient to recognize the cumulative effect of initially adopting Topic 842 as an adjustment to the opening balance sheet in the period of adoption. In addition, the Company elected to not reassess whether contracts are or contain leases, lease classification, or initial direct costs for existing leases as of January 1, 2019. The Company also elected other available practical expedients for existing leases at adoption and new leases post-adoption, and will not record leases with an initial term of 12 months or less on the balance sheet and will not separate lease components from non-lease components. Only the minimum lease payments in accordance with Topic 840 were included in the calculation of the ROU and liability for existing leases as of January 1, 2019. The consolidated balance sheets and results of operations for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under Topic 840. The Company's leases include office buildings for its facilities worldwide and car leases in Israel, which are all classified as operating leases. Certain lease agreements include rental payments that are adjusted periodically for the consumer price index ("CPI"). The ROU and lease liability were calculated using the CPI as of the adoption date and will not be subsequently adjusted. Certain leases include renewal options that are under the Company's sole discretion. The renewal options were included in the ROU and liability calculation if it was reasonably assured that the Company will exercise the option. The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of Topic 842 were as follows: December 31, 2018 Adjustments January 1, 2019 (in thousands) Deferred taxes and other long-term assets $ 118,182 $ 69,102 $ 187,284 Accrued liabilities $ 121,878 $ 16,618 $ 138,496 Other long-term liabilities $ 54,113 $ 52,484 $ 106,597 The components of lease expense and supplemental cash flow information related to leases for the year ended December 31, 2019 were as follows: Year ended December 31, 2019 (in thousands) Components of lease expense: Operating lease cost $ 23,163 Supplemental cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 20,856 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets $ 22,403 For the year ended December 31, 2019 , the weighted average remaining lease term is 6.8 years , and the weighted average discount rate is 3.01 percent. The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease. Maturities of lease liabilities as of December 31, 2019 were as follows: (in thousands) 2020 $ 20,288 2021 16,840 2022 9,832 2023 9,034 2024 8,777 Thereafter 23,645 Total (1) 88,416 Less: Imputed interest (7,662 ) Lease liability $ 80,754 (1) Future lease payments have not been reduced by minimum sublease rental income of $3.6 million owed to the Company in the future under noncancelable subleases. The lease liabilities as of December 31, 2019 do not include the obligations under a lease agreement related to an office being built in Tel Aviv, Israel. The Company is not involved in the construction and will not be exposed to any risks during the construction period. The lease term expires 10 years after the expected lease inception. In addition, the lease contains a renewal option, which the Company determined is not reasonably assured to be exercised. As of December 31, 2019 , the estimated total future lease obligation was approximately $31.8 million |
RESTRUCTURING AND IMPAIRMENT CH
RESTRUCTURING AND IMPAIRMENT CHARGES | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
RESTRUCTURING AND IMPAIRMENT CHARGES | RESTRUCTURING AND IMPAIRMENT CHARGES: While performing the review for impairment for the fourth quarter of 2017, the Company noted an impairment indicator associated with the potential sale or discontinuation of the 1550nm silicon photonics line of business. As a result, the Company recorded $12.0 million of impairment charges for the year ended December 31, 2017 , of which $7.7 million was related to property and equipment and $4.3 million was related to intangible assets. The impairment charges were calculated based on the differences between the net book values of the related assets and their estimated fair values. The Company primarily used the market approach to determine the estimated fair values of the property and equipment. Under this approach we considered various factors, including secondary market comparables, replacement costs, age and condition of the assets and estimated selling costs. The impaired intangible assets represent obsolete technologies that were deemed to have no value, and therefore were fully written off. In connection with the discontinuation of its 1550nm silicon photonics development activities, the Company initiated a restructuring plan in the first quarter of 2018 to wind down the business operations related to these activities, which primarily included terminating employees, exiting contracts with vendors, selling assets, and exiting facilities. The Company recorded $3.5 million , $3.4 million , and $2.4 million of employee separation and severance costs, contract exit costs, and impairment charges and losses on disposal of assets, respectively, during the year ended December 31, 2018. There was also a $0.9 million impairment charge on fixed assets not related to the discontinuation of the 1550nm silicon photonics development activities recorded during the year ended December 31, 2018. During the year ended December 31, 2019 , the Company recorded impairment charges and a net loss on disposal of assets of $1.5 million . The Company does not expect any significant restructuring charges in the future. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS: On June 19, 2018, the Company entered into a settlement agreement (the “Settlement Agreement”) with Starboard Value LP and certain of its affiliates (“Starboard”), together holding, on such date, approximately 10.3% of the Company’s outstanding ordinary shares. The Settlement Agreement provided for, among other things, the concurrent resignations of three members of the Company’s Board of Directors (the “Board”) and the concurrent appointment of two independent directors nominated by Starboard and one mutually agreed upon independent nominee to the Board. Starboard also agreed to terminate its proxy contest against the Company and withdraw its notice of shareholder nomination of individuals for election as directors at the Company's 2018 annual general meeting of shareholders. Furthermore, the Company agreed to reimburse Starboard for its reasonable, documented out-of-pocket fees and expenses (including legal expenses) incurred through the date of the Settlement Agreement in connection with Starboard’s interactions with the Company up to a maximum of $2.0 million . On July 11, 2018, the Company paid $2.0 million for such costs to Starboard. During the year ended December 31, 2019 , Starboard sold all its holdings in the Company, and is no longer a related party. |
SCHEDULE II - CONSOLIDATED VALU
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS | Description: Balance at Beginning of Year Charged to Costs and Expenses Deductions Balance at End of Year (in thousands) Year ended December 31, 2019 Deducted from asset accounts: Allowance for doubtful accounts $ 500 $ — $ (60 ) $ 440 Income tax valuation allowance 8,152 — (2,181 ) 5,971 Total $ 8,652 $ — $ (2,241 ) $ 6,411 Year ended December 31, 2018 Deducted from asset accounts: Allowance for doubtful accounts $ 632 $ — $ (132 ) $ 500 Income tax valuation allowance 42,241 — (34,089 ) 8,152 Total $ 42,873 $ — $ (34,221 ) $ 8,652 Year ended December 31, 2017 Deducted from asset accounts: Allowance for doubtful accounts $ 632 $ — $ — $ 632 Income tax valuation allowance 55,827 — (13,586 ) 42,241 Total $ 56,459 $ — $ (13,586 ) $ 42,873 |
THE COMPANY AND SUMMARY OF SI_2
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 intercompany balances and transactions. |
Reclassification | Certain prior year amounts have been reclassified for consistency with the current year presentation. On the balance sheet, the severance assets were reclassified to deferred taxes and other long-term assets, and the accrued severance was reclassified to other long-term liabilities. |
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 material 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, allowances for price adjustments, investment valuation, warranty reserves, inventory reserves, share-based compensation expense, long-term asset valuations, useful lives of property, equipment, and intangibles, right-of-use ("ROU") assets and liabilities, accounting for business combinations, goodwill and purchased intangible asset valuation, investments in privately-held companies, accounting and fair value of financial instruments and derivatives, 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 and money market funds. |
Restricted cash | Restricted cash As of December 31, 2018 and 2017 |
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. The Company regularly reviews its investment portfolio and charges unrealized losses against net income when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (1) the length of time a security is in an unrealized loss position, (2) the extent to which fair value is less than cost, (3) the financial condition and near term prospects of the issuer and (4) our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. |
Fair value of financial instruments | Fair value of financial instruments |
Derivatives | Derivatives The Company enters into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks, mainly the exposure to changes in the exchange rate of the NIS against the U.S. dollar that are associated with forecasted future cash flows and certain existing assets and liabilities. The Company's primary objective in entering into 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. The Company accounts for its derivative instruments as either assets or liabilities and carries them 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. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the unrealized gains or losses on the derivative instruments is reported as a component of accumulated other comprehensive income ("AOCI") in shareholders’ equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gains or losses on the derivative instruments, if any, is recognized in earnings in the current period. The derivative instruments that hedge the exposure to variability in the fair value of assets or liabilities are not currently designated as hedges for financial reporting purposes, and thus the gains or losses on such derivative instruments are recognized in earnings in the current period. |
Concentration of credit risk | Concentration of credit risk |
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 net realizable 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 years for computer equipment and software, seven years for lab equipment, and seven years for office furniture and fixtures. 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 retires fully depreciated assets when they are no longer in use. As a result, $26.7 million and $16.6 million of cost and accumulated depreciation were removed from the accounts during the years ended December 31, 2019 and 2018 , respectively. No gain or loss was recognized. 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. |
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" is the identification of potential impairment. This involves comparing the fair value of each reporting unit, which the Company has determined to be the entity itself as one reporting unit, with its carrying amount including goodwill. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is considered not impaired and "Step two" of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, "Step two" is performed. This involves comparing the carrying amount of goodwill to its implied fair value, which is determined to be the excess of the reporting unit's fair value over the fair value of its identifiable net assets other than goodwill. If the carrying amount of goodwill exceeds its implied fair value, an impairment exists and is recorded. As of December 31, 2019 , the Company's qualitative assessment of goodwill impairment indicated that goodwill was not impaired. Intangible assets represent acquired intangible assets including developed technology, customer relationships and IPR&D, as well as licensed technology. 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. Intangible assets with finite lives are tested for impairment in accordance with our policy for long-lived assets. 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. |
Equity investments in privately-held companies | Equity investments in privately-held companies The Company has equity investments in privately-held companies. These investments are recorded at cost, less impairments, adjusted by observable price changes. The Company records gains or losses on the sale of these investments when the proceeds are greater than or less than cost, respectively. The investments are included in deferred taxes and 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, furniture and fixtures, ROU assets, 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 when (or as) it satisfies performance obligations by transferring promised products or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, the Company considers the promise to transfer tangible products, extended warranty and post-contract customer support, each of which are distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to rebates and adjustments to determine the net consideration to which the Company expects to receive. As the Company’s standard payment terms are less than one year, the contracts have no significant financing component. The Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. Revenue from tangible products is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment. The revenues from fixed-price support or maintenance contracts, including extended warranty contracts and post-contract customer support agreements, are recognized ratably over the contract period and the costs associated with these contracts are recognized as incurred. The Company's standard arrangements with its customers do not allow for rights of return. 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. A portion of the Company's sales are made to distributors under agreements which contain price protection provisions. Revenue from sales to distributors is recognized upon shipment and transfer of control, net of estimated distribution price adjustments (“DPAs”). The Company calculates the estimated DPAs based on specific earned DPA claims and estimated unearned DPA claims based on an analysis of historical DPA claims, at the distributor level, over a period of time considered adequate to account for current pricing and business trends. The earned DPA claims are recorded as a reduction of revenue and a reduction of gross accounts receivable. The Company records the estimated unearned DPAs as a reduction of revenue and an increase in the allowance for unearned DPAs. In addition, the Company records revenue reserves for rebates as a reduction of revenue and a reduction of gross accounts receivable or as an increase in other current payables. The reserves are recorded in the same period that the related revenue is recorded, and are based on the amounts stated in the contracts. The Company reverses reserves for unclaimed rebates as specific rebate programs contractually end and when it believes unclaimed rebates are no longer subject to payment and will not be paid. As a result, the reversal of unclaimed rebates may have a positive impact on our net revenue and net income in subsequent periods. Most of the Company’s distributors are entitled to a limited right of return related to stock rotation. Distributors have the right to return a limited amount of product not to exceed a percentage of the distributor’s prior quarter's net purchases. However, a simultaneous, compensating order of equal or greater value must be placed by the distributor within the same quarter of the return. |
Product warranty | Product warranty The Company typically offers a limited warranty for its products for periods up to three years |
Research and development | Research and development |
Advertising | Advertising |
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 ("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 and the Employee Share Purchase Plan ("ESPP") 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 did not grant share options in 2019 , 2018 , and 2017 . Share-based 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 in full during the vesting period, and the effect of forfeitures will be recorded as they occur. During the year ended December 31, 2018 , the Company granted 36,000 performance share units ("PSUs"). The PSUs will vest and be earned based on the Company’s achievement of relative total shareholder return and average non-GAAP net operating margin over a three-year performance period commencing on January 1, 2018 and ending on December 31, 2020, subject to the continued service to the Company through the end of the performance period. The number of shares that will actually vest range from zero to 175% |
Comprehensive income (loss) | Comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax on the consolidated balance sheets at December 31, 2019 and 2018 |
Foreign currency translation and remeasurement | Foreign currency translation and remeasurement 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. The Company derives all revenues in U.S. dollars. Expenses are remeasured at the exchange rate in effect on the day the transaction occurred, except for those expenses related to non-monetary assets and liabilities, 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 "Interest and other, net." |
Net income (loss) per share | Net income (loss) per share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of ordinary shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of ordinary shares outstanding during the period increased to include the number of additional shares that would have been outstanding if the potentially dilutive shares had been issued. Potentially dilutive shares include unvested RSUs, PSUs, outstanding stock options, and shares to be purchased by employees under the Company’s employee stock purchase plan. The dilutive effect of potentially dilutive shares is reflected in diluted net income (loss) per share by application of the treasury stock method. |
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 calculated using tax rates expected to be in effect during the period these temporary differences would reverse, and 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. The Company uses a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the guidance on judgments regarding the realizability of deferred taxes. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of income as income tax expense. |
Adoption of new accounting principles and Recent accounting pronouncements | Adoption of new accounting principles In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The standard requires lessees to recognize almost all leases on the balance sheet as a ROU asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. The standard became effective for the Company on January 1, 2019. The Company elected the available practical expedients and implemented internal controls to enable the preparation of financial information on adoption. The adoption of the standard had a material impact on the Company's consolidated balance sheet due to the recognition of the ROU assets and lease liabilities related to the Company's operating leases. In addition, a material portion of the Company's leases are denominated in currencies other than the U.S. Dollar, mainly in New Israeli Shekels ("NIS"). As a result, the associated lease liabilities are remeasured using the current exchange rate, which may result in non-operating foreign exchange gains and losses. See Note 15, "Leases" for details about the impact from adopting the new lease standard and other required disclosures. Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , Measurement of Credit Losses on Financial Instrument s, which modifies the measurement of expected credit losses on certain financial instruments. In addition, for available-for-sale debt securities, the standard eliminates the concept of other-than-temporary impairment and requires the recognition of an allowance for credit losses rather than reductions in the amortized cost of the securities. This standard became effective for the Company beginning January 1, 2020. The Company does not expect this ASU to have a material impact on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. |
THE COMPANY AND SUMMARY OF SI_3
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of the cash and cash equivalents balances reported on the balance sheets and the cash, cash equivalents and restricted cash balances reported in the statements of cash flows: December 31, 2019 2018 2017 (In thousands) Cash and cash equivalents, as reported on the balance sheets $ 77,579 $ 56,766 $ 62,473 Restricted cash in deferred taxes and other long-term assets, as reported on the balance sheets — 7,884 8,025 Cash, cash equivalents, and restricted cash, as reported in the statements of cash flows $ 77,579 $ 64,650 $ 70,498 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of the cash and cash equivalents balances reported on the balance sheets and the cash, cash equivalents and restricted cash balances reported in the statements of cash flows: December 31, 2019 2018 2017 (In thousands) Cash and cash equivalents, as reported on the balance sheets $ 77,579 $ 56,766 $ 62,473 Restricted cash in deferred taxes and other long-term assets, as reported on the balance sheets — 7,884 8,025 Cash, cash equivalents, and restricted cash, as reported in the statements of cash flows $ 77,579 $ 64,650 $ 70,498 |
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, 2019 2018 2017 HPE 11 % 12 % 13 % Dell 10 % 12 % 11 % ____________________ * Less than 10% |
Schedule of changes in the entity's liability for product warranty | Changes in the Company's liability for product warranty were as follows: Year Ended December 31, 2019 2018 (In thousands) Balance, beginning of the period $ 1,375 $ 889 New warranties issued during the period 7,480 2,532 Settlements during the period (6,203 ) (2,046 ) Balance, end of the period 2,652 1,375 Less: long-term portion of product warranty liability (740 ) (285 ) Balance, end of the period $ 1,912 $ 1,090 |
Schedule of computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated: Year Ended December 31, 2019 2018 2017 (In thousands, except per share data) Net income (loss) $ 205,095 $ 134,258 $ (19,425 ) Basic and diluted shares: Weighted average ordinary shares outstanding 54,946 52,863 50,310 Effect of dilutive shares 1,716 1,783 — Shares used to compute diluted net income (loss) per share 56,662 54,646 50,310 Net income (loss) per share—basic $ 3.73 $ 2.54 $ (0.39 ) Net income (loss) per share—diluted $ 3.62 $ 2.46 $ (0.39 ) |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Revenues by geographic region for the years ended December 31, 2019, 2018 and 2017 were as follows: Year ended December 31, 2019 2018 2017 (in thousands) United States $ 515,292 $ 402,840 $ 327,528 China 372,041 258,451 172,405 Europe 169,594 174,892 176,937 Other Americas 123,956 128,077 92,449 Other Asia 149,693 124,483 94,574 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 The following tables represent our total revenues by product type and interconnect protocol for the years ended December 31, 2019, 2018 and 2017 : Year ended December 31, 2019 2018 2017 (in thousands) ICs $ 216,726 $ 149,180 $ 161,216 Boards 532,584 495,753 325,845 Switch systems 329,529 247,478 222,836 Cables, accessories and other 251,737 196,332 153,996 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 Year ended December 31, 2019 2018 2017 (in thousands) InfiniBand: HDR $ 142,127 $ 10,177 $ — EDR 273,045 234,655 194,261 FDR 125,530 149,168 181,465 QDR/DDR/SDR 25,228 44,359 31,599 Total 565,930 438,359 407,325 Ethernet 743,899 618,471 401,005 Other 20,747 31,913 55,563 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 |
Changes in deferred revenue balances | The following table presents the significant changes in the deferred revenue balance during the years ended December 31, 2019 and 2018: Year ended December 31, 2019 2018 (in thousands) Balance, beginning of the period $ 39,223 $ 36,804 New deferred revenue 49,514 29,604 Reclassification to revenue during the year (1) (36,294 ) (27,185 ) Balance, end of the period 52,443 39,223 Less: long-term portion of deferred revenue 27,481 18,665 Current portion, end of the period $ 24,962 $ 20,558 (1) Of the total reclassifications from deferred revenue to revenue, $20.6 million and $19.0 million were related to the beginning balance of 2019 and 2018 , respectively, and $15.7 million and $8.2 million were related to the new deferred revenue during the years ended December 31, 2019 and 2018 , respectively. |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of balance sheet components | December 31, 2019 December 31, 2018 (In thousands) Accounts receivable, net: Accounts receivable $ 240,213 $ 156,525 Less: allowance for unearned DPA (9,900 ) (5,400 ) Less: allowance for doubtful accounts (440 ) (500 ) $ 229,873 $ 150,625 Inventories: Raw materials $ 14,018 $ 19,391 Work-in-process 39,744 39,425 Finished goods 44,268 45,565 $ 98,030 $ 104,381 Property and equipment, net: Computer, equipment, and software $ 227,725 $ 191,130 Furniture and fixtures 2,063 25,358 Leasehold improvements 57,176 49,950 286,964 266,438 Less: Accumulated depreciation and amortization (173,396 ) (161,104 ) $ 113,568 $ 105,334 Deferred taxes and other long-term assets: Right of use assets $ 72,451 $ — Deferred tax assets 36,506 50,660 Severance assets 5,776 17,043 Other assets 44,289 50,479 $ 159,022 $ 118,182 Accrued liabilities: Payroll and related expenses $ 95,904 $ 76,788 Accrued expenses 41,601 28,821 Lease liability, current 19,821 — Other 39,201 16,269 $ 196,527 $ 121,878 Other long-term liabilities: Lease liability, long-term $ 60,933 $ — Income tax payable 30,194 25,600 Accrued severance 7,019 21,645 Other 11,500 6,868 $ 109,646 $ 54,113 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 on a recurring basis as of December 31, 2019 . Level 1 Level 2 Total (in thousands) Money market funds $ 1,058 $ — $ 1,058 Certificates of deposit — 198,663 198,663 Government debt securities — 232,604 232,604 Corporate debt securities — 367,051 367,051 Derivative contracts — 1,056 1,056 Total financial assets $ 1,058 $ 799,374 $ 800,432 The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 . Level 1 Level 2 Total (in thousands) Money market funds $ 1,265 $ — $ 1,265 Certificates of deposit — 95,038 95,038 Government debt securities — 100,478 100,478 Corporate debt securities — 186,208 186,208 1,265 381,724 382,989 Long-term restricted cash — 7,884 7,884 Derivative contracts — 96 96 Total financial assets $ 1,265 $ 389,704 $ 390,969 Derivative contracts $ — $ 2,536 $ 2,536 Total financial liabilities $ — $ 2,536 $ 2,536 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cash, cash equivalents and short-term investments | At December 31, 2019 and 2018 , the Company held cash, cash equivalents and short-term investments classified as available-for-sale securities as follows: December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (in thousands) Cash and cash equivalents $ 76,521 $ 76,521 $ 55,501 $ 55,501 Money market funds 1,058 1,058 1,265 1,265 Certificates of deposit 198,561 198,663 95,080 95,038 Government debt securities 232,357 232,604 100,449 100,478 Corporate debt securities 365,792 367,051 186,571 186,208 Total 874,289 875,897 438,866 438,490 Less amounts classified as cash and cash equivalents (77,579 ) (77,579 ) (56,766 ) (56,766 ) Short-term investments $ 796,710 $ 798,318 $ 382,100 $ 381,724 |
Schedule of contractual maturities of short-term investments | The contractual maturities of short-term investments at December 31, 2019 and 2018 were as follows: December 31, 2019 December 31, 2018 Amortized Estimated Amortized Estimated (in thousands) Due in less than one year $ 424,616 $ 425,053 $ 281,303 $ 280,959 Due in one to three years 372,094 373,265 100,797 100,765 $ 796,710 $ 798,318 $ 382,100 $ 381,724 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The following table represents changes in the carrying amount of goodwill: (in thousands) Balance as of December 31, 2018 $ 473,916 Acquisitions — Adjustments — Balance as of December 31, 2019 $ 473,916 |
Schedule of carrying amount of intangible assets | The carrying amounts of intangible assets as of December 31, 2019 were as follows: Gross Accumulated Net Useful Life (in thousands) (in years) Licensed technology $ 82,673 $ (44,950 ) $ 37,723 1-9 Developed technology 285,443 (203,376 ) 82,067 4-7 Customer relationships 69,776 (37,513 ) 32,263 4-9 Trade names 5,600 (5,600 ) — 3 Total intangible assets $ 443,492 $ (291,439 ) $ 152,053 The carrying amounts of intangible assets as of December 31, 2018 were as follows: Gross Accumulated Net Useful Life (in thousands) (in years) Licensed technology $ 49,546 $ (30,062 ) $ 19,484 1-8 Developed technology 285,443 (164,406 ) 121,037 4-7 Customer relationships 69,776 (31,246 ) 38,530 4-9 Trade names 5,600 (5,323 ) 277 3 Total intangible assets $ 410,365 $ (231,037 ) $ 179,328 |
Schedule of estimated future amortization expense from amortizable intangible assets | The estimated future amortization expense is as follows: (in thousands) 2020 $ 55,857 2021 53,128 2022 18,010 2023 9,572 2024 8,521 Thereafter 6,965 Total $ 152,053 |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of derivative contracts | The fair value of derivative contracts as of December 31, 2019 and 2018 was as follows: Other current assets Other accrued liabilities Other current assets Other accrued liabilities December 31, 2019 December 31, 2018 (in thousands) Derivatives designated as hedging instruments Currency forward and option contracts $ 1,056 $ — $ 27 $ 2,122 Derivatives not designated as hedging instruments Currency forward and option contracts — — 69 414 Total derivatives $ 1,056 $ — $ 96 $ 2,536 |
Schedule of notional amounts of outstanding derivative positions | The gross notional amounts of derivative contracts were NIS denominated. The notional amounts of outstanding derivative contracts in U.S. dollar at December 31, 2019 and 2018 were as follows: December 31, December 31, 2019 2018 (in thousands) Derivatives designated as hedging instruments Currency forward and option contracts $ 85,648 $ 92,956 Derivatives not designated as hedging instruments Currency forward and option contracts $ — $ 57,844 |
Schedule of designated derivative contracts as cash flow hedges and their impact on OCI | The following table represents the unrealized gains (losses) of derivatives designated as hedging instruments, net of tax effects, that were recorded in accumulated other comprehensive income (loss) as of December 31, 2019 and 2018 , and their effect on OCI for the year ended December 31, 2019 (in thousands): December 31, 2018 $ (1,978 ) Amount of gains recognized in OCI (effective portion) 5,027 Amount of gains reclassified from OCI to income (effective portion) (2,072 ) December 31, 2019 $ 977 |
Effect of derivative contracts on the condensed consolidated statement of operations | The effect of derivative contracts on the consolidated statement of operations in the years ended December 31, 2019 , 2018 , and 2017 was as follows: Derivatives designated as hedging instruments Derivatives not designated as hedging instruments Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 (in thousands) Operating income (expenses) $ 2,072 $ (4,787 ) $ 7,034 $ — $ — $ — Other income (expenses) $ — $ — $ — $ 2,331 $ (4,553 ) $ 3,248 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of severance pay details | The severance pay detail is as follows: December 31, 2019 2018 (in thousands) Accrued severance liability $ 7,019 $ 21,645 Severance assets 5,776 17,043 Unfunded portion $ 1,243 $ 4,602 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of purchase commitment, excluding long-term commitment | At December 31, 2019 , the Company had the following non-cancelable purchase commitments: Year Ended December 31, Purchase Commitments (in thousands) 2020 $ 400,260 2021 4,361 2022 2,440 2023 1,750 Total purchase commitments $ 408,811 |
SHARE INCENTIVE PLANS (Tables)
SHARE INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [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, 2017 1,110,061 $ 38.35 Options exercised (586,076 ) $ 24.77 Options canceled (29,482 ) $ 100.81 Outstanding at December 31, 2018 494,503 $ 50.73 Options exercised (219,458 ) $ 34.63 Options canceled (1,040 ) $ 91.91 Outstanding at December 31, 2019 274,005 $ 63.46 |
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, 2017 3,414,705 $ 48.45 Restricted share units granted 1,773,217 $ 80.40 Restricted share units vested (1,354,359 ) $ 48.35 Restricted share units canceled (539,400 ) $ 52.29 Non-vested restricted share units at December 31, 2018 3,294,163 $ 65.05 Restricted share units granted 1,581,524 $ 105.42 Restricted share units vested (1,316,316 ) $ 60.63 Restricted share units canceled (244,023 ) $ 73.76 Non-vested restricted share units at December 31, 2019 3,315,348 $ 85.43 |
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, 2019 : Number of Share options outstanding 274,005 Restricted share units outstanding 3,315,348 Shares authorized for future issuance 2,253,990 ESPP shares available for future issuance 2,625,623 Total shares reserved for future issuance as of December 31, 2019 8,468,966 |
Schedule of weighted average assumptions used to value share options granted | The following weighted average assumptions were used in the valuation of the ESPP for the years ended December 31, 2019 , 2018 and 2017 : Employee Share Purchase Plan Year ended December 31, 2019 2018 2017 Dividend yield, % — — — Expected volatility 27.1 % 31.0 % 24.6 % Risk free interest rate 2.14 % 1.78 % 1.20 % Expected life, years 0.50 0.50 0.50 |
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, 2019 2018 2017 (in thousands) Share-based compensation expense by caption: Cost of goods sold $ 3,493 $ 1,950 $ 2,000 Research and development 61,315 38,922 40,278 Sales and marketing 26,614 17,042 15,693 General and administrative 20,696 13,428 10,893 Total share-based compensation expense $ 112,118 $ 71,342 $ 68,864 Share-based compensation expense by type of award: Share options $ 8 $ 12 $ 115 ESPP 7,161 6,378 6,232 RSU 102,898 64,059 62,517 PSU 2,051 893 — Total share-based compensation expense $ 112,118 $ 71,342 $ 68,864 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of the changes in accumulated balances of other comprehensive income (loss) | The following table summarizes the changes in accumulated other comprehensive income (loss) for the years ended December 31, 2019 and 2018 : Unrealized Gains (Losses) on Available-for-Sale Securities Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments Total (in thousands) Balance at December 31, 2018 $ 927 $ (1,978 ) $ (1,051 ) Other comprehensive income (loss) before reclassifications, net of taxes 737 5,027 5,764 Realized (gains)/losses reclassified from accumulated other comprehensive income (54 ) (2,072 ) (2,126 ) Net current-period other comprehensive income (loss), net of taxes 683 2,955 3,638 Balance at December 31, 2019 $ 1,610 $ 977 $ 2,587 Balance at December 31, 2017 $ 693 $ 925 $ 1,618 Other comprehensive income before reclassifications, net of taxes 218 (7,690 ) (7,472 ) Realized (gains)/losses reclassified from accumulated other comprehensive income 16 4,787 4,803 Net current-period other comprehensive income, net of taxes 234 (2,903 ) (2,669 ) Balance at December 31, 2018 $ 927 $ (1,978 ) $ (1,051 ) |
Schedule of reclassification out of accumulated other comprehensive income | The following table provides details about the realized (gains)/losses reclassified from accumulated other comprehensive income for the years ended December 31, 2019 and 2018 : Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the Statement of Operations Year ended December 31, 2019 2018 (in thousands) Realized (gains)/losses on derivatives designated as hedging instruments $ (2,072 ) $ 4,787 Cost of revenues and Operating expenses: (85 ) 206 Cost of revenues (161 ) 472 General and administrative (163 ) 384 Sales and marketing (1,663 ) 3,725 Research and development Realized losses on available-for-sale securities (54 ) 16 Interest and other, net Total reclassifications for the period $ (2,126 ) $ 4,803 Total |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before income taxes | The components of income (loss) before taxes on income are as follows: Year ended December 31, 2019 2018 2017 (in thousands) United States $ 36,683 $ 19,526 $ (21,528 ) Foreign 187,246 92,685 (375 ) Income (loss) before taxes on income $ 223,929 $ 112,211 $ (21,903 ) |
Schedule of the components of the provision for income taxes | The components of the provision for (benefit from) income taxes are as follows: Year ended December 31, 2019 2018 2017 (in thousands) Current: U.S. federal $ 4,009 $ 1,306 $ (617 ) State and local 571 512 632 Foreign 3,609 4,648 (261 ) Total current 8,189 6,466 (246 ) Deferred: U.S. federal 5,187 (17,487 ) — State and local 613 (12,283 ) — Foreign 4,845 1,257 (2,232 ) Total deferred 10,645 (28,513 ) (2,232 ) Provision for (benefit from) taxes on income $ 18,834 $ (22,047 ) $ (2,478 ) |
Schedule of significant deferred tax assets and liabilities | At December 31, 2019 and 2018 , significant deferred tax assets and liabilities are as follows: December 31, 2019 2018 (in thousands) Deferred tax assets: Net operating loss and credit carryforwards $ 28,936 $ 42,345 Share-based compensation 10,559 7,241 Lease liabilities 7,315 — Reserves and accruals 2,768 6,620 Other 4,030 7,069 Gross deferred tax assets 53,608 63,275 Valuation allowance (5,971 ) (8,152 ) Total deferred tax assets 47,637 55,123 Right of use assets (6,630 ) — Intangible assets (4,021 ) (4,463 ) Others (480 ) — Total deferred tax liabilities (11,131 ) (4,463 ) Net deferred tax assets $ 36,506 $ 50,660 |
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, 2019 2018 2017 Tax at statutory rate 21.0 % 21.0 % 35.0 % Tax at rates other than the statutory rate (15.6 ) (14.2 ) (4.8 ) Valuation allowance — (29.1 ) 47.3 Net change in tax reserves 2.8 4.1 8.0 Adjustment of deferred tax balances following changes in tax rates — — (71.8 ) Other, net 0.2 (1.4 ) (2.4 ) Provision for (benefit from) taxes on income 8.4 % (19.6 )% 11.3 % |
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, 2019 2018 2017 (in thousands) Gross unrecognized tax benefits, beginning of the period $ 46,541 $ 45,154 $ 41,460 Increases in tax positions for prior years 2,789 1,377 3,655 Decreases in tax positions for prior years — (1,860 ) — Increases in tax positions for current year 11,784 5,516 8,090 Increases in tax positions acquired or assumed in a business combination — — — Decreases due to lapses of statutes of limitations (5,642 ) (3,646 ) (8,051 ) Gross unrecognized tax benefits, end of the period $ 55,472 $ 46,541 $ 45,154 |
GEOGRAPHIC INFORMATION (Tables)
GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of revenues by geographic region | Revenues by geographic region are as follows: Year ended December 31, 2019 2018 2017 (in thousands) United States $ 515,292 $ 402,840 $ 327,528 China 372,041 258,451 172,405 Europe 169,594 174,892 176,937 Other Americas 123,956 128,077 92,449 Other Asia 149,693 124,483 94,574 Total revenue $ 1,330,576 $ 1,088,743 $ 863,893 |
Schedule of property and equipment, net by geographic location | Property and equipment, net by geographic location are as follows: December 31, 2019 2018 (in thousands) Israel $ 109,375 $ 99,589 United States 1,815 3,495 Other 2,378 2,250 Total property and equipment, net $ 113,568 $ 105,334 |
INTEREST AND OTHER, NET (Tables
INTEREST AND OTHER, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of other net | Interest and other, net, is summarized in the following table: Year ended December 31, 2019 2018 2017 (in thousands) Interest expense $ (149 ) $ (2,185 ) $ (7,937 ) Interest income and gains on short-term investments, net 15,588 5,629 3,748 Foreign exchange loss, net (7,070 ) (1,256 ) (596 ) Gain on investments in privately-held companies 9,569 — — Impairment of investments in privately-held companies (1,755 ) (1,494 ) — Other (174 ) (557 ) (37 ) Interest and other, net $ 16,009 $ 137 $ (4,822 ) |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of effect of adopting ASU 2016-02 | The cumulative effect of the changes made to the consolidated balance sheet as of January 1, 2019 for the adoption of Topic 842 were as follows: December 31, 2018 Adjustments January 1, 2019 (in thousands) Deferred taxes and other long-term assets $ 118,182 $ 69,102 $ 187,284 Accrued liabilities $ 121,878 $ 16,618 $ 138,496 Other long-term liabilities $ 54,113 $ 52,484 $ 106,597 |
Schedule of components of lease expense and supplemental cash flow information | The components of lease expense and supplemental cash flow information related to leases for the year ended December 31, 2019 were as follows: Year ended December 31, 2019 (in thousands) Components of lease expense: Operating lease cost $ 23,163 Supplemental cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 20,856 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets $ 22,403 |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows: (in thousands) 2020 $ 20,288 2021 16,840 2022 9,832 2023 9,034 2024 8,777 Thereafter 23,645 Total (1) 88,416 Less: Imputed interest (7,662 ) Lease liability $ 80,754 (1) Future lease payments have not been reduced by minimum sublease rental income of $3.6 million owed to the Company in the future under noncancelable subleases. |
THE COMPANY AND SUMMARY OF SI_4
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Pending Merger with NVIDIA Corporation (Details) $ / shares in Units, $ in Millions | Mar. 10, 2019USD ($)extension$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2019₪ / shares | Dec. 31, 2018₪ / shares |
Business Acquisition [Line Items] | ||||
Ordinary shares, par value (in NIS per share) | ₪ / shares | ₪ 0.0175 | ₪ 0.0175 | ||
NVIDIA Merger | ||||
Business Acquisition [Line Items] | ||||
Ordinary shares, par value (in NIS per share) | $ / shares | $ 0.0175 | |||
Conversion price of shares (in usd per share) | $ / shares | $ 125 | |||
Number of merger extensions | extension | 2 | |||
Merger extension period | 3 months | |||
Termination fee, due to Parent | $ 225 | |||
Termination fee, due from Parent | $ 350 | |||
Merger related costs | $ 15.5 |
THE COMPANY AND SUMMARY OF SI_5
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Restricted cash and Concentration of credit risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents, as reported on the balance sheets | $ 77,579 | $ 56,766 | $ 62,473 | |
Restricted cash in deferred taxes and other long-term assets, as reported on the balance sheets | 0 | 7,884 | 8,025 | |
Cash, cash equivalents, and restricted cash, as reported in the statements of cash flows | $ 77,579 | $ 64,650 | $ 70,498 | $ 56,780 |
Customer Concentration Risk | Net sales revenue | HPE | ||||
Concentration of credit risk | ||||
Concentration risk | 11.00% | 12.00% | 13.00% | |
Customer Concentration Risk | Net sales revenue | Dell | ||||
Concentration of credit risk | ||||
Concentration risk | 10.00% | 12.00% | 11.00% |
THE COMPANY AND SUMMARY OF SI_6
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment, net: | ||
Cost and accumulated depreciation, period increase (decrease) | $ 26.7 | $ 16.6 |
Computer, equipment, and software | ||
Property and equipment, net: | ||
Property, plant and equipment, useful life | 3 years | |
Lab equipment | ||
Property and equipment, net: | ||
Property, plant and equipment, useful life | 7 years | |
Office furnitures and fixtures | ||
Property and equipment, net: | ||
Property, plant and equipment, useful life | 7 years |
THE COMPANY AND SUMMARY OF SI_7
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Equity investments in privately-held companies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Impairment of investment in a privately-held company | $ 1,800 | $ 1,500 | $ 1,755 | $ 1,494 | $ 0 |
THE COMPANY AND SUMMARY OF SI_8
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Impairment of long-lived assets | $ 1.5 | $ 2.4 | $ 12 |
Tangible asset impairment charges | $ 0.9 | $ 7.7 |
THE COMPANY AND SUMMARY OF SI_9
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product warranty, advertising (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Product warranty | |||
Warranty period | 3 years | ||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Balance, beginning of the period | $ 1,375 | $ 889 | |
New warranties issued during the period | 7,480 | 2,532 | |
Settlements during the period | (6,203) | (2,046) | |
Balance, end of the period | 2,652 | 1,375 | $ 889 |
Less: long-term portion of product warranty liability | (740) | (285) | |
Product warranty liability | 1,912 | 1,090 | |
Advertising | |||
Advertising expense | $ 3,100 | $ 2,600 | $ 2,900 |
THE COMPANY AND SUMMARY OF S_10
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 112,118 | $ 71,342 | $ 68,864 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
PSU portion of non vested restricted share units (in shares) | 36,000 | 36,000 | |
Share-based compensation expense | $ 2,051 | $ 893 | $ 0 |
Minimum | Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage of the target | 0.00% | ||
Maximum | Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights, percentage of the target | 175.00% |
THE COMPANY AND SUMMARY OF S_11
THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net income (loss) per share and Segment reporting (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net income (loss) | $ | $ 205,095 | $ 134,258 | $ (19,425) |
Basic and diluted shares: | |||
Weighted average ordinary shares outstanding (in shares) | 54,946 | 52,863 | 50,310 |
Effect of dilutive shares (in shares) | 1,716 | 1,783 | 0 |
Shares used to compute diluted net income (loss) per share (in shares) | 56,662 | 54,646 | 50,310 |
Net income (loss) per share - basic (in USD per share) | $ / shares | $ 3.73 | $ 2.54 | $ (0.39) |
Net income (loss) per share - diluted (in USD per share) | $ / shares | $ 3.62 | $ 2.46 | $ (0.39) |
Antidilutive securities excluded from computation of earnings per share (in shares) | 100 | 200 | 4,500 |
Segment reporting | |||
Number of reportable segments | segment | 1 |
REVENUE - Revenue by Geographic
REVENUE - Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 1,330,576 | $ 1,088,743 | $ 863,893 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 515,292 | 402,840 | 327,528 |
China | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 372,041 | 258,451 | 172,405 |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 169,594 | 174,892 | 176,937 |
Other Americas | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 123,956 | 128,077 | 92,449 |
Other Asia | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 149,693 | $ 124,483 | $ 94,574 |
REVENUE - Revenue by Product Ty
REVENUE - Revenue by Product Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 1,330,576 | $ 1,088,743 | $ 863,893 |
ICs | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 216,726 | 149,180 | 161,216 |
Boards | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 532,584 | 495,753 | 325,845 |
Switch systems | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 329,529 | 247,478 | 222,836 |
Cables, accessories and other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 251,737 | $ 196,332 | $ 153,996 |
REVENUE - Revenue by Interconne
REVENUE - Revenue by Interconnect Protocol (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 1,330,576 | $ 1,088,743 | $ 863,893 |
InfiniBand: | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 565,930 | 438,359 | 407,325 |
HDR | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 142,127 | 10,177 | 0 |
EDR | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 273,045 | 234,655 | 194,261 |
FDR | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 125,530 | 149,168 | 181,465 |
QDR/DDR/SDR | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 25,228 | 44,359 | 31,599 |
Ethernet | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 743,899 | 618,471 | 401,005 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 20,747 | $ 31,913 | $ 55,563 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) | Dec. 31, 2019 |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining service period | 5 years |
REVENUE - Contract Liabilities
REVENUE - Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Change in Contract with Customer, Asset and Liability [Roll Forward] | ||
Balance, beginning of the period | $ 39,223 | $ 36,804 |
New deferred revenue | 49,514 | 29,604 |
Reclassification to revenue during the year | (36,294) | (27,185) |
Balance, end of the period | 52,443 | 39,223 |
Less: long-term portion of deferred revenue | 27,481 | 18,665 |
Current portion, end of the period | 24,962 | 20,558 |
Revenue recognized | 20,600 | 19,000 |
New deferred revenue during the year | 15,700 | $ 8,200 |
Performance obligation | 41,700 | |
Assets related to costs related to obtain contracts | 11,300 | |
Amortization of capitalized contract costs | 7,500 | |
Capitalized contract cost | $ 3,800 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligations (Details) | Dec. 31, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, expected timing of satisfaction | 3 years |
BALANCE SHEET COMPONENTS (Detai
BALANCE SHEET COMPONENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Accounts receivable, net: | |||
Accounts receivable | $ 240,213 | $ 156,525 | |
Less: allowance for unearned DPA | (9,900) | (5,400) | |
Less: allowance for doubtful accounts | (440) | (500) | |
Accounts receivable, net | 229,873 | 150,625 | |
Inventories: | |||
Raw materials | 14,018 | 19,391 | |
Work-in-process | 39,744 | 39,425 | |
Finished goods | 44,268 | 45,565 | |
Inventories | 98,030 | 104,381 | |
Property and equipment, net: | |||
Property and equipment, gross | 286,964 | 266,438 | |
Less: Accumulated depreciation and amortization | (173,396) | (161,104) | |
Property and equipment, net | 113,568 | 105,334 | |
Deferred taxes and other long-term assets: | |||
Right of use assets | 72,451 | ||
Deferred tax assets | 36,506 | 50,660 | |
Severance assets | 5,776 | 17,043 | |
Other assets | 44,289 | 50,479 | |
Deferred taxes and other long-term assets | 159,022 | $ 187,284 | 118,182 |
Accrued liabilities: | |||
Payroll and related expenses | 95,904 | 76,788 | |
Accrued expenses | 41,601 | 28,821 | |
Lease liability, current | 19,821 | ||
Other | 39,201 | 16,269 | |
Accrued liabilities | 196,527 | 138,496 | 121,878 |
Other long-term liabilities: | |||
Lease liability, long-term | 60,933 | ||
Income tax payable | 30,194 | 25,600 | |
Accrued severance | 7,019 | 21,645 | |
Other | 11,500 | 6,868 | |
Other long-term liabilities | 109,646 | $ 106,597 | 54,113 |
Computer, equipment, and software | |||
Property and equipment, net: | |||
Property and equipment, gross | 227,725 | 191,130 | |
Furniture and fixtures | |||
Property and equipment, net: | |||
Property and equipment, gross | 2,063 | 25,358 | |
Leasehold improvements | |||
Property and equipment, net: | |||
Property and equipment, gross | $ 57,176 | $ 49,950 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | $ 77,579 | $ 56,766 |
Debt securities, available-for-sale | 798,318 | 381,724 |
Derivative contracts | 1,056 | 96 |
Derivative contracts | 0 | 2,536 |
Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Derivative contracts | 1,056 | 96 |
Investments at fair value | 382,989 | |
Long-term restricted cash | 7,884 | |
Total financial assets | 800,432 | 390,969 |
Derivative contracts | 2,536 | |
Total financial liabilities | 2,536 | |
Fair value, measurements, recurring basis | Level 1 | ||
Financial assets measured at fair value | ||
Derivative contracts | 0 | 0 |
Investments at fair value | 1,265 | |
Long-term restricted cash | 0 | |
Total financial assets | 1,058 | 1,265 |
Derivative contracts | 0 | |
Total financial liabilities | 0 | |
Fair value, measurements, recurring basis | Level 2 | ||
Financial assets measured at fair value | ||
Derivative contracts | 1,056 | 96 |
Investments at fair value | 381,724 | |
Long-term restricted cash | 7,884 | |
Total financial assets | 799,374 | 389,704 |
Derivative contracts | 2,536 | |
Total financial liabilities | 2,536 | |
Money market funds | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 1,058 | 1,265 |
Money market funds | Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 1,058 | 1,265 |
Money market funds | Fair value, measurements, recurring basis | Level 1 | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 1,058 | 1,265 |
Money market funds | Fair value, measurements, recurring basis | Level 2 | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 0 | 0 |
Certificates of deposit | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 198,663 | 95,038 |
Certificates of deposit | Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 198,663 | 95,038 |
Certificates of deposit | Fair value, measurements, recurring basis | Level 1 | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 0 | 0 |
Certificates of deposit | Fair value, measurements, recurring basis | Level 2 | ||
Financial assets measured at fair value | ||
Cash and cash equivalents, estimated fair value | 198,663 | 95,038 |
Government debt securities | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 232,604 | 100,478 |
Government debt securities | Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 232,604 | 100,478 |
Government debt securities | Fair value, measurements, recurring basis | Level 1 | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 0 | 0 |
Government debt securities | Fair value, measurements, recurring basis | Level 2 | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 232,604 | 100,478 |
Corporate debt securities | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 367,051 | 186,208 |
Corporate debt securities | Fair value, measurements, recurring basis | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 367,051 | 186,208 |
Corporate debt securities | Fair value, measurements, recurring basis | Level 1 | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | 0 | 0 |
Corporate debt securities | Fair value, measurements, recurring basis | Level 2 | ||
Financial assets measured at fair value | ||
Debt securities, available-for-sale | $ 367,051 | $ 186,208 |
INVESTMENTS - Schedule of cash,
INVESTMENTS - Schedule of cash, cash equivalents and short-term investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents, Amortized Cost | $ 77,579 | $ 56,766 | $ 62,473 |
Cash and cash equivalents, Estimated Fair Value | 77,579 | 56,766 | |
Short-term Investments, Amortized Cost | 796,710 | 382,100 | |
Short-term Investments, Estimated Fair Value | 798,318 | 381,724 | |
Cash, cash equivalents and short-term investments, Amortized Cost | 874,289 | 438,866 | |
Cash, cash equivalents and short-term investments, Estimated Fair Value | 875,897 | 438,490 | |
Gains/losses on short-term investments | 15,600 | 5,600 | |
Unrealized gains | 1,900 | 100 | |
Unrealized losses | 300 | 500 | |
Cash and cash equivalents | |||
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents, Amortized Cost | 76,521 | 55,501 | |
Cash and cash equivalents, Estimated Fair Value | 76,521 | 55,501 | |
Money market funds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Cash and cash equivalents, Amortized Cost | 1,058 | 1,265 | |
Cash and cash equivalents, Estimated Fair Value | 1,058 | 1,265 | |
Certificates of deposit | |||
Debt Securities, Available-for-sale [Line Items] | |||
Short-term Investments, Amortized Cost | 198,561 | 95,080 | |
Short-term Investments, Estimated Fair Value | 198,663 | 95,038 | |
Government debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Short-term Investments, Amortized Cost | 232,357 | 100,449 | |
Short-term Investments, Estimated Fair Value | 232,604 | 100,478 | |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Short-term Investments, Amortized Cost | 365,792 | 186,571 | |
Short-term Investments, Estimated Fair Value | $ 367,051 | $ 186,208 |
INVESTMENTS - Contractual matur
INVESTMENTS - Contractual maturities of short-term investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amortized Cost | ||||||
Due in less than one year | $ 281,303 | $ 424,616 | $ 281,303 | |||
Due in one to three years | 100,797 | 372,094 | 100,797 | |||
Amortized Cost | 382,100 | 796,710 | 382,100 | |||
Estimated Fair Value | ||||||
Due in less than one year | 280,959 | 425,053 | 280,959 | |||
Due in one to three years | 100,765 | 373,265 | 100,765 | |||
Estimated fair value | 381,724 | 798,318 | 381,724 | |||
Equity investments in privately-held companies | 40,300 | 39,300 | 40,300 | |||
Gain on sale of investment | $ 9,100 | |||||
Escrow deposits | 3,200 | |||||
Gain conversion of note receivable to equity | $ 400 | |||||
Impairment of investment in a privately-held company | $ 1,800 | $ 1,500 | $ 1,755 | $ 1,494 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 473,916 |
Acquisitions | 0 |
Adjustments | 0 |
Goodwill, ending balance | $ 473,916 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of carrying amount of intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 443,492 | $ 410,365 | |
Accumulated Amortization | (291,439) | (231,037) | |
Total | 152,053 | 179,328 | |
Amortization expense of intangible assets | 60,400 | 63,900 | $ 61,300 |
Licensed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 82,673 | 49,546 | |
Accumulated Amortization | (44,950) | (30,062) | |
Total | 37,723 | 19,484 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 285,443 | 285,443 | |
Accumulated Amortization | (203,376) | (164,406) | |
Total | 82,067 | 121,037 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 69,776 | 69,776 | |
Accumulated Amortization | (37,513) | (31,246) | |
Total | 32,263 | 38,530 | |
Trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 5,600 | 5,600 | |
Accumulated Amortization | (5,600) | (5,323) | |
Total | $ 0 | $ 277 | |
Finite-lived intangible asset, useful life | 3 years | 3 years | |
Minimum | Licensed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 1 year | 1 year | |
Minimum | Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 4 years | 4 years | |
Minimum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 4 years | 4 years | |
Maximum | Licensed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 9 years | 8 years | |
Maximum | Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 7 years | 7 years | |
Maximum | Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | 9 years | 9 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Finite-lived intangible assets maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 55,857 | |
2021 | 53,128 | |
2022 | 18,010 | |
2023 | 9,572 | |
2024 | 8,521 | |
Thereafter | 6,965 | |
Total | $ 152,053 | $ 179,328 |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES - Fair value of derivative contracts (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Currency forward contracts, asset | $ 1,056 | $ 96 |
Currency forward contracts, liability | 0 | 2,536 |
Derivatives designated as hedging instruments | ||
Buy Contracts | ||
Notional amounts | 85,648 | 92,956 |
Derivatives not designated as hedging instruments | ||
Buy Contracts | ||
Notional amounts | 0 | 57,844 |
Other current assets | Derivatives designated as hedging instruments | Currency forward and option contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Currency forward contracts, asset | 1,056 | 27 |
Other current assets | Derivatives not designated as hedging instruments | Currency forward and option contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Currency forward contracts, asset | 0 | 69 |
Other accrued liabilities | Derivatives designated as hedging instruments | Currency forward and option contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Currency forward contracts, liability | 0 | 2,122 |
Other accrued liabilities | Derivatives not designated as hedging instruments | Currency forward and option contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Currency forward contracts, liability | $ 0 | $ 414 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES - Effect of derivatives as hedging instruments on accumulated other comprehensive income (loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance of designated derivative contracts as cash flow hedges and their impact on OCI | |||
Balance at beginning of period | $ (1,051) | ||
Amount of gains recognized in OCI (effective portion) | 2,955 | $ (2,903) | $ 1,617 |
Balance at end of period | 2,587 | (1,051) | |
Derivatives designated as hedging instruments | |||
Balance of designated derivative contracts as cash flow hedges and their impact on OCI | |||
Balance at beginning of period | (1,978) | ||
Amount of gains recognized in OCI (effective portion) | 5,027 | ||
Amount of gains reclassified from OCI to income (effective portion) | (2,072) | ||
Balance at end of period | $ 977 | $ (1,978) |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES - Effect of derivative contracts on the consolidated statement of operations (Details) - Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating income (expenses) | Derivatives designated as hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) on derivatives | $ 2,072 | $ (4,787) | $ 7,034 |
Operating income (expenses) | Derivatives not designated as hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) on derivatives | 0 | 0 | 0 |
Other income (expenses) | Derivatives designated as hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) on derivatives | 0 | 0 | 0 |
Other income (expenses) | Derivatives not designated as hedging instruments | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) on derivatives | $ 2,331 | $ (4,553) | $ 3,248 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Jun. 30, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Severance pay details | |||||
Accrued severance liability | $ 7,019 | $ 21,645 | |||
Severance assets | 5,776 | 17,043 | |||
Unfunded portion | $ 1,243 | 4,602 | |||
Israel | Pension plan | |||||
Defined Benefit Plan Disclosures [Line Items] | |||||
Employer contribution limit per calendar year | 6.25% | 6.00% | 6.50% | ||
Defined pension contribution plan expenses | $ 11,500 | 10,600 | $ 10,400 | ||
Company's contribution as a percentage of employee monthly salary to insurance policy or pension fund | 8.30% | ||||
Severance pay expenses | $ 16,200 | 13,700 | 12,600 | ||
Section 401 K Savings Plan | |||||
Defined Benefit Plan Disclosures [Line Items] | |||||
Defined pension contribution plan expenses | $ 1,800 | ||||
Section 401 K Savings Plan | US | |||||
Defined Benefit Plan Disclosures [Line Items] | |||||
Employer contribution limit per calendar year | 4.00% | ||||
Defined pension contribution plan expenses | $ 1,800 | $ 2,200 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Purchase Commitments | ||||||
2020 | $ 400,260 | |||||
2021 | 4,361 | |||||
2022 | 2,440 | |||||
2023 | 1,750 | |||||
Total purchase commitments | 408,811 | |||||
Loss Contingencies [Line Items] | ||||||
Royalty guarantees, commitments, amount | $ 36,400 | |||||
Unrecognized tax benefits | 55,472 | $ 46,541 | $ 45,154 | $ 41,460 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 28,600 | $ 25,700 | $ 24,600 | |||
Settlement agreement with IIA | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement agreement expense | $ 9,300 |
SHARE INCENTIVE PLANS - Stock o
SHARE INCENTIVE PLANS - Stock option plans (Details) - shares | Jul. 25, 2019 | Jul. 25, 2018 | Feb. 14, 2017 | Dec. 31, 2019 | Mar. 14, 2016 |
Share-based compensation | |||||
Total shares reserved for future issuance (in shares) | 8,468,966 | 0 | |||
All other stock option plans | |||||
Share-based compensation | |||||
Total shares reserved for future issuance (in shares) | 750,000 | ||||
Second Restated Plan | |||||
Share-based compensation | |||||
Total shares reserved for future issuance (in shares) | 2,390,000 | ||||
Number of shares reserved for future issuance, increase (decease) | 1,640,000 | ||||
Third Restated Plan | |||||
Share-based compensation | |||||
Total shares reserved for future issuance (in shares) | 4,467,000 | ||||
Number of shares reserved for future issuance, increase (decease) | 2,077,000 | ||||
Fourth Restated Plan | |||||
Share-based compensation | |||||
Total shares reserved for future issuance (in shares) | 6,427,000 | ||||
Number of shares reserved for future issuance, increase (decease) | 1,960,000 |
SHARE INCENTIVE PLANS - Summary
SHARE INCENTIVE PLANS - Summary of share option activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Options outstanding at the beginning of the period (in shares) | 494,503 | 1,110,061 |
Options exercised (in shares) | (219,458) | (586,076) |
Options canceled (in shares) | (1,040) | (29,482) |
Options outstanding at the end of the period (in shares) | 274,005 | 494,503 |
Weighted Average Exercise Price | ||
Options outstanding at the beginning of the period (in USD per share) | $ 50.73 | $ 38.35 |
Options exercised (in USD per share) | 34.63 | 24.77 |
Options canceled (in USD per share) | 91.91 | 100.81 |
Options outstanding at the end of the period (in USD per share) | $ 63.46 | $ 50.73 |
Weighted average remaining contractual life | 2 years 7 months 6 days | |
Share options | ||
Weighted Average Exercise Price | ||
Total pretax intrinsic value of options exercised | $ 15.6 | $ 33.5 |
Share value (in USD per share) | $ 117.18 | $ 92.38 |
Total pretax intrinsic value of all outstanding options | $ 14.7 | $ 21.8 |
Total pretax intrinsic value of all exercisable options | $ 14.7 | $ 21.7 |
Number of exercisable options outstanding (in shares) | 273,963 | |
Weighted average exercise price, options exercisable (in USD per share) | $ 63.47 |
SHARE INCENTIVE PLANS - Restric
SHARE INCENTIVE PLANS - Restricted share unit activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted Stock Units (RSUs) | |||
Number of Shares | |||
Non vested restricted share units at the beginning of the period (in shares) | 3,294,163 | 3,414,705 | |
Restricted share units granted (in shares) | 1,581,524 | 1,773,217 | |
Restricted share units vested (in shares) | (1,316,316) | (1,354,359) | |
Restricted share units canceled (in shares) | (244,023) | (539,400) | |
Non vested restricted share units at the end of the period (in shares) | 3,315,348 | 3,294,163 | 3,414,705 |
Weighted Average Grant Date Fair Value | |||
Non vested restricted share units at the beginning of the period (in USD per share) | $ 65.05 | $ 48.45 | |
Restricted share units granted (in USD per share) | 105.42 | 80.40 | $ 49.88 |
Restricted share units vested (in USD per share) | 60.63 | 48.35 | |
Restricted share units cancelled (in USD per share) | 73.76 | 52.29 | |
Non vested restricted share units at the end of the period (in USD per share) | $ 85.43 | $ 65.05 | $ 48.45 |
Total intrinsic value of all outstanding restricted share units | $ 388.5 | ||
Performance Shares | |||
Number of Shares | |||
Restricted share units granted (in shares) | 36,000 | 36,000 | |
Minimum | Performance Shares | |||
Weighted Average Grant Date Fair Value | |||
Award vesting rights, percentage of the target | 0.00% | ||
Maximum | Performance Shares | |||
Weighted Average Grant Date Fair Value | |||
Award vesting rights, percentage of the target | 175.00% |
SHARE INCENTIVE PLANS - Employe
SHARE INCENTIVE PLANS - Employee stock purchase plan activity (Details) - ESPP - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based compensation | |||
Maximum employee base compensation contribution | 15.00% | ||
ESPP purchase price percentage of market price | 85.00% | ||
Maximum value of ordinary shares issued per employee pursuant to purchase rights under the ESPP per calendar year | $ 25,000 | ||
Shares issued in period (in shares) | 309,723 | 490,123 | 568,876 |
Weighted-average exercise price, options granted (in USD per share) | $ 78.92 | $ 46.62 | $ 38.83 |
SHARE INCENTIVE PLANS - Shares
SHARE INCENTIVE PLANS - Shares reserved for future issuance (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 14, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share options outstanding (in shares) | 274,005 | |||
Total shares reserved for future issuance (in shares) | 8,468,966 | 0 | ||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted share units outstanding (in shares) | 3,315,348 | 3,294,163 | 3,414,705 | |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future issuance (in shares) | 2,625,623 | |||
Global Share Incentive Plan 2006 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future issuance (in shares) | 2,253,990 |
SHARE INCENTIVE PLANS - Weighte
SHARE INCENTIVE PLANS - Weighted average assumptions used (Details) - Employee Share Purchase Plan | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average assumptions | |||
Dividend yield, % | 0.00% | 0.00% | 0.00% |
Expected volatility | 27.10% | 31.00% | 24.60% |
Risk free interest rate | 2.14% | 1.78% | 1.20% |
Expected life, years | 15 days | 15 days | 15 days |
SHARE INCENTIVE PLANS - Share-b
SHARE INCENTIVE PLANS - Share-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based compensation expense | |||
Total share-based compensation expense | $ 112,118 | $ 71,342 | $ 68,864 |
Total unrecognized share-based compensation costs related to non-vested awards | $ 235,400 | ||
Weighted average period for recognition of unrecognized share-based compensation costs (in years) | 2 years 8 months 8 days | ||
Share options | |||
Share-based compensation expense | |||
Total share-based compensation expense | $ 8 | 12 | 115 |
ESPP | |||
Share-based compensation expense | |||
Total share-based compensation expense | 7,161 | 6,378 | 6,232 |
RSU | |||
Share-based compensation expense | |||
Total share-based compensation expense | 102,898 | 64,059 | 62,517 |
PSU | |||
Share-based compensation expense | |||
Total share-based compensation expense | 2,051 | 893 | 0 |
Cost of goods sold | |||
Share-based compensation expense | |||
Total share-based compensation expense | 3,493 | 1,950 | 2,000 |
Research and development | |||
Share-based compensation expense | |||
Total share-based compensation expense | 61,315 | 38,922 | 40,278 |
Sales and marketing | |||
Share-based compensation expense | |||
Total share-based compensation expense | 26,614 | 17,042 | 15,693 |
General and administrative | |||
Share-based compensation expense | |||
Total share-based compensation expense | $ 20,696 | $ 13,428 | $ 10,893 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | $ 1,301,648 | $ 1,057,448 | $ 975,730 |
Other comprehensive income (loss) | 4,941 | (2,669) | 2,546 |
Ending balance | 1,655,845 | 1,301,648 | 1,057,448 |
Unrealized Gains (Losses) on Available-for-Sale Securities | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | 927 | 693 | |
Other comprehensive income (loss) before reclassifications, net of taxes | 737 | 218 | |
Realized (gains)/losses reclassified from accumulated other comprehensive income | (54) | 16 | |
Other comprehensive income (loss) | 683 | 234 | |
Ending balance | 1,610 | 927 | 693 |
Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | (1,978) | ||
Other comprehensive income (loss) before reclassifications, net of taxes | 5,027 | ||
Realized (gains)/losses reclassified from accumulated other comprehensive income | (2,072) | ||
Other comprehensive income (loss) | 2,955 | ||
Ending balance | 977 | (1,978) | |
Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | (1,978) | 925 | |
Other comprehensive income (loss) before reclassifications, net of taxes | (7,690) | ||
Realized (gains)/losses reclassified from accumulated other comprehensive income | 4,787 | ||
Other comprehensive income (loss) | (2,903) | ||
Ending balance | (1,978) | 925 | |
Total | |||
AOCI Attributable to Parent, Net of Tax | |||
Beginning balance | (1,051) | 1,618 | (928) |
Other comprehensive income (loss) before reclassifications, net of taxes | 5,764 | (7,472) | |
Realized (gains)/losses reclassified from accumulated other comprehensive income | (2,126) | 4,803 | |
Other comprehensive income (loss) | 3,638 | (2,669) | |
Ending balance | $ 2,587 | $ (1,051) | $ 1,618 |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Realized gain/losses reclassified from AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Cost of revenues | $ 464,125 | $ 388,573 | $ 300,450 |
General and administrative | 79,473 | 68,870 | 52,170 |
Sales and marketing | 162,726 | 148,553 | 150,457 |
Research and development | 414,875 | 360,344 | 365,878 |
Interest and other, net | 16,009 | 137 | (4,822) |
Net income (loss) | (205,095) | (134,258) | $ 19,425 |
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Net income (loss) | (2,126) | 4,803 | |
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | |||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Cost of revenues and Operating expenses: | (2,072) | ||
Cost of revenues | (85) | ||
General and administrative | (161) | ||
Sales and marketing | (163) | ||
Research and development | (1,663) | ||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | Realized (gains)/losses on derivatives designated as hedging instruments | |||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Cost of revenues and Operating expenses: | 4,787 | ||
Cost of revenues | 206 | ||
General and administrative | 472 | ||
Sales and marketing | 384 | ||
Research and development | 3,725 | ||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | Realized losses on available-for-sale securities | |||
Realized (Gains)/Losses Reclassified from Accumulated Other Comprehensive Income | |||
Interest and other, net | $ 54 | $ (16) |
INCOME TAXES - Income (loss) be
INCOME TAXES - Income (loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 36,683 | $ 19,526 | $ (21,528) |
Foreign | 187,246 | 92,685 | (375) |
Income (loss) before taxes on income | $ 223,929 | $ 112,211 | $ (21,903) |
INCOME TAXES - Provision for in
INCOME TAXES - Provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
U.S. federal | $ 4,009 | $ 1,306 | $ (617) |
State and local | 571 | 512 | 632 |
Foreign | 3,609 | 4,648 | (261) |
Total current | 8,189 | 6,466 | (246) |
Deferred: | |||
U.S. federal | 5,187 | (17,487) | 0 |
State and local | 613 | (12,283) | 0 |
Foreign | 4,845 | 1,257 | (2,232) |
Total deferred | 10,645 | (28,513) | (2,232) |
Provision for (benefit from) taxes on income | $ 18,834 | $ (22,047) | $ (2,478) |
INCOME TAXES - Deferred taxes a
INCOME TAXES - Deferred taxes and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 28,936 | $ 42,345 |
Share-based compensation | 10,559 | 7,241 |
Lease liabilities | 7,315 | |
Reserves and accruals | 2,768 | 6,620 |
Other | 4,030 | 7,069 |
Gross deferred tax assets | 53,608 | 63,275 |
Valuation allowance | (5,971) | (8,152) |
Total deferred tax assets | 47,637 | 55,123 |
Right of use assets | (6,630) | |
Intangible assets | (4,021) | (4,463) |
Others | (480) | 0 |
Total deferred tax liabilities | (11,131) | (4,463) |
Net deferred tax assets | $ 36,506 | $ 50,660 |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) - USD ($) $ in Thousands | Jun. 14, 2017 | Jun. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Operating Loss Carryforwards [Line Items] | ||||||
Deferred tax assets, valuation allowance released | $ 32,100 | |||||
Undistributed earnings of foreign subsidiaries | $ 40,400 | |||||
Amount of unrecognized deferred tax liability, undistributed earnings of foreign subsidiaries | 9,300 | |||||
Unrecognized tax benefits | 55,472 | 46,541 | $ 45,154 | $ 41,460 | ||
Unrecognized tax benefits that would impact effective tax rate | 28,600 | 25,700 | 24,600 | |||
Unrecognized tax benefits, income tax penalties and interest accrued | $ 2,500 | $ 2,600 | $ 2,900 | |||
Effective income tax rate reconciliation, percent | 8.40% | (19.60%) | 11.30% | |||
Change in enacted tax rate, amount | $ (200) | |||||
Domestic Tax Authority | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | $ 56,500 | |||||
State and Local Jurisdiction | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | 46,200 | |||||
Israel Tax Authority | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | 138,400 | |||||
Denmark | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Operating loss carryforwards | $ 5,700 | |||||
Tel Aviv | Israel Tax Authority | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate reconciliation, percent | 12.00% | |||||
Yokneam | Israel Tax Authority | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate reconciliation, percent | 7.50% |
INCOME TAXES - Effective rate r
INCOME TAXES - Effective rate reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at statutory rate | 21.00% | 21.00% | 35.00% |
Tax at rates other than the statutory rate | (15.60%) | (14.20%) | (4.80%) |
Valuation allowance | 0.00% | (29.10%) | 47.30% |
Net change in tax reserves | 2.80% | 4.10% | 8.00% |
Adjustment of deferred tax balances following changes in tax rates | 0.00% | 0.00% | (71.80%) |
Other, net | 0.20% | (1.40%) | (2.40%) |
Provision for (benefit from) taxes on income | 8.40% | (19.60%) | 11.30% |
INCOME TAXES - Tax holiday (Det
INCOME TAXES - Tax holiday (Details) - Israel Tax Authority - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax holiday, aggregate dollar amount | $ 53.7 | $ 27.9 | $ 11.6 |
Income tax holiday, income tax benefits per share (in USD per share) | $ 0.95 | $ 0.49 | $ 0.23 |
Tel Aviv | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax holiday reduced income tax rate after second year of tax holiday | 10.00% |
INCOME TAXES - Unrecognized tax
INCOME TAXES - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits, beginning of the period | $ 46,541 | $ 45,154 | $ 41,460 |
Increases in tax positions for prior years | 2,789 | 1,377 | 3,655 |
Decreases in tax positions for prior years | 0 | (1,860) | 0 |
Increases in tax positions for current year | 11,784 | 5,516 | 8,090 |
Increases in tax positions acquired or assumed in a business combination | 0 | 0 | 0 |
Decreases due to lapses of statutes of limitations | (5,642) | (3,646) | (8,051) |
Gross unrecognized tax benefits, end of the period | $ 55,472 | $ 46,541 | $ 45,154 |
GEOGRAPHIC INFORMATION - Revenu
GEOGRAPHIC INFORMATION - Revenue by geographic region (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 1 | ||
Revenues by geographic region | |||
Total revenue | $ 1,330,576 | $ 1,088,743 | $ 863,893 |
United States | |||
Revenues by geographic region | |||
Total revenue | 515,292 | 402,840 | 327,528 |
China | |||
Revenues by geographic region | |||
Total revenue | 372,041 | 258,451 | 172,405 |
Europe | |||
Revenues by geographic region | |||
Total revenue | 169,594 | 174,892 | 176,937 |
Other Americas | |||
Revenues by geographic region | |||
Total revenue | 123,956 | 128,077 | 92,449 |
Other Asia | |||
Revenues by geographic region | |||
Total revenue | $ 149,693 | $ 124,483 | $ 94,574 |
GEOGRAPHIC INFORMATION - Proper
GEOGRAPHIC INFORMATION - Property and equipment, net by geographic location (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property and equipment, net by geographic location | ||
Total property and equipment, net | $ 113,568 | $ 105,334 |
Israel | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | 109,375 | 99,589 |
United States | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | 1,815 | 3,495 |
Other | ||
Property and equipment, net by geographic location | ||
Total property and equipment, net | $ 2,378 | $ 2,250 |
INTEREST AND OTHER, NET (Detail
INTEREST AND OTHER, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||||
Interest expense | $ (149) | $ (2,185) | $ (7,937) | ||
Interest income and gains on short-term investments, net | 15,588 | 5,629 | 3,748 | ||
Foreign exchange loss, net | (7,070) | (1,256) | (596) | ||
Gain on investments in privately-held companies | $ 0 | 9,569 | 0 | 0 | |
Impairment of investments in privately-held companies | $ (1,800) | $ (1,500) | (1,755) | (1,494) | 0 |
Other | (174) | (557) | (37) | ||
Interest and other, net | $ 16,009 | $ 137 | $ (4,822) |
LEASES - Effect of Changes Made
LEASES - Effect of Changes Made to the Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred taxes and other long-term assets | $ 159,022 | $ 187,284 | $ 118,182 |
Accrued liabilities | 196,527 | 138,496 | 121,878 |
Other long-term liabilities | $ 109,646 | 106,597 | $ 54,113 |
ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred taxes and other long-term assets | 69,102 | ||
Accrued liabilities | 16,618 | ||
Other long-term liabilities | $ 52,484 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense and Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Components of lease expense: | |
Operating lease cost | $ 23,163 |
Supplemental cash flow information: | |
Cash paid for amounts included in the measurement of lease liabilities | 20,856 |
Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets | $ 22,403 |
Weighted average remaining lease term | 6 years 9 months 18 days |
Weighted average discount rate | 3.01% |
LEASES - Lease Liabilities Matu
LEASES - Lease Liabilities Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 20,288 |
2021 | 16,840 |
2022 | 9,832 |
2023 | 9,034 |
2024 | 8,777 |
Thereafter | 23,645 |
Total | 88,416 |
Less: Imputed interest | (7,662) |
Lease liability | 80,754 |
Sublease rental income | $ 3,600 |
Lease term, lease not yet commenced | 10 years |
Future lease obligation | $ 31,800 |
RESTRUCTURING AND IMPAIRMENT _2
RESTRUCTURING AND IMPAIRMENT CHARGES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and impairment charges | $ 1,457 | $ 10,329 | $ 12,019 |
Tangible asset impairment charges | 900 | 7,700 | |
Impairment of intangible assets | 4,300 | ||
Impairment of long-lived assets | $ 1,500 | 2,400 | $ 12,000 |
Employee separation and severance costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | 3,500 | ||
Contract termination | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 3,400 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Jul. 11, 2018 | Jun. 19, 2018 |
Related Party Transaction [Line Items] | ||
Ownership percentage by noncontrolling interest | 10.30% | |
Starboard Value, LP | Settlement Agreement | ||
Related Party Transaction [Line Items] | ||
Maximum reimbursement | $ 2 | |
Costs paid to related party | $ 2 |
SCHEDULE II - CONSOLIDATED VA_2
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Year | $ 8,652 | $ 42,873 | $ 56,459 |
Charged to Costs and Expenses | 0 | 0 | 0 |
Deductions | (2,241) | (34,221) | (13,586) |
Balance at End of Year | 6,411 | 8,652 | 42,873 |
Allowance for doubtful accounts | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Year | 500 | 632 | 632 |
Charged to Costs and Expenses | 0 | 0 | 0 |
Deductions | (60) | (132) | 0 |
Balance at End of Year | 440 | 500 | 632 |
Income tax valuation allowance | |||
Activity in valuation and qualifying accounts | |||
Balance at Beginning of Year | 8,152 | 42,241 | 55,827 |
Charged to Costs and Expenses | 0 | 0 | 0 |
Deductions | (2,181) | (34,089) | (13,586) |
Balance at End of Year | $ 5,971 | $ 8,152 | $ 42,241 |
Uncategorized Items - a20191231
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 3,901,000 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 789,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 3,901,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (789,000) |