Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 28, 2020 | Apr. 23, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CALIX, INC | |
Entity Central Index Key | 0001406666 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 28, 2020 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,624,351 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 46,189 | $ 46,829 |
Restricted cash | 628 | 628 |
Accounts receivable, net | 67,136 | 46,509 |
Inventory | 30,539 | 40,153 |
Prepaid expenses and other current assets | 11,223 | 9,698 |
Total current assets | 155,715 | 143,817 |
Property and equipment, net | 20,402 | 21,527 |
Right-of-use operating leases | 15,212 | 15,864 |
Goodwill | 116,175 | 116,175 |
Other assets | 16,550 | 19,440 |
Total assets | 324,054 | 316,823 |
Current liabilities: | ||
Accounts payable | 20,464 | 10,789 |
Accrued liabilities | 57,975 | 57,546 |
Deferred revenue | 19,912 | 17,158 |
Line of credit | 30,000 | 30,000 |
Total current liabilities | 128,351 | 115,493 |
Long-term portion of deferred revenue | 17,656 | 18,340 |
Operating leases | 13,642 | 14,337 |
Other long-term liabilities | 13,490 | 14,625 |
Total liabilities | 173,139 | 162,795 |
Commitments and contingencies (See Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of March 28, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.025 par value; 100,000 shares authorized; 61,958 shares issued and 56,628 shares outstanding as of March 28, 2020, and 61,778 shares issued and 56,448 shares outstanding as of December 31, 2019 | 1,549 | 1,545 |
Additional paid-in capital | 899,978 | 895,899 |
Accumulated other comprehensive loss | (1,106) | (854) |
Accumulated deficit | (709,520) | (702,576) |
Treasury stock, 5,330 shares as of March 28, 2020 and December 31, 2019 | (39,986) | (39,986) |
Total stockholders’ equity | 150,915 | 154,028 |
Total liabilities and stockholders’ equity | $ 324,054 | $ 316,823 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 28, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 61,958,000 | 61,778,000 |
Common stock, shares outstanding (in shares) | 56,628,000 | 56,448,000 |
Treasury stock, shares (in shares) | 5,330,000 | 5,330,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020 | Sep. 28, 2019 | Mar. 30, 2019 | |
Revenue: | |||
Revenue | $ 101,682 | $ 89,350 | |
Cost of revenue: | |||
Cost of revenue | 56,058 | 51,007 | |
Gross profit | 45,624 | 38,343 | |
Operating expenses: | |||
Research and development | 20,671 | 19,330 | |
Sales and marketing | 20,624 | 19,339 | |
General and administrative | 10,669 | 8,787 | |
Total operating expenses | 51,964 | 47,456 | |
Loss from operations | (6,340) | (9,113) | |
Interest and other expense, net: | |||
Interest expense, net | (290) | (108) | |
Other income (expense), net | 15 | (391) | |
Total interest and other expense, net | (275) | (499) | |
Loss before provision for income taxes | (6,615) | (9,612) | |
Provision for income taxes | 329 | 155 | |
Net loss | $ (6,944) | $ (9,767) | |
Net loss per common share: | |||
Basic and diluted (in dollars per share) | $ (0.12) | $ (0.18) | |
Weighted-average number of shares used to compute net income (loss) per common share | |||
Basic (in shares) | 56,540 | 54,048 | |
Diluted (in shares) | 56,540 | 54,048 | |
Other comprehensive income, net of tax: | |||
Other comprehensive income (loss), net of tax - foreign currency translation adjustments, net | $ (252) | $ 266 | |
Comprehensive loss | (7,196) | (9,501) | |
Systems | |||
Revenue: | |||
Revenue | 94,509 | 82,360 | |
Cost of revenue: | |||
Cost of revenue | 50,708 | 44,601 | |
Services | |||
Revenue: | |||
Revenue | 7,173 | 6,990 | |
Cost of revenue: | |||
Cost of revenue | $ 5,350 | $ 6,406 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock |
Beginning Balance, shares at Dec. 31, 2018 | 53,955 | |||||
Balance at beginning of period at Dec. 31, 2018 | $ 151,934 | $ 1,482 | $ 876,073 | $ (753) | $ (684,882) | $ (39,986) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 3,145 | 3,145 | ||||
Exercise of stock options, shares | 49 | |||||
Exercise of stock options | 290 | $ 1 | 289 | |||
Issuance of vested performance restricted stock units and restricted stock units, net of taxes withheld (in shares) | 167 | |||||
Issuance of vested performance restricted stock units and restricted stock units, net of taxes withheld | (27) | $ 5 | (32) | |||
Stock forfeited under employee stock purchase plans prior to vesting (in shares) | (7) | |||||
Stock forfeited under employee stock purchase plans prior to vesting | 0 | $ 0 | 0 | |||
Net loss | (9,767) | (9,767) | ||||
Other comprehensive loss | 266 | 266 | ||||
Ending Balance, shares at Mar. 30, 2019 | 54,164 | |||||
Balance at end of period at Mar. 30, 2019 | $ 145,841 | $ 1,488 | 879,475 | (487) | (694,649) | (39,986) |
Beginning Balance, shares at Dec. 31, 2019 | 56,448 | 56,448 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ 154,028 | $ 1,545 | 895,899 | (854) | (702,576) | (39,986) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 2,984 | 2,984 | ||||
Exercise of stock options, shares | 200 | 157 | ||||
Exercise of stock options | $ 1,099 | $ 4 | 1,095 | |||
Issuance of vested performance restricted stock units and restricted stock units, net of taxes withheld (in shares) | 48 | |||||
Issuance of vested performance restricted stock units and restricted stock units, net of taxes withheld | 0 | $ 1 | (1) | |||
Stock forfeited under employee stock purchase plans prior to vesting (in shares) | (25) | |||||
Stock forfeited under employee stock purchase plans prior to vesting | 0 | $ (1) | 1 | |||
Net loss | (6,944) | (6,944) | ||||
Other comprehensive loss | $ (252) | (252) | ||||
Ending Balance, shares at Mar. 28, 2020 | 56,628 | 56,628 | ||||
Balance at end of period at Mar. 28, 2020 | $ 150,915 | $ 1,549 | $ 899,978 | $ (1,106) | $ (709,520) | $ (39,986) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Operating activities: | ||
Net loss | $ (6,944) | $ (9,767) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation | 2,984 | 3,145 |
Depreciation and amortization | 3,544 | 2,281 |
Loss on asset retirements | 0 | 95 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (20,627) | 11,823 |
Inventory | 9,614 | 2,925 |
Prepaid expenses and other assets | 758 | (1,935) |
Accounts payable | 9,472 | (6,349) |
Accrued liabilities | 1,367 | (1,614) |
Deferred revenue | 2,071 | 719 |
Other long-term liabilities | (990) | (1,696) |
Net cash provided by (used in) operating activities | 1,249 | (373) |
Investing activities: | ||
Purchases of property and equipment | (1,729) | (5,039) |
Net cash used in investing activities | (1,729) | (5,039) |
Financing activities: | ||
Proceeds from exercise of stock options | 1,099 | 290 |
Taxes paid for awards vested under equity incentive plan | 0 | (27) |
Payments related to financing arrangements | (842) | (653) |
Proceeds from line of credit | 30,000 | 30,000 |
Repayment of line of credit | (30,000) | (30,000) |
Payments to originate the line of credit | (177) | 0 |
Net cash provided by (used in) financing activities | 80 | (390) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (240) | 223 |
Net decrease in cash, cash equivalents and restricted cash | (640) | (5,579) |
Cash, cash equivalents and restricted cash at beginning of period | 47,457 | 50,274 |
Cash, cash equivalents and restricted cash at end of period | $ 46,817 | $ 44,695 |
Company and Basis of Presentati
Company and Basis of Presentation | 3 Months Ended |
Mar. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company and Basis of Presentation | Company and Basis of Presentation Company Calix, Inc. (together with its subsidiaries, “Calix” or the “Company”) was incorporated in August 1999 and is a Delaware corporation. The Company is a leading global provider of cloud and software platforms, systems and services required to deliver the unified access network and smart home and business services of tomorrow. The Company’s platforms and services help its customers build next generation networks by embracing a DevOps operating model, optimizing the subscriber experience by leveraging big data analytics and turn the complexity of the smart home and business into new revenue streams. The Company's cloud and software platforms, systems and services enable communication service providers (“CSPs”) to provide a wide range of revenue-generating services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. The Company focuses on CSP access networks, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers. Basis of Presentation The accompanying unaudited condensed consolidated financial statements, including the accounts of Calix, Inc. and its wholly-owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed or omitted. In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. All intercompany balances and transactions have been eliminated in consolidation. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from the audited financial statements at that date. The results of the Company’s operations can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . The Company’s fiscal year begins on January 1 st and ends on December 31 st . Quarterly periods are based on a 4-4-5 calendar with the first, second and third quarters ending on the 13th Saturday of each fiscal period. As a result, the Company had one less day in the three months ended March 28, 2020 than for the three months ended March 30, 2019 . The preparation of financial statements in conformity with GAAP for interim financial reporting requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the recent COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict. The Company has instituted office closures, implemented shelter-in-place orders and restrictions and instituted a mandatory work from home policy for substantially all of its employees. The spread of COVID-19 has impacted the Company's supply chain operations through restrictions and shutdown of business activities by suppliers whom the Company relies on for sourcing components and materials and third-party partners whom the Company relies on for manufacturing, warehousing and logistics services. Although demand for the Company's products have remained strong as subscribers seek more bandwidth and better WiFi, customers’ purchasing decisions may be impacted by the pandemic, which could in turn impact the Company's revenue and results of operations. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 28, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2019 . The Company’s significant accounting policies did not change during the three months ended March 28, 2020 . Newly Adopted Accounting Standard The Company did not adopt any new accounting standards during the three months ended March 28, 2020 that were significant to the Company. Recent Accounting Pronouncements Not Yet Adopted There have been no additional accounting pronouncements or changes in accounting pronouncements during the three months ended March 28, 2020 , as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , that are significant or potentially significant to the Company. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 3 Months Ended |
Mar. 28, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash consisted of the following (in thousands): March 28, December 31, Cash and cash equivalents: Cash $ 46,189 $ 46,815 Money market funds — 14 Total cash and cash equivalents 46,189 46,829 Restricted cash 628 628 $ 46,817 $ 47,457 The carrying amounts of the Company’s money market funds approximate their fair values due to their nature, duration and short maturities. |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 28, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | Balance Sheet Details Accounts receivable, net consisted of the following (in thousands): March 28, December 31, Accounts receivable $ 67,574 $ 46,883 Allowance for doubtful accounts (438 ) (374 ) $ 67,136 $ 46,509 Inventory consisted of the following (in thousands): March 28, December 31, Raw materials $ 206 $ 656 Finished goods 30,333 39,497 $ 30,539 $ 40,153 Property and equipment, net consisted of the following (in thousands): March 28, December 31, Test equipment $ 37,216 $ 37,001 Software 20,879 20,646 Computer equipment 11,063 10,835 Furniture and fixtures 2,340 2,342 Leasehold improvements 2,031 2,047 Total 73,529 72,871 Accumulated depreciation and amortization (53,127 ) (51,344 ) $ 20,402 $ 21,527 Other long-term assets consisted of the following (in thousands): March 28, December 31, Intangible asset $ 11,491 $ 12,148 Capitalized cloud implementation costs 3,638 6,089 Other long-term assets 1,421 1,203 $ 16,550 $ 19,440 Intangible Asset In March 2018, the Company entered into an agreement with a vendor to develop certain software product and related enhancements pursuant to which the Company may be obligated to make minimum revenue-share payments under the program of up to $15.8 million over the three years following availability for sale. The payments are based on a revenue-share rate applied to revenue from the developed-product and the corresponding hardware sales subject to a minimum and a maximum aggregate amount over the three-year sales period. The intangible asset has an estimated five -year useful life and is being amortized using the greater of the ratio of current gross revenue for the products to the total of current and anticipated future gross revenue for the products or the straight-line method. Capitalized Cloud Implementation Costs I n January 2020, the Company went live with its cloud-based enterprise resource planning (“ERP”) system. As a result the Company capitalized $7.5 million of implementation costs in both prepaid expenses and other current assets and other long-term assets in the Company's Condensed Consolidated Balance Sheet. This amount is being amortized over a period of 29 months , representing the remaining contractual term. The amortization expense for the three months ended March 28, 2020 was $0.8 million . Accrued liabilities consisted of the following (in thousands): March 28, December 31, Compensation and related benefits $ 15,854 $ 19,010 Customer advances or rebates 7,767 7,252 Warranty and retrofit 7,430 7,294 Professional and consulting fees 5,722 4,996 Current portion of financing arrangements 4,618 4,044 Component inventory held by suppliers 4,234 1,925 Operating leases 2,728 2,663 Taxes payable 2,729 2,021 Operations 1,163 1,053 Freight 883 808 Product returns 801 919 Insurance 671 852 Other 3,375 4,709 $ 57,975 $ 57,546 Warranty and Retrofit The Company provides a standard warranty for its hardware products. Hardware generally has a one - or five -year standard warranty from the date of shipment. Under certain circumstances, the Company also provides fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognizes estimated costs related to retrofit activities upon identification of such product failures. The Company accrues for potential warranty and retrofit claims based on the Company’s historical product failure rates and historical costs incurred in correcting product failures along with other relevant information related to any specifically identified product failures. The Company’s warranty and retrofit accruals are based on estimates of losses that are probable based on information available. The adequacy of the accrual is reviewed on a periodic basis and adjusted, if necessary, based on additional information as it becomes available. Changes in the Company’s warranty and retrofit accrual are as follows (in thousands): Three Months Ended March 28, March 30, Balance at beginning of period $ 7,294 $ 8,547 Provision for warranty and retrofit charged to cost of revenue 1,349 706 Utilization of reserve (1,213 ) (1,087 ) Balance at end of period $ 7,430 $ 8,166 |
Credit Agreements
Credit Agreements | 3 Months Ended |
Mar. 28, 2020 | |
Line of Credit Facility [Abstract] | |
Credit Agreements | Credit Agreements Line of Credit In January 2020, the Company terminated its loan and security agreement with Silicon Valley Bank and entered into a new loan and security agreement with Bank of America, N.A. (“BofA Loan Agreement”). The BofA Loan Agreement provides for a revolving facility up to a principal amount of $35.0 million , including a $10.0 million sublimit for letters of credit. The BofA Loan Agreement matures, and all outstanding amounts become due and payable, in January 2023. The BofA Loan Agreement is secured by substantially all of the Company’s assets, including the Company’s intellectual property. Loans under the credit facility will bear interest at a rate per annum equal to LIBOR (customarily defined) plus an applicable margin between 1.50% to 2.25% and Prime Rate (customarily defined) plus an applicable margin between 0.50% to 1.25% , in each case largely based on a fixed charge coverage ratio measured at the end of each fiscal quarter. The availability of borrowings under the BofA Loan Agreement is subject to certain conditions and requirements, including among others, if at any time the Company’s availability is less than $5.0 million , the Company must maintain a minimum fixed charge coverage ratio (“FCCR”) of 1.0 to 1.0. As of March 28, 2020 , the Company was in compliance with these requirements, had borrowings outstanding of $30.0 million , availability of $5.0 million and an FCCR of 7.9 to 1.0. The Company's interest rate on the line of credit was 4.5% as of March 28, 2020 . Financing Arrangements During 2018, the Company entered into financing arrangements to purchase lab and test equipment for approximately $5.1 million . Each agreement is to be paid over 36 months with a weighted average interest rate of 6.2% . As of March 28, 2020 , there was $2.5 million outstanding under these financing arrangements, which is included in accrued liabilities and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheet. During 2017, 2018 and 2019, t he Company entered into financing arrangements for consulting services of $5.4 million in connection with the Company’s ERP implementation. The current amounts due under this agreement are to be paid over a weighted average term of 2.4 years with a weighted average interest rate of 6.5% . As of March 28, 2020 , there was $1.8 million outstanding under these arrangements, which is included in accrued liabilities and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheet. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments The Company leases office space under non-cancelable operating leases. Certain of the Company’s operating leases contain renewal options and rent acceleration clauses. Future minimum payments under the non-cancelable operating leases consisted of the following as of March 28, 2020 (in thousands): Period Minimum Future Lease Payments Remainder of 2020 $ 2,846 2021 3,604 2022 3,461 2023 3,578 2024 3,388 Thereafter 2,881 Total future minimum lease payments 19,758 Less imputed interest (3,388 ) $ 16,370 Operating lease liability consisted of the following (in thousands): March 28, Accrued liabilities - current portion of operating leases $ 2,728 Operating leases 13,642 $ 16,370 The Company leases its headquarters office space in San Jose, California under a lease agreement that expires in December 2025. The future minimum lease payments under the lease are $13.5 million and are included in the table above. The weighted average discount rate for the Company's operating leases as of March 28, 2020 was 7.0% . The weighted average remaining lease term as of March 28, 2020 was 4.9 years . For the three months ended March 28, 2020 and March 30, 2019 , total rent expense of the Company was $1.1 million and $1.2 million , respectively. Cash paid within operating cash flows for operating leases was $1.0 million and $0.8 million for three months ended March 28, 2020 and March 30, 2019 , respectively. Purchase Commitments The Company’s contract manufacturers (“CMs”) and original design manufacturers (“ODMs”) place orders for certain component inventory in advance based upon the Company’s build forecasts in order to reduce manufacturing lead times and ensure adequate component supply. The components are used by the CMs and ODMs to build the products included in the build forecasts. The Company generally does not take ownership of the components held by CMs and ODMs. The Company places purchase orders with its CMs and ODMs in order to fulfill its monthly finished product inventory requirements. The Company incurs a liability when the CMs and ODMs convert the component inventory to a finished product and takes ownership of the finished goods inventory. In the event of termination of services with a manufacturing partner, the Company has purchased, and may be required to purchase in the future, certain of the remaining components inventory held by the CM or ODM as well as any outstanding orders pursuant to the contractual provisions with such CM or ODM. As of March 28, 2020 , the Company had approximately $74.9 million of outstanding purchase commitments for inventories to be delivered by its suppliers, including CMs and ODMs, within one year. The Company has from time to time, and subject to certain conditions, reimbursed its suppliers for component inventory purchases when this inventory has been rendered excess or obsolete, for example due to manufacturing and engineering change orders resulting from design changes, manufacturing discontinuation of parts by its suppliers, or in cases where inventory levels greatly exceed projected demand. The estimated excess and obsolete inventory liabilities related to such manufacturing and engineering change orders and other factors, which are included in accrued liabilities in the accompanying balance sheets, were $4.2 million and $1.9 million as of March 28, 2020 and December 31, 2019 , respectively. The Company records the related charges in cost of systems revenue in its Condensed Consolidated Statements of Comprehensive Loss. Litigation From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities. The Company is not currently a party to any legal proceedings that, if determined adversely to the Company, in management’s opinion, are currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 28, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity 2019 Equity Incentive Award Plan At the annual meeting of stockholders of the Company in May 2019, the stockholders approved the 2019 Equity Incentive Award Plan (the “2019 Plan”). The 2019 Plan supersedes and replaces the 2010 Equity Incentive Award Plan (the “2010 Plan”) and preceding plans. No further awards will be granted under the 2010 Plan; however, the terms and conditions of the 2010 Plan will continue to govern any outstanding awards granted under the 2010 Plan. Employees and consultants of the Company, its subsidiaries and affiliates, as well as members of the Company's Board of Directors, are eligible to receive awards under the 2019 Plan. The 2019 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), other stock or cash-based awards and dividend equivalents to eligible individuals. The number of shares available for issuance under the 2019 Plan includes an initial reserve of 1.7 million shares of common stock, any shares of common stock that are available for issuance under the 2010 Plan as of the effective date of the 2019 Plan and any shares of common stock subject to issued and outstanding awards under the 2010 Plan that expire, are cancelled or otherwise terminate following the effective date of the 2019 Plan. As of March 28, 2020 , there were 2.4 million shares available for issuance under the 2019 Plan. Stock Options During the three months ended March 28, 2020 , performance-based stock option awards exercisable for up to an aggregate of 0.8 million shares of common stock were granted to certain Company executives with a grant date fair value of $9.16 per share. The actual number of shares earned is contingent upon achievement of annual corporate financial targets for bookings and non-GAAP net income for 2020 (collectively, the “2020 Performance Targets”) during the one -year performance period. These performance-based stock option awards will vest, subject to certification by the Compensation Committee of the Company’s Board of Directors upon the achievement of the 2020 Performance Targets, as to 25% of the shares of common stock earned on the date of such certification, and as to the remaining 75% of the shares of common stock earned, in substantially equal quarterly installments over the subsequent 36 months , subject to the executive’s continuous service with the Company through the respective vesting dates. Under the 2020 Performance Targets, if non-GAAP net income is below 80% of target and bookings are below 90% of target, no shares are awarded. From this base, shares are awarded on a 50% weighting for both non-GAAP net income and bookings up to 100% for each 2020 Performance Target using a sliding scale. The probability of meeting the performance conditions related to these performance-based stock option awards was assessed to be probable as of March 28, 2020 , and stock-based compensation expense of $0.3 million was recognized for the three months ended March 28, 2020 . During the three months ended March 30, 2019, performance-based stock option awards exercisable for up to an aggregate of 2.0 million shares of common stock were granted to Company executives with a grant date fair value of $8.03 per share. These performance-based stock option awards contained a one -year performance period and a subsequent three -year service period. The actual number of shares earned was contingent upon achievement of both annual and quarterly corporate financial targets for revenue, non-GAAP gross margin and non-GAAP net income per share for 2019 (collectively, the “2019 Performance Targets”) during the one -year performance period. In February 2020, following the review of the Company’s financial performance for 2019, the Compensation Committee of the Company’s Board of Directors certified that the 2019 Performance Targets (as modified) for the 2019 performance-based stock options were partially met, resulting in an award to each Company executive of 30% of their target shares. One quarter of these performance-based stock option awards vested on this date, and the remaining 75% of the shares of common stock earned will vest in substantially equal quarterly installments over the subsequent 36 months , subject to the executive’s continuous service with the Company through the respective vesting dates. During the three months ended March 28, 2020 , stock options exercisable for up to an aggregate of 50,000 shares were granted with a grant date fair value of $9.16 per share. During the three months ended March 28, 2020 , 0.2 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $7.01 per share. As of March 28, 2020 , unrecognized stock-based compensation expense of $7.5 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.8 years. Restricted Stock Units During the three months ended March 28, 2020 , RSUs for 48,000 shares of common stock vested. As of March 28, 2020 , unrecognized stock-based compensation expense of $0.6 million related to RSUs, net of estimated forfeitures, was expected to be recognized over a weighted-average period of 0.3 years. Employee Stock Purchase Plans The Company maintains two employee stock purchase plans - the Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the Amended and Restated 2017 Nonqualified Employee Stock Purchase Plan (the “NQ ESPP”). The ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their annual compensation subject to certain Internal Revenue Code limitations. In addition, no participant may purchase more than 2,000 shares of common stock in each offering period. The offering periods under the ESPP are six -month periods commencing on May 15 and November 15 of each year. The price of common stock purchased under the ESPP is 85% of the lower of the fair market value of the common stock on the commencement date and the end date of each six -month offering period. In May 2019, the stockholders approved an increase in the number of shares of common stock issuable under the ESPP by 2.5 million shares. The total shares authorized for issuance under the ESPP increased from 7.3 million shares to 9.8 million shares. As of March 28, 2020 , there were 3.2 million shares available for issuance under the ESPP. As of March 28, 2020 , unrecognized stock-based compensation expense of $0.2 million related to the ESPP is expected to be recognized over a remaining service period of 0.1 years. The NQ ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 25% of their annual compensation. Eligible employees have the right to (a) purchase the maximum number of whole shares of common stock that can be purchased with the elected payroll deductions during each offering period for which the employee is enrolled at a purchase price equal to the closing price of the Company’s common stock on the last day of such offering period and (b) receive an equal number of shares of the Company’s common stock that are subject to a risk of forfeiture in the event the employee terminates employment within the one year period immediately following the purchase date. The NQ ESPP provides two six -month offering periods, currently from December 21 through June 20 and June 21 through December 20 of each year. In May 2018, the stockholders approved an amendment of certain terms and an increase in the number of shares of common stock issuable under the NQ ESPP by 2.5 million shares. The maximum number of shares of common stock currently authorized for issuance under the NQ ESPP is 3.5 million shares, with a maximum of 0.5 million shares allocated per purchase period. As of March 28, 2020 , there were 1.6 million shares available for issuance under the NQ ESPP. As of March 28, 2020 , unrecognized stock-based compensation expense of $2.7 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 1.0 years. Stock-Based Compensation The following table summarizes stock-based compensation expense (in thousands): Three months ended March 28, March 30, Cost of revenue: Products $ 107 $ 155 Services 115 99 Research and development 1,010 1,016 Sales and marketing 956 1,074 General and administrative 796 801 $ 2,984 $ 3,145 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company derives revenue from contracts with customers primarily from the following and categorizes its revenue as follows: • Systems include revenue from the sale of access and premises systems, software platform licenses and cloud-based software subscriptions. • Services include revenue from professional services, customer support, software- and cloud-based maintenance, extended warranty subscriptions, training and managed services. The following is a summary of revenue disaggregated by geographic region based upon the location of the customers (in thousands): Three Months Ended March 28, 2020 March 30, 2019 United States $ 88,050 $ 75,785 Europe 4,121 2,439 Canada 3,563 3,415 Caribbean 2,372 2,266 Middle East 2,301 3,751 Other 1,275 1,694 $ 101,682 $ 89,350 Contract Asset The primary contract asset is revenue recognized on professional services contracts where the services are transferred to the customer over time, which has yet to be billed, and is classified within accounts receivable. Amounts are billed in accordance with the agreed-upon contractual terms. The balance at December 31, 2019 was $5.0 million of which $1.7 million remained in the Company's Condensed Consolidated Balance Sheet at March 28, 2020 . The closing balance at March 28, 2020 was $2.9 million of which the Company expects to bill 58% of the balance during the remainder of 2020. The decrease in the contract asset was driven by billings for past services in the first quarter of 2020 as well as the timing and volume of professional services contracts during the quarter. Contract Liability Deferred revenue consisted of the following (in thousands): March 28, December 31, Current: Products and services $ 15,667 $ 12,480 Extended warranty 4,245 4,678 19,912 17,158 Long-term: Products and services 423 790 Extended warranty 17,233 17,550 17,656 18,340 $ 37,568 $ 35,498 The increase in the deferred revenue balance for the three months ended March 28, 2020 is primarily driven by cash payments received or due in advance of satisfying the Company's performance obligations, offset by $6.1 million of revenue recognized that was included in the deferred revenue balance at the beginning of each period, respectively. Revenue allocated to remaining performance obligations represent contract revenue that has not yet been recognized for contracts greater than one year, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This amount was $61.1 million as of March 28, 2020 , and the Company expects to recognize 46% of such revenue over the next 12 months and the remainder thereafter. Contract Costs The Company capitalizes certain sales commissions related primarily to extended warranty support for which the expected amortization period is greater than one year. As of March 28, 2020 , the unamortized balance of deferred commissions was $0.7 million . For the three months ended March 28, 2020 , the amount of amortization was less than $0.1 million , and there was no impairment loss in relation to the costs capitalized. Concentration of Customer Risk CenturyLink, Inc. represented 15% and 14% of total revenue for the three months ended March 28, 2020 and March 30, 2019, respectively. No other customers accounted for more than 10% of the Company’s total revenue for these periods. As of March 28, 2020 , CenturyLink, Inc. accounted for 25% of the Company's accounts receivable and Verizon Communications Inc. accounted for 14% of the Company’s account receivable as of March 30, 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the provision for income taxes from operations and the effective tax rates for the periods indicated (in thousands, except percentages): Three Months Ended March 28, March 30, Provision for income taxes $ 329 $ 155 Effective tax rate (5.0 )% (1.6 )% The effective tax rate for the three months ended March 28, 2020 was determined using an estimated annual effective tax rate adjusted for discrete items, if any, that occurred during the respective periods. Deferred tax assets are recognized if realization of such assets is more likely than not. The Company has established and continues to maintain a full valuation allowance against its net deferred tax assets, with the exception of certain foreign deferred tax assets, as the Company does not believe that realization of those assets is more likely than not . The Company’s effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which it operates, valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions and changes in or the interpretation of tax laws in jurisdictions where it conducts business . |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data): Three Months Ended March 28, March 30, Numerator: Net loss $ (6,944 ) $ (9,767 ) Denominator: Weighted-average common shares outstanding used to compute basic net loss per share 56,540 54,048 Basic and diluted net loss per common share $ (0.12 ) $ (0.18 ) Potentially dilutive shares, weighted average 7,133 6,221 Potentially dilutive shares have been excluded from the computation of diluted net loss per common share when their effect is antidilutive. These antidilutive shares were primarily from stock options, restricted stock units and performance restricted stock units. For each of the periods presented where the Company reported a net loss, the effect of all potentially dilutive securities would be antidilutive, and as a result diluted net loss per common share is the same as basic net loss per common share. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 28, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements, including the accounts of Calix, Inc. and its wholly-owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed or omitted. In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of the Company’s financial position and operating results. All intercompany balances and transactions have been eliminated in consolidation. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from the audited financial statements at that date. The results of the Company’s operations can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . The Company’s fiscal year begins on January 1 st and ends on December 31 st . Quarterly periods are based on a 4-4-5 calendar with the first, second and third quarters ending on the 13th Saturday of each fiscal period. As a result, the Company had one less day in the three months ended March 28, 2020 than for the three months ended March 30, 2019 . The preparation of financial statements in conformity with GAAP for interim financial reporting requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the recent COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Company's business is highly uncertain and difficult to predict. The Company has instituted office closures, implemented shelter-in-place orders and restrictions and instituted a mandatory work from home policy for substantially all of its employees. The spread of COVID-19 has impacted the Company's supply chain operations through restrictions and shutdown of business activities by suppliers whom the Company relies on for sourcing components and materials and third-party partners whom the Company relies on for manufacturing, warehousing and logistics services. Although demand for the Company's products have remained strong as subscribers seek more bandwidth and better WiFi, customers’ purchasing decisions may be impacted by the pandemic, which could in turn impact the Company's revenue and results of operations. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain. |
Recent Accounting Pronouncements | Newly Adopted Accounting Standard The Company did not adopt any new accounting standards during the three months ended March 28, 2020 that were significant to the Company. Recent Accounting Pronouncements Not Yet Adopted There have been no additional accounting pronouncements or changes in accounting pronouncements during the three months ended March 28, 2020 , as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , that are significant or potentially significant to the Company. |
Revenue Recognition | The Company derives revenue from contracts with customers primarily from the following and categorizes its revenue as follows: • Systems include revenue from the sale of access and premises systems, software platform licenses and cloud-based software subscriptions. • Services include revenue from professional services, customer support, software- and cloud-based maintenance, extended warranty subscriptions, training and managed services. |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash and cash equivalents | Cash, cash equivalents and restricted cash consisted of the following (in thousands): March 28, December 31, Cash and cash equivalents: Cash $ 46,189 $ 46,815 Money market funds — 14 Total cash and cash equivalents 46,189 46,829 Restricted cash 628 628 $ 46,817 $ 47,457 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of accounts receivable, net | Accounts receivable, net consisted of the following (in thousands): March 28, December 31, Accounts receivable $ 67,574 $ 46,883 Allowance for doubtful accounts (438 ) (374 ) $ 67,136 $ 46,509 |
Summary of inventory | Inventory consisted of the following (in thousands): March 28, December 31, Raw materials $ 206 $ 656 Finished goods 30,333 39,497 $ 30,539 $ 40,153 |
Summary of property and equipment, net | Property and equipment, net consisted of the following (in thousands): March 28, December 31, Test equipment $ 37,216 $ 37,001 Software 20,879 20,646 Computer equipment 11,063 10,835 Furniture and fixtures 2,340 2,342 Leasehold improvements 2,031 2,047 Total 73,529 72,871 Accumulated depreciation and amortization (53,127 ) (51,344 ) $ 20,402 $ 21,527 |
Schedule of other long-term assets | Other long-term assets consisted of the following (in thousands): March 28, December 31, Intangible asset $ 11,491 $ 12,148 Capitalized cloud implementation costs 3,638 6,089 Other long-term assets 1,421 1,203 $ 16,550 $ 19,440 |
Summary of accrued liabilities | Accrued liabilities consisted of the following (in thousands): March 28, December 31, Compensation and related benefits $ 15,854 $ 19,010 Customer advances or rebates 7,767 7,252 Warranty and retrofit 7,430 7,294 Professional and consulting fees 5,722 4,996 Current portion of financing arrangements 4,618 4,044 Component inventory held by suppliers 4,234 1,925 Operating leases 2,728 2,663 Taxes payable 2,729 2,021 Operations 1,163 1,053 Freight 883 808 Product returns 801 919 Insurance 671 852 Other 3,375 4,709 $ 57,975 $ 57,546 |
Product warranty activities | Changes in the Company’s warranty and retrofit accrual are as follows (in thousands): Three Months Ended March 28, March 30, Balance at beginning of period $ 7,294 $ 8,547 Provision for warranty and retrofit charged to cost of revenue 1,349 706 Utilization of reserve (1,213 ) (1,087 ) Balance at end of period $ 7,430 $ 8,166 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future minimum payments under the non-cancelable operating leases consisted of the following as of March 28, 2020 (in thousands): Period Minimum Future Lease Payments Remainder of 2020 $ 2,846 2021 3,604 2022 3,461 2023 3,578 2024 3,388 Thereafter 2,881 Total future minimum lease payments 19,758 Less imputed interest (3,388 ) $ 16,370 |
Lessee, operating leases | Operating lease liability consisted of the following (in thousands): March 28, Accrued liabilities - current portion of operating leases $ 2,728 Operating leases 13,642 $ 16,370 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Stockholders' Equity Note [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table summarizes stock-based compensation expense (in thousands): Three months ended March 28, March 30, Cost of revenue: Products $ 107 $ 155 Services 115 99 Research and development 1,010 1,016 Sales and marketing 956 1,074 General and administrative 796 801 $ 2,984 $ 3,145 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from external customers by geographic areas | The following is a summary of revenue disaggregated by geographic region based upon the location of the customers (in thousands): Three Months Ended March 28, 2020 March 30, 2019 United States $ 88,050 $ 75,785 Europe 4,121 2,439 Canada 3,563 3,415 Caribbean 2,372 2,266 Middle East 2,301 3,751 Other 1,275 1,694 $ 101,682 $ 89,350 |
Deferred revenue, by arrangement, disclosure | Deferred revenue consisted of the following (in thousands): March 28, December 31, Current: Products and services $ 15,667 $ 12,480 Extended warranty 4,245 4,678 19,912 17,158 Long-term: Products and services 423 790 Extended warranty 17,233 17,550 17,656 18,340 $ 37,568 $ 35,498 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | The following table presents the provision for income taxes from operations and the effective tax rates for the periods indicated (in thousands, except percentages): Three Months Ended March 28, March 30, Provision for income taxes $ 329 $ 155 Effective tax rate (5.0 )% (1.6 )% |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) per share | The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data): Three Months Ended March 28, March 30, Numerator: Net loss $ (6,944 ) $ (9,767 ) Denominator: Weighted-average common shares outstanding used to compute basic net loss per share 56,540 54,048 Basic and diluted net loss per common share $ (0.12 ) $ (0.18 ) Potentially dilutive shares, weighted average 7,133 6,221 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash - (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 | Mar. 30, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 46,189 | $ 46,829 | ||
Restricted cash | 628 | 628 | ||
Total cash | 46,817 | 47,457 | $ 44,695 | $ 50,274 |
Cash | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | 46,189 | 46,815 | ||
Money market funds | ||||
Cash and Cash Equivalents [Line Items] | ||||
Total cash and cash equivalents | $ 0 | $ 14 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Summary of accounts receivable, net | ||
Accounts receivable | $ 67,574 | $ 46,883 |
Allowance for doubtful accounts | (438) | (374) |
Accounts receivable, net | $ 67,136 | $ 46,509 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventory (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Summary of inventory, net | ||
Raw materials | $ 206 | $ 656 |
Finished goods | 30,333 | 39,497 |
Total inventory | $ 30,539 | $ 40,153 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, net (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Summary of property and equipment, net | ||
Property and equipment, gross | $ 73,529 | $ 72,871 |
Accumulated depreciation and amortization | (53,127) | (51,344) |
Property and equipment, net | 20,402 | 21,527 |
Test equipment | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 37,216 | 37,001 |
Software | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 20,879 | 20,646 |
Computer equipment | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 11,063 | 10,835 |
Furniture and fixtures | ||
Summary of property and equipment, net | ||
Property and equipment, gross | 2,340 | 2,342 |
Leasehold improvements | ||
Summary of property and equipment, net | ||
Property and equipment, gross | $ 2,031 | $ 2,047 |
Balance Sheet Details - Loss on
Balance Sheet Details - Loss on Asset Retirement (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2019 | Mar. 28, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset | $ 12,148 | $ 11,491 | |
Capitalized cloud implementation costs | 6,089 | 3,638 | |
Other long-term assets | 1,203 | 1,421 | |
Other assets, noncurrent | 19,440 | 16,550 | |
Other long-term liabilities | 14,625 | 13,490 | |
Accrued liabilities | $ 57,546 | $ 57,975 | |
Licensed Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Royalty payment commitment | $ 15,800 | ||
Royalty payment commitment period | 3 years | ||
Useful life | 5 years |
Balance Sheet Details - Capital
Balance Sheet Details - Capitalized Cloud Implementation Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 28, 2020 | Jan. 31, 2020 | |
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, amortization | $ 0.1 | |
Cloud Implementation Costs | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost | $ 7.5 | |
Capitalized contract cost, amortization period | 29 months | |
Capitalized contract cost, amortization | $ 0.8 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Summary of accrued liabilities | ||
Compensation and related benefits | $ 15,854 | $ 19,010 |
Customer advances or rebates | 7,767 | 7,252 |
Warranty and retrofit | 7,430 | 7,294 |
Professional and consulting fees | 5,722 | 4,996 |
Current portion of financing arrangements | 4,618 | 4,044 |
Component inventory held by suppliers | 4,234 | 1,925 |
Operating leases | 2,728 | 2,663 |
Taxes payable | 2,729 | 2,021 |
Operations | 1,163 | 1,053 |
Freight | 883 | 808 |
Product returns | 801 | 919 |
Insurance | 671 | 852 |
Other | 3,375 | 4,709 |
Total accrued liabilities | $ 57,975 | $ 57,546 |
Balance Sheet Details - Warrant
Balance Sheet Details - Warranty Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 7,294 | $ 8,547 |
Provision for warranty and retrofit charged to cost of revenue | 1,349 | 706 |
Utilization of reserve | (1,213) | (1,087) |
Balance at end of period | $ 7,430 | $ 8,166 |
Minimum | ||
Other Commitments [Line Items] | ||
Warranty period | 1 year | |
Maximum | ||
Other Commitments [Line Items] | ||
Warranty period | 5 years |
Credit Agreements - Line of Cre
Credit Agreements - Line of Credit (Details) | Jan. 20, 2020USD ($) | Mar. 28, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||
Line of credit | $ 30,000,000 | $ 30,000,000 | |
Bank Of America | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum capacity | $ 35,000,000 | ||
Covenant compliance, minimum availability | $ 5,000,000 | ||
Covenant compliance, minimum fixed charge coverage ratio | 1 | ||
Line of credit | 30,000,000 | ||
Line of credit, amount available | $ 5,000,000 | ||
Covenant compliance, fixed charge coverage ratio | 7.9 | ||
Bank Of America | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum capacity | $ 10,000,000 | ||
Interest rate | 4.50% | ||
Bank Of America | London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
Bank Of America | London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Bank Of America | Prime Rate | Minimum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Bank Of America | Prime Rate | Maximum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.25% |
Credit Agreements - Financing A
Credit Agreements - Financing Arrangements (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 28, 2020 | Dec. 31, 2019 | |
Research And Development Equipment | ||||
Debt Instrument [Line Items] | ||||
Purchase obligation | $ 5.1 | |||
Purchase obligation, term | 36 months | |||
Weighted average interest rate | 6.20% | |||
Amount outstanding | $ 2.5 | |||
Consulting Services | ||||
Debt Instrument [Line Items] | ||||
Purchase obligation | $ 5.4 | |||
Purchase obligation, term | 2 years 5 months | |||
Weighted average interest rate | 6.50% | |||
Amount outstanding | $ 1.8 |
Commitments and Contingencies -
Commitments and Contingencies - Textual (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies [Line Items] | |||
Total future minimum lease payments | $ 19,758 | ||
Weighted average operating discount rate used to determine the operating lease liability (percent) | 7.00% | ||
Weighted average remaining lease term for operating lease | 4 years 10 months 18 days | ||
Rent expense | $ 1,100 | $ 1,200 | |
Operating lease, payments | 1,000 | $ 800 | |
Outstanding purchase commitments | 74,900 | ||
Accrued customer rebates/prepayments | 4,234 | $ 1,925 | |
San Jose, California | |||
Commitments and Contingencies [Line Items] | |||
Total future minimum lease payments | $ 13,500 |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases (Details) $ in Thousands | Mar. 28, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2020 | $ 2,846 |
2021 | 3,604 |
2022 | 3,461 |
2023 | 3,578 |
2024 | 3,388 |
Thereafter | 2,881 |
Total future minimum lease payments | 19,758 |
Less imputed interest | (3,388) |
Operating lease liability | $ 16,370 |
Commitments and Contingencies_3
Commitments and Contingencies - Operating Lease Liability (Details) - USD ($) $ in Thousands | Mar. 28, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Accrued liabilities - current portion of operating leases | $ 2,728 | $ 2,663 |
Operating leases | 13,642 | $ 14,337 |
Operating lease liability | $ 16,370 |
Stockholders' Equity - (Details
Stockholders' Equity - (Details) $ / shares in Units, $ in Thousands | May 16, 2018shares | May 17, 2017periodshares | May 31, 2019shares | Mar. 28, 2020USD ($)Plan$ / sharesshares | Mar. 30, 2019USD ($)$ / sharesshares | Sep. 28, 2019$ / sharesshares | Apr. 30, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options granted (in shares) | 50,000 | ||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 9.16 | ||||||
Stock-based compensation | $ | $ 2,984 | $ 3,145 | |||||
Stock options exercised (in shares) | 200,000 | ||||||
Weighted-average exercise price per share, stock options (in dollars per share) | $ / shares | $ 7.01 | ||||||
Unrecognized stock-based compensation expense, stock options | $ | $ 7,500 | ||||||
Weighted-average amortization period | 2 years 9 months 12 days | ||||||
Number of employee stock purchase plans | Plan | 2 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted-average amortization period | 3 months 24 days | ||||||
Awards granted (in shares) | 200,000 | ||||||
Grant date fair value (in dollars per share) | $ / shares | $ 6.62 | ||||||
Awards vested (in shares) | 0 | ||||||
Unrecognized stock-based compensation expense | $ | $ 600 | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuance (in shares) | 3,178,049 | ||||||
Weighted-average amortization period | 1 month 24 days | ||||||
Unrecognized stock-based compensation expense | $ | $ 200 | ||||||
ESPP, maximum employee payroll deduction percentage | 15.00% | ||||||
ESPP, maximum number of shares per employee (in shares) | 2,000 | ||||||
Offering period | 6 months | ||||||
ESPP, discounted purchase price percentage | 85.00% | ||||||
Number of additional shares authorized (in shares) | 2,500,000 | ||||||
Number of shares authorized (in shares) | 9,800,000 | 7,300,000 | |||||
Shares purchased under ESPP (in shares) | 500,000 | ||||||
Performance Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation | $ | $ 400 | ||||||
2019 Equity Incentive Award Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuance (in shares) | 1,700,000 | 2,400,000 | |||||
2019 Performance Targets | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award performance period | 1 year | ||||||
Award subsequent performance period | 3 years | ||||||
2017 Nonqualified Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuance (in shares) | 1,600,000 | ||||||
Unrecognized stock-based compensation expense, stock options | $ | $ 2,700 | ||||||
Weighted-average amortization period | 1 year | ||||||
Number of additional shares authorized (in shares) | 2,500,000 | ||||||
Number of shares authorized (in shares) | 3,500,000 | ||||||
Shares purchased under ESPP (in shares) | 500,000 | ||||||
Maximum contribution percent (up to 25%) | 25.00% | ||||||
Employee termination period following purchase date to receive shares subject to risk of forfeiture | 1 year | ||||||
Number of offering periods | period | 2 | ||||||
Offering period | 6 months | ||||||
Number of shares authorized per purchase period (in shares) | 500,000 | ||||||
Executive Officer | 2020 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options granted (in shares) | 800,000 | ||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 9.16 | ||||||
Award performance period | 1 year | ||||||
Net income per share, target achievement performance threshold, percent | 80.00% | ||||||
Bookings, target achievement performance threshold, percent | 90.00% | ||||||
Number of shares granted if no-GAAP income below 80% and bookings below 90% of target (in shares) | 0 | ||||||
Shares award weighting percent | 50.00% | ||||||
Target achievement threshold for shares award sliding scale | 100.00% | ||||||
Stock-based compensation | $ | $ 300 | ||||||
Executive Officer | 2019 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 8.03 | ||||||
Awards granted (in shares) | 2,000,000 | ||||||
Executive Officer | Period One | 2020 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 25.00% | ||||||
Executive Officer | Period One | 2019 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 30.00% | ||||||
Executive Officer | Period Two | 2020 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 75.00% | ||||||
Award vesting period | 36 months | ||||||
Executive Officer | Period Two | 2019 Performance Targets | Performance Based Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights, percentage | 75.00% | ||||||
Award vesting period | 36 months |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 2,984 | $ 3,145 |
Products | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 107 | 155 |
Services | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 115 | 99 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 1,010 | 1,016 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 956 | 1,074 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 796 | $ 801 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 101,682 | $ 89,350 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 88,050 | 75,785 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,121 | 2,439 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,563 | 3,415 |
Caribbean | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,372 | 2,266 |
Middle East | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,301 | 3,751 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 1,275 | $ 1,694 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Asset and Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Contract with customer, asset | $ 2,900 | $ 5,000 |
Contract with customer, asset, prior period, not recognized | $ 1,700 | |
Contract with customer, asset, expected to be billed remainder of year, percent | 58.00% | |
Deferred revenue, current | $ 19,912 | 17,158 |
Deferred revenue, current | 17,656 | 18,340 |
Deferred revenue | 37,568 | 35,498 |
Contract with customer, liability, revenue recognized | 6,100 | |
Products and services | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue, current | 15,667 | 12,480 |
Deferred revenue, current | 423 | 790 |
Extended warranty | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue, current | 4,245 | 4,678 |
Deferred revenue, current | $ 17,233 | $ 17,550 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Costs (Details) | 3 Months Ended |
Mar. 28, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Capitalized contract cost, gross | $ 700,000 |
Capitalized contract cost, amortization | 100,000 |
Capitalized contract cost, impairment | $ 0 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Performance Obligations (Details) $ in Millions | Mar. 28, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation, amount | $ 61.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 46.00% |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
CenturyLink, Inc. | Revenue from Contract with Customer Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.00% | 14.00% |
CenturyLink, Inc. | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.00% | |
Verizon | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.00% |
Income Taxes - (Details)
Income Taxes - (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 329 | $ 155 |
Effective tax rate | (5.00%) | (1.60%) |
Net Loss Per Common Share - (De
Net Loss Per Common Share - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Numerator: | ||
Net loss | $ (6,944) | $ (9,767) |
Denominator: | ||
Weighted-average common shares outstanding used to compute basic net income (loss) per share (in shares) | 56,540 | 54,048 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.12) | $ (0.18) |
Potentially dilutive shares, weighted average (in shares) | 7,133 | 6,221 |