Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Sep. 17, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | ATEN | |
Entity Registrant Name | A10 Networks, Inc. | |
Entity Central Index Key | 1,580,808 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 72,707,302 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 46,964 | $ 46,567 |
Marketable securities | 83,738 | 84,567 |
Accounts receivable, net of allowances of $850 and $983, respectively | 47,755 | 48,266 |
Inventory | 16,189 | 17,577 |
Prepaid expenses and other current assets | 14,352 | 6,825 |
Total current assets | 208,998 | 203,802 |
Property and equipment, net | 9,634 | 9,913 |
Goodwill | 1,307 | 1,307 |
Intangible assets | 4,829 | 5,190 |
Other non-current assets | 7,229 | 4,646 |
Total assets | 231,997 | 224,858 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Accounts payable | 7,632 | 9,033 |
Accrued liabilities | 25,491 | 21,835 |
Deferred revenue | 65,735 | 61,858 |
Total current liabilities | 98,858 | 92,726 |
Deferred revenue, non-current | 31,895 | 32,779 |
Other non-current liabilities | 884 | 967 |
Total liabilities | 131,637 | 126,472 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Common stock, $0.00001 par value: 500,000 shares authorized; 72,707 and 71,692 shares issued and outstanding, respectively | 1 | 1 |
Additional paid-in-capital | 364,953 | 355,533 |
Accumulated other comprehensive loss | (296) | (123) |
Accumulated deficit | (264,298) | (257,025) |
Total stockholders' equity | 100,360 | 98,386 |
Total liabilities and stockholders' equity | $ 231,997 | $ 224,858 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 850 | $ 983 |
Common Stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 72,707,000 | 71,692,000 |
Common stock, shares outstanding (in shares) | 72,707,000 | 71,692,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Total revenue | $ 49,183 | $ 63,934 |
Cost of revenue: | ||
Total cost of revenue | 11,884 | 14,743 |
Gross profit | 37,299 | 49,191 |
Operating expenses: | ||
Sales and marketing | 26,904 | 26,263 |
Research and development | 18,797 | 17,042 |
General and administrative | 11,594 | 7,647 |
Total operating expenses | 57,295 | 50,952 |
Loss from operations | (19,996) | (1,761) |
Non-operating income (expense): | ||
Interest expense | (33) | (44) |
Interest and other income, net | 566 | 842 |
Total non-operating income, net | 533 | 798 |
Loss before income taxes | (19,463) | (963) |
Provision for income taxes | 207 | 374 |
Net loss | $ (19,670) | $ (1,337) |
Net loss per share: | ||
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.02) |
Weighted-average shares used in computing net loss per share: | ||
Basic and diluted (in shares) | 72,232 | 68,571 |
Products | ||
Revenue: | ||
Total revenue | $ 28,149 | $ 43,698 |
Cost of revenue: | ||
Total cost of revenue | 7,109 | 10,502 |
Services | ||
Revenue: | ||
Total revenue | 21,034 | 20,236 |
Cost of revenue: | ||
Total cost of revenue | $ 4,775 | $ 4,241 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (19,670) | $ (1,337) |
Other comprehensive loss, net of tax: | ||
Unrealized loss on marketable securities | (173) | (1) |
Comprehensive loss | $ (19,843) | $ (1,338) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (19,670) | $ (1,337) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,134 | 2,202 |
Stock-based compensation | 8,151 | 4,316 |
Other non-cash items | 389 | (278) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 94 | 1,759 |
Inventory | 827 | (1,623) |
Prepaid expenses and other assets | (1,687) | (1,699) |
Accounts payable | (1,202) | (1,624) |
Accrued liabilities | 3,599 | (1,647) |
Deferred revenue | 6,995 | 490 |
Other | 18 | (14) |
Net cash (used in) provided by operating activities | (352) | 545 |
Cash flows from investing activities: | ||
Proceeds from sales of marketable securities | 10,709 | 7,620 |
Maturities of marketable securities | 17,150 | 10,694 |
Purchases of marketable securities | (27,220) | (18,616) |
Purchases of property and equipment | (1,133) | (678) |
Net cash used in investing activities | (494) | (980) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under employee equity incentive plans | 1,269 | 2,065 |
Other | (26) | (25) |
Net cash provided by financing activities | 1,243 | 2,040 |
Net increase in cash and cash equivalents | 397 | 1,605 |
Cash and cash equivalents - beginning of period | 46,567 | 28,975 |
Cash and cash equivalents - end of period | 46,964 | 30,580 |
Non-cash investing and financing activities: | ||
Inventory transfers to property and equipment | 561 | 783 |
Purchases of property and equipment included in accounts payable | 87 | 458 |
Vesting of early exercised stock options | $ 0 | $ 41 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business A10 Networks, Inc. (together with our subsidiaries, the “Company”, “we”, “our” or “us”) was incorporated in California in 2004 and reincorporated in Delaware in March 2014. We are headquartered in San Jose, California and have wholly-owned subsidiaries throughout the world including Asia and Europe. We are a leading provider of secure application solutions and services that enable a new generation of intelligently connected companies with the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology (“IT”) and network infrastructures. Our product portfolio seeks to address many of the aforementioned challenges and solution requirements. The portfolio consists of six secure application solutions; Thunder Application Delivery Controllers (“ADC”), Lightning Application Delivery Controller (“Lightning ADC”), Thunder Carrier Grade Network Address Translation (“CGN”), Thunder Threat Protection System (“TPS”), Thunder SSL Insight (“SSLi”) and Thunder Convergent Firewall (“CFW”), and two intelligent management and automation tools; Harmony Controller and aGalaxy. Our solutions are available in a variety of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include those of A10 Networks, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions. We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). As permitted under these rules and regulations, we have condensed or omitted certain financial information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited financial statements, which are included in its 2017 Annual Report on Form 10-K for the year ended December 31, 2017 on file with the SEC (our “Annual Report”). These financial statements have been prepared on the same basis as our annual financial statements and, in management’s opinion, reflect all adjustments consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial information. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the financial statements and accompanying notes thereto in our Annual Report. Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated balance sheets and the condensed consolidated statements of cash flows. We have separately presented the line items “Proceeds from sales of marketable securities” and “Maturities of marketable securities” as opposed to our historical consolidated presentation of “Proceeds from sales and maturities of marketable securities” in the condensed consolidated statement of cash flows for the three months ended March 31, 2017. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Those estimates and assumptions affect revenue recognition and deferred revenue, the allowance for doubtful accounts, the sales return reserve, the valuation of inventory, the fair value of marketable securities, contingencies and litigation, acquisition related purchase price allocations, accrued liabilities, deferred commissions and the determination of fair value of stock-based compensation. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates. 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, 2017. Other than the accounting policies related to the adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) discussed in Note 11 in this report, there have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 2018. Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash, cash equivalents and marketable securities are held and invested in high-credit quality financial instruments by recognized financial institutions and are subject to minimum credit risk. Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations based on a number of factors, including past transaction experience, evaluation of credit history and review of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support accounts receivable. Significant customers, including distribution channel partners and direct customers, are those which represent more than 10% of our total revenue for each period presented or our gross accounts receivable balance as of each respective balance sheet date. Revenues from our significant customers as a percentage of our total revenue are as follows: Three Months Ended March 31, 2018 2017 Customer A (a distribution channel partner) * 18% Customer B (a distribution channel partner) * 11% Customer C (a direct customer) * 12% * represents less than 10% of total revenue As of March 31, 2018 , one customer accounted for 13% of our total gross accounts receivable, respectively. As of December 31, 2017 , no customer accounted for 10% or more of our total gross accounts receivable. Recently Adopted Accounting Guidance In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. The amendments will be applied prospectively to an award modified on or after the adoption date. The adoption of ASU 2017-09 on January 1, 2018 did not impact our condensed consolidated financial statements or disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as subsequently amended, which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. This ASU requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the capitalization of incremental customer acquisition costs and amortization of these costs over the contract period or estimated customer life which resulted in the recognition of a deferred commission asset on our condensed consolidated balance sheet. We adopted ASU 2014-09 and its related amendments (collectively “ASC 606”) on January 1, 2018 using the modified retrospective method. See Note 11 in this report for disclosure on the impact of adopting this standard. Recent Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This new accounting standard primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In July 2018, FASB issued ASU No. 2018-11, Topic 842 - Targeted Improvements. The update requires modified retrospective transition, with the option to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment and elect various practical expedients. This standard is effective for annual periods beginning after December 15, 2018 with early adoption permitted. We will adopt this standard effective January 1, 2019. We are currently gathering information and evaluating the impact of this guidance on our condensed consolidated financial statements and related disclosures. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118. These amendments add SEC guidance to the FASB Accounting Standards Codification regarding the Tax Cuts and Jobs Act pursuant to the issuance of SAB 118. The amendments are effective upon addition to the FASB Codification. See Note 9 in this report for disclosures related to the effect of the Tax Cuts and Jobs Act and our utilization of SAB 118. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective 30 days after publication in the Federal Register. The final rule was not yet published in the Federal Register as of the date of this Quarterly Report on Form 10-Q. We are evaluating the impact of this guidance on our condensed consolidated financial statements. There are several other new accounting pronouncements issued by the FASB, which we will adopt. However, we do not believe any of those accounting pronouncements will have a material impact on our consolidated financial position, operating results or statements of cash flows. |
Restatement of Previously Issue
Restatement of Previously Issued Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Consolidated Financial Statements | Restatement of Previously Issued Consolidated Financial Statements Restatement Background Subsequent to the issuance of the condensed consolidated financial statements as of September 30, 2017, the Audit Committee of our Board of Directors (the “Audit Committee”) commenced an investigation (the “Investigation”) with the assistance of outside counsel relating to certain accounting and internal control matters at the Company, principally focused on certain revenue recognition matters from the fourth quarter of 2015 through the fourth quarter of 2017 inclusive. The investigation was conducted with the assistance of outside counsel and independent counsel. Counsel retained forensic accountants to assist with their work. The investigation commenced following the identification of violations of the Company's Insider Trading Policy and Code of Conduct by a mid-level employee within the finance department, and as a result it was determined that further review and procedures relating to certain accounting and internal control matters should be undertaken. During the course of this Investigation, code of conduct breaches and accounting and financial reporting errors were identified. The matters primarily resulted in modification to the timing of the recognition of revenue in a limited number of sale transactions between the Company and its resellers and distributors. The Company determined the need to restate the condensed consolidated financial statements as of and for the three months ended March 31, 2017 and the consolidated statements as of and for the year ended December 31, 2016, including interim periods therein. The Company also adjusted the consolidated financial statements as of and for the year ended December 31, 2015 to correct identified immaterial errors. Revenue Recognition Adjustments During the three months ended March 31, 2017 , revenue on certain sale transactions was recognized prematurely in prior year, as it was determined that there was an oversight or misuse of facts which indicated that the reseller’s or distributor’s price was not fixed or determinable, or that collectability was not reasonably assured, because the reseller’s or distributor’s payment to the Company was contingent on resale of the product or the transaction included extended payment terms beyond the Company’s customary terms. To correct these errors, the related revenue and cost of revenue were reversed in the period in which the accounting errors took place and have been recognized in subsequent periods when all of the revenue recognition criteria were met. Additionally, certain adjustments to accounts receivable, net of allowances, inventory, and deferred revenue, current, were made to the condensed consolidated balance sheet at the end of the period in which the accounting errors occurred. Other Adjustments In addition to the restatement adjustments described above, we have identified other revenue and expense classification errors that are not material, individually or in the aggregate that have been corrected in connection with the restatement. Tax effect of restatement adjustments The Company recorded adjustments to its deferred taxes as a result of the restatement. The overall impact of the restatement is an increase to deferred taxes with the corresponding increase to the valuation allowance with no impact to the effective tax rate or income tax expense. Impact of the Restatement The following table presents the condensed consolidated statement of operations as previously reported, restatement adjustments and the condensed consolidated statement of operations as restated for the three months ended March 31, 2017 (in thousands, except per share amounts): Three Months Ended March 31, 2017 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 39,706 $ 3,634 $ 358 $ 43,698 Services 20,580 14 (358 ) 20,236 Total revenue 60,286 3,648 — 63,934 Cost of revenue: Products 9,784 599 119 10,502 Services 4,360 — (119 ) 4,241 Total cost of revenue 14,144 599 — 14,743 Gross profit $ 46,142 $ 3,049 $ — $ 49,191 Operating expenses: General and administrative $ 7,161 $ 486 $ — $ 7,647 Total operating expenses $ 50,466 $ 486 $ — $ 50,952 Loss from operations $ (4,324 ) $ 2,563 $ — $ (1,761 ) Loss before income taxes $ (3,526 ) $ 2,563 $ — $ (963 ) Net loss $ (3,900 ) $ 2,563 $ — $ (1,337 ) Net loss per share: Basic and diluted $ (0.06 ) $ (0.02 ) Weighted-average shares used in computing net loss per share: Basic and diluted 68,571 68,571 The following table presents the condensed consolidated statement of cash flows as previously reported, restatement adjustments, and the condensed consolidated statement of cash flows as restated for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (3,900 ) $ 2,563 $ (1,337 ) Adjustments to reconcile net loss to net cash provided by operating activities: Changes in operating assets and liabilities: Accounts receivable, net $ 5,214 $ (3,455 ) $ 1,759 Inventory $ (2,222 ) $ 599 $ (1,623 ) Deferred revenue $ 197 $ 293 $ 490 Net cash provided by operating activities $ 545 $ — $ 545 The only change to the condensed consolidated statement of comprehensive loss and the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2017 as a result of the restatements is due to the changes in net loss. Refer to the condensed consolidated statement of comprehensive loss as restated. |
Condensed Consolidated Financia
Condensed Consolidated Financial Statement Details | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Condensed Consolidated Financial Statement Details | Condensed Consolidated Financial Statement Details Inventory March 31, December 31, (in thousands) Raw materials $ 5,869 $ 6,643 Finished goods 10,320 10,934 Total inventory $ 16,189 $ 17,577 Property and Equipment, Net Useful Life March 31, December 31, (in years) (in thousands) Equipment 1-3 $ 49,245 $ 47,817 Software 1-3 4,018 3,988 Furniture and fixtures 1-3 951 950 Leasehold improvements 2-8 3,824 3,824 Property and equipment, gross 58,038 56,579 Less: accumulated depreciation (48,404 ) (46,666 ) Property and equipment, net $ 9,634 $ 9,913 Depreciation expense on property and equipment was $1.7 million and $1.8 million for the three months ended March 31, 2018 and 2017 , respectively. Intangible Assets Purchased intangible assets, net, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Developed technology $ 5,050 $ (1,768 ) $ 3,282 $ 5,050 $ (1,515 ) $ 3,535 Patents 2,936 (1,389 ) 1,547 2,936 (1,281 ) 1,655 Total $ 7,986 $ (3,157 ) $ 4,829 $ 7,986 $ (2,796 ) $ 5,190 Amortization expense related to purchased intangible assets was $0.4 million each for the three months ended March 31, 2018 and 2017 . Purchased intangible assets will be amortized over a remaining weighted average useful life of 3.4 years. Future amortization expense for purchased intangible assets as of March 31, 2018 is as follows (in thousands): Fiscal Year Remainder of 2018 $ 1,082 2019 1,442 2020 1,442 2021 863 $ 4,829 Accrued Liabilities March 31, December 31, (in thousands) Accrued compensation and benefits $ 14,156 $ 13,828 Accrued tax liabilities 3,118 2,985 Other 8,217 5,022 Total accrued liabilities $ 25,491 $ 21,835 Deferred Revenue March 31, December 31, (in thousands) Deferred revenue: Products $ 5,714 $ 6,161 Services 91,916 88,476 Total deferred revenue 97,630 94,637 Less: current portion (65,735 ) (61,858 ) Non-current portion $ 31,895 $ 32,779 |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Marketable Securities and Fair Value Measurements | Marketable Securities and Fair Value Measurements Marketable Securities Marketable securities, classified as available-for-sale, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 16,999 $ 2 $ (8 ) $ 16,993 $ 17,000 $ 6 $ (1 ) $ 17,005 Corporate securities 41,452 — (191 ) 41,261 39,154 1 (76 ) 39,079 U.S. Treasury and agency securities 5,243 — (25 ) 5,218 5,744 — (19 ) 5,725 Commercial paper 6,473 — (4 ) 6,469 9,225 1 (2 ) 9,224 Asset-backed securities 13,867 — (70 ) 13,797 13,567 — (33 ) 13,534 $ 84,034 $ 2 $ (298 ) $ 83,738 $ 84,690 $ 8 $ (131 ) $ 84,567 During the three months ended March 31, 2018 and 2017 , we did not reclassify any amount to earnings from accumulated other comprehensive loss related to unrealized gains or losses. The following table summarizes the cost and estimated fair value of marketable securities based on stated effective maturities as of March 31, 2018 (in thousands): Amortized Cost Fair Value Less than 1 year $ 56,501 $ 56,372 Mature in 1 - 3 years 27,533 27,366 $ 84,034 $ 83,738 All available-for-sale securities have been classified as current because they are available for use in current operations. Marketable securities in an unrealized loss position consisted of the following (in thousands): Less Than 12 Months 12 Months or More Total As of March 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 10,491 $ (8 ) $ — $ — $ 10,491 $ (8 ) Corporate securities 39,761 (191 ) — — 39,761 (191 ) U.S. Treasury and agency securities 1,736 (10 ) 3,482 (15 ) 5,218 (25 ) Commercial paper 6,469 (4 ) — — 6,469 (4 ) Asset-backed securities 12,872 (67 ) 925 (3 ) 13,797 (70 ) $ 71,329 $ (280 ) $ 4,407 $ (18 ) $ 75,736 $ (298 ) Less Than 12 Months 12 Months or More Total As of December 31, 2017 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 2,999 $ (1 ) $ — $ — $ 2,999 $ (1 ) Corporate securities 36,079 (74 ) 1,499 (2 ) 37,578 (76 ) U.S. Treasury and agency securities 2,246 (2 ) 3,479 (17 ) 5,725 (19 ) Commercial paper 4,232 (2 ) — — 4,232 (2 ) Asset-backed securities 11,415 (32 ) 728 (1 ) 12,143 (33 ) $ 56,971 $ (111 ) $ 5,706 $ (20 ) $ 62,677 $ (131 ) Based on evaluation of securities that have been in a continuous loss position, we did not recognize any other-than-temporary impairment charges during the three months ended March 31, 2018 and 2017 . Fair Value Measurements The following is a summary of our cash, cash equivalents and marketable securities measured at fair value on a recurring basis (in thousands): March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash $ 33,798 $ — $ — $ 33,798 $ 34,453 $ — $ — $ 34,453 Cash equivalents 13,166 — — 13,166 12,114 — — 12,114 Certificates of deposit — 16,993 — 16,993 — 17,005 — 17,005 Corporate securities — 41,261 — 41,261 — 39,079 — 39,079 U.S. Treasury and agency securities — 5,218 — 5,218 — 5,725 — 5,725 Commercial paper — 6,469 — 6,469 — 9,224 — 9,224 Asset-backed securities — 13,797 — 13,797 — 13,534 — 13,534 $ 46,964 $ 83,738 $ — $ 130,702 $ 46,567 $ 84,567 $ — $ 131,134 There were no transfers between Level 1 and Level 2 fair value measurement categories during the three months ended March 31, 2018 and 2017 . |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2018 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility In November 2016, we entered into a loan and security agreement (the “2016 Credit Facility”) with Silicon Valley Bank (“SVB”) as the lender. The 2016 Credit Facility provides a three -year, $25.0 million revolving credit facility, which includes a maximum of $25.0 million letter of credit subfacility. When the balance of our cash, cash equivalents and marketable securities minus outstanding revolving loans and letters of credit equals or exceeds $50.0 million , loans may be advanced under the 2016 Credit Facility up to the full $25.0 million . When our net cash falls below $50.0 million , loans may be advanced under the 2016 Credit Facility based on a borrowing base equal to a specified percentage of the value of our eligible accounts receivable. The loans bear interest, at our option, at (i) the prime rate reported in The Wall Street Journal, minus 0.50% or (ii) a LIBOR rate determined in accordance with the 2016 Credit Facility, plus 2.50% . We are required to pay customary closing fees, commitment fees and letter of credit fees for a facility of this size and type. In September 2018, we entered into an amendment with SVB to reduce the unused revolving line facility fee on the 2016 Credit Facility from 0.4% to 0.3% . Our obligations under the 2016 Credit Facility are secured by substantially all of our assets, excluding our intellectual property. The 2016 Credit Facility contains customary affirmative and negative covenants. In addition, the 2016 Credit Facility requires us to maintain compliance with an adjusted quick ratio of not less than 1.50:1.00, as determined in accordance with the 2016 Credit Facility. As of March 31, 2018 , we had no outstanding balance under the 2016 Credit Facility and were in compliance with all financial statement covenants except for the submission of our quarterly financial statements no later than 45 days after the last day of the fiscal quarter. However, SVB granted a forbearance on this requirement through August 31, 2018, and we submitted our quarterly financial statements within the forbearance period. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we may be party or subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Some of these proceedings involve claims that are subject to substantial uncertainties and unascertainable damages. We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Unless otherwise specifically disclosed in this note, we have determined that no provision for liability nor disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. On March 22, 2018, the Company, our Chief Executive Officer, our Chief Financial Officer, and certain former officers, were named as defendants in a putative class action lawsuit filed in the United States District Court for the Northern District of California, captioned Shah v. A10 Networks, Inc. et al., 3:18-cv-01772-VC (the “Securities Action”). The complaint in the Securities Action alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks unspecified damages and other relief. On August 31, 2018, the court appointed a lead plaintiff. An operative amended complaint remains to be filed. On May 30, 2018, certain of our current and former directors and officers were named as defendants in a putative shareholder derivative lawsuit filed in the United States District Court for the Northern District of California, captioned Moulton v. Chen et al., 3:18-cv-03223-VC (the “Derivative Action”). We were also named as a nominal defendant. The complaint in the Derivative Action alleges breaches of fiduciary duties and other related claims in connection with purported misrepresentations related to internal controls and revenues and failures to ensure that financial statements were made in accordance with generally accepted accounting principles. Plaintiff seeks unspecified damages allegedly sustained by the Company, restitution, and other relief. On July 11, 2018 the Derivative Action was stayed until a motion to dismiss in the Securities Action is granted with prejudice or denied in whole or in part. Defendants are not required to move or otherwise respond to the current complaint. Investigations The U.S. Securities and Exchange Commission (“SEC”) is conducting a private investigation into possible violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14, 13a-15, and 13b2-1 thereunder. The Company is cooperating with the SEC regarding this investigation. The Company is unable to predict the duration, scope or outcome of the investigation, but an adverse outcome is reasonably possible. In such an event, the Company could be required to pay fines and sanctions and/or implement additional remedial measures. However, the Company is not able to estimate the likelihood or a reasonable range of possible loss. Lease Commitments We lease various operating spaces in the United States, Asia and Europe under non-cancelable operating lease arrangements that expire on various dates through April 2022 . These arrangements require us to pay certain operating expenses, such as taxes, repairs and insurance, and contain renewal and escalation clauses. We recognize rent expense under these arrangements on a straight-line basis over the term of the lease. Guarantees and Indemnifications In the normal course of business, we provide indemnifications to customers against claims of intellectual property infringement made by third parties arising from the use of our products. Other guarantees or indemnification arrangements include guarantees of product and service performance, and standby letters of credit for lease facilities and corporate credit cards. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantees and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. |
Equity Incentive Plans and Stoc
Equity Incentive Plans and Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Incentive Plans and Stock-Based Compensation | Equity Incentive Plans and Stock-Based Compensation Equity Incentive Plans 2014 Equity Incentive Plan The 2014 Equity Incentive Plan (the “2014 Plan”) provides for the granting of stock options, restricted stock awards, restricted stock units (“RSUs”), performance-based RSUs (“PSUs”), stock appreciation rights, performance units and performance shares to our employees, consultants and members of our board of directors. In June 2015, our board of directors adopted and our stockholders approved an amendment and restatement of the 2014 Plan, which increased the number of shares available for issuance under the 2014 Plan by the number of shares granted under the 2008 Stock Plan (the “2008 Plan”) that were or may in the future be canceled or otherwise forfeited or repurchased after March 20, 2014. A maximum of 8,310,566 shares may become available from such awards granted under the 2008 Plan for issuance under the 2014 Plan. The shares authorized for the 2014 Plan increase annually by the least of (i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding fiscal year, or (iii) such other amount as determined by our Board of Directors. Accordingly, on January 1, 2018 , the number of shares in the 2014 Plan increased by 3,584,623 shares, representing 5% of the prior year end’s common stock outstanding. As of March 31, 2018 , we had a total of 10,633,711 shares available for future grant. 2014 Employee Stock Purchase Plan The 2014 Employee Stock Purchase Plan (the “2014 Purchase Plan”) provides for twenty-four month offering periods with four six-month purchase periods in each offering period. Employees purchase shares in each purchase period at 85% of the market value of our common stock at the beginning of the offering period or the end of the purchase period, whichever is lower. If the market value of our common stock at the end of the purchase period is less than the market value at the beginning of the offering period, participants will be withdrawn from the then current offering period following their purchase of shares, and automatically will be enrolled in the immediately following offering period. Participants may contribute up to 15% of their eligible compensation, subject to certain limits. As of March 31, 2018 , we had 3,065,182 shares available for future issuance under the 2014 Purchase Plan. The 2014 Purchase Plan was suspended effective March 16, 2018 due to the delay of the Form 10-K filing for the fiscal year ended December 31, 2017. Accordingly, there were no stock purchases under the 2014 Purchase Plan during the three months ended March 31, 2018 . The 2014 Purchase Plan may resume after we become a current filer, subject to the Board acting at that time to establish new purchase and offering periods. Stock-Based Compensation A summary of our stock-based compensation expense is as follows (in thousands): Three Months Ended March 31, 2018 2017 Stock-based compensation by type of award: Stock options $ 329 $ 819 Stock awards 2,665 2,949 Employee stock purchase rights (1) 5,157 548 $ 8,151 $ 4,316 Stock-based compensation by category of expense: Cost of revenue $ 893 $ 283 Sales and marketing 2,765 1,536 Research and development 3,382 1,664 General and administrative 1,111 833 $ 8,151 $ 4,316 (1) Amount includes $4.1 million of accelerated stock-based compensation expense. In March 2018, as a result of a suspension of the 2014 Purchase Plan due to our non-timely filing status, all unrecognized stock-based compensation expense related to ESPP was accelerated and recognized within the condensed consolidated statement of operations. As of March 31, 2018 , we had $27.5 million of unrecognized stock-based compensation expense related to unvested stock-based awards which will be recognized over a weighted-average period of 2.3 years. We did not grant stock options and employee stock purchase rights during the three months ended March 31, 2018 and 2017 . Stock Options The following tables summarize our stock option activities and related information: Number of Shares (thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2017 6,018 $ 5.18 Exercised (359 ) $ 3.54 Canceled (1) (87 ) $ 10.74 Outstanding as of March 31, 2018 5,572 $ 5.19 5.0 $ 7,546 Vested and exercisable as of March 31, 2018 4,688 $ 5.03 4.4 $ 7,027 (1) Includes 51,995 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. As of March 31, 2018 , the aggregate intrinsic value represents the excess of the closing price of our common stock of $5.82 over the exercise price of the outstanding in-the-money options. The intrinsic value of options exercised was $1.1 million and $4.7 million during the three months ended March 31, 2018 and 2017 , respectively. Stock Awards We have granted RSUs to our employees, consultants and members of our board of directors, and PSUs and market performance-based restricted stock units (“MSUs”) to certain executives. In 2014 and 2015, we granted 540,000 MSUs and 40,000 MSUs, respectively, to certain executives. These MSUs will vest if the closing price of our common stock remains above certain predetermined target prices for 20 consecutive trading days within a 4 -year period following the grant date, subject to continued service by the award holder. None of these MSUs were vested as of March 31, 2018 . In February 2016, we granted 547,000 PSUs with certain financial and operational targets. Actual performance, as measured at the time and prior to the restatement of the 2016 financial statements, resulted in participants achieving 80% of target. Given the PSUs did not contain explicit or implicit claw back rights, there was no change to stock-based compensation expense for the impact of the restatement. As of March 31, 2018 , 178,402 shares had vested, 181,600 shares were forfeited, and the remaining shares will vest in annual tranches through February 2020 subject to continued service vesting requirements. In October 2016, we granted 60,641 PSUs with certain financial and operational targets. To the extent they become eligible to vest upon achievement of the performance targets, these PSUs additionally are subject to service condition vesting requirements with scheduled vesting dates of March 2017 through June 2018. As of March 31, 2018 , 12,128 shares had vested, 30,321 shares were forfeited, and the remaining shares were unvested and are eligible to vest based on achievement of performance targets. The following table summarizes our stock award activities and related information: Number of Shares (thousands) Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Term Outstanding as of December 31, 2017 5,568 $ 6.88 Granted 99 $ 6.86 Released (656 ) $ 6.44 Canceled (284 ) $ 7.57 Outstanding as of March 31, 2018 4,727 $ 6.90 1.4 The aggregate fair value of stock awards released as of the respective vesting dates was approximately $4.3 million and $6.2 million for the three months ended March 31, 2018 and 2017 , respectively. Stock Repurchase Program On October 23, 2017, our board of directors authorized a share repurchase program for up to $20.0 million of our common stock over 12 months. Under the repurchase authorization, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The repurchase authorization may be commenced, suspended or discontinued at any time at our discretion. No shares were repurchased under this repurchase program as of March 31, 2018 . |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed using the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed using the weighted average number of common shares outstanding for the period plus potential dilutive common shares, including stock options, RSUs and employee stock purchase rights, unless the potential common shares are anti-dilutive. Since we had net losses in the three months ended March 31, 2018 and 2017 , none of the potential dilutive common shares were included in the computation of diluted shares for these periods, as inclusion of such shares would have been anti-dilutive. The following table presents common shares related to potentially dilutive shares excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2018 2017 Stock options, RSUs and employee stock purchase rights 10,431 13,478 Common stock subject to repurchase — 8 10,431 13,486 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recorded income tax expense of $0.2 million and $0.4 million for the three months ended March 31, 2018 and 2017 , respectively, which primarily consisted of foreign taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the financial statements and their respective tax bases using tax rates expected to be in effect during the years in which the basis differences reverse. We believe it is more likely than not that our federal and state net deferred tax assets will not be fully realized. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of our deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such deferred tax assets will not be realized. Accordingly, we continue to maintain a valuation allowance against all of our U.S. and certain foreign net deferred tax assets as of March 31, 2018. We will continue to maintain a full valuation allowance against our net federal, state and certain foreign deferred tax assets until there is sufficient evidence to support recoverability of our deferred tax assets. We had $3.9 million and $3.8 million of unrecognized tax benefits as of March 31, 2018 and December 31, 2017 , respectively. We do not anticipate a material change to our unrecognized tax benefits over the next twelve months. Unrecognized tax benefits may change during the next twelve months for items that arise in the ordinary course of business. Accrued interest and penalties related to unrecognized tax benefits are recognized as part of our income tax provision in our condensed consolidated statements of operations. We are subject to taxation in the United States, various states, and several foreign jurisdictions. Because we have net operating loss and credit carryforwards, there are open statutes of limitations in which federal, state and foreign taxing authorities may examine our tax returns for all years from 2004 through the current period. We are not currently under examination by any taxing authorities. The Tax Cuts and Jobs Act In December 2017, the United States enacted the Tax Cuts and Jobs Act (“TCJA”), which instituted fundamental changes to the taxation of multinational corporations, including, but not limited to: (1) a reduction of the U.S. federal corporate income tax rate to 21% for tax years beginning after December 31, 2017; (2) a requirement for companies to pay a one-time transition tax on certain unremitted earnings of foreign subsidiaries; and, (3) the transition of international taxation from a worldwide tax system to a territorial system. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. For the three months ended March 31, 2018, the accounting for the TCJA remained incomplete, but there were no material changes to the provisional tax impacts assessed for the year ended December 31, 2017. The ultimate impact may materially differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA. The accounting is expected to be completed when the 2017 U.S. corporate income tax return is filed in 2018. We are not currently under examination by any taxing authorities. |
Geographic Information
Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information The following table depicts the disaggregation of revenue by geographic region based on the ship to location of our customers and is consistent with how we evaluate our financial performance (in thousands): Three Months Ended March 31, 2018 2017 United States $ 20,678 $ 34,274 Japan 13,080 13,079 Asia Pacific, excluding Japan 7,438 9,862 EMEA 6,499 5,632 Other 1,488 1,087 $ 49,183 $ 63,934 The following table is a summary of our long-lived assets which include property and equipment, net based on the physical location of the assets (in thousands): March 31, December 31, United States $ 7,430 $ 7,733 Japan 1,409 1,510 Other 795 670 Total $ 9,634 $ 9,913 |
Revenue Revenue
Revenue Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue ASC 606 Adoption Impact On January 1, 2018, we adopted ASC 606 applying the modified retrospective method. We recognized the cumulative effect of initially applying the new guidance as an adjustment to the opening balance of accumulated deficit as of the adoption date. We applied ASC 606 to all contracts that were not completed at the date of initial application. Comparative information for prior periods has not been restated and continues to be reported under the accounting standards in effect for those periods. In connection with the adoption of ASC 606, we also adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, we refer to ASC 606 and ASC 340-40 as the “new standard.” Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, commissions and deferred commissions as discussed below. We recorded a reduction to opening accumulated deficit of $12.4 million as of January 1, 2018 due to the cumulative impact of adopting the new standard as follows: • A decrease in total deferred revenue of $4.0 million primarily due to the removal of the current limitation on contingent revenue that would have accelerated revenue recognition for certain of our historical revenue contracts; and • Recognition of a deferred commissions asset of $8.4 million due to the requirement under the new standard to recognize incremental customer acquisition costs in our condensed consolidated statement of operations as the related performance obligations are met as compared to the previous recognition to expense as incurred. Impact on the Condensed Consolidated Financial Statements The following tables summarize the impact of the new standard on our condensed consolidated statement of balance sheet and condensed consolidated of operations for the period presented: Selected Condensed Consolidated Balance Sheet Line Items March 31, 2018 (in thousands) As Reported Adjustments Balance Without Adopting the New Standard Assets Prepaid expenses and other current assets $ 14,352 $ (5,755 ) $ 8,597 Other non-current assets 7,229 (2,610 ) 4,619 Liabilities Deferred revenue, current 65,735 2,657 68,392 Deferred revenue, non-current 31,895 1,686 33,581 Stockholders' Equity Accumulated deficit (264,298 ) (12,785 ) (277,083 ) Selected Condensed Consolidated Statement of Operations Line Items Three Months Ended March 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balance Without Adopting the New Standard Revenue - products $ 28,149 $ (342 ) $ 27,807 Revenue - services 21,034 — 21,034 Total revenue 49,183 (342 ) 48,841 Gross profit 37,299 (342 ) 36,957 Sales and marketing 26,904 39 26,943 Total operating expenses 57,295 39 57,334 Loss from operations (19,996 ) (381 ) (20,377 ) Net loss (19,670 ) (381 ) (20,051 ) Basic and diluted net loss per share (0.27 ) (0.28 ) Changes in Accounting Policies Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and subscription revenue; and (ii) services revenue, which includes post contract support (“PCS”), professional services, and training. A substantial portion of our revenue is from sales of our products and services through distribution channel partners, such as resellers and distributors. Revenue is recognized, net of applicable taxes, upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services. We apply the following five-step revenue recognition model: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. PCS revenue includes arrangements for software support and technical support for our products. PCS is offered under renewable, fee-based contracts, which include technical support, hardware repair and replacement parts, bug fixes, patches, and unspecified upgrades on a when-and-if available basis. Revenue for PCS services is recognized on a straight-line basis over the service contract term, which is typically one year, but can be up to five years as there is no discernable pattern of transfer related to these promises. Billed but unearned PCS revenue is included in deferred revenue. Professional service revenue primarily consists of the fees we earn related to installation and consulting services. We recognize revenue from professional services upon delivery or completion of performance. Professional service arrangements are typically short term in nature and are largely completed within 30 to 90 days from the start of service. Revenue is recognized for training when the training course is delivered. Contracts with Multiple Performance Obligations Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our hardware includes embedded ACOS software, which together deliver the essential functionality of our products. For contracts which contain multiple performance obligations, we allocate revenue to each distinct performance obligation based on the standalone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performance obligation. We use a range of amounts to estimate SSP for products and PCS sold together in a contract to determine whether there is a discount to be allocated based on the relative SSP of the various products and PCS. If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is estimated using judgment and considering all reasonably available information such as market conditions and information about the size and/or purchase volume of the customer. We generally use a range of amounts to estimate SSP for individual products and services based on multiple factors including, but not limited to the sales channel (reseller, distributor or end customer), the geographies in which our products and services are sold, and the size of the end customer. We account for multiple contracts with a single partner as one arrangement if the contractual terms and/or substance of those agreements indicate that they may be so closely related that they are, in effect, parts of a single contract. We may occasionally accept returns to address customer satisfaction issues even though there is generally no contractual provision for such returns. We estimate returns for sales to customers based on historical returns rates applied against current-period shipments. Specific customer returns and allowances are considered when determining our sales return reserve estimate. Our policy applies to the accounting for individual contracts. However, we have elected a practical expedient to apply the guidance to a portfolio of contracts or performance obligations with similar characteristics so long as such application would not differ materially from applying the guidance to the individual contracts (or performance obligations) within that portfolio. Consequently, we have chosen to apply the portfolio approach when possible, which we do not believe will happen frequently. Additionally, we will evaluate a portfolio of data, when possible, in various situations, including accounting for commissions, rights of return and transactions with variable consideration. We report revenue net of sales taxes. We include shipping charges billed to customers in revenue and the related shipping costs are included in cost of product revenue. Contract Balances The following table reflects contract balances with customers (in thousands): As of As of Adoption Balance Sheet Line Reference March 31, 2018 January 1, 2018 Accounts receivable, net Accounts receivables, net $ 47,755 $ 48,266 Deferred revenue, current Deferred revenue 65,735 59,360 Deferred revenue, non-current Deferred revenue, non-current 31,895 31,276 We receive payments from customers based upon billing cycles. Invoice payment terms are usually ranging from 30 to 90 days. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include amounts related to our contractual right to consideration for performance obligations not yet billed and are included in prepaid and other current assets in the condensed consolidated balance sheets. Amount is immaterial as of March 31, 2018 and as of the adoption date. Deferred revenue primarily consists of amounts that have been invoiced but not yet been recognized as revenue and consists of performance obligations pertaining to support and subscription services. During the three months ended March 31, 2018 , $19.5 million of revenue recognized was included in the deferred revenues balance at the beginning of the period. Deferred Contract Acquisition Costs In connection with the adoption of ASC 340-40, we capitalize certain contract acquisition costs consisting of incremental sales commissions incurred to obtain customer contracts. Deferred commissions related to product revenues are recognized upon transfer of control to customers. Deferred commissions related to services revenue are recognized as the related performance obligations are met. Deferred commissions that will be recognized during the succeeding 12-month period are recorded as prepaid expenses and other current assets, and the remaining portion is recorded as other non-current assets. Amortization of deferred commissions is included in sales and marketing expense. Deferred contract acquisition costs were $8.4 million as of March 31, 2018 and the related amortization amount for the three months ended March 31, 2018 was $1.7 million. We had no impairment loss in relation to the costs capitalized and no asset impairment charges related to contract assets. Remaining Performance Obligations Remaining performance obligations represent contracted revenues that are non-cancellable and have not yet been recognized due to unsatisfied or partially satisfied performance obligations, which includes deferred revenues and amounts that will be invoiced and recognized as revenues in future periods. We expect to recognize revenue on the remaining performance obligations as follows (in thousands): March 31, 2018 Within 1 year $ 65,735 Next 2 to 3 years 30,062 Thereafter 1,833 Total $ 97,630 |
Description of Business and S18
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business A10 Networks, Inc. (together with our subsidiaries, the “Company”, “we”, “our” or “us”) was incorporated in California in 2004 and reincorporated in Delaware in March 2014. We are headquartered in San Jose, California and have wholly-owned subsidiaries throughout the world including Asia and Europe. We are a leading provider of secure application solutions and services that enable a new generation of intelligently connected companies with the ability to continuously improve cyber protection and digital responsiveness across dynamic Information Technology (“IT”) and network infrastructures. Our product portfolio seeks to address many of the aforementioned challenges and solution requirements. The portfolio consists of six secure application solutions; Thunder Application Delivery Controllers (“ADC”), Lightning Application Delivery Controller (“Lightning ADC”), Thunder Carrier Grade Network Address Translation (“CGN”), Thunder Threat Protection System (“TPS”), Thunder SSL Insight (“SSLi”) and Thunder Convergent Firewall (“CFW”), and two intelligent management and automation tools; Harmony Controller and aGalaxy. Our solutions are available in a variety of form factors, such as optimized hardware appliances, bare metal software, virtual appliances and cloud-native software. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include those of A10 Networks, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions. We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). As permitted under these rules and regulations, we have condensed or omitted certain financial information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited financial statements, which are included in its 2017 Annual Report on Form 10-K for the year ended December 31, 2017 on file with the SEC (our “Annual Report”). These financial statements have been prepared on the same basis as our annual financial statements and, in management’s opinion, reflect all adjustments consisting only of normal recurring adjustments that are necessary for a fair presentation of our financial information. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the financial statements and accompanying notes thereto in our Annual Report. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated balance sheets and the condensed consolidated statements of cash flows. We have separately presented the line items “Proceeds from sales of marketable securities” and “Maturities of marketable securities” as opposed to our historical consolidated presentation of “Proceeds from sales and maturities of marketable securities” in the condensed consolidated statement of cash flows for the three months ended March 31, 2017. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Those estimates and assumptions affect revenue recognition and deferred revenue, the allowance for doubtful accounts, the sales return reserve, the valuation of inventory, the fair value of marketable securities, contingencies and litigation, acquisition related purchase price allocations, accrued liabilities, deferred commissions and the determination of fair value of stock-based compensation. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject us to concentrations of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. Our cash, cash equivalents and marketable securities are held and invested in high-credit quality financial instruments by recognized financial institutions and are subject to minimum credit risk. Our accounts receivable are unsecured and represent amounts due to us based on contractual obligations of our customers. We mitigate credit risk in respect to accounts receivable by performing periodic credit evaluations based on a number of factors, including past transaction experience, evaluation of credit history and review of the invoicing terms of the contract. We generally do not require our customers to provide collateral to support accounts receivable. Significant customers, including distribution channel partners and direct customers, are those which represent more than 10% of our total revenue for each period presented or our gross accounts receivable balance as of each respective balance sheet date. |
Recently Adopted Accounting Guidance/Recent Accounting Pronouncements Not Yet Effective | Recently Adopted Accounting Guidance In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, to provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This standard is effective for annual periods beginning after December 15, 2017 and interim periods within that reporting period. The amendments will be applied prospectively to an award modified on or after the adoption date. The adoption of ASU 2017-09 on January 1, 2018 did not impact our condensed consolidated financial statements or disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), as subsequently amended, which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition. This ASU requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the capitalization of incremental customer acquisition costs and amortization of these costs over the contract period or estimated customer life which resulted in the recognition of a deferred commission asset on our condensed consolidated balance sheet. We adopted ASU 2014-09 and its related amendments (collectively “ASC 606”) on January 1, 2018 using the modified retrospective method. See Note 11 in this report for disclosure on the impact of adopting this standard. Recent Accounting Pronouncements Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This new accounting standard primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In July 2018, FASB issued ASU No. 2018-11, Topic 842 - Targeted Improvements. The update requires modified retrospective transition, with the option to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment and elect various practical expedients. This standard is effective for annual periods beginning after December 15, 2018 with early adoption permitted. We will adopt this standard effective January 1, 2019. We are currently gathering information and evaluating the impact of this guidance on our condensed consolidated financial statements and related disclosures. In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118. These amendments add SEC guidance to the FASB Accounting Standards Codification regarding the Tax Cuts and Jobs Act pursuant to the issuance of SAB 118. The amendments are effective upon addition to the FASB Codification. See Note 9 in this report for disclosures related to the effect of the Tax Cuts and Jobs Act and our utilization of SAB 118. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective 30 days after publication in the Federal Register. The final rule was not yet published in the Federal Register as of the date of this Quarterly Report on Form 10-Q. We are evaluating the impact of this guidance on our condensed consolidated financial statements. There are several other new accounting pronouncements issued by the FASB, which we will adopt. However, we do not believe any of those accounting pronouncements will have a material impact on our consolidated financial position, operating results or statements of cash flows. |
Revenue Recognition | Revenue Recognition We derive revenue from two sources: (i) products revenue, which includes hardware, perpetual software license and subscription revenue; and (ii) services revenue, which includes post contract support (“PCS”), professional services, and training. A substantial portion of our revenue is from sales of our products and services through distribution channel partners, such as resellers and distributors. Revenue is recognized, net of applicable taxes, upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services. We apply the following five-step revenue recognition model: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied. PCS revenue includes arrangements for software support and technical support for our products. PCS is offered under renewable, fee-based contracts, which include technical support, hardware repair and replacement parts, bug fixes, patches, and unspecified upgrades on a when-and-if available basis. Revenue for PCS services is recognized on a straight-line basis over the service contract term, which is typically one year, but can be up to five years as there is no discernable pattern of transfer related to these promises. Billed but unearned PCS revenue is included in deferred revenue. Professional service revenue primarily consists of the fees we earn related to installation and consulting services. We recognize revenue from professional services upon delivery or completion of performance. Professional service arrangements are typically short term in nature and are largely completed within 30 to 90 days from the start of service. Revenue is recognized for training when the training course is delivered. Contracts with Multiple Performance Obligations Most of our contracts with customers, other than renewals of PCS, contain multiple performance obligations with a combination of products and PCS. Products and PCS generally qualify as distinct performance obligations. Our hardware includes embedded ACOS software, which together deliver the essential functionality of our products. For contracts which contain multiple performance obligations, we allocate revenue to each distinct performance obligation based on the standalone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performance obligation. We use a range of amounts to estimate SSP for products and PCS sold together in a contract to determine whether there is a discount to be allocated based on the relative SSP of the various products and PCS. If we do not have an observable SSP, such as when we do not sell a product or service separately, then SSP is estimated using judgment and considering all reasonably available information such as market conditions and information about the size and/or purchase volume of the customer. We generally use a range of amounts to estimate SSP for individual products and services based on multiple factors including, but not limited to the sales channel (reseller, distributor or end customer), the geographies in which our products and services are sold, and the size of the end customer. We account for multiple contracts with a single partner as one arrangement if the contractual terms and/or substance of those agreements indicate that they may be so closely related that they are, in effect, parts of a single contract. We may occasionally accept returns to address customer satisfaction issues even though there is generally no contractual provision for such returns. We estimate returns for sales to customers based on historical returns rates applied against current-period shipments. Specific customer returns and allowances are considered when determining our sales return reserve estimate. Our policy applies to the accounting for individual contracts. However, we have elected a practical expedient to apply the guidance to a portfolio of contracts or performance obligations with similar characteristics so long as such application would not differ materially from applying the guidance to the individual contracts (or performance obligations) within that portfolio. Consequently, we have chosen to apply the portfolio approach when possible, which we do not believe will happen frequently. Additionally, we will evaluate a portfolio of data, when possible, in various situations, including accounting for commissions, rights of return and transactions with variable consideration. We report revenue net of sales taxes. We include shipping charges billed to customers in revenue and the related shipping costs are included in cost of product revenue. |
Deferred Contract Acquisition Costs | In connection with the adoption of ASC 340-40, we capitalize certain contract acquisition costs consisting of incremental sales commissions incurred to obtain customer contracts. Deferred commissions related to product revenues are recognized upon transfer of control to customers. Deferred commissions related to services revenue are recognized as the related performance obligations are met. Deferred commissions that will be recognized during the succeeding 12-month period are recorded as prepaid expenses and other current assets, and the remaining portion is recorded as other non-current assets. Amortization of deferred commissions is included in sales and marketing expense. |
Description of Business and S19
Description of Business and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue as Percentage of Total Revenue | Revenues from our significant customers as a percentage of our total revenue are as follows: Three Months Ended March 31, 2018 2017 Customer A (a distribution channel partner) * 18% Customer B (a distribution channel partner) * 11% Customer C (a direct customer) * 12% * represents less than 10% of total revenue |
Restatement of Previously Iss20
Restatement of Previously Issued Consolidated Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table presents the condensed consolidated statement of cash flows as previously reported, restatement adjustments, and the condensed consolidated statement of cash flows as restated for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, 2017 As Previously Reported Revenue Recognition Adjustments As Restated Cash flows from operating activities: Net loss $ (3,900 ) $ 2,563 $ (1,337 ) Adjustments to reconcile net loss to net cash provided by operating activities: Changes in operating assets and liabilities: Accounts receivable, net $ 5,214 $ (3,455 ) $ 1,759 Inventory $ (2,222 ) $ 599 $ (1,623 ) Deferred revenue $ 197 $ 293 $ 490 Net cash provided by operating activities $ 545 $ — $ 545 The following table presents the condensed consolidated statement of operations as previously reported, restatement adjustments and the condensed consolidated statement of operations as restated for the three months ended March 31, 2017 (in thousands, except per share amounts): Three Months Ended March 31, 2017 As Previously Reported Revenue Recognition Adjustments Other Adjustments As Restated Revenue: Products $ 39,706 $ 3,634 $ 358 $ 43,698 Services 20,580 14 (358 ) 20,236 Total revenue 60,286 3,648 — 63,934 Cost of revenue: Products 9,784 599 119 10,502 Services 4,360 — (119 ) 4,241 Total cost of revenue 14,144 599 — 14,743 Gross profit $ 46,142 $ 3,049 $ — $ 49,191 Operating expenses: General and administrative $ 7,161 $ 486 $ — $ 7,647 Total operating expenses $ 50,466 $ 486 $ — $ 50,952 Loss from operations $ (4,324 ) $ 2,563 $ — $ (1,761 ) Loss before income taxes $ (3,526 ) $ 2,563 $ — $ (963 ) Net loss $ (3,900 ) $ 2,563 $ — $ (1,337 ) Net loss per share: Basic and diluted $ (0.06 ) $ (0.02 ) Weighted-average shares used in computing net loss per share: Basic and diluted 68,571 68,571 |
Condensed Consolidated Financ21
Condensed Consolidated Financial Statement Details (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Inventory | March 31, December 31, (in thousands) Raw materials $ 5,869 $ 6,643 Finished goods 10,320 10,934 Total inventory $ 16,189 $ 17,577 |
Schedule of Property and Equipment, Net | Useful Life March 31, December 31, (in years) (in thousands) Equipment 1-3 $ 49,245 $ 47,817 Software 1-3 4,018 3,988 Furniture and fixtures 1-3 951 950 Leasehold improvements 2-8 3,824 3,824 Property and equipment, gross 58,038 56,579 Less: accumulated depreciation (48,404 ) (46,666 ) Property and equipment, net $ 9,634 $ 9,913 |
Schedule of Acquired Intangible Assets | Purchased intangible assets, net, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Developed technology $ 5,050 $ (1,768 ) $ 3,282 $ 5,050 $ (1,515 ) $ 3,535 Patents 2,936 (1,389 ) 1,547 2,936 (1,281 ) 1,655 Total $ 7,986 $ (3,157 ) $ 4,829 $ 7,986 $ (2,796 ) $ 5,190 |
Schedule of Future Amortization Expense for Purchased Finite-lived Intangible Assets | Future amortization expense for purchased intangible assets as of March 31, 2018 is as follows (in thousands): Fiscal Year Remainder of 2018 $ 1,082 2019 1,442 2020 1,442 2021 863 $ 4,829 |
Schedule of Accrued Liabilities | March 31, December 31, (in thousands) Accrued compensation and benefits $ 14,156 $ 13,828 Accrued tax liabilities 3,118 2,985 Other 8,217 5,022 Total accrued liabilities $ 25,491 $ 21,835 |
Schedule of Deferred Revenue | March 31, December 31, (in thousands) Deferred revenue: Products $ 5,714 $ 6,161 Services 91,916 88,476 Total deferred revenue 97,630 94,637 Less: current portion (65,735 ) (61,858 ) Non-current portion $ 31,895 $ 32,779 |
Marketable Securities and Fai22
Marketable Securities and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Available-for-sale Securities | Marketable securities, classified as available-for-sale, consisted of the following (in thousands): March 31, 2018 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Certificates of deposit $ 16,999 $ 2 $ (8 ) $ 16,993 $ 17,000 $ 6 $ (1 ) $ 17,005 Corporate securities 41,452 — (191 ) 41,261 39,154 1 (76 ) 39,079 U.S. Treasury and agency securities 5,243 — (25 ) 5,218 5,744 — (19 ) 5,725 Commercial paper 6,473 — (4 ) 6,469 9,225 1 (2 ) 9,224 Asset-backed securities 13,867 — (70 ) 13,797 13,567 — (33 ) 13,534 $ 84,034 $ 2 $ (298 ) $ 83,738 $ 84,690 $ 8 $ (131 ) $ 84,567 |
Schedule of Cost and Estimated Fair Values of Available-for-sale Securities by Contractual Maturity | The following table summarizes the cost and estimated fair value of marketable securities based on stated effective maturities as of March 31, 2018 (in thousands): Amortized Cost Fair Value Less than 1 year $ 56,501 $ 56,372 Mature in 1 - 3 years 27,533 27,366 $ 84,034 $ 83,738 |
Schedule of gross unrealized losses | Marketable securities in an unrealized loss position consisted of the following (in thousands): Less Than 12 Months 12 Months or More Total As of March 31, 2018 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 10,491 $ (8 ) $ — $ — $ 10,491 $ (8 ) Corporate securities 39,761 (191 ) — — 39,761 (191 ) U.S. Treasury and agency securities 1,736 (10 ) 3,482 (15 ) 5,218 (25 ) Commercial paper 6,469 (4 ) — — 6,469 (4 ) Asset-backed securities 12,872 (67 ) 925 (3 ) 13,797 (70 ) $ 71,329 $ (280 ) $ 4,407 $ (18 ) $ 75,736 $ (298 ) Less Than 12 Months 12 Months or More Total As of December 31, 2017 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Certificates of deposit $ 2,999 $ (1 ) $ — $ — $ 2,999 $ (1 ) Corporate securities 36,079 (74 ) 1,499 (2 ) 37,578 (76 ) U.S. Treasury and agency securities 2,246 (2 ) 3,479 (17 ) 5,725 (19 ) Commercial paper 4,232 (2 ) — — 4,232 (2 ) Asset-backed securities 11,415 (32 ) 728 (1 ) 12,143 (33 ) $ 56,971 $ (111 ) $ 5,706 $ (20 ) $ 62,677 $ (131 ) |
Schedule of Cash, Cash Equivalents and Available-for-sale Investments Measured at Fair Value on Recurring Basis | The following is a summary of our cash, cash equivalents and marketable securities measured at fair value on a recurring basis (in thousands): March 31, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash $ 33,798 $ — $ — $ 33,798 $ 34,453 $ — $ — $ 34,453 Cash equivalents 13,166 — — 13,166 12,114 — — 12,114 Certificates of deposit — 16,993 — 16,993 — 17,005 — 17,005 Corporate securities — 41,261 — 41,261 — 39,079 — 39,079 U.S. Treasury and agency securities — 5,218 — 5,218 — 5,725 — 5,725 Commercial paper — 6,469 — 6,469 — 9,224 — 9,224 Asset-backed securities — 13,797 — 13,797 — 13,534 — 13,534 $ 46,964 $ 83,738 $ — $ 130,702 $ 46,567 $ 84,567 $ — $ 131,134 |
Equity Incentive Plans and St23
Equity Incentive Plans and Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-based Compensation | A summary of our stock-based compensation expense is as follows (in thousands): Three Months Ended March 31, 2018 2017 Stock-based compensation by type of award: Stock options $ 329 $ 819 Stock awards 2,665 2,949 Employee stock purchase rights (1) 5,157 548 $ 8,151 $ 4,316 Stock-based compensation by category of expense: Cost of revenue $ 893 $ 283 Sales and marketing 2,765 1,536 Research and development 3,382 1,664 General and administrative 1,111 833 $ 8,151 $ 4,316 (1) Amount includes $4.1 million of accelerated stock-based compensation expense. In March 2018, as a result of a suspension of the 2014 Purchase Plan due to our non-timely filing status, all unrecognized stock-based compensation expense related to ESPP was accelerated and recognized within the condensed consolidated statement of operations. |
Summary of Activity under Stock Option Plans | The following tables summarize our stock option activities and related information: Number of Shares (thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (thousands) Outstanding as of December 31, 2017 6,018 $ 5.18 Exercised (359 ) $ 3.54 Canceled (1) (87 ) $ 10.74 Outstanding as of March 31, 2018 5,572 $ 5.19 5.0 $ 7,546 Vested and exercisable as of March 31, 2018 4,688 $ 5.03 4.4 $ 7,027 (1) Includes 51,995 shares of canceled stock options from the 2008 Plan that became available for issuance under the 2014 Plan. |
Summary of Restricted Stock Units Activity | The following table summarizes our stock award activities and related information: Number of Shares (thousands) Weighted-Average Grant Date Fair Value Weighted-Average Remaining Vesting Term Outstanding as of December 31, 2017 5,568 $ 6.88 Granted 99 $ 6.86 Released (656 ) $ 6.44 Canceled (284 ) $ 7.57 Outstanding as of March 31, 2018 4,727 $ 6.90 1.4 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Anti-dilutive Shares | The following table presents common shares related to potentially dilutive shares excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive (in thousands): Three Months Ended March 31, 2018 2017 Stock options, RSUs and employee stock purchase rights 10,431 13,478 Common stock subject to repurchase — 8 10,431 13,486 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Total Revenue Based on Geographic Location (Disaggregation of Revenue) | The following table depicts the disaggregation of revenue by geographic region based on the ship to location of our customers and is consistent with how we evaluate our financial performance (in thousands): Three Months Ended March 31, 2018 2017 United States $ 20,678 $ 34,274 Japan 13,080 13,079 Asia Pacific, excluding Japan 7,438 9,862 EMEA 6,499 5,632 Other 1,488 1,087 $ 49,183 $ 63,934 |
Long-lived Assets by Geographic Areas | The following table is a summary of our long-lived assets which include property and equipment, net based on the physical location of the assets (in thousands): March 31, December 31, United States $ 7,430 $ 7,733 Japan 1,409 1,510 Other 795 670 Total $ 9,634 $ 9,913 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Selected Condensed Consolidated Balance Sheet Line Items March 31, 2018 (in thousands) As Reported Adjustments Balance Without Adopting the New Standard Assets Prepaid expenses and other current assets $ 14,352 $ (5,755 ) $ 8,597 Other non-current assets 7,229 (2,610 ) 4,619 Liabilities Deferred revenue, current 65,735 2,657 68,392 Deferred revenue, non-current 31,895 1,686 33,581 Stockholders' Equity Accumulated deficit (264,298 ) (12,785 ) (277,083 ) Selected Condensed Consolidated Statement of Operations Line Items Three Months Ended March 31, 2018 (in thousands, except per share amounts) As Reported Adjustments Balance Without Adopting the New Standard Revenue - products $ 28,149 $ (342 ) $ 27,807 Revenue - services 21,034 — 21,034 Total revenue 49,183 (342 ) 48,841 Gross profit 37,299 (342 ) 36,957 Sales and marketing 26,904 39 26,943 Total operating expenses 57,295 39 57,334 Loss from operations (19,996 ) (381 ) (20,377 ) Net loss (19,670 ) (381 ) (20,051 ) Basic and diluted net loss per share (0.27 ) (0.28 ) |
Contract with Customer, Asset and Liability | The following table reflects contract balances with customers (in thousands): As of As of Adoption Balance Sheet Line Reference March 31, 2018 January 1, 2018 Accounts receivable, net Accounts receivables, net $ 47,755 $ 48,266 Deferred revenue, current Deferred revenue 65,735 59,360 Deferred revenue, non-current Deferred revenue, non-current 31,895 31,276 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | We expect to recognize revenue on the remaining performance obligations as follows (in thousands): March 31, 2018 Within 1 year $ 65,735 Next 2 to 3 years 30,062 Thereafter 1,833 Total $ 97,630 |
Description of Business and S27
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018toolsolution | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of software based advanced solutions | solution | 6 |
Number of intelligent management and automation tools | tool | 2 |
Description of Business and S28
Description of Business and Summary of Significant Accounting Policies - Concentration Risk (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accounts Receivable | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage representation of significant customers (percent) | 13.00% | |
Customer A | Revenue | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage representation of significant customers (percent) | 18.00% | |
Customer B | Revenue | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage representation of significant customers (percent) | 11.00% | |
Customer C | Revenue | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage representation of significant customers (percent) | 12.00% |
Restatement of Previously Iss29
Restatement of Previously Issued Consolidated Financial Statements - Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Total revenue | $ 49,183 | $ 63,934 |
Cost of revenue: | ||
Total cost of revenue | 11,884 | 14,743 |
Gross profit | 37,299 | 49,191 |
Operating expenses: | ||
General and administrative | 11,594 | 7,647 |
Total operating expenses | 57,295 | 50,952 |
Loss from operations | (19,996) | (1,761) |
Loss before income taxes | (19,463) | (963) |
Net loss | $ (19,670) | $ (1,337) |
Net loss per share: | ||
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.02) |
Weighted-average shares used in computing net loss per share: | ||
Basic and diluted (in shares) | 72,232 | 68,571 |
As Previously Reported | ||
Revenue: | ||
Total revenue | $ 60,286 | |
Cost of revenue: | ||
Total cost of revenue | 14,144 | |
Gross profit | 46,142 | |
Operating expenses: | ||
General and administrative | 7,161 | |
Total operating expenses | 50,466 | |
Loss from operations | (4,324) | |
Loss before income taxes | (3,526) | |
Net loss | $ (3,900) | |
Net loss per share: | ||
Basic and diluted (in dollars per share) | $ (0.06) | |
Weighted-average shares used in computing net loss per share: | ||
Basic and diluted (in shares) | 68,571 | |
Revenue Recognition Adjustments | ||
Revenue: | ||
Total revenue | $ 3,648 | |
Cost of revenue: | ||
Total cost of revenue | 599 | |
Gross profit | 3,049 | |
Operating expenses: | ||
General and administrative | 486 | |
Total operating expenses | 486 | |
Loss from operations | 2,563 | |
Loss before income taxes | 2,563 | |
Net loss | 2,563 | |
Other Adjustments | ||
Revenue: | ||
Total revenue | 0 | |
Cost of revenue: | ||
Total cost of revenue | 0 | |
Gross profit | 0 | |
Operating expenses: | ||
General and administrative | 0 | |
Total operating expenses | 0 | |
Loss from operations | 0 | |
Loss before income taxes | 0 | |
Net loss | 0 | |
Products | ||
Revenue: | ||
Total revenue | $ 28,149 | 43,698 |
Cost of revenue: | ||
Total cost of revenue | 7,109 | 10,502 |
Products | As Previously Reported | ||
Revenue: | ||
Total revenue | 39,706 | |
Cost of revenue: | ||
Total cost of revenue | 9,784 | |
Products | Revenue Recognition Adjustments | ||
Revenue: | ||
Total revenue | 3,634 | |
Cost of revenue: | ||
Total cost of revenue | 599 | |
Products | Other Adjustments | ||
Revenue: | ||
Total revenue | 358 | |
Cost of revenue: | ||
Total cost of revenue | 119 | |
Services | ||
Revenue: | ||
Total revenue | 21,034 | 20,236 |
Cost of revenue: | ||
Total cost of revenue | $ 4,775 | 4,241 |
Services | As Previously Reported | ||
Revenue: | ||
Total revenue | 20,580 | |
Cost of revenue: | ||
Total cost of revenue | 4,360 | |
Services | Revenue Recognition Adjustments | ||
Revenue: | ||
Total revenue | 14 | |
Cost of revenue: | ||
Total cost of revenue | 0 | |
Services | Other Adjustments | ||
Revenue: | ||
Total revenue | (358) | |
Cost of revenue: | ||
Total cost of revenue | $ (119) |
Restatement of Previously Iss30
Restatement of Previously Issued Consolidated Financial Statements - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (19,670) | $ (1,337) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 94 | 1,759 |
Inventory | 827 | (1,623) |
Deferred revenue | 6,995 | 490 |
Net cash provided by operating activities | $ (352) | 545 |
As Previously Reported | ||
Cash flows from operating activities: | ||
Net loss | (3,900) | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 5,214 | |
Inventory | (2,222) | |
Deferred revenue | 197 | |
Net cash provided by operating activities | 545 | |
Revenue Recognition Adjustments | ||
Cash flows from operating activities: | ||
Net loss | 2,563 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3,455) | |
Inventory | 599 | |
Deferred revenue | 293 | |
Net cash provided by operating activities | $ 0 |
Condensed Consolidated Financ31
Condensed Consolidated Financial Statement Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,869 | $ 6,643 |
Finished goods | 10,320 | 10,934 |
Total inventory | $ 16,189 | $ 17,577 |
Condensed Consolidated Financ32
Condensed Consolidated Financial Statement Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 58,038 | $ 56,579 |
Less: accumulated depreciation | (48,404) | (46,666) |
Property and equipment, net | 9,634 | 9,913 |
Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 49,245 | 47,817 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 4,018 | 3,988 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 951 | 950 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 3,824 | $ 3,824 |
Minimum | Equipment | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 1 year | |
Minimum | Software | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 1 year | |
Minimum | Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 1 year | |
Minimum | Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 2 years | |
Maximum | Equipment | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 3 years | |
Maximum | Software | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 3 years | |
Maximum | Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 3 years | |
Maximum | Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Useful life | 8 years |
Condensed Consolidated Financ33
Condensed Consolidated Financial Statement Details - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1.7 | $ 1.8 |
Amortization expense related to intangible assets | $ 0.4 | $ 0.4 |
Weighted average useful life of purchased intangible assets (in years) | 3 years 5 months |
Condensed Consolidated Financ34
Condensed Consolidated Financial Statement Details - Purchased Intangible Assets, net (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 7,986 | $ 7,986 |
Accumulated Amortization | (3,157) | (2,796) |
Total | 4,829 | 5,190 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,050 | 5,050 |
Accumulated Amortization | (1,768) | (1,515) |
Total | 3,282 | 3,535 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,936 | 2,936 |
Accumulated Amortization | (1,389) | (1,281) |
Total | $ 1,547 | $ 1,655 |
Condensed Consolidated Financ35
Condensed Consolidated Financial Statement Details - Future Amortization Expense of Acquired Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Remainder of 2018 | $ 1,082 | |
2,019 | 1,442 | |
2,020 | 1,442 | |
2,021 | 863 | |
Total | $ 4,829 | $ 5,190 |
Condensed Consolidated Financ36
Condensed Consolidated Financial Statement Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and benefits | $ 14,156 | $ 13,828 |
Accrued tax liabilities | 3,118 | 2,985 |
Other | 8,217 | 5,022 |
Total accrued liabilities | $ 25,491 | $ 21,835 |
Condensed Consolidated Financ37
Condensed Consolidated Financial Statement Details - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 97,630 | $ 94,637 |
Less: current portion | (65,735) | (61,858) |
Non-current portion | 31,895 | 32,779 |
Products | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | 5,714 | 6,161 |
Services | ||
Deferred Revenue Arrangement [Line Items] | ||
Total deferred revenue | $ 91,916 | $ 88,476 |
Marketable Securities and Fai38
Marketable Securities and Fair Value Measurements - Estimate of Fair Value of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 84,034 | $ 84,690 |
Gross Unrealized Gains | 2 | 8 |
Gross Unrealized Losses | (298) | (131) |
Fair Value | 83,738 | 84,567 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,999 | 17,000 |
Gross Unrealized Gains | 2 | 6 |
Gross Unrealized Losses | (8) | (1) |
Fair Value | 16,993 | 17,005 |
Corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 41,452 | 39,154 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (191) | (76) |
Fair Value | 41,261 | 39,079 |
U.S. Treasury and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,243 | 5,744 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (25) | (19) |
Fair Value | 5,218 | 5,725 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,473 | 9,225 |
Gross Unrealized Gains | 0 | 1 |
Gross Unrealized Losses | (4) | (2) |
Fair Value | 6,469 | 9,224 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,867 | 13,567 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (70) | (33) |
Fair Value | $ 13,797 | $ 13,534 |
Marketable Securities and Fai39
Marketable Securities and Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Less than 1 year | $ 56,501 | |
Mature in 1 - 3 years | 27,533 | |
Amortized Cost | 84,034 | $ 84,690 |
Fair Value | ||
Less than 1 year | 56,372 | |
Mature in 1 - 3 years | 27,366 | |
Fair Value | $ 83,738 | $ 84,567 |
Marketable Securities and Fai40
Marketable Securities and Fair Value Measurements - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value | ||
Less Than 12 Months | $ 71,329 | $ 56,971 |
12 Months or More | 4,407 | 5,706 |
Total | 75,736 | 62,677 |
Gross Unrealized Losses | ||
Less Than 12 Months | (280) | (111) |
12 Months or More | (18) | (20) |
Total | (298) | (131) |
Certificates of deposit | ||
Fair Value | ||
Less Than 12 Months | 10,491 | 2,999 |
12 Months or More | 0 | 0 |
Total | 10,491 | 2,999 |
Gross Unrealized Losses | ||
Less Than 12 Months | (8) | (1) |
12 Months or More | 0 | 0 |
Total | (8) | (1) |
Corporate securities | ||
Fair Value | ||
Less Than 12 Months | 39,761 | 36,079 |
12 Months or More | 0 | 1,499 |
Total | 39,761 | 37,578 |
Gross Unrealized Losses | ||
Less Than 12 Months | (191) | (74) |
12 Months or More | 0 | (2) |
Total | (191) | (76) |
U.S. Treasury and agency securities | ||
Fair Value | ||
Less Than 12 Months | 1,736 | 2,246 |
12 Months or More | 3,482 | 3,479 |
Total | 5,218 | 5,725 |
Gross Unrealized Losses | ||
Less Than 12 Months | (10) | (2) |
12 Months or More | (15) | (17) |
Total | (25) | (19) |
Commercial paper | ||
Fair Value | ||
Less Than 12 Months | 6,469 | 4,232 |
12 Months or More | 0 | 0 |
Total | 6,469 | 4,232 |
Gross Unrealized Losses | ||
Less Than 12 Months | (4) | (2) |
12 Months or More | 0 | 0 |
Total | (4) | (2) |
Asset-backed securities | ||
Fair Value | ||
Less Than 12 Months | 12,872 | 11,415 |
12 Months or More | 925 | 728 |
Total | 13,797 | 12,143 |
Gross Unrealized Losses | ||
Less Than 12 Months | (67) | (32) |
12 Months or More | (3) | (1) |
Total | $ (70) | $ (33) |
Marketable Securities and Fai41
Marketable Securities and Fair Value Measurements - Schedule of Fair Value of Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financial Assets | ||
Marketable Securities | $ 83,738 | $ 84,567 |
Total | 130,702 | 131,134 |
Level 1 | ||
Financial Assets | ||
Total | 46,964 | 46,567 |
Level 2 | ||
Financial Assets | ||
Total | 83,738 | 84,567 |
Cash | ||
Financial Assets | ||
Cash and Cash Equivalents | 33,798 | 34,453 |
Cash | Level 1 | ||
Financial Assets | ||
Cash and Cash Equivalents | 33,798 | 34,453 |
Cash equivalents | ||
Financial Assets | ||
Cash and Cash Equivalents | 13,166 | 12,114 |
Cash equivalents | Level 1 | ||
Financial Assets | ||
Cash and Cash Equivalents | 13,166 | 12,114 |
Certificates of deposit | ||
Financial Assets | ||
Marketable Securities | 16,993 | 17,005 |
Certificates of deposit | Level 2 | ||
Financial Assets | ||
Marketable Securities | 16,993 | 17,005 |
Corporate securities | ||
Financial Assets | ||
Marketable Securities | 41,261 | 39,079 |
Corporate securities | Level 2 | ||
Financial Assets | ||
Marketable Securities | 41,261 | 39,079 |
U.S. Treasury and agency securities | ||
Financial Assets | ||
Marketable Securities | 5,218 | 5,725 |
U.S. Treasury and agency securities | Level 2 | ||
Financial Assets | ||
Marketable Securities | 5,218 | 5,725 |
Commercial paper | ||
Financial Assets | ||
Marketable Securities | 6,469 | 9,224 |
Commercial paper | Level 2 | ||
Financial Assets | ||
Marketable Securities | 6,469 | 9,224 |
Asset-backed securities | ||
Financial Assets | ||
Marketable Securities | 13,797 | 13,534 |
Asset-backed securities | Level 2 | ||
Financial Assets | ||
Marketable Securities | $ 13,797 | $ 13,534 |
Credit Facility (Details)
Credit Facility (Details) - Line of credit | 1 Months Ended | ||
Sep. 30, 2018 | Nov. 30, 2016USD ($) | Mar. 31, 2018USD ($) | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Debt instrument term (in years) | 3 years | ||
Maximum borrowing capacity | $ 25,000,000 | ||
Debt covenant, net cash equals or exceeds, amount | 50,000,000 | ||
Debt covenant, net cash falls below, amount | $ 50,000,000 | ||
Unused capacity commitment fee | 0.40% | ||
Minimum adjusted quick ratio under debt compliance | 1.50 | ||
Amount outstanding | $ 0 | ||
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Prime Rate | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Variable rate basis spread | 0.50% | ||
LIBOR | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Variable rate basis spread | 2.50% | ||
Subsequent event | Amended Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Unused capacity commitment fee | 0.30% |
Equity Incentive Plans and St43
Equity Incentive Plans and Stock-Based Compensation - 2014 Equity Incentive Plan/ESPP (Details) - USD ($) | Jan. 01, 2018 | Jun. 10, 2015 | Mar. 31, 2018 | Dec. 31, 2016 | Oct. 23, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for future grant (in shares) | 51,995 | ||||
2014 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for future grant (in shares) | 10,633,711 | ||||
2014 Stock Incentive Plan | Prior Common Stock Outstanding | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of outstanding shares of common stock | 5.00% | ||||
Additional shares authorized for future issuance (in shares) | 3,584,623 | ||||
2014 Stock Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for reallocation (in shares) | 8,310,566 | ||||
Additional shares reserved for future issuance (in shares) | 8,000,000 | ||||
Percentage of outstanding shares of common stock | 5.00% | ||||
2014 Employee Stock Purchase Plan | ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for future grant (in shares) | 3,065,182 | ||||
Percentage of market value | 85.00% | ||||
Percentage of eligible compensation | 15.00% | ||||
Common stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized amount to be repurchased | $ 20,000,000 | ||||
Shares repurchased (in shares) | 0 |
Equity Incentive Plans and St44
Equity Incentive Plans and Stock-Based Compensation - Schedule of Stock-based Compensation Awards Granted under Stock Option Plan in Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 8,151 | $ 4,316 |
Cost of revenue | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 893 | 283 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 2,765 | 1,536 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 3,382 | 1,664 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 1,111 | 833 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 329 | 819 |
Stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 2,665 | 2,949 |
Employee stock purchase rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 5,157 | $ 548 |
Accelerated stock-based compensation | $ 4,100 |
Equity Incentive Plans and St45
Equity Incentive Plans and Stock-Based Compensation - Stock-based Compensation/Stock Repurchase Program (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Total compensation expense related to unvested awards granted, not yet recognized | $ 27.5 |
Total compensation expense related to unvested awards granted, not yet recognized weighted-average period for recognition (in years) | 2 years 4 months |
Equity Incentive Plans and St46
Equity Incentive Plans and Stock-Based Compensation - Summary of Activity under Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Number of Shares (thousands) | ||
Outstanding options, Beginning balance (in shares) | 6,018,000 | |
Exercised (in shares) | (359,000) | |
Canceled (in shares) | (87,000) | |
Outstanding options, Ending balance (in shares) | 5,572,000 | |
Vested and exercisable (in shares) | 4,688,000 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 5.18 | |
Exercised (in dollars per share) | 3.54 | |
Canceled (in dollars per share) | 10.74 | |
Ending balance (in dollars per share) | 5.19 | |
Vested and exercisable at end of period (in dollars per share) | $ 5.03 | |
Weighted-average remaining contractual term (in years) | 5 years | |
Weighted average remaining contractual term, Vested and exercisable at end of period (in years) | 4 years 5 months 5 days | |
Aggregate Intrinsic Value | $ 7,546 | |
Aggregate Intrinsic Value, Vested and exercisable at end of period | $ 7,027 | |
Number of shares available for future grant | 51,995 | |
Closing price (in dollars per share) | $ 5.82 | |
Intrinsic value of options exercised | $ 1,100 | $ 4,700 |
Equity Incentive Plans and St47
Equity Incentive Plans and Stock-Based Compensation - Information About Stock Options (Details) - shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2016 | Feb. 29, 2016 | Mar. 31, 2018 | Dec. 31, 2015 | Dec. 31, 2014 | |
MSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 40,000 | 540,000 | |||
Number of consecutive trading days | 20 days | ||||
Measurement period | 4 years | ||||
Vested in period (in shares) | 0 | ||||
PSUs, February 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 547,000 | ||||
Vested in period (in shares) | 178,402 | ||||
Forfeited in period (in shares) | 181,600 | ||||
Actual performance vesting percentage | 80.00% | ||||
PSUs, October 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 60,641 | ||||
Vested in period (in shares) | 12,128 | ||||
Forfeited in period (in shares) | 30,321 |
Equity Incentive Plans and St48
Equity Incentive Plans and Stock-Based Compensation - Summary of RSU activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Closing price (in dollars per share) | $ 5.82 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 5,568 | |
Granted (in shares) | 99 | |
Released (in shares) | (656) | |
Canceled (in shares) | (284) | |
Outstanding at end of period (in shares) | 4,727 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 6.88 | |
Granted (in dollars per share) | 6.86 | |
Released (in dollars per share) | 6.44 | |
Canceled (in dollars per share) | 7.57 | |
Outstanding at ending of period (in dollars per share) | $ 6.90 | |
Weighted-Average Remaining Vesting Term (years) | 1 year 5 months 5 days | |
Vested in period (in shares) | $ 4.3 | $ 6.2 |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Outstanding Shares of Common Stock Equivalents (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Diluted [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net income per share | 10,431 | 13,486 |
Stock options, RSUs and employee stock purchase rights | ||
Earnings Per Share Diluted [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net income per share | 10,431 | 13,478 |
Common stock subject to repurchase | ||
Earnings Per Share Diluted [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net income per share | 0 | 8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 207 | $ 374 | |
Unrecognized tax benefits | $ 3,900 | $ 3,800 |
Geographic Information - Schedu
Geographic Information - Schedule of Total Revenue Based on Customer's Location (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 49,183 | $ 63,934 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 20,678 | 34,274 |
Japan | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 13,080 | 13,079 |
Asia Pacific, excluding Japan | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 7,438 | 9,862 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 6,499 | 5,632 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 1,488 | $ 1,087 |
Geographic Information - Long L
Geographic Information - Long Lived Assets By Geographic Area (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 9,634 | $ 9,913 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 7,430 | 7,733 |
Japan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 1,409 | 1,510 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 795 | $ 670 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | $ (264,298,000) | $ (257,025,000) | |
Revenue recognized | 19,500,000 | ||
Asset impairment charges for contract assets | 0 | ||
ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accumulated deficit | 12,785,000 | $ 12,400,000 | |
Deferred revenue | 4,000,000 | ||
Deferred commissions asset | 8,400,000 | ||
Deferred Sales Commissions | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred contract acquisition costs | 8,400,000 | ||
Amortization | 1,700,000 | ||
Impairment loss of capitalized costs | $ 0 |
Revenue - ASC 606 Adjustments,
Revenue - ASC 606 Adjustments, Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Prepaid expenses and other current assets | $ 14,352 | $ 6,825 | |
Other non-current assets | 7,229 | 4,646 | |
Liabilities | |||
Deferred revenue, current | 65,735 | $ 59,360 | 61,858 |
Deferred revenue, non-current | 31,895 | 31,276 | 32,779 |
Stockholders' Equity | |||
Accumulated deficit | 264,298 | $ 257,025 | |
Adjustments Increase (Decrease) | |||
Assets | |||
Prepaid expenses and other current assets | (5,755) | ||
Other non-current assets | (2,610) | ||
Liabilities | |||
Deferred revenue, current | 2,657 | ||
Deferred revenue, non-current | 1,686 | ||
Stockholders' Equity | |||
Accumulated deficit | (12,785) | $ (12,400) | |
Balance Without Adopting the New Standard | |||
Assets | |||
Prepaid expenses and other current assets | 8,597 | ||
Other non-current assets | 4,619 | ||
Liabilities | |||
Deferred revenue, current | 68,392 | ||
Deferred revenue, non-current | 33,581 | ||
Stockholders' Equity | |||
Accumulated deficit | $ 277,083 |
Revenue - ASC 606 Adjustments55
Revenue - ASC 606 Adjustments, Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 49,183 | $ 63,934 |
Gross profit | 37,299 | 49,191 |
Sales and marketing | 26,904 | 26,263 |
Total operating expenses | 57,295 | 50,952 |
Loss from operations | (19,996) | (1,761) |
Net loss | $ (19,670) | $ (1,337) |
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.02) |
Adjustments Increase (Decrease) | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ (342) | |
Gross profit | (342) | |
Sales and marketing | 39 | |
Total operating expenses | 39 | |
Loss from operations | (381) | |
Net loss | $ (381) | |
Basic and diluted (in dollars per share) | ||
Balance Without Adopting the New Standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 48,841 | |
Gross profit | 36,957 | |
Sales and marketing | 26,943 | |
Total operating expenses | 57,334 | |
Loss from operations | (20,377) | |
Net loss | $ (20,051) | |
Basic and diluted (in dollars per share) | $ (0.28) | |
Products | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 28,149 | $ 43,698 |
Products | Adjustments Increase (Decrease) | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | (342) | |
Products | Balance Without Adopting the New Standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 27,807 | |
Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 21,034 | $ 20,236 |
Services | Adjustments Increase (Decrease) | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | 0 | |
Services | Balance Without Adopting the New Standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenue | $ 21,034 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 47,755 | $ 48,266 | |
Deferred revenue, current | 65,735 | $ 59,360 | 61,858 |
Deferred revenue, non-current | $ 31,895 | $ 31,276 | $ 32,779 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 97,630 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 65,735 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 30,062 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 1,833 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation period |