Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36468 | |
Entity Registrant Name | Arista Networks, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-1751121 | |
Entity Address, Address Line One | 5453 Great America Parkway | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | (408) | |
Local Phone Number | 547-5500 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | ANET | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,399,052 | |
Entity Central Index Key | 0001596532 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,095,265 | $ 649,950 |
Marketable securities | 1,351,775 | 1,306,197 |
Accounts receivable, net of rebates and allowances of $6,711 and $9,120, respectively | 447,252 | 331,777 |
Inventories | 239,802 | 264,557 |
Prepaid expenses and other current assets | 106,326 | 162,321 |
Total current assets | 3,240,420 | 2,714,802 |
Property and equipment, net | 40,188 | 75,355 |
Acquisition-related intangible assets, net | 48,319 | 58,610 |
Goodwill | 54,855 | 53,684 |
Investments | 4,150 | 30,336 |
Operating lease right-of-use assets | 91,903 | 0 |
Deferred tax assets | 110,630 | 126,492 |
Other assets | 29,360 | 22,704 |
TOTAL ASSETS | 3,619,825 | 3,081,983 |
CURRENT LIABILITIES: | ||
Accounts payable | 78,600 | 93,757 |
Accrued liabilities | 128,930 | 123,254 |
Deferred revenue | 291,384 | 358,586 |
Other current liabilities | 49,275 | 30,907 |
Total current liabilities | 548,189 | 606,504 |
Income taxes payable | 60,278 | 36,167 |
Operating lease liabilities, non-current | 87,099 | 0 |
Finance lease liabilities, non-current | 0 | 35,431 |
Deferred revenue, non-current | 237,628 | 228,641 |
Other long-term liabilities | 30,627 | 31,851 |
TOTAL LIABILITIES | 963,821 | 938,594 |
Commitments and contingencies (Note 7) | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.0001 par value—100,000 shares authorized and no shares issued and outstanding as of September 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.0001 par value—1,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 76,368 and 75,668 shares issued and outstanding as of September 30, 2019 and December 31, 2018 | 8 | 8 |
Additional paid-in capital | 1,076,732 | 956,572 |
Retained earnings | 1,579,063 | 1,190,803 |
Accumulated other comprehensive income (loss) | 201 | (3,994) |
TOTAL STOCKHOLDERS’ EQUITY | 2,656,004 | 2,143,389 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 3,619,825 | $ 3,081,983 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Rebates and allowances | $ 6,711 | $ 9,120 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 76,368,000 | 75,668,000 |
Common stock, shares outstanding (in shares) | 76,368,000 | 75,668,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 654,415 | $ 563,309 | $ 1,858,160 | $ 1,555,643 |
Cost of revenue: | ||||
Total cost of revenue | 237,141 | 201,726 | 670,125 | 557,258 |
Gross profit | 417,274 | 361,583 | 1,188,035 | 998,385 |
Operating expenses: | ||||
Research and development | 118,732 | 117,589 | 352,696 | 324,029 |
Sales and marketing | 55,279 | 47,903 | 159,372 | 136,231 |
General and administrative | 14,657 | 15,321 | 46,182 | 53,420 |
Legal settlement | 0 | 0 | 0 | 405,000 |
Total operating expenses | 188,668 | 180,813 | 558,250 | 918,680 |
Income from operations | 228,606 | 180,770 | 629,785 | 79,705 |
Other income (expense), net | 19,169 | 8,619 | 45,313 | 10,606 |
Income before income taxes | 247,775 | 189,389 | 675,098 | 90,311 |
Provision for (benefit from) income taxes | 38,880 | 20,865 | 75,923 | (67,482) |
Net income | 208,895 | 168,524 | 599,175 | 157,793 |
Net income attributable to common stockholders: | ||||
Basic | 208,799 | 168,439 | 598,861 | 157,706 |
Diluted | $ 208,804 | $ 168,445 | $ 598,880 | $ 157,713 |
Net income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 2.73 | $ 2.25 | $ 7.85 | $ 2.12 |
Diluted (in dollars per share) | $ 2.59 | $ 2.08 | $ 7.38 | $ 1.95 |
Weighted-average shares used in computing net income per share attributable to common stockholders: | ||||
Basic (in shares) | 76,426 | 75,011 | 76,301 | 74,506 |
Diluted (in shares) | 80,753 | 81,018 | 81,104 | 80,844 |
Product | ||||
Revenue: | ||||
Total revenue | $ 555,066 | $ 485,481 | $ 1,573,652 | $ 1,337,865 |
Cost of revenue: | ||||
Total cost of revenue | 218,220 | 187,764 | 616,906 | 516,077 |
Service | ||||
Revenue: | ||||
Total revenue | 99,349 | 77,828 | 284,508 | 217,778 |
Cost of revenue: | ||||
Total cost of revenue | $ 18,921 | $ 13,962 | $ 53,219 | $ 41,181 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 208,895 | $ 168,524 | $ 599,175 | $ 157,793 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (1,730) | (379) | (1,767) | (1,193) |
Net change in unrealized gains (losses) on available-for-sale securities | (104) | 488 | 5,962 | (1,311) |
Other comprehensive income (loss) | (1,834) | 109 | 4,195 | (2,504) |
Comprehensive income | $ 207,061 | $ 168,633 | $ 603,370 | $ 155,289 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | |
Beginning balance (in shares) at Dec. 31, 2017 | 73,706 | |||||
Beginning balance at Dec. 31, 2017 | $ 1,661,914 | $ 7 | $ 804,731 | $ 859,114 | $ (1,938) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment to beginning balance | 3,574 | 3,574 | ||||
Net income | 157,793 | 157,793 | ||||
Other comprehensive income (loss), net of tax | (2,504) | (2,504) | ||||
Stock-based compensation | 66,583 | 66,583 | ||||
Issuance of common stock in connection with employee equity incentive plans (in shares) | 1,634 | |||||
Issuance of common stock in connection with employee equity incentive plans | 49,642 | $ 1 | 49,641 | |||
Tax withholding paid for net share settlement of equity awards (in shares) | (27) | |||||
Tax withholding paid for net share settlement of equity awards | (6,914) | (6,914) | ||||
Vesting of early-exercised stock options | 233 | 233 | ||||
Common stock issued for business acquisition (in shares) | 80 | |||||
Common stock issued for business acquisition | 15,555 | 15,555 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 75,393 | |||||
Ending balance at Sep. 30, 2018 | 1,945,876 | $ 8 | 929,829 | 1,020,481 | (4,442) | |
Beginning balance (in shares) at Jun. 30, 2018 | 74,791 | |||||
Beginning balance at Jun. 30, 2018 | 1,719,973 | $ 8 | 872,559 | 851,957 | (4,551) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment to beginning balance | 0 | 0 | ||||
Net income | 168,524 | 168,524 | ||||
Other comprehensive income (loss), net of tax | 109 | 109 | ||||
Stock-based compensation | 23,254 | 23,254 | ||||
Issuance of common stock in connection with employee equity incentive plans (in shares) | 531 | |||||
Issuance of common stock in connection with employee equity incentive plans | 20,832 | $ 0 | 20,832 | |||
Tax withholding paid for net share settlement of equity awards (in shares) | (9) | |||||
Tax withholding paid for net share settlement of equity awards | (2,451) | (2,451) | ||||
Vesting of early-exercised stock options | 80 | 80 | ||||
Common stock issued for business acquisition (in shares) | 80 | |||||
Common stock issued for business acquisition | 15,555 | 15,555 | ||||
Ending balance (in shares) at Sep. 30, 2018 | 75,393 | |||||
Ending balance at Sep. 30, 2018 | 1,945,876 | $ 8 | 929,829 | 1,020,481 | (4,442) | |
Beginning balance (in shares) at Dec. 31, 2018 | 75,668 | |||||
Beginning balance at Dec. 31, 2018 | 2,143,389 | $ 8 | 956,572 | 1,190,803 | (3,994) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment to beginning balance | [1] | 3,702 | 3,702 | |||
Net income | 599,175 | 599,175 | ||||
Other comprehensive income (loss), net of tax | 4,195 | 4,195 | ||||
Stock-based compensation | 74,845 | 74,845 | ||||
Issuance of common stock in connection with employee equity incentive plans (in shares) | 1,648 | |||||
Issuance of common stock in connection with employee equity incentive plans | 52,177 | 52,177 | ||||
Tax withholding paid for net share settlement of equity awards (in shares) | (29) | |||||
Tax withholding paid for net share settlement of equity awards | (7,069) | (7,069) | ||||
Vesting of early-exercised stock options | 207 | 207 | ||||
Repurchase of common stock (in shares) | (919) | |||||
Repurchase of common stock | (214,617) | $ (214,617) | (214,617) | |||
Ending balance (in shares) at Sep. 30, 2019 | 76,368 | |||||
Ending balance at Sep. 30, 2019 | 2,656,004 | $ 8 | 1,076,732 | 1,579,063 | 201 | |
Beginning balance (in shares) at Jun. 30, 2019 | 76,555 | |||||
Beginning balance at Jun. 30, 2019 | 2,525,560 | $ 8 | 1,038,740 | 1,484,777 | 2,035 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment to beginning balance | [1] | 0 | 0 | |||
Net income | 208,895 | 208,895 | ||||
Other comprehensive income (loss), net of tax | (1,834) | (1,834) | ||||
Stock-based compensation | 26,257 | 26,257 | ||||
Issuance of common stock in connection with employee equity incentive plans (in shares) | 336 | |||||
Issuance of common stock in connection with employee equity incentive plans | 14,073 | 14,073 | ||||
Tax withholding paid for net share settlement of equity awards (in shares) | (11) | |||||
Tax withholding paid for net share settlement of equity awards | (2,407) | (2,407) | ||||
Vesting of early-exercised stock options | 69 | 69 | ||||
Repurchase of common stock (in shares) | (512) | |||||
Repurchase of common stock | (114,609) | $ (114,609) | (114,609) | |||
Ending balance (in shares) at Sep. 30, 2019 | 76,368 | |||||
Ending balance at Sep. 30, 2019 | $ 2,656,004 | $ 8 | $ 1,076,732 | $ 1,579,063 | $ 201 | |
[1] | On January 1, 2019, we adopted Accounting Standard Codification Topic 842 - Leases ("ASC 842"), which resulted in a cumulative-effect adjustment to the beginning balance of Retained Earnings for 2019. See Note 1 of the accompanying notes for further details. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 599,175 | $ 157,793 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and other | 24,948 | 18,440 | |
Stock-based compensation | 74,845 | 66,583 | |
Noncash lease expense | 12,007 | 0 | |
Deferred income taxes | 10,945 | (49,615) | |
(Gain) loss on investments in privately-held companies | (5,427) | 9,100 | |
Accretion of investment discounts | (6,032) | (1,863) | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (115,475) | (68,192) | |
Inventories | 24,951 | 98,284 | |
Prepaid expenses and other current assets | 59,388 | (50,507) | |
Other assets | (7,009) | (767) | |
Accounts payable | (14,361) | 30,515 | |
Accrued liabilities | 5,731 | (35,917) | |
Deferred revenue | (58,216) | 13,161 | |
Income taxes payable | 29,808 | 10,311 | |
Other liabilities | 595 | 9,974 | |
Net cash provided by operating activities | 635,873 | 207,300 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Proceeds from maturities of marketable securities | 806,519 | 366,999 | |
Purchases of marketable securities | (840,098) | (827,198) | |
Business acquisitions, net of cash acquired | (1,365) | (95,640) | |
Purchases of property and equipment | (13,319) | (17,613) | |
Proceeds from (purchases of) investments in privately-held companies | 28,220 | (8,000) | |
Other investing activities | 0 | (2,000) | |
Net cash used in investing activities | (20,043) | (583,452) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Principal payments of lease financing obligations | 0 | (1,392) | |
Proceeds from issuance of common stock under equity plans | 52,177 | 49,642 | |
Tax withholding paid on behalf of employees for net share settlement | (7,069) | (6,914) | |
Repurchase of common stock | (214,617) | 0 | |
Net cash provided by (used in) financing activities | (169,509) | 41,336 | |
Effect of exchange rate changes | (994) | (984) | |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 445,327 | (335,800) | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —Beginning of period | 654,164 | 864,697 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period | [1] | 1,099,491 | 528,897 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||
Right-of-use assets recognized upon the adoption of ASC 842 | [2] | 93,207 | 0 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 10,948 | 0 | |
Property and equipment included in accounts payable and accrued liabilities | 684 | 2,479 | |
Common stock issued for business acquisition | $ 0 | $ 15,555 | |
[1] | See Note 4 of the accompanying notes for a reconciliation of the ending balance of cash, cash equivalents and restricted cash as shown in this condensed consolidated statements of cash flows. | ||
[2] | See Note 1 of the accompanying notes. |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Organization Arista Networks, Inc. (together with our subsidiaries, “we,” “our,” “us” or the “Company”) is a supplier of cloud networking solutions that use software innovations to address the needs of large-scale Internet companies, cloud service providers and next-generation enterprise. Our cloud networking solutions consist of our Extensible Operating System (“EOS”), a set of network applications and our 10/25/40/50/100 Gigabit Ethernet switching and routing platforms. We are incorporated in the state of Delaware. Our corporate headquarters are located in Santa Clara, California, and we have wholly-owned subsidiaries throughout the world, including North America, Europe, Asia and Australia. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Arista Networks, Inc. and its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial information. The results for the three and nine months ended September 30, 2019 , are not necessarily indicative of the results expected for the full fiscal year. The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. All significant intercompany accounts and transactions have been eliminated. Our condensed consolidated financial statements and related financial information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 , filed with the SEC on February 15, 2019. Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts, sales rebates and return reserves; valuation of goodwill and acquisition-related intangible assets, accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; estimate of useful lives of long-lived assets including intangible assets; valuation of inventory and contract manufacturer/supplier liabilities; recognition and measurement of contingent liabilities; valuation of equity investments in privately-held companies; determination of fair value for stock-based awards; estimate of incremental borrowing rate for determining the present value of future lease payments; and valuation of warranty accruals. We evaluate our estimates and assumptions based on historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates. Significant Accounting Policies Effective January 1, 2019, we adopted Accounting Standard Codification (“ASC”) 842 - Leases , as discussed in the section titled Recently Adopted Accounting Pronouncements of this Note 1. As a result, we added a new significant accounting policy “Leases” as described below. There have been no other significant changes to our accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2018 , filed with the SEC on February 15, 2019. Leases Our initial application date of ASC 842 is January 1, 2019. For the periods prior to 2019, our leases were accounted for under the legacy guidance in ASC 840. We determine if a contract contains a lease at inception. The lease term represents the non-cancellable period for which we have the right to use an underlying asset, which may include periods covered by certain options to extend and/or terminate the lease. Lease liabilities and corresponding right-of-use (“ROU”) assets are recognized at the commencement date of a lease. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. A lease liability is the present value of our future fixed lease payments. As none of our leases provides an implicit interest rate, we use our estimated incremental borrowing rate as of the lease commencement date to determine the present value of future lease payments. Our discount rates are determined and applied at a company level. An ROU asset is calculated as the lease liability, adjusted by unamortized initial direct costs, unamortized lease incentives received, cumulative deferred or prepaid lease payments, and accumulated impairment losses. For fixed lease payments under operating leases, lease expense is recognized on a straight-lined basis over the lease term. For variable lease payments, lease expense is recognized when incurred. For operating leases that include both lease and non-lease components, we account for lease and non-lease components as a single lease component for all classes of underlying assets and, therefore, recognize non-lease payments as lease expense. Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”), and in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”) (collectively referred to as “ASC 842”). Under the guidance, lessees are required to recognize assets and lease liabilities on the balance sheet for most leases including operating leases and provide enhanced disclosures. Companies are required to adopt this guidance using a modified retrospective approach and apply the transition provisions under the guidance at either 1) the later of the beginning of the earliest comparative period presented in the financial statements and the commencement date of the lease, or 2) the beginning of the period of adoption (i.e. on the effective date). Under the transition method using the second application date, a company initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted the guidance on January 1, 2019 using the modified retrospective transition method and initially applied the transition provisions at January 1, 2019, which allows us to continue to apply the legacy guidance in ASC 840 for periods prior to 2019. We elected the package of transition practical expedients, which, among other things, allows us to keep the historical lease classifications and not have to reassess the lease classification for any existing leases as of the date of adoption. We also made the following accounting policy elections as allowed by ASC 842: • to apply the short-term lease exception, which allows us to keep leases with an initial term of twelve months or less off the balance sheet. • to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all our leases. As a result of the adoption, we recognized operating leases that were previously not recognized on the consolidated balance sheets. In addition, we derecognized the assets and the lease financing liabilities previously recorded for our headquarters building under a build-to-suit lease. Under ASC 842, this lease is recognized as an operating lease in our condensed consolidated financial statements beginning in the first quarter of 2019. The table below summarizes the impact of the adoption of ASC 842 on the condensed consolidated balance sheet as of January 1, 2019 (in thousands). Adjustments for the Adoption of ASC 842 Balance Sheet Line Item December 31, 2018 Derecognition of Build-to-Suit Lease Recognition of Operating Leases (1) January 1, 2019 Property and equipment, net $ 75,355 $ (32,806 ) $ — $ 42,549 Operating lease right-of-use assets — — 93,207 93,207 Deferred tax assets 126,492 (1,165 ) — 125,327 Other current liabilities 30,907 (2,242 ) 12,391 41,056 Operating lease liabilities, non-current — — 88,230 88,230 Finance lease liabilities, non-current 35,431 (35,431 ) — — Other long-term liabilities 31,851 — (7,414 ) 24,437 Retained earnings 1,190,803 3,702 — 1,194,505 __________________ (1) Includes an operating lease for our corporate headquarters building under the build-to-suit arrangement, which was accounted for as a financing lease prior to 2019 and derecognized on January 1, 2019 upon the adoption of ASC 842. Recent Accounting Pronouncements Not Yet Effective Credit Losses of Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The proposed standard requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. For trade receivables, we will be required to estimate lifetime expected credit losses. For available-for-sale debt securities, we will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses, Topic 326 , which allows companies to make an irrevocable one-time election upon adoption of ASU 2016-13 to elect the fair value option for certain financial assets currently measured at amortized cost (except held-to-maturity securities). The election is to be applied on an instrument-by-instrument basis. ASU 2016-13 is effective for us for our first quarter of 2020. We are currently assessing the impact this guidance may have on our consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 2. Business Combinations In the three months ended September 30, 2018, we acquired Mojo Networks, Inc. (“Mojo”) and Metamako Holding PTY LTD. (“Metamako”) in order to extend our cognitive cloud networking architecture and to improve our next generation platforms for low-latency applications. The total fair value of consideration transferred for these acquisitions was $118.7 million , which consisted of $103.1 million in cash and $15.6 million for the fair value of 58,072 shares of our common stock issued. The following table summarizes our final purchase price allocation of the two acquisitions, in aggregate, based on the estimated fair value of the assets acquired and liabilities assumed at their respective acquisition dates (in thousands): Purchase Price Allocation Cash and cash equivalents $ 4,953 Other tangible assets 23,872 Liabilities (28,707 ) Intangible assets 63,720 Goodwill 54,855 Net assets acquired $ 118,693 The acquired intangible assets are amortized on a straight-line basis over their estimated useful lives as we believe this method most closely reflects the pattern in which the economic benefits of the assets will be consumed. The following table shows the valuation of the intangible assets acquired (in thousands) along with their estimated useful lives. Acquisition Date Fair Value Estimated Useful Life Developed technology $ 52,510 5 years Customer relationships 7,080 7 years Trade name 2,470 3 years Others 1,660 1 year Total intangible assets acquired $ 63,720 Goodwill of $54.9 million |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Assets and liabilities recorded at fair value on a recurring basis in the accompanying condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. We use a fair value hierarchy to measure fair value, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The three-tiers of the fair value hierarchy are as follows: Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level II - Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level III - Unobservable inputs that are supported by little or no market data for the related assets or liabilities and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. We measure and report our cash equivalents, restricted cash, and available-for-sale marketable securities at fair value on a recurring basis. The following tables summarize the amortized costs, unrealized gains and losses and fair value of these financial assets by significant investment category and their level within the fair value hierarchy (in thousands): September 30, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Level I Level II Level III Financial Assets: Cash Equivalents: Money market funds $ 647,064 $ — $ — $ 647,064 $ 647,064 $ — $ — Marketable Securities: Corporate bonds 661,704 3,109 (69 ) 664,744 — 664,744 — U.S. government notes 368,410 633 (3 ) 369,040 369,040 — — Agency securities 262,534 721 (3 ) 263,252 — 263,252 — Commercial paper 51,739 — — 51,739 — 51,739 — Certificates of deposits (1) 3,000 — — 3,000 — 3,000 — 1,347,387 4,463 (75 ) 1,351,775 369,040 982,735 — Other Assets: Money market funds - restricted 4,226 — — 4,226 4,226 — — Total Financial Assets $ 1,998,677 $ 4,463 $ (75 ) $ 2,003,065 $ 1,020,330 $ 982,735 $ — December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Level I Level II Level III Financial Assets: Cash Equivalents: Money market funds $ 322,080 $ — $ — $ 322,080 $ 322,080 $ — $ — Marketable Securities: Corporate bonds 660,353 264 (1,399 ) 659,218 — 659,218 — U.S. government notes 308,946 118 (286 ) 308,778 308,778 — — Agency securities 273,993 240 (511 ) 273,722 — 273,722 — Commercial paper 59,479 — — 59,479 — 59,479 — Certificates of deposits (1) 5,000 — — 5,000 — 5,000 — 1,307,771 622 (2,196 ) 1,306,197 308,778 997,419 — Other Assets: Money market funds - restricted 4,214 — — 4,214 4,214 — — Total Financial Assets $ 1,634,065 $ 622 $ (2,196 ) $ 1,632,491 $ 635,072 $ 997,419 $ — ______________________ (1) As of September 30, 2019 and December 31, 2018 , all of our certificates of deposits were domestic deposits. We did no t realize any other-than-temporary losses on our marketable securities for the three and nine months ended September 30, 2019 and 2018 . As of September 30, 2019 and December 31, 2018 , total unrealized losses of our marketable securities that had been in a continuous unrealized loss position were immaterial. We invest in marketable securities that have maximum maturities of up to two years and are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these marketable securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those marketable securities purchased at a time with lower interest rates show a mark-to-market unrealized loss. We expect to realize the full value of these investments upon maturity or sale and therefore, we do no t consider any of our marketable securities to be other-than-temporarily impaired as of September 30, 2019 . As of September 30, 2019 , the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale marketable securities, by remaining contractual maturity, are as follows (in thousands): September 30, 2019 Due in 1 year or less $ 936,777 Due in 1 year through 2 years 414,998 Total marketable securities $ 1,351,775 The weighted-average remaining duration of our current marketable securities is approximately 0.7 years as of September 30, 2019 . As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying unaudited condensed consolidated balance sheets. |
Financial Statements Details
Financial Statements Details | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Components [Abstract] | |
Financial Statements Details | 4. Financial Statements Details Cash, Cash Equivalents and Restricted Cash The following table is a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets that sum to the total of the same such amounts shown in the accompanying condensed consolidated statements of cash flows (in thousands): September 30, 2019 September 30, 2018 Cash and cash equivalents $ 1,095,265 $ 524,687 Restricted cash included in other assets 4,226 4,210 Total cash, cash equivalents and restricted cash $ 1,099,491 $ 528,897 Restricted cash included in other assets as of September 30, 2019 and September 30, 2018 primarily included $4.0 million pledged as collateral representing a security deposit required for a facility lease. Accounts Receivable, Net Accounts receivable, net consists of the following (in thousands): September 30, 2019 December 31, 2018 Accounts receivable $ 453,963 $ 340,897 Allowance for doubtful accounts (852 ) (507 ) Product sales rebate and returns reserve (5,859 ) (8,613 ) Accounts receivable, net $ 447,252 $ 331,777 Inventories Inventories consist of the following (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 120,236 $ 76,795 Finished goods 119,566 187,762 Total inventories $ 239,802 $ 264,557 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following (in thousands): September 30, 2019 December 31, 2018 Prepaid income taxes $ 25,643 $ 38,636 Inventory deposit 15,090 14,639 Other current assets 52,800 95,730 Other prepaid expenses and deposits 12,793 13,316 Total prepaid expenses and other current assets $ 106,326 $ 162,321 Property and Equipment, Net Property and equipment, net consists of the following (in thousands): September 30, 2019 December 31, 2018 Equipment and machinery $ 62,233 $ 55,912 Computer hardware and software 35,409 30,566 Leasehold improvements 31,335 36,447 Furniture and fixtures 3,734 3,697 Building — 35,154 Construction-in-process 140 3,591 Property and equipment, gross 132,851 165,367 Less: accumulated depreciation (92,663 ) (90,012 ) Property and equipment, net $ 40,188 $ 75,355 On January 1, 2019, upon the adoption of ASC 842, we derecognized the building and certain leasehold improvements that were capitalized for our corporate headquarters building under a build-to-suit arrangement. See Note 1 and Note 6 for further details. Depreciation expense was $4.8 million and $5.4 million for the three months ended September 30, 2019 and 2018 , respectively, and $14.3 million and $16.0 million for the nine months ended September 30, 2019 and 2018 , respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Accrued payroll related costs $ 69,522 $ 70,755 Accrued manufacturing costs 25,407 31,336 Accrued product development costs 17,534 6,988 Accrued professional fees 7,335 5,678 Accrued warranty costs 5,408 5,362 Other 3,724 3,135 Total accrued liabilities $ 128,930 $ 123,254 Warranty Accrual The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands): Nine Months Ended September 30, 2019 2018 Warranty accrual, beginning of period $ 5,362 $ 7,415 Liabilities accrued for warranties issued during the period 3,887 6,898 Warranty costs incurred during the period (3,841 ) (4,198 ) Warranty accrual, end of period $ 5,408 $ 10,115 Contract Balances The following table summarizes the activity related to our contract assets (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Contract assets, beginning balance $ 1,668 $ 6,959 $ 6,341 $ — Contract assets, ending balance 14,482 9,417 14,482 9,417 The following table summarizes the activity related to our contract liabilities (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Contract liabilities, beginning balance $ 42,026 $ 21,842 $ 32,595 $ 16,521 Less: Revenue recognized from beginning balance (3,700 ) (2,157 ) (10,134 ) (6,107 ) Less: Beginning balance reclassified to deferred revenue (1,689 ) (970 ) (967 ) (521 ) Add: Contract liabilities recognized 13,506 6,580 28,649 15,402 Contract liabilities, ending balance $ 50,143 $ 25,295 $ 50,143 $ 25,295 As of September 30, 2019 and December 31, 2018 , $19.6 million and $13.5 million of our contract liabilities, respectively, was included in “Other current liabilities” with the remaining balances included in “Other long-term liabilities”. Deferred Revenue and Performance Obligations Deferred revenue is comprised mainly of unearned revenue related to multi-year PCS contracts, services and product deferrals related to acceptance clauses. The following table summarizes the activity related to our deferred revenue (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Deferred revenue, beginning balance (1) $ 502,218 $ 448,644 $ 587,227 $ 498,740 Less: Revenue recognized from beginning balance (84,277 ) (97,995 ) (306,909 ) (306,350 ) Add: Deferral of revenue in current period, excluding amounts recognized during the period 111,071 179,206 248,694 337,465 Deferred revenue, ending balance $ 529,012 $ 529,855 $ 529,012 $ 529,855 ______________________ (1) The beginning balance of the nine months ended September 30, 2018 excludes $16.5 million that was reclassified to other current liabilities and other long-term liabilities at January 1, 2018 as a result of our adoption of ASC 606. Revenue from Remaining Performance Obligations Revenue from remaining performance obligations represents contracted revenue that has not yet been recognized, which includes contract liabilities and deferred revenue that will be recognized as revenue in future periods. As of September 30, 2019 , approximately $610.2 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 80% of these remaining performance obligations over the next two years and 20% during the third to the fifth year. Other Income (Expense), Net Other income (expense), net consists of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Interest income $ 13,446 $ 8,585 $ 38,451 $ 21,933 Interest expense — (673 ) — (2,040 ) Gain (loss) on investment in privately-held companies 4,277 — 5,427 (9,100 ) Other income (expense), net 1,446 707 1,435 (187 ) Total $ 19,169 $ 8,619 $ 45,313 $ 10,606 Upon the adoption of ASC 842 on January 1, 2019, we derecognized the lease financing obligation associated with a build-to-suit lease, and therefore did not incur interest expense in the three and nine months ended September 30, 2019 . See Note 1 for further details. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments in privately-held companies [Abstract] | |
Investments | 5. Investments Investments in Privately-Held Companies Our investments are in the equity of privately-held companies, which do not have readily determinable fair values. These non-marketable equity securities are initially recorded at cost, and subsequently remeasured to fair value on a non-recurring basis based on observable price changes in orderly transactions for similar investments of the same issuer, or for impairment. These investments are classified within Level III of the fair value hierarchy as we estimate the value based on valuation methods using the observable transaction price at the transaction date and other significant unobservable inputs, such as volatility, rights, and obligations related to those investments. In addition, the valuation requires management judgment due to the absence of market price and inherent lack of liquidity. The following table summarizes the activity related to our investments in privately-held companies held as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Cost of investment $ 18,000 $ 44,136 Cumulative impairment (15,000 ) (15,000 ) Cumulative upward adjustment 1,150 1,200 Carrying amount of investment $ 4,150 $ 30,336 During the three months ended September 30, 2019 , the Company recorded a realized gain of $4.3 million upon the sale of one of our investments. The realized gains are classified in "Other income (expense), net" in our accompanying unaudited condensed consolidated statements of operations. During the three months ended September 30, 2019 and September 30, 2018 , there were no unrealized gains or losses recorded on our remaining investments. In each of the nine month periods ended September 30, 2019 and September 30, 2018 , we recorded $1.2 million of unrealized gains. These unrealized gains were recorded on investments that were re-measured to fair value as of the date observable transactions occurred. In addition, during the nine months ended September 30, 2018 , we recorded an impairment of $10.3 million on one of our investments. These unrealized gains and losses are classified in "Other income (expense), net" in our accompanying unaudited condensed consolidated statements of operations. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Operating Leases We lease various offices and data centers in North America, Europe, Asia and Australia under non-cancelable operating lease arrangements that expire on various dates through 2028. Some of our leases include options to extend the term of such leases for a period from three months to up to 10 years and/or options to early terminate the leases. As of September 30, 2019 , we did not include any such options in determining the lease terms because we were not reasonably certain that we would exercise those options. Most of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, repairs, and insurance, and contain renewal and escalation clauses. Build-to-Suit Lease In August 2012, we executed a lease for a building then under construction in Santa Clara, California to serve as our headquarters. The lease term is 120 months and commenced in August 2013. Based on the terms of the lease agreement and due to our involvement in certain aspects of the construction, we were deemed the accounting owner of the building during the construction period in accordance with ASC 840. As a result, we recognized assets under construction and corresponding liabilities on the consolidated balance sheet. Upon completion of the construction in 2013, we concluded that we had forms of continued economic involvement in the facility, and therefore did not meet with the provisions for sale-leaseback accounting. Pursuant to ASC 840, we continued to carry the assets and liabilities capitalized during the construction period and accounted for the lease as a capital lease for the building and an operating lease for the underlying land. Upon our adoption of ASC 842 on January 1, 2019 (see Note 1), we derecognized the assets and the lease financing liabilities recorded for the building. The build-to-suit lease was re-classified as an operating lease effective January 1, 2019 in accordance with ASC 842. The following table summarizes the supplemental balance sheet information related to our operating leases as of September 30, 2019 (in thousands). Financial Statement Classification September 30, 2019 Right-of-use assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 91,903 Lease liabilities: Operating lease liabilities, current Other current liabilities 15,545 Operating lease liabilities, non-current Operating lease liabilities, non-current 87,099 Total operating lease liabilities $ 102,644 The following table summarizes our lease costs for the three and nine months ended September 30, 2019 (in thousands). Financial Statement Classification Three Months Ended Nine Months Ended Operating lease costs: Fixed lease costs Operating expenses $ 5,800 $ 16,898 Variable lease costs Operating expenses 1,534 4,529 Total operating lease costs $ 7,334 $ 21,427 The operating lease costs in the table above include costs for long-term leases and short-term leases. Total short-term lease costs were immaterial. Fixed lease costs include expenses recognized for base rent payments on a straight-lined basis. Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments, and are excluded from the calculation of operating lease liabilities and ROU assets. For the three and nine months ended September 30, 2019 , cash paid for amounts associated with our operating lease liabilities were approximately $4.7 million and $13.6 million , respectively, which were classified as operating activities in the condensed consolidated statements of cash flows. Prior to 2019, we recognized rent expense for our operating leases under the legacy guidance ASC 840. For the three and nine months ended September 30, 2018 , rent expense for all operating leases amounted to $3.1 million and $8.9 million , respectively, and did not include maintenance, utilities and other operating expenses in accordance with ASC 840. The following table shows our undiscounted future fixed payment obligations under our recognized operating leases and a reconciliation to the operating lease liabilities as of September 30, 2019 (in thousands). September 30, 2019 Remainder of 2019 $ 4,932 2020 20,510 2021 21,271 2022 21,470 2023 17,694 2024 and thereafter 36,008 Total future fixed operating lease payments 121,885 Less: Imputed interest (19,241 ) Total operating lease liabilities $ 102,644 September 30, 2019 Weighted-average remaining lease term — operating leases 6.0 years Weighted-average discount rate — operating leases 5.1% |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Leases We lease various offices and data centers in North America, Europe, Asia and Australia under non-cancelable operating lease arrangements that expire on various dates through 2028. See Note 6 for our future minimum payment obligations under our leases as of September 30, 2019 . Purchase Commitments We outsource most of our manufacturing and supply chain management operations to third-party contract manufacturers, who procure components and assemble products on our behalf based on our forecasts in order to reduce manufacturing lead times and ensure adequate component supply. We issue purchase orders to our contract manufacturers for finished products and a significant portion of these orders consist of firm non-cancellable commitments. In addition, we purchase strategic component inventory from certain suppliers under purchase commitments that in some cases are non-cancellable, including integrated circuits, which are consigned to our contract manufacturers. As of September 30, 2019 , we had non-cancellable purchase commitments of $222.4 million , of which $209.6 million was to our contract manufacturers and suppliers. In addition, we have provided deposits to secure our obligations to purchase inventory. We had $17.8 million and $17.4 million in deposits as of September 30, 2019 and December 31, 2018 , respectively. These deposits are classified in “Prepaid expenses and other current assets” and “Other assets” in our accompanying unaudited condensed consolidated balance sheets. Guarantees We have entered into agreements with some of our direct customers and channel partners that contain indemnification provisions relating to potential situations where claims could be alleged that our products infringe the intellectual property rights of a third party. We have, at our option and expense, the ability to repair any infringement, replace product with a non-infringing equivalent-in-function product or refund our customers all or a portion of the value of the product. Other guarantees or indemnification agreements include guarantees of product and service performance and standby letters of credit for leased facilities and corporate credit cards. We have not recorded a liability related to these indemnification and guarantee provisions and our guarantee and indemnification arrangements have not had any significant impact on our consolidated financial statements to date. Legal Proceedings OptumSoft, Inc. Matters On April 4, 2014, OptumSoft filed a lawsuit against us in the Superior Court of California, Santa Clara County titled OptumSoft, Inc. v. Arista Networks, Inc., in which it asserts (i) ownership of certain components of our EOS network operating system pursuant to the terms of a 2004 agreement between the companies; and (ii) breaches of certain confidentiality and use restrictions in that agreement. Under the terms of the 2004 agreement, OptumSoft provided us with a non-exclusive, irrevocable, royalty-free license to software delivered by OptumSoft comprising a software tool used to develop certain components of EOS and a runtime library that is incorporated into EOS. The 2004 agreement places certain restrictions on our use and disclosure of the OptumSoft software and gives OptumSoft ownership of improvements, modifications and corrections to, and derivative works of, the OptumSoft software that we develop. In its lawsuit, OptumSoft has asked the Court to order us to (i) give OptumSoft access to our software for evaluation by OptumSoft; (ii) cease all conduct constituting the alleged confidentiality and use restriction breaches; (iii) secure the return or deletion of OptumSoft’s alleged intellectual property provided to third parties, including our customers; (iv) assign ownership to OptumSoft of OptumSoft’s alleged intellectual property currently owned by us; and (v) pay OptumSoft’s alleged damages, attorney’s fees, and costs of the lawsuit. David Cheriton, one of our founders and a former member of our board of directors, who resigned from our board of directors on March 1, 2014 and has no continuing role with us, is a founder and, we believe, the largest stockholder and director of OptumSoft. The 2010 David R. Cheriton Irrevocable Trust dated July 28, 2010, a trust for the benefit of the minor children of Mr. Cheriton, is one of our largest stockholders. On April 14, 2014, we filed a cross-complaint against OptumSoft, in which we asserted our ownership of the software components at issue and our interpretation of the 2004 agreement. Among other things, we asserted that the language of the 2004 agreement and the parties’ long course of conduct support our ownership of the disputed software components. We asked the Court to declare our ownership of those software components, all similarly-situated software components developed in the future and all related intellectual property. We also asserted that, even if we are found not to own certain components, such components are licensed to us under the terms of the 2004 agreement. However, there can be no assurance that our assertions will ultimately prevail in litigation. On the same day, we also filed an answer to OptumSoft’s claims, as well as affirmative defenses based in part on OptumSoft’s failure to maintain the confidentiality of its claimed trade secrets, its authorization of the disclosures it asserts and its delay in claiming ownership of the software components at issue. We have also taken additional steps to respond to OptumSoft’s allegations that we improperly used and/or disclosed OptumSoft confidential information. While we believe we have meritorious defenses to these allegations, we believe we have (i) revised our software to remove the elements we understand to be the subject of the claims relating to improper use and disclosure of OptumSoft confidential information and made the revised software available to our customers and (ii) removed information from our website that OptumSoft asserted disclosed OptumSoft confidential information. The parties tried Phase I of the case, relating to contract interpretation and application of the contract to certain claimed source code, in September 2015. On March 23, 2016, the Court issued a Final Statement of Decision Following Phase I Trial, in which it agreed with and adopted our interpretation of the 2004 agreement and held that we, and not OptumSoft, own all the software at issue in Phase I. The remaining issues that were not addressed in the Phase I trial were set to be tried in Phase II, including the application of the Court’s interpretation of the 2004 agreement to any other source code that OptumSoft claims to own and the trade secret misappropriation and confidentiality claims. On September 24, 2019, the Company and OptumSoft entered into a settlement agreement resolving all the issues that were set to be tried in Phase II of the litigation. Under the settlement agreement, OptumSoft may still pursue its appeal of the Court’s Final Statement of Decision Following Phase I Trial, and pursue any further litigation that may result, but has granted the Company a release on all other outstanding claims. We intend to vigorously defend against any claims brought against us by OptumSoft. However, we cannot be certain that, if litigated, any claims by OptumSoft would be resolved in our favor. For example, if it were determined that OptumSoft owned components of our EOS network operating system, we would be required to transfer ownership of those components and any related intellectual property to OptumSoft. If OptumSoft were the owner of those components, it could make them available to our competitors, such as through a sale or license. An adverse litigation ruling could result in a significant damages award against us and injunctive relief. In addition, OptumSoft could assert additional or different claims against us, including claims that our license from OptumSoft is invalid. With respect to the legal proceedings described above, it is our belief that while a loss is not probable, it may be reasonably possible. Further, at this stage in the litigation, any possible loss or range of loss cannot be estimated. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us in a reporting period for a material amount, our consolidated financial statements for that reporting period could be materially adversely affected. GlobalFoundries Litigation On August 26, 2019, GlobalFoundries U.S. Inc. (“GlobalFoundries”) filed complaints in the International Trade Commission and federal court against TSMC and numerous companies that sell products incorporating semiconductor devices manufactured by TSMC, including Arista, Broadcom, NVIDIA, Apple, Asus, Cisco, and Lenovo. The complaints allege that these semiconductor devices infringe four GlobalFoundries patents relating to semiconductor manufacturing techniques. In our case, GlobalFoundries has accused the merchant silicon we purchase from Broadcom of infringement. On October 28, 2019, TSMC and GlobalFoundries entered into a cross-license agreement to settle the litigation. Other Matters In the ordinary course of business, we are a party to other claims and legal proceedings including matters relating to commercial, employee relations, business practices and intellectual property. We record a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. As of September 30, 2019 , provisions recorded for contingent losses related to other claims and matters have not been significant. Based on currently available information, management does not believe that any additional liabilities relating to other unresolved matters are probable or that the amount of any resulting loss is estimable, and believes these other matters are not likely, individually and in the aggregate, to have a material adverse effect on our financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on our financial position, results of operations or cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Stock Repurchase Program In April 2019, our board of directors authorized a $1.0 billion stock repurchase program (the “Repurchase Program”). This authorization allows us to repurchase shares of our common stock opportunistically and will be funded from working capital. Repurchases may be made at management’s discretion from time to time on the open market, through privately negotiated transactions, transactions structured through investment banking institutions, block purchases, trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or a combination of the foregoing. The Repurchase Program, which expires in April 2022 , does not obligate us to acquire any of our common stock, and may be suspended or discontinued by us at any time without prior notice. As of September 30, 2019 , the remaining authorized amount for stock repurchases under this program was approximately $785.4 million . A summary of the stock repurchase activity under the Repurchase Program for the three and nine months ended September 30, 2019 is as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Aggregate purchase price $ 114,609 $ 214,617 Shares repurchased 512 919 Average price paid per share $ 223.99 $ 233.72 The aggregate purchase price of repurchased shares of our common stock is recorded as a reduction to retained earnings. All shares repurchased under the Repurchase Program have been retired. Equity Award Plan Activities 2014 Employee Stock Purchase Plan Effective January 1, 2019, our board of directors authorized an increase of 756,679 shares to the shares available for issuance under our 2014 Employee Stock Purchase Plan (the “ESPP”). Pursuant to the ESPP, the 2019 share increase was determined based on the lesser of 1% of the total shares of common stock outstanding on December 31, 2018 , 2,500,000 shares, or such amount as determined by our board of directors. During the three and nine months ended September 30, 2019 , we issued 51,600 and 97,343 shares at a weighted-average purchase price of $179.73 and $184.70 per share, respectively, under the ESPP. As of September 30, 2019 , there remained 3,192,774 shares available for issuance under the ESPP. Stock Option Activities The following table summarizes the option activity under our stock plans and related information (in thousands, except years and per share amounts): Options Outstanding Number of Outstanding Options Weighted- Weighted- Aggregate Balance—December 31, 2018 5,899 $ 37.09 5.2 $ 1,027,741 Options granted 76 226.53 Options exercised (1,164 ) 29.37 Options canceled (64 ) 37.08 Balance—September 30, 2019 4,747 $ 42.02 4.6 $ 935,350 Vested and exercisable—September 30, 2019 2,700 $ 27.53 4.1 $ 570,690 Restricted Stock Unit (RSU) Activities A summary of the RSU activity under our 2014 equity incentive plan (“2014 Plan”) and related information are presented below (in thousands, except years and per share amounts): Number of Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Unvested balance—December 31, 2018 1,308 $ 150.60 1.5 $ 275,638 RSUs granted 325 245.29 RSUs vested (386 ) 121.02 RSUs forfeited/canceled (64 ) 179.78 Unvested balance—September 30, 2019 1,183 $ 184.64 1.6 $ 282,612 Shares Available for Grant The following table presents the stock activity and the total number of shares available for grant under the 2014 Plan as of September 30, 2019 (in thousands): Number of Shares Balance—December 31, 2018 15,386 Options granted (76 ) RSUs granted (325 ) Options canceled 64 RSUs forfeited 64 Shares traded for taxes 29 Balance—September 30, 2019 15,142 Stock-Based Compensation Expense Total stock-based compensation expense related to options, restricted stock units, restricted stock, and employee stock purchase rights granted were allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Cost of revenue $ 1,258 $ 1,268 $ 3,384 $ 3,706 Research and development 13,472 12,010 39,171 34,700 Sales and marketing 7,832 6,537 21,463 18,771 General and administrative 3,695 3,439 10,827 9,406 Total stock-based compensation $ 26,257 $ 23,254 $ 74,845 $ 66,583 As of September 30, 2019 , unrecognized stock-based compensation expenses by award type and their expected weighted-average recognition periods are summarized in the following table (in thousands, except years). September 30, 2019 Stock Option RSU ESPP Restricted Stock Unrecognized stock-based compensation expense $ 48,448 $ 194,942 $ 12,619 $ 4,298 Weighted-average amortization period 3.5 years 3.3 years 1.3 years 3.0 years |
Net Income (Loss) Per Share Ava
Net Income (Loss) Per Share Available to Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Available to Common Stock | 9. Net Income (Loss) Per Share Available to Common Stock The following table sets forth the computation of our basic and diluted net income (loss) per share available to common stock (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Basic: Net income $ 208,895 $ 168,524 $ 599,175 $ 157,793 Less: undistributed earnings allocated to participating securities (96 ) (85 ) (314 ) (87 ) Net income available to common stockholders, basic $ 208,799 $ 168,439 $ 598,861 $ 157,706 Diluted: Net income attributable to common stockholders, basic $ 208,799 $ 168,439 $ 598,861 $ 157,706 Add: undistributed earnings allocated to participating securities 5 6 19 7 Net income attributable to common stockholders, diluted $ 208,804 $ 168,445 $ 598,880 $ 157,713 Denominator: Basic: Weighted-average shares used in computing net income per share available to common stockholders, basic 76,426 75,011 76,301 74,506 Diluted: Weighted-average shares used in computing net income per share available to common stockholders, basic 76,426 75,011 76,301 74,506 Add weighted-average effect of dilutive securities: Stock options and RSUs 4,308 5,967 4,784 6,298 Employee stock purchase plan 19 40 19 40 Weighted-average shares used in computing net income per share available to common stockholders, diluted 80,753 81,018 81,104 80,844 Net income per share attributable to common stockholders: Basic $ 2.73 $ 2.25 $ 7.85 $ 2.12 Diluted $ 2.59 $ 2.08 $ 7.38 $ 1.95 The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income (loss) per share available to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options and RSUs to purchase common stock 277 82 211 87 Employee stock purchase plan 41 98 59 59 Total 318 180 270 146 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands, except percentages) Income before income taxes $ 247,775 $ 189,389 $ 675,098 $ 90,311 Provision for (benefit from) income taxes 38,880 20,865 $ 75,923 $ (67,482 ) Effective tax rate 15.7 % 11.0 % 11.2 % (74.7 )% The change in the effective tax rate in the nine months ended September 30, 2019 , as compared to the same period in 2018 , was a result of the significant benefit on the $405 million charge related to the settlement of our litigation with Cisco recorded in the nine months ended September 30, 2018 . In addition, the increase in the effective tax rate in the three months and nine months ended September 30, 2019 , as compared to the same periods in 2018 , was due to the overall increase in worldwide earnings, which proportionally exceeded the increase in excess tax benefits attributable to equity compensation. On June 7, 2019, the Court of Appeals for the Ninth Circuit issued an opinion on Altera Corporation and Subsidiaries vs. Commissioner on Internal Revenue (“Opinion”). The Opinion overturned the Tax Court decision and ruled in favor of the Commissioner validating the regulations requiring stock-based compensation to be included in a cost sharing arrangement (the “Regulations”) . As a result of the Opinion, we have changed our position and determined it is more likely than not that the Regulations are valid. As such, we have accounted for the impact of the decision in the nine months ended September 30, 2019 resulting in a discrete income tax expense of $9.8 million . Further, the estimated annual effective tax rate for the year ending December 31, 2019 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information We have determined that we operate as one reportable segment. The following table represents revenue based on the customer’s location, as determined by the customer’s shipping address (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Americas $ 532,318 $ 406,666 $ 1,418,325 $ 1,099,624 Europe, Middle East and Africa 75,439 92,911 298,768 316,608 Asia-Pacific 46,658 63,732 141,067 139,411 Total revenue $ 654,415 $ 563,309 $ 1,858,160 $ 1,555,643 Long-lived assets, excluding intercompany receivables, investments in subsidiaries, privately-held equity investments and deferred tax assets, net by location are summarized as follows (in thousands): September 30, 2019 December 31, 2018 United States $ 34,225 $ 69,238 International 5,963 6,117 Total $ 40,188 $ 75,355 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Arista Networks, Inc. and its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our financial information. The results for the three and nine months ended September 30, 2019 , are not necessarily indicative of the results expected for the full fiscal year. The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. All significant intercompany accounts and transactions have been eliminated. Our condensed consolidated financial statements and related financial information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 , filed with the SEC on February 15, 2019. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts, sales rebates and return reserves; valuation of goodwill and acquisition-related intangible assets, accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; estimate of useful lives of long-lived assets including intangible assets; valuation of inventory and contract manufacturer/supplier liabilities; recognition and measurement of contingent liabilities; valuation of equity investments in privately-held companies; determination of fair value for stock-based awards; estimate of incremental borrowing rate for determining the present value of future lease payments; and valuation of warranty accruals. We evaluate our estimates and assumptions based on historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates. |
Leases | Leases Our initial application date of ASC 842 is January 1, 2019. For the periods prior to 2019, our leases were accounted for under the legacy guidance in ASC 840. We determine if a contract contains a lease at inception. The lease term represents the non-cancellable period for which we have the right to use an underlying asset, which may include periods covered by certain options to extend and/or terminate the lease. Lease liabilities and corresponding right-of-use (“ROU”) assets are recognized at the commencement date of a lease. Leases with an initial lease term of 12 months or less are not recorded on the balance sheet. A lease liability is the present value of our future fixed lease payments. As none of our leases provides an implicit interest rate, we use our estimated incremental borrowing rate as of the lease commencement date to determine the present value of future lease payments. Our discount rates are determined and applied at a company level. An ROU asset is calculated as the lease liability, adjusted by unamortized initial direct costs, unamortized lease incentives received, cumulative deferred or prepaid lease payments, and accumulated impairment losses. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Effective | Recently Adopted Accounting Pronouncements Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”), and in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”) (collectively referred to as “ASC 842”). Under the guidance, lessees are required to recognize assets and lease liabilities on the balance sheet for most leases including operating leases and provide enhanced disclosures. Companies are required to adopt this guidance using a modified retrospective approach and apply the transition provisions under the guidance at either 1) the later of the beginning of the earliest comparative period presented in the financial statements and the commencement date of the lease, or 2) the beginning of the period of adoption (i.e. on the effective date). Under the transition method using the second application date, a company initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted the guidance on January 1, 2019 using the modified retrospective transition method and initially applied the transition provisions at January 1, 2019, which allows us to continue to apply the legacy guidance in ASC 840 for periods prior to 2019. We elected the package of transition practical expedients, which, among other things, allows us to keep the historical lease classifications and not have to reassess the lease classification for any existing leases as of the date of adoption. We also made the following accounting policy elections as allowed by ASC 842: • to apply the short-term lease exception, which allows us to keep leases with an initial term of twelve months or less off the balance sheet. • to account for each separate lease component of a contract and its associated non-lease components as a single lease component for all our leases. As a result of the adoption, we recognized operating leases that were previously not recognized on the consolidated balance sheets. In addition, we derecognized the assets and the lease financing liabilities previously recorded for our headquarters building under a build-to-suit lease. Under ASC 842, this lease is recognized as an operating lease in our condensed consolidated financial statements beginning in the first quarter of 2019. The table below summarizes the impact of the adoption of ASC 842 on the condensed consolidated balance sheet as of January 1, 2019 (in thousands). Adjustments for the Adoption of ASC 842 Balance Sheet Line Item December 31, 2018 Derecognition of Build-to-Suit Lease Recognition of Operating Leases (1) January 1, 2019 Property and equipment, net $ 75,355 $ (32,806 ) $ — $ 42,549 Operating lease right-of-use assets — — 93,207 93,207 Deferred tax assets 126,492 (1,165 ) — 125,327 Other current liabilities 30,907 (2,242 ) 12,391 41,056 Operating lease liabilities, non-current — — 88,230 88,230 Finance lease liabilities, non-current 35,431 (35,431 ) — — Other long-term liabilities 31,851 — (7,414 ) 24,437 Retained earnings 1,190,803 3,702 — 1,194,505 __________________ (1) Includes an operating lease for our corporate headquarters building under the build-to-suit arrangement, which was accounted for as a financing lease prior to 2019 and derecognized on January 1, 2019 upon the adoption of ASC 842. Recent Accounting Pronouncements Not Yet Effective Credit Losses of Financial Instruments In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The proposed standard requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. For trade receivables, we will be required to estimate lifetime expected credit losses. For available-for-sale debt securities, we will be required to recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses, Topic 326 , which allows companies to make an irrevocable one-time election upon adoption of ASU 2016-13 to elect the fair value option for certain financial assets currently measured at amortized cost (except held-to-maturity securities). The election is to be applied on an instrument-by-instrument basis. ASU 2016-13 is effective for us for our first quarter of 2020. We are currently assessing the impact this guidance may have on our consolidated financial statements. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Impact of the Adoption of ASC 842 | The table below summarizes the impact of the adoption of ASC 842 on the condensed consolidated balance sheet as of January 1, 2019 (in thousands). Adjustments for the Adoption of ASC 842 Balance Sheet Line Item December 31, 2018 Derecognition of Build-to-Suit Lease Recognition of Operating Leases (1) January 1, 2019 Property and equipment, net $ 75,355 $ (32,806 ) $ — $ 42,549 Operating lease right-of-use assets — — 93,207 93,207 Deferred tax assets 126,492 (1,165 ) — 125,327 Other current liabilities 30,907 (2,242 ) 12,391 41,056 Operating lease liabilities, non-current — — 88,230 88,230 Finance lease liabilities, non-current 35,431 (35,431 ) — — Other long-term liabilities 31,851 — (7,414 ) 24,437 Retained earnings 1,190,803 3,702 — 1,194,505 __________________ (1) Includes an operating lease for our corporate headquarters building under the build-to-suit arrangement, which was accounted for as a financing lease prior to 2019 and derecognized on January 1, 2019 upon the adoption of ASC 842. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes our final purchase price allocation of the two acquisitions, in aggregate, based on the estimated fair value of the assets acquired and liabilities assumed at their respective acquisition dates (in thousands): Purchase Price Allocation Cash and cash equivalents $ 4,953 Other tangible assets 23,872 Liabilities (28,707 ) Intangible assets 63,720 Goodwill 54,855 Net assets acquired $ 118,693 |
Schedule of Intangible Assets Acquired | The following table shows the valuation of the intangible assets acquired (in thousands) along with their estimated useful lives. Acquisition Date Fair Value Estimated Useful Life Developed technology $ 52,510 5 years Customer relationships 7,080 7 years Trade name 2,470 3 years Others 1,660 1 year Total intangible assets acquired $ 63,720 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Assets by Level | The following tables summarize the amortized costs, unrealized gains and losses and fair value of these financial assets by significant investment category and their level within the fair value hierarchy (in thousands): September 30, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Level I Level II Level III Financial Assets: Cash Equivalents: Money market funds $ 647,064 $ — $ — $ 647,064 $ 647,064 $ — $ — Marketable Securities: Corporate bonds 661,704 3,109 (69 ) 664,744 — 664,744 — U.S. government notes 368,410 633 (3 ) 369,040 369,040 — — Agency securities 262,534 721 (3 ) 263,252 — 263,252 — Commercial paper 51,739 — — 51,739 — 51,739 — Certificates of deposits (1) 3,000 — — 3,000 — 3,000 — 1,347,387 4,463 (75 ) 1,351,775 369,040 982,735 — Other Assets: Money market funds - restricted 4,226 — — 4,226 4,226 — — Total Financial Assets $ 1,998,677 $ 4,463 $ (75 ) $ 2,003,065 $ 1,020,330 $ 982,735 $ — December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Level I Level II Level III Financial Assets: Cash Equivalents: Money market funds $ 322,080 $ — $ — $ 322,080 $ 322,080 $ — $ — Marketable Securities: Corporate bonds 660,353 264 (1,399 ) 659,218 — 659,218 — U.S. government notes 308,946 118 (286 ) 308,778 308,778 — — Agency securities 273,993 240 (511 ) 273,722 — 273,722 — Commercial paper 59,479 — — 59,479 — 59,479 — Certificates of deposits (1) 5,000 — — 5,000 — 5,000 — 1,307,771 622 (2,196 ) 1,306,197 308,778 997,419 — Other Assets: Money market funds - restricted 4,214 — — 4,214 4,214 — — Total Financial Assets $ 1,634,065 $ 622 $ (2,196 ) $ 1,632,491 $ 635,072 $ 997,419 $ — ______________________ (1) As of September 30, 2019 and December 31, 2018 , all of our certificates of deposits were domestic deposits. |
Fair Value of Available-For-Sale Investments By Contractual Maturity | The fair values of available-for-sale marketable securities, by remaining contractual maturity, are as follows (in thousands): September 30, 2019 Due in 1 year or less $ 936,777 Due in 1 year through 2 years 414,998 Total marketable securities $ 1,351,775 |
Financial Statements Details (T
Financial Statements Details (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Balance Sheet Components [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table is a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets that sum to the total of the same such amounts shown in the accompanying condensed consolidated statements of cash flows (in thousands): September 30, 2019 September 30, 2018 Cash and cash equivalents $ 1,095,265 $ 524,687 Restricted cash included in other assets 4,226 4,210 Total cash, cash equivalents and restricted cash $ 1,099,491 $ 528,897 |
Schedule of Accounts Receivable, Net | Accounts receivable, net consists of the following (in thousands): September 30, 2019 December 31, 2018 Accounts receivable $ 453,963 $ 340,897 Allowance for doubtful accounts (852 ) (507 ) Product sales rebate and returns reserve (5,859 ) (8,613 ) Accounts receivable, net $ 447,252 $ 331,777 |
Schedule of Inventories | Inventories consist of the following (in thousands): September 30, 2019 December 31, 2018 Raw materials $ 120,236 $ 76,795 Finished goods 119,566 187,762 Total inventories $ 239,802 $ 264,557 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consists of the following (in thousands): September 30, 2019 December 31, 2018 Prepaid income taxes $ 25,643 $ 38,636 Inventory deposit 15,090 14,639 Other current assets 52,800 95,730 Other prepaid expenses and deposits 12,793 13,316 Total prepaid expenses and other current assets $ 106,326 $ 162,321 |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): September 30, 2019 December 31, 2018 Equipment and machinery $ 62,233 $ 55,912 Computer hardware and software 35,409 30,566 Leasehold improvements 31,335 36,447 Furniture and fixtures 3,734 3,697 Building — 35,154 Construction-in-process 140 3,591 Property and equipment, gross 132,851 165,367 Less: accumulated depreciation (92,663 ) (90,012 ) Property and equipment, net $ 40,188 $ 75,355 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): September 30, 2019 December 31, 2018 Accrued payroll related costs $ 69,522 $ 70,755 Accrued manufacturing costs 25,407 31,336 Accrued product development costs 17,534 6,988 Accrued professional fees 7,335 5,678 Accrued warranty costs 5,408 5,362 Other 3,724 3,135 Total accrued liabilities $ 128,930 $ 123,254 |
Schedule of Warranty Accrual | The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands): Nine Months Ended September 30, 2019 2018 Warranty accrual, beginning of period $ 5,362 $ 7,415 Liabilities accrued for warranties issued during the period 3,887 6,898 Warranty costs incurred during the period (3,841 ) (4,198 ) Warranty accrual, end of period $ 5,408 $ 10,115 |
Schedule of Contract Balances | The following table summarizes the activity related to our contract assets (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Contract assets, beginning balance $ 1,668 $ 6,959 $ 6,341 $ — Contract assets, ending balance 14,482 9,417 14,482 9,417 The following table summarizes the activity related to our contract liabilities (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Contract liabilities, beginning balance $ 42,026 $ 21,842 $ 32,595 $ 16,521 Less: Revenue recognized from beginning balance (3,700 ) (2,157 ) (10,134 ) (6,107 ) Less: Beginning balance reclassified to deferred revenue (1,689 ) (970 ) (967 ) (521 ) Add: Contract liabilities recognized 13,506 6,580 28,649 15,402 Contract liabilities, ending balance $ 50,143 $ 25,295 $ 50,143 $ 25,295 |
Schedule of Deferred Revenue | Deferred revenue is comprised mainly of unearned revenue related to multi-year PCS contracts, services and product deferrals related to acceptance clauses. The following table summarizes the activity related to our deferred revenue (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Deferred revenue, beginning balance (1) $ 502,218 $ 448,644 $ 587,227 $ 498,740 Less: Revenue recognized from beginning balance (84,277 ) (97,995 ) (306,909 ) (306,350 ) Add: Deferral of revenue in current period, excluding amounts recognized during the period 111,071 179,206 248,694 337,465 Deferred revenue, ending balance $ 529,012 $ 529,855 $ 529,012 $ 529,855 ______________________ (1) The beginning balance of the nine months ended September 30, 2018 excludes $16.5 million that was reclassified to other current liabilities and other long-term liabilities at January 1, 2018 as a result of our adoption of ASC 606. |
Schedule of Other Income (Expense), Net | Other income (expense), net consists of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Interest income $ 13,446 $ 8,585 $ 38,451 $ 21,933 Interest expense — (673 ) — (2,040 ) Gain (loss) on investment in privately-held companies 4,277 — 5,427 (9,100 ) Other income (expense), net 1,446 707 1,435 (187 ) Total $ 19,169 $ 8,619 $ 45,313 $ 10,606 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments in privately-held companies [Abstract] | |
Equity Securities without Readily Determinable Fair Value | The following table summarizes the activity related to our investments in privately-held companies held as of September 30, 2019 and December 31, 2018 (in thousands): September 30, 2019 December 31, 2018 Cost of investment $ 18,000 $ 44,136 Cumulative impairment (15,000 ) (15,000 ) Cumulative upward adjustment 1,150 1,200 Carrying amount of investment $ 4,150 $ 30,336 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information | The following table summarizes the supplemental balance sheet information related to our operating leases as of September 30, 2019 (in thousands). Financial Statement Classification September 30, 2019 Right-of-use assets: Operating lease right-of-use assets Operating lease right-of-use assets $ 91,903 Lease liabilities: Operating lease liabilities, current Other current liabilities 15,545 Operating lease liabilities, non-current Operating lease liabilities, non-current 87,099 Total operating lease liabilities $ 102,644 |
Lease Costs | September 30, 2019 Weighted-average remaining lease term — operating leases 6.0 years Weighted-average discount rate — operating leases 5.1% The following table summarizes our lease costs for the three and nine months ended September 30, 2019 (in thousands). Financial Statement Classification Three Months Ended Nine Months Ended Operating lease costs: Fixed lease costs Operating expenses $ 5,800 $ 16,898 Variable lease costs Operating expenses 1,534 4,529 Total operating lease costs $ 7,334 $ 21,427 |
Lease Maturities | The following table shows our undiscounted future fixed payment obligations under our recognized operating leases and a reconciliation to the operating lease liabilities as of September 30, 2019 (in thousands). September 30, 2019 Remainder of 2019 $ 4,932 2020 20,510 2021 21,271 2022 21,470 2023 17,694 2024 and thereafter 36,008 Total future fixed operating lease payments 121,885 Less: Imputed interest (19,241 ) Total operating lease liabilities $ 102,644 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Shares Repurchased | A summary of the stock repurchase activity under the Repurchase Program for the three and nine months ended September 30, 2019 is as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Aggregate purchase price $ 114,609 $ 214,617 Shares repurchased 512 919 Average price paid per share $ 223.99 $ 233.72 |
Schedule of Option Activity | The following table summarizes the option activity under our stock plans and related information (in thousands, except years and per share amounts): Options Outstanding Number of Outstanding Options Weighted- Weighted- Aggregate Balance—December 31, 2018 5,899 $ 37.09 5.2 $ 1,027,741 Options granted 76 226.53 Options exercised (1,164 ) 29.37 Options canceled (64 ) 37.08 Balance—September 30, 2019 4,747 $ 42.02 4.6 $ 935,350 Vested and exercisable—September 30, 2019 2,700 $ 27.53 4.1 $ 570,690 |
Schedule of Restricted Stock Units Activity | A summary of the RSU activity under our 2014 equity incentive plan (“2014 Plan”) and related information are presented below (in thousands, except years and per share amounts): Number of Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Unvested balance—December 31, 2018 1,308 $ 150.60 1.5 $ 275,638 RSUs granted 325 245.29 RSUs vested (386 ) 121.02 RSUs forfeited/canceled (64 ) 179.78 Unvested balance—September 30, 2019 1,183 $ 184.64 1.6 $ 282,612 |
Schedule of Shares Available for Grant | The following table presents the stock activity and the total number of shares available for grant under the 2014 Plan as of September 30, 2019 (in thousands): Number of Shares Balance—December 31, 2018 15,386 Options granted (76 ) RSUs granted (325 ) Options canceled 64 RSUs forfeited 64 Shares traded for taxes 29 Balance—September 30, 2019 15,142 |
Schedule of Stock-Based Compensation Expense | Total stock-based compensation expense related to options, restricted stock units, restricted stock, and employee stock purchase rights granted were allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Cost of revenue $ 1,258 $ 1,268 $ 3,384 $ 3,706 Research and development 13,472 12,010 39,171 34,700 Sales and marketing 7,832 6,537 21,463 18,771 General and administrative 3,695 3,439 10,827 9,406 Total stock-based compensation $ 26,257 $ 23,254 $ 74,845 $ 66,583 |
Schedule of Unrecognized Stock-Based Compensation Expense | As of September 30, 2019 , unrecognized stock-based compensation expenses by award type and their expected weighted-average recognition periods are summarized in the following table (in thousands, except years). September 30, 2019 Stock Option RSU ESPP Restricted Stock Unrecognized stock-based compensation expense $ 48,448 $ 194,942 $ 12,619 $ 4,298 Weighted-average amortization period 3.5 years 3.3 years 1.3 years 3.0 years |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Available to Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share Available to Common Stock | The following table sets forth the computation of our basic and diluted net income (loss) per share available to common stock (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Basic: Net income $ 208,895 $ 168,524 $ 599,175 $ 157,793 Less: undistributed earnings allocated to participating securities (96 ) (85 ) (314 ) (87 ) Net income available to common stockholders, basic $ 208,799 $ 168,439 $ 598,861 $ 157,706 Diluted: Net income attributable to common stockholders, basic $ 208,799 $ 168,439 $ 598,861 $ 157,706 Add: undistributed earnings allocated to participating securities 5 6 19 7 Net income attributable to common stockholders, diluted $ 208,804 $ 168,445 $ 598,880 $ 157,713 Denominator: Basic: Weighted-average shares used in computing net income per share available to common stockholders, basic 76,426 75,011 76,301 74,506 Diluted: Weighted-average shares used in computing net income per share available to common stockholders, basic 76,426 75,011 76,301 74,506 Add weighted-average effect of dilutive securities: Stock options and RSUs 4,308 5,967 4,784 6,298 Employee stock purchase plan 19 40 19 40 Weighted-average shares used in computing net income per share available to common stockholders, diluted 80,753 81,018 81,104 80,844 Net income per share attributable to common stockholders: Basic $ 2.73 $ 2.25 $ 7.85 $ 2.12 Diluted $ 2.59 $ 2.08 $ 7.38 $ 1.95 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net income (loss) per share available to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock options and RSUs to purchase common stock 277 82 211 87 Employee stock purchase plan 41 98 59 59 Total 318 180 270 146 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands, except percentages) Income before income taxes $ 247,775 $ 189,389 $ 675,098 $ 90,311 Provision for (benefit from) income taxes 38,880 20,865 $ 75,923 $ (67,482 ) Effective tax rate 15.7 % 11.0 % 11.2 % (74.7 )% |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Long Lived Assets, by Location | The following table represents revenue based on the customer’s location, as determined by the customer’s shipping address (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Americas $ 532,318 $ 406,666 $ 1,418,325 $ 1,099,624 Europe, Middle East and Africa 75,439 92,911 298,768 316,608 Asia-Pacific 46,658 63,732 141,067 139,411 Total revenue $ 654,415 $ 563,309 $ 1,858,160 $ 1,555,643 Long-lived assets, excluding intercompany receivables, investments in subsidiaries, privately-held equity investments and deferred tax assets, net by location are summarized as follows (in thousands): September 30, 2019 December 31, 2018 United States $ 34,225 $ 69,238 International 5,963 6,117 Total $ 40,188 $ 75,355 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Impact of the Adoption of ASC 842 (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | $ 40,188 | $ 42,549 | $ 75,355 |
Operating lease right-of-use assets | 91,903 | 93,207 | 0 |
Deferred tax assets | 110,630 | 125,327 | 126,492 |
Other current liabilities | 49,275 | 41,056 | 30,907 |
Operating lease liabilities, non-current | 87,099 | 88,230 | 0 |
Finance lease liabilities, non-current | 0 | 0 | 35,431 |
Other long-term liabilities | 30,627 | 24,437 | 31,851 |
Retained earnings | $ 1,579,063 | 1,194,505 | $ 1,190,803 |
Adjustments for the Adoption of ASC 842 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Property and equipment, net | (32,806) | ||
Operating lease right-of-use assets | 93,207 | ||
Deferred tax assets | (1,165) | ||
Operating lease liabilities, non-current | 88,230 | ||
Finance lease liabilities, non-current | (35,431) | ||
Other long-term liabilities | (7,414) | ||
Retained earnings | 3,702 | ||
Build-To-Suit Lease | Adjustments for the Adoption of ASC 842 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current liabilities | (2,242) | ||
Operating Lease | Adjustments for the Adoption of ASC 842 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current liabilities | $ 12,391 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($)businessshares | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |||
Goodwill | $ 54,855 | $ 53,684 | |
Mojo Networks, Inc and Metamako Holdings PTY LTD Acquisitions | |||
Business Acquisition [Line Items] | |||
Total consideration transferred | 118,700 | ||
Cash transferred to acquire businesses | 103,100 | ||
Stock issued to acquire businesses, fair value | $ 15,600 | ||
Common stock issued (shares) | shares | 58,072 | ||
Number of businesses acquired | business | 2 | ||
Goodwill | $ 54,855 |
Business Combinations - Schedul
Business Combinations - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 54,855 | $ 53,684 |
Mojo Networks, Inc and Metamako Holdings PTY LTD Acquisitions | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 4,953 | |
Other tangible assets | 23,872 | |
Liabilities | (28,707) | |
Intangible assets | 63,720 | |
Goodwill | 54,855 | |
Net assets acquired | $ 118,693 |
Business Combinations - Sched_2
Business Combinations - Schedule of Intangible Assets Acquired (Details) - Mojo Networks, Inc and Metamako Holdings PTY LTD Acquisitions $ in Thousands | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquisition Date Fair Value | $ 63,720 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquisition Date Fair Value | $ 52,510 |
Estimated Useful Life | 5 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquisition Date Fair Value | $ 7,080 |
Estimated Useful Life | 7 years |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquisition Date Fair Value | $ 2,470 |
Estimated Useful Life | 3 years |
Others | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquisition Date Fair Value | $ 1,660 |
Estimated Useful Life | 1 year |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Financial Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, amortized cost | $ 647,064 | |
Cash equivalents, fair value | 647,064 | $ 322,080 |
Marketable securities, amortized cost | 1,347,387 | 1,307,771 |
Marketable securities, unrealized gains | 4,463 | 622 |
Marketable securities, unrealized losses | (75) | (2,196) |
Marketable securities, fair value | 1,351,775 | 1,306,197 |
Other assets, amortized cost | 4,226 | 4,214 |
Other assets, fair value | 4,226 | 4,214 |
Financial assets, amortized costs | 1,998,677 | 1,634,065 |
Financial assets, fair value | 2,003,065 | 1,632,491 |
Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, fair value | 647,064 | 322,080 |
Marketable securities, fair value | 369,040 | 308,778 |
Other assets, fair value | 4,226 | 4,214 |
Financial assets, fair value | 1,020,330 | 635,072 |
Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 982,735 | 997,419 |
Other assets, fair value | 0 | 0 |
Financial assets, fair value | 982,735 | 997,419 |
Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Other assets, fair value | 0 | 0 |
Financial assets, fair value | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, amortized cost | 322,080 | |
Money market funds | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, fair value | 0 | 0 |
Money market funds | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents, fair value | 0 | 0 |
Agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, amortized cost | 262,534 | 273,993 |
Marketable securities, unrealized gains | 721 | 240 |
Marketable securities, unrealized losses | (3) | (511) |
Marketable securities, fair value | 263,252 | 273,722 |
Agency securities | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Agency securities | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 263,252 | 273,722 |
Agency securities | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
U.S. government notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, amortized cost | 368,410 | 308,946 |
Marketable securities, unrealized gains | 633 | 118 |
Marketable securities, unrealized losses | (3) | (286) |
Marketable securities, fair value | 369,040 | 308,778 |
U.S. government notes | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 369,040 | 308,778 |
U.S. government notes | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
U.S. government notes | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, amortized cost | 661,704 | 660,353 |
Marketable securities, unrealized gains | 3,109 | 264 |
Marketable securities, unrealized losses | (69) | (1,399) |
Marketable securities, fair value | 664,744 | 659,218 |
Corporate bonds | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Corporate bonds | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 664,744 | 659,218 |
Corporate bonds | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, amortized cost | 51,739 | 59,479 |
Marketable securities, unrealized gains | 0 | 0 |
Marketable securities, unrealized losses | 0 | 0 |
Marketable securities, fair value | 51,739 | 59,479 |
Commercial paper | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Commercial paper | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 51,739 | 59,479 |
Commercial paper | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Certificates of deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, amortized cost | 3,000 | 5,000 |
Marketable securities, unrealized gains | 0 | 0 |
Marketable securities, unrealized losses | 0 | 0 |
Marketable securities, fair value | 3,000 | 5,000 |
Certificates of deposits | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 0 | 0 |
Certificates of deposits | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | 3,000 | 5,000 |
Certificates of deposits | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities, fair value | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Realized losses on other-than-temporary securities | $ 0 | $ 0 | $ 0 | $ 0 |
Marketable securities in a continuous unrealized loss position | $ 0 | $ 0 | $ 0 | $ 0 |
Marketable securities, maximum maturity period | 24 months | 24 months | ||
Marketable securities, weighted average remaining duration | 8 months 12 days |
Fair Value Measurements - Inves
Fair Value Measurements - Investment by Maturity Dates (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Due in 1 year or less | $ 936,777 | |
Due in 1 year through 2 years | 414,998 | |
Total marketable securities | $ 1,351,775 | $ 1,306,197 |
Financial Statements Details -
Financial Statements Details - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | ||
Balance Sheet Components [Abstract] | ||||||
Cash and cash equivalents | $ 1,095,265 | $ 649,950 | $ 524,687 | |||
Restricted cash included in other assets | 4,226 | 4,210 | ||||
Total cash, cash equivalents and restricted cash | 1,099,491 | [1] | $ 654,164 | 528,897 | [1] | $ 864,697 |
Restricted cash, pledged as collateral | $ 4,000 | $ 4,000 | ||||
[1] | See Note 4 of the accompanying notes for a reconciliation of the ending balance of cash, cash equivalents and restricted cash as shown in this condensed consolidated statements of cash flows. |
Financial Statements Details _2
Financial Statements Details - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Components [Abstract] | ||
Accounts receivable | $ 453,963 | $ 340,897 |
Allowance for doubtful accounts | (852) | (507) |
Product sales rebate and returns reserve | (5,859) | (8,613) |
Accounts receivable, net | $ 447,252 | $ 331,777 |
Financial Statements Details _3
Financial Statements Details - Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 120,236 | $ 76,795 |
Finished goods | 119,566 | 187,762 |
Total inventories | $ 239,802 | $ 264,557 |
Financial Statements Details _4
Financial Statements Details - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Balance Sheet Components [Abstract] | ||
Prepaid income taxes | $ 25,643 | $ 38,636 |
Inventory deposit | 15,090 | 14,639 |
Other current assets | 52,800 | 95,730 |
Other prepaid expenses and deposits | 12,793 | 13,316 |
Total prepaid expenses and other current assets | $ 106,326 | $ 162,321 |
Financial Statements Details _5
Financial Statements Details - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 132,851 | $ 132,851 | $ 165,367 | |||
Less: accumulated depreciation | (92,663) | (92,663) | (90,012) | |||
Property and equipment, net | 40,188 | 40,188 | $ 42,549 | 75,355 | ||
Depreciation | 4,800 | $ 5,400 | 14,300 | $ 16,000 | ||
Equipment and machinery | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 62,233 | 62,233 | 55,912 | |||
Computer hardware and software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 35,409 | 35,409 | 30,566 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 31,335 | 31,335 | 36,447 | |||
Furniture and fixtures | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 3,734 | 3,734 | 3,697 | |||
Building | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 0 | 0 | 35,154 | |||
Construction-in-process | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 140 | $ 140 | $ 3,591 |
Financial Statements Details _6
Financial Statements Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Components [Abstract] | ||||
Accrued payroll related costs | $ 69,522 | $ 70,755 | ||
Accrued manufacturing costs | 25,407 | 31,336 | ||
Accrued product development costs | 17,534 | 6,988 | ||
Accrued professional fees | 7,335 | 5,678 | ||
Accrued warranty costs | 5,408 | 5,362 | $ 10,115 | $ 7,415 |
Other | 3,724 | 3,135 | ||
Total accrued liabilities | $ 128,930 | $ 123,254 |
Financial Statements Details _7
Financial Statements Details - Warranty Accrual (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Warranty [Roll Forward] | ||
Warranty accrual, beginning of period | $ 5,362 | $ 7,415 |
Liabilities accrued for warranties issued during the period | 3,887 | 6,898 |
Warranty costs incurred during the period | (3,841) | (4,198) |
Warranty accrual, end of period | $ 5,408 | $ 10,115 |
Financial Statements Details _8
Financial Statements Details - Contract Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Change in Contract with Customer, Asset [Roll Forward] | ||||
Contract assets, beginning balance | $ 1,668 | $ 6,959 | $ 6,341 | $ 0 |
Contract assets, ending balance | 14,482 | 9,417 | 14,482 | 9,417 |
Change in Contract with Customer, Liability [Roll Forward] | ||||
Contract liabilities, beginning balance | 42,026 | 21,842 | 32,595 | 16,521 |
Less: Revenue recognized from beginning balance | (3,700) | (2,157) | (10,134) | (6,107) |
Less: Beginning balance reclassified to deferred revenue | (1,689) | (970) | (967) | (521) |
Add: Contract liabilities recognized | 13,506 | 6,580 | 28,649 | 15,402 |
Contract liabilities, ending balance | 50,143 | $ 25,295 | 50,143 | $ 25,295 |
Other Current Liabilities | ||||
Change in Contract with Customer, Liability [Roll Forward] | ||||
Contract liabilities, beginning balance | 13,500 | |||
Contract liabilities, ending balance | $ 19,600 | $ 19,600 |
Financial Statements Details _9
Financial Statements Details - Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2018 | |
Movement in Deferred Revenue [Roll Forward] | |||||
Deferred revenue, beginning balance | $ 502,218 | $ 448,644 | $ 587,227 | $ 498,740 | |
Less: Revenue recognized from beginning balance | (84,277) | (97,995) | (306,909) | (306,350) | |
Add: Deferral of revenue in current period, excluding amounts recognized during the period | 111,071 | 179,206 | 248,694 | 337,465 | |
Deferred revenue, ending balance | 529,012 | 529,855 | 529,012 | 529,855 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||
Deferred revenue | $ (502,218) | $ (448,644) | $ (587,227) | $ (498,740) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||
Deferred revenue | $ 16,500 |
Financial Statements Details_10
Financial Statements Details - Performance Obligations (Details) $ in Millions | Sep. 30, 2019USD ($) |
Balance Sheet Components [Abstract] | |
Revenue, remaining performance obligation, amount | $ 610.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, percentage | 80.00% |
Performance obligation, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, percentage | 20.00% |
Performance obligation, period | 5 years |
Financial Statements Details_11
Financial Statements Details - Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Balance Sheet Components [Abstract] | ||||
Interest income | $ 13,446 | $ 8,585 | $ 38,451 | $ 21,933 |
Interest expense | 0 | (673) | 0 | (2,040) |
Gain (loss) on investment in privately-held companies | 4,277 | 0 | 5,427 | (9,100) |
Other income (expense), net | 1,446 | 707 | 1,435 | (187) |
Total other income (expense), net | $ 19,169 | $ 8,619 | $ 45,313 | $ 10,606 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Equity Securities without Readily Determinable Fair Value | |||||
Cost of investment | $ 18,000,000 | $ 18,000,000 | $ 44,136,000 | ||
Cumulative impairment | (15,000,000) | (15,000,000) | (15,000,000) | ||
Cumulative upward adjustment | 1,150,000 | 1,150,000 | 1,200,000 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Carrying amount of investment | 4,150,000 | 4,150,000 | $ 30,336,000 | ||
Equity Securities, Gain (Loss) | |||||
Realized gain (loss) | 4,300,000 | ||||
Unrealized gain (loss) | $ 0 | $ 0 | |||
Unrealized gain for upward adjustment | $ 1,200,000 | $ 1,200,000 | |||
Impairment loss | $ (10,300,000) |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2013 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee, Lease, Description [Line Items] | |||||
Lease term | 120 months | ||||
Cash paid for operating lease liabilities | $ 4.7 | $ 13.6 | |||
Operating lease rent expense | $ 3.1 | $ 8.9 | |||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease, renewal term | 3 months | 3 months | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease, renewal term | 10 years | 10 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 91,903 | $ 93,207 | $ 0 |
Operating lease liabilities, current | 15,545 | ||
Operating lease liabilities, non-current | 87,099 | $ 88,230 | $ 0 |
Total operating lease liabilities | $ 102,644 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Fixed lease costs | $ 5,800 | $ 16,898 |
Variable lease costs | 1,534 | 4,529 |
Total operating lease costs | $ 7,334 | $ 21,427 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Leases | |
Remainder of 2019 | $ 4,932 |
2020 | 20,510 |
2021 | 21,271 |
2022 | 21,470 |
2023 | 17,694 |
2024 and thereafter | 36,008 |
Total future fixed operating lease payments | 121,885 |
Imputed interest | (19,241) |
Total operating lease liabilities | $ 102,644 |
Leases - Weighted-average Remai
Leases - Weighted-average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term — operating leases | 6 years |
Weighted-average discount rate — operating leases | 5.10% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Long-term Purchase Commitment [Line Items] | ||
Non-cancellable purchase commitments | $ 222.4 | |
Deposits to purchase inventory | 17.8 | $ 17.4 |
Contract with manufacturers and suppliers | ||
Long-term Purchase Commitment [Line Items] | ||
Non-cancellable purchase commitments | $ 209.6 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Jan. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Apr. 01, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized amount for stock repurchases | $ 1,000,000,000 | |||
Remaining authorized repurchase amount | $ 785,400,000 | $ 785,400,000 | ||
2014 Employee Stock Purchase Plan | ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of additional shares authorized for issuance (in shares) | 756,679 | |||
Percent of shares outstanding to increase number of shares available for grant and issuance | 1.00% | |||
Maximum increase of number of shares available for issuance (in shares) | 2,500,000 | |||
Shares issued during period (in shares) | 51,600 | 97,343 | ||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 179.73 | $ 184.70 | ||
Common stock reserved for issuance (in shares) | 3,192,774 | 3,192,774 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate purchase price | $ 114,609 | $ 214,617 |
Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate purchase price | $ 114,609 | $ 214,617 |
Shares repurchased (in shares) | 512 | 919 |
Average price paid per share (in dollars per share) | $ 223.99 | $ 233.72 |
Stockholders' Equity - Option A
Stockholders' Equity - Option Activities (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Shares Underlying Outstanding Options | ||
Outstanding, beginning balance (in shares) | 5,899 | |
Options granted (in shares) | 76 | |
Options exercised (in shares) | (1,164) | |
Options canceled (in shares) | (64) | |
Outstanding, ending balance (in shares) | 4,747 | 5,899 |
Vested and exercisable (in shares) | 2,700 | |
Weighted- Average Exercise Price per Share | ||
Outstanding, beginning balance (in dollars per share) | $ 37.09 | |
Options granted (in dollars per share) | 226.53 | |
Options exercised (in dollars per share) | 29.37 | |
Options canceled (in dollars per share) | 37.08 | |
Outstanding, ending balance (in dollars per share) | 42.02 | $ 37.09 |
Vested and exercisable (in dollars per share) | $ 27.53 | |
Weighted- Average Remaining Contractual Term (Years) and Aggregate Intrinsic Value of Stock Options | ||
Weighted-average remaining contractual term of stock options outstanding | 4 years 7 months 6 days | 5 years 2 months 12 days |
Weighted-average remaining contractual term of stock options vested and exercisable | 4 years 1 month 6 days | |
Aggregate intrinsic value of stock options outstanding | $ 935,350 | $ 1,027,741 |
Aggregate intrinsic value of stock options outstanding, vested and exercisable | $ 570,690 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Unit (RSU) Activities (Details) - RSU - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Unvested beginning balance (in shares) | 1,308 | |
RSUs granted (in shares) | 325 | |
RSUs vested (in shares) | (386) | |
RSUs forfeited/canceled (in shares) | (64) | |
Unvested ending balance (in shares) | 1,183 | 1,308 |
Weighted- Average Grant Date Fair Value Per Share | ||
Unvested beginning balance (in dollars per share) | $ 150.60 | |
RSUs granted (in dollars per share) | 245.29 | |
RSUs vested (in dollars per share) | 121.02 | |
RSUs forfeited/canceled (in dollars per share) | 179.78 | |
Unvested ending balance (in dollars per share) | $ 184.64 | $ 150.60 |
Restricted Stock Unit Activities, Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Unvested, weighted average remaining contractual term (in years) | 1 year 7 months 6 days | 1 year 6 months |
Unvested, aggregate intrinsic value | $ 282,612 | $ 275,638 |
Stockholders' Equity - Shares A
Stockholders' Equity - Shares Available for Grant (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2019shares | |
Shares Available for Grant [Roll Forward] | |
Beginning balance (in shares) | 15,386 |
Options granted (in shares) | (76) |
Options canceled (in shares) | 64 |
Shares traded for taxes (in shares) | 29 |
Ending balance (in shares) | 15,142 |
RSU | |
Shares Available for Grant [Roll Forward] | |
RSUs granted (in shares) | (325) |
RSUs forfeited (in shares) | 64 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 26,257 | $ 23,254 | $ 74,845 | $ 66,583 |
Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | 48,448 | $ 48,448 | ||
Weighted-average amortization period | 3 years 6 months | |||
RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | 194,942 | $ 194,942 | ||
Weighted-average amortization period | 3 years 3 months 18 days | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | 12,619 | $ 12,619 | ||
Weighted-average amortization period | 1 year 3 months 18 days | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense | 4,298 | $ 4,298 | ||
Weighted-average amortization period | 3 years | |||
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 1,258 | 1,268 | $ 3,384 | 3,706 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 13,472 | 12,010 | 39,171 | 34,700 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 7,832 | 6,537 | 21,463 | 18,771 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 3,695 | $ 3,439 | $ 10,827 | $ 9,406 |
Net Income (Loss) Per Share A_3
Net Income (Loss) Per Share Available to Common Stock - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Calculation of Basic and Diluted Net Income Per Share, Numerator [Abstract] | ||||
Net income | $ 208,895 | $ 168,524 | $ 599,175 | $ 157,793 |
Less: undistributed earnings allocated to participating securities | (96) | (85) | (314) | (87) |
Net income attributable to common stockholders, basic | 208,799 | 168,439 | 598,861 | 157,706 |
Net income attributable to common stockholders, basic | 208,799 | 168,439 | 598,861 | 157,706 |
Add: undistributed earnings allocated to participating securities | 5 | 6 | 19 | 7 |
Net income attributable to common stockholders, diluted | $ 208,804 | $ 168,445 | $ 598,880 | $ 157,713 |
Calculation of Basic and Diluted Net Income Per Share, Denominator [Abstract] | ||||
Weighted-average shares used in computing net income per share available to common stockholders, basic (in shares) | 76,426 | 75,011 | 76,301 | 74,506 |
Add weighted-average effect of dilutive securities: | ||||
Stock options and RSUs (in shares) | 4,308 | 5,967 | 4,784 | 6,298 |
Employee stock purchase plan (in shares) | 19 | 40 | 19 | 40 |
Weighted-average shares used in computing net income per share available to common stockholders, diluted (in shares) | 80,753 | 81,018 | 81,104 | 80,844 |
Net income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 2.73 | $ 2.25 | $ 7.85 | $ 2.12 |
Diluted (in dollars per share) | $ 2.59 | $ 2.08 | $ 7.38 | $ 1.95 |
Net Income (Loss) Per Share A_4
Net Income (Loss) Per Share Available to Common Stock - Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share (in shares) | 318 | 180 | 270 | 146 |
Stock options and RSUs to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share (in shares) | 277 | 82 | 211 | 87 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from earnings per share (in shares) | 41 | 98 | 59 | 59 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 247,775 | $ 189,389 | $ 675,098 | $ 90,311 |
Provision for (benefit from) income taxes | $ 38,880 | $ 20,865 | $ 75,923 | $ (67,482) |
Effective tax rate | 15.70% | 11.00% | 11.20% | (74.70%) |
Legal settlement | $ 0 | $ 0 | $ 0 | $ 405,000 |
A discrete income tax expense | $ 9,800 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Number of reportable segments | segment | 1 | |||||
Revenue | $ 654,415 | $ 563,309 | $ 1,858,160 | $ 1,555,643 | ||
Long-lived assets | 40,188 | 40,188 | $ 42,549 | $ 75,355 | ||
Americas | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | 532,318 | 406,666 | 1,418,325 | 1,099,624 | ||
Europe, Middle East and Africa | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | 75,439 | 92,911 | 298,768 | 316,608 | ||
Asia-Pacific | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Revenue | 46,658 | $ 63,732 | 141,067 | $ 139,411 | ||
United States | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Long-lived assets | 34,225 | 34,225 | 69,238 | |||
International | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Long-lived assets | $ 5,963 | $ 5,963 | $ 6,117 |