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Revenue | Accounts Receivable | ||||||||||||||
Year Ended December 31, | December 31, | ||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | |||||||||||
Customer A | 16 | % | 12 | % | 15 | % | 36 | % | 30 | % |
• | Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of stand-alone purchase orders or purchase orders issued pursuant to the terms and conditions of a master sales agreement. It is our practice to identify an end customer prior to shipment to a reseller or distributor. |
• | Delivery or performance has occurred. We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We generally do not have significant obligations for future performance, rights of return or pricing credits associated with our product sales. In instances where substantive acceptance provisions are specified in the customer arrangement, revenue and the related cost of revenue is deferred until all acceptance criteria have been met. |
• | The sales price is fixed or determinable. We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. |
• | Collectability is reasonably assured. We assess probability of collectability on a customer-by-customer basis. Our customers and channel partners are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services. |
• | VSOE—We determine VSOE based on our historical pricing and discounting practices for the specific products and services when sold separately. In determining VSOE, we require that a substantial majority of the stand-alone selling prices fall within a reasonably narrow pricing range. |
• | TPE—When VSOE cannot be established for deliverables in multiple-element arrangements, we apply judgment with respect to whether we can establish a selling price based on TPE. TPE is determined based on competitor prices for interchangeable products or services when sold separately to similarly situated customers. However, as our products contain a significant element of proprietary technology and offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as we are unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, we are not able to obtain reliable evidence of TPE of selling price. |
• | BESP—When we are unable to establish selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service was sold regularly on a stand-alone basis. BESP is based on considering multiple factors including, but not limited to the sales channel (reseller, distributor or end customer), the geographies in which our products and services were sold (domestic or international) and size of the end customer. |
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December 31, 2016 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
Financial Assets: | |||||||||||||||
Money market funds | $ | 305,182 | $ | — | $ | — | $ | 305,182 | |||||||
Money market funds-restricted | 4,245 | — | — | 4,245 | |||||||||||
Commercial Paper | 5,962 | — | — | 5,962 | |||||||||||
U.S. government notes | 110,756 | — | — | 110,756 | |||||||||||
Corporate bonds | — | 183,192 | — | 183,192 | |||||||||||
Total financial assets | $ | 426,145 | $ | 183,192 | $ | — | $ | 609,337 |
December 31, 2015 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
Financial Assets: | |||||||||||||||
Money market funds | $ | 104,156 | $ | — | $ | — | $ | 104,156 | |||||||
U.S. government notes | 4,041 | — | — | 4,041 | |||||||||||
Total financial assets | $ | 108,197 | $ | — | $ | — | $ | 108,197 |
|
December 31, 2016 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Commercial paper | $ | 5,962 | $ | — | $ | — | $ | 5,962 | |||||||
U.S. government notes | 110,945 | 5 | (194 | ) | 110,756 | ||||||||||
Corporate bonds | 183,455 | 109 | (372 | ) | 183,192 | ||||||||||
Total marketable securities | $ | 300,362 | $ | 114 | $ | (566 | ) | $ | 299,910 |
December 31, 2016 | ||||
Due in 1 year or less | $ | 140,879 | ||
Due in 1 year through 2 years | 159,031 | |||
Total marketable securities | $ | 299,910 |
December 31, | |||||||
2016 | 2015 | ||||||
Accounts receivable | $ | 254,640 | $ | 145,792 | |||
Allowance for doubtful accounts | (204 | ) | (963 | ) | |||
Product sales return reserve | (1,317 | ) | (566 | ) | |||
Accounts receivable, net | $ | 253,119 | $ | 144,263 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Balance at the beginning of year | $ | 963 | $ | 1,063 | $ | 810 | |||||
Charged (credited) to expense | (292 | ) | 335 | 860 | |||||||
Deductions (write-offs) | (467 | ) | (435 | ) | (607 | ) | |||||
Balance at the end of year | $ | 204 | $ | 963 | $ | 1,063 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Balance at the beginning of year | $ | 566 | $ | 2,031 | $ | 1,529 | |||||
Charged against revenue | 3,791 | 2,798 | 4,063 | ||||||||
Deductions | (4,371 | ) | (2,283 | ) | (2,943 | ) | |||||
Change in estimate | 1,331 | (1,980 | ) | (618 | ) | ||||||
Balance at the end of year | $ | 1,317 | $ | 566 | $ | 2,031 |
December 31, | |||||||
2016 | 2015 | ||||||
Raw materials | $ | 99,190 | $ | 29,831 | |||
Finished goods | 137,300 | 62,298 | |||||
Total inventories | $ | 236,490 | $ | 92,129 |
December 31, | |||||||
2016 | 2015 | ||||||
Inventory deposit | $ | 60,315 | $ | — | |||
Prepaid income taxes | 17,383 | 14,150 | |||||
Other current assets | 79,140 | 29,270 | |||||
Other prepaid expenses and deposits | 11,846 | 7,190 | |||||
Total prepaid expenses and other current assets | $ | 168,684 | $ | 50,610 |
December 31, | |||||||
2016 | 2015 | ||||||
Equipment and machinery | $ | 40,721 | $ | 29,101 | |||
Computer hardware and software | 17,420 | 12,630 | |||||
Furniture and fixtures | 2,879 | 2,380 | |||||
Leasehold improvements | 29,498 | 24,372 | |||||
Building | 35,154 | 35,154 | |||||
Construction-in-process | 421 | 6,408 | |||||
Property and equipment, gross | 126,093 | 110,045 | |||||
Less: accumulated depreciation | (49,132 | ) | (30,339 | ) | |||
Property and equipment, net | $ | 76,961 | $ | 79,706 |
December 31, | |||||||
2016 | 2015 | ||||||
Accrued payroll related costs | $ | 52,854 | $ | 39,479 | |||
Accrued warranty costs | 6,744 | 4,718 | |||||
Accrued manufacturing costs | 14,824 | 6,397 | |||||
Accrued professional fees | 6,829 | 4,875 | |||||
Accrued taxes | 1,098 | 1,347 | |||||
Other | 8,602 | 4,155 | |||||
Total accrued liabilities | $ | 90,951 | $ | 60,971 |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Warranty accrual, beginning of year | $ | 4,718 | $ | 3,204 | |||
Liabilities accrued for warranties issued during the year | $ | 5,421 | 3,973 | ||||
Warranty costs incurred during the year | (3,395 | ) | (2,459 | ) | |||
Warranty accrual, end of year | $ | 6,744 | $ | 4,718 |
|
|
Years Ending December 31, | |||
2017 | $ | 7,867 | |
2018 | 7,373 | ||
2019 | 6,889 | ||
2020 | 6,552 | ||
2021 | 5,704 | ||
Thereafter | 15,746 | ||
Total minimum future lease payments | $ | 50,131 |
Years Ending December 31, | |||
2017 | $ | 5,933 | |
2018 | 6,113 | ||
2019 | 6,293 | ||
2020 | 6,477 | ||
2021 | 6,674 | ||
Thereafter | 12,136 | ||
Total payments | 43,626 | ||
Less: interest and land lease expense | (26,045 | ) | |
Total payments under facility financing obligations | 17,581 | ||
Property reverting to landlord | 23,630 | ||
Present value of obligation | 41,211 | ||
Less current portion | (1,618 | ) | |
Long-term portion of obligation | $ | 39,593 |
|
Options Outstanding | |||||||||||||
Number of Shares Underlying Outstanding Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (Years) of Stock Options | Aggregate Intrinsic Value of Stock Options Outstanding | ||||||||||
Balance—December 31, 2015 | 11,630 | $ | 24.49 | 7.6 | $ | 620,802 | |||||||
Authorized | |||||||||||||
Options granted | 441 | 56.95 | |||||||||||
Options exercised | (2,200 | ) | 11.32 | ||||||||||
Options canceled | (362 | ) | 31.22 | ||||||||||
Balance—December 31, 2016 | 9,509 | $ | 28.79 | 6.9 | $ | 646,394 | |||||||
Vested and exercisable—December 31, 2016 | 3,642 | $ | 15.29 | 6.1 | $ | 296,738 | |||||||
Vested and expected to vest—December 31, 2016 | 9,050 | $ | 28.23 | 6.9 | $ | 620,296 |
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Unvested balance—December 31, 2015 | 893 | $ | 70.14 | 1.9 | $ | 69,509 | ||||||
RSUs granted | 816 | 76.54 | ||||||||||
RSUs vested | (244 | ) | 69.32 | |||||||||
RSUs forfeited/canceled | (90 | ) | 67.97 | |||||||||
Unvested balance—December 31, 2016 | 1,375 | $ | 74.23 | 1.8 | $ | 133,081 | ||||||
RSUs vested and expected to vest—December 31, 2016 | 1,288 | $ | 74.14 | 1.7 | $ | 124,683 |
Number of Shares | |||
Balance—December 31, 2015 | 10,495 | ||
Authorized | 2,044 | ||
Options granted | (441 | ) | |
RSUs granted | (816 | ) | |
Options canceled | 362 | ||
Options repurchased | 5 | ||
RSUs forfeited | 90 | ||
Shares traded for taxes | 15 | ||
Balance—December 31, 2016 | 11,754 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Cost of revenue | $ | 3,620 | $ | 3,048 | $ | 1,535 | |||||
Research and development | 31,892 | 25,515 | 14,986 | ||||||||
Sales and marketing | 15,666 | 11,454 | 7,643 | ||||||||
General and administrative | 7,854 | 5,286 | 3,455 | ||||||||
Total stock-based compensation | $ | 59,032 | $ | 45,303 | $ | 27,619 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Expected term (in years) | 6.7 | 6.2 | 7.6 | |||||
Risk-free interest rate | 1.5 | % | 1.6 | % | 2.2 | % | ||
Expected volatility | 38.9 | % | 42.9 | % | 47.7 | % | ||
Dividend rate | — | % | — | % | — | % |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Expected term (in years) | 1.2 | 1.4 | 1.4 | |||||
Risk-free interest rate | 0.6 | % | 0.3 | % | 0.3 | % | ||
Expected volatility | 31.8 | % | 34.8 | % | 36.3 | % | ||
Dividend rate | — | % | — | — |
|
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Domestic | $ | 196,202 | $ | 129,240 | $ | 120,838 | |||||
Foreign | 46,023 | 16,769 | 670 | ||||||||
Income before provision for income taxes | $ | 242,225 | $ | 146,009 | $ | 121,508 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Current provision for income taxes: | |||||||||||
Federal | $ | 67,253 | $ | 43,706 | $ | 34,314 | |||||
State | 10,529 | 5,500 | 4,493 | ||||||||
Foreign | 2,016 | 1,588 | 3,306 | ||||||||
Total current | 79,798 | 50,794 | 42,113 | ||||||||
Deferred tax benefit: | |||||||||||
Federal | (18,579 | ) | (23,896 | ) | (7,105 | ) | |||||
State | (3,564 | ) | (2,300 | ) | 230 | ||||||
Foreign | 381 | 309 | (580 | ) | |||||||
Total deferred | (21,762 | ) | (25,887 | ) | (7,455 | ) | |||||
Total provision for income taxes | $ | 58,036 | $ | 24,907 | $ | 34,658 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
U.S. federal statutory income tax | 35.00 | % | 35.00 | % | 35.00 | % | ||
State tax, net of federal benefit | (0.03 | ) | (1.35 | ) | 1.19 | |||
Foreign tax differential | (3.24 | ) | (2.16 | ) | 0.68 | |||
Tax credits | (4.24 | ) | (6.72 | ) | (5.26 | ) | ||
Change in valuation allowance | 1.71 | 2.84 | 1.92 | |||||
Permanent items | (1.02 | ) | (1.32 | ) | (0.86 | ) | ||
Uncertain tax positions and associated interest | (1.46 | ) | (3.95 | ) | 0.37 | |||
Stock-based compensation | (2.81 | ) | (5.29 | ) | (4.01 | ) | ||
Other, net | 0.05 | 0.01 | (0.51 | ) | ||||
Total provision for income taxes | 23.96 | % | 17.06 | % | 28.52 | % |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets: | |||||||
Property and equipment | $ | 473 | $ | 241 | |||
Stock-based compensation | 23,071 | 15,859 | |||||
Reserves and accruals not currently deductible | 49,436 | 33,686 | |||||
Net operating losses | 1,140 | 221 | |||||
Tax credits | 15,015 | 12,465 | |||||
State taxes | — | 9 | |||||
Other | 194 | 380 | |||||
Gross deferred tax assets | 89,329 | 62,861 | |||||
Valuation allowance | (16,894 | ) | (12,655 | ) | |||
Total deferred tax assets | 72,435 | 50,206 | |||||
Deferred tax liabilities: | |||||||
Property and equipment | (198 | ) | (1,517 | ) | |||
Accrued liabilities | (2,555 | ) | (728 | ) | |||
Other | (3 | ) | (1 | ) | |||
Total deferred tax liabilities | (2,756 | ) | (2,246 | ) | |||
Net deferred tax assets | $ | 69,679 | $ | 47,960 |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets, non-current | 70,960 | 48,429 | |||||
Deferred tax liabilities, non-current | (1,281 | ) | (469 | ) | |||
Total net deferred tax assets | $ | 69,679 | $47,960 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Gross unrecognized tax benefits—beginning balance | $ | 22,239 | $ | 21,322 | $ | 16,973 | |||||
Increases related to tax positions taken in a prior year | 46 | 346 | 425 | ||||||||
Increases related to tax positions taken during current year | 11,359 | 7,385 | 4,355 | ||||||||
Decreases related to tax positions taken in a prior year | (426 | ) | (228 | ) | (431 | ) | |||||
Decreases related to settlements with taxing authorities | (432 | ) | — | — | |||||||
Decreases related to lapse of statute of limitations | (5,871 | ) | (6,586 | ) | — | ||||||
Gross unrecognized tax benefits—ending balance | $ | 26,915 | $ | 22,239 | $ | 21,322 |
|
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | $ | 862,352 | $ | 634,413 | $ | 456,691 | |||||
Other Americas | 12,388 | 12,506 | 8,853 | ||||||||
Europe, Middle East and Africa | 168,789 | 128,400 | 74,555 | ||||||||
Asia Pacific | 85,638 | 62,272 | 44,007 | ||||||||
Total revenue | $ | 1,129,167 | $ | 837,591 | $ | 584,106 |
December 31, | |||||||
2016 | 2015 | ||||||
United States | $ | 69,352 | $ | 70,719 | |||
International | 7,609 | 8,987 | |||||
Total | $ | 76,961 | $ | 79,706 |
|
|
Three Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Product | $ | 289,008 | $ | 254,238 | $ | 235,616 | $ | 212,475 | $ | 217,325 | $ | 193,339 | $ | 174,072 | $ | 160,141 | ||||||||||||||||
Service | 38,961 | 36,023 | 33,125 | 29,721 | 28,121 | 24,209 | 21,480 | 18,904 | ||||||||||||||||||||||||
Total revenue | 327,969 | 290,261 | 268,741 | 242,196 | 245,446 | 217,548 | 195,552 | 179,045 | ||||||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||||||||||
Product | 108,057 | 94,777 | 88,021 | 78,913 | 81,142 | 67,990 | 60,014 | 54,439 | ||||||||||||||||||||||||
Service | 9,757 | 9,064 | 9,269 | 8,193 | 8,136 | 7,810 | 7,648 | 6,852 | ||||||||||||||||||||||||
Total cost of revenue | 117,814 | 103,841 | 97,290 | 87,106 | 89,278 | 75,800 | 67,662 | 61,291 | ||||||||||||||||||||||||
Gross profit | 210,155 | 186,420 | 171,451 | 155,090 | 156,168 | 141,748 | 127,890 | 117,754 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 71,398 | 70,648 | 69,020 | 62,515 | 57,413 | 58,748 | 49,947 | 43,340 | ||||||||||||||||||||||||
Sales and marketing | 38,321 | 33,216 | 31,744 | 27,606 | 31,308 | 26,508 | 26,681 | 24,587 | ||||||||||||||||||||||||
General and administrative | 22,941 | 19,535 | 17,529 | 15,234 | 18,050 | 25,195 | 18,403 | 14,072 | ||||||||||||||||||||||||
Total operating expenses | 132,660 | 123,399 | 118,293 | 105,355 | 106,771 | 110,451 | 95,031 | 81,999 | ||||||||||||||||||||||||
Income from operations | 77,495 | 63,021 | 53,158 | 49,735 | 49,397 | 31,297 | 32,859 | 35,755 | ||||||||||||||||||||||||
Other income (expense), net: | ||||||||||||||||||||||||||||||||
Interest expense | (918 | ) | (735 | ) | (732 | ) | (751 | ) | (746 | ) | (753 | ) | (832 | ) | (821 | ) | ||||||||||||||||
Other income (expense), net | 560 | 639 | 416 | 337 | (109 | ) | 13 | 417 | (468 | ) | ||||||||||||||||||||||
Total other income (expense), net | (358 | ) | (96 | ) | (316 | ) | (414 | ) | (855 | ) | (740 | ) | (415 | ) | (1,289 | ) | ||||||||||||||||
Income before provision for income taxes | 77,137 | 62,925 | 52,842 | 49,321 | 48,542 | 30,557 | 32,444 | 34,466 | ||||||||||||||||||||||||
Provision for income taxes | 18,354 | 11,668 | 13,938 | 14,076 | 4,618 | 1,867 | 8,448 | 9,974 | ||||||||||||||||||||||||
Net income | $ | 58,783 | $ | 51,257 | $ | 38,904 | $ | 35,245 | $ | 43,924 | $ | 28,690 | $ | 23,996 | $ | 24,492 | ||||||||||||||||
Net income per share attributable to common stockholders: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.84 | $ | 0.74 | $ | 0.57 | $ | 0.52 | $ | 0.65 | $ | 0.42 | $ | 0.36 | $ | 0.37 | ||||||||||||||||
Diluted | $ | 0.79 | $ | 0.69 | $ | 0.53 | $ | 0.48 | $ | 0.60 | $ | 0.39 | $ | 0.33 | $ | 0.34 |
|
• | Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of stand-alone purchase orders or purchase orders issued pursuant to the terms and conditions of a master sales agreement. It is our practice to identify an end customer prior to shipment to a reseller or distributor. |
• | Delivery or performance has occurred. We use shipping documents or written evidence of customer acceptance, when applicable, to verify delivery or performance. We recognize product revenue upon transfer of title and risk of loss, which primarily is upon shipment to customers. We generally do not have significant obligations for future performance, rights of return or pricing credits associated with our product sales. In instances where substantive acceptance provisions are specified in the customer arrangement, revenue and the related cost of revenue is deferred until all acceptance criteria have been met. |
• | The sales price is fixed or determinable. We assess whether the sales price is fixed or determinable based on payment terms and whether the sales price is subject to refund or adjustment. |
• | Collectability is reasonably assured. We assess probability of collectability on a customer-by-customer basis. Our customers and channel partners are subjected to a credit review process that evaluates their financial condition and ability to pay for products and services. |
• | VSOE—We determine VSOE based on our historical pricing and discounting practices for the specific products and services when sold separately. In determining VSOE, we require that a substantial majority of the stand-alone selling prices fall within a reasonably narrow pricing range. |
• | TPE—When VSOE cannot be established for deliverables in multiple-element arrangements, we apply judgment with respect to whether we can establish a selling price based on TPE. TPE is determined based on competitor prices for interchangeable products or services when sold separately to similarly situated customers. However, as our products contain a significant element of proprietary technology and offer substantially different features and functionality, the comparable pricing of products with similar functionality typically cannot be obtained. Additionally, as we are unable to reliably determine what competitors products’ selling prices are on a stand-alone basis, we are not able to obtain reliable evidence of TPE of selling price. |
• | BESP—When we are unable to establish selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service was sold regularly on a stand-alone basis. BESP is based on considering multiple factors including, but not limited to the sales channel (reseller, distributor or end customer), the geographies in which our products and services were sold (domestic or international) and size of the end customer. |
|
Revenue | Accounts Receivable | ||||||||||||||
Year Ended December 31, | December 31, | ||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | |||||||||||
Customer A | 16 | % | 12 | % | 15 | % | 36 | % | 30 | % |
|
December 31, 2016 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
Financial Assets: | |||||||||||||||
Money market funds | $ | 305,182 | $ | — | $ | — | $ | 305,182 | |||||||
Money market funds-restricted | 4,245 | — | — | 4,245 | |||||||||||
Commercial Paper | 5,962 | — | — | 5,962 | |||||||||||
U.S. government notes | 110,756 | — | — | 110,756 | |||||||||||
Corporate bonds | — | 183,192 | — | 183,192 | |||||||||||
Total financial assets | $ | 426,145 | $ | 183,192 | $ | — | $ | 609,337 |
December 31, 2015 | |||||||||||||||
Level I | Level II | Level III | Total | ||||||||||||
Financial Assets: | |||||||||||||||
Money market funds | $ | 104,156 | $ | — | $ | — | $ | 104,156 | |||||||
U.S. government notes | 4,041 | — | — | 4,041 | |||||||||||
Total financial assets | $ | 108,197 | $ | — | $ | — | $ | 108,197 |
|
December 31, 2016 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Commercial paper | $ | 5,962 | $ | — | $ | — | $ | 5,962 | |||||||
U.S. government notes | 110,945 | 5 | (194 | ) | 110,756 | ||||||||||
Corporate bonds | 183,455 | 109 | (372 | ) | 183,192 | ||||||||||
Total marketable securities | $ | 300,362 | $ | 114 | $ | (566 | ) | $ | 299,910 |
December 31, 2016 | ||||
Due in 1 year or less | $ | 140,879 | ||
Due in 1 year through 2 years | 159,031 | |||
Total marketable securities | $ | 299,910 |
December 31, | |||||||
2016 | 2015 | ||||||
Accounts receivable | $ | 254,640 | $ | 145,792 | |||
Allowance for doubtful accounts | (204 | ) | (963 | ) | |||
Product sales return reserve | (1,317 | ) | (566 | ) | |||
Accounts receivable, net | $ | 253,119 | $ | 144,263 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Balance at the beginning of year | $ | 963 | $ | 1,063 | $ | 810 | |||||
Charged (credited) to expense | (292 | ) | 335 | 860 | |||||||
Deductions (write-offs) | (467 | ) | (435 | ) | (607 | ) | |||||
Balance at the end of year | $ | 204 | $ | 963 | $ | 1,063 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Balance at the beginning of year | $ | 566 | $ | 2,031 | $ | 1,529 | |||||
Charged against revenue | 3,791 | 2,798 | 4,063 | ||||||||
Deductions | (4,371 | ) | (2,283 | ) | (2,943 | ) | |||||
Change in estimate | 1,331 | (1,980 | ) | (618 | ) | ||||||
Balance at the end of year | $ | 1,317 | $ | 566 | $ | 2,031 |
December 31, | |||||||
2016 | 2015 | ||||||
Raw materials | $ | 99,190 | $ | 29,831 | |||
Finished goods | 137,300 | 62,298 | |||||
Total inventories | $ | 236,490 | $ | 92,129 |
December 31, | |||||||
2016 | 2015 | ||||||
Inventory deposit | $ | 60,315 | $ | — | |||
Prepaid income taxes | 17,383 | 14,150 | |||||
Other current assets | 79,140 | 29,270 | |||||
Other prepaid expenses and deposits | 11,846 | 7,190 | |||||
Total prepaid expenses and other current assets | $ | 168,684 | $ | 50,610 |
December 31, | |||||||
2016 | 2015 | ||||||
Equipment and machinery | $ | 40,721 | $ | 29,101 | |||
Computer hardware and software | 17,420 | 12,630 | |||||
Furniture and fixtures | 2,879 | 2,380 | |||||
Leasehold improvements | 29,498 | 24,372 | |||||
Building | 35,154 | 35,154 | |||||
Construction-in-process | 421 | 6,408 | |||||
Property and equipment, gross | 126,093 | 110,045 | |||||
Less: accumulated depreciation | (49,132 | ) | (30,339 | ) | |||
Property and equipment, net | $ | 76,961 | $ | 79,706 |
December 31, | |||||||
2016 | 2015 | ||||||
Accrued payroll related costs | $ | 52,854 | $ | 39,479 | |||
Accrued warranty costs | 6,744 | 4,718 | |||||
Accrued manufacturing costs | 14,824 | 6,397 | |||||
Accrued professional fees | 6,829 | 4,875 | |||||
Accrued taxes | 1,098 | 1,347 | |||||
Other | 8,602 | 4,155 | |||||
Total accrued liabilities | $ | 90,951 | $ | 60,971 |
Year Ended December 31, | |||||||
2016 | 2015 | ||||||
Warranty accrual, beginning of year | $ | 4,718 | $ | 3,204 | |||
Liabilities accrued for warranties issued during the year | $ | 5,421 | 3,973 | ||||
Warranty costs incurred during the year | (3,395 | ) | (2,459 | ) | |||
Warranty accrual, end of year | $ | 6,744 | $ | 4,718 |
|
Years Ending December 31, | |||
2017 | $ | 7,867 | |
2018 | 7,373 | ||
2019 | 6,889 | ||
2020 | 6,552 | ||
2021 | 5,704 | ||
Thereafter | 15,746 | ||
Total minimum future lease payments | $ | 50,131 |
Years Ending December 31, | |||
2017 | $ | 5,933 | |
2018 | 6,113 | ||
2019 | 6,293 | ||
2020 | 6,477 | ||
2021 | 6,674 | ||
Thereafter | 12,136 | ||
Total payments | 43,626 | ||
Less: interest and land lease expense | (26,045 | ) | |
Total payments under facility financing obligations | 17,581 | ||
Property reverting to landlord | 23,630 | ||
Present value of obligation | 41,211 | ||
Less current portion | (1,618 | ) | |
Long-term portion of obligation | $ | 39,593 |
|
Options Outstanding | |||||||||||||
Number of Shares Underlying Outstanding Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (Years) of Stock Options | Aggregate Intrinsic Value of Stock Options Outstanding | ||||||||||
Balance—December 31, 2015 | 11,630 | $ | 24.49 | 7.6 | $ | 620,802 | |||||||
Authorized | |||||||||||||
Options granted | 441 | 56.95 | |||||||||||
Options exercised | (2,200 | ) | 11.32 | ||||||||||
Options canceled | (362 | ) | 31.22 | ||||||||||
Balance—December 31, 2016 | 9,509 | $ | 28.79 | 6.9 | $ | 646,394 | |||||||
Vested and exercisable—December 31, 2016 | 3,642 | $ | 15.29 | 6.1 | $ | 296,738 | |||||||
Vested and expected to vest—December 31, 2016 | 9,050 | $ | 28.23 | 6.9 | $ | 620,296 |
Number of Shares | Weighted- Average Grant Date Fair Value Per Share | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||
Unvested balance—December 31, 2015 | 893 | $ | 70.14 | 1.9 | $ | 69,509 | ||||||
RSUs granted | 816 | 76.54 | ||||||||||
RSUs vested | (244 | ) | 69.32 | |||||||||
RSUs forfeited/canceled | (90 | ) | 67.97 | |||||||||
Unvested balance—December 31, 2016 | 1,375 | $ | 74.23 | 1.8 | $ | 133,081 | ||||||
RSUs vested and expected to vest—December 31, 2016 | 1,288 | $ | 74.14 | 1.7 | $ | 124,683 |
Number of Shares | |||
Balance—December 31, 2015 | 10,495 | ||
Authorized | 2,044 | ||
Options granted | (441 | ) | |
RSUs granted | (816 | ) | |
Options canceled | 362 | ||
Options repurchased | 5 | ||
RSUs forfeited | 90 | ||
Shares traded for taxes | 15 | ||
Balance—December 31, 2016 | 11,754 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Cost of revenue | $ | 3,620 | $ | 3,048 | $ | 1,535 | |||||
Research and development | 31,892 | 25,515 | 14,986 | ||||||||
Sales and marketing | 15,666 | 11,454 | 7,643 | ||||||||
General and administrative | 7,854 | 5,286 | 3,455 | ||||||||
Total stock-based compensation | $ | 59,032 | $ | 45,303 | $ | 27,619 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Expected term (in years) | 6.7 | 6.2 | 7.6 | |||||
Risk-free interest rate | 1.5 | % | 1.6 | % | 2.2 | % | ||
Expected volatility | 38.9 | % | 42.9 | % | 47.7 | % | ||
Dividend rate | — | % | — | % | — | % |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Expected term (in years) | 1.2 | 1.4 | 1.4 | |||||
Risk-free interest rate | 0.6 | % | 0.3 | % | 0.3 | % | ||
Expected volatility | 31.8 | % | 34.8 | % | 36.3 | % | ||
Dividend rate | — | % | — | — |
|
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Domestic | $ | 196,202 | $ | 129,240 | $ | 120,838 | |||||
Foreign | 46,023 | 16,769 | 670 | ||||||||
Income before provision for income taxes | $ | 242,225 | $ | 146,009 | $ | 121,508 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Current provision for income taxes: | |||||||||||
Federal | $ | 67,253 | $ | 43,706 | $ | 34,314 | |||||
State | 10,529 | 5,500 | 4,493 | ||||||||
Foreign | 2,016 | 1,588 | 3,306 | ||||||||
Total current | 79,798 | 50,794 | 42,113 | ||||||||
Deferred tax benefit: | |||||||||||
Federal | (18,579 | ) | (23,896 | ) | (7,105 | ) | |||||
State | (3,564 | ) | (2,300 | ) | 230 | ||||||
Foreign | 381 | 309 | (580 | ) | |||||||
Total deferred | (21,762 | ) | (25,887 | ) | (7,455 | ) | |||||
Total provision for income taxes | $ | 58,036 | $ | 24,907 | $ | 34,658 |
Year Ended December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
U.S. federal statutory income tax | 35.00 | % | 35.00 | % | 35.00 | % | ||
State tax, net of federal benefit | (0.03 | ) | (1.35 | ) | 1.19 | |||
Foreign tax differential | (3.24 | ) | (2.16 | ) | 0.68 | |||
Tax credits | (4.24 | ) | (6.72 | ) | (5.26 | ) | ||
Change in valuation allowance | 1.71 | 2.84 | 1.92 | |||||
Permanent items | (1.02 | ) | (1.32 | ) | (0.86 | ) | ||
Uncertain tax positions and associated interest | (1.46 | ) | (3.95 | ) | 0.37 | |||
Stock-based compensation | (2.81 | ) | (5.29 | ) | (4.01 | ) | ||
Other, net | 0.05 | 0.01 | (0.51 | ) | ||||
Total provision for income taxes | 23.96 | % | 17.06 | % | 28.52 | % |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets: | |||||||
Property and equipment | $ | 473 | $ | 241 | |||
Stock-based compensation | 23,071 | 15,859 | |||||
Reserves and accruals not currently deductible | 49,436 | 33,686 | |||||
Net operating losses | 1,140 | 221 | |||||
Tax credits | 15,015 | 12,465 | |||||
State taxes | — | 9 | |||||
Other | 194 | 380 | |||||
Gross deferred tax assets | 89,329 | 62,861 | |||||
Valuation allowance | (16,894 | ) | (12,655 | ) | |||
Total deferred tax assets | 72,435 | 50,206 | |||||
Deferred tax liabilities: | |||||||
Property and equipment | (198 | ) | (1,517 | ) | |||
Accrued liabilities | (2,555 | ) | (728 | ) | |||
Other | (3 | ) | (1 | ) | |||
Total deferred tax liabilities | (2,756 | ) | (2,246 | ) | |||
Net deferred tax assets | $ | 69,679 | $ | 47,960 |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets, non-current | 70,960 | 48,429 | |||||
Deferred tax liabilities, non-current | (1,281 | ) | (469 | ) | |||
Total net deferred tax assets | $ | 69,679 | $47,960 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Gross unrecognized tax benefits—beginning balance | $ | 22,239 | $ | 21,322 | $ | 16,973 | |||||
Increases related to tax positions taken in a prior year | 46 | 346 | 425 | ||||||||
Increases related to tax positions taken during current year | 11,359 | 7,385 | 4,355 | ||||||||
Decreases related to tax positions taken in a prior year | (426 | ) | (228 | ) | (431 | ) | |||||
Decreases related to settlements with taxing authorities | (432 | ) | — | — | |||||||
Decreases related to lapse of statute of limitations | (5,871 | ) | (6,586 | ) | — | ||||||
Gross unrecognized tax benefits—ending balance | $ | 26,915 | $ | 22,239 | $ | 21,322 |
|
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
United States | $ | 862,352 | $ | 634,413 | $ | 456,691 | |||||
Other Americas | 12,388 | 12,506 | 8,853 | ||||||||
Europe, Middle East and Africa | 168,789 | 128,400 | 74,555 | ||||||||
Asia Pacific | 85,638 | 62,272 | 44,007 | ||||||||
Total revenue | $ | 1,129,167 | $ | 837,591 | $ | 584,106 |
December 31, | |||||||
2016 | 2015 | ||||||
United States | $ | 69,352 | $ | 70,719 | |||
International | 7,609 | 8,987 | |||||
Total | $ | 76,961 | $ | 79,706 |
|
Three Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Product | $ | 289,008 | $ | 254,238 | $ | 235,616 | $ | 212,475 | $ | 217,325 | $ | 193,339 | $ | 174,072 | $ | 160,141 | ||||||||||||||||
Service | 38,961 | 36,023 | 33,125 | 29,721 | 28,121 | 24,209 | 21,480 | 18,904 | ||||||||||||||||||||||||
Total revenue | 327,969 | 290,261 | 268,741 | 242,196 | 245,446 | 217,548 | 195,552 | 179,045 | ||||||||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||||||||||
Product | 108,057 | 94,777 | 88,021 | 78,913 | 81,142 | 67,990 | 60,014 | 54,439 | ||||||||||||||||||||||||
Service | 9,757 | 9,064 | 9,269 | 8,193 | 8,136 | 7,810 | 7,648 | 6,852 | ||||||||||||||||||||||||
Total cost of revenue | 117,814 | 103,841 | 97,290 | 87,106 | 89,278 | 75,800 | 67,662 | 61,291 | ||||||||||||||||||||||||
Gross profit | 210,155 | 186,420 | 171,451 | 155,090 | 156,168 | 141,748 | 127,890 | 117,754 | ||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 71,398 | 70,648 | 69,020 | 62,515 | 57,413 | 58,748 | 49,947 | 43,340 | ||||||||||||||||||||||||
Sales and marketing | 38,321 | 33,216 | 31,744 | 27,606 | 31,308 | 26,508 | 26,681 | 24,587 | ||||||||||||||||||||||||
General and administrative | 22,941 | 19,535 | 17,529 | 15,234 | 18,050 | 25,195 | 18,403 | 14,072 | ||||||||||||||||||||||||
Total operating expenses | 132,660 | 123,399 | 118,293 | 105,355 | 106,771 | 110,451 | 95,031 | 81,999 | ||||||||||||||||||||||||
Income from operations | 77,495 | 63,021 | 53,158 | 49,735 | 49,397 | 31,297 | 32,859 | 35,755 | ||||||||||||||||||||||||
Other income (expense), net: | ||||||||||||||||||||||||||||||||
Interest expense | (918 | ) | (735 | ) | (732 | ) | (751 | ) | (746 | ) | (753 | ) | (832 | ) | (821 | ) | ||||||||||||||||
Other income (expense), net | 560 | 639 | 416 | 337 | (109 | ) | 13 | 417 | (468 | ) | ||||||||||||||||||||||
Total other income (expense), net | (358 | ) | (96 | ) | (316 | ) | (414 | ) | (855 | ) | (740 | ) | (415 | ) | (1,289 | ) | ||||||||||||||||
Income before provision for income taxes | 77,137 | 62,925 | 52,842 | 49,321 | 48,542 | 30,557 | 32,444 | 34,466 | ||||||||||||||||||||||||
Provision for income taxes | 18,354 | 11,668 | 13,938 | 14,076 | 4,618 | 1,867 | 8,448 | 9,974 | ||||||||||||||||||||||||
Net income | $ | 58,783 | $ | 51,257 | $ | 38,904 | $ | 35,245 | $ | 43,924 | $ | 28,690 | $ | 23,996 | $ | 24,492 | ||||||||||||||||
Net income per share attributable to common stockholders: | ||||||||||||||||||||||||||||||||
Basic | $ | 0.84 | $ | 0.74 | $ | 0.57 | $ | 0.52 | $ | 0.65 | $ | 0.42 | $ | 0.36 | $ | 0.37 | ||||||||||||||||
Diluted | $ | 0.79 | $ | 0.69 | $ | 0.53 | $ | 0.48 | $ | 0.60 | $ | 0.39 | $ | 0.33 | $ | 0.34 |
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