NETGEAR, INC, 10-K filed on 2/24/2017
Annual Report
Document And Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Feb. 17, 2017
Jul. 3, 2016
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
NETGEAR, INC 
 
 
Entity Central Index Key
0001122904 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2016 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
32,931,706 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 917.2 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
ASSETS
 
 
Cash and cash equivalents
$ 240,468 
$ 181,945 
Short-term investments
125,514 
96,321 
Accounts receivable, net
313,839 
290,642 
Inventories
247,862 
213,118 
Prepaid expenses and other current assets
35,102 
39,117 
Total current assets
962,785 
821,143 
Property and equipment, net
19,473 
22,384 
Intangibles, net
37,899 
48,947 
Goodwill
85,463 
81,721 
Other non-current assets
78,836 
76,374 
Total assets
1,184,456 
1,050,569 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Accounts payable
112,436 
90,546 
Accrued employee compensation
33,096 
27,868 
Other accrued liabilities
170,674 
166,282 
Deferred revenue
35,301 
29,125 
Income taxes payable
5,146 
1,951 
Total current liabilities
356,653 
315,772 
Non-current income taxes payable
15,119 
14,444 
Other non-current liabilities
15,865 
11,643 
Total liabilities
387,637 
341,859 
Commitments and contingencies (Note 8)
   
   
Stockholders’ equity:
 
 
Preferred stock: $0.001 par value; 5,000,000 shares authorized; none issued or outstanding
0 
0 
Common stock: $0.001 par value; 200,000,000 shares authorized; shared issued and outstanding: 32,958,444 and 32,600,990 as of December 31, 2016 and 2015, respectively
33 
33 
Additional paid-in capital
566,307 
513,047 
Accumulated other comprehensive income
1,938 
3 
Retained earnings
228,541 
195,627 
Total stockholders’ equity
796,819 
708,710 
Total liabilities and stockholders’ equity
$ 1,184,456 
$ 1,050,569 
Consolidated Balance Sheets Consolidated Balance Sheets (Parentheticals) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Preferred Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Preferred Stock, Shares Authorized
5,000,000 
5,000,000 
Preferred Stock, Shares Issued
0 
0 
Preferred Stock, Shares Outstanding
0 
0 
Common Stock, Par or Stated Value Per Share
$ 0.001 
$ 0.001 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares, Issued
32,958,444 
32,600,990 
Common Stock, Shares, Outstanding
32,958,444 
32,600,990 
Consolidated Statements Of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Net revenue
$ 1,328,298 
$ 1,300,695 
$ 1,393,515 
Cost of revenue
916,113 
933,016 
995,597 
Gross profit
412,185 
367,679 
397,918 
Operating expenses:
 
 
 
Research and development
89,367 
86,499 
90,902 
Sales and marketing
150,355 
146,794 
157,017 
General and administrative
54,482 
45,313 
46,552 
Restructuring and other charges
3,881 
6,398 
2,209 
Litigation reserves, net
73 
(2,682)
(1,011)
Goodwill impairment charges
0 
0 
74,196 
Total operating expenses
298,158 
282,322 
369,865 
Income from operations
114,027 
85,357 
28,053 
Interest income
1,163 
295 
253 
Other income (expense), net
(121)
(88)
2,455 
Income before income taxes
115,069 
85,564 
30,761 
Provision for income taxes
39,218 
36,980 
21,973 
Net Income
$ 75,851 
$ 48,584 
$ 8,788 
Net income per share:
 
 
 
Basic net income per share (in dollars per share)
$ 2.32 
$ 1.47 
$ 0.25 
Diluted net income per share (in dollars per share)
$ 2.25 
$ 1.44 
$ 0.24 
Weighted average shares outstanding used to compute net income per share:
 
 
 
Basic (in shares)
32,758 
33,161 
35,771 
Diluted (in shares)
33,728 
33,788 
36,445 
Consolidated Statement of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Net Income
$ 75,851 
$ 48,584 
$ 8,788 
Other comprehensive income (loss), before tax:
 
 
 
Unrealized gain (loss) on derivative instruments
2,187 
0 
(22)
Unrealized gain (loss) on available-for-sale securities
33 
(56)
(14)
Other comprehensive income (loss), before tax
2,220 
(56)
(36)
Tax benefit (provision) related to derivative instruments
(273)
0 
0 
Tax benefit (provision) related to available-for-sale securities
(12)
21 
5 
Other comprehensive income (loss), net of tax
1,935 
(35)
(31)
Comprehensive income
$ 77,786 
$ 48,549 
$ 8,757 
Consolidated Statements of Stockholders' Equity Statement (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Retained Earnings [Member]
Balance at Dec. 31, 2013
$ 773,783 
$ 37 
$ 421,901 
$ 69 
$ 351,776 
Balance,shares at Dec. 31, 2013
 
36,840 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
(9)
 
 
(9)
 
Change in unrealized gains and losses on derivatives, Net of Tax
(22)
 
 
(22)
 
Net Income
8,788 
 
 
 
8,788 
Share-based Compensation expense
19,983 
 
19,983 
 
 
Stock Repurchased and Retired During Period, Shares
 
(2,908)
 
 
 
Stock Repurchased and Retired During Period, Value
(93,218)
(2)
 
 
(93,216)
Issuance of common stock under stock-based compensation plans, shares
 
777 
 
 
 
Issuance of common stock under stock-based compensation plans
12,741 
0 
12,741 
 
 
Income tax impact associated with stock option exercises
(481)
 
(481)
 
 
Balance at Dec. 31, 2014
721,565 
35 
454,144 
38 
267,348 
Balance,shares at Dec. 31, 2014
 
34,709 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
(35)
 
 
(35)
 
Net Income
48,584 
 
 
 
48,584 
Share-based Compensation expense
16,813 
 
16,813 
 
 
Stock Repurchased and Retired During Period, Shares
 
(3,855)
 
 
 
Stock Repurchased and Retired During Period, Value
(120,309)
(4)
 
 
(120,305)
Issuance of common stock under stock-based compensation plans, shares
 
1,747 
 
 
 
Issuance of common stock under stock-based compensation plans
44,325 
2 
44,323 
 
 
Income tax impact associated with stock option exercises
(2,233)
 
(2,233)
 
 
Balance at Dec. 31, 2015
708,710 
33 
513,047 
3 
195,627 
Balance,shares at Dec. 31, 2015
 
32,601 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
Change in unrealized gains and losses on available-for-sale Securities, Net of Tax
21 
 
 
21 
 
Change in unrealized gains and losses on derivatives, Net of Tax
1,914 
 
 
1,914 
 
Net Income
75,851 
 
 
 
75,851 
Share-based Compensation expense
19,180 
 
19,180 
 
 
Stock Repurchased and Retired During Period, Shares
 
(999)
 
 
 
Stock Repurchased and Retired During Period, Value
(42,938)
(1)
 
 
(42,937)
Issuance of common stock under stock-based compensation plans, shares
 
1,356 
 
 
 
Issuance of common stock under stock-based compensation plans
31,627 
1 
31,626 
 
 
Income tax impact associated with stock option exercises
2,454 
 
2,454 
 
 
Balance at Dec. 31, 2016
$ 796,819 
$ 33 
$ 566,307 
$ 1,938 
$ 228,541 
Balance,shares at Dec. 31, 2016
 
32,958 
 
 
 
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Taxes Paid
$ 35,149 
$ 40,273 
$ 38,938 
Cash flows from operating activities:
 
 
 
Net Income
75,851 
48,584 
8,788 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
31,993 
35,850 
35,590 
Purchase premium amortization/discount accretion on investments, net
167 
(57)
11 
Non-cash stock-based compensation
18,949 
16,825 
20,014 
Income tax impact associated with stock option exercises
2,454 
(2,233)
(481)
Excess tax benefit from stock-based compensation
(3,008)
(759)
(485)
Goodwill impairment charges
0 
0 
74,196 
Deferred income taxes
(2,723)
(710)
(20,261)
Changes in assets and liabilities, net of effect of acquisitions:
 
 
 
Accounts receivable
(23,206)
(14,952)
(9,205)
Inventories
(34,744)
9,765 
1,573 
Prepaid expenses and other assets
5,932 
560 
(7,905)
Accounts payable
21,327 
(14,990)
(8,236)
Accrued employee compensation
5,228 
6,280 
5,037 
Other accrued liabilities
6,907 
29,987 
2,574 
Deferred revenue
6,176 
(2,496)
5,188 
Income taxes payable
3,870 
(1,263)
2,566 
Net cash provided by operating activities
115,173 
110,391 
108,964 
Cash flows from investing activities:
 
 
 
Purchases of short-term investments
(144,271)
(110,316)
(145,186)
Proceeds from maturities of short-term investments
115,291 
130,273 
134,827 
Purchase of property and equipment
(10,972)
(14,000)
(19,338)
Payments made in connection with business acquisitions, net of cash acquired
(8,807)
0 
(1,050)
Net cash provided by (used in) investing activities
(48,759)
5,957 
(30,747)
Cash flows from financing activities:
 
 
 
Purchase and retirement of Common stock
(42,938)
(120,309)
(93,218)
Proceeds from exercise of stock options
28,147 
40,928 
9,979 
Proceeds from issuance of common stock under employee stock purchase plan
3,892 
2,985 
2,762 
Excess tax benefit from stock-based compensation
3,008 
759 
485 
Net cash used in financing activities
(7,891)
(75,637)
(79,992)
Net increase (decrease) in cash and cash equivalents
58,523 
40,711 
(1,775)
Cash and cash equivalents, at beginning of period
181,945 
141,234 
143,009 
Cash and cash equivalents, at end of period
$ 240,468 
$ 181,945 
$ 141,234 
The Company and Summary of Significant Accounting Policies (Notes)
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]
The Company and Summary of Significant Accounting Policies

The Company

NETGEAR, Inc. (“NETGEAR” or the “Company”) was incorporated in Delaware in January 1996. The Company is a global company that designs, develops and markets innovative networking solutions and smart connected products for consumers, businesses and service providers. The Company's products are built on a variety of proven technologies such as wireless (WiFi and LTE), Ethernet and powerline, with a focus on reliability and ease-of-use. The product line consists of wired and wireless devices that enable networking, broadband access and network connectivity. These products are available in multiple configurations to address the needs of the end-users in each geographic region in which the Company's products are sold.

The Company operates in three specific business segments: retail, commercial, and service provider. The Company believes this structure enables it to better focus its efforts on the Company's core customer segments and allows it to be more nimble and opportunistic as a company overall. Each business unit contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of these customer segments. The retail business unit is focused on individual consumers and consists of high performance, dependable and easy-to-use whole home WiFi networking solutions and Smart connected products. The commercial business unit is focused on small and medium-sized businesses and consists of business networking, storage and security solutions that bring enterprise class functionality down to small and medium-sized businesses at an affordable price. The service provider business unit is focused on the service provider market and consists of made-to-order and retail-proven whole home networking hardware and software solutions, including 4G LTE hotspots sold to service providers for sale to their subscribers.

The Company sells networking products through multiple sales channels worldwide, including traditional retailers, online retailers, wholesale distributors, direct market resellers (“DMRs”), value-added resellers (“VARs”), and broadband service providers.

Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries.

Fiscal periods

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions.

Short-term investments

Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity.

Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net.

Certain risks and uncertainties

The Company's products are concentrated in the networking and smart connected industries, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results.

The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results.

Derivative financial instruments

The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within nine months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes.

The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.

Concentration of credit risk
    
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions.

The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets.

As of December 31, 2016 and 2015, Best Buy, Inc. and affiliates accounted for 38% and 37% of the Company's total accounts receivable, respectively, Amazon and affiliates accounted for 11% of the Company's total accounts receivable as of December 31, 2016, and no other customers accounted for 10% or greater of the Company's total accounts receivable.

The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. In the event of turbulence or the onset of a financial crisis in financial markets, the failure of additional counterparties cannot be ruled out.

Fair value measurements

The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. See Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures.

Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses.

Inventories

Inventories consist primarily of finished goods which are valued at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by the demand forecast but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis.

Property and equipment, net

Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years


Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment. Charges related to the impairment of property and equipment were insignificant for the years ended December 31, 2016, 2015 and 2014.

Goodwill

Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates.

Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The Company identified the reporting units as retail, commercial and service provider reporting units, as this is the lowest level for which discrete financial information is available and segment management regularly reviews the operating results. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its net assets. If the fair value is greater than the carrying value of its net assets, no impairment is recorded. If the fair value is less than its carrying value, the Company would determine the fair value of the goodwill by comparing the implied fair value to the carrying value of the goodwill in the same manner as if the reporting unit were being acquired in a business combination. Specifically, the Company would allocate the fair value to all of its assets and liabilities, including any unrecognized intangibles, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, an impairment charge would be recorded to earnings in the consolidated statements of operations.

The Company did not recognize any goodwill impairment charges during the years ended December 31, 2016 and 2015. A goodwill impairment charge of $74.2 million was recorded in 2014, which was the entire goodwill balance related to the service provider reporting unit.

Intangibles, net

Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.

During the years ended December 31, 2016, there were no events or changes in circumstances that indicated the carrying amount of our finite-lived assets may not be recoverable from their undiscounted cash flows. Consequently, we did not perform an impairment test. The Company recorded no impairments to intangibles during the years ended December 31, 2016, 2015 and 2014.

Warranty obligations

The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability.

Revenue recognition

Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer.

The Company has product offerings with multiple elements. The Company's multiple-element product offerings include hardware with free services, networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the hardware and networking hardware with embedded software are delivered up front, while the free services are delivered over the stated service period, or the estimated useful life, while the subscription services and support are delivered over the subscription and support period. The Company allocates revenue to the deliverables based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured.

When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy.

Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition.
 
Sales incentives

The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue.

The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer.

Shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue. Shipping and handling costs associated with outbound freight are included in sales and marketing expenses and totaled $9.2 million, $10.4 million and $10.5 million in the years ended December 31, 2016, 2015 and 2014 respectively.

Research and development

Costs incurred in the research and development of new products are charged to expense as incurred.

Advertising costs

Advertising costs are expensed as incurred. Total advertising and promotional expenses were $24.5 million, $19.4 million, and $19.1 million in the years ended December 31, 2016, 2015 and 2014 respectively.

Income taxes

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income.

In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense.

Net income per share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, vesting of restricted stock awards, and issuances of ESPP. Potentially dilutive shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive.

Stock-based compensation

The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. Prior to February 16, 2016, the fair value of Employee Stock Purchase Plan (“ESPP”) was based on the 15% discount at purchase, since the price of the shares was determined at the purchase date. Beginning February 16, 2016, the fair value of the shares offered under the ESPP is estimated at grant using a Black-Scholes option valuation model.

The compensation expense for equity awards is reduced by an estimate for forfeitures and is recognized over the vesting period of the award under a graded vesting method. In addition, the Company will recognize an excess benefit from stock-based compensation in equity based on the difference between tax expense computed with consideration of the windfall deduction and without consideration of the windfall deduction. In addition, the Company accounts for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit in the income statement. See Note 10, Employee Benefit Plans, in Notes to Consolidated Financial Statements for a further discussion on stock-based compensation.

Comprehensive income

Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year.

Foreign currency translation and re-measurement

The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets. Revenue is re-measured at average exchange rates in effect during each period. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Gains and losses arising from foreign currency transactions are included in Other income (expense), net.

Recent accounting pronouncements

Accounting Pronouncement Recently Adopted

In July 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2015-11, "Simplifying the Measurement of Inventory" (Topic 330). The new guidance changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. ASU 2015-11 should be applied on a prospective basis and is effective for the Company beginning in the first fiscal quarter of 2017. Early adoption is permitted. The Company elected to early adopt the ASU 2015-11 effective December 31, 2016 on a prospective basis. There was no impact of the adoption on the Company's financial position, results of operations or cash flows and such statements have been presented in accordance with this new guidance.

In November 2015, the FASB issued ASU 2015-17, "Balance Sheet Classification of Deferred Taxes" (Topic 740), which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. ASU 2015-17 may be adopted either prospectively or retrospectively and is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company elected to early adopt ASU 2015-17 effective December 31, 2015 on a prospective basis. Adoption of this ASU resulted in a reclassification of the Company's net current deferred tax asset to the net non-current deferred tax asset in its consolidated balance sheets as of December 31, 2015.

Accounting Pronouncements Not Yet Effective

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers" (Topic 606), which was further updated in March, April, May and December 2016. The guidance in this update supersedes the revenue recognition requirements in Topic 605, "Revenue Recognition". Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer. An entity should apply the amendments in the update either retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application (modified retrospective method). On July 9, 2015, the FASB concluded to delay the effective date of the new revenue standard by one year. ASU 2014-09 is effective for the Company beginning in the first quarter of fiscal 2018 and early adoption is permitted. The Company currently anticipates adopting the new standard effective January 1, 2018. The company continues to evaluate the impact of the new standard on its consolidated financial statements and disclosures. Although the Company is still in the process of evaluating its contracts, at this stage of the process, it does not believe the adoption of ASU 2014-09 will have a significant impact on the amount or timing of its revenues. The accounting for consideration payable to a customer under ASU 2014-09 differs to the superseded guidance, which consequently may require the Company to estimate for future consideration payable to a customer ahead of commitment date. The impact of this guidance change is still being evaluated but may result, upon adoption, of an adjustment to the statement of financial position to bring forward the recognition of as of yet committed liabilities at the adoption date. The Company expects to complete the assessment process, including selecting a transition method for adoption, by the end of the third quarter of fiscal 2017 along with the implementation process prior to the first quarter of fiscal 2018.

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities" (Subtopic 825-10), which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. This guidance also clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU 2016-01 is effective for the Company in the first quarter of fiscal 2018 and early adoption is permitted. The Company is currently evaluating the impact the update will have on its financial position, results of operations and cash flows and related disclosures.

In February 2016, FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize on the balance sheets a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than twelve months. The liability will be equal to the present value of lease payments while the right-of-use asset will be based on the liability, subject to adjustment, such as for initial direct costs. In addition, ASU 2016-02 expands the disclosure requirements for lessees. Upon adoption, the Company will be required to record a lease asset and lease liability related to its operating leases. ASU 2016-02 will be applied using a modified retrospective transition method and is effective for the Company in the first quarter fiscal 2019, with early adoption permitted. The Company does not plan to early adopt the guidance and is currently evaluating the impact the update will have on its financial position, results of operations and cash flows and related disclosures.

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting" (Topic 718), which simplifies the accounting for share-based payment transactions, including the income tax consequences, forfeitures, and statutory tax withholding requirements, as well as classification on the statements of cash flows. ASU 2016-09 is effective for the Company beginning in the first quarter of fiscal 2017, with early adoption permitted. The Company will adopt the guidance in the first quarter of fiscal 2017. The Company does not expect the adoption will have material impacts on its financial position, results of operations or cash flows, and expects the primary impact of this standard to be the income tax effects of awards recognized in the income statement when the awards are vested or settled. The tax impacts cannot be quantified until the award vest or settlement date.

In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments" (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. ASU 2016-13 is effective for the Company beginning in the first quarter of 2020 and early adoption is permitted. The Company is evaluating the new guidance, but does not expect it to have material impacts on its financial position, results of operations or cash flows.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory" (Topic 740), which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. ASU 2016-16 is effective for the Company in the first quarter of fiscal 2018 and early adoption is permitted. The Company is currently evaluating what impact, if any, the adoption of this guidance will have on its financial position, results of operations and cash flows.

In January 2017, the FASB issued ASU 2017-01, "Business Combinations: Clarifying the Definition of a Business" (Topic 805), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 is effective for the Company in the first quarter of fiscal 2018 and early adoption is permitted. The guidance should be applied prospectively to any transactions occurring on or after the adoption date. The Company is currently evaluating what impact the adoption of this guidance will have on its financial position, results of operations and cash flows.

In January 2017, the FASB issued ASU 2017-04, "Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment" (Topic 350), which simplifies the subsequent measurement of goodwill by removing Step 2 of goodwill impairment test that requires the determination of the fair value of individual assets and liabilities of a reporting unit. The new guidance requires goodwill impairment to be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 will be applied prospectively and is effective for the Company in the first quarter of fiscal 2020, with early adoption permitted. The Company is currently evaluating what impact the adoption of this guidance will have on its financial position, results of operations and cash flows.
Business Acquisitions
Business Acquisitions
Business Acquisition
Placemeter, Inc.
On November 30, 2016, the Company acquired Placemeter, Inc. ("Placemeter"), an industry leader in computer vision analytics, for total purchase consideration of $9.6 million. The Company believes Placemeter’s engineering talent will add great value to NETGEAR’s Arlo Smart security team, and their proprietary computer vision algorithms will help to build leading video analytics solutions for the Arlo platform.
The Company paid $8.8 million of the aggregate purchase price in the fourth quarter of 2016 and paid the remaining $0.8 million in the first quarter of 2017. The acquisition qualified as a business combination and was accounted for using the acquisition method of accounting. The results of Placemeter have been included in the consolidated financial statements since the date of acquisition. Pro forma results of operations for the acquisition are not presented as the financial impact to the Company's consolidated results of operations is not material.
The allocation of the purchase price was as follows (in thousands):
Cash and cash equivalents
$
8

Accounts receivable, net
11

Prepaid expenses and other current assets
130

Property and equipment, net
83

Intangibles, net
6,000

Goodwill
3,742

Accounts payable
(40
)
Other current accrued liabilities
(74
)
Deferred tax liabilities, net
(308
)
Total purchase price
$
9,552


The $3.7 million of goodwill recorded on the acquisition of Placemeter is not deductible for U.S. federal or U.S. state income tax purposes. The goodwill recognized, which was assigned to the Company's retail business unit, is primarily attributable to expected synergies resulting from the acquisition.
In connection with the acquisition, the Company recorded $0.3 million of deferred tax liabilities net of deferred tax assets. The deferred tax liabilities were recorded for the book basis of intangible assets for which the Company has no tax basis. The deferred tax liabilities are reduced by the tax benefit of the net operating losses as of the date of the acquisition after consideration of limitations on the use under U.S. Internal Revenue Code section 382.
The Company designated $5.5 million of the acquired intangibles as software technology and a further $0.2 million of the acquired intangibles as database. The valuations were arrived at using the replacement cost method, with consideration having been given to the estimated time, investment and resources required to recreate the acquired intangibles. A discount rate of 15.0% was used in the valuation of each intangible. The acquired intangibles are being amortized over an estimated useful life of four years.
The Company designated $0.3 million of the acquired intangibles as non-compete agreements. The value was calculated based on the present value of the future estimated cash flows derived from projections of future operations attributable to the non-compete agreements and discounted at 20.0%. The acquired agreements are being amortized over an estimated useful life of three years.

Balance Sheet Components
Balance Sheet Components
Balance Sheet Components

Available-for-sale short-term investments
 
As of
 
December 31, 2016
 
December 31, 2015
 
Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
 Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
(In thousands)
U.S. treasuries
$
123,869

 
$
9

 
$
(40
)
 
$
123,838

 
$
95,057

 
$
1

 
$
(65
)
 
$
94,993

Certificates of deposits
148

 
—

 
—

 
148

 
147

 
—

 
—

 
147

Total
$
124,017

 
$
9

 
$
(40
)
 
$
123,986

 
$
95,204

 
$
1

 
$
(65
)
 
$
95,140



The Company’s short-term investments are primarily comprised of marketable securities that are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months. Accordingly, none of the available-for-sale securities have unrealized losses greater than 12 months.

Accounts receivable, net
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Gross accounts receivable
$
333,080

 
$
309,926

Allowance for doubtful accounts
(1,255
)
 
(1,255
)
Allowance for sales returns
(13,506
)
 
(15,904
)
Allowance for price protection
(4,480
)
 
(2,125
)
Total allowances
(19,241
)
 
(19,284
)
Total accounts receivable, net
$
313,839

 
$
290,642



Inventories 
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Raw materials
$
4,596

 
$
4,292

Work-in-process
—

 
2

Finished goods
243,266

 
208,824

Total inventories
$
247,862

 
$
213,118



The Company records provisions for excess and obsolete inventory based on forecasts of future demand. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand.

Property and equipment, net 
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Computer equipment
$
10,557

 
$
11,161

Furniture, fixtures and leasehold improvements
20,827

 
18,317

Software
28,663

 
30,396

Machinery and equipment
63,446

 
66,662

Total property and equipment, gross
123,493

 
126,536

Accumulated depreciation and amortization
(104,020
)
 
(104,152
)
Total property and equipment, net
$
19,473

 
$
22,384



Depreciation and amortization expense pertaining to property and equipment was $14.6 million, $18.1 million and $17.6 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Intangibles, net
 
The following tables present details of the Company’s purchased intangibles:
 
As of December 31, 2016
 
Gross
 
Accumulated Amortization
 
Net
 
(In thousands)
Technology
$
66,599

 
$
(57,381
)
 
$
9,218

Customer contracts and relationships
56,500

 
(30,375
)
 
26,125

Other
11,045

 
(8,489
)
 
2,556

Total intangibles, net
134,144

 
(96,245
)
 
37,899


 
As of December 31, 2015
 
Gross
 
Accumulated Amortization
 
Net
 
(In thousands)
Technology
$
61,099

 
$
(48,485
)
 
$
12,614

Customer contracts and relationships
56,500

 
(23,290
)
 
33,210

Other
10,545

 
(7,422
)
 
3,123

Total intangibles, net
$
128,144

 
$
(79,197
)
 
$
48,947



Amortization of purchased intangibles in the years ended December 31, 2016, 2015 and 2014 was $17.0 million, $17.3 million and $17.9 million, respectively. No impairment charges were recorded in the years ended December 31, 2016, 2015 and 2014.

Estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows:
Year Ended December 31,
Amounts (In thousands)
2017
$
12,911

2018
9,396

2019
7,544

2020
6,622

2021
1,413

Thereafter
13

Total estimated amortization expense
$
37,899



Goodwill
 
The changes in the carrying amount of goodwill during the years ended December 31, 2016 and 2015 are as follows:
 
 
Retail
 
Commercial
 
Service Provider
 
Total
 
 
(In thousands)
As of December 31, 2014
 
$
45,442

 
$
36,279

 
$
—

 
$
81,721

      Goodwill impairment charges
 
—

 
—

 
—

 
—

As of December 31, 2015
 
45,442

 
36,279

 
—

 
81,721

      Goodwill from acquisition of Placemeter
 
3,742

 
—

 
—

 
3,742

As of December 31, 2016
 
$
49,184

 
$
36,279

 
$
—

 
$
85,463



In the fourth fiscal quarter of 2016, the Company completed the annual impairment test of goodwill. The test was performed as of the first day of the fourth quarter, or October 3, 2016.

The Company performed a qualitative test for goodwill impairment of the retail and commercial reporting units as of October 3, 2016. Based upon the results of the qualitative testing, the respective fair values of the retail and commercial reporting units were substantially in excess of these reporting units’ carrying values. The Company believes it is more-likely-than-not that the fair value of these reporting units are greater than their respective carrying values and therefore performing the first step of the two-step impairment test for the retail and commercial reporting units was unnecessary. No goodwill impairment was recognized for the retail and commercial reporting units in the years ended December 31, 2016, 2015 or 2014.

In the fourth quarter of fiscal year 2014, the Company recorded a goodwill impairment charge of $74.2 million related to the service provider reporting unit. There were no impairments to goodwill in the years ended December 31, 2016 and 2015. Accumulated goodwill impairment charges for the years ended December 31, 2016 and 2015, was $74.2 million and $74.2 million, respectively.

Other non-current assets
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Non-current deferred income taxes
$
70,859

 
$
68,445

Other
7,977

 
7,929

Total other non-current assets
$
78,836

 
$
76,374



Other accrued liabilities  
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Sales and marketing programs
$
74,330

 
$
69,693

Warranty obligation
58,520

 
56,706

Freight
8,980

 
5,748

Other
28,844

 
34,135

Total other accrued liabilities
$
170,674

 
$
166,282

Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company’s subsidiaries have had, and will continue to have material future cash flows, including revenue and expenses, which are denominated in currencies other than the Company’s functional currency. The Company and all its subsidiaries designate the U.S. dollar as the functional currency. Changes in exchange rates between the Company’s functional currency and other currencies in which the Company transacts business will cause fluctuations in cash flow expectations and cash flow realized or settled. Accordingly, the Company uses derivatives to mitigate its business exposure to foreign exchange risk. The Company enters into foreign currency forward contracts in Australian dollars, British pounds, Euros, Canadian dollar, and Japanese yen to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses and existing assets and liabilities. The Company does not enter into derivatives transactions for trading or speculative purposes.

The Company’s foreign currency forward contracts do not contain any credit-risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counter-parties of its forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one counter-party. In addition, the derivative contracts typically mature in less than nine months and the Company continuously evaluates the credit standing of its counter-party financial institutions. The counter-parties to these arrangements are large highly rated financial institutions and the Company does not consider non-performance a material risk.

The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, materiality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange rates. The Company’s accounting policies for these instruments are based on whether the instruments are designated as hedge or non-hedge instruments in accordance with the authoritative guidance for derivatives and hedging. The Company records all derivatives on the balance sheets at fair value. The effective portions of cash flow hedges are recorded in other comprehensive income ("OCI") until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of its designated hedges are adjusted to fair value through earnings in other income (expense), net in the consolidated statements of operations.

The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2016, and 2015, are summarized as follows:
 
Derivative Assets
 
Balance Sheets
Location
 
Fair value at December 31, 2016
 
Balance Sheets
Location
 
Fair value at December 31, 2015
 
 
 
 
(In thousands)

 
 
 
(In thousands)

Derivative assets not designated as hedging instruments
 
Prepaid expenses and other current assets
 
$
5,873

 
Prepaid expenses and other current assets
 
$
3,203

Derivative assets designated as hedging
instruments
 
Prepaid expenses and other current assets
 
2,890

 
Prepaid expenses and other current assets
 
2

Total
 
 
 
$
8,763

 
 
 
$
3,205


 
Derivative Liabilities
 
Balance Sheets
Location
 
Fair value at December 31, 2016
 
Balance Sheets
Location
 
Fair value at December 31, 2015
 
 
 
 
(In thousands)

 
 
 
(In thousands)

Derivative liabilities not designated as hedging instruments
 
Other accrued liabilities
 
$
1,002

 
Other accrued liabilities
 
$
447

Derivative liabilities designated as hedging instruments
 
Other accrued liabilities
 
703

 
Other accrued liabilities
 
4

Total
 
 
 
$
1,705

 
 
 
$
451



See Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for detailed disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures.

Offsetting Derivative Assets and Liabilities

The Company has entered into master netting arrangements which allow net settlements under certain conditions. Although netting is permitted, it is currently the Company's policy and practice to record all derivative assets and liabilities on a gross basis in the consolidated balance sheets.

The following tables set forth the offsetting of derivative assets as of December 31, 2016 and 2015:
As of December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
J.P. Morgan Chase
 
$
1,492

 
$
—

 
$
1,492

 
$
(442
)
 
$
—

 
$
1,050

Wells Fargo
 
7,271

 
—

 
7,271

 
(1,263
)
 
—

 
6,008

Total
 
$
8,763

 
$
—

 
$
8,763

 
$
(1,705
)
 
$
—

 
$
7,058


As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
Barclays        
 
$
577

 
$
—

 
$
577

 
$
(56
)
 
$
—

 
$
521

Wells Fargo
 
2,628

 
—

 
2,628

 
(395
)
 
—

 
2,233

Total
 
$
3,205

 
$
—

 
$
3,205

 
$
(451
)
 
$
—

 
$
2,754



The following tables set forth the offsetting of derivative liabilities as of December 31, 2016 and 2015:
As of December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
J.P. Morgan Chase
 
$
442

 
$
—

 
$
442

 
$
(442
)
 
$
—

 
$
—

Wells Fargo
 
1,263

 
—

 
1,263

 
(1,263
)
 
—

 
—

Total
 
$
1,705

 
$
—

 
$
1,705

 
$
(1,705
)
 
$
—

 
$
—


As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
Barclays        
 
$
56

 
$
—

 
$
56

 
$
(56
)
 
$
—

 
$
—

Wells Fargo
 
395

 
—

 
395

 
(395
)
 
—

 
—

Total
 
$
451

 
$
—

 
$
451

 
$
(451
)
 
$
—

 
$
—



Cash flow hedges

To help manage the exposure of operating margins to fluctuations in foreign currency exchange rates, the Company hedges a portion of its anticipated foreign currency revenue, costs of revenue and certain operating expenses. These hedges are designated at the inception of the hedge relationship as cash flow hedges under the authoritative guidance for derivatives and hedging. Effectiveness is tested at least quarterly both prospectively and retrospectively using regression analysis to ensure that the hedge relationship has been effective and is likely to remain effective in the future. The Company typically hedges portions of its anticipated foreign currency exposure for five to eight months. The Company enters into about ten forward contracts per quarter with an average size of approximately $8 million USD equivalent related to its cash flow hedging program.

The Company expects to reclassify to earnings all of the amounts recorded in OCI associated with its cash flow hedges over the next 12 months. OCI associated with cash flow hedges of foreign currency revenue is recognized as a component of net revenue in the same period as the related revenue is recognized. OCI associated with cash flow hedges of foreign currency costs of revenue and operating expenses are recognized as a component of cost of revenue and operating expense in the same period as the related costs of revenue and operating expenses are recognized.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur within the designated hedge period or if not recognized within 60 days following the end of the hedge period. Deferred gains and losses in OCI associated with such derivative instruments are reclassified immediately into earnings through other income (expense), net. Any subsequent changes in the fair value of such derivative instruments are reflected in current earnings unless they are re-designated as hedges of other transactions. The Company did not recognize any material net gains or losses related to the loss of hedge designation on discontinued cash flow hedges during the years ended December 31, 2016, 2015 and 2014.

The pre-tax effects of the Company’s derivative instruments on OCI and the consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 are summarized as follows:
Derivatives Designated as Hedging Instruments
 
Year Ended December 31, 2016
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
3,007

 
Net revenue
 
$
1,100

 
Other income (expense), net
 
$
365

Foreign currency forward contracts
 
—

 
Cost of revenue
 
(6
)
 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(274
)
 
Other income (expense), net
 
—

Total
 
$
3,007

 
 
 
$
820

 
 
 
$
365

(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.


Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2015
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
453

 
Net revenue
 
$
462

 
Other income (expense), net
 
$
(52
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
6

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(15
)
 
Other income (expense), net
 
—

Total
 
$
453

 
 
 
$
453

 
 
 
$
(52
)
(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.
Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2014
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
292

 
Net revenue
 
$
459

 
Other income (expense), net
 
$
(144
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
4

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
292

 
 
 
$
314

 
 
 
$
(144
)
(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.

The Company did not recognize any material net gains or losses related to the loss of hedge designation as there were no discontinued cash flow hedges during the years ended December 31, 2016, 2015 and 2014.

Non-designated hedges

The Company enters into non-designated hedges under the authoritative guidance for derivatives and hedging to manage the exposure of non-functional currency monetary assets and liabilities held on its financial statements to fluctuations in foreign currency exchange rates, as well as to reduce volatility in other income and expense. The non-designated hedges are generally expected to offset the changes in value of its net non-functional currency asset and liability position resulting from foreign exchange rate fluctuations. Foreign currency denominated accounts receivable and payable are hedged with non-designated hedges when the related anticipated foreign revenue and expenses are recognized in the Company’s financial statements. The Company also hedges certain non-functional currency monetary assets and liabilities that may not be incorporated into the cash flow hedge program. The Company adjusts its non-designated hedges monthly and enters into about ten non-designated derivatives per quarter. The average size of its non-designated hedges is approximately $2 million USD equivalent and these hedges normally range from one to three months in duration.

The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014, are as follows:
 
 
 
 
Year ended December 31,
Derivatives Not Designated as Hedging Instruments
 
Location of Gains (Losses)
Recognized in Income on Derivative
2016
2015
2014
 
 
 
(In thousands)
Foreign currency forward contracts
 
Other income (expense), net
3,789

4,956

$
4,897

Net Income Per Share
Net Income Per Share
Net Income Per Share

Basic net income per share is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of ESPP, which are reflected in diluted net income per share by application of the treasury stock method. Under the treasury stock method, the amount that the employee must pay for exercising stock options, the amount of stock-based compensation cost for future services that the Company has not yet recognized, and the estimated tax benefit that would be recorded in additional paid-in capital upon exercise are assumed to be used to repurchase shares.

Net income per share for the years ended December 31, 2016, 2015 and 2014 was as follows:
 
 
 
Year Ended December 31,
 
 
2016
 
2015
 
2014
 
 
(In thousands, except per share data)
Numerator:
 
 
 
 
 
 
Net income
 
$
75,851

 
$
48,584

 
$
8,788

Denominator:
 
 
 
 
 
 
Weighted average common shares - basic
 
32,758

 
33,161

 
35,771

Potentially dilutive common share equivalent
 
970

 
627

 
674

Weighted average common shares - dilutive
 
33,728

 
33,788

 
36,445

 
 
 
 
 
 
 
Basic net income per share
 
$
2.32

 
$
1.47

 
$
0.25

Diluted net income per share
 
$
2.25

 
$
1.44

 
$
0.24

 
 
 
 
 
 
 
Anti-dilutive employee stock-based awards, excluded
 
258

 
1,807

 
2,617

Other Income (Expense), Net (Notes)
Other Income and Other Expense Disclosure [Text Block]
Other Income (Expense), Net

Other income (expense), net consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Foreign currency transaction loss, net
$
(3,835
)
 
$
(5,114
)
 
$
(5,642
)
Foreign currency contract gain, net
4,154

 
4,904

 
4,753

Gain on litigation settlements
—

 
—

 
2,800

Other
(440
)
 
122

 
544

Total
$
(121
)
 
$
(88
)
 
$
2,455

Income Taxes Income Taxes (Notes)
Income Tax Disclosure [Text Block]
Income Taxes

Income before income taxes and the provision for income taxes consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
United States
$
88,748

 
$
88,681

 
$
25,152

International
26,321

 
(3,117
)
 
5,609

Total
$
115,069

 
$
85,564

 
$
30,761


 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Current:
 
 
 
 
 
U.S. Federal
$
33,267

 
$
30,970

 
$
29,089

State
2,693

 
3,139

 
2,873

Foreign
6,278

 
6,105

 
10,930

 
42,238

 
40,214

 
42,892

Deferred:
 
 
 
 
 
U.S. Federal
(2,052
)
 
(2,645
)
 
(20,347
)
State
441

 
134

 
(326
)
Foreign
(1,409
)
 
(723
)
 
(246
)
 
(3,020
)
 
(3,234
)
 
(20,919
)
Total
$
39,218

 
$
36,980

 
$
21,973



Net deferred tax assets consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
(In thousands)
Deferred Tax Assets:
 
 
 
Accruals and allowances
$
32,303

 
$
29,279

Net operating loss carryforwards
6,358

 
5,353

Stock-based compensation
8,250

 
9,895

Deferred rent
3,002

 
2,740

Deferred revenue
1,957

 
1,185

Tax credit carryforwards
1,543

 
2,262

Acquired intangibles
21,871

 
22,778

Depreciation and amortization
1,160

 
—

Total deferred tax assets
76,444

 
73,492

Deferred Tax Liabilities:
 
 
 
Depreciation and amortization
—

 
(967
)
Other
(991
)
 
(438
)
Total deferred tax liabilities
(991
)
 
(1,405
)
 
 
 
 
Valuation Allowance (1)
(4,594
)
 
(3,642
)
Net deferred tax assets
$
70,859

 
$
68,445


(1) 
Valuation allowance is presented gross. The valuation allowance net of the federal tax effect is ($2,986) and ($2,367) for the years ended December 31, 2016 and 2015, respectively.

Management's judgment is required in determining the Company's provision for income taxes, its deferred tax assets and any valuation allowance recorded against its deferred tax assets. As of December 31, 2016, a valuation allowance of $4.6 million was placed against California deferred tax assets since the recovery of the assets is uncertain. There was a valuation allowance of $3.6 million placed against deferred tax assets as of December 31, 2015. Accordingly, the valuation allowance increased $1.0 million during 2016. In management's judgment it is more likely than not that the remaining deferred tax assets will be realized in the future as of December 31, 2016, and as such no valuation allowance has been recorded against the remaining deferred tax assets.

The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Tax at federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State, net of federal benefit
1.8
 %
 
2.6
 %
 
2.5
 %
Impact of international operations
(2.7
)%
 
7.1
 %
 
19.8
 %
Stock-based compensation
1.2
 %
 
(0.4
)%
 
5.5
 %
Tax credits
(0.9
)%
 
(1.2
)%
 
(3.8
)%
Valuation allowance
—
 %
 
—
 %
 
3.5
 %
Goodwill impairment
—
 %
 
—
 %
 
7.8
 %
Others
(0.3
)%
 
0.1
 %
 
1.1
 %
Provision for income taxes
34.1
 %
 
43.2
 %
 
71.4
 %


Income tax benefits (provision) in the amount of $2.5 million, $(2.2) million and $(0.5) million related to stock options were credited to additional paid-in capital during the years ended December 31, 2016, 2015, and 2014, respectively. As a result of changes in fair value of available-for-sale securities and foreign currency hedging, income tax (provision) benefits of $(285,000) , $21,000 and $5,000 were recorded in comprehensive income related to the years ended December 31, 2016, 2015, and 2014, respectively.

As of December 31, 2016, the Company has approximately $18.2 million of acquired federal net operating loss carry forwards as well as $1.5 million of California tax credits carryforwards. All of the losses are subject to annual usage limitations under Internal Revenue Code Section 382. The federal losses expire in different years beginning in fiscal 2021. The California tax credit carryforwards have no expiration.

The Company files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations for years before 2011. The U.S. federal Internal Revenue Service (IRS) recently commenced an audit of the tax year ended December 31, 2014. The Company is no longer subject to foreign income tax examinations before 2004. The Italian Tax Authority (ITA) has audited the Company’s 2004 through 2012 tax years. The Company is currently in litigation with the ITA with respect to all of these years. In April 2015, the German Tax Authority (GTA) commenced an examination of the Company’s 2008 and 2013 tax years. The examination is ongoing. The Company has limited audit activity in various states and other foreign jurisdictions. Due to the uncertain nature of ongoing tax audits, the Company has recorded its liability for uncertain tax positions as part of its long-term liability as payments cannot be anticipated over the next 12 months. The existing tax positions of the Company continue to generate an increase in the liability for uncertain tax positions. The liability for uncertain tax positions may be reduced for liabilities that are settled with taxing authorities or on which the statute of limitations could expire without assessment from tax authorities. The possible reduction in liabilities for uncertain tax positions resulting from the expiration of statutes of limitation in multiple jurisdictions in the next 12 months is approximately $1.0 million, excluding the interest, penalties and the effect of any related deferred tax assets or liabilities.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows:
 
Federal, State, and Foreign Tax
 
(In thousands)
Balance as of December 31, 2013
$
12,743

Additions based on tax positions related to the current year
1,894

Additions for tax positions of prior years
1,722

Settlements
(503
)
Reductions for tax positions of prior years
(152
)
Reductions due to lapse of applicable statutes
(1,838
)
Adjustments due to foreign exchange rate movement
(502
)
Balance as of December 31, 2014
13,364

Additions based on tax positions related to the current year
1,608

Additions for tax positions of prior years
228

Settlements
(199
)
Reductions for tax positions of prior years
(302
)
Reductions due to lapse of applicable statutes
(1,053
)
Adjustments due to foreign exchange rate movement
(816
)
Balance as of December 31, 2015
$
12,830

Additions based on tax positions related to the current year
1,523

Additions for tax positions of prior years
45

Settlements
—

Reductions for tax positions of prior years
(237
)
Reductions due to lapse of applicable statutes
(627
)
Adjustments due to foreign exchange rate movement
(569
)
Balance as of December 31, 2016
12,965



The total amount of net UTB that, if recognized would affect the effective tax rate as of December 31, 2016 is $11.2 million. The ending net UTB results from adjusting the gross balance at December 31, 2016 for items such as U.S. federal and state deferred tax, interest, and deductible taxes. The net UTB is included as a component of non-current income taxes payable within the consolidated balance sheets.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2016, 2015, and 2014, total interest and penalties expensed were $0.6 million, $0.1 million and $1.1 million, respectively. As of December 31, 2016 and 2015, accrued interest and penalties on a gross basis was $3.6 million and $3.1 million, respectively. Included in accrued interest are amounts related to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

With the exception of those foreign sales subsidiaries for which deferred tax has been provided, the Company intends to indefinitely reinvest foreign earnings. These earnings were approximately $154.2 million and $136.9 million as of December 31, 2016 and 2015, respectively. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the income tax liability that would be payable if such earnings were not indefinitely reinvested.
Commitments And Contingencies
Commitments And Contingencies
Commitments and Contingencies

Leases

The Company leases office space, cars and equipment under operating leases, with various expiration dates through December 2026. Rent expense in the years ended, December 31, 2016, 2015, and 2014 was $9.5 million, $9.8 million and $10.8 million, respectively. The terms of some of the Company’s office leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid.

As of December 31, 2016, future minimum lease payments under non-cancelable operating leases are as follows:
Fiscal Year
Amount (In thousands)
2017
$
7,744

2018
7,138

2019
6,366

2020
5,381

2021
5,134

Thereafter
17,701

Total
$
49,464



Purchase Obligations

The Company has entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. As of December 31, 2016, the Company had approximately $136.9 million in non-cancelable purchase commitments with suppliers. The Company establishes a loss liability for all products it does not expect to sell for which it has committed purchases from suppliers. Such losses have not been material to date. From time to time the Company’s suppliers procure unique complex components on the Company's behalf. If these components do not meet specified technical criteria or are defective, the Company should not be obligated to purchase the materials. However, disputes may arise as a result and significant resources may be spent resolving such disputes.

Warranty obligations

Changes in the Company's warranty liability, which is included in other accrued liabilities in the consolidated balance sheets, are as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Balance at the beginning of the year
$
56,706

 
$
44,888

 
$
48,754

Provision for warranty obligations made during the year
87,570

 
80,085

 
62,709

Settlements made during the year
(85,756
)
 
(68,267
)
 
(66,575
)
Balance at the end of year
$
58,520

 
$
56,706

 
$
44,888



Guarantees and Indemnifications

The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a Director and Officer Insurance Policy that enables it to recover a portion of any future amounts paid. As a result of its insurance policy coverage, the Company believes the fair value of each indemnification agreement is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2016.

In its sales agreements, the Company typically agrees to indemnify its direct customers, distributors and resellers for any expenses or liability resulting from claimed infringements by the Company's products of patents, trademarks or copyrights of third parties, subject to customary carve outs. The terms of these indemnification agreements are generally perpetual any time after execution date of the respective agreement. The maximum amount of potential future infringement indemnification is generally unlimited. The Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2016.

Employment Agreements

The Company has signed various employment agreements with key executives pursuant to which, if their employment is terminated without cause, such employees are entitled to receive their base salary (and commission or bonus, as applicable) for 52 weeks (for the Chief Executive Officer), 39 weeks (for the Senior Vice President of Worldwide Operations and Support) and up to 26 weeks (for other key executives). Such employees will also continue to have equity awards vest for up to a one-year period following such termination without cause. If a termination without cause or resignation for good reason occurs within one year of a change in control, such employees are entitled to full acceleration (for the Chief Executive Officer) and up to two years acceleration (for other key executives) of any unvested portion of his or her equity awards. The Company has no liabilities recorded for these agreements as of December 31, 2016.

Litigation and Other Legal Matters

The Company is involved in disputes, litigation, and other legal actions, including, but not limited to, the matters described below. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, the Company accrues for the amount, or if a range, the Company accrues the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within litigation reserves, net. The Company monitors developments in these legal matters that could affect the estimate the Company had previously accrued. In relation to such matters, the Company currently believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its financial position within the next twelve months, or the outcome of these matters is currently not determinable. There are many uncertainties associated with any litigation, and these actions or other third-party claims against the Company may cause the Company to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require the Company to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, the Company's business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from the Company's estimates, which could result in the need to adjust the liability and record additional expenses.

Ericsson v. NETGEAR, Inc.

On September 14, 2010, Ericsson Inc. and Telefonaktiebolaget LM Ericsson (collectively “Ericsson”) filed a patent infringement lawsuit against the Company and defendants D-Link Corporation, D-Link Systems, Inc., Acer, Inc., Acer America Corporation, and Gateway, Inc. in the U.S. District Court, Eastern District of Texas alleging that the defendants infringe certain Ericsson patents. The Company has been accused of infringing eight U.S. patents: 5,790,516 (the “‘516 Patent”); 6,330,435 (the “‘435 Patent”); 6,424,625 (the “‘625 Patent”); 6,519,223 (the “‘223 Patent”); 6,772,215 (the “‘215 Patent”); 5,987,019 (the “‘019 Patent”); 6,466,568 (the “‘568 Patent”); and 5,771,468 (the “'468 Patent"). Ericsson generally alleged that the Company and the other defendants have infringed and continue to infringe the Ericsson patents through the defendants' IEEE 802.11-compliant products. In addition, Ericsson alleged that the Company infringed the claimed methods and apparatuses of the '468 Patent through the Company's PCMCIA routers. The Company filed its answer to the Ericsson complaint on December 17, 2010 where it asserted the affirmative defenses of non-infringement and invalidity of the asserted patents. On June 8, 2011, Ericsson filed an amended complaint that added Dell, Toshiba and Belkin as defendants. At the status conference held on June 9, 2011, the Court set a Markman (claim construction) hearing for June 28, 2012 and trial for June 3, 2013. On June 21, 2012, Ericsson dismissed the '468 Patent (“Multi-purpose base station”) with prejudice and gave the Company a covenant not to sue as to products in the marketplace now or in the past. On June 22, 2012, Intel filed its Complaint in Intervention, meaning that Intel became an official defendant in the Ericsson case. During the exchange of the expert reports, Ericsson dropped the '516 Patent (the OFDM “pulse shaping” patent). In addition, Ericsson dropped the '223 Patent (packet discard patent) against all the defendants' products, except for those products that use Intel chips. Thus, Ericsson has now dropped the '468 Patent (wireless base station), the '516 Patent (OFDM pulse shaping), and the '223 Patent (packet discard patent) for all non-Intel products.

A jury trial in the Ericsson case occurred in the Eastern District of Texas from June 3 through June 13, 2013. After hearing the evidence, the jury found no infringement of the '435 and '223 Patents, and the jury found infringement of claim 1 of the '625 Patent, claims 1 and 5 of the '568 Patent, and claims 1 and 2 of the '215 Patent. The jury also found that there was no willful infringement by any defendant. Additionally, the jury found no invalidity of the asserted claims of the '435 and '625 Patents. The jury assessed the following damages against the defendants: D-Link: $435,000; NETGEAR: $3,555,000; Acer/Gateway: $1,170,000; Dell: $1,920,000; Toshiba: $2,445,000; Belkin: $600,000. The damages awards equated to 15 cent per unit for each accused 802.11 device sold by each defendant (5 cent per patent).

On December 16, 2013, the Company and defendants submitted their appeal brief to the Federal Circuit. Ericsson filed its response brief on February 20, 2014, and the defendants filed their reply brief before on March 24, 2014. The oral arguments before the Federal Circuit took place on June 5, 2014.

On December 4, 2014, the Federal Circuit issued its opinion and order in the Company’s Ericsson appeal. The Federal Circuit vacated the entirety of the $3.6 million jury verdict against the Company and the ongoing 15 cent per unit royalty verdict, and also vacated the entirety of the verdict against the other defendants and their ongoing royalties, finding that the District Court hadn’t properly instructed the jury on royalty rates and Ericsson’s licensing promises. The Federal Circuit held that the lower court had failed to adequately instruct the jury about Ericsson’s actual commitments to license the infringed patents on reasonable and nondiscriminatory (“RAND”) terms. Further, the Federal Circuit stated that the lower court had neglected to inform the jury that a royalty for a patented technology must be removed from the value of the entire standard, and that a RAND royalty rate should be based on the invention’s value, rather than any added value from standardization. The jury’s damages awards were therefore completely vacated, and the case was remanded for further proceedings.

While the Federal Circuit found the district court had inadequate jury instructions, it held that there was enough evidence for the jury to find infringement of two claims of U.S. Patent Number 6,466,568 and two claims of U.S. Patent Number 6,772,215, but reversed the lower court’s decision not to grant a non-infringement judgment as a matter of law regarding the third patent, U.S. Patent Number 6,424,625, finding that no reasonable jury could find that the ‘625 Patent was infringed by the defendants.

In September of 2013, Broadcom filed petitions in the USPTO at the Patent Trial and Appeal Board (PTAB) seeking inter partes review (“IPR”) of Ericsson’s three patents that the jury found were infringed by the Company and other defendants. On March 6, 2015, the PTAB invalidated all the claims of these three patents that were asserted against the Company and other defendants at trial -- claim 1 of the '625 Patent, claims 1 and 5 of the '568 Patent, and claims 1 and 2 of the '215 Patent -- ruling these claims were anticipated or obvious in light of prior art. The PTAB also rejected two motions to amend by Ericsson, which sought to substitute certain proposed claims in the '625 and '568 patents, should they be found unpatentable by the PTAB. This PTAB decision comes on top of the Federal Circuit decision (a) vacating the jury verdict after finding that the district court had not properly instructed the jury on royalty rates and Ericsson’s licensing promises, and (b) ruling that no reasonable jury could have found the ‘625 Patent infringed. Ericsson appealed the PTAB decision to the Federal Circuit and also requested that the PTAB reconsider its decision, but the PTAB denied Ericsson’s request for reconsideration. Accordingly, the Company reversed the accruals related to this case in the first fiscal quarter of 2015. On September 16, 2016, the Federal Circuit upheld the invalidity of certain claims of the '625 Patent, the '568 Patent, and '215 Patent, as previously determined by the PTAB. The Federal Circuit only issued one precedential written opinion, on the 215 Patent; the PTAB invalidity rulings on the '625 and '568 Patents were upheld without a written decision. Ericsson petitioned the Federal Circuit for an en banc rehearing of the Federal Circuits appeal decision, and the Federal Circuit agreed to the en banc rehearing. The present status of the case continues to be that the Company does not infringe on any valid Ericsson patent.

Agenzia Entrate Provincial Revenue Office 1 of Milan v. NETGEAR International, Inc.

In November 2012, the Italian tax police began a comprehensive tax audit of NETGEAR International, Inc.’s Italian Branch. The scope of the audit initially was from 2004 through 2011 and was subsequently expanded to include 2012. The tax audit encompassed Corporate Income Tax (IRES), Regional Business Tax (IRAP) and Value-Added Tax (VAT). In December 2013, December 2014, August 2015, and December 2015 an assessment was issued by Inland Revenue Agency, Provincial Head Office No. 1 of Milan-Auditing Department (Milan Tax Office) for the 2004 tax year, the 2005 through 2007 tax years, the 2008 through 2010 tax years, and the 2011 through 2012 tax years, respectively.

In May 2014, the Company filed with the Provincial Tax Court of Milan an appeal brief, including a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2004 year. The hearing was held and decision was issued on December 19, 2014. The Tax Court decided in favor of the Company and nullified the assessment by the Inland Revenue Agency for 2004. The Inland Revenue Agency appealed the decision of the Tax Court on June 12, 2015. The Company filed its counter appeal with respect to the 2004 year during September 2015. On February 26, 2016 the Regional Tax Court conducted the appeals hearing for the 2004 year, ruling in favor of the Company. On June 13, 2016, the Inland Revenue Agency appealed the decision to the Supreme Court. The Company filed a counter appeal on July 23, 2016 and is awaiting scheduling of the hearing.

In June 2015, the Company filed with the Provincial Tax Court of Milan an appeal brief including a Request for Hearing in Open Court and Request for Suspension of the Tax Assessment for the 2005 through 2007 tax years. The hearing for suspension was held and the Request for Suspension of payment was granted. The hearing for the validity of the tax assessment for 2005 and 2006 was held in December 2015 with the Provincial Tax Court issuing its decision in favor of the Company. The Inland Revenue Agency filed its appeal with the Regional Tax Court. The Company filed its counter brief on September 30, 2016 and the hearing is scheduled for March 22, 2017.

The hearing for the validity of the tax assessment for 2007 was held on March 10, 2016 with the Provincial Tax Court who issued its decision in favor of the Company on April 7, 2016. The Inland Revenue Agency has filed its appeal to the Regional Tax Court and the Company has submitted its counter brief. The hearing has not yet been scheduled.

With respect to 2008 through 2010, the Company filed its briefs with the Tax Court in October 2015 and the hearing for the validity of the tax assessments was held on April 21, 2016 and a decision favorable to the Company was issued on May 12, 2016. The Inland Revenue Agency has filed its appeal to the Regional Tax Court. The Company filed its counter brief on February 1, 2017.

With respect to 2011 through 2012, the Company has filed its appeal brief on February 26, 2016 with the Provincial Tax Court to contest this assessment. The hearing for suspension was held and the Request for Suspension of payment was granted. On October 13, 2016, the Company filed its brief with the Provincial Tax Court. The hearing was held on October 24, 2016 and a decision favorable to the Company was issued by the Court. The Inland Revenue Agency has until May 8, 2017 to appeal the decision.

With regard to all tax years, it is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Via Vadis v. NETGEAR, Inc.

On August 22, 2014, the Company was sued by Via Vadis, LLC and AC Technologies, S.A. (“Via Vadis”), in the Western District of Texas. The complaint alleges that the Company’s ReadyNAS and Stora products “with built-in BitTorrent software" allegedly infringe three related patents of Via Vadis (U.S. Patent Nos. 7,904,680, RE40, 521, and 8,656,125). Via Vadis filed similar complaints against Belkin, Buffalo, Blizzard, D-Link, and Amazon.

By referring to “built-in BitTorrent software,” the Company believes that the complaint is referring to the BitTorrent Sync application, which was released by BitTorrent Inc. in spring of 2014. At a high-level, the application allows file synchronization across multiple devices by storing the underlying files on multiple local devices, rather than on a centralized server. The Company’s ReadyNAS products do not include BitTorrent software when sold. The BitTorrent application is provided as one of a multitude of potential download options, but the software itself is not included on the Company’s devices when shipped. Therefore, the only viable allegation at this point is an indirect infringement allegation.

On November 10, 2014, the Company answered the complaint denying that it infringes the patents in suit and also asserting the affirmative defenses that the patents in suit are invalid and barred by the equitable doctrines of laches, waiver, and/or estoppel.

On February 6, 2015, the Company filed its motion to transfer venue from the Western District of Texas to the Northern District of California with the Court; on February 13, 2015, Via Vadis filed its opposition to the Company’s motion to transfer; and on February 20, 2015, the Company filed its reply brief on its motion to transfer. In early April 2015, the Company received the plaintiff’s infringement contentions, and on June 12, 2015, the defendants served invalidity contentions. On July 30, 2015 the Court granted the Company’s motion to transfer venue to the Northern District of California. In addition, the Company learned that Amazon and Blizzard filed petitions for the inter partes reviews (“IPRs”) for the patents in suit. On October 30, 2015, the Company and Via Vadis filed a joint stipulation requesting that the Court vacate all deadlines and enter a stay of all proceedings in the case pending the Patent Trial and Appeal Board’s final non-appealable decision on the IPRs initiated by Amazon and Blizzard. On November 2, 2015 the Court granted the requested stay. On March 8, 2016, the Patent Trial and Appeal Board issued written decisions instituting the IPRs jointly filed by Amazon and Blizzard.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Chrimar Systems, Inc. v NETGEAR, Inc.

On July 1, 2015, the Company was sued by a non-practicing entity named Chrimar Systems, Inc., doing business as CMS Technologies and Chrimar Holding Company, LLC (collectively, “CMS”), in the Eastern District of Texas for allegedly infringing four patents-U.S. Patent Nos. 8,155,012 (the “'012 Patent”), entitled “System and method for adapting a piece of terminal equipment”; 8,942,107 (the “'107 Patent”), entitled “Piece of ethernet terminal equipment”; 8,902,760 (the “'760 Patent”), entitled “Network system and optional tethers”; and 9,019,838 (the “'838 Patent”), entitled “Central piece of network equipment” (collectively “patents-in-suit”). 

The patents-in-suit relate to using or embedding an electrical DC current or signal into an existing Ethernet communication link in order to transmit additional data about the devices on the communication link, and the specifications for the patents are identical. It appears that CMS has approximately 40 active cases in the Eastern District of Texas, as well as some cases in the Northern District of California on the patents-in-suit and the parent patent to the patents-in-suit.

The Company answered the complaint on September 15, 2015. On November 24, 2015, CMS served its infringement contentions on the Company, and CMS is generally attempting to assert that the patents in suit cover the Power over Ethernet standard (802.3af and 802.3at) used by certain of the Company's products.

On December 3, 2015, the Company filed with the Court a motion to transfer venue to the District Court for the Northern District of California and their memorandum of law in support thereof. On December 23, 2015, CMS filed its response to the Company’s motion to transfer, and, on January 8, 2016, the Company filed its reply brief in support of its motion to transfer venue. On January 15, 2016, the Court granted the Company’s motion to transfer venue to the District Court for the Northern District of California. The initial case management conference in the Northern District of California occurred on May 13, 2016, and on August 19, 2016, the parties exchanged preliminary claim constructions and extrinsic evidence. On August 26, 2016, the Company and three defendants in other Northern District of California CMS cases (Juniper Networks, Inc., Ruckus Wireless, Inc., and Fortinet, Inc.) submitted motions to stay their cases. The defendants in part argued that stays were appropriate pending the resolution of the currently-pending IPRs of the patents-in-suit before the Patent Trial and Appeal Board (PTAB), including four IPR Petitions filed by Juniper. On September 9, 2016, CMS submitted its opposition to the motions to stay the cases. On September 26, 2016, the Court ordered the cases stayed in their entirety, until the PTAB reaches institution decisions with respect to Juniper’s four pending IPR petitions. Juniper’s four IPR petitions were instituted by the PTAB in January 2017, and the Company subsequently moved to join the IPR petitions as an “understudy” to Juniper, only assuming a more active role in the petitions in the event Juniper settles with CMS. The Northern District of California CMS cases remain stayed in their entirety by the Court.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Tessera v. NETGEAR, Inc.

On May 23, 2016, Tessera Technologies, Inc., Tessera, Inc., and Invensas Corp. (collectively, “Tessera”) filed a complaint requesting that the U.S. International Trade Commission (“Commission”) commence an investigation pursuant to Section 337 by reason of alleged infringement of certain patent claims by the Company and other respondents. On June 20, 2016, the Commission issued the related Notice of Investigation, and the Investigation was instituted on June 24, 2016.

The Tessera complaint alleges that the following “Proposed Respondents” unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain semiconductor devices, semiconductor device packages, and products containing the same that infringe one or more claims of U.S. Patent Nos. 6,856,007 (the ‘007 patent), 6,849,946 (the ‘946 patent), and 6,133,136 (the ‘136 patent) (collectively, the “asserted patents”): Broadcom Limited of Singapore; Broadcom Corp. of Irvine, California; Avago Technologies Limited of Singapore; Avago Technologies U.S. Inc. of San Jose, California; Arista Networks, Inc. of Santa Clara, California; ARRIS International plc of Suwanee, Georgia; ARRIS Group, Inc. of Suwanee, Georgia; ARRIS Technology, Inc. of Horsham, Pennsylvania; ARRIS Enterprises LLC of Suwanee, Georgia; ARRIS Solutions, Inc. of Suwanee, Georgia; Pace Ltd. (formerly Pace plc) of England; Pace Americas, LLC of Boca Raton, Florida; Pace USA, LLC of Boca Raton, Florida; ASUSTeK Computer Inc. of Taiwan; ASUS Computer International of Fremont, California; Comcast Cable Communications, LLC of Philadelphia, Pennsylvania; Comcast Cable Communications Management, LLC of Philadelphia, Pennsylvania; Comcast Business Communications, LLC of Philadelphia, Pennsylvania; HTC Corp. of Taiwan; HTC America, Inc. of Bellevue, Washington; Technicolor S.A. of France; Technicolor USA, Inc. of Indianapolis, Indiana; Technicolor Connected Home USA LLC of Indianapolis, Indiana; and the Company.

According to the complaint, the asserted patents generally relate to semiconductor packaging technology. In particular, the ‘007 patent relates to a compact and economical semiconductor chip assembly that includes a packaged semiconductor chip, a chip carrier with a metallic thermal conductor, and a circuit panel with a thermal conductor mounting. The ‘946 patent relates to a semiconductor layout configuration and method that results in a more efficient planarization process for a semiconductor chip. Lastly, the ‘136 patent relates to a structure for metal interconnects used in semiconductor packaging.

In the complaint, Tessera states that the Proposed Respondents import and sell products that infringe the asserted patents. In particular, the complaint refers to multiple categories of accused semiconductor products associated with Broadcom and asserts that the remaining Proposed Respondents import and sell products that contain these infringing Broadcom semiconductor products. Tessera requested that the Commission issue a permanent limited exclusion order and a permanent cease and desist order directed at the Proposed Respondents and related entities.

The claim construction hearing for the Investigation is scheduled for December 1, 2016; the evidentiary hearing is scheduled for March 27 - 31, 2017; and the target date for completion of the Investigation is October 24, 2017.

Concurrently with the filing of the instant ITC complaint, Tessera also filed a complaint against Broadcom Corp. in the U.S. District Court for the District of Delaware alleging infringement of the asserted patents. The Company has not been sued in Delaware or any other jurisdiction other than the ITC.

Discovery in the ITC case is ongoing. The Company stipulated to certain facts regarding its importation and inventory of Broadcom-based products in return for various relief from discovery, such as reduced depositions and discovery responses.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Symbology v. NETGEAR, Inc.

On June 7, 2016, the Company and numerous other companies were sued in the Eastern District of Texas by a non-practicing entity named Symbology Innovations, LLC (“Symbology”). The lawsuit alleges infringement of three patents: U.S. Patent Nos. 8,424,752 (the ‘752 Patent); 8,651,369 (the ‘369 Patent); and 8,936,190 (the ‘190 Patent) (collectively “Patents in Suit”). The Patents in Suit are all entitled “System and method for presenting information about an object on a portable electronic device”, and the complaint targets the Company’s use of QR codes. In total, Symbology has filed approximately 50 lawsuits against 50 companies alleging infringement of the Patents in Suit.

The alleged infringers Symbology is targeting are advertisers using QR codes. The plaintiff generally is alleging that the Patents in Suit cover the use of QR codes to display content from a website, such as using a mobile phone to scan the QR code, whereby the phone gets the URL from the QR code and fetches the associated web page and then displays it on the mobile phone.

The Company was served with the complaint on July 8, 2016. On August 29, 2016, the Company received Symbology’s Preliminary Infringement Contentions and Disclosures. On September 12, 2016 the Company filed its Answer to the Complaint, denying the allegations of infringement and asserting numerous affirmative defenses.

On September 30, 2016, the Company received Symbology’s Initial Disclosures. On October 3, 2016, the Company filed a Motion to Transfer the case from the Eastern District of Texas to the Northern District of California, and on October 10, 2016, the Company filed its Initial Disclosures and initial technical document production. Without admitting any wrongdoing or violation of law and to avoid the distraction and expense of continued litigation and the uncertainty of a jury verdict on the merits, on January 2, 2017, the Company and Symbology settled the lawsuit for a one-time payment from the Company to Symbology in return for a license to the Company to the Symbology patents and applications that are currently owned by Symbology. The lawsuit against the Company was dismissed with prejudice on January 23, 2017. The settlement did not have a material financial impact to the Company.

e.Digital v. NETGEAR, Inc.

On September 12, 2016, e.Digital Corporation (e.Digital) filed a lawsuit against the Company in the Northern District of California accusing the Company of infringing U.S. Patent Nos. 8,311,522 (“the ’522 patent”); 8,311,524 (“the ’524 patent”); 9,002,331 (“the ’331 patent”); and 9,178,983 (“the ’983 patent”) (collectively, the “patents-in-suit”), which purportedly cover systems and methods for the remote detection, classification, and communication of sensor data. In the Complaint, e.Digital broadly accuses the Company’s Arlo wireless camera systems, including the Arlo Wire-Free, Arlo Q, and Arlo Q Plus cameras (collectively, the “Accused Products”). The allegations are generally directed at the “remote monitoring and communication” functionality of the Accused Products. Specifically, the Complaint alleges that the Accused Products infringe the patents-in-suit by utilizing sensors-such as cameras and microphones-to collect data and perform various operations-such as send alerts, trigger video recording, or take a snapshot-in response to a classification of the collected sensor data.

Beginning with a lawsuit against Dropcam in July, 2014, e.Digital has litigated the patents-in-suit, and related portfolio, against a handful of other companies with products similar to the Arlo wireless camera systems. The previous litigation includes the lawsuit against Dropcam along with suits against ArcSoft, Inc., ShenZhen Gospell Smarthome Electronic Co., Ltd., iBaby Labs, Inc., iSmart Alarm, Inc., MivaTek International, Inc., MyFox, Inc., and Nest. Concurrent with the filing of the instant complaint against the Company, e.Digital also filed similar suits against Netatmo LLC and Y-Cam Solutions, LLC. The Company submitted its answer to the e.Digital complaint in early November 2016, denying the infringement allegations and asserting several defenses. Discovery is ongoing.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

Rothschild Patent Imaging v. NETGEAR, Inc.

On December 9, 2016, a non-practicing entity named Rothschild Patent Imaging filed a patent infringement lawsuit against the Company in the U.S. District Court, Eastern District of Texas. RPI asserts infringement of U.S. Patent Nos. 8,204,437, 8,437,797, and 8,594,722, each entitled “Wireless Image Distribution System and Method.”

In its complaint, RPI alleges that its patents cover the wireless transmission of images from a mobile capturing device (e.g., security camera) to a user mobile device (e.g., smartphone) based on some pairing criterion between the capturing device and the user mobile device (e.g., proximate location, use of same user account). RPI specifically identifies the Company’s “Arlo Q and Arlo Q Plus cameras” of infringing claim 1 of the ’437 Patent, claim 6 of the ’797 Patent, and claims 1 and 5 of the ’722 Patent.

The answer was originally due on January 12, 2017, but the Company received an extension until February 13, 2017 to answer the Complaint, and on that date the Company answered the complaint by denying the infringement allegations, asserting various affirmative defenses, and bringing declaratory judgment counterclaims of non-infringement and invalidity of the patents in suit.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.
 
Script Security Solutions v. NETGEAR, Inc.

On December 12, 2016, Script Security Solutions L.L.C. (“Script”) sued the Company in U.S. District Court, Eastern District of Texas for alleged patent infringement of U.S. Patent Nos. 6,542,078 and 6,828,909. Script is a non-practicing entity and has filed over twenty other lawsuits alleging infringement of the same patents. A first wave of cases was filed in March 2015 against 11 defendants. All but one of those cases has settled or been terminated. A second wave of cases was filed in June 2015 against 6 defendants. Only two of those cases remain active. The third and most recent wave of cases was filed on December 12, 2016, against the Company and six other defendants.

The asserted patents are related. The ‘909 patent is a continuation-in-part of the ’078 patent. The asserted patents are titled “Portable Motion Detector and Alarm System and Method” and allegedly claim priority to May 30, 1996. The asserted patents generally are directed to a portable security alarm system that detects movement of objects relative to a variety of predetermined positions.

The complaint is directed to the Company’s Arlo Home Security Systems and VueZone wireless home video system and alleges that the Company directly infringes at least claim 1 of the ’078 patent and claim 1 of the ’909 patent.

The answer was originally due on January 12, 2017, but the Company received an extension until February 21, 2017 to answer the Complaint.  On that date, the Company answered the complaint by submitting a motion to dismiss the complaint because of Script’s failure to properly and sufficiently state a claim for relief.

It is too early to reasonably estimate any financial impact to the Company resulting from this litigation matter.

IP Indemnification Claims

In its sales agreements, the Company typically agrees to indemnify its direct customers, distributors and resellers (the “Indemnified Parties”) for any expenses or liability resulting from claimed infringements by the Company's products of patents, trademarks or copyrights of third parties that are asserted against the Indemnified Parties, subject to customary carve outs. The terms of these indemnification agreements are generally perpetual after execution of the agreement. The maximum amount of potential future indemnification is generally unlimited. From time to time, the Company receives requests for indemnity and may choose to assume the defense of such litigation asserted against the Indemnified Parties.

Environmental Regulation

The Company is required to comply and is currently in compliance with the European Union ("EU") and other Directives on the Restrictions of the use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”), Waste Electrical and Electronic Equipment ("WEEE") requirements, Energy Using Product (“EuP”) requirements, the REACH Regulation, Packaging Directive and the Battery Directive.

The Company is subject to various federal, state, local, and foreign environmental laws and regulations, including those governing the use, discharge, and disposal of hazardous substances in the ordinary course of our manufacturing process. The Company believes that its current manufacturing and other operations comply in all material respects with applicable environmental laws and regulations; however, it is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create an environmental liability with respect to its facilities, operations, or products. See further discussion of the business risks associated with environmental legislation under the risk titled, "We are subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution and sale of our products, as well as any such future laws and regulations. Some of our customers also require that we comply with their own unique requirements relating to these matters. Any failure to comply with such laws, regulations and requirements, and any associated unanticipated costs, may adversely affect our business, financial condition and results of operations." within Item 1A Risk Factors of this Form 10-K.
Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity

Common Stock Repurchase Programs

On October 21, 2008, October 17, 2014 and July 21, 2015, the Company’s Board of Directors authorized management to repurchase up to 6.0 million, 3.0 million and 3.0 million shares of the Company’s outstanding common stock, respectively, which, at the time of authorization, were incremental to the remaining shares under the share repurchase programs. Under the authorizations, the Company may repurchase shares of its common stock, depending on market conditions, in the open market or through privately negotiated transactions. The timing and actual number of shares subject to repurchase are at the discretion of management and are contingent on a number of factors, such as levels of cash generation from operations, cash requirements for acquisitions and the price of the Company’s common stock. As of December 31, 2016, both share repurchase programs authorized prior to July 2015 have been completed and there were 1.3 million shares remaining in the Company's buyback program. The Company repurchased, reported based on trade date, approximately 0.9 million shares of common stock at a cost of $38.3 million during the year ended December 31, 2016. During the years ended December 31, 2015 and December 31, 2014 , the Company repurchased and retired, reported based on trade date, approximately 3.8 million shares of common stock at a cost of $117.7 million and approximately 2.8 million shares of common stock at a cost of $90.6 million, respectively.

The Company repurchased, as reported based on trade date, approximately 0.1 million shares of common stock at a cost of $4.7 million, under a repurchase program to help administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes for individuals receiving RSUs during the year ended December 31, 2016. Similarly, during the years ended December 31, 2015 and December 31, 2014, the Company repurchased approximately 85,000 shares of common stock at a cost of $2.6 million and 82,000 shares of common stock at a cost of $2.6 million, respectively, under the same program to help facilitate tax withholding for RSUs.

These shares were retired upon repurchase. The Company’s policy related to repurchases of its common stock is to charge the excess of cost over par value to retained earnings. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Accumulated Other Comprehensive Income (Loss)

The following table sets forth the changes in accumulated other comprehensive income by component during the years ended December 31, 2016, 2015 and 2014:
 
Unrealized gains (losses) on available-for-sale securities
 
Unrealized gains (losses) on derivatives
 
Estimated tax benefit (provision)
 
Total
 
(In thousands)
Balance as of December 31, 2013
$
6

 
$
65

 
$
(2
)
 
$
69

      Other comprehensive income (loss) before reclassifications
(14
)
 
292

 
5

 
283

 Less: Amount reclassified from accumulated other comprehensive income
—

 
314

 
—

 
314

      Net current period other comprehensive loss
(14
)
 
(22
)
 
5

 
(31
)
Balance as of December 31, 2014
$
(8
)
 
$
43

 
$
3

 
$
38

      Other comprehensive income (loss) before reclassifications
(56
)
 
453

 
21

 
418

 Less: Amount reclassified from accumulated other comprehensive income
—

 
453

 
—

 
453

      Net current period other comprehensive loss
(56
)
 
—

 
21

 
(35
)
Balance as of December 31, 2015
$
(64
)
 
$
43

 
$
24

 
$
3

      Other comprehensive income before reclassifications
33

 
3,007

 
(572
)
 
2,468

 Less: Amount reclassified from accumulated other comprehensive income
—

 
820

 
(287
)
 
533

      Net current period other comprehensive income
33

 
2,187

 
(285
)
 
1,935

Balance as of December 31, 2016
$
(31
)
 
$
2,230

 
$
(261
)
 
$
1,938



The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2016, 2015 and 2014:
 
 
Year Ended December 31,
Details about Accumulated Other Comprehensive Income Components
 
2016
 
2015
 
2014
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
 
(In thousands)
Gains (losses) on cash flow hedge:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
1,100

 
Net revenue
 
$
462

 
Net revenue
 
$
459

 
Net revenue
Foreign currency forward contracts
 
(6
)
 
Cost of revenue
 
6

 
Cost of revenue
 
4

 
Cost of revenue
Foreign currency forward contracts
 
(274
)
 
Operating expenses
 
(15
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
 
820

 
Total before tax
 
453

 
Total before tax
 
314

 
Total before tax
 
 
(287
)
 
Tax impact
 
—

 
Tax impact (1)
 
—

 
Tax impact (1)
 
 
$
533

 
Total, net of tax
 
$
453

 
Total, net of tax
 
$
314

 
Total, net of tax

(1) 
Under the Company's 2015 and 2014 tax structure, all hedging gains and losses from derivative contracts were ultimately borne by a legal entity in a jurisdiction with no income tax.
Employee Benefit Plans (Notes)
Employee Benefit Plans
Employee Benefit Plans

2003 Stock Plan

In April 2003, the Company adopted the 2003 Stock Plan (the “2003 Plan”). The 2003 Plan provided for the granting of stock options to employees and consultants of the Company. During the second quarter of 2013, the Company's 2003 Stock Plan expired. No further equity awards can be granted under the 2003 Plan. Outstanding awards under the 2003 Stock Plan remain subject to the terms and conditions of the 2003 plan.

2006 Long Term Incentive Plan

In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”). The 2006 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards and other stock awards, to eligible directors, employees and consultants of the Company. The Company's 2006 Plan expired on April 13, 2016 by its terms. No further equity awards can be granted under the 2006 Plan. Outstanding awards under the 2006 Stock Plan remain subject to the terms and conditions of the 2006 plan.

2016 Equity Incentive Plan
In April 2016, the Company's Board of Directors adopted the 2016 Equity Incentive Plan (the "2016 Plan") which was approved by the Company's stockholders at the 2016 Annual Meeting of Stockholders on June 3, 2016. The 2016 Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible directors, employees and consultants of the Company. Award vesting periods for this plan are generally four years. The maximum aggregate number of shares that may be issued under the 2016 Plan is 2.5 million Shares, plus (i) any shares that were available for grant under the Company’s 2006 Plan as of immediately prior to the 2006 Plan's expiration by its terms, which was 699,827 shares, plus (ii) any shares granted under the 2006 Plan that expire, are forfeited to or repurchased by the Company. As of December 31, 2016, approximately 3.1 million shares were reserved for future grants under the 2016 Plan.
Options granted under the 2016 Plan may be either incentive stock options or nonstatutory stock options. Incentive stock options (“ISO”) may be granted only to Company employees (including officers and directors who are also employees). Nonstatutory stock options (“NSO”) may be granted to Company employees, directors and consultants. Options may be granted for periods of up to ten years and at prices no less than the estimated fair value of the common stock on the date of grant. In addition, the exercise price of an ISO granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. Options granted under the 2016 Plan generally vest over four years, the first tranche at the end of twelve months and the remaining shares underlying the option vesting monthly over the remaining three years. 
Stock Appreciation Rights may be granted under the 2016 Plan subject to the terms specified by the plan administrator, provided that the term of any such right may not exceed ten years from the date of grant. The exercise price may not be less than the fair market value of the Company’s common stock on the date of grant.    
Restricted stock awards may be granted under the 2016 Plan subject to the terms specified by the plan administrator. The period over which any restricted award may fully vest is generally no less than three years. Restricted stock awards are nonvested stock awards that may include grants of restricted stock or grants of restricted stock units. Restricted stock awards are rights to acquire or purchase shares that generally are subject to transferability and forfeitability restrictions for a specified period. Restricted stock has the same voting rights as other common stock and is considered to be currently issued and outstanding. Restricted stock units do not have the voting rights of common stock, and the shares underlying the restricted stock units are not considered issued and outstanding. The Company expenses the cost of the restricted stock awards, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.    

Performance units and performance shares are awards that result in a payment to a participant only if specified performance objectives or other vesting provisions are achieved during a specified performance period. Each performance unit will have an initial value established by the Administrator on or before the grant date. Each performance share will have an initial value equal to the fair market value of a share on the grant date. The plan administrator will determine the number of performance awards that will be granted and will establish the performance goals and other conditions for payment of such performance awards. The period of measuring the achievement of performance goals will be specified by an award agreement.

Other stock or cash awards may be granted under the 2016 Plan subject to the terms specified by the plan administrator.

Any shares subject to restricted stock, restricted stock units, performance units, or performance shares awarded under the 2016 Plan will be counted against the shares available for issuance under the 2016 Plan as one and fifty-eight hundredths (1.58) shares for every one share subject to such awards. Any shares of common stock subject to an award that is forfeited, settled in cash, expires or is otherwise settled without the issuance of shares shall again be available for awards under the 2016 Plan. Additionally, any shares that are tendered by a participant of the 2016 Plan or retained by the Company as full or partial payment to the Company for the purchase of an award or to satisfy tax withholding obligations in connection with an award shall no longer again be made available for issuance under the 2016 Plan.

Employee Stock Purchase Plan

The Company sponsors an Employee Stock Purchase Plan (the “ESPP”), pursuant to which eligible employees may contribute up to 10% of compensation, subject to certain income limits, to purchase shares of the Company’s common stock. Prior to February 16, 2016, employees could purchase stock semi-annually at a price equal to 85% of the fair market value on the purchase date. As the price of the shares was determined at the purchase date, the Company recognized expense based on the 15% discount at purchase. Beginning February 16, 2016, the terms of the plan include a look-back feature that enables employees to purchase stock semi-annually at a price equal to 85% of the lesser of the fair market value at the beginning of the offering period or the purchase date. The duration of each offering period is generally six-months. The fair value of the shares offered under the ESPP is estimated at grant using a Black-Scholes option valuation model. In April 2016, the Company approved an amendment to the plan to increase the number of shares of common stock authorized for sale under the plan by 1.0 million shares to a total of 2.0 million shares. For the years ended December 31, 2016, 2015, and 2014, the Company recognized ESPP compensation expense of $1.3 million, $0.5 million and $0.5 million, respectively. Employees purchased 0.1 million shares of common stock at an average exercise price of $31.47 in fiscal 2016. As of December 31, 2016, 1.0 million shares were reserved for future issuance under the ESPP.

Option Activity

Stock option activity during the year ended December 31, 2016 was as follows:
 
Number of
Shares
 
Weighted Average
Exercise Price Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding as of December 31, 2015
2,461

 
$
30.08

 
 
 
 
Granted
328

 
39.53

 
 
 
 
Exercised
(888
)
 
31.25

 
 
 
 
Cancelled
(15
)
 
34.13

 
 
 
 
Expired
(2
)
 
34.23

 
 
 
 
Outstanding as of December 31, 2016
1,884

 
$
31.14

 
5.88
 
$
43,724

 
 
 
 
 
 
 
 
As of December 31, 2016
 
 
 
 
 
 
 
Vested and expected to vest
1,811

 
$
30.93

 
5.76
 
$
42,413

Exercisable Options
1,236

 
$
28.71

 
4.47
 
$
31,690



The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price on the last trading day of 2016 and the exercise price, multiplied by the number of shares underlying the in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2016. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the year ended December 31, 2016, 2015, and 2014 was $14.5 million, $11.4 million and $3.4 million, respectively.

The total fair value of options vested during the years ended December 31, 2016, 2015, and 2014 was $4.2 million, $6.5 million and $10.0 million, respectively.

The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2016:
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
Shares
Outstanding
 
Weighted-
Average
Remaining
Contractual
Life
 
Weighted-
Average
Exercise
Price Per
Share
 
Shares
Exercisable
 
Weighted-
Average
Exercise
Price Per
Share
 
(In thousands)
 
(In years)
 
(In dollars)
 
(In thousands)
 
(In dollars)
$10.69 - $28.79
417

 
2.35
 
$
19.81

 
416

 
$
19.78

$29.76 - $32.21
377

 
7.06
 
31.29

 
205

 
31.30

$32.30 - $32.55
385

 
6.79
 
32.51

 
264

 
32.51

$33.15 - $39.53
703

 
6.84
 
37.01

 
349

 
34.88

$40.01 - $40.01
2

 
5.09
 
40.01

 
2

 
40.01

$10.69 - $40.01
1,884

 
5.88
 
$
31.14

 
1,236

 
$
28.71



RSU Activity

RSU activity during the year ended December 31, 2016 was as follows:

 
Number of
Shares
 
Weighted Average
Grant Date Fair Value Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding as of December 31, 2015
964

 
$
31.63

 
 
 
 
Granted
479

 
41.19

 
 
 
 
Vested
(345
)
 
31.40

 
 
 
 
Cancelled
(102
)
 
33.04

 
 
 
 
Outstanding as of December 31, 2016
996

 
$
36.22

 
1.36
 
$
54,131



Total intrinsic value of RSUs, or the release date fair value of RSUs, vested during the years ended December 31, 2016, 2015 and 2014 was $15.4 million, $8.9 million and $9.0 million, respectively. The total fair value or RSUs, or the grant date fair value of RSUs, vested during the years ended December 31, 2016, 2015 and 2014 was $10.8 million, $8.8 million and $8.4 million, respectively.

Valuation and Expense Information
The Company measures stock-based compensation at the grant date based on the estimated fair value of the award. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. The fair value of Employee Stock Purchase Plan (“ESPP”) is based on the 15% discount at purchase, since the price of the shares is determined at the purchase date. The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option valuation model that uses the assumptions noted in the following table. The estimated expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk free interest rate is based on the implied yield currently available on U.S. Treasury securities with a remaining term commensurate with the estimated expected term. Expected volatility is based on historical volatility over the most recent period commensurate with the estimated expected term.
The following table sets forth the weighted-average assumptions used to estimate the fair value option grants during the years ended December 31, 2016, 2015 and 2014 and purchase rights granted under the ESPP commencing February 16, 2016 and August 16, 2016 during the year ended December 31, 2016: 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
Stock Options
 
ESPP
Expected life (in years)
4.4

 
4.5

 
4.5

 
0.5

 
N/A
 
N/A
Risk-free interest rate
1.28
%
 
1.44
%
 
1.43
%
 
0.43
%
 
N/A
 
N/A
Expected volatility
35.4
%
 
39.3
%
 
42.6
%
 
38.3
%
 
N/A
 
N/A
Dividend yield
—

 
—

 
—

 
—

 
N/A
 
N/A


The weighted average estimated fair value of options granted during the years ended December 31, 2016, 2015 and 2014 was $12.28, $10.83 and $12.04, respectively.

The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations:

 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Cost of revenue
$
1,740

 
$
1,566

 
$
2,037

Research and development
4,075

 
3,451

 
4,916

Sales and marketing
5,065

 
5,022

 
6,168

General and administrative
8,069

 
6,786

 
6,893

Total
$
18,949

 
$
16,825

 
$
20,014



The Company recognizes these compensation costs net of the estimated forfeitures on a straight-line basis over the requisite service period of the award, which is generally the option vesting term of four years.

Total stock-based compensation cost capitalized in inventory was less than $0.5 million in the years ended December 31, 2016, 2015 and 2014.

As of December 31, 2016, $5.9 million of unrecognized compensation cost related to stock options, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 2.5 years. As of December 31, 2016, $22.4 million of unrecognized compensation cost related to unvested RSUs, adjusted for estimated forfeitures, is expected to be recognized over a weighted-average period of 2.4 years.

401(k) Plan

In April 2000, the Company adopted the NETGEAR 401(k) Plan to which employees may contribute up to 100% of salary subject to the legal maximum. In the first quarter of 2012, the Company began matching 50% of contributions for employees that remain active with the Company through the end of the fiscal year, up to a maximum of $6,000 in employee contributions. During the years ended December 31, 2016, 2015 and 2014 the Company recognized $1.0 million, $0.9 million and $1.0 million, respectively, in expenses related to the 401(k) match.
Segment Information, Operations By Geographic Area And Customer Concentration (Notes)
Segment Information, Operations By Geographic Area And Customer Concentration
Segment Information

Operating segments are components of an enterprise about which separate financial information is available and is regularly evaluated by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM and operates in three specific business units: retail, commercial, and service provider. The retail business unit consists of high performance, dependable and easy-to-use whole home WiFi networking solutions and Smart connected products. The commercial business unit consists of business networking, storage and security solutions that bring enterprise class functionality down to small and medium-sized businesses at an affordable price. The service provider business unit consists of made-to-order and retail-proven whole home networking hardware and software solutions, including 4G LTE hotspots sold to service providers for sale to their subscribers. Each business unit contains leadership focused on the product development efforts, both from a product marketing and engineering standpoint, to service the unique needs of these customer segments. The Company believes this structure enables it to better focus its efforts on the Company's core customer segments and allows it to be more nimble and opportunistic as a company overall.

The results of the reportable segments are derived directly from the Company’s management reporting system. The results are based on the Company’s method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income. Segment contribution income includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing expense and general and administrative costs, amortization of intangibles, stock-based compensation expense, restructuring and other charges, losses on inventory commitments due to restructuring, litigation reserves, net, interest income and other income (expense), net. The Company does not evaluate operating segments using discrete asset information.

Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands, except percentage data)
Net revenue:
 
 
 
 
 
Retail
$
763,549

 
$
614,367

 
$
508,100

Commercial
290,836

 
264,846

 
305,677

Service provider
273,913

 
421,482

 
579,738

Total net revenues
$
1,328,298

 
$
1,300,695

 
$
1,393,515

Contribution income:
 
 
 
 
 
  Retail
$
104,454

 
$
85,231

 
$
76,266

  Retail contribution margin
13.7
%
 
13.9
%
 
15.0
%
  Commercial
73,734

 
53,393

 
70,810

  Commercial contribution margin
25.4
%
 
20.2
%
 
23.2
%
  Service Provider
44,615

 
39,151

 
47,547

  Service Provider contribution margin
16.3
%
 
9.3
%
 
8.2
%
  Total segment contribution income
222,803

 
177,775

 
194,623

Corporate and unallocated costs
(69,140
)
 
(54,501
)
 
(53,581
)
Amortization of intangibles (1)
(16,733
)
 
(16,969
)
 
(17,573
)
Stock-based compensation expense
(18,949
)
 
(16,825
)
 
(20,014
)
Restructuring and other charges
(3,881
)
 
(6,398
)
 
(2,209
)
Acquisition-related expense (2)
—

 
—

 
(8
)
Losses on inventory commitments due to restructuring
—

 
(407
)
 
—

Litigation reserves, net
(73
)
 
2,682

 
1,011

Goodwill impairment charges
—

 
—

 
(74,196
)
Interest income
1,163

 
295

 
253

Other income (expense), net
(121
)
 
(88
)
 
2,455

Income before income taxes
$
115,069

 
$
85,564

 
$
30,761


(1) 
Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue.
(2) 
These acquisition-related charges were expensed in the period incurred and reported in the Company's consolidated statements of operations within cost of revenue and operating expenses.

Operations by Geographic Area

The Company conducts business across three geographic regions: Americas; Europe, Middle-East and Africa (“EMEA”) and Asia Pacific ("APAC'). Net revenue by geography comprises gross revenue less such items as end-user customer rebates and other sales incentives deemed to be a reduction of net revenue per the authoritative guidance for revenue recognition, sales returns and price protection. For reporting purposes revenue is attributed to each geographic region based on the location of the customer.

The following table shows net revenue by geography for the year ended December 31, 2016, 2015 and 2014:
 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
United States (U.S.)
$
855,796

 
$
779,361

 
$
750,933

Americas (excluding U.S.)
27,852

 
18,385

 
19,957

United Kingdom (U.K.)
52,375

 
103,649

 
154,503

EMEA (excluding U.K.)
193,030

 
218,065

 
267,384

APAC
199,245

 
181,235

 
200,738

Total net revenue
$
1,328,298

 
$
1,300,695

 
$
1,393,515



Long-lived assets by Geographic Area
Long-lived assets include purchased intangibles, goodwill and property and equipment. The Company's property and equipment are located in the following geographic locations:
 
As of
 
December 31, 2016
 
December 31, 2015
 
December 31, 2014
 
(In thousands)
United States
$
9,542

 
$
9,832

 
$
12,453

Canada
2,745

 
3,586

 
4,375

EMEA
210

 
468

 
657

China
5,219

 
6,562

 
10,786

APAC (excluding China)
1,757

 
1,936

 
1,423

Total property and equipment, net
$
19,473

 
$
22,384

 
$
29,694



Significant Customers

Two customers, one wholly within the retail business unit and the other one primarily within the retail business unit, accounted for 17% and 12% of net revenue in the year ended December 31, 2016, respectively. One customer accounted for 15% of net revenue, wholly within the retail business unit, in the year ended December 31, 2015. No customers accounted for 10% or more of net revenue in the year ended December 31, 2014.
Fair Value Measurements
Fair Value Of Financial Instruments
Fair Value Measurements

The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015:
 
As of December 31, 2016
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents: money-market funds
$
17,027

 
$
17,027

 
$
—

 
$
—

Available-for-sale securities: U.S. treasuries (1)
123,838

 
123,838

 
—

 
—

Available-for-sale securities: certificates of deposit (1)
148

 
148

 
—

 
—

Trading securities: mutual funds (1)
1,528

 
1,528

 
—

 
—

Foreign currency forward contracts (2)
8,763

 
—

 
8,763

 
—

Total assets measured at fair value
$
151,304

 
$
142,541

 
$
8,763

 
$
—


(1)
Included in short-term investments on the Company's consolidated balance sheets.
(2)  
Included in prepaid expenses and other current assets on the Company's consolidated balance sheets.
 
As of December 31, 2016
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts (3)
$
1,705

 
$
—

 
$
1,705

 
$
—

Total liabilities measured at fair value
$
1,705

 
$
—

 
$
1,705

 
$
—


 (3)  
Included in other accrued liabilities on the Company's consolidated balance sheets.
 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents: money-market funds
$
10,976

 
$
10,976

 
$
—

 
$
—

Available-for-sale securities: U.S. treasuries (1)
94,993

 
94,993

 
—

 
—

Available-for-sale securities: certificates of deposit (1)
147

 
147

 
—

 
—

Trading securities: mutual funds (1)
1,181

 
1,181

 
—

 
—

Foreign currency forward contracts (2)
3,205

 
—

 
3,205

 
—

Total assets measured at fair value
$
110,502

 
$
107,297

 
$
3,205

 
$
—


(1)
Included in short-term investments on the Company's consolidated balance sheets.
(2)  
Included in prepaid expenses and other current assets on the Company's consolidated balance sheets.

 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts (3)
$
451

 
$
—

 
$
451

 
$
—

Total liabilities measured at fair value
$
451

 
$
—

 
$
451

 
$
—


 (3)  
Included in other accrued liabilities on the Company's consolidated balance sheets.

The Company's investments in cash equivalents and available-for-sale securities are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company enters into foreign currency forward contracts with only those counterparties that have long-term credit ratings of A-/A3 or higher. The Company's foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into such models. Additionally, the Company includes an adjustment for non-performance risk in the recognized measure of fair value of derivative instruments. As of December 31, 2016 and 2015, the adjustment for non-performance risk did not have a material impact on the fair value of the Company's foreign currency forward contracts. The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including accounts receivable and accounts payable, approximate fair value due to their short maturities.
Restructuring and Other Charges (Notes)
Restructruring and Other Charges [Text Block]
Restructuring and Other Charges

The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company presents expenses related to restructuring and other charges as a separate line item in its consolidated statements of operations. Accrued restructuring and other charges are classified within other accrued liabilities in the consolidated balance sheets.

No significant restructuring and other charges or benefits were recognized during the last two fiscal quarters of 2016. Restructuring and other charges recognized in the second quarter of 2016 related primarily to severance as headcount reductions occurred within the commercial business unit. The headcount reductions were implemented in line with channel shift and changing buying behaviors being experienced for the commercial business unit products. Restructuring and other charges recognized in the first quarter of 2016, and the first and second quarter of 2015 respectively related to actions to resize the service provider business unit and supporting functions. The actions were taken to match the reduced revenue outlook and to concentrate resources on LTE Advanced and long-term profitable accounts. Charges incurred in these periods primarily related to severance, other one-time termination benefits and other associated costs attributable to the restructuring actions announced in February 2015 and January 2016, respectively. Amounts attributable to lease contract termination charges will be paid over the remaining lease term until January 2022. During the year ended December 31, 2014, the Company recognized a charge of $1.4 million relating primarily to expenses associated with the early termination of a lease agreement in Canada and $0.8 million primarily relating to one-time separation charges associated with the departure of the retail business unit general manager.


The following tables provide a summary of accrued restructuring and other charges activity for the years ended December 31, 2016, 2015 and 2014:  
 
Employee termination charges
 
Lease contract termination and other charges
 
Total
 
(In thousands)
Balance as of December 31, 2013
$
821

 
$
202

 
$
1,023

Additions
904

 
1,330

 
2,234

Cash payments
(1,387
)
 
(1,530
)
 
(2,917
)
Adjustments
(22
)
 
(2
)
 
(24
)
Balance as of December 31, 2014
316

 
—

 
316

Additions (1)
4,689

 
1,257

 
5,946

Cash payments
(4,992
)
 
(4
)
 
(4,996
)
Balance as of December 31, 2015
13

 
1,253

 
1,266

Additions (1)
3,128

 
629

 
3,757

Cash payments
(2,941
)
 
(480
)
 
(3,421
)
Adjustments
(194
)
 
—

 
(194
)
Balance as of December 31, 2016
$
6

 
$
1,402

 
$
1,408

(1) 
Total restructuring and other charges recognized in the Company's consolidated statements of operations for the year ended December 31, 2016 and 2015 included non-cash charges and adjustments, net of $0.3 million and $0.5 million. These amounts have been excluded from the table above.
Quarterly Financial Data (Notes)
Quarterly Financial Information [Text Block]
QUARTERLY FINANCIAL DATA
(In thousands, except per share amounts)
(Unaudited)

The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results.
 
December 31,
2016
October 2,
2016
July 3,
2016
April 3,
2016
Net revenue
$
367,929

$
338,458

$
311,655

$
310,256

Gross profit
$
110,710

$
103,122

$
97,788

$
100,565

Provision for income taxes
$
11,754

$
9,144

$
9,427

$
8,893

Net income
$
22,109

$
21,119

$
16,034

$
16,589

Net income per share—basic
$
0.67

$
0.64

$
0.49

$
0.51

Net income per share—diluted
$
0.65

$
0.62

$
0.48

$
0.50

 
 
 
 
 
 
December 31,
2015
September 27,
2015
June 28,
2015
March 29,
2015
Net revenue
$
360,863

$
341,893

$
288,782

$
309,157

Gross profit
$
105,416

$
96,327

$
77,656

$
88,280

Provision for income taxes
$
8,927

$
10,780

$
7,258

$
10,015

Net income
$
21,807

$
15,099

$
3,667

$
8,011

Net income per share—basic
$
0.68

$
0.47

$
0.11

$
0.23

Net income per share—diluted
$
0.66

$
0.47

$
0.11

$
0.23

Schedule II-Valuation and Qualifying Accounts (Notes)
Schedule of Valuation and Quarterly Financial Information [Text Block]
The following financial statement schedule of NETGEAR, Inc. for the fiscal years ended December 31, 2016, 2015 and 2014 is filed as part of this Form 10-K and should be read in conjunction with the consolidated financial statements of NETGEAR, Inc.
Schedule II—Valuation and Qualifying Accounts
 
Balance at
Beginning
of Year
 
Additions
 
Deductions
 
Balance
at End of
Year
 
(In thousands)
Allowance for doubtful accounts:
 
 
 
 
 
 
 
Year ended December 31, 2016
$
1,255

 
$
60

 
$
(60
)
 
$
1,255

Year ended December 31, 2015
1,255

 
35

 
(35
)
 
1,255

Year ended December 31, 2014
1,255

 
189

 
(189
)
 
1,255

Allowance for sales returns and warranty:
 
 
 
 
 
 
 
Year ended December 31, 2016
$
72,609

 
$
109,494

 
$
(110,077
)
 
$
72,026

Year ended December 31, 2015
62,376

 
105,987

 
(95,754
)
 
72,609

Year ended December 31, 2014
66,221

 
97,546

 
(101,391
)
 
62,376

Allowance for price protection:
 
 
 
 
 
 
 
Year ended December 31, 2016
$
2,125

 
$
12,239

 
$
(9,884
)
 
$
4,480

Year ended December 31, 2015
1,806

 
7,467

 
(7,148
)
 
2,125

Year ended December 31, 2014
4,273

 
7,534

 
(10,001
)
 
1,806

The Company and Summary of Significant Accounting Policies (Policies)
Basis of Presentation [Policy Text Block] 
Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in the consolidation of these subsidiaries.
Fiscal Periods [Policy Text Block] 
Fiscal periods

The Company's fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. The Company reports its results on a fiscal quarter basis rather than on a calendar quarter basis. Under the fiscal quarter basis, each of the first three fiscal quarters ends on the Sunday closest to the calendar quarter end, with the fourth quarter ending on December 31.
Use of Estimates [Policy Text Block] 
Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Cash and Cash Equivalents [Policy Text Block] 
Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity at the time of purchase of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions.
Short-Term Investment [Policy Text Block] 
Short-term investments

Short-term investments are partially comprised of marketable securities that consist of government securities with an original maturity or a remaining maturity at the time of purchase, of greater than three months and no more than 12 months. The marketable securities are held in the Company's name with one high quality financial institution, which acts as the Company's custodian and investment manager. These marketable securities are classified as available-for-sale securities in accordance with the provisions of the authoritative guidance for investments and are carried at fair value with unrealized gains and losses reported as a separate component of stockholders' equity.

Short-term investments are also comprised of marketable securities related to deferred compensation under the Company’s Deferred Compensation Plan. Mutual funds are the only investments allowed in the Company's Deferred Compensation Plan and the investments are held in a grantor trust formed by the Company. The Company has classified these investments as trading securities as the grantor trust actively manages the asset allocation to match the participants’ notional fund allocations. These securities are recorded at fair market value with unrealized gains and losses included in other income (expense), net.
Certain Risks And Uncertainties [Policy Text Block] 
Certain risks and uncertainties

The Company's products are concentrated in the networking and smart connected industries, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. The success of the Company depends on management's ability to anticipate and/or to respond quickly and adequately to such changes. Any significant delays in the development or introduction of products could have a material adverse effect on the Company's business and operating results.

The Company relies on a limited number of third parties to manufacture all of its products. If any of the Company's third-party manufacturers cannot or will not manufacture its products in required volumes, on a cost-effective basis, in a timely manner, or at all, the Company will have to secure additional manufacturing capacity. Any interruption or delay in manufacturing could have a material adverse effect on the Company's business and operating results.
Derivatives[Policy Text Block] 
Derivative financial instruments

The Company uses foreign currency forward contracts to manage the exposures to foreign exchange risk related to expected future cash flows on certain forecasted revenue, costs of revenue, operating expenses, and on certain existing assets and liabilities. Foreign currency forward contracts generally mature within nine months of inception. Under its foreign currency risk management strategy, the Company utilizes derivative instruments to reduce the impact of currency exchange rate movements on the Company's operating results by offsetting gains and losses on the forward contracts with increases or decreases in foreign currency transactions. The company does not use derivative financial instruments for speculative purposes.

The Company accounts for its derivative instruments as either assets or liabilities and records them at fair value. Derivatives that are not defined as hedges in the authoritative guidance for derivatives and hedging must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in current earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. For derivatives designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.
Concentration Risk, Credit Risk [Policy Text Block] 
Concentration of credit risk
    
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, short-term investments and accounts receivable. The Company believes that there is minimal credit risk associated with the investment of its cash and cash equivalents and short-term investments, due to the restrictions placed on the type of investment that can be entered into under the Company's investment policy. The Company's short-term investments consist of investment-grade securities, and the Company's cash and investments are held and managed by recognized financial institutions.

The Company's customers are primarily distributors as well as retailers and broadband service providers who sell or distribute the products to a large group of end-users. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of the Company's customers to make required payments. The Company regularly performs credit evaluations of the Company's customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic or country-specific risks and current economic conditions that may affect customers' ability to pay. The Company does not require collateral from its customers. The Company secures credit insurance for certain customers in international and domestic markets.

As of December 31, 2016 and 2015, Best Buy, Inc. and affiliates accounted for 38% and 37% of the Company's total accounts receivable, respectively, Amazon and affiliates accounted for 11% of the Company's total accounts receivable as of December 31, 2016, and no other customers accounted for 10% or greater of the Company's total accounts receivable.

The Company is exposed to credit loss in the event of nonperformance by counterparties to the foreign currency forward contracts used to mitigate the effect of foreign currency exchange rate changes. The Company believes the counterparties for its outstanding contracts are large, financially sound institutions and thus, the Company does not anticipate nonperformance by these counterparties. In the event of turbulence or the onset of a financial crisis in financial markets, the failure of additional counterparties cannot be ruled out.

Fair Value of Financial Instruments [Policy Text Block] 
Fair value measurements

The carrying amounts of the Company's financial instruments, including cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair values due to their short maturities. Foreign currency forward contracts are recorded at fair value based on observable market data. See Note 12, Fair Value Measurements, in Notes to Consolidated Financial Statements for disclosures regarding fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures.
Allowance for doubtful accounts [Policy Text Block] 
Allowance for doubtful accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company regularly performs credit evaluations of its customers' financial condition and considers factors such as historical experience, credit quality, age of the accounts receivable balances, and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. The allowance for doubtful accounts is reviewed quarterly and adjusted if necessary based on the Company's assessments of its customers' ability to pay. If the financial condition of the Company's customers should deteriorate or if actual defaults are higher than the Company's historical experience, additional allowances may be required, which could have an adverse impact on operating expenses.
Inventory, Policy [Policy Text Block] 
Inventories

Inventories consist primarily of finished goods which are valued at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. The Company writes down its inventories based on estimated excess and obsolete inventories determined primarily by the demand forecast but takes into account market conditions, product development plans, product life expectancy and other factors. At the point of loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase of the newly established cost basis.

Property, Plant and Equipment, Policy [Policy Text Block] 
Property and equipment, net

Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years


Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The carrying value of the asset is reviewed on a regular basis for the existence of facts, both internal and external, that may suggest impairment.
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] 
Goodwill

Goodwill represents the purchase price over estimated fair value of net assets of businesses acquired in a business combination. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually on the first day of the fourth quarter. Should certain events or indicators of impairment occur between annual impairment tests, the Company performs the impairment test as those events or indicators occur. Examples of such events or circumstances include the following: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in the business climate; and slower growth rates.

Goodwill is tested for impairment at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. The Company identified the reporting units as retail, commercial and service provider reporting units, as this is the lowest level for which discrete financial information is available and segment management regularly reviews the operating results. The qualitative assessment considers the following factors: macroeconomic conditions, industry and market considerations, cost factors, overall company financial performance, events affecting the reporting units, and changes in the Company's share price. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its net assets. If the fair value is greater than the carrying value of its net assets, no impairment is recorded. If the fair value is less than its carrying value, the Company would determine the fair value of the goodwill by comparing the implied fair value to the carrying value of the goodwill in the same manner as if the reporting unit were being acquired in a business combination. Specifically, the Company would allocate the fair value to all of its assets and liabilities, including any unrecognized intangibles, in a hypothetical analysis that would calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, an impairment charge would be recorded to earnings in the consolidated statements of operations.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] 
Intangibles, net

Purchased intangibles with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from three to ten years. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
Standard Product Warranty, Policy [Policy Text Block] 
Warranty obligations

The Company provides for estimated future warranty obligations at the time revenue is recognized. The Company's standard warranty obligation to its direct customers generally provides for a right of return of any product for a full refund in the event that such product is not merchantable or is found to be damaged or defective. At the time revenue is recognized, an estimate of future warranty returns is recorded to reduce revenue in the amount of the expected credit or refund to be provided to its direct customers. At the time the Company records the reduction to revenue related to warranty returns, the Company includes within cost of revenue a write-down to reduce the carrying value of such products to net realizable value. The Company's standard warranty obligation to its end-users provides for replacement of a defective product for one or more years. Factors that affect the warranty obligation include product failure rates, material usage, and service delivery costs incurred in correcting product failures. The estimated cost associated with fulfilling the Company's warranty obligation to end-users is recorded in cost of revenue. Because the Company's products are manufactured by third-party manufacturers, in certain cases the Company has recourse to the third-party manufacturer for replacement or credit for the defective products. The Company gives consideration to amounts recoverable from its third-party manufacturers in determining its warranty liability.
Revenue Recognition, Policy [Policy Text Block] 
Revenue recognition

Revenue from product sales is generally recognized at the time the product is shipped provided that persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured. Currently, for some of the Company's customers, title passes to the customer upon delivery to the port or country of destination, upon their receipt of the product, or upon the customer's resale of the product. At the end of each fiscal quarter, the Company estimates and defers revenue related to product where title has not transferred. The revenue continues to be deferred until such time that title passes to the customer. The Company assesses collectability based on a number of factors, including general economic and market conditions, past transaction history with the customer, and the creditworthiness of the customer. If the Company determines that collection is not reasonably assured, then revenue is deferred until receipt of the payment from the customer.

The Company has product offerings with multiple elements. The Company's multiple-element product offerings include hardware with free services, networking hardware with embedded software, various software subscription services, and support, which are considered separate units of accounting. In general, the hardware and networking hardware with embedded software are delivered up front, while the free services are delivered over the stated service period, or the estimated useful life, while the subscription services and support are delivered over the subscription and support period. The Company allocates revenue to the deliverables based upon their relative selling price. Revenue allocated to each unit of accounting is then recognized when persuasive evidence of an arrangement exists, title and risk of loss has transferred to the customer, the selling price is fixed or determinable and collection of the related receivable is reasonably assured.

When applying the relative selling price method, the Company determines the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of fair value of the deliverable, or when VSOE of fair value is unavailable, its best estimate of selling price (“ESP”), as the Company has determined it is unable to establish third-party evidence of selling price for the deliverables. In determining VSOE, the Company requires that a substantial majority of the selling prices for a deliverable sold on a stand-alone basis fall within a reasonably narrow pricing range, generally evidenced by approximately 80% of such historical stand-alone transactions falling within +/-15% of the median price. The Company determines ESP for a deliverable by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The objective of ESP is to determine the price at which the Company would transact a sale if the deliverable were sold on a stand-alone basis. The determination of ESP is made through consultation with and formal approval by the Company's management, taking into consideration the go-to-market strategy.

Certain distributors and retailers generally have the right to return product for stock rotation purposes. Upon shipment of the product, the Company reduces revenue for an estimate of potential future product warranty and stock rotation returns related to the current period product revenue. Management analyzes historical returns, channel inventory levels, current economic trends and changes in customer demand for the Company's products when evaluating the adequacy of the allowance for sales returns, namely warranty and stock rotation returns. Revenue on shipments is also reduced for estimated price protection and sales incentives deemed to be contra-revenue under the authoritative guidance for revenue recognition.
Revenue Recognition, Incentives [Policy Text Block] 
Sales incentives

The Company accrues for sales incentives as a marketing expense if it receives an identifiable benefit in exchange and can reasonably estimate the fair value of the identifiable benefit received; otherwise, it is recorded as a reduction to revenues. As a consequence, the Company records a substantial portion of its channel marketing costs as a reduction of revenue.

The Company records estimated reductions to revenues for sales incentives at the later of when the related revenue is recognized or when the program is offered to the customer or end consumer.
Shipping and Handling Cost, Policy [Policy Text Block] 
Shipping and handling fees and costs

The Company includes shipping and handling fees billed to customers in net revenue. Shipping and handling costs associated with inbound freight are included in cost of revenue. In cases where the Company gives a freight allowance to the customer for their own inbound freight costs, such costs are appropriately recorded as a reduction in net revenue.
Research and Development Expense, Policy [Policy Text Block] 
Research and development

Costs incurred in the research and development of new products are charged to expense as incurred.
Advertising Costs, Policy [Policy Text Block] 
Advertising costs

Advertising costs are expensed as incurred.
Income Tax, Policy [Policy Text Block] 
Income taxes

The Company accounts for income taxes under an asset and liability approach. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences resulting from different treatment for tax versus accounting for certain items, such as accruals and allowances not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheets. The Company must then assess the likelihood that the Company's deferred tax assets will be recovered from future taxable income and to the extent the Company believes that recovery is not more likely than not, the Company must establish a valuation allowance. The Company’s assessment considers the recognition of deferred tax assets on a jurisdictional basis. Accordingly, in assessing its future taxable income on a jurisdictional basis, the Company considers the effect of its transfer pricing policies on that income.

In the ordinary course of business there is inherent uncertainty in assessing the Company's income tax positions. The Company assesses its tax positions and records benefits for all years subject to examination based on management's evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recorded in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component of income tax expense.

Earnings Per Share, Policy [Policy Text Block] 
Net income per share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted net income per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options, vesting of restricted stock awards, and issuances of ESPP. Potentially dilutive shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] 
Stock-based compensation

The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to restricted stock units (“RSUs”) is based on the closing fair market value of the Company’s common stock on the date of grant. Prior to February 16, 2016, the fair value of Employee Stock Purchase Plan (“ESPP”) was based on the 15% discount at purchase, since the price of the shares was determined at the purchase date. Beginning February 16, 2016, the fair value of the shares offered under the ESPP is estimated at grant using a Black-Scholes option valuation model.

The compensation expense for equity awards is reduced by an estimate for forfeitures and is recognized over the vesting period of the award under a graded vesting method. In addition, the Company will recognize an excess benefit from stock-based compensation in equity based on the difference between tax expense computed with consideration of the windfall deduction and without consideration of the windfall deduction. In addition, the Company accounts for the indirect effects of stock-based compensation on the research tax credit and the foreign tax credit in the income statement.
Comprehensive Income [Policy Text Block] 
Comprehensive income

Comprehensive income consists of net income and other gains and losses affecting stockholder's equity that the Company excluded from net income, including gains and losses related to fair value of short-term investments and the effective portion of cash flow hedges that were outstanding as of the end of the year.
Foreign Currency Transactions and Translations Policy [Policy Text Block] 
Foreign currency translation and re-measurement

The Company's functional currency is the U.S. dollar for all of its international subsidiaries. Foreign currency transactions of international subsidiaries are re-measured into U.S. dollars at the end-of-period exchange rates for monetary assets and liabilities, and at historical exchange rates for non-monetary assets. Revenue is re-measured at average exchange rates in effect during each period. Expenses are re-measured at average exchange rates in effect during each period, except for expenses related to non-monetary assets, which are re-measured at historical exchange rates. Gains and losses arising from foreign currency transactions are included in Other income (expense), net.

The Company and Summary of Significant Accounting Policies (Tables)
Schedule Of Estimated Useful Lives Of Property and Equipment, Net [Table Text Block]
Property and equipment are stated at historical cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Computer equipment
2 years
Furniture and fixtures
5 years
Software
2-5 years
Machinery and equipment
2-3 years
Leasehold improvements
Shorter of the lease term or 5 years
Business Acquisitions (Tables) (Placemeter [Member])
Schedule of Business Acquisitions, by Acquisition
The allocation of the purchase price was as follows (in thousands):
Cash and cash equivalents
$
8

Accounts receivable, net
11

Prepaid expenses and other current assets
130

Property and equipment, net
83

Intangibles, net
6,000

Goodwill
3,742

Accounts payable
(40
)
Other current accrued liabilities
(74
)
Deferred tax liabilities, net
(308
)
Total purchase price
$
9,552

Balance Sheet Components (Tables)
Schedule Of Available-For-Sale Short-Term 
 
As of
 
December 31, 2016
 
December 31, 2015
 
Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
 Cost
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
 
(In thousands)
U.S. treasuries
$
123,869

 
$
9

 
$
(40
)
 
$
123,838

 
$
95,057

 
$
1

 
$
(65
)
 
$
94,993

Certificates of deposits
148

 
—

 
—

 
148

 
147

 
—

 
—

 
147

Total
$
124,017

 
$
9

 
$
(40
)
 
$
123,986

 
$
95,204

 
$
1

 
$
(65
)
 
$
95,140

Schedule Of Accounts Receivable And Related Allowances 
Accounts receivable, net
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Gross accounts receivable
$
333,080

 
$
309,926

Allowance for doubtful accounts
(1,255
)
 
(1,255
)
Allowance for sales returns
(13,506
)
 
(15,904
)
Allowance for price protection
(4,480
)
 
(2,125
)
Total allowances
(19,241
)
 
(19,284
)
Total accounts receivable, net
$
313,839

 
$
290,642

Schedule Of Inventories 
Inventories 
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Raw materials
$
4,596

 
$
4,292

Work-in-process
—

 
2

Finished goods
243,266

 
208,824

Total inventories
$
247,862

 
$
213,118

Schedule Of Property And Equipment, Net 
Property and equipment, net 
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Computer equipment
$
10,557

 
$
11,161

Furniture, fixtures and leasehold improvements
20,827

 
18,317

Software
28,663

 
30,396

Machinery and equipment
63,446

 
66,662

Total property and equipment, gross
123,493

 
126,536

Accumulated depreciation and amortization
(104,020
)
 
(104,152
)
Total property and equipment, net
$
19,473

 
$
22,384

Schedule Of Purchased Intangibles, Net 
Intangibles, net
 
The following tables present details of the Company’s purchased intangibles:
 
As of December 31, 2016
 
Gross
 
Accumulated Amortization
 
Net
 
(In thousands)
Technology
$
66,599

 
$
(57,381
)
 
$
9,218

Customer contracts and relationships
56,500

 
(30,375
)
 
26,125

Other
11,045

 
(8,489
)
 
2,556

Total intangibles, net
134,144

 
(96,245
)
 
37,899


 
As of December 31, 2015
 
Gross
 
Accumulated Amortization
 
Net
 
(In thousands)
Technology
$
61,099

 
$
(48,485
)
 
$
12,614

Customer contracts and relationships
56,500

 
(23,290
)
 
33,210

Other
10,545

 
(7,422
)
 
3,123

Total intangibles, net
$
128,144

 
$
(79,197
)
 
$
48,947

Schedule Of Estimated Amortization Expense Related To Intangibles 
Estimated amortization expense related to finite-lived intangibles for each of the next five years and thereafter is as follows:
Year Ended December 31,
Amounts (In thousands)
2017
$
12,911

2018
9,396

2019
7,544

2020
6,622

2021
1,413

Thereafter
13

Total estimated amortization expense
$
37,899

Schedule Of Activity Related To Goodwill 
Goodwill
 
The changes in the carrying amount of goodwill during the years ended December 31, 2016 and 2015 are as follows:
 
 
Retail
 
Commercial
 
Service Provider
 
Total
 
 
(In thousands)
As of December 31, 2014
 
$
45,442

 
$
36,279

 
$
—

 
$
81,721

      Goodwill impairment charges
 
—

 
—

 
—

 
—

As of December 31, 2015
 
45,442

 
36,279

 
—

 
81,721

      Goodwill from acquisition of Placemeter
 
3,742

 
—

 
—

 
3,742

As of December 31, 2016
 
$
49,184

 
$
36,279

 
$
—

 
$
85,463

Schedule of Other Assets, Noncurrent 
Other non-current assets
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Non-current deferred income taxes
$
70,859

 
$
68,445

Other
7,977

 
7,929

Total other non-current assets
$
78,836

 
$
76,374



Schedule Of Other Accrued Liabilities 
Other accrued liabilities  
 
As of
 
December 31, 2016
 
December 31, 2015
 
(In thousands)
Sales and marketing programs
$
74,330

 
$
69,693

Warranty obligation
58,520

 
56,706

Freight
8,980

 
5,748

Other
28,844

 
34,135

Total other accrued liabilities
$
170,674

 
$
166,282

Derivative Financial Instruments (Tables)
Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets 
The fair values of the Company’s derivative instruments and the line items on the consolidated balance sheets to which they were recorded as of December 31, 2016, and 2015, are summarized as follows:
 
Derivative Assets
 
Balance Sheets
Location
 
Fair value at December 31, 2016
 
Balance Sheets
Location
 
Fair value at December 31, 2015
 
 
 
 
(In thousands)

 
 
 
(In thousands)

Derivative assets not designated as hedging instruments
 
Prepaid expenses and other current assets
 
$
5,873

 
Prepaid expenses and other current assets
 
$
3,203

Derivative assets designated as hedging
instruments
 
Prepaid expenses and other current assets
 
2,890

 
Prepaid expenses and other current assets
 
2

Total
 
 
 
$
8,763

 
 
 
$
3,205


 
Derivative Liabilities
 
Balance Sheets
Location
 
Fair value at December 31, 2016
 
Balance Sheets
Location
 
Fair value at December 31, 2015
 
 
 
 
(In thousands)

 
 
 
(In thousands)

Derivative liabilities not designated as hedging instruments
 
Other accrued liabilities
 
$
1,002

 
Other accrued liabilities
 
$
447

Derivative liabilities designated as hedging instruments
 
Other accrued liabilities
 
703

 
Other accrued liabilities
 
4

Total
 
 
 
$
1,705

 
 
 
$
451



Schedule of Offsetting of Derivative Assets 
The following tables set forth the offsetting of derivative assets as of December 31, 2016 and 2015:
As of December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
J.P. Morgan Chase
 
$
1,492

 
$
—

 
$
1,492

 
$
(442
)
 
$
—

 
$
1,050

Wells Fargo
 
7,271

 
—

 
7,271

 
(1,263
)
 
—

 
6,008

Total
 
$
8,763

 
$
—

 
$
8,763

 
$
(1,705
)
 
$
—

 
$
7,058


As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
Barclays        
 
$
577

 
$
—

 
$
577

 
$
(56
)
 
$
—

 
$
521

Wells Fargo
 
2,628

 
—

 
2,628

 
(395
)
 
—

 
2,233

Total
 
$
3,205

 
$
—

 
$
3,205

 
$
(451
)
 
$
—

 
$
2,754

Schedule of Offsetting of Derivative Liabilities 
The following tables set forth the offsetting of derivative liabilities as of December 31, 2016 and 2015:
As of December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
J.P. Morgan Chase
 
$
442

 
$
—

 
$
442

 
$
(442
)
 
$
—

 
$
—

Wells Fargo
 
1,263

 
—

 
1,263

 
(1,263
)
 
—

 
—

Total
 
$
1,705

 
$
—

 
$
1,705

 
$
(1,705
)
 
$
—

 
$
—


As of December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts Of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
 
 
(In thousands)
Barclays        
 
$
56

 
$
—

 
$
56

 
$
(56
)
 
$
—

 
$
—

Wells Fargo
 
395

 
—

 
395

 
(395
)
 
—

 
—

Total
 
$
451

 
$
—

 
$
451

 
$
(451
)
 
$
—

 
$
—

Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations 
The pre-tax effects of the Company’s derivative instruments on OCI and the consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014 are summarized as follows:
Derivatives Designated as Hedging Instruments
 
Year Ended December 31, 2016
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
3,007

 
Net revenue
 
$
1,100

 
Other income (expense), net
 
$
365

Foreign currency forward contracts
 
—

 
Cost of revenue
 
(6
)
 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(274
)
 
Other income (expense), net
 
—

Total
 
$
3,007

 
 
 
$
820

 
 
 
$
365

(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.


Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2015
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
453

 
Net revenue
 
$
462

 
Other income (expense), net
 
$
(52
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
6

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(15
)
 
Other income (expense), net
 
—

Total
 
$
453

 
 
 
$
453

 
 
 
$
(52
)
(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.
Derivatives Designated as
Hedging Instruments
 
Year Ended December 31, 2014
 
Gains (Losses) 
Recognized in
OCI -
Effective
Portion
 
Location of
Gains (Losses)
Reclassified from OCI
into Income - Effective
Portion
 
Gains (Losses)
Reclassified
from
OCI into
Income -
Effective
Portion (1)
 
Location of
Gains (Losses)
Recognized in
Income and
Excluded from
Effectiveness  Testing
 
Amount of Gains (Losses) Recognized in
Income and
Excluded from
Effectiveness  Testing
 
 
(In thousands)
Cash flow hedges:
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
292

 
Net revenue
 
$
459

 
Other income (expense), net
 
$
(144
)
Foreign currency forward contracts
 
—

 
Cost of revenue
 
4

 
Other income (expense), net
 
—

Foreign currency forward contracts
 
—

 
Operating expenses
 
(149
)
 
Other income (expense), net
 
—

Total
 
$
292

 
 
 
$
314

 
 
 
$
(144
)
(1)  
Refer to Note 9, Stockholders' Equity, which summarizes the accumulated other comprehensive income activity related to derivatives.

Schedule Of Derivatives Not Designated As Hedging Instruments 
The effects of the Company’s derivatives not designated as hedging instruments in other income (expense), net in the consolidated statements of operations for the years ended December 31, 2016, 2015 and 2014, are as follows:
 
 
 
 
Year ended December 31,
Derivatives Not Designated as Hedging Instruments
 
Location of Gains (Losses)
Recognized in Income on Derivative
2016
2015
2014
 
 
 
(In thousands)
Foreign currency forward contracts
 
Other income (expense), net
3,789

4,956

$
4,897

Net Income Per Share (Tables)
Schedule Of Net Income Per Share
Net income per share for the years ended December 31, 2016, 2015 and 2014 was as follows:
 
 
 
Year Ended December 31,
 
 
2016
 
2015
 
2014
 
 
(In thousands, except per share data)
Numerator:
 
 
 
 
 
 
Net income
 
$
75,851

 
$
48,584

 
$
8,788

Denominator:
 
 
 
 
 
 
Weighted average common shares - basic
 
32,758

 
33,161

 
35,771

Potentially dilutive common share equivalent
 
970

 
627

 
674

Weighted average common shares - dilutive
 
33,728

 
33,788

 
36,445

 
 
 
 
 
 
 
Basic net income per share
 
$
2.32

 
$
1.47

 
$
0.25

Diluted net income per share
 
$
2.25

 
$
1.44

 
$
0.24

 
 
 
 
 
 
 
Anti-dilutive employee stock-based awards, excluded
 
258

 
1,807

 
2,617

Other Income (Expense), Net (Tables)
Schedule of Other Nonoperating Income (Expense) [Table Text Block]
Other income (expense), net consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Foreign currency transaction loss, net
$
(3,835
)
 
$
(5,114
)
 
$
(5,642
)
Foreign currency contract gain, net
4,154

 
4,904

 
4,753

Gain on litigation settlements
—

 
—

 
2,800

Other
(440
)
 
122

 
544

Total
$
(121
)
 
$
(88
)
 
$
2,455

Income Taxes (Tables)
Schedule of Income Before Income Taxes 
Income before income taxes and the provision for income taxes consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
United States
$
88,748

 
$
88,681

 
$
25,152

International
26,321

 
(3,117
)
 
5,609

Total
$
115,069

 
$
85,564

 
$
30,761

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Current:
 
 
 
 
 
U.S. Federal
$
33,267

 
$
30,970

 
$
29,089

State
2,693

 
3,139

 
2,873

Foreign
6,278

 
6,105

 
10,930

 
42,238

 
40,214

 
42,892

Deferred:
 
 
 
 
 
U.S. Federal
(2,052
)
 
(2,645
)
 
(20,347
)
State
441

 
134

 
(326
)
Foreign
(1,409
)
 
(723
)
 
(246
)
 
(3,020
)
 
(3,234
)
 
(20,919
)
Total
$
39,218

 
$
36,980

 
$
21,973

Schedule of Deferred Tax Assets and Liabilities [Table Text Block] 
Net deferred tax assets consisted of the following:
 
Year Ended December 31,
 
2016
 
2015
 
(In thousands)
Deferred Tax Assets:
 
 
 
Accruals and allowances
$
32,303

 
$
29,279

Net operating loss carryforwards
6,358

 
5,353

Stock-based compensation
8,250

 
9,895

Deferred rent
3,002

 
2,740

Deferred revenue
1,957

 
1,185

Tax credit carryforwards
1,543

 
2,262

Acquired intangibles
21,871

 
22,778

Depreciation and amortization
1,160

 
—

Total deferred tax assets
76,444

 
73,492

Deferred Tax Liabilities:
 
 
 
Depreciation and amortization
—

 
(967
)
Other
(991
)
 
(438
)
Total deferred tax liabilities
(991
)
 
(1,405
)
 
 
 
 
Valuation Allowance (1)
(4,594
)
 
(3,642
)
Net deferred tax assets
$
70,859

 
$
68,445

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] 
The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Tax at federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State, net of federal benefit
1.8
 %
 
2.6
 %
 
2.5
 %
Impact of international operations
(2.7
)%
 
7.1
 %
 
19.8
 %
Stock-based compensation
1.2
 %
 
(0.4
)%
 
5.5
 %
Tax credits
(0.9
)%
 
(1.2
)%
 
(3.8
)%
Valuation allowance
—
 %
 
—
 %
 
3.5
 %
Goodwill impairment
—
 %
 
—
 %
 
7.8
 %
Others
(0.3
)%
 
0.1
 %
 
1.1
 %
Provision for income taxes
34.1
 %
 
43.2
 %
 
71.4
 %
Schedule of Reconciliation of Unrecognized Tax Benefits [Table Text Block] 
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (“UTB”) is as follows:
 
Federal, State, and Foreign Tax
 
(In thousands)
Balance as of December 31, 2013
$
12,743

Additions based on tax positions related to the current year
1,894

Additions for tax positions of prior years
1,722

Settlements
(503
)
Reductions for tax positions of prior years
(152
)
Reductions due to lapse of applicable statutes
(1,838
)
Adjustments due to foreign exchange rate movement
(502
)
Balance as of December 31, 2014
13,364

Additions based on tax positions related to the current year
1,608

Additions for tax positions of prior years
228

Settlements
(199
)
Reductions for tax positions of prior years
(302
)
Reductions due to lapse of applicable statutes
(1,053
)
Adjustments due to foreign exchange rate movement
(816
)
Balance as of December 31, 2015
$
12,830

Additions based on tax positions related to the current year
1,523

Additions for tax positions of prior years
45

Settlements
—

Reductions for tax positions of prior years
(237
)
Reductions due to lapse of applicable statutes
(627
)
Adjustments due to foreign exchange rate movement
(569
)
Balance as of December 31, 2016
12,965

Commitments And Contingencies Commitments and contingencies (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]
As of December 31, 2016, future minimum lease payments under non-cancelable operating leases are as follows:
Fiscal Year
Amount (In thousands)
2017
$
7,744

2018
7,138

2019
6,366

2020
5,381

2021
5,134

Thereafter
17,701

Total
$
49,464

Commitments And Contingencies Product Warranties (Tables)
Schedule of Product Warranty Liability [Table Text Block]
Changes in the Company's warranty liability, which is included in other accrued liabilities in the consolidated balance sheets, are as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Balance at the beginning of the year
$
56,706

 
$
44,888

 
$
48,754

Provision for warranty obligations made during the year
87,570

 
80,085

 
62,709

Settlements made during the year
(85,756
)
 
(68,267
)
 
(66,575
)
Balance at the end of year
$
58,520

 
$
56,706

 
$
44,888

Stockholders' Equity (Tables)
Schedule Of Accumulated Other Comprehensive Income 
The following table sets forth the changes in accumulated other comprehensive income by component during the years ended December 31, 2016, 2015 and 2014:
 
Unrealized gains (losses) on available-for-sale securities
 
Unrealized gains (losses) on derivatives
 
Estimated tax benefit (provision)
 
Total
 
(In thousands)
Balance as of December 31, 2013
$
6

 
$
65

 
$
(2
)
 
$
69

      Other comprehensive income (loss) before reclassifications
(14
)
 
292

 
5

 
283

 Less: Amount reclassified from accumulated other comprehensive income
—

 
314

 
—

 
314

      Net current period other comprehensive loss
(14
)
 
(22
)
 
5

 
(31
)
Balance as of December 31, 2014
$
(8
)
 
$
43

 
$
3

 
$
38

      Other comprehensive income (loss) before reclassifications
(56
)
 
453

 
21

 
418

 Less: Amount reclassified from accumulated other comprehensive income
—

 
453

 
—

 
453

      Net current period other comprehensive loss
(56
)
 
—

 
21

 
(35
)
Balance as of December 31, 2015
$
(64
)
 
$
43

 
$
24

 
$
3

      Other comprehensive income before reclassifications
33

 
3,007

 
(572
)
 
2,468

 Less: Amount reclassified from accumulated other comprehensive income
—

 
820

 
(287
)
 
533

      Net current period other comprehensive income
33

 
2,187

 
(285
)
 
1,935

Balance as of December 31, 2016
$
(31
)
 
$
2,230

 
$
(261
)
 
$
1,938

Schedule of Reclassification out of Accumulated Other Comprehensive Income 
The following tables provide details about significant amounts reclassified out of each component of accumulated other comprehensive income for the years ended December 31, 2016, 2015 and 2014:
 
 
Year Ended December 31,
Details about Accumulated Other Comprehensive Income Components
 
2016
 
2015
 
2014
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
Amount Reclassified from AOCI
 
Affected Line Item in the Statements of Operations
 
 
(In thousands)
Gains (losses) on cash flow hedge:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
1,100

 
Net revenue
 
$
462

 
Net revenue
 
$
459

 
Net revenue
Foreign currency forward contracts
 
(6
)
 
Cost of revenue
 
6

 
Cost of revenue
 
4

 
Cost of revenue
Foreign currency forward contracts
 
(274
)
 
Operating expenses
 
(15
)
 
Operating expenses
 
(149
)
 
Operating expenses
 
 
820

 
Total before tax
 
453

 
Total before tax
 
314

 
Total before tax
 
 
(287
)
 
Tax impact
 
—

 
Tax impact (1)
 
—

 
Tax impact (1)
 
 
$
533

 
Total, net of tax
 
$
453

 
Total, net of tax
 
$
314

 
Total, net of tax

(1) 
Under the Company's 2015 and 2014 tax structure, all hedging gains and losses from derivative contracts were ultimately borne by a legal entity in a jurisdiction with no income tax.
Employee Benefit Plans (Tables)
Schedule Of Stock Option Activity 
Option Activity

Stock option activity during the year ended December 31, 2016 was as follows:
 
Number of
Shares
 
Weighted Average
Exercise Price Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding as of December 31, 2015
2,461

 
$
30.08

 
 
 
 
Granted
328

 
39.53

 
 
 
 
Exercised
(888
)
 
31.25

 
 
 
 
Cancelled
(15
)
 
34.13

 
 
 
 
Expired
(2
)
 
34.23

 
 
 
 
Outstanding as of December 31, 2016
1,884

 
$
31.14

 
5.88
 
$
43,724

 
 
 
 
 
 
 
 
As of December 31, 2016
 
 
 
 
 
 
 
Vested and expected to vest
1,811

 
$
30.93

 
5.76
 
$
42,413

Exercisable Options
1,236

 
$
28.71

 
4.47
 
$
31,690

Schedule of Ranges of Outstanding And Exercisable Stock Options 
The following table summarizes significant ranges of outstanding and exercisable stock options as of December 31, 2016:
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
Shares
Outstanding
 
Weighted-
Average
Remaining
Contractual
Life
 
Weighted-
Average
Exercise
Price Per
Share
 
Shares
Exercisable
 
Weighted-
Average
Exercise
Price Per
Share
 
(In thousands)
 
(In years)
 
(In dollars)
 
(In thousands)
 
(In dollars)
$10.69 - $28.79
417

 
2.35
 
$
19.81

 
416

 
$
19.78

$29.76 - $32.21
377

 
7.06
 
31.29

 
205

 
31.30

$32.30 - $32.55
385

 
6.79
 
32.51

 
264

 
32.51

$33.15 - $39.53
703

 
6.84
 
37.01

 
349

 
34.88

$40.01 - $40.01
2

 
5.09
 
40.01

 
2

 
40.01

$10.69 - $40.01
1,884

 
5.88
 
$
31.14

 
1,236

 
$
28.71

Schedule Of RSU Activity 
RSU Activity

RSU activity during the year ended December 31, 2016 was as follows:

 
Number of
Shares
 
Weighted Average
Grant Date Fair Value Per
Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
 
(In thousands)
 
(In dollars)
 
(In years)
 
(In thousands)
Outstanding as of December 31, 2015
964

 
$
31.63

 
 
 
 
Granted
479

 
41.19

 
 
 
 
Vested
(345
)
 
31.40

 
 
 
 
Cancelled
(102
)
 
33.04

 
 
 
 
Outstanding as of December 31, 2016
996

 
$
36.22

 
1.36
 
$
54,131

Schedule Of Valuation And Expense Information 
The following table sets forth the weighted-average assumptions used to estimate the fair value option grants during the years ended December 31, 2016, 2015 and 2014 and purchase rights granted under the ESPP commencing February 16, 2016 and August 16, 2016 during the year ended December 31, 2016: 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
Stock Options
 
ESPP
Expected life (in years)
4.4

 
4.5

 
4.5

 
0.5

 
N/A
 
N/A
Risk-free interest rate
1.28
%
 
1.44
%
 
1.43
%
 
0.43
%
 
N/A
 
N/A
Expected volatility
35.4
%
 
39.3
%
 
42.6
%
 
38.3
%
 
N/A
 
N/A
Dividend yield
—

 
—

 
—

 
—

 
N/A
 
N/A
Schedule Of Total Stock-Based Compensation Expense Resulting From Stock Options, Restricted Stock Awards, And The Employee Stock Purchase Plan 

The following table sets forth stock-based compensation expense resulting from stock options, restricted stock awards, and the Employee Stock Purchase Plan included in the Company’s consolidated statements of operations:

 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Cost of revenue
$
1,740

 
$
1,566

 
$
2,037

Research and development
4,075

 
3,451

 
4,916

Sales and marketing
5,065

 
5,022

 
6,168

General and administrative
8,069

 
6,786

 
6,893

Total
$
18,949

 
$
16,825

 
$
20,014

Segment Information, Operations By Geographic Area And Customer Concentration (Tables)
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes 
Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands, except percentage data)
Net revenue:
 
 
 
 
 
Retail
$
763,549

 
$
614,367

 
$
508,100

Commercial
290,836

 
264,846

 
305,677

Service provider
273,913

 
421,482

 
579,738

Total net revenues
$
1,328,298

 
$
1,300,695

 
$
1,393,515

Contribution income:
 
 
 
 
 
  Retail
$
104,454

 
$
85,231

 
$
76,266

  Retail contribution margin
13.7
%
 
13.9
%
 
15.0
%
  Commercial
73,734

 
53,393

 
70,810

  Commercial contribution margin
25.4
%
 
20.2
%
 
23.2
%
  Service Provider
44,615

 
39,151

 
47,547

  Service Provider contribution margin
16.3
%
 
9.3
%
 
8.2
%
  Total segment contribution income
222,803

 
177,775

 
194,623

Corporate and unallocated costs
(69,140
)
 
(54,501
)
 
(53,581
)
Amortization of intangibles (1)
(16,733
)
 
(16,969
)
 
(17,573
)
Stock-based compensation expense
(18,949
)
 
(16,825
)
 
(20,014
)
Restructuring and other charges
(3,881
)
 
(6,398
)
 
(2,209
)
Acquisition-related expense (2)
—

 
—

 
(8
)
Losses on inventory commitments due to restructuring
—

 
(407
)
 
—

Litigation reserves, net
(73
)
 
2,682

 
1,011

Goodwill impairment charges
—

 
—

 
(74,196
)
Interest income
1,163

 
295

 
253

Other income (expense), net
(121
)
 
(88
)
 
2,455

Income before income taxes
$
115,069

 
$
85,564

 
$
30,761


(1) 
Amount excludes amortization expense related to patents within purchased intangibles in cost of revenue.
(2) 
These acquisition-related charges were expensed in the period incurred and reported in the Company's consolidated statements of operations within cost of revenue and operating expenses.

Schedule Of Net Revenue By Geography Periods 
The following table shows net revenue by geography for the year ended December 31, 2016, 2015 and 2014:
 
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
United States (U.S.)
$
855,796

 
$
779,361

 
$
750,933

Americas (excluding U.S.)
27,852

 
18,385

 
19,957

United Kingdom (U.K.)
52,375

 
103,649

 
154,503

EMEA (excluding U.K.)
193,030

 
218,065

 
267,384

APAC
199,245

 
181,235

 
200,738

Total net revenue
$
1,328,298

 
$
1,300,695

 
$
1,393,515

Schedule Of Long-Lived Asset By Geographic Areas 
The Company's property and equipment are located in the following geographic locations:
 
As of
 
December 31, 2016
 
December 31, 2015
 
December 31, 2014
 
(In thousands)
United States
$
9,542

 
$
9,832

 
$
12,453

Canada
2,745

 
3,586

 
4,375

EMEA
210

 
468

 
657

China
5,219

 
6,562

 
10,786

APAC (excluding China)
1,757

 
1,936

 
1,423

Total property and equipment, net
$
19,473

 
$
22,384

 
$
29,694



Fair Value Measurements (Tables)
Fair Value, Assets Measured On Recurring Basis 
 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents: money-market funds
$
10,976

 
$
10,976

 
$
—

 
$
—

Available-for-sale securities: U.S. treasuries (1)
94,993

 
94,993

 
—

 
—

Available-for-sale securities: certificates of deposit (1)
147

 
147

 
—

 
—

Trading securities: mutual funds (1)
1,181

 
1,181

 
—

 
—

Foreign currency forward contracts (2)
3,205

 
—

 
3,205

 
—

Total assets measured at fair value
$
110,502

 
$
107,297

 
$
3,205

 
$
—


(1)
Included in short-term investments on the Company's consolidated balance sheets.
(2)  
Included in prepaid expenses and other current assets on the Company's consolidated balance sheets.

 
As of December 31, 2016
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Assets:
 
 
 
 
 
 
 
Cash equivalents: money-market funds
$
17,027

 
$
17,027

 
$
—

 
$
—

Available-for-sale securities: U.S. treasuries (1)
123,838

 
123,838

 
—

 
—

Available-for-sale securities: certificates of deposit (1)
148

 
148

 
—

 
—

Trading securities: mutual funds (1)
1,528

 
1,528

 
—

 
—

Foreign currency forward contracts (2)
8,763

 
—

 
8,763

 
—

Total assets measured at fair value
$
151,304

 
$
142,541

 
$
8,763

 
$
—


(1)
Included in short-term investments on the Company's consolidated balance sheets.
(2)  
Included in prepaid expenses and other current assets on the Company's consolidated balance sheets.
Fair Value, Liabilities Measured On Recurring Basis 
 
As of December 31, 2015
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts (3)
$
451

 
$
—

 
$
451

 
$
—

Total liabilities measured at fair value
$
451

 
$
—

 
$
451

 
$
—


 (3)  
Included in other accrued liabilities on the Company's consolidated balance sheets.
 
As of December 31, 2016
 
Total
 
Quoted market
prices in active
markets
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
(In thousands)
Liabilities:
 
 
 
 
 
 
 
Foreign currency forward contracts (3)
$
1,705

 
$
—

 
$
1,705

 
$
—

Total liabilities measured at fair value
$
1,705

 
$
—

 
$
1,705

 
$
—


 (3)  
Included in other accrued liabilities on the Company's consolidated balance sheets.
Restructuring and Other Charges (Tables)
Restructuring and other charges [Table Text Block]
 
 
Employee termination charges
 
Lease contract termination and other charges
 
Total
 
(In thousands)
Balance as of December 31, 2013
$
821

 
$
202

 
$
1,023

Additions
904

 
1,330

 
2,234

Cash payments
(1,387
)
 
(1,530
)
 
(2,917
)
Adjustments
(22
)
 
(2
)
 
(24
)
Balance as of December 31, 2014
316

 
—

 
316

Additions (1)
4,689

 
1,257

 
5,946

Cash payments
(4,992
)
 
(4
)
 
(4,996
)
Balance as of December 31, 2015
13

 
1,253

 
1,266

Additions (1)
3,128

 
629

 
3,757

Cash payments
(2,941
)
 
(480
)
 
(3,421
)
Adjustments
(194
)
 
—

 
(194
)
Balance as of December 31, 2016
$
6

 
$
1,402

 
$
1,408

(1) 
Total restructuring and other charges recognized in the Company's consolidated statements of operations for the year ended December 31, 2016 and 2015 included non-cash charges and adjustments, net of $0.3 million and $0.5 million. These amounts have been excluded from the table above.
Quarterly Financial Data (Tables)
Schedule of Quarterly Financial Information [Table Text Block]
The following table presents unaudited quarterly financial information for each of the Company’s last eight quarters. This information has been derived from the Company’s unaudited financial statements and has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, consisting only of normal recurring adjustments, have been included to state fairly the quarterly results.
 
December 31,
2016
October 2,
2016
July 3,
2016
April 3,
2016
Net revenue
$
367,929

$
338,458

$
311,655

$
310,256

Gross profit
$
110,710

$
103,122

$
97,788

$
100,565

Provision for income taxes
$
11,754

$
9,144

$
9,427

$
8,893

Net income
$
22,109

$
21,119

$
16,034

$
16,589

Net income per share—basic
$
0.67

$
0.64

$
0.49

$
0.51

Net income per share—diluted
$
0.65

$
0.62

$
0.48

$
0.50

 
 
 
 
 
 
December 31,
2015
September 27,
2015
June 28,
2015
March 29,
2015
Net revenue
$
360,863

$
341,893

$
288,782

$
309,157

Gross profit
$
105,416

$
96,327

$
77,656

$
88,280

Provision for income taxes
$
8,927

$
10,780

$
7,258

$
10,015

Net income
$
21,807

$
15,099

$
3,667

$
8,011

Net income per share—basic
$
0.68

$
0.47

$
0.11

$
0.23

Net income per share—diluted
$
0.66

$
0.47

$
0.11

$
0.23

The Company and Summary of Significant Accounting Policies Narrative (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Significant Accounting Policies [Line Items]
 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
$ 0 
$ 0 
$ 0 
Goodwill impairment charges
0 
0 
74,196,000 
Shipping, Handling and Transportation Costs
9,200,000 
10,400,000 
10,500,000 
Marketing and Advertising Expense
24,500,000 
19,400,000 
19,100,000 
Service Provider [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Goodwill impairment charges
 
$ 0 
$ 74,196,000 
Minimum [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
3 years 
 
 
Standard Warranty Replacement of a Defective Product, Period
1 year 
 
 
Maximum [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Finite-Lived Intangible Asset, Useful Life
10 years 
 
 
Accounts Receivable [Member] |
Best Buy Inc [Member] |
Customer Concentration Risk [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Concentration Risk, Percentage
38.00% 
37.00% 
 
Accounts Receivable [Member] |
Amazon [Member] |
Customer Concentration Risk [Member]
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
Concentration Risk, Percentage
11.00% 
 
 
The Company and Summary of Significant Accounting Policies Property and Equipment, Net (Schedule of Estimated Useful Lives) (Details)
12 Months Ended
Dec. 31, 2016
Computer Equipment [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Furniture and Fixtures [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Software [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Software [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Machinery and Equipment [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
2 years 
Machinery and Equipment [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
3 years 
Leasehold Improvements [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Estimated Useful Lives
Shorter of the lease term or 5 years 
Leasehold Improvements [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property, Plant and Equipment, Useful Life
5 years 
Business Acquisitions (Narrative) (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 3 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Nov. 30, 2016
Placemeter [Member]
Dec. 31, 2016
Placemeter [Member]
Nov. 30, 2016
Placemeter [Member]
Nov. 30, 2016
Placemeter [Member]
Technology [Member]
Nov. 30, 2016
Placemeter [Member]
Technology [Member]
Nov. 30, 2016
Placemeter [Member]
Dadabase [Member]
Nov. 30, 2016
Placemeter [Member]
Dadabase [Member]
Nov. 30, 2016
Placemeter [Member]
Noncompete Agreements [Member]
Nov. 30, 2016
Placemeter [Member]
Noncompete Agreements [Member]
Nov. 30, 2016
Placemeter [Member]
US Federal [Member]
Nov. 30, 2016
Placemeter [Member]
State and Local Jurisdiction [Member]
Mar. 31, 2017
Subsequent Event [Member]
Placemeter [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total purchase price
 
 
 
$ 9,552,000 
 
 
 
 
 
 
 
 
 
 
 
Purchase price, cash paid
 
 
 
 
8,800,000 
 
 
 
 
 
 
 
 
 
800,000 
Intangible assets, net
 
 
 
 
 
6,000,000 
 
5,500,000 
 
200,000 
 
300,000 
 
 
 
Goodwill
85,463,000 
81,721,000 
81,721,000 
 
 
3,742,000 
 
 
 
 
 
 
 
 
 
Discount rate used to calculate present value of future cash flows ( in percentage)
 
 
 
 
 
 
15.00% 
 
15.00% 
 
20.00% 
 
 
 
 
Acquired intangible assets, estimated useful life ( in years)
 
 
 
 
 
 
4 years 
 
4 years 
 
3 years 
 
 
 
 
Business Acquisition, Goodwill, Expected Tax Deductible Amount
 
 
 
 
 
 
 
 
 
 
 
 
$ 0 
$ 0 
 
Business Acquisitions (Schedule Of Allocation Of Purchase Price) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Nov. 30, 2016
Placemeter [Member]
Business Acquisition [Line Items]
 
 
 
 
Cash
 
 
 
$ 8 
Accounts Receivable
 
 
 
11 
Prepaid and Other Current Assets
 
 
 
130 
Property and equipment, net
 
 
 
83 
Intangible assets, net
 
 
 
6,000 
Goodwill
85,463 
81,721 
81,721 
3,742 
Accounts Payable
 
 
 
(40)
Current Liabilities, Other
 
 
 
(74)
Deferred Tax Liabilities, Non-current
 
 
 
(308)
Total purchase price
 
 
 
$ 9,552 
Balance Sheet Components (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Balance Sheet Components [Line Items]
 
 
 
Asset Impairment Charges
 
$ 0 
$ 0 
Goodwill, Impaired, Accumulated Impairment Loss
74,200,000 
74,200,000 
 
Amortization expense
17,000,000 
17,300,000 
17,900,000 
Goodwill impairment charges
0 
0 
74,196,000 
Impairment of Intangible Assets (Excluding Goodwill)
0 
0 
0 
Service Provider [Member]
 
 
 
Balance Sheet Components [Line Items]
 
 
 
Goodwill impairment charges
 
$ 0 
$ 74,196,000 
Balance Sheet Components (Schedule Of Available-For-Sale Short-Term) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
$ 124,017 
$ 95,204 
Unrealized Gain
9 
1 
Unrealized Loss
(40)
(65)
Estimated Fair Value
123,986 
95,140 
Treasuries [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
123,869 
95,057 
Unrealized Gain
9 
1 
Unrealized Loss
(40)
(65)
Estimated Fair Value
123,838 
94,993 
Certificates Of Deposits [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Cost
148 
147 
Unrealized Gain
0 
0 
Unrealized Loss
0 
0 
Estimated Fair Value
$ 148 
$ 147 
Balance Sheet Components (Schedule Of Inventories) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
 
 
Raw materials
$ 4,596 
$ 4,292 
Work-in-process
0 
2 
Finished Goods
243,266 
208,824 
Total
$ 247,862 
$ 213,118 
Balance Sheet Components (Schedule Of Property And Equipment, Net) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Total property and equipment, gross
$ 123,493 
$ 126,536 
 
Accumulated depreciation and amortization
(104,020)
(104,152)
 
Total property and equipment, net
19,473 
22,384 
29,694 
Computer Equipment [Member]
 
 
 
Total property and equipment, gross
10,557 
11,161 
 
Furniture, Fixtures And Leasehold Improvements [Member]
 
 
 
Total property and equipment, gross
20,827 
18,317 
 
Software [Member]
 
 
 
Total property and equipment, gross
28,663 
30,396 
 
Machinery and Equipment [Member]
 
 
 
Total property and equipment, gross
$ 63,446 
$ 66,662 
 
Balance Sheet Components Balance Sheet Components - Property and Equipment, other information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
 
Depreciation
$ 14.6 
$ 18.1 
$ 17.6 
Balance Sheet Components (Schedule Of Intangibles, Net) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Purchased Intangible Assets [Line Items]
 
 
Gross
$ 134,144 
$ 128,144 
Accumulated Amortization
(96,245)
(79,197)
Finite-lived intangibles, net
37,899 
48,947 
Technology [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
66,599 
61,099 
Accumulated Amortization
(57,381)
(48,485)
Finite-lived intangibles, net
9,218 
12,614 
Customer Contracts And Relationships [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
56,500 
56,500 
Accumulated Amortization
(30,375)
(23,290)
Finite-lived intangibles, net
26,125 
33,210 
Other [Member]
 
 
Purchased Intangible Assets [Line Items]
 
 
Gross
11,045 
10,545 
Accumulated Amortization
(8,489)
(7,422)
Finite-lived intangibles, net
$ 2,556 
$ 3,123 
Balance Sheet Components (Schedule Of Goodwill By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
$ 81,721 
$ 81,721 
 
Goodwill, Acquired During Period
3,742 
 
 
Goodwill impairment charges
0 
0 
74,196 
Goodwill (period end)
85,463 
81,721 
81,721 
Retail [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
45,442 
45,442 
 
Goodwill, Acquired During Period
3,742 
 
 
Goodwill impairment charges
 
0 
 
Goodwill (period end)
49,184 
45,442 
 
Commercial [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
36,279 
36,279 
 
Goodwill, Acquired During Period
0 
 
 
Goodwill impairment charges
 
0 
 
Goodwill (period end)
36,279 
36,279 
 
Service Provider [Member]
 
 
 
Goodwill [Roll Forward]
 
 
 
Goodwill (period start)
0 
0 
 
Goodwill, Acquired During Period
0 
 
 
Goodwill impairment charges
 
0 
74,196 
Goodwill (period end)
$ 0 
$ 0 
$ 0 
Balance Sheet Components Schedule of Other Non-Current Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
 
 
Non-current deferred income taxes
$ 70,859 
$ 68,445 
Other
7,977 
7,929 
Total other non-current assets
$ 78,836 
$ 76,374 
Balance Sheet Components (Schedule Of Other Accrued Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Balance Sheet Related Disclosures [Abstract]
 
 
Sales and marketing programs
$ 74,330 
$ 69,693 
Warranty obligation
58,520 
56,706 
Freight
8,980 
5,748 
Other
28,844 
34,135 
Total other accrued liabilities
$ 170,674 
$ 166,282 
Derivative Financial Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Foreign Currency Forward Contracts [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
9 months 
Foreign Currency Forward Contracts [Member] |
Cash Flow Hedges [Member]
 
Derivative [Line Items]
 
Approximate number of derivatives per quarter (in derivatives)
10 
Cash flow hedge
$ 8 
Number of months taken by the company to reclass the amounts recorded in other comprehensive income to earnings (in months)
12 months 
Hedge period of forecasted hedge transaction (in days)
60 days 
Derivatives Designated As Hedging Instruments [Member] |
Cash Flow Hedges [Member] |
Minimum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
5 months 
Derivatives Designated As Hedging Instruments [Member] |
Cash Flow Hedges [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
8 months 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member]
 
Derivative [Line Items]
 
Approximate number of derivatives per quarter (in derivatives)
10 
Cash flow hedge
$ 2 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Minimum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
1 month 
Derivatives Not Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Maximum [Member]
 
Derivative [Line Items]
 
Derivative, Term of Contract ( in months)
3 months 
Derivative Financial Instruments (Schedule Of Fair Values Of The Company's Derivative Instruments And The Line Items On The Consolidated Balance Sheets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Derivatives, Fair Value [Line Items]
 
 
Gross Amounts of Recognized Assets
$ 8,763 
$ 3,205 
Gross Amounts of Recognized Liabilities
1,705 
451 
Prepaid Expenses And Other Current Assets [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gross Amounts of Recognized Assets
5,873 
3,203 
Prepaid Expenses And Other Current Assets [Member] |
Derivatives Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gross Amounts of Recognized Assets
2,890 
2 
Other Current Liabilities [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gross Amounts of Recognized Liabilities
1,002 
447 
Other Current Liabilities [Member] |
Derivatives Designated As Hedging Instruments [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gross Amounts of Recognized Liabilities
$ 703 
$ 4 
Derivative Financial Instruments Scheduel of Offsetting of Derivative Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Offsetting of Derivative Assets [Line Items]
 
 
Gross Amounts of Recognized Assets
$ 8,763 
$ 3,205 
Gross Amounts Offset in the Consolidated Balance Sheets
0 
0 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
8,763 
3,205 
Financial Instruments
(1,705)
(451)
Cash Collateral Pledged
0 
0 
Net Amount
7,058 
2,754 
Barclays [Member]
 
 
Offsetting of Derivative Assets [Line Items]
 
 
Gross Amounts of Recognized Assets
 
577 
Gross Amounts Offset in the Consolidated Balance Sheets
 
0 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
 
577 
Financial Instruments
 
(56)
Cash Collateral Pledged
 
0 
Net Amount
 
521 
J.P. Morgan Chase [Member]
 
 
Offsetting of Derivative Assets [Line Items]
 
 
Gross Amounts of Recognized Assets
1,492 
 
Gross Amounts Offset in the Consolidated Balance Sheets
0 
 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
1,492 
 
Financial Instruments
(442)
 
Cash Collateral Pledged
0 
 
Net Amount
1,050 
 
Wells Fargo Bank [Member]
 
 
Offsetting of Derivative Assets [Line Items]
 
 
Gross Amounts of Recognized Assets
7,271 
2,628 
Gross Amounts Offset in the Consolidated Balance Sheets
0 
0 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
7,271 
2,628 
Financial Instruments
(1,263)
(395)
Cash Collateral Pledged
0 
0 
Net Amount
$ 6,008 
$ 2,233 
Derivative Financial Instruments Schedule of Offsetting of Derivate Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Offsetting Liabilities [Line Items]
 
 
Gross Amounts of Recognized Liabilities
$ 1,705 
$ 451 
Gorss Amount Offset in the Consolidated Balance Sheets
0 
0 
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets
1,705 
451 
Financial Instruments
(1,705)
(451)
Cash Collateral Pledged
0 
0 
Net Amounts
0 
0 
Barclays [Member]
 
 
Offsetting Liabilities [Line Items]
 
 
Gross Amounts of Recognized Liabilities
 
56 
Gorss Amount Offset in the Consolidated Balance Sheets
 
0 
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets
 
56 
Financial Instruments
 
(56)
Cash Collateral Pledged
 
0 
Net Amounts
 
0 
J.P. Morgan Chase [Member]
 
 
Offsetting Liabilities [Line Items]
 
 
Gross Amounts of Recognized Liabilities
442 
 
Gorss Amount Offset in the Consolidated Balance Sheets
0 
 
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets
442 
 
Financial Instruments
(442)
 
Cash Collateral Pledged
0 
 
Net Amounts
0 
 
Wells Fargo Bank [Member]
 
 
Offsetting Liabilities [Line Items]
 
 
Gross Amounts of Recognized Liabilities
1,263 
395 
Gorss Amount Offset in the Consolidated Balance Sheets
0 
0 
Net Amounts of LIabilities Presented in the Consolidated Balance Sheets
1,263 
395 
Financial Instruments
(1,263)
(395)
Cash Collateral Pledged
0 
0 
Net Amounts
$ 0 
$ 0 
Derivative Financial Instruments (Schedule Of Company's Derivative Instruments On Other Comprehensive Income And The Consolidated Statement Of Operations) (Details) (Derivatives Designated As Hedging Instruments [Member], Foreign Currency Forward Contracts [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Recognized in OCI-Effective Portion
$ 3,007 
$ 453 
$ 292 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
820 
453 
314 
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing
365 
(52)
(144)
Net Revenue [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
1,100 
462 
459 
Cost Of Revenue [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
(6)
6 
4 
Operating Expenses [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
(274)
(15)
(149)
Other Income (Expense), net [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of Gain or (Loss) Recognized in Income and Excluded from Effectiveness Testing
$ 365 
$ (52)
$ (144)
Derivative Financial Instruments (Schedule Of Derivatives Not Designated As Hedging Instruments) (Details) (Other Income (Expense), net [Member], Foreign Currency Forward Contracts [Member], Derivatives Not Designated As Hedging Instruments [Member], USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Other Income (Expense), net [Member] |
Foreign Currency Forward Contracts [Member] |
Derivatives Not Designated As Hedging Instruments [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of Gains or (Losses) Recognized in Income on Derivative
$ 3,789 
$ 4,956 
$ 4,897 
Net Income Per Share (Schedule Of Net Income Per Share) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 2, 2016
Jul. 3, 2016
Apr. 3, 2016
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net Income
$ 22,109 
$ 21,119 
$ 16,034 
$ 16,589 
$ 21,807 
$ 15,099 
$ 3,667 
$ 8,011 
$ 75,851 
$ 48,584 
$ 8,788 
Weighted average shares outstanding: Basic (in shares)
 
 
 
 
 
 
 
 
32,758 
33,161 
35,771 
Dilutive potential common shares (in shares)
 
 
 
 
 
 
 
 
970 
627 
674 
Weighted average shares outstanding: Total (in shares)
 
 
 
 
 
 
 
 
33,728 
33,788 
36,445 
Basic net income per share (in dollars per share)
$ 0.67 
$ 0.64 
$ 0.49 
$ 0.51 
$ 0.68 
$ 0.47 
$ 0.11 
$ 0.23 
$ 2.32 
$ 1.47 
$ 0.25 
Diluted net income per share (in dollars per share)
$ 0.65 
$ 0.62 
$ 0.48 
$ 0.50 
$ 0.66 
$ 0.47 
$ 0.11 
$ 0.23 
$ 2.25 
$ 1.44 
$ 0.24 
Anti-dilutive employee stock-based awards, excluded(in shares)
 
 
 
 
 
 
 
 
258 
1,807 
2,617 
Other Income (Expense), Net (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Other Income and Expenses [Abstract]
 
 
 
Foreign Currency Transaction Gain (loss), net
$ (3,835)
$ (5,114)
$ (5,642)
Foreign Currency Contract Gain (Loss), Net
4,154 
4,904 
4,753 
Gain on litigation settlement
0 
0 
2,800 
Other
(440)
122 
544 
Total
$ (121)
$ (88)
$ 2,455 
Income Taxes (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Line Items]
 
 
 
Income tax impact associated with stock option exercises
$ 2,454,000 
$ (2,233,000)
$ (481,000)
Other Comprehensive Income (Loss), Tax
(285,000)
21,000 
5,000 
Valuation Allowance
4,594,000 1
3,642,000 1
 
Possible reduction in liabilities for uncertain tax positions
1,000,000 
 
 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
11,200,000 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense
600,000 
100,000 
1,100,000 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
3,600,000 
3,100,000 
 
Effective Income Tax Rate Reconciliation, Tax Credit, Foreign, Amount
154,200,000 
136,900,000 
 
State and Local Jurisdiction [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Valuation Allowance
4,600,000 
3,600,000 
 
Tax Credit Carryforward, Amount
1,500,000 
 
 
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount
1,000,000 
 
 
US Federal [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Operating Loss Carryforwards
$ 18,200,000 
 
 
Operating Loss Expiration Date, Range Start
2021 
 
 
ITALY |
Earliest Tax Year [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2004 
 
 
ITALY |
Latest Tax Year [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2012 
 
 
GERMANY |
Earliest Tax Year [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2008 
 
 
GERMANY |
Latest Tax Year [Member]
 
 
 
Income Tax Disclosure [Line Items]
 
 
 
Income Tax Examination, Year under Examination
2013 
 
 
Income Taxes Schedule of Income Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
United States
$ 88,748 
$ 88,681 
$ 25,152 
International
26,321 
(3,117)
5,609 
Income before income taxes
$ 115,069 
$ 85,564 
$ 30,761 
Income Taxes Schedule of Provision For Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 2, 2016
Jul. 3, 2016
Apr. 3, 2016
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
U.S. Federal
 
 
 
 
 
 
 
 
$ 33,267 
$ 30,970 
$ 29,089 
State
 
 
 
 
 
 
 
 
2,693 
3,139 
2,873 
Foreign
 
 
 
 
 
 
 
 
6,278 
6,105 
10,930 
Current, Total
 
 
 
 
 
 
 
 
42,238 
40,214 
42,892 
U.S. Federal
 
 
 
 
 
 
 
 
(2,052)
(2,645)
(20,347)
State
 
 
 
 
 
 
 
 
441 
134 
(326)
Foreign
 
 
 
 
 
 
 
 
(1,409)
(723)
(246)
Deferred, Total
 
 
 
 
 
 
 
 
(3,020)
(3,234)
(20,919)
Provision for income taxes
$ 11,754 
$ 9,144 
$ 9,427 
$ 8,893 
$ 8,927 
$ 10,780 
$ 7,258 
$ 10,015 
$ 39,218 
$ 36,980 
$ 21,973 
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Accruals And Allowance
$ 32,303 
$ 29,279 
Operating Loss Carryforwards
6,358 
5,353 
Stock-Based Compensation
8,250 
9,895 
Deferred Rent
3,002 
2,740 
Deferred Revenue
1,957 
1,185 
Tax Credit Carryforwards
1,543 
2,262 
Acquired Intangibles
21,871 
22,778 
Depreciation And Amortization
1,160 
0 
Total Deferred Tax Assets
76,444 
73,492 
Depreciation And Amortization
0 
(967)
Other
(991)
(438)
Total Deferred Tax Liabilities
(991)
(1,405)
Valuation Allowance
(4,594)1
(3,642)1
Net Deferred Tax Assets
$ 70,859 
$ 68,445 
Income Taxes Schedule of Effective Income Tax Rate Reconciliation (Details)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
Tax at federal statutory rate
35.00% 
35.00% 
35.00% 
State, net of federal benefit
1.80% 
2.60% 
2.50% 
Impact of international operations
(2.70%)
7.10% 
19.80% 
Stock-based compensation
1.20% 
(0.40%)
5.50% 
Tax credits
(0.90%)
(1.20%)
(3.80%)
Valuation allowance
0.00% 
0.00% 
3.50% 
Goodwill impairment
0.00% 
0.00% 
7.80% 
Others
(0.30%)
0.10% 
1.10% 
Effective Income Tax Rate Reconciliation, Percent
34.10% 
43.20% 
71.40% 
Income Taxes Schedule of Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Beginning
$ 12,830 
$ 13,364 
$ 12,743 
Additions based on tax positions related to the current year
1,523 
1,608 
1,894 
Additions for tax positions of prior years
45 
228 
1,722 
Settlements
0 
(199)
(503)
Reductions for tax positions of prior years
(237)
(302)
(152)
Reductions due to lapse of applicable statutes
(627)
(1,053)
(1,838)
Adjustments due to foreign exchange rate movement
(569)
(816)
(502)
Ending
$ 12,965 
$ 12,830 
$ 13,364 
Commitments And Contingencies (Narrative) (Details) (USD $)
12 Months Ended 6 Months Ended 12 Months Ended
Dec. 31, 2016
claims
Dec. 31, 2015
Dec. 31, 2014
Jun. 30, 2013
Sep. 14, 2010
patents
Dec. 31, 2014
Ericsson v. NETGEAR [Member]
Dec. 31, 2016
Chrismar Systems vs. NETGEAR [Member]
case
Jul. 1, 2015
Chrismar Systems vs. NETGEAR [Member]
patent
Dec. 31, 2016
Symbology vs. NETGEAR [Member]
case
Jun. 30, 2013
D-Link [Member]
Ericsson v. NETGEAR [Member]
Jun. 30, 2013
NETGEAR [Member]
Ericsson v. NETGEAR [Member]
Jun. 30, 2013
Toshiba [Member]
Ericsson v. NETGEAR [Member]
Jun. 30, 2013
Belkin [Member]
Ericsson v. NETGEAR [Member]
Jun. 30, 2013
Acer Gateway [Member]
Ericsson v. NETGEAR [Member]
Jun. 30, 2013
Dell [Member]
Ericsson v. NETGEAR [Member]
Dec. 31, 2016
46 To 60 Days [Member]
Dec. 31, 2016
31 To 45 Days [Member]
Dec. 31, 2016
Chief Executive Officer [Member]
Dec. 31, 2016
Senior Vice President Of Worldwide Operations And Support [Member]
Dec. 31, 2016
Other Key Executives [Member]
Dec. 31, 2016
Minimum [Member]
46 To 60 Days [Member]
Dec. 31, 2016
Minimum [Member]
31 To 45 Days [Member]
Dec. 31, 2016
Maximum [Member]
46 To 60 Days [Member]
Dec. 31, 2016
Maximum [Member]
31 To 45 Days [Member]
Dec. 31, 2016
Earliest Tax Year [Member]
ITALY
Dec. 31, 2016
Latest Tax Year [Member]
ITALY
Loss contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating leases expiration date
Dec. 31, 2026 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Leases, Rent Expense
$ 9,500,000 
$ 9,800,000 
$ 10,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of weeks for which salary is payable upon termination of employment without cause (in days)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
365 days 
273 days 
182 days 
 
 
 
 
 
 
Continued vesting period after termination without cause (in years)
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of years after change of control to trigger full accelerated vest of unvested portion of stock options (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
 
 
 
 
 
 
 
Maximum number of years covered by accelerated vest for other key executives if term without cause is within one year of change in control (in years)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 years 
 
 
 
 
 
 
Percentage of cancelable orders
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
25.00% 
 
 
 
 
 
 
 
 
 
Required notice period prior to the expected shipment date (in days)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46 days 
31 days 
60 days 
45 days 
 
 
Number of days for non-cancellation of purchase obligations prior to expected shipment date (in days)
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-cancelable purchase commitments
136,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liability for Director and Officer Indemnification Agreements
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liability For Customers, Distributors, and Resellers Indemnification Agreements
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities for executive's employment agreements
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of exiting cases and proceedings that the Company currently believes are liking to have a material adverse effect on its financial position
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The future legnth the Company currently considered regarding existing cases and proceedings that are likely to have a material advese effect on it (in months)
12 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of patents company is accused of infringing (in patents)
 
 
 
 
8 
 
 
4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss Contingency, Damages Awarded, Value
 
 
 
 
 
 
 
 
 
435,000 
3,555,000 
2,445,000 
600,000 
1,170,000 
1,920,000 
 
 
 
 
 
 
 
 
 
 
 
Estimated future RAND royalty rate 2018 through 2020
 
 
 
5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reasonable and nondiscriminatory (RAND) royalty rate (USD per unit)
 
 
 
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foregone colleting verdict amount (in USD)
 
 
 
 
 
$ 3,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of active cases the suing company has
 
 
 
 
 
 
40 
 
50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foregone reasonable and nondiscriminatory (RAND) royalty rate
 
 
 
 
 
0.15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Tax Examination, Year under Examination
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2004 
2012 
Commitments And Contingencies Schedule of Future Minimum Lease Paynments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
 
2017
$ 7,744 
2018
7,138 
2019
6,366 
2020
5,381 
2021
5,134 
Thereafter
17,701 
Total Future Minimum Lease Payments
$ 49,464 
Commitments And Contingencies Product Warranty Liability (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Product Warranties Disclosures [Abstract]
 
 
 
Balance at the beginning of the period
$ 56,706 
$ 44,888 
$ 48,754 
Product Warranty Accrual, Warranties Issued
87,570 
80,085 
62,709 
Settlements made during the year
(85,756)
(68,267)
(66,575)
Balance at the end of the period
$ 58,520 
$ 56,706 
$ 44,888 
Stockholders' Equity (Narrative) (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2014
Repurchase plan authorized in Oct 2008 [Member]
Oct. 21, 2008
Repurchase plan authorized in Oct 2008 [Member]
Dec. 31, 2015
Repurchase plan authorized in Oct 2014 [Member]
Oct. 17, 2014
Repurchase plan authorized in Oct 2014 [Member]
Dec. 31, 2016
Repurchase plan approved in Oct 2015 [Member]
Jul. 21, 2015
Repurchase plan approved in Oct 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares)
 
 
 
 
6,000,000 
 
3,000,000 
 
3,000,000 
Stock Repurchased and Retired During Period, Shares
 
 
 
2,800,000 
 
3,800,000 
 
900,000 
 
Payments for Repurchase of Common Stock
$ 42,938,000 
$ 120,309,000 
$ 93,218,000 
$ 90,600,000 
 
$ 117,700,000 
 
$ 38,300,000 
 
Remaining Number of Shares Authorized to be Repurchased
1,300,000 
 
 
 
 
 
 
 
 
Shares Paid for Tax Withholding for Share Based Compensation
105,000 
85,000 
82,000 
 
 
 
 
 
 
Payments related to tax withholding for share based compensation (in USD)
$ 4,700,000 
$ 2,600,000 
$ 2,600,000 
 
 
 
 
 
 
Stockholders' Equity (Schedule Of Changes in Accumulated Other Comprehensive Income by Component Net of Tax) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Sep. 27, 2015
Accumulated Other Comprehensive Income (Loss), Tax [Roll Froward] [Roll Forward]
 
 
 
 
AOCI Tax (Beginning balance)
$ 24 
$ 3 
$ (2)
 
Other Comprehensive Income (Loss) before Reclassifications, Tax
(572)
21 
5 
 
Reclassification from AOCI, Current Period, Tax
(287)
0 
0 
 
Other Comprehensive Income (Loss), Tax
(285)
21 
5 
 
AOCI Tax (Ending balance)
(261)
24 
3 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
 
 
Beginning balance
3 
38 
69 
3 
Other comprehensive (loss) income before reclassifications
2,468 
418 
283 
 
Amounts reclassified from accumulated other comprehensive income (loss)
533 
453 
314 
 
Net current period other comprehensive loss
1,935 
(35)
(31)
 
Ending balance
1,938 
3 
38 
3 
Gains and losses on available for sale securities [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Before Tax [ Roll Forward] [Roll Forward]
 
 
 
 
AOCI before tax (Beginning)
(64)
(8)
6 
 
Other Comprehensive Income (Loss), before Reclassifications, before Tax
33 
(56)
(14)
 
Reclassification from AOCI, Current Period, before Tax
0 
0 
0 
 
Other Comprehensive Income (Loss), before Tax
33 
(56)
(14)
 
AOCI before Tax (Ending)
(31)
(64)
(8)
 
Gains and losses on derivatives [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss), Before Tax [ Roll Forward] [Roll Forward]
 
 
 
 
AOCI before tax (Beginning)
43 
43 
65 
 
Other Comprehensive Income (Loss), before Reclassifications, before Tax
3,007 
453 
292 
 
Reclassification from AOCI, Current Period, before Tax
820 
453 
314 
 
Other Comprehensive Income (Loss), before Tax
2,187 
0 
(22)
 
AOCI before Tax (Ending)
$ 2,230 
$ 43 
$ 43 
 
Stockholders' Equity (Schedule of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
$ 533 
$ 453 
$ 314 
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
820 
453 
314 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax
(287)
0 1
0 1
Amounts reclassified from accumulated other comprehensive income (loss)
533 
453 
314 
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Net Revenue [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
1,100 
462 
459 
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Cost Of Revenue [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
(6)
6 
4 
Derivatives Designated As Hedging Instruments [Member] |
Foreign Currency Forward Contracts [Member] |
Operating Expenses [Member]
 
 
 
Reclassification Out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
Gain or (Loss) Reclassified from OCI into Income-Effective Portion
$ (274)
$ (15)
$ (149)
Employee Benefit Plans (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Maximum Amount Of Stock-Based Compensation Cost Capitalized
$ 500,000 
$ 500,000 
$ 500,000 
Equity Instruments Other than Options, Vested in Period, Total Intrinsic Value
15,400,000 
8,900,000 
9,000,000 
Options granted, vesting term (in years)
4 years 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount
500,000 
 
 
Non-cash stock-based compensation
18,949,000 
16,825,000 
20,014,000 
Equity Instruments Other than Options, Vested in Period, Fair Value
10,800,000 
8,800,000 
8,400,000 
Maximum Percentage Contribution Of Salary By Employees
100.00% 
 
 
Employer Matching Contribution, Percent of Employees' Gross Pay
50.00% 
 
 
Maximum Contribution By Employer Value
6,000 
 
 
Cost Recognized
1,000,000 
900,000 
1,000,000 
Employee Stock Purchase Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of Shares Authorized
2,000,000.0 
 
 
Number of Additional Shares Authorized
1,000,000.0 
 
 
Shares purchased under ESPP
100,000 
 
 
Weighted Average Price of Shares Purchased under ESPP
$ 31.47 
 
 
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Grants In Period, Weighted Average Grant Date Fair Value
$ 12.28 
$ 10.83 
$ 12.04 
Options, Exercises in Period, Intrinsic Value
14,500,000 
11,400,000 
3,400,000 
Total unrecognized compensation
5,900,000 
 
 
Weighted-average period of recognition of stock based compensation (in days)
2 years 6 months 2 days 
 
 
Options, Vested in Period, Total Fair Value
4,200,000 
6,500,000 
10,000,000 
RSUs [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Total unrecognized compensation
22,400,000 
 
 
Weighted-average period of recognition of stock based compensation (in days)
2 years 4 months 21 days 
 
 
2006 Long Term Incentive Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expiration Date
Apr. 13, 2016 
 
 
2016 Incentive Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Minimum Percentage Of Exercise Price Granted To Ten Percentage Of Shareholders
110.00% 
 
 
Term Of Stock Appreciation Rights From Date Of Grant
10 years 
 
 
Common Stock, Capital Shares Reserved for Future Issuance
2,500,000.0 
 
 
Other Share Increase (Decrease)
699,827 
 
 
Options granted, vesting term (in years)
4 years 
 
 
Number of shares reserved for future grant (in shares)
3,100,000 
 
 
2016 Incentive Plan [Member] |
First Tranche [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Options granted, vesting term (in years)
12 months 
 
 
2016 Incentive Plan [Member] |
Remaining Tranche [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Options granted, vesting term (in years)
3 years 
 
 
2016 Incentive Plan [Member] |
Minimum [Member] |
RSUs [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Options granted, vesting term (in years)
3 years 
 
 
Employee Stock Purchase Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of shares reserved for future grant (in shares)
1,000,000 
 
 
Maximum Percentage of compensation contributed by employees (in percentage)
10.00% 
 
 
Purchase percentage of stock at fair market value (in percentage)
85.00% 
 
 
discount from Market Price, Purchase Date
15.00% 
 
 
Non-cash stock-based compensation
$ 1,300,000 
$ 539,000 
$ 523,000 
Employee Benefit Plans (Schedule Of Stock Option Activity) (Details) (Stock Options [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
Number of Shares, Beginning Balance (in shares)
2,461 
Number of Shares, Granted (in shares)
328 
Number of Shares, Exercised (in shares)
(888)
Number of Shares, Cancelled (in shares)
(15)
Number of shares, expired (in shares)
(2)
Number of Shares, Ending Balance (in shares)
1,884 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
 
Beginning Balance (in dollars per share)
$ 30.08 
Grants (in dollars per share)
$ 39.53 
Exercises (in dollars per share)
$ 31.25 
Cancelled (in dollars per share)
$ 34.13 
Expired (in dollars per share)
$ 34.23 
Ending Balance (in dollars per share)
$ 31.14 
Outstanding, Weighted Average Remaining Contractual Term
5 years 10 months 17 days 
Outstanding, Intrinsic Value
$ 43,724 
Vested and Expected to Vest, Number
1,811 
Vested and Expected to Vest, Weighted Average Exercise Price
$ 30.93 
Vested and Expected to Vest, Weighted Average Remaining Contractual Term
5 years 9 months 2 days 
Vested and Expected to Vest, Aggregate Intrinsic Value
42,413 
Exercisable, Number
1,236 
Exercisable, Weighted Average Exercise Price
$ 28.71 
Exercisable, Weighted Average Remaining Contractual Term
4 years 5 months 21 days 
Exercisable, Intrinsic Value
$ 31,690 
Employee Benefit Plans (Schedule of Ranges of Outstanding And Exercisable Stock Optoins) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
1,884 
Outstanding Options, Weighted Average Remaining Contractual Term
5 years 10 months 18 days 
Outstanding Options, Weighted Average Exercise Price
$ 31.14 
Exercise Price Range, Number of Exercisable Options
1,236 
Exercisable Options, Weighted Average Exercise Price
$ 28.71 
$10.69 - $28.79
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
417 
Outstanding Options, Weighted Average Remaining Contractual Term
2 years 4 months 7 days 
Outstanding Options, Weighted Average Exercise Price
$ 19.81 
Exercise Price Range, Number of Exercisable Options
416 
Exercisable Options, Weighted Average Exercise Price
$ 19.78 
$29.76 - $32.21
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
377 
Outstanding Options, Weighted Average Remaining Contractual Term
7 years 0 months 21 days 
Outstanding Options, Weighted Average Exercise Price
$ 31.29 
Exercise Price Range, Number of Exercisable Options
205 
Exercisable Options, Weighted Average Exercise Price
$ 31.30 
$32.30 - $32.55
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
385 
Outstanding Options, Weighted Average Remaining Contractual Term
6 years 9 months 16 days 
Outstanding Options, Weighted Average Exercise Price
$ 32.51 
Exercise Price Range, Number of Exercisable Options
264 
Exercisable Options, Weighted Average Exercise Price
$ 32.51 
$33.15 - $39.53
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
703 
Outstanding Options, Weighted Average Remaining Contractual Term
6 years 10 months 4 days 
Outstanding Options, Weighted Average Exercise Price
$ 37.01 
Exercise Price Range, Number of Exercisable Options
349 
Exercisable Options, Weighted Average Exercise Price
$ 34.88 
$40.01 - $40.01
 
Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Number of Outstanding Options
2 
Outstanding Options, Weighted Average Remaining Contractual Term
5 years 1 month 1 day 
Outstanding Options, Weighted Average Exercise Price
$ 40.01 
Exercise Price Range, Number of Exercisable Options
2 
Exercisable Options, Weighted Average Exercise Price
$ 40.01 
Employee Benefit Plans (Schedule Of RSU Activity) (Details) (RSUs [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
RSUs [Member]
 
Equity Instruments Other than Options, Nonvested [Roll Forward]
 
Beginning Balance (in shares)
964 
RSUs granted (in shares)
479 
RSUs vested (in shares)
(345)
RSUs cancelled (in shares)
(102)
Ending Balance (in shares)
996 
Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
 
Beginning Balance (in dollars per share)
$ 31.63 
RSUs granted (in dollars per share)
$ 41.19 
RSUs vested (in dollars per share)
$ 31.40 
RSUs cancelled (in dollars per share)
$ 33.04 
Ending Balance (in dollars per share)
$ 36.22 
Weighted Average Remaining Contractual Terms
1 year 4 months 11 days 
Equity Instruments Other than Options, Nonvested Intrinisc Value
$ 54,131 
Employee Benefit Plans (Schedule Of Valuation And Expense Information) (Details)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Employee Stock Purchase Plan [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected Term
6 months 
 
 
Risk Free Interest Rate
0.43% 
 
 
Expected Volatility Rate
38.30% 
 
 
Dividend yield (in percentage)
0.00% 
 
 
Stock Options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected Term
4 years 4 months 24 days 
4 years 6 months 0 days 
4 years 6 months 0 days 
Risk Free Interest Rate
1.28% 
1.44% 
1.43% 
Expected Volatility Rate
35.40% 
39.30% 
42.60% 
Dividend yield (in percentage)
0.00% 
0.00% 
0.00% 
Employee Benefit Plans (Schedule Of Total Stock-Based Compensation Expense Resulting) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 18,949 
$ 16,825 
$ 20,014 
Cost Of Revenue [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
1,740 
1,566 
2,037 
Research And Development [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
4,075 
3,451 
4,916 
Sales And Marketing [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
5,065 
5,022 
6,168 
General And Administrative [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 8,069 
$ 6,786 
$ 6,893 
Segment Information, Operations By Geographic Area And Customer Concentration (Narrative) (Details)
12 Months Ended
Dec. 31, 2016
business_unit
Dec. 31, 2014
Net Revenue [Member]
None of the customers [Member]
Dec. 31, 2016
Retail [Member]
Net Revenue [Member]
Customer A [Domain]
Dec. 31, 2015
Retail [Member]
Net Revenue [Member]
Customer A [Member]
Dec. 31, 2016
Retail [Member]
Net Revenue [Member]
Customer B [Member]
Concentration Risk, Percentage
 
10.00% 
17.00% 
15.00% 
12.00% 
Number of reportable segments (in segments)
3 
 
 
 
 
Schedule Of Reportable Segment And Reconciliation Of Segment Contribution Income To Income Before Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 2, 2016
Jul. 3, 2016
Apr. 3, 2016
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
$ 367,929 
$ 338,458 
$ 311,655 
$ 310,256 
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 1,328,298 
$ 1,300,695 
$ 1,393,515 
Total segment contribution income
 
 
 
 
 
 
 
 
222,803 
177,775 
194,623 
Corporate and unallocated costs
 
 
 
 
 
 
 
 
(69,140)
(54,501)
(53,581)
Amortization of intangible assets
 
 
 
 
 
 
 
 
(16,733)1
(16,969)1
(17,573)1
Stock-based compensation expense
 
 
 
 
 
 
 
 
(18,949)
(16,825)
(20,014)
Restructuring and other charges
 
 
 
 
 
 
 
 
(3,881)
(6,398)
(2,209)
Acquisition-related expense
 
 
 
 
 
 
 
 
0 
0 
(8)2
Losses on inventory commitments due to restructuring
 
 
 
 
 
 
 
 
0 
(407)
0 
Litigation reserves, net
 
 
 
 
 
 
 
 
(73)
2,682 
1,011 
Goodwill impairment charges
 
 
 
 
 
 
 
 
0 
0 
(74,196)
Interest income
 
 
 
 
 
 
 
 
1,163 
295 
253 
Other income (expense), net
 
 
 
 
 
 
 
 
(121)
(88)
2,455 
Income before income taxes
 
 
 
 
 
 
 
 
115,069 
85,564 
30,761 
Retail [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
763,549 
614,367 
508,100 
Total segment contribution income
 
 
 
 
 
 
 
 
104,454 
85,231 
76,266 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
13.70% 
13.90% 
15.00% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
 
0 
 
Commercial [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
290,836 
264,846 
305,677 
Total segment contribution income
 
 
 
 
 
 
 
 
73,734 
53,393 
70,810 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
25.40% 
20.20% 
23.20% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
 
0 
 
Service Provider [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
273,913 
421,482 
579,738 
Total segment contribution income
 
 
 
 
 
 
 
 
44,615 
39,151 
47,547 
Segment contribution margin (in percentage)
 
 
 
 
 
 
 
 
16.30% 
9.30% 
8.20% 
Goodwill impairment charges
 
 
 
 
 
 
 
 
 
$ 0 
$ (74,196)
Schedule Of Net Revenue By Geography Periods (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 2, 2016
Jul. 3, 2016
Apr. 3, 2016
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
$ 367,929 
$ 338,458 
$ 311,655 
$ 310,256 
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 1,328,298 
$ 1,300,695 
$ 1,393,515 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
855,796 
779,361 
750,933 
Americas Excluding United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
27,852 
18,385 
19,957 
United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
52,375 
103,649 
154,503 
EMEA Excluding United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
193,030 
218,065 
267,384 
APAC [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total net revenues
 
 
 
 
 
 
 
 
$ 199,245 
$ 181,235 
$ 200,738 
Schedule Of Long-Lived Asset By Geographic Areas (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
$ 19,473 
$ 22,384 
$ 29,694 
United States [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
9,542 
9,832 
12,453 
CANADA
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
2,745 
3,586 
4,375 
EMEA [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
210 
468 
657 
China [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
5,219 
6,562 
10,786 
APAC Excluding China [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived assets
$ 1,757 
$ 1,936 
$ 1,423 
Fair Value Measurements (Summary Of Valuation Of Company's Financial Instruments By Various Levels) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
$ 151,304 
$ 110,502 
Liabilities, Fair value
1,705 
451 
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
142,541 
107,297 
Liabilities, Fair value
0 
0 
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
8,763 
3,205 
Liabilities, Fair value
1,705 
451 
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Foreign Currency Forward Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
8,763 1
3,205 1
Liabilities, Fair value
1,705 2
451 2
Foreign Currency Forward Contracts [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Foreign Currency Forward Contracts [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
8,763 1
3,205 1
Liabilities, Fair value
1,705 2
451 2
Foreign Currency Forward Contracts [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Liabilities, Fair value
0 
0 
Money Market Funds [Member] |
Cash Equivalents [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
17,027 
10,976 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
17,027 
10,976 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Money Market Funds [Member] |
Cash Equivalents [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Treasuries [Member] |
Available-For-Sale Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
123,838 3
94,993 3
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
123,838 3
94,993 3
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Treasuries [Member] |
Available-For-Sale Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
148 3
147 3
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
148 3
147 3
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Certificates Of Deposits [Member] |
Available-For-Sale Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Mutual Funds [Member] |
Trading Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
1,528 3
1,181 3
Mutual Funds [Member] |
Trading Securities [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
1,528 3
1,181 3
Mutual Funds [Member] |
Trading Securities [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
0 
0 
Mutual Funds [Member] |
Trading Securities [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair value
$ 0 
$ 0 
Restructuring and Other Charges (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2014
Restructuring Cost and Reserve [Line Items]
 
 
Severance Costs
 
$ 0.8 
Office lease exit [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Completion Date
Jan. 31, 2022 
 
Business Exit Costs
 
$ 1.4 
Restructuring and Other Charges Schedule of Restructuring and Other Charges (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Non cash charges and adjustments, net
$ 300,000 
$ 500,000 
 
 
Additions to restructuring cost
3,757,000 1
5,946,000 1
2,234,000 
 
Payments for Restructuring
(3,421,000)
(4,996,000)
(2,917,000)
 
Restructuring adjustment
(194,000)
 
(24,000)
 
Restructuring Reserve
1,408,000 
1,266,000 
316,000 
1,023,000 
Employee Severance [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Additions to restructuring cost
3,128,000 1
4,689,000 1
904,000 
 
Payments for Restructuring
(2,941,000)
(4,992,000)
(1,387,000)
 
Restructuring adjustment
(194,000)
 
(22,000)
 
Restructuring Reserve
6,000 
13,000 
316,000 
821,000 
Facility Closing [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Additions to restructuring cost
629,000 1
1,257,000 1
1,330,000 
 
Payments for Restructuring
(480,000)
(4,000)
(1,530,000)
 
Restructuring adjustment
0 
 
(2,000)
 
Restructuring Reserve
$ 1,402,000 
$ 1,253,000 
$ 0 
$ 202,000 
Quarterly Financial Data (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Oct. 2, 2016
Jul. 3, 2016
Apr. 3, 2016
Dec. 31, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Quarterly Financial Data [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net revenue
$ 367,929 
$ 338,458 
$ 311,655 
$ 310,256 
$ 360,863 
$ 341,893 
$ 288,782 
$ 309,157 
$ 1,328,298 
$ 1,300,695 
$ 1,393,515 
Gross Profit
110,710 
103,122 
97,788 
100,565 
105,416 
96,327 
77,656 
88,280 
412,185 
367,679 
397,918 
Provision for income taxes
11,754 
9,144 
9,427 
8,893 
8,927 
10,780 
7,258 
10,015 
39,218 
36,980 
21,973 
Net Income
$ 22,109 
$ 21,119 
$ 16,034 
$ 16,589 
$ 21,807 
$ 15,099 
$ 3,667 
$ 8,011 
$ 75,851 
$ 48,584 
$ 8,788 
Basic net income per share (in dollars per share)
$ 0.67 
$ 0.64 
$ 0.49 
$ 0.51 
$ 0.68 
$ 0.47 
$ 0.11 
$ 0.23 
$ 2.32 
$ 1.47 
$ 0.25 
Diluted net income per share (in dollars per share)
$ 0.65 
$ 0.62 
$ 0.48 
$ 0.50 
$ 0.66 
$ 0.47 
$ 0.11 
$ 0.23 
$ 2.25 
$ 1.44 
$ 0.24 
Schedule II-Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Allowance for Doubtful Accounts [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
$ 1,255 
$ 1,255 
$ 1,255 
Additions
60 
35 
189 
Deductions
(60)
(35)
(189)
Balance at end of year
1,255 
1,255 
1,255 
Allowance For Sales Returns And Product Warranty [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
72,609 
62,376 
66,221 
Additions
109,494 
105,987 
97,546 
Deductions
(110,077)
(95,754)
(101,391)
Balance at end of year
72,026 
72,609 
62,376 
Allowance For Price Protection [Member]
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at beginning of year
2,125 
1,806 
4,273 
Additions
12,239 
7,467 
7,534 
Deductions
(9,884)
(7,148)
(10,001)
Balance at end of year
$ 4,480 
$ 2,125 
$ 1,806