Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2019	Feb. 11, 2020	Jun. 28, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	001-37557
Entity Registrant Name	Penumbra, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	05-0605598
Entity Address, Address Line One	One Penumbra Place
Entity Address, City or Town	Alameda
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94502
City Area Code	510
Local Phone Number	748-3200
Title of 12(b) Security	Common Stock, Par value $0.001 per share
Trading Symbol	PEN
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 5.1
Entity Common Stock, Shares Outstanding		35,052,239
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement for its 2020 annual meeting of stockholders, which is to be filed not more than 120 days after the registrant’s fiscal year ended December 31, 2019, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Entity Central Index Key	0001321732
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 72,779	$ 67,850
Marketable investments	116,610	133,039
Accounts receivable, net of doubtful accounts of $2,946 and $2,782 at December 31, 2019 and December 31, 2018, respectively	105,901	81,896
Inventories	152,992	115,741
Prepaid expenses and other current assets	14,852	12,200
Total current assets	463,134	410,726
Property and equipment, net	51,812	35,407
Operating lease right-of-use assets	43,717
Finance lease right-of-use assets	39,924
Intangible assets, net	25,407	27,245
Goodwill	7,656	7,813
Deferred taxes	31,305	32,940
Other non-current assets	2,946	875
Total assets	665,901	515,006
Current liabilities:
Accounts payable	15,111	8,176
Accrued liabilities	67,630	57,886
Current operating lease liabilities	4,142
Current finance lease liabilities	4,165
Total current liabilities	91,048	66,062
Deferred rent	0	7,586
Non-current operating lease liabilities	47,242
Non-current finance lease liabilities	26,748
Other non-current liabilities	15,250	18,943
Total liabilities	180,288	92,591
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $.001 par value per share - 5,000,000 shares authorized, none issued and outstanding at December 31, 2019 and December 31, 2018	0	0
Common stock, $.001 par value per share - 300,000,000 shares authorized, 35,001,581 issued and outstanding at December 31, 2019; 300,000,000 shares authorized, 34,437,339 issued and outstanding at December 31, 2018	35	34
Additional paid-in capital	430,659	415,084
Accumulated other comprehensive loss	(2,324)	(1,942)
Retained earnings	57,522	9,064
Total Penumbra, Inc. stockholders’ equity	485,892	422,240
Non-controlling interest	(279)	175
Total stockholders’ equity	485,613	422,415
Total liabilities and stockholders’ equity	$ 665,901	$ 515,006

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Jun. 30, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 2,946	$ 2,946
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common Stock, Shares, Issued	35,001,581	34,437,339
Common stock, shares outstanding (in shares)	35,001,581	34,437,339

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenues	$ 547,405	$ 444,938	$ 333,764
Cost of revenue	175,441	152,405	116,622
Gross profit	371,964	292,533	217,142
Operating expenses:
Research and development	51,723	36,165	31,661
Sales, general and administrative	272,733	226,385	184,316
Acquired in-process research and development	0	30,835	0
Total operating expenses	324,456	293,385	215,977
Income (loss) from operations	47,508	(852)	1,165
Interest income, net	2,854	2,964	2,653
Other expense, net	(227)	(504)	(1,342)
Income before income taxes and equity in losses of unconsolidated investee	50,135	1,608	2,476
Provision for (benefit from) income taxes	3,131	(4,403)	(3,611)
Income before equity in losses of unconsolidated investee	47,004	6,011	6,087
Equity in losses of unconsolidated investee	0	(3,101)	(1,430)
Consolidated net income	47,004	2,910	4,657
Net loss attributable to non-controlling interest	(1,454)	(3,691)	0
Net income attributable to Penumbra, Inc.	$ 48,458	$ 6,601	$ 4,657
Net income (loss) attributable to Penumbra, Inc. per share: Basic (in dollars per share)	$ 1.39	$ 0.19	$ 0.14
Net income (loss) attributable to Penumbra, Inc. per share: Diluted (in dollars per share)	$ 1.34	$ 0.18	$ 0.13
Weighted average shares outstanding: Basic (in shares)	34,750,706	34,138,176	32,978,065
Weighted average shares outstanding: Diluted (in shares)	36,265,999	36,086,821	35,319,103

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Consolidated net income (loss)	$ 47,004	$ 2,910	$ 4,657
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net of tax	(1,120)	(3,246)	6,387
Net change in unrealized gains (losses) on available-for-sale securities, net of tax	738	(265)	(130)
Total other comprehensive income (loss), net of tax	(382)	(3,511)	6,257
Consolidated comprehensive (loss) income	46,622	(601)	10,914
Net loss attributable to non-controlling interest	(1,454)	(3,691)	0
Comprehensive income attributable to Penumbra, Inc.	$ 48,076	$ 3,090	$ 10,914

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Earnings (Accumulated Deficit)	Total Penumbra, Inc. Stockholders’ Equity	Non-controlling Interest
Beginning balance (in shares) at Dec. 31, 2016		31,108,828
Beginning balance at Dec. 31, 2016	$ 266,547	$ 31	$ 273,865	$ (4,688)	$ (2,661)	$ 266,547
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		1,131,344
Issuance of common stock	$ 5,048		5,048			5,048
Issuance of common stock under employee stock purchase plan (in shares)	91,685	91,685
Issuance of common stock under employee stock purchase plan	$ 5,809		5,809			5,809
Shares issued (in shares)		1,495,000
Stock Issued During Period, Value, New Issues	106,269	$ 2	106,267			106,269
Shares held for tax withholdings (in shares)		(141,711)
Shares held for tax withholding	(11,686)		(11,686)			(11,686)
Stock-based compensation	17,507		17,507			17,507
Other comprehensive loss	6,257			6,257		6,257
Net income (loss) attributable to Penumbra, Inc.	4,657
Net loss attributable to non-controlling interest	0
Consolidated net income (loss)	4,657				4,657	4,657
Ending balance at Dec. 31, 2017	400,408	$ 33	396,810	1,569	1,996	400,408
Ending balance (in shares) at Dec. 31, 2017		33,685,146
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		774,475
Issuance of common stock	$ 5,064	$ 1	5,063			5,064
Issuance of common stock under employee stock purchase plan (in shares)	74,344	74,344
Issuance of common stock under employee stock purchase plan	$ 7,231		7,231			7,231
Shares issued (in shares)		53,256
Stock Issued During Period, Value, New Issues	5,256		5,256			5,256
Shares held for tax withholdings (in shares)		(149,882)
Shares held for tax withholding	(17,725)		(17,725)			(17,725)
Stock-based compensation	18,449		18,449			18,449
Asset acquisition date fair value of non-controlling interest	3,366						$ 3,366
Capital contribution from non-controlling interest	500						500
Other comprehensive loss	(3,511)			(3,511)		(3,511)
Net income (loss) attributable to Penumbra, Inc.	6,601					6,601
Net loss attributable to non-controlling interest	(3,691)						(3,691)
Consolidated net income (loss)	2,910				6,601
Ending balance at Dec. 31, 2018	422,415	$ 34	415,084	(1,942)	9,064	422,240	175
Ending balance (in shares) at Dec. 31, 2018		34,437,339
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		612,221
Issuance of common stock	$ 4,121	$ 1	4,120			4,121
Issuance of common stock under employee stock purchase plan (in shares)	81,644	81,644
Issuance of common stock under employee stock purchase plan	$ 8,984		8,984			8,984
Shares held for tax withholdings (in shares)		(129,623)
Shares held for tax withholding	(18,535)		(18,535)			(18,535)
Stock-based compensation	21,006		21,006			21,006
Capital contribution from non-controlling interest	1,000						1,000
Other comprehensive loss	(382)			(382)		(382)
Net income (loss) attributable to Penumbra, Inc.	48,458					48,458
Net loss attributable to non-controlling interest	(1,454)						(1,454)
Consolidated net income (loss)	47,004				48,458
Ending balance at Dec. 31, 2019	$ 485,613	$ 35	$ 430,659	$ (2,324)	$ 57,522	$ 485,892	$ (279)
Ending balance (in shares) at Dec. 31, 2019		35,001,581

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Cash Flows [Abstract]
Consolidated net income (loss)	$ 47,004	$ 2,910	$ 4,657
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	8,104	6,168	3,781
Stock-based compensation	21,485	18,422	17,812
Loss on non-marketable equity investments	0	3,101	1,430
Provision for doubtful accounts	656	1,563	606
Inventory write-offs and write-downs	4,411	1,700	1,037
Deferred taxes	1,820	(6,480)	(4,288)
Acquired in-process research and development	0	30,835	0
Change in fair value of contingent consideration	(35)	950	109
Other	49	(101)	1,036
Changes in operating assets and liabilities:
Accounts receivable	(25,029)	(25,762)	(9,118)
Inventories	(41,407)	(22,288)	(18,826)
Prepaid expenses and other current and non-current assets	(4,001)	2,231	2,436
Accounts payable	6,038	1,329	1,851
Accrued expenses and other non-current liabilities	7,557	14,230	10,168
Net cash provided by operating activities	26,652	28,808	12,691
CASH FLOWS FROM INVESTING ACTIVITIES:
Asset acquisition (Note 3 and Note 6) and acquisition of business (Note 5), net of cash acquired	0	(20,414)	(9,253)
Contributions to non-marketable investments	0	(1,382)	(5,265)
Lease payments made prior to commencement	(6,636)
Purchases of marketable investments	(77,326)	(108,227)	(189,658)
Proceeds from sales of marketable investments	4,746	12,129	28,752
Proceeds from maturities of marketable investments	90,614	127,112	112,803
Acquisition of intangible assets from a licensing agreement	0	0	(2,500)
Purchases of property and equipment	(22,109)	(9,603)	(12,532)
Other	(2,000)	0	0
Net cash used in investing activities	(12,711)	(385)	(77,653)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock upon underwritten public offering, net of issuance cost	0	0	106,267
Proceeds from exercises of stock options	4,120	5,064	5,048
Proceeds from issuance of stock under employee stock purchase plan	8,984	7,231	5,809
Payment of obligations on debt and credit facilities	0	(404)	(1,079)
Payment of employee taxes related to vested common and restricted stock	(18,535)	(17,725)	(11,686)
Payments of finance lease obligations	(2,570)
Payment of acquisition-related obligations	(1,758)	(4,481)	0
Proceeds from capital contribution from non-controlling interest	800	500	0
Net cash (used in) provided by financing activities	(8,959)	(9,815)	104,359
Effect of foreign exchange rate changes on cash and cash equivalents	(53)	(1,395)	(1,996)
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,929	17,213	37,401
CASH AND CASH EQUIVALENTS—Beginning of period	67,850	50,637	13,236
CASH AND CASH EQUIVALENTS—End of period	72,779	67,850	50,637
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes	175	156	141
NONCASH INVESTING AND FINANCING ACTIVITIES:
Common shares issued as consideration in connection with a buyout agreement (Notes 7, 10 and 11)	0	5,256	0
Purchase of property and equipment funded through accounts payable and accrued liabilities	2,903	1,037	977
Asset acquisition (Note 3 and Note 6) and acquisition of business (Note 5) related contingent and working capital liabilities	0	4,000	6,067
Indefinite-lived intangible assets related to licensed technology related contingent liabilities (Note 7)	$ 0	$ 0	$ 12,717

Organization and Description of Business	12 Months Ended
Organization and Description of Business	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Description of Business	1. Organization and Description of Business Penumbra, Inc. (the “Company”) is a global healthcare company focused on innovative therapies. The Company designs, develops, manufactures and markets medical devices and has a broad portfolio of products that addresses challenging medical conditions and significant clinical needs.

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Dec. 31, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Certain changes in presentation were made in the consolidated financial statements for the year ended December 31, 2018 and 2017, to conform to the presentation for the year ended December 31, 2019. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiary. The portion of equity not attributable to the Company is considered non-controlling interest and is classified separately in the consolidated financial statements. Any subsequent changes in the Company’s ownership interest while the Company retains its controlling interest in its majority-owned subsidiary will be accounted for as equity transactions. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, provisions for doubtful accounts, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, operating and finance lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates. Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker (“CODM”), its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance. The Company’s entity-wide disclosures are included in Note “16. Revenues.” Foreign Currency Translation The Company’s consolidated financial statements are prepared in United States Dollars (“USD”). Its foreign subsidiaries use their local currency as their functional currency and maintain their records in the local currency. Accordingly, the assets and liabilities of these subsidiaries are translated into USD using the current exchange rates in effect at the balance sheet date and equity accounts are translated into USD using historical rates. Revenues and expenses are translated using the average exchange rates in effect for the year involved. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheets. Transactions denominated in currencies other than the respective functional currencies are translated at exchange rates as of the date of transaction with foreign currency gains and losses recorded in other expense, net in the consolidated statements of operations. The Company realized net foreign currency transaction losses of $0.8 million, $0.9 million and $1.0 million during the years ended December 31, 2019, 2018 and 2017, respectively. As the Company’s international operations grow, its risks associated with fluctuation in currency rates will become greater, and the Company will continue to reassess its approach to managing this risk. In addition, currency fluctuations or a weakening USD can increase the costs of the Company’s international expansion. To date, the Company has not entered into any foreign currency hedging contracts. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable investments (as described in greater detail in this footnote under the header “Cash, Cash Equivalents and Marketable Investments” below) and accounts receivable. The majority of the Company’s cash is held by one financial institution in the U. S. in excess of federally insured limits. The Company maintained investments in money market funds that were not federally insured during the year ended December 31, 2019 and held cash in foreign entities of approximately $17.3 million and $23.4 million at December 31, 2019 and 2018, respectively, which was not federally insured. The Company’s revenue has been derived from sales of its products in the United States and international markets. The Company uses both its own salesforce and independent distributors to sell its products. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base. The Company performs ongoing credit evaluations of its customers, including its distributors, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary. During the year ended December 31, 2019 and 2018, no customer accounted for greater than 10% of the Company’s revenue. During December 31, 2017, one customer, a distributor, accounted for 10.1% of the Company’s revenue. One customer accounted for greater than 10% of the Company’s accounts receivable balance as of December 31, 2019. No customers accounted for greater than 10% of the Company’s accounts receivable balance as of December 31, 2018. Significant Risks and Uncertainties The Company is subject to risks common to medical device companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of products and the potential need to obtain additional financing. The Company is dependent on third party suppliers, in some cases single-source suppliers. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company sells its products. If the Company is denied such approvals or clearances or such approvals or clearances are delayed, it may have a material adverse impact on the Company’s results of operations, financial position and liquidity. Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Cash, Cash Equivalents and Marketable Investments The Company invests its cash primarily in highly liquid corporate debt securities, debt instruments of U.S. federal, state and municipal governments, and their agencies, in money market funds and in commercial paper. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks. The Company determines the appropriate classification of its investments in marketable investments at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable investments have been classified and accounted for as available-for-sale. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in marketable investments are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive loss. Any realized gains or losses on the sale of marketable investments are determined on a specific identification method, and such gains and losses are reflected as a component of other income (expense), net. Impairment of Marketable Investments After determining the fair value of available-for-sale debt instruments, unrealized gains or losses on these securities are recorded to accumulated other comprehensive loss until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition, and near-term prospects of the issuer. There were no other-than-temporary impairments for the years ended December 31, 2019, 2018 or 2017. Non-Marketable Equity Investments Entities in which the Company has at least a 20%, but not more than a 50%, interest are accounted for under the equity method unless it is determined that the Company has a controlling financial interest in the entity, in which case the entity would be consolidated. Non-marketable equity investments are classified as long-term investments on the consolidated balance sheet. The Company’s proportionate share of the operating results of its non-marketable equity method investments are recorded as profit or loss and presented in equity in losses of unconsolidated investee, in the consolidated statements of operations. See Note “3. Investments and Fair Value of Financial Instruments” for further details. Accounts Receivable Accounts receivable are stated at invoice value less estimated allowances for doubtful accounts. The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers’ inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, a specific allowance is recorded against amounts due, and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible. Inventories Inventories are stated at the lower of cost (determined under the first-in first-out method) or net realizable value. Write-downs are provided for raw materials, components or finished goods that are determined to be excessive or obsolete. The Company regularly reviews inventory quantities in consideration of actual loss experience, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. As a result of these evaluations, the Company recognized total write-offs and write-downs of $4.4 million, $1.7 million, and $1.0 million for the years ended December 31, 2019, 2018 and 2017. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Machinery and equipment and furniture and fixtures are depreciated over a five to ten year period and computers and software are depreciated over two to five years. Upon retirement or sale, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to consolidated statements of operations as incurred. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There was no impairment of long-lived assets during the years ended December 31, 2019, 2018 or 2017. Contingent Consideration Certain agreements the Company enters into, including business combinations, involve the potential payment of future consideration that is contingent upon certain performance and revenue milestones being achieved. Contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recognized generally within sales, general and administrative expense, depending on the nature of the contingent consideration liability, in the consolidated statements of operations. Asset acquisitions are accounted for using a cost accumulation and allocation model and the cost of the acquisition is allocated to the assets acquired and liabilities assumed. Contingent consideration obligations incurred in connection with an asset acquisition are recorded when it is probable that they will occur and they can be reasonably estimated. As of December 31, 2019 and 2018, the Company’s contingent consideration obligations in connection with business combinations relate to milestone payments for the acquisition of Crossmed S.p.A. (“Crossmed”). For more information with respect to the fair value of contingent consideration, refer to Note “5. Business Combinations.” Intangible Assets Intangible assets primarily consist of purchased rights to licensed technology, customer relationships, and trade secrets and processes. Indefinite-lived intangible assets relate to an exclusive right to licensed technology. The acquired licensed technology is accounted for as an indefinite-lived intangible asset. Upon the commercialization of the underlying product utilizing the licensed technology, the capitalized amount will be amortized over its estimated useful life. Indefinite-lived intangible assets are tested for impairment at least annually, in the fourth quarter, or more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired. If the fair value of the asset is less than the carrying amount, an impairment loss would be recognized in an amount equal to the difference between the carrying amount and the fair value. Refer to Note “7. Intangible Assets” for more information on the Company’s intangible assets. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. Refer to Note “7. Intangible Assets” for more information on the Company’s intangible assets. Goodwill Goodwill represents the excess of the purchase price of an acquired business or assets over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate the carrying value may no longer be recoverable and that an impairment loss may have occurred. The Company operates as one segment, which is considered to be the sole reporting unit, and therefore goodwill is tested for impairment at the consolidated level. Refer to Note “5. Business Combinations” and Note “8. Goodwill” for more information. Revenue Recognition Revenue is comprised of product revenue net of returns, discounts, administration fees and sales rebates. The Company adopted the guidance under ASC 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. Therefore, the financial information for the year ended December 31, 2017 has not been adjusted and continues to be reported under ASC 605 with the impact of the adoption reflected in opening retained earnings in 2018. Under ASC 606, the Company recognizes revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue from product sales is recognized either on the date of shipment or the date of receipt by the customer, but is deferred for certain transactions when control has not yet transferred. With respect to products that the Company consigns to hospitals, which primarily consist of coils, the Company recognizes revenue at the time hospitals utilize products in a procedure. Deferred revenue represents amounts that the Company has already invoiced and are ultimately expected to be recognized as revenue, but for which not all revenue recognition criteria have been met. As of December 31, 2019 and December 31, 2018, respectively, the Company's deferred revenue balance was not material. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns utilizing historical return rates, rebates, discounts, and other adjustments to net revenue. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s terms and conditions permit product returns and exchanges. The Company bases its estimates for sales returns on actual historical returns over the prior three years and they are recorded as reductions in revenue at the time of sale. Upon recognition, the Company reduces revenue and cost of revenue for the estimated return. Return rates can fluctuate over time, but are sufficiently predictable to allow the Company to estimate expected future product returns. For more information and disclosures on the Company’s revenue, refer to Note “16. Revenues.” Shipping Costs Shipping and handling costs charged to customers are recorded as revenue. Shipping and handling costs are included in cost of revenue. Research and Development (“R&D”) Costs R&D costs primarily consist of product development, clinical and regulatory expenses, materials, depreciation and other costs associated with the development of the Company’s products. R&D costs also include related personnel and consultants’ salaries, benefits and related costs, including stock-based compensation. The Company expenses R&D costs as they are incurred. The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites. The Company estimates preclinical and clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. Internal Use Software The Company capitalizes certain costs incurred for the development of computer software for internal use. These costs generally relate to third-party software as well as the internal development of software associated with our REAL Immersive System offerings. The Company capitalizes these costs when it is determined that it is probable that the project will be completed and the software will be used to perform the function intended, and the preliminary project stage is completed. Capitalized internal use software development costs are included in property and equipment, net within the consolidated balance sheets. Capitalized internal use software is amortized on a straight-line basis over its estimated useful life. For software that supports our REAL Immersive System, the amortization expense is recorded in cost of revenue within the consolidated statements of operations. Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred. Advertising Costs Advertising costs are included in sales, general and administrative expenses and are expensed as incurred. Advertising costs were $0.5 million, $0.5 million and $0.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. Stock-Based Compensation The Company recognizes the cost of stock-based compensation in the financial statements based upon fair value. The fair value of restricted stock and restricted stock unit (“RSU”) awards is determined based on the number of units granted and the closing price of the Company’s common stock as of the grant date. The fair value of each purchase under the employee stock purchase plan (“ESPP”) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. The fair value of stock options is determined as of the grant date using the Black-Scholes option pricing model. The Company’s determination of the fair value of equity-settled awards is impacted by the price of the Company’s common stock as well as changes in assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected term that awards will remain outstanding, expected common stock price volatility over the term of the awards, risk-free interest rates and expected dividends. The fair value of an award is recognized over the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense recognized at fair value includes the impact of estimated forfeitures. The Company estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. To the extent actual forfeiture results differ from the estimates, the difference is recorded as a cumulative adjustment in the period forfeiture estimates are revised. No compensation cost is recorded for awards that do not vest. Prior to the adoption of Accounting Standard Update (“ASU”) No. 2018-07, “Compensation – Stock Compensation,” the Company recorded its equity instruments issued to non-employees at their fair value on the measurement date and were subject to periodic adjustments as the Company remeasured the fair value of the non-employee awards at each reporting period prior to vesting and at the vesting dates of each non-employee award. In the third quarter of 2018, the Company adopted ASU 2018-07 and recognizes the fair value of non-employee awards over the requisite service period (usually the vesting period) on a straight-line basis. Therefore, equity instruments issued to non-employees are recorded at their fair value on the grant date in the same manner as employee awards. The fair value of these equity instruments is expensed over the service period. Estimates of the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, are affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect the fair value of the award and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. For all stock options granted prior to the Company’s IPO, the Company estimated the volatility data based on a study of publicly traded industry peer companies. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. For all stock options granted prior to the IPO, the Company used the Staff Accounting Bulletin, No. 110 (“SAB 110”) simplified method to calculate the expected term, which is the average of the contractual term and vesting period. For stock options granted post-IPO, the Company used its historical data to calculate the expected term and volatility used in the valuation of options. Income Taxes The Company accounts for income taxes using the asset and liability method, whereby deferred tax asset (“DTA”) and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce the net DTAs to their estimated realizable value. The calculation of the Company’s current provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, interpretation of current tax laws and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. The calculation of the Company’s DTA balance involves the use of estimates, assumptions and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. The Company follows the guidance relating to accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statements of operations. Comprehensive Income Comprehensive income consists of net income, unrealized gains or losses on available-for-sale investments and the effects of foreign currency translation adjustments. The Company presents comprehensive income and its components in the consolidated statements of comprehensive (loss) income. Net Income (Loss) Per Share of Common Stock The Company’s basic net income (loss) attributable to Penumbra, Inc. per share is calculated by dividing the net income attributable to Penumbra, Inc. per share by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share attributable to Penumbra, Inc. is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock and restricted stock units are considered common stock equivalents. Leases The Company adopted the guidance under ASC Topic 842, “Leases” ("ASC 842") on January 1, 2019 using the modified retrospective transition approach. There was no cumulative-effect adjustment recorded to retained earnings upon adoption. Under ASC 842, the Company determines if an arrangement is a lease at inception. In addition, the Company determines whether leases meet the classification criteria of a finance or operating lease at the lease commencement date considering: (1) whether the lease transfers ownership of the underlying asset to the lessee at the end of the lease term, (2) whether the lease contains a bargain purchase option, (3) whether the lease term is for a major part of the remaining economic life of the underlying asset, (4) whether the present value of the sum of the lease payments and residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. As of December 31, 2019, the Company's lease population consisted of operating and finance real estate, equipment and vehicle leases. As of the date of adoption of ASC 842 the Company did not have material finance leases. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and non-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in finance lease right-of-use assets, current finance lease liabilities, and non-current finance lease liabilities in our consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate which requires management’s judgement as the rate implicit in the lease is generally not readily determinable. The determination of the Company’s incremental borrowing rate requires management judgment including, the development of a synthetic credit rating and cost of debt as the Company currently does not carry any debt. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments and exclude lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Finance lease cost is recognized as depreciation expense on a straight-line basis over the expected lease term and interest expense using the accelerated interest method of recognition. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a non-cancelable term of less than 12 months are not recorded on the Company’s consolidated balance sheet. For more information about the impact of adoption and disclosures on the Company’s leases, refer to Note “9. Leases." Recent Accounting Guidance Recently Adopted Accounting Standards On January 1, 2019, the Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842), and its associated amendments using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. There was no cumulative-effect adjustment recorded to retained earnings upon adoption. Under the standard, a lessee is required to recognize a lease liability and ROU asset for all leases. The new guidance also modified the classification criteria and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease continues to depend primarily on its classification. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical lease classification, its assessment on whether a contract was or contains a lease, and its initial direct costs for any leases that existed prior to January 1, 2019. In addition, the Company elected the following transitional practical expedients: (1) the short-term lease exception and (2) to not separate its non-lease components for its real estate, vehicle and equipment leases. The impact of adoption and additional disclosures required by the ASU have been included in “Significant Accounting Policies - Leases” below and in Note “9. Leases.” Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments—Credit Losses. The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. In April 2019, the FASB issued ASU No. 2019-04 which provides additional clarification and addresses stakeholders’ specific issues about certain aspects of the amendments in the previously issued ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-05 which further amends ASU No. 2016-13 by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-11 which further provides additional clarification and addresses stakeholders’ specific issues about certain aspects of the amendments in the previously issued ASU No. 2016-13. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for all periods beginning after December 15, 2018. The Company determined that it will apply the modified retrospective transition method and does not expect the adoption of this standard to have a material impact on its investments. Additionally, the Company is currently evaluating the impact of this standard on its trade receivables and related disclosures. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The primary focus of the standard is to improve the effectiveness of the disclosure requirements for fair value measurements. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of the standard and may delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the impact of adopting this standard. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes— Simplifying the Accounting for Income Taxes. The standard intends to simplify and reduce the cost of accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for foreign investments, the incremental approach to performing intraperiod allocation, and calculating income taxes in interim periods for year to date losses that exceed anticipated full year losses. The standard also adds guidance to reduce complexity in certain areas, including accounting for franchise taxes that are partially based on income, transactions with a government that result with a step up in the tax basis of goodwill, enacted changes in tax law during interim periods, and allocating taxes to members of a consolidated group which are not subject to tax. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all periods in which financial statements have not yet been issued, including interim periods. The Company is currently evaluating the impact of adopting the new guidance.

Investments and Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Investments and Fair Value of Financial Instruments

3. Investments and Fair Value of Financial Instruments

Marketable Investments

The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of December 31, 2019 and 2018 were as follows (in thousands):


	December 31, 2019
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Commercial paper	$	7,456	$	1	$	—	$	7,457
U.S. treasury	4,972		7		—		4,979
U.S. agency securities and government sponsored securities	2,499		19		—		2,518
U.S. states and municipalities	4,889		4		—		4,893
Corporate bonds	96,484		282		(3)		96,763

Total	$	116,300	$	313	$	(3)	$	116,610


	December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Commercial paper	$	13,701	$	—	$	(3)	$	13,698
U.S. treasury	6,400		—		(22)		6,378
U.S. agency securities and government sponsored securities	7,699		18		(27)		7,690
U.S. states and municipalities	5,134		—		(12)		5,122
Corporate bonds	100,606		14		(469)		100,151

Total	$	133,540	$	32	$	(533)	$	133,039

The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than and more than twelve months as of December 31, 2019 and 2018 (in thousands):


	December 31, 2019
	Less than 12 months						More than 12 months						Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses




Corporate bonds	$	7,875	$	(3)	$	—	$	—	$	7,875	$	(3)

Total	$	7,875	$	(3)	$	—	$	—	$	7,875	$	(3)


	December 31, 2018
	Less than 12 months						More than 12 months						Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Commercial paper	$	12,208	$	(3)	$	—	$	—	$	12,208	$	(3)
U.S. treasury	—		—		6,378		(22)		6,378		(22)
U.S. agency securities and government sponsored securities	1,436		(5)		2,759		(22)		4,195		(27)
U.S. states and municipalities	1,529		(5)		3,593		(7)		5,122		(12)
Corporate bonds	58,961		(176)		33,215		(293)		92,176		(469)

Total	$	74,134	$	(189)	$	45,945	$	(344)	$	120,079	$	(533)

The contractual maturities of the Company’s marketable investments as of December 31, 2019 and 2018 were as follows (in thousands):


	December 31,
	2019		2018
Marketable Investments	Fair Value		Fair Value
Due in one year	$	51,990	$	83,391
Due in one to five years	64,620		49,648
Total	$	116,610	$	133,039

Non-Marketable Equity Investments

In the second quarter of 2017, the Company and Sixense Enterprises, Inc. (“Sixense”) formed MVI as a privately-held joint venture for the purpose of exploring healthcare applications of virtual reality technology, with each party holding 50% of the issued and outstanding equity of MVI. On August 31, 2018 (“Transfer Agreement Closing Date”), the Company entered into a Stock Transfer Agreement (the “Transfer Agreement”) between the Company, MVI and Sixense, to purchase an additional 40% of the equity interest in MVI from Sixense for an initial cash purchase price of $20.0 million, excluding the additional $4.5 million of probable future payments relating to an anti-dilution provision in the Transfer Agreement. Following the Transfer Agreement Closing Date, the Company owns a 90% controlling interest in MVI and Sixense retains the remaining 10% minority interest.

Prior to the Transfer Agreement Closing Date, the Company accounted for its investment in MVI under the equity method and was not required to consolidate MVI and determined that MVI was not a variable interest entity (“VIE”). Furthermore, pursuant to agreements between the parties at the time of MVI’s formation, the Company was obligated to perform certain services or make additional cash contributions to MVI for no additional equity interest. These services included, but were not limited to, information technology, accounting, other administrative services and research and development. The Company’s contributions made prior to the Transfer Agreement Closing Date are presented as a component of the “Contributions to non-marketable investments” in the consolidated statements of cash flows.

For the eight months ended August 31, 2018, prior to the Transfer Agreement Closing Date, MVI had no revenue and recorded a net loss of $6.2 million. The Company reflected its 50% share of MVI’s losses as equity in losses of unconsolidated investee in the consolidated statements of operations through the Transfer Agreement Closing Date.

Prior to the Transfer Agreement Closing Date, the unconsolidated balance sheet of MVI had total assets of $5.2 million, total liabilities of $1.0 million and total equity of $4.2 million. As of December 31, 2018, the unconsolidated balance sheet of MVI primarily consists of cash remaining from the initial investment and intangible assets totaling $7.9 million.

Impact of Transfer Agreement on Non-Marketable Equity Investments

The Company accounted for the Transfer Agreement as an asset acquisition, as it was determined that the transaction did not meet the definition of a business under the framework of the authoritative accounting guidance for business combinations. The total consideration transferred has been allocated to the non-monetary assets acquired and liabilities assumed based on their relative fair value.

The following table presents the components of the consideration transferred at fair value as of the Transfer Agreement Closing Date (amounts presented in thousands):


	Amount
Cash transferred	$	20,000
Anti-dilution protection at Transfer Agreement Closing Date	4,500
Carrying amount of Penumbra’s equity method investment in MVI	2,202
Fair value of the remaining non-controlling interest	3,365
Total consideration transferred	$	30,067

In addition to the cash transferred, the consideration included a probable contingent liability related to an anti-dilution provision whereby the Company may be obligated to contribute funds for the issuance of additional shares of MVI to Sixense with an aggregate value of up to $4.5 million. The consideration transferred also included the $2.2 million carrying amount of the Company’s equity method investment in MVI as of the Transfer Agreement Closing Date, which was written-off as part of the accounting for the Transfer Agreement. The Company also recorded $3.4 million in non-controlling interest on the consolidated financial statements related to the fair value of the remaining minority interest held by Sixense as of the Transfer Agreement Closing Date.

The primary asset acquired in the Transfer Agreement constitutes an in-process research and development asset (“IPR&D”). Due to the nature of the other assets acquired and liabilities assumed, the difference between the fair value of the consideration transferred and the fair value of the tangible net liabilities acquired was allocated solely to the IPR&D. The Company recorded a charge of $30.8 million to acquired in-process research and development expense in the consolidated statements of operations at the Transfer Agreement Closing Date because the Company determined that (1) the IPR&D asset had not yet reached technological feasibility and MVI had not yet obtained the appropriate regulatory approval for any products and (2) the asset had no alternative future use as of the Transfer Agreement Closing Date. Following the Transfer Agreement Closing Date, the financial results of MVI have been consolidated into the accompanying consolidated financial statements, with the amounts attributable to the non-controlling interest classified separately. Refer to Note “6. Asset Acquisition” for more information on the anti-dilution provision and payments related to the 2018 asset acquisition of MVI.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company classifies its cash equivalents and marketable investments within Level 1 and Level 2, as it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs.

The Company determined the fair value of its Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments.

Marketable investments classified within Level 2 of the fair value hierarchy are valued based on other observable inputs, including broker or dealer quotations or alternative pricing sources. When quoted prices in active markets for identical assets or liabilities are not available, the Company relies on non-binding quotes from its investment managers, which are based on proprietary valuation models of independent pricing services. These models generally use inputs such as observable market data, quoted market prices for similar instruments, historical pricing trends of a security as relative to its peers. To validate the fair value determination provided by its investment managers, the Company reviews the pricing movement in the context of overall market trends and trading information from its investment managers. In addition, the Company assesses the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy.

The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands):


	As of December 31, 2019
	Level 1		Level 2		Level 3		Fair Value
Financial Assets
Cash equivalents:
Commercial paper	$	—	$	9,474	$	—	$	9,474
Money market funds	24,054		—		—		24,054



Marketable investments:
Commercial paper	—		7,457		—		7,457
U.S. treasury	4,979		—		—		4,979
U.S. agency and government sponsored securities	—		2,518		—		2,518
U.S. states and municipalities	—		4,893		—		4,893
Corporate bonds	—		96,763		—		96,763

Total	$	29,033	$	121,105	$	—	$	150,138


	As of December 31, 2018
	Level 1		Level 2		Level 3		Fair Value
Financial Assets
Cash equivalents:
Commercial paper	$	—	$	10,967	$	—	$	10,967
Money market funds	12,087		—		—		12,087
Marketable investments:
Commercial paper	—		13,698		—		13,698
U.S. treasury	6,378		—		—		6,378
U.S. agency and government sponsored securities	—		7,690		—		7,690
U.S. states and municipalities	—		5,122		—		5,122
Corporate bonds	—		100,151		—		100,151

Total	$	18,465	$	137,628	$	—	$	156,093
Financial Liabilities:
Contingent consideration obligations	$	—	$	—	$	2,571	$	2,571
Total	$	—	$	—	$	2,571	$	2,571

Contingent Consideration Obligations

As of December 31, 2019, there is no contingent consideration liability balance classified as Level 3. The Company's contingent consideration liability balance of $1.2 million as of December 31, 2019 is based on actual revenue performance for the year ended December 31, 2019 and is not based on unobservable inputs. As of December 31, 2018, the Company’s contingent consideration liability relates to milestone payments due in connection with the acquisition of Crossmed and is classified as a Level 3 measurement for which fair value is derived from various inputs, including forecasted revenues during

the earn-out milestone periods, revenue volatilities, discount rates, and estimates in the timing and likelihood of achieving revenue-based milestones. The fair value of the contingent consideration liability is remeasured each reporting period. Of the $2.6 million contingent consideration liability as of December 31, 2018, $1.3 million relates to a liability based on actual revenue performance for the year ended December 31, 2018 and is not based on unobservable inputs. Accordingly, only the portion of the contingent consideration liability based on unobservable inputs is included in the table below. The following table presents quantitative information about certain unobservable inputs used in the Level 3 fair value measurement of the Company’s contingent consideration liability, other than the forecasted revenues during the earn-out milestone period:

Fair Value at December 31, 2018 (in thousands)

Valuation Method

Unobservable Inputs

Inputs

Crossmed:
Revenue-based milestones

$

1,268

Monte Carlo Simulation

Earn-out period over which revenue-based milestone payments are made

2019

Risk-adjusted discount rate

15%

Revenue volatilities for each type of revenue-based milestone

5.1% and 18.4%

The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2019 (in thousands):


	Fair Value of Contingent Consideration
Balance at December 31, 2018	$	2,571

Payments of contingent consideration liabilities	(1,296)
Changes in fair value	(35)
Foreign currency remeasurement	(34)
Balance at December 31, 2019	$	1,206


	Fair Value of Contingent Consideration
Balance at December 31, 2017	$	4,675

Payments of contingent consideration liabilities	(3,017)
Changes in fair value	950
Foreign currency remeasurement	(37)
Balance at December 31, 2018	$	2,571

During the year ended December 31, 2019, there were no material changes to the fair value of the contingent consideration obligation for the final remaining earn-out payment. During the year ended December 31, 2018, the fair value of the contingent consideration obligation increased by $1.0 million, which was recorded in sales, general and administrative expense in the consolidated statements of operations. The fair value of the contingent consideration increased as a result of updates to the underlying forecasts based on actual results to date and changes in estimates. For more information related to the payment of the contingent consideration liabilities refer to Note “5. Business Combinations.”

During the years ended December 31, 2019, 2018, and 2017, the Company did not record impairment charges related to its marketable investments and the Company did not hold any Level 3 marketable investments as of December 31, 2019 and 2018. During the year ended December 31, 2019 and 2018, the Company did not have any transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy. Additionally, the Company did not have any financial assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2019 and 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Balance Sheet Components

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

4. Balance Sheet Components

Accounts Receivable, Net

The Company’s allowance for doubtful accounts comprised of the following (in thousands):


	Balance At Beginning Of Year		Charged To Costs And Expenses		Deductions⁽¹⁾		Balance At End Of Year
For the year ended:
December 31, 2017	$	684	$	606	$	—	$	1,290
December 31, 2018	1,290		1,563		(71)		2,782
December 31, 2019	2,782		656		(492)		2,946

⁽¹⁾Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries.

Inventories

The components of inventories consisted of the following (in thousands):


	December 31,
	2019		2018
Raw materials	$	21,646	$	18,829
Work in process	21,651		10,630
Finished goods	109,695		86,282
Inventories	$	152,992	$	115,741

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	December 31,
	2019		2018
Machinery and equipment	$	20,959	$	15,400
Furniture and fixtures	9,307		7,140
Leasehold improvements	20,283		17,665
Software	5,830		4,095
Computers	5,702		3,289
Construction in progress	11,146		3,234
Total property and equipment	73,227		50,823
Less: Accumulated depreciation and amortization	(21,415)		(15,416)
Property and equipment, net	$	51,812	$	35,407

Depreciation and amortization expense, excluding intangible assets and software, was $5.9 million, $4.4 million and $3.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. Software amortization expense was $0.9 million, $0.7 million and $0.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company had accumulated software amortization of $2.3 million and $1.3 million for the years ended December 31, 2019 and 2018, respectively.

Accrued Liabilities

The following table shows the components of accrued liabilities as of December 31, 2019 and 2018 (in thousands):


	December 31, 2019		December 31, 2018
Payroll and employee-related expenses	$	37,727	$	33,838
Accrued expenses	7,811		4,088
Sales return reserve	1,821		2,986



Product warranty	2,318		1,875



Contingent consideration & other acquisition-related costs⁽¹⁾	4,291		4,439
Other accrued liabilities	13,662		10,660
Total accrued liabilities	$	67,630	$	57,886

⁽¹⁾Acquisition-related costs consist of the current portion of contingent liabilities related to (1) the cash milestone payments and working capital adjustment liabilities for the acquisition of Crossmed and (2) an anti-dilution provision for the asset acquisition of MVI. Refer to Note “5. Business Combinations” for more information on the acquisition of Crossmed and Note “3. Investments and Fair Value of Financial Instruments” and Note “6. Asset Acquisition” for more information on the MVI asset acquisition.

The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of December 31, 2019, 2018 and 2017 (in thousands):


	December 31,
	2019		2018		2017
Balance at the beginning of the year	$	1,875	$	1,088	$	1,254
Accruals of warranties issued	1,065		1,336		471
Settlements of warranty claims	(622)		(549)		(637)
Balance at the end of the year	$	2,318	$	1,875	$	1,088

Other Non-Current Liabilities

The following table shows the components of other non-current liabilities as of December 31, 2019 and 2018 (in thousands):


	December 31,
	2019		2018
Deferred tax liabilities	$	4,005	$	4,171
Licensing-related cost⁽¹⁾	10,878		11,506

Other non-current liabilities	367		3,266
Total other non-current liabilities	$	15,250	$	18,943

⁽¹⁾Amount relates to the non-current liability recorded for probable future milestone payments to be made under the indefinite-lived intangible assets related to licensed technology described in Note “7. Intangible Assets.” Refer therein for more information.

Business Combinations

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Business Combinations

5. Business Combinations

On July 3, 2017 (the “Closing Date”), the Company completed the acquisition of Crossmed, a joint stock company organized under the laws of Italy. Crossmed is engaged in the business of distributing medical supplies and equipment in Italy, San Marino, Vatican City and Switzerland. Crossmed was the Company’s exclusive distributor in Italy, San Marino, and Vatican City and the acquisition provides the Company with a direct relationship with its customers in these regions.

The Company is obligated to pay additional consideration in the form of milestone payments based on Crossmed’s net revenue and may be required to pay additional consideration based on incremental net revenue for each of the years ended December 31, 2017, 2018, and 2019. There is no limit on the milestone payments that can be paid out. As of December 31, 2019 and December 31, 2018, the fair value of the liability related to the future cash milestone payments was $1.2 million and

$2.6 million and was classified as a current liability on the consolidated balance sheet. For more information with respect to the nature and fair value of the Company’s contingent consideration obligations, refer to Note “3. Investments and Fair Value of Financial Instruments.” During the year ended December 31, 2019, the Company made $1.3 million in milestone payments of which $0.6 million is presented in operating activities and $0.7 million is presented in financing activities in the consolidated statements of cash flows. During the year ended December 31, 2018, the Company made $4.5 million in cash payments to the Sellers, of which $3.0 million related to the achievement of the 2017 milestones and the remainder related to working capital and financial debt adjustments. These payments have been presented as a component of financing activities in the consolidated statements of cash flows due to the nature and timing of the payments.

The purchase price measurement period was closed as of June 30, 2018. For the periods ended December 31, 2019 and 2018, Crossmed results of operations were included in the consolidated statements of operations. The following table presents the allocation of the purchase price for Crossmed, reflecting the measurement period adjustments recorded in 2017 (in thousands):


	Acquisition-Date Fair Value		Estimated Useful Life of Finite-Lived Intangible Assets
Tangible assets acquired and (liabilities) assumed:
Current assets	$	5,749


Other current and non-current assets	1,596
Property and equipment, net	829
Current liabilities	(5,080)



Other non-current liabilities	(797)
Intangible assets acquired:
Customer relationships	$	6,790	15 years
Other	1,750		5 years
Goodwill	7,867
Total purchase price	$	18,704

The intangible assets acquired are amortized on a straight-line basis over their assigned estimated useful lives. The amortization of the acquired intangible assets are not deductible for tax purposes. As a result, a $2.5 million deferred tax liability was recorded as of the Closing Date. The goodwill arising from the Crossmed acquisition is primarily attributed to expected synergies from future growth and assembled workforce. Goodwill is not deductible for tax purposes.

The following table presents certain unaudited pro forma information, for illustrative purposes only, for the year ended December 31, 2017, as if Crossmed had been acquired on January 1, 2016. The pro forma information may not be indicative of what would have occurred had the acquisition taken place on January 1, 2016, and may not be indicative of the Company’s future consolidated results. The unaudited pro forma information is presented below (unaudited, in thousands):


	December 31,
	2017
Pro forma net revenue	$	336,557
Pro forma net income	5,992

Asset Acquisition	12 Months Ended
Asset Acquisition	Dec. 31, 2019
Asset Acquisition [Abstract]
Asset Acquisition	6. Asset Acquisition Payments Related to 2018 MVI Asset Acquisition In the third quarter of 2018, the Company completed its asset acquisition to obtain a controlling interest of MVI pursuant to the Transfer Agreement between the Company, MVI and Sixense to obtain a controlling interest of MVI. During the year ended December 31, 2019, the Company contributed $1.0 million to MVI related to the anti-dilution provision, $0.8 million relates to cash payments which is presented in financing activities in the consolidated statements of cash flows and $0.2 million relates to non-cash contributions primarily related to in-kind services and goods provided to MVI. During the year ended December 31, 2018, the Company contributed $0.5 million to MVI related to the anti-dilution provision. As of December 31, 2019, the Company’s consolidated balance sheet included $3.0 million in current liabilities related to the anti-dilution provision in the Transfer Agreement. As of December 31, 2018, the Company’s consolidated balance sheet included $1.5 million and $2.5 million, respectively, in current and non-current liabilities related to the anti-dilution provision in the Transfer Agreement.

Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

7. Intangible Assets

The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets as of December 31, 2019 and 2018 (in thousands, except weighted-average amortization period):


As of December 31, 2019	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,686	$	(1,114)	$	5,572
Trade secrets and processes	20.0 years	5,256		(526)		4,730
Other	5.0 years	1,724		(862)		862
Total intangible assets subject to amortization	16.4 years	$	13,666	$	(2,502)	$	11,164
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,243		—		14,243
Total intangible assets		$	27,909	$	(2,502)	$	25,407


As of December 31, 2018	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,823	$	(681)	$	6,142
Trade secrets and processes	20.0 years	5,256		(263)		4,993
Other	5.0 years	1,759		(528)		1,231
Total intangible assets subject to amortization	16.0 years	$	13,838	$	(1,472)	$	12,366
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,879		—		14,879
Total intangible assets		$	28,717	$	(1,472)	$	27,245

The customer relationships and other intangible assets subject to amortization relate to the acquisition of Crossmed during the third quarter of 2017. The gross carrying amount and accumulated amortization of these intangible assets are subject to foreign currency translation effects. Refer to Note “5. Business Combinations” for more information. The Company’s $5.3 million trade secrets and processes intangible asset was recognized in connection with a royalty buyout agreement during the first quarter of 2018, which is discussed further in Note “10. Commitments and Contingencies” and Note “11. Stockholders’ Equity.”

The following table presents the amortization recorded related to the Company’s finite-lived intangible assets for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	263	$	263	$	—

Sales, general and administrative	789		832		418
Total	$	1,052	$	1,095	$	418

As of December 31, 2019, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in thousands):


	Amortization Expense
2020	$	1,053
2021	1,053
2022	881
2023	709
2024	709
Thereafter	6,759
Total amortization	$	11,164

Licensed technology

During the third quarter of 2017, the Company entered into an exclusive technology license agreement (the “License Agreement”) that required the Company to pay an upfront payment to the licensor of $2.5 million and future revenue milestone-based payments on sales of products covered by the licensed intellectual property. The Company accounted for the transaction as an asset acquisition and recorded an indefinite-lived intangible asset as it was determined to have alternative future use. The Company recorded an indefinite-lived intangible asset equal to the total payments made and expected to be made under the License Agreement and a corresponding contingent liability for the probable future milestone payments not yet paid. Upon the commercialization of the underlying product utilizing the licensed technology, the capitalized amount will be amortized over its estimated useful life.

At the end of each reporting period the Company adjusts the contingent liabilities to reflect the amount of future milestone payments that are probable to be paid. Prior to the commercialization of products utilizing the underlying technology, any changes in the contingent liability are recorded as an adjustment between the liability balances and the gross carrying amount of the indefinite-lived intangible asset. As of December 31, 2019, the balance of the contingent liability related to probable future milestone payments under the License Agreement was $11.7 million, of which $0.8 million and $10.9 million were included in accrued liabilities and other non-current liabilities on the condensed consolidated balance sheet, respectively. As of December 31, 2018, the balance of the contingent liability related to probable future milestone payments under the Licensing Agreement was $12.4 million, of which $0.9 million and $11.5 million were included in accrued liabilities and other non-current liabilities on the consolidated balance sheet, respectively.

As of December 31, 2019, the gross carrying amount of the indefinite-lived intangible asset was $14.2 million.The Company completed its annual impairment analysis of its indefinite-lived intangible asset during the fourth quarter of 2019 and determined that there was no impairment of the indefinite-lived intangible asset.

Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

8. Goodwill

The following table presents the changes in goodwill during the year ended December 31, 2019 (in thousands):


	Total Company
Balance as of December 31, 2018	$	7,813

Foreign currency translation adjustments	(157)
Balance as of December 31, 2019	$	7,656

Goodwill Impairment Review

The Company reviews goodwill for impairment annually during the fourth quarter, on October 31st, or more frequently if events or circumstances indicate that an impairment loss may have occurred. During the fourth quarter of 2019 and 2018, the Company reviewed goodwill for impairment and no impairment was identified.

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

9. Leases

Adoption of ASC Topic 842, “Leases”

The Company adopted the guidance under ASC 842 on January 1, 2019 using the modified retrospective transition approach. Therefore the comparative prior year information has not been adjusted and continues to be reported under ASC 840.

The impact of the adoption of ASC 842 on the Company’s consolidated balance sheet as of January 1, 2019 was as follows (in thousands):


	December 31, 2018		Adjustments due to the adoption of Topic 842		January 1, 2019
Assets
Prepaid expenses and other current assets⁽¹⁾	$	12,200	$	(424)	$	11,776
Total current assets	410,726		(424)		410,302
Operating lease right-of-use assets⁽¹⁾	—		43,277		43,277
Total assets	$	515,006	$	42,853	$	557,859
Liabilities and Stockholders’ Equity
Accrued liabilities⁽²⁾	$	57,886	$	(132)	$	57,754
Current operating lease liabilities⁽²⁾	—		3,608		3,608
Total current liabilities	66,062		3,476		69,538
Deferred rent⁽²⁾	7,586		(7,586)		—
Non-current operating lease liabilities⁽²⁾	—		46,963		46,963
Total liabilities	92,591		42,853		135,444
Total liabilities and stockholders’ equity	$	515,006	$	42,853	$	557,859

⁽¹⁾Upon the adoption of ASC 842, prepaid rent is included in the operating lease right-of-use assets.

⁽²⁾ Upon the adoption of ASC 842, current and non-current deferred rent is included in the current and non-current operating lease liabilities.

Lease Overview

As of December 31, 2018 and December 31, 2019, the Company’s contracts that contained a lease consisted of real estate, equipment and vehicle leases.

The Company leases real estate for office and warehouse space under non-cancelable operating and finance leases that expire at various dates through 2035, subject to the Company’s option to renew certain leases for an additional five to fifteen years. The Company also leases other equipment and vehicles primarily under non-cancelable operating leases that expire at various dates through 2024.

The following table presents the components of the Company’s lease cost, lease term and discount rate during the year ended December 31, 2019 (in thousands, except years and percentages):


	Year Ended December 31, 2019
Lease Cost
Operating lease cost	$	7,293
Finance lease cost:
Amortization of right-of-use assets	284
Interest on lease liabilities	186
Variable lease cost⁽¹⁾	3,570
Total lease costs	$	11,333

Weighted Average Remaining Lease Term
Operating leases	10.0 years
Finance leases	15.0 years
Weighted Average Discount Rate
Operating leases	6.20		%
Finance leases	5.42		%

⁽¹⁾Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company elected not to separate non-lease components from lease components upon adoption of ASC 842.

Prior to January 1, 2019, the Company recorded operating lease rent expense under ASC 840 on a straight-line basis over the non-cancelable lease term. Rent expense for the year ended December 31, 2018 and 2017 was $5.8 million and $5.8 million, respectively. As of December 31, 2018, the Company did not have material finance leases.

During the third quarter of 2019, the Company signed a fifteen year lease for additional space at the Company’s headquarters located at 1310 Harbor Bay Business Park, Alameda, California (the “1310 Harbor Bay Lease”) which has not yet commenced as of December 31, 2019. The 1310 Harbor Bay Lease is expected to commence upon substantial completion of lessor owned improvements in connection with the development of the building which the Company anticipates will occur in the next two years.

During the third quarter of 2018, the Company signed a fifteen year lease for a manufacturing facility in Roseville, California (as amended, the “Roseville Lease”). In the fourth quarter of 2019, the Roseville lease commenced once the building was made ready and available for its intended use. The Company determined that the Roseville lease is a non-cancelable finance lease which will expire in 2035.

The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of December 31, 2019 (in thousands):


	Operating Lease Payments⁽¹⁾		Finance Lease Payments
Year Ending December 31:

2020	$	7,189	$	5,705
2021	6,817		2,473
2022	6,637		2,489
2023	6,464		2,538
2024	6,325		2,588
Thereafter	36,444		28,585
Total undiscounted lease payments	69,876		44,378
Less imputed interest	(18,492)		(13,465)
Present value of lease liabilities	$	51,384	$	30,913

⁽¹⁾The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the fifteen year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building.

The following table below shows the maturities of the Company’s operating lease liabilities previously disclosed under ASC 840 as of December 31, 2018 (in thousands):


	Lease Payments⁽¹⁾
Year Ending December 31:
2019	$	6,575
2020	6,571
2021	5,809
2022	5,772
2023	5,735
Thereafter	40,194
Total future minimum lease payments	$	70,656

⁽¹⁾The table above excluded the estimated future minimum lease payment for the Roseville Lease, due to the uncertainty around the timing of when the Roseville Lease would commence and payments would be due as of December 31, 2018.

Supplemental cash flow information related to leases during the year ended December 31, 2019 are as follows (in thousands):


	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,829
Financing cash flows from finance leases	$	2,570

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	4,261
Finance leases	$	33,283

Leases

9. Leases

Adoption of ASC Topic 842, “Leases”

The Company adopted the guidance under ASC 842 on January 1, 2019 using the modified retrospective transition approach. Therefore the comparative prior year information has not been adjusted and continues to be reported under ASC 840.

The impact of the adoption of ASC 842 on the Company’s consolidated balance sheet as of January 1, 2019 was as follows (in thousands):


	December 31, 2018		Adjustments due to the adoption of Topic 842		January 1, 2019
Assets
Prepaid expenses and other current assets⁽¹⁾	$	12,200	$	(424)	$	11,776
Total current assets	410,726		(424)		410,302
Operating lease right-of-use assets⁽¹⁾	—		43,277		43,277
Total assets	$	515,006	$	42,853	$	557,859
Liabilities and Stockholders’ Equity
Accrued liabilities⁽²⁾	$	57,886	$	(132)	$	57,754
Current operating lease liabilities⁽²⁾	—		3,608		3,608
Total current liabilities	66,062		3,476		69,538
Deferred rent⁽²⁾	7,586		(7,586)		—
Non-current operating lease liabilities⁽²⁾	—		46,963		46,963
Total liabilities	92,591		42,853		135,444
Total liabilities and stockholders’ equity	$	515,006	$	42,853	$	557,859

⁽¹⁾Upon the adoption of ASC 842, prepaid rent is included in the operating lease right-of-use assets.

⁽²⁾ Upon the adoption of ASC 842, current and non-current deferred rent is included in the current and non-current operating lease liabilities.

Lease Overview

As of December 31, 2018 and December 31, 2019, the Company’s contracts that contained a lease consisted of real estate, equipment and vehicle leases.

The Company leases real estate for office and warehouse space under non-cancelable operating and finance leases that expire at various dates through 2035, subject to the Company’s option to renew certain leases for an additional five to fifteen years. The Company also leases other equipment and vehicles primarily under non-cancelable operating leases that expire at various dates through 2024.

The following table presents the components of the Company’s lease cost, lease term and discount rate during the year ended December 31, 2019 (in thousands, except years and percentages):


	Year Ended December 31, 2019
Lease Cost
Operating lease cost	$	7,293
Finance lease cost:
Amortization of right-of-use assets	284
Interest on lease liabilities	186
Variable lease cost⁽¹⁾	3,570
Total lease costs	$	11,333

Weighted Average Remaining Lease Term
Operating leases	10.0 years
Finance leases	15.0 years
Weighted Average Discount Rate
Operating leases	6.20		%
Finance leases	5.42		%

⁽¹⁾Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company elected not to separate non-lease components from lease components upon adoption of ASC 842.

Prior to January 1, 2019, the Company recorded operating lease rent expense under ASC 840 on a straight-line basis over the non-cancelable lease term. Rent expense for the year ended December 31, 2018 and 2017 was $5.8 million and $5.8 million, respectively. As of December 31, 2018, the Company did not have material finance leases.

During the third quarter of 2019, the Company signed a fifteen year lease for additional space at the Company’s headquarters located at 1310 Harbor Bay Business Park, Alameda, California (the “1310 Harbor Bay Lease”) which has not yet commenced as of December 31, 2019. The 1310 Harbor Bay Lease is expected to commence upon substantial completion of lessor owned improvements in connection with the development of the building which the Company anticipates will occur in the next two years.

During the third quarter of 2018, the Company signed a fifteen year lease for a manufacturing facility in Roseville, California (as amended, the “Roseville Lease”). In the fourth quarter of 2019, the Roseville lease commenced once the building was made ready and available for its intended use. The Company determined that the Roseville lease is a non-cancelable finance lease which will expire in 2035.

The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of December 31, 2019 (in thousands):


	Operating Lease Payments⁽¹⁾		Finance Lease Payments
Year Ending December 31:

2020	$	7,189	$	5,705
2021	6,817		2,473
2022	6,637		2,489
2023	6,464		2,538
2024	6,325		2,588
Thereafter	36,444		28,585
Total undiscounted lease payments	69,876		44,378
Less imputed interest	(18,492)		(13,465)
Present value of lease liabilities	$	51,384	$	30,913

⁽¹⁾The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the fifteen year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building.

The following table below shows the maturities of the Company’s operating lease liabilities previously disclosed under ASC 840 as of December 31, 2018 (in thousands):


	Lease Payments⁽¹⁾
Year Ending December 31:
2019	$	6,575
2020	6,571
2021	5,809
2022	5,772
2023	5,735
Thereafter	40,194
Total future minimum lease payments	$	70,656

⁽¹⁾The table above excluded the estimated future minimum lease payment for the Roseville Lease, due to the uncertainty around the timing of when the Roseville Lease would commence and payments would be due as of December 31, 2018.

Supplemental cash flow information related to leases during the year ended December 31, 2019 are as follows (in thousands):


	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,829
Financing cash flows from finance leases	$	2,570

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	4,261
Finance leases	$	33,283

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	10. Commitments and Contingencies Purchase Commitments As of December 31, 2019, the Company had non-cancelable purchase obligations to suppliers of $15.1 million. Royalty Obligations In March 2005, the Company entered into a license agreement that requires the Company to make minimum royalty payments to the licensor, on a quarterly basis. As of December 31, 2018 and 2017, the license agreement requires minimum annual royalty payments of $0.1 million in equal quarterly installments. On each January 1, the quarterly calendar year minimum royalty shall be adjusted to equal the prior year’s minimum royalty adjusted by a percentage equal to the percentage change in the “consumer price index for all urban consumers” for the prior calendar year as reported by the U.S. Department of Labor. Unless terminated earlier, the term of the license agreement shall continue until the expiration of the last to expire patent that covers that licensed product or for the period of fifteen years following the first commercial sale of such licensed product, whichever is longer. The first commercial sale of covered products occurred in June 2007. In July 2019, the Company amended the license agreement to extend the term for an additional ten years. As of December 31, 2019, the amended license agreement required minimum annual royalty payments of $0.3 million in equal quarterly installments through 2027. In April 2012, the Company entered into an agreement that requires the Company to pay, on a quarterly basis, a 5% royalty on sales of products covered under applicable patents. The first commercial sale of covered products occurred in April 2014. Unless terminated earlier, the royalty term for each applicable product shall continue for fifteen years following the first commercial sale of such patented product, or when the applicable patent covering such product has expired, whichever is sooner. In November 2013, the Company entered into an agreement that requires the Company to pay, on a quarterly basis, a 3% royalty on the first $5 million in sales and a 1% royalty on sales thereafter of products covered under applicable patents. The agreement was terminated effective January 1, 2018. In April 2015, the Company entered into a royalty agreement that required the Company to pay a 2% royalty on sales of certain products covered by the agreement, on a quarterly basis, in exchange for certain trade secrets and processes which were used to develop such covered products. The Company began the first commercial sale of the covered products in July 2015. In the first quarter of 2018, the Company entered into a buyout of this agreement (the “Buyout Agreement”) in which future royalty payments were canceled in exchange for shares of the Company’s common stock with a fair value of $5.3 million. The Company recorded an intangible asset equal to the $5.3 million buyout amount which will be amortized into cost of revenue over the period in which the Company receives future economic benefit. After determining that the pattern of future cash flows associated with this intangible asset could not be reliably estimated with a high level of precision, the Company concluded that the intangible asset will be amortized on a straight-line basis over its estimated useful life. For more information refer to Note “11. Stockholders’ Equity.” Royalty expense included in cost of sales for the years ended December 31, 2019, 2018 and 2017 was $3.8 million, $3.4 million and $4.1 million, respectively. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Refer to Note “3. Investments and Fair Value of Financial Instruments,” Note “5. Business Combinations” and Note “7. Intangible Assets” for more information on contingent liabilities recorded on the consolidated balance sheet. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. In many such arrangements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified parties for losses suffered or incurred by the indemnified parties in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The Company also agrees to indemnify many indemnified parties for product defect and similar claims. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with any of these indemnification requirements has been recorded to date. Litigation From time to time, the Company is subject to other claims and assessments in the ordinary course of business. The Company is not currently a party to any such litigation matter that, individually or in the aggregate, is expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stockholders' Equity

11. Stockholders’ Equity

Stockholders’ Equity

Preferred Stock

The Company has 5,000,000 of authorized preferred stock issuable. There is no preferred stock outstanding as of December 31, 2019 and 2018.

Common Stock

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding.

In the first quarter of 2018, the Company issued 53,256 fully vested restricted stock units with a fair value of $5.3 million in connection with the Buyout Agreement, as discussed in Note “10. Commitments and Contingencies.” The Company recorded the $5.3 million fair value of the shares issued to additional-paid in capital on the consolidated balance sheet upon the issuance of the awards, with the associated expense being amortized into cost of sales over the period in which the Company receives future economic benefit from the buyout.

Issuance of Common Stock in Public Offerings

In March 2017, the Company issued and sold an aggregate of 1,495,000 shares of common stock at a public offering price of $76.00 per share, less the underwriters’ discounts and commissions, pursuant to an underwritten public offering. The Company received approximately $106.3 million in net cash proceeds after deducting underwriting discounts and commissions of $6.8 million and other offering expenses of $0.5 million.

Stock-Based Benefit Plans

2005 Stock Plan

The Company adopted the Penumbra, Inc. 2005 Stock Plan (the “2005 Plan”) in January 2005. The 2005 Plan was subsequently amended and restated in 2006, 2007, 2008 and 2010. Under the 2005 Plan, the board of directors could grant incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), and/or stock awards to eligible persons, including employees, non-employees, directors, consultants and other independent advisors who provide services to the Company. Stock purchase rights could also be granted under the 2005 Plan. The board of directors had the authority to determine to whom options would be granted, the number of options, the term and the exercise price. ISOs could only be granted to Company employees, which include officers and directors of the Company. NSOs and stock purchase rights could be granted to employees and consultants. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price for an ISO could not be less than 110% of the fair market value of a share of common stock on the date of grant. Options granted under the 2005 Plan permitted an optionee to exercise options immediately upon grant irrespective of the vesting term. Options generally vest annually at a rate of 1/4 after the first year and 1/48 per month thereafter. The term of the options is no longer than five years for ISOs, for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than 10 years for all other options. On September 17, 2015, the Penumbra, Inc. 2014 Equity Incentive Plan (as amended and restated, the “2014 Plan”) replaced the 2005 Plan and no further equity awards may be granted under the 2005 Plan. The remaining 564 shares of common stock available for issuance from the 2005 Plan were transferred to and may be granted under the 2014 Plan. As of December 31, 2019, 187,985 shares of common stock were reserved for issuance under the 2005 Plan.

2011 Equity Incentive Plan

The Company adopted the Penumbra, Inc. 2011 Equity Incentive Plan (the “2011 Plan”) in October 2011. Under the 2011 Plan, the board of directors could grant ISOs, NSOs, restricted stock, and/or RSUs to eligible persons, including employees, directors and consultants who provide services to the Company. Stock Appreciation Rights (“SAR”) could also be granted under the 2011 Plan. The board of directors had the authority to determine to whom options would be granted, the number of options, the term and the exercise price. ISOs could only be granted to Company employees, which include officers and directors of the Company. NSOs, SARs, restricted stock and RSUs could be granted to employees and consultants. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price for an ISO could not be less than 110% of the fair market value of a share of common stock on the date of grant. Stock options granted under the 2011 Plan generally have a contractual life of ten years, and generally vest over a period of four years. On September 17, 2015, the 2014 Plan replaced the 2011 Plan and no further equity awards may be granted under the 2011 Plan. The remaining 89,559 shares of common stock available for issuance under the 2011 Plan were transferred to and may be granted under the 2014 Plan. As of December 31, 2019, 145,000 shares of common stock were reserved for issuance under the 2011 Plan.

Amended and Restated 2014 Equity Incentive Plan

The Company adopted the Penumbra, Inc. 2014 Equity Incentive Plan in May 2014. The plan was amended and restated as of September 17, 2015 (as amended and restated, the “2014 Plan”). The 2014 Plan replaced the 2011 Plan and the 2005 Plan and no further equity awards may be granted under the 2011 Plan or the 2005 Plan. As of December 31, 2019, 8,376,751 shares of common stock were reserved for issuance and 6,959,455 shares of common stock were available for grant under the 2014 Plan.

Employee Stock Purchase Plan

The Penumbra, Inc. Employee Stock Purchase Plan (the “ESPP”), became effective on September 17, 2015. The ESPP initially reserved 600,000 shares of common stock for purchase under the ESPP, with the number of shares reserved for purchase increasing each year pursuant to an “evergreen” provision set forth in the ESPP. As of December 31, 2019, 1,095,695 shares of common stock were reserved and available for issuance under the plan. All qualifying employees of the Company and its designated subsidiaries are eligible to participate in the ESPP. Each offering to the Company’s employees to purchase stock under the ESPP will begin on each May 20 and November 20 and will end on the following November 19 and May 19, respectively, each referred to as offering periods except that the first offering period under the ESPP began on September 17, 2015 and ended on May 19, 2016. Under the ESPP, each employee may purchase shares by authorizing payroll deductions at a minimum of 1% and up to 15% of his or her eligible compensation for each pay period during the offering period. Unless the participating employee withdraws from the offering, his or her accumulated payroll deductions will be used to purchase the Company’s common stock on the last business day of the offering period at a price equal to 85% of the fair market value of the common stock on either the first or the last day of the offering period, whichever is lower, provided that no more than 2,000 shares of the Company’s common stock or such other lesser maximum number established by the ESPP administrator

may be purchased by any one employee during each offering period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of common stock, valued at the start of the purchase period (corresponding to an offering period), under the ESPP in any calendar year.

Early Exercises

The 2005 Plan and 2011 Plan allow the board of directors to grant stock options that provide employee option holders the right to elect to exercise unvested options in exchange for restricted common stock. As of December 31, 2019 and 2018, there were no such early exercised unvested shares.

Stock-Based Benefit Plan Activity and Stock-Based Compensation

Stock Options

Activity of stock options under the 2005 Plan, 2011 Plan and 2014 Plan (collectively, the "Plans") is set forth below:


	Number of Shares	Weighted-Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2018	1,688,881	$	18.91
Grants	7,900	$	158.30
Exercised	(314,433)	$	13.12
Canceled/Forfeited	(3,273)	$	21.94
Balance at December 31, 2019	1,379,075	$	21.02
Vested and expected to vest—December 31, 2019	1,378,440	$	20.95	4.98	$	197,551
Balance at Exercisable—December 31, 2019	1,371,175	$	20.23	4.95	$	197,508

The total intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $46.1 million, $49.1 million and $56.4 million, respectively. The intrinsic value is calculated as the difference between the estimated fair value of the Company’s common stock at the exercise date and the exercise price of the stock option.

The weighted average grant date fair value of stock options was $69.73 per share for the year ended December 31, 2019. The Company did not grant stock options during the years ended December 31, 2018 and 2017.

Restricted Stock and Restricted Stock Units

The activity of unvested restricted stock and restricted stock units ("RSU") under the Plans is set forth below:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2018	451,463	$	57.29
Granted	261,071	151.44
Released/Vested - Restricted Stock/RSUs	(297,788)	44.11
Canceled/Forfeited	(43,540)	88.16
Unvested at December 31, 2019	371,206	$	130.47

The fair value of the restricted stock and RSUs that vested during the years ended December 31, 2019, 2018 and 2017 was $42.7 million, $47.0 million and $29.1 million, respectively. As of December 31, 2019, 348,676, RSUs are expected to vest.

Employee Stock Purchase Plan

Under the ESPP, employees purchased 81,644 shares, 74,344 shares, and 91,685 shares for $9.0 million, $7.2 million, and $5.8 million during the years ended December 31, 2019, 2018, and 2017 respectively.

Stock-based Compensation

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options and ESPP rights. The valuation model for stock compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation including the expected term (weighted average period of time that the options granted are expected to be outstanding); expected volatility of the Company’s common stock and an assumed risk-free interest rate.

The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of stock options granted in 2019:


						Stock Options
						Year Ended December 31,
						2019
Expected term (in years)						6.89
Expected volatility						40%
Risk-free interest rate						1.82%
Expected dividend yield						0%

The Company did not grant stock options during the years ended December 31, 2018 and 2017.

The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of ESPP rights:


	ESPP Rights
	Year Ended December 31,
	2019	2018	2017
Expected term (in years)	0.50	0.50	0.50
Expected volatility	45%	42%	34%
Risk-free interest rate	2.30%	2.36%	1.26%
Expected dividend yield	0%	0%	0%

Weighted Average Expected Term. The Company’s expected term for stock options and ESPP rights is based on historical data.

Volatility. In 2019, 2018 and 2017, volatility assumptions used in the valuation of options and ESPP rights were calculated based on the historical volatility of the Company’s stock.

Risk-Free Interest Rate. The risk-free interest rate is based upon U.S. Treasury zero-coupon issues with remaining terms similar to the expected term of the stock options or ESPP rights.

Dividend Yield. The Company has never paid any dividends and does not plan to pay dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

Forfeitures. The Company estimates forfeitures at the time of grant, and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period that the estimates are revised.

The following table sets forth the stock-based compensation expense included in the consolidated statements of operations (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of sales	$	1,396	$	1,004	$	1,009
Research and development	2,835		1,597		1,289
Sales, general and administrative	17,254		15,821		15,514
	$	21,485	$	18,422	$	17,812

As of December 31, 2019, total unrecognized compensation cost was $43.0 million related to unvested stock-based compensation arrangements which is expected to be recognized over a weighted average period of 3.1 years.

The total stock-based compensation cost capitalized in inventory was $0.8 million, $0.4 million and $0.2 million as of December 31, 2019, 2018 and 2017, respectively.

Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Accumulated Other Comprehensive Loss

12. Accumulated Other Comprehensive Loss

Other comprehensive (loss) income consists of two components: unrealized gains or losses on the Company’s available-for-sale marketable investments and gains or losses from foreign currency translation adjustments. Until realized and reported as a component of consolidated net income, these comprehensive (loss) income items accumulate and are included within accumulated other comprehensive loss. Unrealized gains and losses on our marketable investments are reclassified from accumulated other comprehensive loss into earnings when realized upon sale, and are determined based on specific identification of securities sold. Gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies are included in accumulated other comprehensive loss.

The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive loss into earnings affect our consolidated statements of comprehensive income (loss) (in thousands):


	Year Ended December 31, 2019										Year Ended December 31, 2018
	Marketable Investments		Currency Translation Adjustments		Total		Marketable Investments		Currency Translation Adjustments		Total
Balance, beginning of the year	$	(500)	$	(1,442)	$	(1,942)	$	(235)	$	1,804	$	1,569
Other comprehensive (loss) income before reclassifications:
Unrealized losses (gains) — marketable investments	811		—		811		(165)		—		(165)
Foreign currency translation losses	—		(1,120)		(1,120)		—		(3,027)		(3,027)
Income tax effect — expense	(73)		—		(73)		(100)		(219)		(319)
Net of tax	738		(1,120)		(382)		(265)		(3,246)		(3,511)
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Realized (gain) loss — marketable investments	—		—		—		—		—		—
Income tax effect — (expense) benefit	—		—		—		—		—		—
Net of tax	—		—		—		—		—		—
Net current-year other comprehensive loss	738		(1,120)		(382)		(265)		(3,246)		(3,511)
Balance, end of the year	$	238	$	(2,562)	$	(2,324)	$	(500)	$	(1,442)	$	(1,942)

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2019
Retirement Benefits [Abstract]
Employee Benefit Plan	13. Employee Benefit Plan The Company offers a retirement savings plan under Section 401(k) of the Internal Revenue Code (“IRC”) to its eligible U.S. employees whereby they may contribute up to the maximum amount permitted by the IRC. The Company makes 401(k) matching contributions of eligible compensation under the plan, subject to a maximum dollar threshold. Contribution expense was $3.2 million, $1.6 million, and $1.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

The Company’s income tax (benefit) expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in both the United States and foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax (benefit) expense.

The Company is incorporated in the United States and operates in various countries with different tax laws and rates. A portion of the Company’s income or (loss) before taxes and the (benefit from) provision for income taxes are generated from international operations.

Income (loss) before income taxes and equity in losses of unconsolidated investee for the years ended December 31, 2019, 2018 and 2017 is summarized as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	46,859	$	(2,790)	$	543
Foreign	3,276		4,398		1,933
Total income (loss) before income taxes and equity in losses of unconsolidated investee	$	50,135	$	1,608	$	2,476

Income tax (benefit) or provision in 2019, 2018 and 2017 is comprised of federal, state, and foreign taxes.

The components of the (benefit from) provision for income taxes are summarized as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	(738)	$	290	$	(13)
State	34		183		259
Foreign	2,458		1,689		739
Total current	$	1,754	$	2,162	$	985
Deferred:
Federal	1,556		(5,436)		(2,502)
State	295		(770)		(1,742)
Foreign	(474)		(359)		(352)
Total deferred	$	1,377	$	(6,565)	$	(4,596)
(Benefit from) Provision for Income Taxes	$	3,131	$	(4,403)	$	(3,611)

The Company’s actual (benefit from) or provision for tax differed from the amounts computed by applying the Company’s U.S. federal statutory income tax rate to pretax income as a result of the following:


	Year Ended December 31,
	2019		2018		2017
Income tax at federal statutory rate	21.0	%	21.0	%	34.0	%
State income taxes, net of federal benefit	0.4		(33.1)		(94.6)
Foreign taxes differential	2.2		37.2		(4.2)
Prepaid tax ASC 810-10	(0.8)		5.0		(39.8)
IPR&D charge	—		402.5		—
Stock-based compensation	(20.8)		(809.6)		(802.0)
Non-deductible meals and entertainment	1.6		31.3		19.4
Imputed interest	0.6		19.8		19.1
Tax credits	—		—		(0.5)
Remeasurement of deferred tax assets and liabilities	—		—		622.5
Transfer pricing tax benefit	—		—		(35.3)
Global intangible low-taxed income ("GILTI")	0.8		14.0		—
Contingent liabilities	—		12.4		—
Executive compensation	0.4		6.5		—
Non-deductible expenses	—		15.3		—
Other	0.8		3.9		8.0
Change in valuation allowance	—		—		127.6
Effective tax rate	6.2	%	(273.8)	%	(145.8)	%

Deferred income tax assets and liabilities consist of the following (in thousands):


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	24,470	$	27,456
Tax credits	15,992		11,459
Accruals and reserves	4,700		6,078
Stock-based compensation	4,252		3,485
Translation adjustment	155		527
UNICAP adjustments	6,816		4,993
ASC 842 Lease Liabilities	20,183		—
Other	471		464
Gross deferred tax assets	77,039		54,462
Valuation allowance	(21,558)		(17,284)
Total deferred tax assets	55,481		37,178
Deferred tax liabilities:
Depreciation and amortization	(5,550)		(6,293)
Unrealized Gains	(73)		—
ASC 842 Lease ROU Assets	(20,394)		—
Total deferred tax liabilities	(26,017)		(6,293)
Net deferred tax assets	$	29,464	$	30,885

As of December 31, 2019, the Company had approximately $89.3 million, $78.6 million and $0.4 million of federal, state and foreign net operating loss carryforwards, respectively, available to offset future taxable income. The federal net operating loss will begin to expire in 2036, except for $24.0 million that has an indefinite carryforward period but is limited to offset 80% of taxable income in the year utilized. The state net operating loss carryforwards will begin to expire in 2020. As of December 31, 2019, the Company had federal research credits of $9.2 million and California state tax credits of $10.5 million. The federal research credits are generally carried forward for 20 years. California state tax credits may be carried forward indefinitely.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017, (the “Tax Reform Act”) was enacted. The Tax Reform Act significantly revised the U.S. corporate income tax regime. Also on December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”), which provided for a measurement period that should not extend beyond one year from the Tax Reform Act enactment date. As of December 31, 2018, the Company completed its accounting for the tax effects of the Tax Reform Act under FASB ASC 740 “Income Taxes”. The Company’s financial statements reflect tax law interpretations based on authoritative guidance available to date. Legislative guidance continues to be issued which could impact the Company’s current interpretations.

The Company maintains that all foreign earnings, with the exception of a portion of the earnings of its German subsidiary, are permanently reinvested outside the U.S. and therefore deferred taxes attributable to such are not provided for in the Company’s financial statements as of December 31, 2019. The Company will repatriate foreign earnings only to the extent doing so will not result with any material U.S. tax consequences. Thus, deferred taxes on any potential future repatriation of a portion of the earnings of its German subsidiary were not reflected in the Company’s financial statements as of December 31, 2019.

The Company generated significant domestic DTAs in recent years, primarily due to the excess tax benefits from stock option exercises and vesting of restricted stock. The Company assessed its ability to realize the benefits of its domestic DTAs by evaluating all available positive and negative evidence, objective and subjective in nature, including (1) cumulative results of operations in recent years, (2) sources of recent pre-tax income, (3) estimates of future taxable income, (4) respective carryback and/or carryforward periods of tax attributes available to date, and (5) limitations on net operating loss (“NOL”) utilization against taxable income. The Company determined it would be in a three-year cumulative taxable income position, had it not been for the impact of excess tax deductions from stock-based compensation. The Company also measured its current DTA balances against estimates of future income based on objectively verifiable operating results from the Company’s recent history.

The Company considered its projections of future taxable income in conjunction with relevant provisions of the Tax Reform Act, including but not limited to, the indefinite carryforward period for NOLs generated in years beginning on or after

January 1, 2018. The Company also considered its three-year cumulative taxable income position, exclusive of the impact of excess tax deductions from stock-based compensation. After an evaluation of all available qualitative and quantitative evidence, both positive and negative in nature, the Company concluded that sufficient future taxable income will be generated to realize the benefits of its federal DTAs prior to expiration other than its federal research and development tax credit DTAs. The tax attribute ordering rules provide that net operating losses must be used to offset taxable income prior to the utilization of tax credits. Accordingly, the Company could not assert, at the required more-likely-than-not level of certainty, that it will be able to realize the benefit of its federal research and development tax credit DTAs, with a limited 20 year carryforward period, prior to expiration. As a result, as of December 31, 2019, the Company maintained a full valuation allowance against its federal research and development tax credit DTAs.

For years ended December 31, 2019, 2018 and 2017, a full valuation allowance remains against the Company’s California DTA balances.

As of December 31, 2019, the Company’s DTA balance included $3.1 million of tax attributes gained upon acquisition of a majority interest ownership in MVI. The acquired DTAs are subject to Separate Return Limitation Year (“SRLY”) rules which will limit the utilization of the pre-acquisition tax attributes to offset future taxable income solely generated by MVI. As of December 31, 2019, the Company could not conclude, at the required more-likely-than-not level of certainty, that MVI will generate sufficient taxable income to realize the benefit of its tax attributes prior to expiration. As a result, a $3.1 million valuation allowance is maintained against the DTAs acquired from MVI.

The change in the Company’s deferred tax valuation allowance against net DTAs from January 1, 2017 to December 31, 2019, is as follows (in thousands):


	Beginning Balance		Additions Charged To Expenses or Other Accounts⁽¹⁾		Deductions Credited to Expenses or Other Accounts⁽²⁾		Ending Balance
For the year ended:
December 31, 2017	$	6,062	$	4,400	$	(167)	$	10,295
December 31, 2018	10,295		6,989		—		17,284
December 31, 2019	17,284		4,395		(121)		21,558

⁽¹⁾Additions include current year additions charged to expenses and current year build due to increases in net DTAs, return to provision true-ups, and other adjustments.

⁽²⁾Deductions include current year releases credited to expenses and current year reductions due to decreases in net DTAs, return to provision true-ups, and other adjustments.

The Company will continue to closely monitor the need for a valuation allowance against its existing domestic and foreign DTAs and any additional DTAs that are generated in each subsequent reporting period. The need for a valuation allowance can be impacted by actual operating results, forecasted financial performance, variances between the two, and the rate at which future DTAs are generated.

IRC Sections 382 and 383 limit the use of net operating losses and business credits if there is a change in ownership. In 2009, the Company determined there were changes in ownership in 2004 and 2008, which did not cause any impairment of tax attributes.

A reconciliation of the change in the gross unrecognized tax benefits from January 1, 2017 to December 31, 2019, is as follows (in thousands):


	December 31,
	2019		2018		2017
Beginning Balance	$	5,174	$	4,152	$	3,827
Gross increase for tax positions of current year	1,191		1,421		871
Gross increase for tax positions of prior years	386		238		130
Gross decrease for tax positions of prior years	(565)		(616)		(659)
Settlement	—		—		—
Lapse of statute of limitations	(111)		(21)		(17)
Ending Balance	$	6,075	$	5,174	$	4,152

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Income tax expense for the years ended December 31, 2019, 2018 and 2017 included interest and penalties that were not material. As of December 31, 2019, 2018 and 2017, the Company had approximately $0.2 million, $0.2 million, and $0.1 million, respectively, of accrued interest and penalties attributable to uncertain tax positions. Included in the $6.1 million balance of unrecognized tax benefits as of December 31, 2019 is $1.9 million of tax benefit that, if recognized, would affect the effective tax rate.

The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryovers, the tax years ending December 31, 2004 through December 31, 2019 remain subject to examination by federal and state tax authorities. In Australia and Canada, tax years ending December 31, 2009 through December 31, 2019 generally remain subject to examination by tax authorities. In Germany and Italy, tax years ending December 31, 2013 through December 31, 2019 remain subject to examination by tax authorities. In the year ended December 31, 2018, the German tax authority initiated an income tax audit for tax years ended December 31, 2014, 2015 and 2016. The Company believes that an adequate provision has been made for any adjustments that may result from the tax examination, however, the audit is in its preliminary stages and so the outcome and timing of resolution is uncertain.

The Company does not anticipate significant changes in the balance of gross unrecognized tax benefits over the next 12 months.

Net Income Attributable to Penumbra, Inc. per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Net Income Attributable to Penumbra, Inc. per Share

15. Net Income Attributable to Penumbra, Inc. Per Share

The Company computed basic net income attributable to Penumbra, Inc. per share based on the weighted average number of shares of common stock outstanding during the period. The Company computed diluted net income attributable to Penumbra, Inc. per share based on the weighted average number of shares of common stock outstanding plus potentially dilutive common stock equivalents outstanding during the period. For the purposes of this calculation, stock options, restricted stock, restricted stock units and stock sold through the ESPP are considered common stock equivalents.

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income attributable to Penumbra, Inc. is as follows (in thousands, except share and per share amounts):


	Year Ended December 31,
	2019		2018		2017
Numerator:
Net income attributable to Penumbra, Inc.	$	48,458	$	6,601	$	4,657




Denominator:
Weighted average shares used to compute net income attributable to common stockholders:
Basic	34,750,706		34,138,176		32,978,065
Potential dilutive stock-based options and awards, as calculated using treasury stock method	1,515,293		1,948,645		2,341,038


Diluted	36,265,999		36,086,821		35,319,103

Net income attributable to Penumbra, Inc. per share from:
Basic	$	1.39	$	0.19	$	0.14
Diluted	$	1.34	$	0.18	$	0.13

For the year ended December 31, 2019, outstanding stock-based awards of 100 thousand shares were excluded from the computation of diluted net income attributable to Penumbra, Inc. per share because their effect would have been anti-dilutive. For the years ended December 31, 2018 and 2017, outstanding stock-based awards of 49 thousand and 54 thousand shares, respectively, were excluded from the computation of diluted net income attributable to Penumbra, Inc. per share because their effect would have been anti-dilutive.

Revenues

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenues

16. Revenues

Adoption of ASC Topic 606, “Revenue from Contracts with Customers”

The Company adopted the guidance under ASC 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. Therefore, the comparative prior year information has not been adjusted and continues to be reported under ASC 605 with the impact of the adoption reflected in opening retained earnings. As a result of adoption, the cumulative impact to our retained earnings at January 1, 2018 was $0.3 million.

The adoption of ASC 606 represents a change in accounting principle that more closely aligns the timing of revenue recognition with the point in time that a performance obligation is satisfied. The Company’s performance obligations are satisfied at a point in time. The implementation of the new standard did not have a material impact on the measurement or recognition of revenue from prior periods, however additional disclosures have been added in accordance with the guidance.

Revenue Recognition

Revenue is recognized in an amount that reflects the consideration we expect to be entitled to in exchange for goods or services. All revenue recognized in the income statement is considered to be revenue from contracts with customers.

The Company’s revenues, disaggregated by geography, based on the destination to which the Company ships its products, for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	355,222	$	290,716	$	219,173
Japan	42,520		41,805		33,790
Other International	149,663		112,417		80,801
Total	$	547,405	$	444,938	$	333,764

The Company’s revenues disaggregated by product category, for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Neuro	$	331,685	$	294,333	$	232,446
Vascular	215,720		150,605		101,318
Total	$	547,405	$	444,938	$	333,764

Performance Obligations

Delivery of products - The Company’s contracts with customers typically contain a single performance obligation, delivery of the Company’s products. Satisfaction of that performance obligation occurs when control of the promised goods transfers to the customer, which is generally upon shipment for non-consignment sale agreements and upon utilization for consignment sale agreements.

Payment terms - Our payment terms vary by the type and location of our customer. The timing between fulfillment of performance obligations and when payment is due is not significant and does not give rise to financing transactions. The Company did not have any contracts with significant financing components as of December 31, 2019.

Product returns - The Company may allow customers to return products purchased at the Company’s discretion. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a

reduction of revenue in the period in which the related product revenue is recognized. The Company currently estimates product return liabilities using its own historic sales information, trends, industry data, and other relevant data points.

Warranties - The Company offers its standard warranty to all customers and it is not available for sale on a standalone basis. The Company’s standard warranty represents its guarantee that its products function as intended, are free from defects, and comply with agreed-upon specifications and quality standards. This assurance does not constitute a service and is not a separate performance obligation.

Transaction Price

Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns utilizing historical return rates, rebates, discounts, and other adjustments to net revenue. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price. When determining if variable consideration should be constrained, management considers whether there are factors that could result in a significant reversal of revenue and the likelihood of a potential reversal. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are reassessed each reporting period as required. During the year ended December 31, 2019, the Company made no material changes in estimates for variable consideration. When the Company performs shipping and handling activities after control of goods is transferred to the customer, they are considered as fulfillment activities, and costs are accrued for when the related revenue is recognized. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

17. Selected Quarterly Financial Data (Unaudited)

The following tables provide the selected quarterly financial data for 2019 and 2018 (in thousands, except share and per share amounts):


	2019 Quarters Ended
Selected Statement of Operations Data:	March 31⁽¹⁾		June 30		September 30		December 31
Revenue	$	128,439	$	134,201	$	139,502	$	145,263
Cost of revenue	44,529		40,273		43,504		47,135
Gross profit	83,910		93,928		95,998		98,128

Total operating expenses	72,758		81,127		83,022		87,549
Income before provision for (benefit from) income taxes	11,909		13,514		12,963		11,749
Provision for (benefit from) income taxes	1,455		(2,735)		1,963		2,448


Consolidated net income	10,454		16,249		11,000		9,301
Net loss attributable to non-controlling interest	(244)		(339)		(483)		(388)
Net income attributable to Penumbra, Inc.	$	10,698	$	16,588	$	11,483	$	9,689
Net income attributable to Penumbra, Inc. per share:
Basic	$	0.31	$	0.48	$	0.33	$	0.28
Diluted	$	0.30	$	0.46	$	0.32	$	0.27
Weighted average shares used to compute net income per share:
Basic	34,507,279		34,694,228		34,840,370		34,955,043
Diluted	36,213,164		36,214,321		36,271,394		36,312,471


	2018 Quarters Ended
Selected Statement of Operations Data:	March 31⁽²⁾		June 30		September 30⁽³⁾		December 31
Revenue	$	102,701	$	109,638	$	111,806	$	120,793
Cost of revenue	36,144		37,386		36,794		42,081
Gross profit	66,557		72,252		75,012		78,712
Acquired in-process research and development	—		—		30,835		—
Total operating expenses	62,512		62,969		95,861		72,043
Income (loss) before income taxes and equity in losses of unconsolidated investee	4,504		9,663		(19,908)		7,349
(Benefit from) provision for income taxes	(1,938)		(4,948)		1,598		885
Income (loss) before equity in losses of unconsolidated investee	6,442		14,611		(21,506)		6,464
Equity in losses of unconsolidated investee	(951)		(1,230)		(920)		—
Consolidated net income (loss)	5,491		13,381		(22,426)		6,464
Net loss attributable to non-controlling interest	—		—		(3,496)		(195)
Net income (loss) attributable to Penumbra, Inc.	$	5,491	$	13,381	$	(18,930)	$	6,659
Net income (loss) per share:
Basic	$	0.16	$	0.39	$	(0.55)	$	0.19
Diluted	$	0.15	$	0.37	$	(0.55)	$	0.18
Weighted average shares used to compute net income (loss) per share:
Basic	33,846,142		34,072,223		34,248,484		34,378,415
Diluted	35,917,051		36,116,254		34,248,484		36,150,450

⁽¹⁾In first quarter of 2019, the Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842), and its associated amendments. Under the standard, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The Company elected to apply the modified retrospective transition approach to all leases existing at the date of initial application and not restate comparative periods. In addition, the Company elected the following transitional practical expedients: (1) the short-term lease exception and (2) to not separate its non-lease components for its real estate, vehicle and equipment leases. As a result of the adoption, there was no cumulative-effect adjustment recorded to retained earnings upon adoption. Refer to Note “2. Summary of Significant Accounting Policies” and Note “9. Leases” for more information.

⁽²⁾In the first quarter of 2018, the Company adopted Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), and its associated amendments. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company applied the five step method outlined in the ASU to all revenue streams and elected to utilize the modified retrospective implementation method. As a result of adoption, the Company recorded a $0.3 million cumulative adjustment to its retained earnings at January 1, 2018. Refer to Note “2. Summary of Significant Accounting Policies” and Note “16. Revenues” for more information.

⁽³⁾On August 31, 2018, the Company acquired a controlling interest in MVI which was accounted for as an asset acquisition. In connection with the transaction, the Company recorded a $30.8 million IPR&D charge during the three months ended September 30, 2018 in the consolidated statements of operations related to the acquired technology under development from MVI. Of the total IPR&D charge, $27.4 million was attributable to the net loss of Penumbra, Inc.

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and ConsolidationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Certain changes in presentation were made in the consolidated financial statements for the year ended December 31, 2018 and 2017, to conform to the presentation for the year ended December 31, 2019
Consolidation	The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiary. The portion of equity not attributable to the Company is considered non-controlling interest and is classified separately in the consolidated financial statements. Any subsequent changes in the Company’s ownership interest while the Company retains its controlling interest in its majority-owned subsidiary will be accounted for as equity transactions. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity accounts; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to marketable investments, provisions for doubtful accounts, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, operating and finance lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other contingencies, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other data. Actual results could differ from those estimates.
Segments	Segments The Company determined its operating segment on the same basis that it uses to evaluate its performance internally. The Company has one business activity: the design, development, manufacturing and marketing of innovative medical devices, and operates as one operating segment. The Company’s chief operating decision-maker (“CODM”), its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance.
Foreign Currency Translation	Foreign Currency Translation The Company’s consolidated financial statements are prepared in United States Dollars (“USD”). Its foreign subsidiaries use their local currency as their functional currency and maintain their records in the local currency. Accordingly, the assets and liabilities of these subsidiaries are translated into USD using the current exchange rates in effect at the balance sheet date and equity accounts are translated into USD using historical rates. Revenues and expenses are translated using the average exchange rates in effect for the year involved. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive loss in the consolidated balance sheets. Transactions denominated in currencies other than the respective functional currencies are translated at exchange rates as of the date of transaction with foreign currency gains and losses recorded in other expense, net in the consolidated statements of operations. The Company realized net foreign currency transaction losses of $0.8 million, $0.9 million and $1.0 million during the years ended December 31, 2019, 2018 and 2017, respectively. As the Company’s international operations grow, its risks associated with fluctuation in currency rates will become greater, and the Company will continue to reassess its approach to managing this risk. In addition, currency fluctuations or a weakening USD can increase the costs of the Company’s international expansion. To date, the Company has not entered into any foreign currency hedging contracts.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, marketable investments (as described in greater detail in this footnote under the header “Cash, Cash Equivalents and Marketable Investments” below) and accounts receivable. The majority of the Company’s cash is held by one financial institution in the U. S. in excess of federally insured limits. The Company maintained investments in money market funds that were not federally insured during the year ended December 31, 2019 and held cash in foreign entities of approximately $17.3 million and $23.4 million at December 31, 2019 and 2018, respectively, which was not federally insured. The Company’s revenue has been derived from sales of its products in the United States and international markets. The Company uses both its own salesforce and independent distributors to sell its products. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of entities comprising the Company’s customer base. The Company performs ongoing credit evaluations of its customers, including its distributors, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary.
Significant Risks and Uncertainties	Significant Risks and Uncertainties The Company is subject to risks common to medical device companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of products and the potential need to obtain additional financing. The Company is dependent on third party suppliers, in some cases single-source suppliers. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all. The Company’s products require approval or clearance from the FDA prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company sells its products. If the Company is denied such approvals or clearances or such approvals or clearances are delayed, it may have a material adverse impact on the Company’s results of operations, financial position and liquidity.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities.
Cash and Cash Equivalents	Cash, Cash Equivalents and Marketable Investments The Company invests its cash primarily in highly liquid corporate debt securities, debt instruments of U.S. federal, state and municipal governments, and their agencies, in money market funds and in commercial paper. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents; all highly liquid investments with stated maturities of greater than three months are classified as marketable investments. The majority of the Company’s cash and investments are held in U.S. banks.
Marketable Investments	The Company determines the appropriate classification of its investments in marketable investments at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable investments have been classified and accounted for as available-for-sale. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in marketable investments are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive loss. Any realized gains or losses on the sale of marketable investments are determined on a specific identification method, and such gains and losses are reflected as a component of other income (expense), net. Impairment of Marketable Investments After determining the fair value of available-for-sale debt instruments, unrealized gains or losses on these securities are recorded to accumulated other comprehensive loss until either the security is sold or the Company determines that the decline in value is other-than-temporary. The primary differentiating factors that the Company considers in classifying impairments as either temporary or other-than-temporary impairments is the intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition, and near-term prospects of the issuer. There were no other-than-temporary impairments for the years ended December 31, 2019, 2018 or 2017.
Non-Marketable Equity Investments	Non-Marketable Equity Investments Entities in which the Company has at least a 20%, but not more than a 50%, interest are accounted for under the equity method unless it is determined that the Company has a controlling financial interest in the entity, in which case the entity would be consolidated. Non-marketable equity investments are classified as long-term investments on the consolidated balance sheet. The Company’s proportionate share of the operating results of its non-marketable equity method investments are recorded as profit or loss and presented in equity in losses of unconsolidated investee, in the consolidated statements of operations. See Note “3. Investments and Fair Value of Financial Instruments” for further details.
Accounts Receivable	Accounts Receivable Accounts receivable are stated at invoice value less estimated allowances for doubtful accounts. The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers’ inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, a specific allowance is recorded against amounts due, and thereby reduces the net recognized receivable to the amount reasonably believed to be collectible.
Inventories	Inventories Inventories are stated at the lower of cost (determined under the first-in first-out method) or net realizable value. Write-downs are provided for raw materials, components or finished goods that are determined to be excessive or obsolete. The Company regularly reviews inventory quantities in consideration of actual loss experience, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate.
Property and Equipment, net	Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Machinery and equipment and furniture and fixtures are depreciated over a five to ten year period and computers and software are depreciated over two to five years. Upon retirement or sale, the cost and the related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to consolidated statements of operations as incurred.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset.
Contingent Consideration	Contingent Consideration Certain agreements the Company enters into, including business combinations, involve the potential payment of future consideration that is contingent upon certain performance and revenue milestones being achieved. Contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recognized generally within sales, general and administrative expense, depending on the nature of the contingent consideration liability, in the consolidated statements of operations. Asset acquisitions are accounted for using a cost accumulation and allocation model and the cost of the acquisition is allocated to the assets acquired and liabilities assumed. Contingent consideration obligations incurred in connection with an asset acquisition are recorded when it is probable that they will occur and they can be reasonably estimated. As of December 31, 2019 and 2018, the Company’s contingent consideration obligations in connection with business combinations relate to milestone payments for the acquisition of Crossmed S.p.A. (“Crossmed”). For more information with respect to the fair value of contingent consideration, refer to Note “5. Business Combinations.”
Intangible Assets	Intangible Assets Intangible assets primarily consist of purchased rights to licensed technology, customer relationships, and trade secrets and processes. Indefinite-lived intangible assets relate to an exclusive right to licensed technology. The acquired licensed technology is accounted for as an indefinite-lived intangible asset. Upon the commercialization of the underlying product utilizing the licensed technology, the capitalized amount will be amortized over its estimated useful life. Indefinite-lived intangible assets are tested for impairment at least annually, in the fourth quarter, or more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired. If the fair value of the asset is less than the carrying amount, an impairment loss would be recognized in an amount equal to the difference between the carrying amount and the fair value. Refer to Note “7. Intangible Assets” for more information on the Company’s intangible assets. Finite-lived intangible assets are amortized over the estimated economic useful lives of the assets, which is the period during which expected cash flows support the fair value of such intangible assets. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. Refer to Note “7. Intangible Assets” for more information on the Company’s intangible assets.
Goodwill	GoodwillGoodwill represents the excess of the purchase price of an acquired business or assets over the fair value of the identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but is tested for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate the carrying value may no longer be recoverable and that an impairment loss may have occurred. The Company operates as one segment, which is considered to be the sole reporting unit, and therefore goodwill is tested for impairment at the consolidated level.
Revenue Recognition	Revenue Recognition Revenue is comprised of product revenue net of returns, discounts, administration fees and sales rebates. The Company adopted the guidance under ASC 606 on January 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. Therefore, the financial information for the year ended December 31, 2017 has not been adjusted and continues to be reported under ASC 605 with the impact of the adoption reflected in opening retained earnings in 2018. Under ASC 606, the Company recognizes revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue from product sales is recognized either on the date of shipment or the date of receipt by the customer, but is deferred for certain transactions when control has not yet transferred. With respect to products that the Company consigns to hospitals, which primarily consist of coils, the Company recognizes revenue at the time hospitals utilize products in a procedure. Deferred revenue represents amounts that the Company has already invoiced and are ultimately expected to be recognized as revenue, but for which not all revenue recognition criteria have been met. As of December 31, 2019 and December 31, 2018, respectively, the Company's deferred revenue balance was not material. Revenue is recorded at the net sales price, which includes estimates of variable consideration such as product returns utilizing historical return rates, rebates, discounts, and other adjustments to net revenue. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price. Variable consideration is included in revenue only to the extent that it is probable that a significant reversal of the revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s terms and conditions permit product returns and exchanges. The Company bases its estimates for sales returns on actual historical returns over the prior three years and they are recorded as reductions in revenue at the time of sale. Upon recognition, the Company reduces revenue and cost of revenue for the estimated return. Return rates can fluctuate over time, but are sufficiently predictable to allow the Company to estimate expected future product returns. For more information and disclosures on the Company’s revenue, refer to Note “16. Revenues.”
Shipping Costs	Shipping Costs Shipping and handling costs charged to customers are recorded as revenue. Shipping and handling costs are included in cost of revenue.
Research and Development (R&D) Costs	Research and Development (“R&D”) Costs R&D costs primarily consist of product development, clinical and regulatory expenses, materials, depreciation and other costs associated with the development of the Company’s products. R&D costs also include related personnel and consultants’ salaries, benefits and related costs, including stock-based compensation. The Company expenses R&D costs as they are incurred. The Company’s clinical trial accruals are based on estimates of patient enrollment and related costs at clinical investigator sites. The Company estimates preclinical and clinical trial expenses based on the services performed pursuant to contracts with research institutions and clinical research organizations that conduct and manage preclinical studies and clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. Payments made to third parties under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses until the services are rendered. Internal Use Software The Company capitalizes certain costs incurred for the development of computer software for internal use. These costs generally relate to third-party software as well as the internal development of software associated with our REAL Immersive System offerings. The Company capitalizes these costs when it is determined that it is probable that the project will be completed and the software will be used to perform the function intended, and the preliminary project stage is completed. Capitalized internal use software development costs are included in property and equipment, net within the consolidated balance sheets. Capitalized internal use software is amortized on a straight-line basis over its estimated useful life. For software that supports our REAL Immersive System, the amortization expense is recorded in cost of revenue within the consolidated statements of operations. Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred.
Advertising Costs	Advertising CostsAdvertising costs are included in sales, general and administrative expenses and are expensed as incurred.
Stock-Based Compensation	Stock-Based Compensation The Company recognizes the cost of stock-based compensation in the financial statements based upon fair value. The fair value of restricted stock and restricted stock unit (“RSU”) awards is determined based on the number of units granted and the closing price of the Company’s common stock as of the grant date. The fair value of each purchase under the employee stock purchase plan (“ESPP”) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. The fair value of stock options is determined as of the grant date using the Black-Scholes option pricing model. The Company’s determination of the fair value of equity-settled awards is impacted by the price of the Company’s common stock as well as changes in assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected term that awards will remain outstanding, expected common stock price volatility over the term of the awards, risk-free interest rates and expected dividends. The fair value of an award is recognized over the requisite service period (usually the vesting period) on a straight-line basis. Stock-based compensation expense recognized at fair value includes the impact of estimated forfeitures. The Company estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. To the extent actual forfeiture results differ from the estimates, the difference is recorded as a cumulative adjustment in the period forfeiture estimates are revised. No compensation cost is recorded for awards that do not vest. Prior to the adoption of Accounting Standard Update (“ASU”) No. 2018-07, “Compensation – Stock Compensation,” the Company recorded its equity instruments issued to non-employees at their fair value on the measurement date and were subject to periodic adjustments as the Company remeasured the fair value of the non-employee awards at each reporting period prior to vesting and at the vesting dates of each non-employee award. In the third quarter of 2018, the Company adopted ASU 2018-07 and recognizes the fair value of non-employee awards over the requisite service period (usually the vesting period) on a straight-line basis. Therefore, equity instruments issued to non-employees are recorded at their fair value on the grant date in the same manner as employee awards. The fair value of these equity instruments is expensed over the service period. Estimates of the fair value of equity-settled awards as of the grant date using valuation models, such as the Black-Scholes option pricing model, are affected by assumptions regarding a number of complex variables. Changes in the assumptions can materially affect the fair value of the award and ultimately how much stock-based compensation expense is recognized. These inputs are subjective and generally require significant analysis and judgment to develop. For all stock options granted prior to the Company’s IPO, the Company estimated the volatility data based on a study of publicly traded industry peer companies. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. The risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues similar in duration to the expected term of the equity-settled award. For all stock options granted prior to the IPO, the Company used the Staff Accounting Bulletin, No. 110 (“SAB 110”) simplified method to calculate the expected term, which is the average of the contractual term and vesting period. For stock options granted post-IPO, the Company used its historical data to calculate the expected term and volatility used in the valuation of options.
Income Taxes	Income Taxes The Company accounts for income taxes using the asset and liability method, whereby deferred tax asset (“DTA”) and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce the net DTAs to their estimated realizable value. The calculation of the Company’s current provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, interpretation of current tax laws and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. The calculation of the Company’s DTA balance involves the use of estimates, assumptions and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. The Company follows the guidance relating to accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense in the accompanying consolidated statements of operations.
Comprehensive Income	Comprehensive Income Comprehensive income consists of net income, unrealized gains or losses on available-for-sale investments and the effects of foreign currency translation adjustments. The Company presents comprehensive income and its components in the consolidated statements of comprehensive (loss) income.
Net Income (Loss) Per Share of Common Stock	Net Income (Loss) Per Share of Common Stock The Company’s basic net income (loss) attributable to Penumbra, Inc. per share is calculated by dividing the net income attributable to Penumbra, Inc. per share by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share attributable to Penumbra, Inc. is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock and restricted stock units are considered common stock equivalents.
Leases	Leases The Company adopted the guidance under ASC Topic 842, “Leases” ("ASC 842") on January 1, 2019 using the modified retrospective transition approach. There was no cumulative-effect adjustment recorded to retained earnings upon adoption. Under ASC 842, the Company determines if an arrangement is a lease at inception. In addition, the Company determines whether leases meet the classification criteria of a finance or operating lease at the lease commencement date considering: (1) whether the lease transfers ownership of the underlying asset to the lessee at the end of the lease term, (2) whether the lease contains a bargain purchase option, (3) whether the lease term is for a major part of the remaining economic life of the underlying asset, (4) whether the present value of the sum of the lease payments and residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset, and (5) whether the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. As of December 31, 2019, the Company's lease population consisted of operating and finance real estate, equipment and vehicle leases. As of the date of adoption of ASC 842 the Company did not have material finance leases. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and non-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in finance lease right-of-use assets, current finance lease liabilities, and non-current finance lease liabilities in our consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses its incremental borrowing rate which requires management’s judgement as the rate implicit in the lease is generally not readily determinable. The determination of the Company’s incremental borrowing rate requires management judgment including, the development of a synthetic credit rating and cost of debt as the Company currently does not carry any debt. The operating lease ROU assets also include adjustments for prepayments, accrued lease payments and exclude lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Operating lease cost is recognized on a straight-line basis over the expected lease term. Finance lease cost is recognized as depreciation expense on a straight-line basis over the expected lease term and interest expense using the accelerated interest method of recognition. Lease agreements entered into after the adoption of ASC 842 that include lease and non-lease components are accounted for as a single lease component. Lease agreements with a non-cancelable term of less than 12 months are not recorded on the Company’s consolidated balance sheet.
Recent Accounting Guidance and Recently Issued Accounting Standards	Recent Accounting Guidance Recently Adopted Accounting Standards On January 1, 2019, the Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842), and its associated amendments using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. There was no cumulative-effect adjustment recorded to retained earnings upon adoption. Under the standard, a lessee is required to recognize a lease liability and ROU asset for all leases. The new guidance also modified the classification criteria and requires additional disclosures to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. Consistent with current guidance, a lessee’s recognition, measurement, and presentation of expenses and cash flows arising from a lease continues to depend primarily on its classification. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical lease classification, its assessment on whether a contract was or contains a lease, and its initial direct costs for any leases that existed prior to January 1, 2019. In addition, the Company elected the following transitional practical expedients: (1) the short-term lease exception and (2) to not separate its non-lease components for its real estate, vehicle and equipment leases. The impact of adoption and additional disclosures required by the ASU have been included in “Significant Accounting Policies - Leases” below and in Note “9. Leases.” Recently Issued Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments—Credit Losses. The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. In April 2019, the FASB issued ASU No. 2019-04 which provides additional clarification and addresses stakeholders’ specific issues about certain aspects of the amendments in the previously issued ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-05 which further amends ASU No. 2016-13 by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. In November 2019, the FASB issued ASU No. 2019-11 which further provides additional clarification and addresses stakeholders’ specific issues about certain aspects of the amendments in the previously issued ASU No. 2016-13. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. Early adoption is permitted for all periods beginning after December 15, 2018. The Company determined that it will apply the modified retrospective transition method and does not expect the adoption of this standard to have a material impact on its investments. Additionally, the Company is currently evaluating the impact of this standard on its trade receivables and related disclosures. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The primary focus of the standard is to improve the effectiveness of the disclosure requirements for fair value measurements. The standard is effective for fiscal years and interim periods beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of the standard and may delay adoption of the additional disclosures until their effective date. The Company is currently evaluating the impact of adopting this standard. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes— Simplifying the Accounting for Income Taxes. The standard intends to simplify and reduce the cost of accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for foreign investments, the incremental approach to performing intraperiod allocation, and calculating income taxes in interim periods for year to date losses that exceed anticipated full year losses. The standard also adds guidance to reduce complexity in certain areas, including accounting for franchise taxes that are partially based on income, transactions with a government that result with a step up in the tax basis of goodwill, enacted changes in tax law during interim periods, and allocating taxes to members of a consolidated group which are not subject to tax. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all periods in which financial statements have not yet been issued, including interim periods. The Company is currently evaluating the impact of adopting the new guidance.

Investments and Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Marketable Investments

The Company’s marketable investments have been classified and accounted for as available-for-sale. The Company’s marketable investments as of December 31, 2019 and 2018 were as follows (in thousands):


	December 31, 2019
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Commercial paper	$	7,456	$	1	$	—	$	7,457
U.S. treasury	4,972		7		—		4,979
U.S. agency securities and government sponsored securities	2,499		19		—		2,518
U.S. states and municipalities	4,889		4		—		4,893
Corporate bonds	96,484		282		(3)		96,763

Total	$	116,300	$	313	$	(3)	$	116,610


	December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Commercial paper	$	13,701	$	—	$	(3)	$	13,698
U.S. treasury	6,400		—		(22)		6,378
U.S. agency securities and government sponsored securities	7,699		18		(27)		7,690
U.S. states and municipalities	5,134		—		(12)		5,122
Corporate bonds	100,606		14		(469)		100,151

Total	$	133,540	$	32	$	(533)	$	133,039

Schedule of the Fair Value of Marketable Investments in an Unrealized Loss Position for Less than Twelve Months

The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than and more than twelve months as of December 31, 2019 and 2018 (in thousands):


	December 31, 2019
	Less than 12 months						More than 12 months						Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses




Corporate bonds	$	7,875	$	(3)	$	—	$	—	$	7,875	$	(3)

Total	$	7,875	$	(3)	$	—	$	—	$	7,875	$	(3)


	December 31, 2018
	Less than 12 months						More than 12 months						Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Commercial paper	$	12,208	$	(3)	$	—	$	—	$	12,208	$	(3)
U.S. treasury	—		—		6,378		(22)		6,378		(22)
U.S. agency securities and government sponsored securities	1,436		(5)		2,759		(22)		4,195		(27)
U.S. states and municipalities	1,529		(5)		3,593		(7)		5,122		(12)
Corporate bonds	58,961		(176)		33,215		(293)		92,176		(469)

Total	$	74,134	$	(189)	$	45,945	$	(344)	$	120,079	$	(533)

Schedule of Contractual Maturities of Marketable Investments

The contractual maturities of the Company’s marketable investments as of December 31, 2019 and 2018 were as follows (in thousands):


	December 31,
	2019		2018
Marketable Investments	Fair Value		Fair Value
Due in one year	$	51,990	$	83,391
Due in one to five years	64,620		49,648
Total	$	116,610	$	133,039

Schedule of Consideration Transferred in Asset Acquisition

The following table presents the components of the consideration transferred at fair value as of the Transfer Agreement Closing Date (amounts presented in thousands):


	Amount
Cash transferred	$	20,000
Anti-dilution protection at Transfer Agreement Closing Date	4,500
Carrying amount of Penumbra’s equity method investment in MVI	2,202
Fair value of the remaining non-controlling interest	3,365
Total consideration transferred	$	30,067

Schedule of Fair Value of Assets and Liabilities

The following tables set forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy (in thousands):


	As of December 31, 2019
	Level 1		Level 2		Level 3		Fair Value
Financial Assets
Cash equivalents:
Commercial paper	$	—	$	9,474	$	—	$	9,474
Money market funds	24,054		—		—		24,054



Marketable investments:
Commercial paper	—		7,457		—		7,457
U.S. treasury	4,979		—		—		4,979
U.S. agency and government sponsored securities	—		2,518		—		2,518
U.S. states and municipalities	—		4,893		—		4,893
Corporate bonds	—		96,763		—		96,763

Total	$	29,033	$	121,105	$	—	$	150,138


	As of December 31, 2018
	Level 1		Level 2		Level 3		Fair Value
Financial Assets
Cash equivalents:
Commercial paper	$	—	$	10,967	$	—	$	10,967
Money market funds	12,087		—		—		12,087
Marketable investments:
Commercial paper	—		13,698		—		13,698
U.S. treasury	6,378		—		—		6,378
U.S. agency and government sponsored securities	—		7,690		—		7,690
U.S. states and municipalities	—		5,122		—		5,122
Corporate bonds	—		100,151		—		100,151

Total	$	18,465	$	137,628	$	—	$	156,093
Financial Liabilities:
Contingent consideration obligations	$	—	$	—	$	2,571	$	2,571
Total	$	—	$	—	$	2,571	$	2,571

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis

The following table presents quantitative information about certain unobservable inputs used in the Level 3 fair value measurement of the Company’s contingent consideration liability, other than the forecasted revenues during the earn-out milestone period:

Fair Value at December 31, 2018 (in thousands)

Valuation Method

Unobservable Inputs

Inputs

Crossmed:
Revenue-based milestones

$

1,268

Monte Carlo Simulation

Earn-out period over which revenue-based milestone payments are made

2019

Risk-adjusted discount rate

15%

Revenue volatilities for each type of revenue-based milestone

5.1% and 18.4%

Schedule of Contingent Consideration Obligation

The following table summarizes the changes in fair value of the contingent consideration obligation for the year ended December 31, 2019 (in thousands):


	Fair Value of Contingent Consideration
Balance at December 31, 2018	$	2,571

Payments of contingent consideration liabilities	(1,296)
Changes in fair value	(35)
Foreign currency remeasurement	(34)
Balance at December 31, 2019	$	1,206


	Fair Value of Contingent Consideration
Balance at December 31, 2017	$	4,675

Payments of contingent consideration liabilities	(3,017)
Changes in fair value	950
Foreign currency remeasurement	(37)
Balance at December 31, 2018	$	2,571

Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Allowance for Doubtful Accounts

The Company’s allowance for doubtful accounts comprised of the following (in thousands):


	Balance At Beginning Of Year		Charged To Costs And Expenses		Deductions⁽¹⁾		Balance At End Of Year
For the year ended:
December 31, 2017	$	684	$	606	$	—	$	1,290
December 31, 2018	1,290		1,563		(71)		2,782
December 31, 2019	2,782		656		(492)		2,946

⁽¹⁾Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries.

Schedule of Inventories

The components of inventories consisted of the following (in thousands):


	December 31,
	2019		2018
Raw materials	$	21,646	$	18,829
Work in process	21,651		10,630
Finished goods	109,695		86,282
Inventories	$	152,992	$	115,741

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	December 31,
	2019		2018
Machinery and equipment	$	20,959	$	15,400
Furniture and fixtures	9,307		7,140
Leasehold improvements	20,283		17,665
Software	5,830		4,095
Computers	5,702		3,289
Construction in progress	11,146		3,234
Total property and equipment	73,227		50,823
Less: Accumulated depreciation and amortization	(21,415)		(15,416)
Property and equipment, net	$	51,812	$	35,407

Schedule of Accrued Liabilities

The following table shows the components of accrued liabilities as of December 31, 2019 and 2018 (in thousands):


	December 31, 2019		December 31, 2018
Payroll and employee-related expenses	$	37,727	$	33,838
Accrued expenses	7,811		4,088
Sales return reserve	1,821		2,986



Product warranty	2,318		1,875



Contingent consideration & other acquisition-related costs⁽¹⁾	4,291		4,439
Other accrued liabilities	13,662		10,660
Total accrued liabilities	$	67,630	$	57,886

⁽¹⁾Acquisition-related costs consist of the current portion of contingent liabilities related to (1) the cash milestone payments and working capital adjustment liabilities for the acquisition of Crossmed and (2) an anti-dilution provision for the asset acquisition of MVI. Refer to Note “5. Business Combinations” for more information on the acquisition of Crossmed and Note “3. Investments and Fair Value of Financial Instruments” and Note “6. Asset Acquisition” for more information on the MVI asset acquisition.

Schedule of Estimated Product Warranty Accrual

The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, as of December 31, 2019, 2018 and 2017 (in thousands):


	December 31,
	2019		2018		2017
Balance at the beginning of the year	$	1,875	$	1,088	$	1,254
Accruals of warranties issued	1,065		1,336		471
Settlements of warranty claims	(622)		(549)		(637)
Balance at the end of the year	$	2,318	$	1,875	$	1,088

Other Noncurrent Liabilities

The following table shows the components of other non-current liabilities as of December 31, 2019 and 2018 (in thousands):


	December 31,
	2019		2018
Deferred tax liabilities	$	4,005	$	4,171
Licensing-related cost⁽¹⁾	10,878		11,506

Other non-current liabilities	367		3,266
Total other non-current liabilities	$	15,250	$	18,943

⁽¹⁾Amount relates to the non-current liability recorded for probable future milestone payments to be made under the indefinite-lived intangible assets related to licensed technology described in Note “7. Intangible Assets.” Refer therein for more information.

Business Combinations (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Schedule of Purchase Price Allocation

The purchase price measurement period was closed as of June 30, 2018. For the periods ended December 31, 2019 and 2018, Crossmed results of operations were included in the consolidated statements of operations. The following table presents the allocation of the purchase price for Crossmed, reflecting the measurement period adjustments recorded in 2017 (in thousands):


	Acquisition-Date Fair Value		Estimated Useful Life of Finite-Lived Intangible Assets
Tangible assets acquired and (liabilities) assumed:
Current assets	$	5,749


Other current and non-current assets	1,596
Property and equipment, net	829
Current liabilities	(5,080)



Other non-current liabilities	(797)
Intangible assets acquired:
Customer relationships	$	6,790	15 years
Other	1,750		5 years
Goodwill	7,867
Total purchase price	$	18,704

Pro Forma Information

The unaudited pro forma information is presented below (unaudited, in thousands):


	December 31,
	2017
Pro forma net revenue	$	336,557
Pro forma net income	5,992

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-lived Intangible Assets

The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets as of December 31, 2019 and 2018 (in thousands, except weighted-average amortization period):


As of December 31, 2019	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,686	$	(1,114)	$	5,572
Trade secrets and processes	20.0 years	5,256		(526)		4,730
Other	5.0 years	1,724		(862)		862
Total intangible assets subject to amortization	16.4 years	$	13,666	$	(2,502)	$	11,164
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,243		—		14,243
Total intangible assets		$	27,909	$	(2,502)	$	25,407


As of December 31, 2018	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,823	$	(681)	$	6,142
Trade secrets and processes	20.0 years	5,256		(263)		4,993
Other	5.0 years	1,759		(528)		1,231
Total intangible assets subject to amortization	16.0 years	$	13,838	$	(1,472)	$	12,366
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,879		—		14,879
Total intangible assets		$	28,717	$	(1,472)	$	27,245

Schedule of Indefinite-lived Intangible Assets

The following table presents details of the Company’s acquired finite-lived and indefinite-lived intangible assets as of December 31, 2019 and 2018 (in thousands, except weighted-average amortization period):


As of December 31, 2019	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,686	$	(1,114)	$	5,572
Trade secrets and processes	20.0 years	5,256		(526)		4,730
Other	5.0 years	1,724		(862)		862
Total intangible assets subject to amortization	16.4 years	$	13,666	$	(2,502)	$	11,164
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,243		—		14,243
Total intangible assets		$	27,909	$	(2,502)	$	25,407


As of December 31, 2018	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Net

Customer relationships	15.0 years	$	6,823	$	(681)	$	6,142
Trade secrets and processes	20.0 years	5,256		(263)		4,993
Other	5.0 years	1,759		(528)		1,231
Total intangible assets subject to amortization	16.0 years	$	13,838	$	(1,472)	$	12,366
Indefinite-lived intangible assets:
Intangible assets related to licensed technology		14,879		—		14,879
Total intangible assets		$	28,717	$	(1,472)	$	27,245

Finite-lived Intangible Assets Amortization Expense

The following table presents the amortization recorded related to the Company’s finite-lived intangible assets for the years ended December 31, 2019, 2018 and 2017 (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of revenue	$	263	$	263	$	—

Sales, general and administrative	789		832		418
Total	$	1,052	$	1,095	$	418

Schedule of Future Amortization Expense

As of December 31, 2019, expected amortization expense for the unamortized acquired intangible assets for the next five years and thereafter is as follows (in thousands):


	Amortization Expense
2020	$	1,053
2021	1,053
2022	881
2023	709
2024	709
Thereafter	6,759
Total amortization	$	11,164

Goodwill (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table presents the changes in goodwill during the year ended December 31, 2019 (in thousands):


	Total Company
Balance as of December 31, 2018	$	7,813

Foreign currency translation adjustments	(157)
Balance as of December 31, 2019	$	7,656

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The impact of the adoption of ASC 842 on the Company’s consolidated balance sheet as of January 1, 2019 was as follows (in thousands):


	December 31, 2018		Adjustments due to the adoption of Topic 842		January 1, 2019
Assets
Prepaid expenses and other current assets⁽¹⁾	$	12,200	$	(424)	$	11,776
Total current assets	410,726		(424)		410,302
Operating lease right-of-use assets⁽¹⁾	—		43,277		43,277
Total assets	$	515,006	$	42,853	$	557,859
Liabilities and Stockholders’ Equity
Accrued liabilities⁽²⁾	$	57,886	$	(132)	$	57,754
Current operating lease liabilities⁽²⁾	—		3,608		3,608
Total current liabilities	66,062		3,476		69,538
Deferred rent⁽²⁾	7,586		(7,586)		—
Non-current operating lease liabilities⁽²⁾	—		46,963		46,963
Total liabilities	92,591		42,853		135,444
Total liabilities and stockholders’ equity	$	515,006	$	42,853	$	557,859

⁽¹⁾Upon the adoption of ASC 842, prepaid rent is included in the operating lease right-of-use assets.

⁽²⁾ Upon the adoption of ASC 842, current and non-current deferred rent is included in the current and non-current operating lease liabilities.

Lease, Cost

The following table presents the components of the Company’s lease cost, lease term and discount rate during the year ended December 31, 2019 (in thousands, except years and percentages):


	Year Ended December 31, 2019
Lease Cost
Operating lease cost	$	7,293
Finance lease cost:
Amortization of right-of-use assets	284
Interest on lease liabilities	186
Variable lease cost⁽¹⁾	3,570
Total lease costs	$	11,333

Weighted Average Remaining Lease Term
Operating leases	10.0 years
Finance leases	15.0 years
Weighted Average Discount Rate
Operating leases	6.20		%
Finance leases	5.42		%

⁽¹⁾Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company elected not to separate non-lease components from lease components upon adoption of ASC 842.

Lessee, Operating Lease, Liability, Maturity

The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of December 31, 2019 (in thousands):


	Operating Lease Payments⁽¹⁾		Finance Lease Payments
Year Ending December 31:

2020	$	7,189	$	5,705
2021	6,817		2,473
2022	6,637		2,489
2023	6,464		2,538
2024	6,325		2,588
Thereafter	36,444		28,585
Total undiscounted lease payments	69,876		44,378
Less imputed interest	(18,492)		(13,465)
Present value of lease liabilities	$	51,384	$	30,913

⁽¹⁾The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the fifteen year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building.

Finance Lease, Liability, Maturity

The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of December 31, 2019 (in thousands):


	Operating Lease Payments⁽¹⁾		Finance Lease Payments
Year Ending December 31:

2020	$	7,189	$	5,705
2021	6,817		2,473
2022	6,637		2,489
2023	6,464		2,538
2024	6,325		2,588
Thereafter	36,444		28,585
Total undiscounted lease payments	69,876		44,378
Less imputed interest	(18,492)		(13,465)
Present value of lease liabilities	$	51,384	$	30,913

⁽¹⁾The table above excludes the estimated future minimum lease payment for the 1310 Harbor Bay Lease due to uncertainty around the timing of when the 1310 Harbor Bay Lease will commence and payments will be due. The total estimated lease payments over the fifteen year lease term will be calculated based on the total development costs incurred in connection with the development of the building which will be determined upon substantial completion of the building.

Schedule of Future Minimum Lease Payments under Operating Leases

The following table below shows the maturities of the Company’s operating lease liabilities previously disclosed under ASC 840 as of December 31, 2018 (in thousands):


	Lease Payments⁽¹⁾
Year Ending December 31:
2019	$	6,575
2020	6,571
2021	5,809
2022	5,772
2023	5,735
Thereafter	40,194
Total future minimum lease payments	$	70,656

⁽¹⁾The table above excluded the estimated future minimum lease payment for the Roseville Lease, due to the uncertainty around the timing of when the Roseville Lease would commence and payments would be due as of December 31, 2018.

Schedule of Cash Flow, Supplemental Disclosures

Supplemental cash flow information related to leases during the year ended December 31, 2019 are as follows (in thousands):


	Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,829
Financing cash flows from finance leases	$	2,570

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	4,261
Finance leases	$	33,283

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Summary of Stock Option Activity

Activity of stock options under the 2005 Plan, 2011 Plan and 2014 Plan (collectively, the "Plans") is set forth below:


	Number of Shares	Weighted-Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2018	1,688,881	$	18.91
Grants	7,900	$	158.30
Exercised	(314,433)	$	13.12
Canceled/Forfeited	(3,273)	$	21.94
Balance at December 31, 2019	1,379,075	$	21.02
Vested and expected to vest—December 31, 2019	1,378,440	$	20.95	4.98	$	197,551
Balance at Exercisable—December 31, 2019	1,371,175	$	20.23	4.95	$	197,508

Summary of Unvested Restricted Stock Activity

The activity of unvested restricted stock and restricted stock units ("RSU") under the Plans is set forth below:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2018	451,463	$	57.29
Granted	261,071	151.44
Released/Vested - Restricted Stock/RSUs	(297,788)	44.11
Canceled/Forfeited	(43,540)	88.16
Unvested at December 31, 2019	371,206	$	130.47

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of stock options granted in 2019:


						Stock Options
						Year Ended December 31,
						2019
Expected term (in years)						6.89
Expected volatility						40%
Risk-free interest rate						1.82%
Expected dividend yield						0%

The Company did not grant stock options during the years ended December 31, 2018 and 2017.

The Company used the following assumptions in its Black-Scholes option pricing model to determine the fair value of ESPP rights:


	ESPP Rights
	Year Ended December 31,
	2019	2018	2017
Expected term (in years)	0.50	0.50	0.50
Expected volatility	45%	42%	34%
Risk-free interest rate	2.30%	2.36%	1.26%
Expected dividend yield	0%	0%	0%

Schedule of Stock-based Compensation Expense

The following table sets forth the stock-based compensation expense included in the consolidated statements of operations (in thousands):


	Year Ended December 31,
	2019		2018		2017
Cost of sales	$	1,396	$	1,004	$	1,009
Research and development	2,835		1,597		1,289
Sales, general and administrative	17,254		15,821		15,514
	$	21,485	$	18,422	$	17,812

Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the accumulated balances during the period, and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive loss into earnings affect our consolidated statements of comprehensive income (loss) (in thousands):


	Year Ended December 31, 2019										Year Ended December 31, 2018
	Marketable Investments		Currency Translation Adjustments		Total		Marketable Investments		Currency Translation Adjustments		Total
Balance, beginning of the year	$	(500)	$	(1,442)	$	(1,942)	$	(235)	$	1,804	$	1,569
Other comprehensive (loss) income before reclassifications:
Unrealized losses (gains) — marketable investments	811		—		811		(165)		—		(165)
Foreign currency translation losses	—		(1,120)		(1,120)		—		(3,027)		(3,027)
Income tax effect — expense	(73)		—		(73)		(100)		(219)		(319)
Net of tax	738		(1,120)		(382)		(265)		(3,246)		(3,511)
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Realized (gain) loss — marketable investments	—		—		—		—		—		—
Income tax effect — (expense) benefit	—		—		—		—		—		—
Net of tax	—		—		—		—		—		—
Net current-year other comprehensive loss	738		(1,120)		(382)		(265)		(3,246)		(3,511)
Balance, end of the year	$	238	$	(2,562)	$	(2,324)	$	(500)	$	(1,442)	$	(1,942)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Income or (Loss) before Income Taxes

Income (loss) before income taxes and equity in losses of unconsolidated investee for the years ended December 31, 2019, 2018 and 2017 is summarized as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	46,859	$	(2,790)	$	543
Foreign	3,276		4,398		1,933
Total income (loss) before income taxes and equity in losses of unconsolidated investee	$	50,135	$	1,608	$	2,476

Components of the Provision for (Benefit from) Income Taxes

The components of the (benefit from) provision for income taxes are summarized as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Current:
Federal	$	(738)	$	290	$	(13)
State	34		183		259
Foreign	2,458		1,689		739
Total current	$	1,754	$	2,162	$	985
Deferred:
Federal	1,556		(5,436)		(2,502)
State	295		(770)		(1,742)
Foreign	(474)		(359)		(352)
Total deferred	$	1,377	$	(6,565)	$	(4,596)
(Benefit from) Provision for Income Taxes	$	3,131	$	(4,403)	$	(3,611)

Schedule of Effective Income Tax Reconciliation

The Company’s actual (benefit from) or provision for tax differed from the amounts computed by applying the Company’s U.S. federal statutory income tax rate to pretax income as a result of the following:


	Year Ended December 31,
	2019		2018		2017
Income tax at federal statutory rate	21.0	%	21.0	%	34.0	%
State income taxes, net of federal benefit	0.4		(33.1)		(94.6)
Foreign taxes differential	2.2		37.2		(4.2)
Prepaid tax ASC 810-10	(0.8)		5.0		(39.8)
IPR&D charge	—		402.5		—
Stock-based compensation	(20.8)		(809.6)		(802.0)
Non-deductible meals and entertainment	1.6		31.3		19.4
Imputed interest	0.6		19.8		19.1
Tax credits	—		—		(0.5)
Remeasurement of deferred tax assets and liabilities	—		—		622.5
Transfer pricing tax benefit	—		—		(35.3)
Global intangible low-taxed income ("GILTI")	0.8		14.0		—
Contingent liabilities	—		12.4		—
Executive compensation	0.4		6.5		—
Non-deductible expenses	—		15.3		—
Other	0.8		3.9		8.0
Change in valuation allowance	—		—		127.6
Effective tax rate	6.2	%	(273.8)	%	(145.8)	%

Schedule of Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities consist of the following (in thousands):


	December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	24,470	$	27,456
Tax credits	15,992		11,459
Accruals and reserves	4,700		6,078
Stock-based compensation	4,252		3,485
Translation adjustment	155		527
UNICAP adjustments	6,816		4,993
ASC 842 Lease Liabilities	20,183		—
Other	471		464
Gross deferred tax assets	77,039		54,462
Valuation allowance	(21,558)		(17,284)
Total deferred tax assets	55,481		37,178
Deferred tax liabilities:
Depreciation and amortization	(5,550)		(6,293)
Unrealized Gains	(73)		—
ASC 842 Lease ROU Assets	(20,394)		—
Total deferred tax liabilities	(26,017)		(6,293)
Net deferred tax assets	$	29,464	$	30,885

Summary of Valuation Allowance

The change in the Company’s deferred tax valuation allowance against net DTAs from January 1, 2017 to December 31, 2019, is as follows (in thousands):


	Beginning Balance		Additions Charged To Expenses or Other Accounts⁽¹⁾		Deductions Credited to Expenses or Other Accounts⁽²⁾		Ending Balance
For the year ended:
December 31, 2017	$	6,062	$	4,400	$	(167)	$	10,295
December 31, 2018	10,295		6,989		—		17,284
December 31, 2019	17,284		4,395		(121)		21,558

⁽¹⁾Additions include current year additions charged to expenses and current year build due to increases in net DTAs, return to provision true-ups, and other adjustments.

⁽²⁾Deductions include current year releases credited to expenses and current year reductions due to decreases in net DTAs, return to provision true-ups, and other adjustments.

Schedule of Unrecognized Tax Benefits

A reconciliation of the change in the gross unrecognized tax benefits from January 1, 2017 to December 31, 2019, is as follows (in thousands):


	December 31,
	2019		2018		2017
Beginning Balance	$	5,174	$	4,152	$	3,827
Gross increase for tax positions of current year	1,191		1,421		871
Gross increase for tax positions of prior years	386		238		130
Gross decrease for tax positions of prior years	(565)		(616)		(659)
Settlement	—		—		—
Lapse of statute of limitations	(111)		(21)		(17)
Ending Balance	$	6,075	$	5,174	$	4,152

Net Income Attributable to Penumbra, Inc. per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of the Numerator and Denominator used in the Calculation of the Basic and Diluted Earnings per Share

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income attributable to Penumbra, Inc. is as follows (in thousands, except share and per share amounts):


	Year Ended December 31,
	2019		2018		2017
Numerator:
Net income attributable to Penumbra, Inc.	$	48,458	$	6,601	$	4,657




Denominator:
Weighted average shares used to compute net income attributable to common stockholders:
Basic	34,750,706		34,138,176		32,978,065
Potential dilutive stock-based options and awards, as calculated using treasury stock method	1,515,293		1,948,645		2,341,038


Diluted	36,265,999		36,086,821		35,319,103

Net income attributable to Penumbra, Inc. per share from:
Basic	$	1.39	$	0.19	$	0.14
Diluted	$	1.34	$	0.18	$	0.13

Revenues (Tables)

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The Company’s revenues, disaggregated by geography, based on the destination to which the Company ships its products, for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
United States	$	355,222	$	290,716	$	219,173
Japan	42,520		41,805		33,790
Other International	149,663		112,417		80,801
Total	$	547,405	$	444,938	$	333,764

The Company’s revenues disaggregated by product category, for the years ended December 31, 2019, 2018 and 2017 was as follows (in thousands):


	Year Ended December 31,
	2019		2018		2017
Neuro	$	331,685	$	294,333	$	232,446
Vascular	215,720		150,605		101,318
Total	$	547,405	$	444,938	$	333,764

Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The following tables provide the selected quarterly financial data for 2019 and 2018 (in thousands, except share and per share amounts):


	2019 Quarters Ended
Selected Statement of Operations Data:	March 31⁽¹⁾		June 30		September 30		December 31
Revenue	$	128,439	$	134,201	$	139,502	$	145,263
Cost of revenue	44,529		40,273		43,504		47,135
Gross profit	83,910		93,928		95,998		98,128

Total operating expenses	72,758		81,127		83,022		87,549
Income before provision for (benefit from) income taxes	11,909		13,514		12,963		11,749
Provision for (benefit from) income taxes	1,455		(2,735)		1,963		2,448


Consolidated net income	10,454		16,249		11,000		9,301
Net loss attributable to non-controlling interest	(244)		(339)		(483)		(388)
Net income attributable to Penumbra, Inc.	$	10,698	$	16,588	$	11,483	$	9,689
Net income attributable to Penumbra, Inc. per share:
Basic	$	0.31	$	0.48	$	0.33	$	0.28
Diluted	$	0.30	$	0.46	$	0.32	$	0.27
Weighted average shares used to compute net income per share:
Basic	34,507,279		34,694,228		34,840,370		34,955,043
Diluted	36,213,164		36,214,321		36,271,394		36,312,471


	2018 Quarters Ended
Selected Statement of Operations Data:	March 31⁽²⁾		June 30		September 30⁽³⁾		December 31
Revenue	$	102,701	$	109,638	$	111,806	$	120,793
Cost of revenue	36,144		37,386		36,794		42,081
Gross profit	66,557		72,252		75,012		78,712
Acquired in-process research and development	—		—		30,835		—
Total operating expenses	62,512		62,969		95,861		72,043
Income (loss) before income taxes and equity in losses of unconsolidated investee	4,504		9,663		(19,908)		7,349
(Benefit from) provision for income taxes	(1,938)		(4,948)		1,598		885
Income (loss) before equity in losses of unconsolidated investee	6,442		14,611		(21,506)		6,464
Equity in losses of unconsolidated investee	(951)		(1,230)		(920)		—
Consolidated net income (loss)	5,491		13,381		(22,426)		6,464
Net loss attributable to non-controlling interest	—		—		(3,496)		(195)
Net income (loss) attributable to Penumbra, Inc.	$	5,491	$	13,381	$	(18,930)	$	6,659
Net income (loss) per share:
Basic	$	0.16	$	0.39	$	(0.55)	$	0.19
Diluted	$	0.15	$	0.37	$	(0.55)	$	0.18
Weighted average shares used to compute net income (loss) per share:
Basic	33,846,142		34,072,223		34,248,484		34,378,415
Diluted	35,917,051		36,116,254		34,248,484		36,150,450

⁽¹⁾In first quarter of 2019, the Company adopted Accounting Standard Update (“ASU”) No. 2016-02, Leases (Topic 842), and its associated amendments. Under the standard, a lessee will be required to recognize a lease liability and right-of-use asset for all leases with terms in excess of twelve months. The Company elected to apply the modified retrospective transition approach to all leases existing at the date of initial application and not restate comparative periods. In addition, the Company elected the following transitional practical expedients: (1) the short-term lease exception and (2) to not separate its non-lease components for its real estate, vehicle and equipment leases. As a result of the adoption, there was no cumulative-effect adjustment recorded to retained earnings upon adoption. Refer to Note “2. Summary of Significant Accounting Policies” and Note “9. Leases” for more information.

⁽²⁾In the first quarter of 2018, the Company adopted Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), and its associated amendments. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company applied the five step method outlined in the ASU to all revenue streams and elected to utilize the modified retrospective implementation method. As a result of adoption, the Company recorded a $0.3 million cumulative adjustment to its retained earnings at January 1, 2018. Refer to Note “2. Summary of Significant Accounting Policies” and Note “16. Revenues” for more information.

⁽³⁾On August 31, 2018, the Company acquired a controlling interest in MVI which was accounted for as an asset acquisition. In connection with the transaction, the Company recorded a $30.8 million IPR&D charge during the three months ended September 30, 2018 in the consolidated statements of operations related to the acquired technology under development from MVI. Of the total IPR&D charge, $27.4 million was attributable to the net loss of Penumbra, Inc.

Summary of Significant Accounting Policies - Narrative (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) customer segment financial_instituion activity	Dec. 31, 2018 USD ($) customer	Dec. 31, 2017 USD ($) customer
Schedule of Equity Method Investments [Line Items]
Number of business activities \| activity	1
Number of operating segments \| segment	1
Foreign currency transaction losses	$ (800,000)	$ (900,000)	$ (1,000,000.0)
Other-than-temporary impairments for marketable investments	0	0	0
Inventory write-offs and write-downs	4,411,000	1,700,000	1,037,000
Impairment of long-lived assets	$ 0	0	0
Sales returns on actual historical returns, period	3 years
Advertising expense	$ 500,000	$ 500,000	$ 700,000
Revenue \| Customer Concentration Risk
Schedule of Equity Method Investments [Line Items]
Concentration risk number of customers that accounted for greater than specified benchmark \| customer	0	0
Concentration risk (as a percent)	10.00%	10.00%
Accounts Receivable \| Customer Concentration Risk
Schedule of Equity Method Investments [Line Items]
Concentration risk number of customers that accounted for greater than specified benchmark \| customer	1	1
Concentration risk (as a percent)	10.00%	10.00%
One Major Customer \| Revenue \| Customer Concentration Risk
Schedule of Equity Method Investments [Line Items]
Concentration risk number of customers that accounted for greater than specified benchmark \| customer			1
Concentration risk (as a percent)			10.10%
United States
Schedule of Equity Method Investments [Line Items]
Number of financial institutions holding cash in excess of federally insured limits \| financial_instituion	1
Foreign Countries
Schedule of Equity Method Investments [Line Items]
Cash that is not federally insured	$ 17,300,000	$ 23,400,000
Machinery and Equipment and Furniture and Fixtures \| Minimum
Schedule of Equity Method Investments [Line Items]
Useful life of property and equipment	5 years
Machinery and Equipment and Furniture and Fixtures \| Maximum
Schedule of Equity Method Investments [Line Items]
Useful life of property and equipment	10 years
Computers and Software \| Minimum
Schedule of Equity Method Investments [Line Items]
Useful life of property and equipment	2 years
Computers and Software \| Maximum
Schedule of Equity Method Investments [Line Items]
Useful life of property and equipment	5 years

Investments and Fair Value of Financial Instruments - Gains and Losses of Marketable Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 116,300	$ 133,540
Gross Unrealized Gains	313	32
Gross Unrealized Losses	(3)	(533)
Fair Value	116,610	133,039
Commercial Paper
Schedule of Available-for-sale Securities [Line Items]
Cost	7,456	13,701
Gross Unrealized Gains	1	0
Gross Unrealized Losses	0	(3)
Fair Value	7,457	13,698
U.S. treasury
Schedule of Available-for-sale Securities [Line Items]
Cost	4,972	6,400
Gross Unrealized Gains	7	0
Gross Unrealized Losses	0	(22)
Fair Value	4,979	6,378
U.S. agency and government sponsored securities
Schedule of Available-for-sale Securities [Line Items]
Cost	2,499	7,699
Gross Unrealized Gains	19	18
Gross Unrealized Losses	0	(27)
Fair Value	2,518	7,690
U.S. states and municipalities
Schedule of Available-for-sale Securities [Line Items]
Cost	4,889	5,134
Gross Unrealized Gains	4	0
Gross Unrealized Losses	0	(12)
Fair Value	4,893	5,122
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Cost	96,484	100,606
Gross Unrealized Gains	282	14
Gross Unrealized Losses	(3)	(469)
Fair Value	$ 96,763	$ 100,151

Investments and Fair Value of Financial Instruments - Marketable Securities in an Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 7,875	$ 74,134
Less than 12 months: Gross Unrealized Losses	(3)	(189)
12 Months of more: Fair Value	0	45,945
12 months or more: Gross Unrealized Losses	0	(344)
Total: Fair Value	7,875	120,079
Total: Gross Unrealized Losses	(3)	(533)
Commercial Paper
Schedule of Available-for-sale Securities [Line Items]
Fair Value		12,208
Less than 12 months: Gross Unrealized Losses		(3)
12 Months of more: Fair Value		0
12 months or more: Gross Unrealized Losses		0
Total: Fair Value		12,208
Total: Gross Unrealized Losses		(3)
U.S. treasury
Schedule of Available-for-sale Securities [Line Items]
Fair Value		0
Less than 12 months: Gross Unrealized Losses		0
12 Months of more: Fair Value		6,378
12 months or more: Gross Unrealized Losses		(22)
Total: Fair Value		6,378
Total: Gross Unrealized Losses		(22)
U.S. agency and government sponsored securities
Schedule of Available-for-sale Securities [Line Items]
Fair Value		1,436
Less than 12 months: Gross Unrealized Losses		(5)
12 Months of more: Fair Value		2,759
12 months or more: Gross Unrealized Losses		(22)
Total: Fair Value		4,195
Total: Gross Unrealized Losses		(27)
U.S. states and municipalities
Schedule of Available-for-sale Securities [Line Items]
Fair Value		1,529
Less than 12 months: Gross Unrealized Losses		(5)
12 Months of more: Fair Value		3,593
12 months or more: Gross Unrealized Losses		(7)
Total: Fair Value		5,122
Total: Gross Unrealized Losses		(12)
Corporate bonds
Schedule of Available-for-sale Securities [Line Items]
Fair Value	7,875	58,961
Less than 12 months: Gross Unrealized Losses	(3)	(176)
12 Months of more: Fair Value	0	33,215
12 months or more: Gross Unrealized Losses	0	(293)
Total: Fair Value	7,875	92,176
Total: Gross Unrealized Losses	$ (3)	$ (469)

Investments and Fair Value of Financial Instruments - Contractual Maturities of Marketable Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Due in less than one year	$ 51,990	$ 83,391
Due in one to five years	64,620	49,648
Fair Value	$ 116,610	$ 133,039

Investments and Fair Value of Financial Instruments - Non-Marketable Equity Investments (Details) - USD ($)		3 Months Ended								8 Months Ended	12 Months Ended
	Aug. 31, 2018	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Aug. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule of Equity Method Investments [Line Items]
Revenues		$ 145,263,000	$ 139,502,000	$ 134,201,000	$ 128,439,000	$ 120,793,000	$ 111,806,000	$ 109,638,000	$ 102,701,000		$ 547,405,000	$ 444,938,000	$ 333,764,000
Fair value of the remaining non-controlling interest												3,366,000
Acquired in-process research and development						0	30,835,000	$ 0	$ 0		$ 0	30,835,000	$ 0
MVI Health Inc.
Schedule of Equity Method Investments [Line Items]
Equity method ownership percentage	50.00%									50.00%
Revenues										$ 0
Equity method investment, net income (loss)										(6,200,000)
Assets	$ 5,200,000					$ 7,900,000				5,200,000		$ 7,900,000
Liabilities of investment	1,000,000.0									1,000,000.0
Equity of investment	$ 4,200,000									$ 4,200,000
MVI Health Inc.
Schedule of Equity Method Investments [Line Items]
Asset acquisition, percentage of additional interest acquired	40.00%									40.00%
Cash transferred	$ 20,000,000.0
Loss contingency accrual	$ 4,500,000									$ 4,500,000
Asset acquisition, ownership percentage	90.00%									90.00%
Remaining equity interest	10.00%									10.00%
Carrying amount of Penumbra’s equity method investment in MVI	$ 2,202,000									$ 2,202,000
Fair value of the remaining non-controlling interest	3,365,000
Acquired in-process research and development	$ 30,800,000						$ 30,800,000

Investments and Fair Value of Financial Instruments - Impact of Transfer Agreement on Non-Marketable Equity Investments (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 31, 2018	Dec. 31, 2018
Schedule of Asset Acquisition [Line Items]
Fair value of the remaining non-controlling interest		$ 3,366
MVI Health Inc.
Schedule of Asset Acquisition [Line Items]
Cash transferred	$ 20,000
Anti-dilution protection at Transfer Agreement Closing Date	4,500
Carrying amount of Penumbra’s equity method investment in MVI	2,202
Fair value of the remaining non-controlling interest	3,365
Total consideration transferred	$ 30,067

Investments and Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial Assets
Total	$ 150,138	$ 156,093
Financial Liabilities Fair Value Disclosure		2,571
Commercial Paper
Financial Assets
Marketable investments	7,457	13,698
U.S. treasury
Financial Assets
Marketable investments	4,979	6,378
U.S. agency and government sponsored securities
Financial Assets
Marketable investments	2,518	7,690
U.S. states and municipalities
Financial Assets
Marketable investments	4,893	5,122
Corporate bonds
Financial Assets
Marketable investments	96,763	100,151
Commercial Paper
Financial Assets
Cash Equivalents	9,474	10,967
Money Market Funds
Financial Assets
Cash Equivalents	24,054	12,087
Fair Value, Inputs, Level 1
Financial Assets
Total	29,033	18,465
Financial Liabilities Fair Value Disclosure		0
Fair Value, Inputs, Level 1 \| Commercial Paper
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 1 \| U.S. treasury
Financial Assets
Marketable investments	4,979	6,378
Fair Value, Inputs, Level 1 \| U.S. agency and government sponsored securities
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 1 \| U.S. states and municipalities
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 1 \| Corporate bonds
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 1 \| Commercial Paper
Financial Assets
Cash Equivalents	0	0
Fair Value, Inputs, Level 1 \| Money Market Funds
Financial Assets
Cash Equivalents	24,054	12,087
Fair Value, Inputs, Level 2
Financial Assets
Total	121,105	137,628
Financial Liabilities Fair Value Disclosure		0
Fair Value, Inputs, Level 2 \| Commercial Paper
Financial Assets
Marketable investments	7,457	13,698
Fair Value, Inputs, Level 2 \| U.S. treasury
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 2 \| U.S. agency and government sponsored securities
Financial Assets
Marketable investments	2,518	7,690
Fair Value, Inputs, Level 2 \| U.S. states and municipalities
Financial Assets
Marketable investments	4,893	5,122
Fair Value, Inputs, Level 2 \| Corporate bonds
Financial Assets
Marketable investments	96,763	100,151
Fair Value, Inputs, Level 2 \| Commercial Paper
Financial Assets
Cash Equivalents	9,474	10,967
Fair Value, Inputs, Level 2 \| Money Market Funds
Financial Assets
Cash Equivalents	0	0
Fair Value, Inputs, Level 3
Financial Assets
Total	0	0
Financial Liabilities Fair Value Disclosure		2,571
Fair Value, Inputs, Level 3 \| Commercial Paper
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 3 \| U.S. treasury
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 3 \| U.S. agency and government sponsored securities
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 3 \| U.S. states and municipalities
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 3 \| Corporate bonds
Financial Assets
Marketable investments	0	0
Fair Value, Inputs, Level 3 \| Commercial Paper
Financial Assets
Cash Equivalents	0	0
Fair Value, Inputs, Level 3 \| Money Market Funds
Financial Assets
Cash Equivalents	$ 0	0
Contingent Consideration Liability
Financial Assets
Financial Liabilities Fair Value Disclosure		2,571
Contingent Consideration Liability \| Fair Value, Inputs, Level 1
Financial Assets
Financial Liabilities Fair Value Disclosure		0
Contingent Consideration Liability \| Fair Value, Inputs, Level 2
Financial Assets
Financial Liabilities Fair Value Disclosure		0
Contingent Consideration Liability \| Fair Value, Inputs, Level 3
Financial Assets
Financial Liabilities Fair Value Disclosure		$ 2,571

Investments and Fair Value of Financial Instruments - Quantitative Information On Unobservable Inputs (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Minimum \| Monte Carlo Simulation \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Revenue volatilities for each type of revenue-based milestone (as a percent)	5.10%
Maximum \| Monte Carlo Simulation \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Revenue volatilities for each type of revenue-based milestone (as a percent)	18.40%
Crossmed
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Changes in fair value	$ 0	$ 1,000,000.0
Crossmed \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value	1,206,000	2,571,000	$ 4,675,000
Payments of contingent consideration liabilities	1,296,000	3,017,000
Changes in fair value	(35,000)	$ 950,000
Crossmed \| Monte Carlo Simulation \| Fair Value, Inputs, Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value	1,200,000
Fair value of revenue based milestones	$ 1,268,000
Risk-adjusted discount rate (as a percent)		15.00%
Measurement Input, Actual Revenue Results \| Crossmed
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Fair value of revenue based milestones		$ 1,300,000

Investments and Fair Value of Financial Instruments - Contingent Consideration (Details) - Crossmed - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Changes in fair value	$ 0	$ 1,000,000.0
Fair Value, Inputs, Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	2,571,000	4,675,000
Payments of contingent consideration liabilities	(1,296,000)	(3,017,000)
Changes in fair value	(35,000)	950,000
Foreign currency remeasurement	(34,000)	(37,000)
Ending balance	1,206,000	$ 2,571,000
Fair Value, Inputs, Level 3 \| Monte Carlo Simulation
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Ending balance	$ 1,200,000

Balance Sheet Components - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balance At Beginning Of Year	$ 2,782	$ 1,290	$ 684
Charged To Costs And Expenses	656	1,563	606
Deductions	(492)	(71)	0
Balance At End Of Year	$ 2,946	$ 2,782	$ 1,290

Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	$ 21,646	$ 18,829
Work in process	21,651	10,630
Finished goods	109,695	86,282
Inventories	$ 152,992	$ 115,741

Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 73,227	$ 50,823
Less: Accumulated depreciation and amortization	(21,415)	(15,416)
Property and equipment, net	51,812	35,407
Depreciation and amortization expense	8,104	6,168	$ 3,781
Accumulated amortization	21,415	15,416
Property, Plant and Equipment
Property, Plant and Equipment [Line Items]
Depreciation and amortization expense	5,900	4,400	3,000
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	20,959	15,400
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment	9,307	7,140
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	20,283	17,665
Software
Property, Plant and Equipment [Line Items]
Total property and equipment	5,830	4,095
Less: Accumulated depreciation and amortization	(2,300)	(1,300)
Depreciation and amortization expense	900	700	$ 400
Accumulated amortization	2,300	1,300
Computers
Property, Plant and Equipment [Line Items]
Total property and equipment	5,702	3,289
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 11,146	$ 3,234

Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Payroll and employee-related expenses	$ 37,727		$ 33,838
Accrued expenses	7,811		4,088
Sales return reserve	1,821		2,986
Product warranty	2,318		1,875
Contingent consideration & other acquisition related costs	4,291		4,439
Other accrued liabilities	13,662		10,660
Total accrued liabilities	$ 67,630	$ 57,754	$ 57,886

Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Product Warranty, Increase (Decrease) [Roll Forward]
Balance at the beginning of the year	$ 1,875	$ 1,088	$ 1,254
Accruals of warranties issued	1,065	1,336	471
Settlements of warranty claims	(622)	(549)	(637)
Balance at the end of the year	$ 2,318	$ 1,875	$ 1,088

Balance Sheet Components - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Other Non-Current Liabilities Disclosure [Abstract]
Deferred tax liabilities	$ 4,005	$ 4,171
Licensing-related cost	10,878	11,506
Other non-current liabilities	367	3,266
Other non-current liabilities	$ 15,250	$ 18,943

Business Combinations - Narrative (Details) $ in Thousands	12 Months Ended
Business Combinations - Narrative (Details) $ in Thousands	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jul. 03, 2017 USD ($)
Business Combinations [Abstract]
Number of operating segments \| segment	1
Business Acquisition [Line Items]
Payment of milestone payments, financing activities	$ 1,758	$ 4,481	$ 0
Crossmed
Business Acquisition [Line Items]
Contingent consideration arrangements, maximum	no	no
Payments of milestone payments	$ 1,300
Payment of milestone payments, financing activities	700	$ 4,500
Payment of milestone payments, operating activities	600
Deferred tax liability				$ 2,500
Current Liabilities \| Crossmed
Business Acquisition [Line Items]
Contingent consideration for milestone payments	$ 1,200	2,600
Milestone Achievement Payment \| Crossmed
Business Acquisition [Line Items]
Payment of milestone payments, financing activities		$ 3,000

Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands		12 Months Ended
	Jul. 03, 2017	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill		$ 7,656	$ 7,813
Estimated Useful Life of Finite-Lived Intangible Assets		16 years 4 months 24 days	16 years
Crossmed
Business Acquisition [Line Items]
Current assets	$ 5,749
Other current and non-current assets	1,596
Property and equipment, net	829
Current liabilities	(5,080)
Other non-current liabilities	(797)
Goodwill	7,867
Total purchase price	18,704
Customer relationships
Business Acquisition [Line Items]
Estimated Useful Life of Finite-Lived Intangible Assets		15 years	15 years
Customer relationships \| Crossmed
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 6,790
Estimated Useful Life of Finite-Lived Intangible Assets	15 years
Other
Business Acquisition [Line Items]
Estimated Useful Life of Finite-Lived Intangible Assets		5 years	5 years
Other \| Crossmed
Business Acquisition [Line Items]
Finite-lived intangible assets acquired	$ 1,750
Estimated Useful Life of Finite-Lived Intangible Assets	5 years

Business Combinations - Pro Forma (Details) - Crossmed $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Pro forma net revenue	$ 336,557
Pro forma net income	$ 5,992

Asset Acquisition (Details) - USD ($) $ in Thousands	12 Months Ended
Asset Acquisition (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Schedule of Asset Acquisition [Line Items]
Proceeds from capital contribution from non-controlling interest	$ 800	$ 500	$ 0
MVI Asset Acquisition
Schedule of Asset Acquisition [Line Items]
Payments made for anti-dilution provision	1,000	500
Cash payments made	800
Noncash payments made for anti-dilution provision	200
Current loss contingency accrual	$ 3,000	1,500
Noncurrent loss accrual		$ 2,500

Intangible Assets - Intangible Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period		16 years 4 months 24 days	16 years
Gross Carrying Amount		$ 13,666	$ 13,838
Accumulated amortization		(2,502)	(1,472)
Net		11,164	12,366
Indefinite-lived intangible assets		14,200
Intangible assets, gross		27,909	28,717
Intangible assets, net		25,407	27,245
Amortization of intangible assets		1,052	1,095	$ 418
Payments to acquire intangible assets	$ 2,500	$ 0	$ 0	2,500
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period		15 years	15 years
Gross Carrying Amount		$ 6,686	$ 6,823
Accumulated amortization		(1,114)	(681)
Net		$ 5,572	$ 6,142
Trade secrets and processes
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period		20 years	20 years
Gross Carrying Amount		$ 5,256	$ 5,256		$ 5,300
Accumulated amortization		(526)	(263)
Net		$ 4,730	$ 4,993
Other
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period		5 years	5 years
Gross Carrying Amount		$ 1,724	$ 1,759
Accumulated amortization		(862)	(528)
Net		862	1,231
Technology Licensing Agreement
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets		14,243	14,879
Loss contingency accrual		11,700	12,400
Cost of Sales
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets		263	263	0
Sales, general and administrative
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets		789	832	$ 418
Accrued Liabilities \| Technology Licensing Agreement
Finite-Lived Intangible Assets [Line Items]
Loss contingency accrual		800	900
Noncurrent Liabilities \| Technology Licensing Agreement
Finite-Lived Intangible Assets [Line Items]
Loss contingency accrual		$ 10,900	$ 11,500

Intangible Assets - Future Amortization (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2020	$ 1,053
2021	1,053
2022	881
2023	709
2024	709
Thereafter	6,759
Net	$ 11,164	$ 12,366

Goodwill (Details) - USD ($)	3 Months Ended		12 Months Ended
Goodwill (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019
Goodwill [Roll Forward]
Balance as of December 31, 2018			$ 7,813,000
Foreign currency translation adjustments			(157,000)
Balance as of December 31, 2019	$ 7,656,000	$ 7,813,000	$ 7,656,000
Goodwill impairment	$ 0	$ 0

Leases - Schedule of Impact on Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets	$ 14,852	$ 11,776	$ 12,200
Total current assets	463,134	410,302	410,726
Operating lease right-of-use assets	43,717	43,277
Assets	665,901	557,859	515,006
Accrued liabilities	67,630	57,754	57,886
Current operating lease liabilities	4,142	3,608
Total current liabilities	91,048	69,538	66,062
Deferred rent	0	0	7,586
Non-current operating lease liabilities	47,242	46,963
Liabilities	180,288	135,444	92,591
Liabilities and Equity	$ 665,901	557,859	$ 515,006
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Prepaid expenses and other current assets		(424)
Total current assets		(424)
Operating lease right-of-use assets		43,277
Assets		42,853
Accrued liabilities		(132)
Current operating lease liabilities		3,608
Total current liabilities		3,476
Deferred rent		(7,586)
Non-current operating lease liabilities		46,963
Liabilities		42,853
Liabilities and Equity		$ 42,853

Leases - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Sep. 30, 2019	Sep. 30, 2018
Lessee, Lease, Description [Line Items]
Rent expense	$ 5.8	$ 5.8
1310 Harbor Bay Lease
Lessee, Lease, Description [Line Items]
Operating lease, lease not yet commenced, term of contract				15 years
Roseville Lease
Lessee, Lease, Description [Line Items]
Operating lease, lease not yet commenced, term of contract					15 years
Minimum
Lessee, Lease, Description [Line Items]
Lease, renewal term			5 years
Maximum
Lessee, Lease, Description [Line Items]
Lease, renewal term			15 years

Leases - Summary of Lease Cost (Details) $ in Thousands	12 Months Ended
Leases - Summary of Lease Cost (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 7,293
Amortization of right-of-use assets	284
Interest on lease liabilities	186
Variable lease cost	3,570
Total lease costs	$ 11,333
Operating lease, weighted average remaining lease term	10 years
Finance lease, weighted average remaining lease term	15 years
Operating lease, weighted average discount rate	6.20%
Finance lease, weighted average discount rate	5.42%

Leases - Schedule of Maturity of Lease Liabilities (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Lessee, Operating Lease, Description [Abstract]
2020	$ 7,189
2021	6,817
2022	6,637
2023	6,464
2024	6,325
Thereafter	36,444
Total undiscounted lease payments	69,876
Less imputed interest	(18,492)
Present value of lease liabilities	51,384
Lessee, Finance Lease, Description [Abstract]
2020	5,705
2021	2,473
2022	2,489
2023	2,538
2024	2,588
Thereafter	28,585
Total undiscounted lease payments	44,378
Less imputed interest	(13,465)
Present value of lease liabilities	$ 30,913

Leases - Schedule of Lease Payments Under Previous Guidance (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Leases [Abstract]
2019	$ 6,575
2020	6,571
2021	5,809
2022	5,772
2023	5,735
Thereafter	40,194
Total estimated lease payments	$ 70,656

Leases - Supplemental Cash Flow Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 6,829
Financing cash flows from finance leases	2,570
Right-of-use asset obtained in exchange for lease obligations, operating leases	4,261
Right-of-use asset obtained in exchange for lease obligations, finance leases	$ 33,283

Commitments and Contingencies - Royalty Obligations (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Other Commitments [Line Items]
Purchase obligations	$ 15,100,000
Gross Carrying Amount	13,666,000	$ 13,838,000
Cost of Sales
Other Commitments [Line Items]
Royalty expense	3,800,000	3,400,000	$ 4,100,000
Royalty Agreement, March 2005
Other Commitments [Line Items]
Minimum annual royalty payments	$ 300,000	100,000	$ 100,000
Term of royalty agreement	15 years
Additional term of royalty obligation	10 years
Royalty Agreement, April 2012
Other Commitments [Line Items]
Term of royalty agreement	15 years
Royalty as a percent of sales	5.00%
Royalty Agreement, November 2013, Less than $5 Million in Sales
Other Commitments [Line Items]
Royalty as a percent of sales	3.00%
Royalty Agreement, November 2013, Greater than $5 Million in Sales
Other Commitments [Line Items]
Royalty as a percent of sales	1.00%
Royalty agreement, threshold	$ 5,000,000
Royalty Agreement, April 2015
Other Commitments [Line Items]
Royalty as a percent of sales	2.00%
Trade secrets and processes
Other Commitments [Line Items]
Gross Carrying Amount	$ 5,256,000	$ 5,256,000		$ 5,300,000

Stockholders' Equity - Preferred Stock and Common Stock (Details) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) shares	Dec. 31, 2019 vote shares	Jun. 30, 2019 shares	Dec. 31, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, shares authorized (in shares)		5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)		0	0	0
Common stock, number of votes per share \| vote		1
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued in connection with Buyout Agreement	53,256
Fair value of shares issued \| $	$ 5.3

Stockholders' Equity - Issuance of Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Net cash proceeds from shares issued and sold		$ 5,256	$ 106,269
Public Stock Offering
Class of Stock [Line Items]
Shares issued (in shares)	1,495,000
Shares issued, price per share (in dollars per share)	$ 76.00
Net cash proceeds from shares issued and sold	$ 106,300
Underwriting discounts and commissions	6,800
Other issuance costs	$ 500

Stockholders' Equity - Stock Plans Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Sep. 17, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options unvested and subject to repurchase (in shares)	0	0
Intrinsic value of options exercised in period	$ 46,100,000	$ 49,100,000	$ 56,400,000
Issuance of common stock under employee stock purchase plan (in shares)	81,644	74,344	91,685
Issuance of common stock under employee stock purchase plan	$ 8,984,000	$ 7,231,000	$ 5,809,000
Unrecognized compensation cost related to unvested share-based compensation arrangements	$ 43,000,000.0
Unrecognized compensation cost, expected recognition period	3 years 1 month 6 days
Share-based compensation expense capitalized in inventory	$ 800,000	400,000	200,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value of stock options (in dollars per share)	$ 69.73
Restricted Stock and Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock vested	$ 42,700,000	$ 47,000,000.0	$ 29,100,000
Expected to vest (in shares)	348,676
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for future issuance (in shares)	1,095,695			600,000
Minimum percent of eligible compensation per pay period to be used to purchase shares under plan	1.00%
Maximum percent of eligible compensation per pay period to be used to purchase shares under plan	15.00%
Purchase price of common stock, percent of fair market value	85.00%
Maximum number of shares that may be purchased by any one employee (in shares)	2,000
Maximum value of shares that may be purchased by any one employee	$ 25,000
2005 Stock Plan \| Stock Options \| Vesting, First Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rate	25.00%
2005 Stock Plan \| Stock Options \| Vesting, After First Year, Monthly Vesting Rate
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rate	2.00%
2005 Stock Plan \| Other Options \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of award	10 years
2005 Stock Plan \| Incentive Stock Options (ISO)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum voting rights for determination of exercise price, percent	10.00%
Minimum exercise price, percent over fair market value	110.00%
Shares transferred to different plan (in shares)	564
Shares of common stock reserved for future issuance (in shares)	187,985
2005 Stock Plan \| Incentive Stock Options (ISO) \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of award	5 years
2011 Equity Incentive Plan \| Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of award	10 years
Award vesting period	4 years
Shares transferred to different plan (in shares)	89,559
Shares of common stock reserved for future issuance (in shares)	145,000
2011 Equity Incentive Plan \| Incentive Stock Options (ISO)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum voting rights for determination of exercise price, percent	10.00%
Minimum exercise price, percent over fair market value	110.00%
2014 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for future issuance (in shares)	8,376,751
Grants (in shares)	7,900
Number of shares available for grant (in shares)	6,959,455

Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance (in shares) \| shares	1,688,881
Exercised (in shares) \| shares	(314,433)
Cancelled/Forfeited (in shares) \| shares	(3,273)
Ending balance (in shares) \| shares	1,379,075
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Beginning balance (in dollars per share)	$ 18.91
Grants (in dollars per share)	158.30
Exercised (in dollars per share)	13.12
Cancelled/Forfeited (in dollars per share)	21.94
Ending balance (in dollars per share)	$ 21.02
Options Vested and Expected to Vest
Vested and expected to vest (in shares) \| shares	1,378,440
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share)	$ 20.95
Vested and expected to vest, Weighted average remaining contractual life (in years)	4 years 11 months 23 days
Vested and expected to vest, aggregate intrinsic value \| $	$ 197,551
Balance at Exercisable (in shares) \| shares	1,371,175
Balance at Exercisable, weighted average exercise price (in dollars per share)	$ 20.23
Balance at Exercisable, weighted average remaining contractual life (in years)	4 years 11 months 12 days
Balance at Exercisable, aggregate intrinsic value \| $	$ 197,508

Stockholders' Equity - Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units (RSUs)	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Number of Shares
Unvested beginning balance (in shares) \| shares	451,463
Granted (in shares) \| shares	261,071
Vested (in shares) \| shares	(297,788)
Cancelled/Forfeited (in shares) \| shares	(43,540)
Unvested ending balance (in shares) \| shares	371,206
Weighted Average Grant Date Fair Value
Unvested beginning balance (in dollars per share) \| $ / shares	$ 57.29
Granted (in dollars per share) \| $ / shares	151.44
Vested (in dollars per share) \| $ / shares	44.11
Cancelled/Forfeited (in dollars per share) \| $ / shares	88.16
Unvested ending balance (in dollars per share) \| $ / shares	$ 130.47

Stockholders' Equity - Stock Options Assumptions (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 10 months 20 days
Expected volatility (percent)	40.00%
Risk-free interest rate	1.82%
Expected dividend rate (percent)	0.00%
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)		6 months	6 months
Expected volatility (percent)	45.00%	42.00%	34.00%
Risk-free interest rate	2.30%	2.36%	1.26%
Expected dividend rate (percent)	0.00%	0.00%	0.00%

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 21,485	$ 18,422	$ 17,812
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,396	1,004	1,009
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	2,835	1,597	1,289
Sales, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 17,254	$ 15,821	$ 15,514

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 422,240	$ 422,240
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Net current-year other comprehensive loss		(382)	$ (3,511)	$ 6,257
Ending balance		485,892	422,240
Marketable Investments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(500)	(500)	(235)
Other comprehensive (loss) income before reclassifications:
OCI, before reclassifications, before tax, attributable to parent		811	(165)
Income tax effect — expense		(73)	(100)
Net of tax		738	(265)
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Realized (gain) loss — marketable investments	0	0
Income tax effect — (expense) benefit		0	0
Net of tax		0	0
Net current-year other comprehensive loss		738	(265)
Ending balance		238	(500)	(235)
Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(1,442)	(1,442)	1,804
Other comprehensive (loss) income before reclassifications:
OCI, before reclassifications, before tax, attributable to parent		(1,120)	(3,027)
Income tax effect — expense		0	(219)
Net of tax		(1,120)	(3,246)
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Realized (gain) loss — marketable investments	0	0
Income tax effect — (expense) benefit		0	0
Net of tax		0	0
Net current-year other comprehensive loss		(1,120)	(3,246)
Ending balance		(2,562)	(1,442)	1,804
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(1,942)	(1,942)	1,569
Other comprehensive (loss) income before reclassifications:
Income tax effect — expense		(73)	(319)
Net of tax		(382)	(3,511)
Amounts reclassified from accumulated other comprehensive loss to consolidated net income
Realized (gain) loss — marketable investments	$ 0	0
Income tax effect — (expense) benefit		0	0
Net of tax		0	0
Net current-year other comprehensive loss		(382)	(3,511)	6,257
Ending balance		$ (2,324)	$ (1,942)	$ 1,569

Employee Benefit Plan (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plan (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Retirement Benefits [Abstract]
Employer contribution cost	$ 3.2	$ 1.6	$ 1.1

Income Taxes - Income (Loss) before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
United States									$ 46,859	$ (2,790)	$ 543
Foreign									3,276	4,398	1,933
Income before income taxes and equity in losses of unconsolidated investee	$ 11,749	$ 12,963	$ 13,514	$ 11,909	$ 7,349	$ (19,908)	$ 9,663	$ 4,504	$ 50,135	$ 1,608	$ 2,476

Income Taxes - Provision for (Benefit from) for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current:
Federal									$ (738)	$ 290	$ (13)
State									34	183	259
Foreign									2,458	1,689	739
Total current									1,754	2,162	985
Deferred:
Federal									1,556	(5,436)	(2,502)
State									295	(770)	(1,742)
Foreign									(474)	(359)	(352)
Total deferred									1,377	(6,565)	(4,596)
(Benefit from) Provision for Income Taxes	$ 2,448	$ 1,963	$ (2,735)	$ 1,455	$ 885	$ 1,598	$ (4,948)	$ (1,938)	$ 3,131	$ (4,403)	$ (3,611)

Income Taxes - Effective Income Tax Reconciliation (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax at federal statutory rate	21.00%	21.00%	34.00%
State income taxes, net of federal benefit	0.40%	(33.10%)	(94.60%)
Foreign taxes differential	2.20%	37.20%	(4.20%)
Prepaid tax ASC 810-10	(0.80%)	5.00%	(39.80%)
IPR&D charge	0.00%	402.50%	0.00%
Stock-based compensation	(20.80%)	(809.60%)	(802.00%)
Non-deductible meals and entertainment	1.60%	31.30%	19.40%
Imputed interest	0.60%	19.80%	19.10%
Tax credits	0.00%	0.00%	(0.50%)
Remeasurement of deferred tax assets and liabilities	0.00%	0.00%	622.50%
Transfer pricing tax benefit	0.00%	0.00%	(35.30%)
Global intangible low-taxed income ("GILTI")	0.80%	14.00%	0.00%
Contingent liabilities	0.00%	12.40%	0.00%
Executive compensation	0.40%	6.50%	0.00%
Non-deductible expenses	0.00%	15.30%	0.00%
Other	0.80%	3.90%	8.00%
Change in valuation allowance	0.00%	0.00%	127.60%
Effective tax rate	6.20%	(273.80%)	(145.80%)

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Net operating loss carryforwards	$ 24,470	$ 27,456
Tax credits	15,992	11,459
Accruals and reserves	4,700	6,078
Stock-based compensation	4,252	3,485
Translation adjustment	155	527
UNICAP adjustments	6,816	4,993
ASC 842 Lease Liabilities	20,183
Other	471	464
Gross deferred tax assets	77,039	54,462
Valuation allowance	(21,558)	(17,284)	$ (17,284)	$ (10,295)	$ (6,062)
Total deferred tax assets	55,481	37,178
Deferred tax liabilities:
Depreciation and amortization	(5,550)	(6,293)
Unrealized Gains	(73)		$ 0
ASC 842 Lease ROU Assets	(20,394)
Total deferred tax liabilities	(26,017)	(6,293)
Net deferred tax assets	$ 29,464	$ 30,885

Income Taxes - Operating Loss Carryforwards (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, limited to offset taxable income in year utilized, percent	80.00%
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 89.3
Operating loss carryforwards, indefinite lived	$ 24.0
Operating loss carryforwards, carryforward period	20 years
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 78.6
Foreign
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 0.4

Income Taxes - Tax Credit Carryforwards (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
MVI Health Inc.
Tax Credit Carryforward [Line Items]
Asset Acquisition MVI DTA	$ 3.1
Research Tax Credit \| Federal
Tax Credit Carryforward [Line Items]
Tax credit carryforwards	$ 9.2
Period for which credits are carried forward	20 years
Research Tax Credit \| State
Tax Credit Carryforward [Line Items]
Tax credit carryforwards	$ 10.5
Federal
Tax Credit Carryforward [Line Items]
Operating loss carryforwards, carryforward period	20 years

Income Taxes - Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of valuation allowance
Beginning Balance	$ 17,284	$ 10,295	$ 6,062
Additions Charged To Expenses or Other Accounts	4,395	6,989	4,400
Deductions Credited to Expenses or Other Accounts	(121)	0	(167)
Ending Balance	$ 21,558	$ 17,284	$ 10,295

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of the change in gross unrecognized tax benefits
Beginning balance	$ 5,174	$ 4,152	$ 3,827
Gross increase for tax positions of current year	1,191	1,421	871
Gross increase for tax positions of prior years	386	238	130
Gross decrease for tax positions of prior years	(565)	(616)	(659)
Settlement	0	0	0
Lapse of statute of limitations	(111)	(21)	(17)
Ending balance	6,075	5,174	4,152
Accrued interest and penalties related to uncertain tax positions				$ 200	$ 200	$ 100
Unrecognized tax benefits	$ 6,075	$ 4,152	$ 4,152	6,075	$ 5,174	$ 4,152
Unrecognized tax benefits that would affect the effective tax rate if recognized				$ 1,900

Net Income Attributable to Penumbra, Inc. per Share - Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator:
Net income (loss) attributable to Penumbra, Inc.	$ 9,689	$ 11,483	$ 16,588	$ 10,698	$ 6,659	$ (18,930)	$ 13,381	$ 5,491	$ 48,458	$ 6,601	$ 4,657
Denominator:
Weighted average shares outstanding: Basic (in shares)	34,955,043	34,840,370	34,694,228	34,507,279	34,378,415	34,248,484	34,072,223	33,846,142	34,750,706	34,138,176	32,978,065
Potential dilutive common stock securities, as calculated using treasury stock method (in shares)									1,515,293	1,948,645	2,341,038
Weighted average shares outstanding: Diluted (in shares)	36,312,471	36,271,394	36,214,321	36,213,164	36,150,450	34,248,484	36,116,254	35,917,051	36,265,999	36,086,821	35,319,103
Net income (loss) attributable to Penumbra, Inc. per share: Basic (in dollars per share)	$ 0.28	$ 0.33	$ 0.48	$ 0.31	$ 0.19	$ (0.55)	$ 0.39	$ 0.16	$ 1.39	$ 0.19	$ 0.14
Net income (loss) attributable to Penumbra, Inc. per share: Diluted (in dollars per share)	$ 0.27	$ 0.32	$ 0.46	$ 0.30	$ 0.18	$ (0.55)	$ 0.37	$ 0.15	$ 1.34	$ 0.18	$ 0.13

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Net Income Attributable to Penumbra, Inc. per Share - Antidilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)		49	54
Employee Stock Purchase Plan
Class of Stock [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	100

Revenues - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2018

Disaggregation of Revenue [Line Items]

Revenues

$ 145,263

$ 139,502

$ 134,201

$ 128,439

$ 120,793

$ 111,806

$ 109,638

$ 102,701

$ 547,405

$ 444,938

$ 333,764

Cumulative effect adjustments

$ 467

Neuro

Disaggregation of Revenue [Line Items]

Revenues

331,685

294,333

232,446

Vascular

Disaggregation of Revenue [Line Items]

Revenues

215,720

150,605

101,318

United States

Disaggregation of Revenue [Line Items]

Revenues

355,222

290,716

219,173

Japan

Disaggregation of Revenue [Line Items]

Revenues

42,520

41,805

33,790

Other International

Disaggregation of Revenue [Line Items]

Revenues

$ 149,663

$ 112,417

$ 80,801

Retained Earnings (Accumulated Deficit)

Disaggregation of Revenue [Line Items]

Cumulative effect adjustments

^[1]

467

Retained Earnings (Accumulated Deficit) | Accounting Standards Update 2014-09

Disaggregation of Revenue [Line Items]

Cumulative effect adjustments

$ 300

[1]

Cumulative effect adjustments relate to the adoption of Accounting Standard Update (“ASU”) No. 2014-09 - Revenue from Contracts with Customers (“Topic 606”), ASU No. 2016-16 - Income Taxes (“Topic 740”), and ASU No. 2018-02 - Income Statement - Reporting Comprehensive Income (“Topic 220”). Refer to the accompanying notes, including Note “2. Summary of Significant Accounting Policies,” for more information.

Selected Quarterly Financial Data (Unaudited) - Selected Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 145,263	$ 139,502	$ 134,201	$ 128,439	$ 120,793	$ 111,806	$ 109,638	$ 102,701	$ 547,405	$ 444,938	$ 333,764
Cost of revenue	47,135	43,504	40,273	44,529	42,081	36,794	37,386	36,144	175,441	152,405	116,622
Gross Profit	98,128	95,998	93,928	83,910	78,712	75,012	72,252	66,557	371,964	292,533	217,142
Acquired in-process research and development					0	30,835	0	0	0	30,835	0
Total operating expenses	87,549	83,022	81,127	72,758	72,043	95,861	62,969	62,512	324,456	293,385	215,977
Income (loss) before income taxes and equity in losses of unconsolidated investee	11,749	12,963	13,514	11,909	7,349	(19,908)	9,663	4,504	50,135	1,608	2,476
Provision for (benefit from) income taxes	2,448	1,963	(2,735)	1,455	885	1,598	(4,948)	(1,938)	3,131	(4,403)	(3,611)
Income before equity in losses of unconsolidated investee					6,464	(21,506)	14,611	6,442	47,004	6,011	6,087
Equity in losses of unconsolidated investee					0	(920)	(1,230)	(951)	0	(3,101)	(1,430)
Consolidated net income (loss)	9,301	11,000	16,249	10,454	6,464	(22,426)	13,381	5,491	47,004	2,910	4,657
Net loss attributable to non-controlling interest	(388)	(483)	(339)	(244)	(195)	(3,496)	0	0	(1,454)	(3,691)	0
Net income (loss) attributable to Penumbra, Inc.	$ 9,689	$ 11,483	$ 16,588	$ 10,698	$ 6,659	$ (18,930)	$ 13,381	$ 5,491	$ 48,458	$ 6,601	$ 4,657
Net income (loss) attributable to Penumbra, Inc. per share: Basic (in dollars per share)	$ 0.28	$ 0.33	$ 0.48	$ 0.31	$ 0.19	$ (0.55)	$ 0.39	$ 0.16	$ 1.39	$ 0.19	$ 0.14
Net income (loss) attributable to Penumbra, Inc. per share: Diluted (in dollars per share)	$ 0.27	$ 0.32	$ 0.46	$ 0.30	$ 0.18	$ (0.55)	$ 0.37	$ 0.15	$ 1.34	$ 0.18	$ 0.13
Weighted average shares outstanding: Basic (in shares)	34,955,043	34,840,370	34,694,228	34,507,279	34,378,415	34,248,484	34,072,223	33,846,142	34,750,706	34,138,176	32,978,065
Weighted average shares outstanding: Diluted (in shares)	36,312,471	36,271,394	36,214,321	36,213,164	36,150,450	34,248,484	36,116,254	35,917,051	36,265,999	36,086,821	35,319,103

Selected Quarterly Financial Data (Unaudited) - Additional Information (Details) - USD ($)
$ in Thousands

3 Months Ended

12 Months Ended

Aug. 31, 2018

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Jan. 01, 2018

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Cumulative effect adjustments

$ 467

Acquired in-process research and development

$ 0

$ 30,835

$ 0

$ 30,835

$ 0

Retained Earnings (Accumulated Deficit)

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Cumulative effect adjustments

^[1]

467

Accounting Standards Update 2014-09 | Retained Earnings (Accumulated Deficit)

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Cumulative effect adjustments

$ 300

MVI Health Inc.

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Acquired in-process research and development

$ 30,800

30,800

Penumbra, Inc.

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Acquired in-process research and development

$ 27,400

[1]

Cumulative effect adjustments relate to the adoption of Accounting Standard Update (“ASU”) No. 2014-09 - Revenue from Contracts with Customers (“Topic 606”), ASU No. 2016-16 - Income Taxes (“Topic 740”), and ASU No. 2018-02 - Income Statement - Reporting Comprehensive Income (“Topic 220”). Refer to the accompanying notes, including Note “2. Summary of Significant Accounting Policies,” for more information.

Label

Element

Value

Parent [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption

us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption

$ 467,000

^[1]

[1]

Cumulative effect adjustments relate to the adoption of Accounting Standard Update (“ASU”) No. 2014-09 - Revenue from Contracts with Customers (“Topic 606”), ASU No. 2016-16 - Income Taxes (“Topic 740”), and ASU No. 2018-02 - Income Statement - Reporting Comprehensive Income (“Topic 220”). Refer to the accompanying notes, including Note “2. Summary of Significant Accounting Policies,” for more information.