PENUMBRA INC, 10-Q filed on 5/2/2023
Quarterly Report
v3.23.1
Cover - shares
3 Months Ended
Mar. 31, 2023
Apr. 18, 2023
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2023  
Document Transition Report false  
Entity File Number 001-37557  
Entity Registrant Name Penumbra, Inc  
Entity Address, Address Description One Penumbra Place  
Entity Address, City or Town Alameda  
Entity Address, State or Province CA  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 05-0605598  
Entity Address, Postal Zip Code 94502  
City Area Code 510  
Local Phone Number 748-3200  
Title of 12(b) Security Common Stock, Par value $0.001 per share  
Trading Symbol PEN  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   38,252,969
Entity Central Index Key 0001321732  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q1  
Amendment Flag false  
v3.23.1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 94,688 $ 69,858
Marketable investments 104,409 118,172
Accounts receivable, net of allowance for credit losses of $937 and $862 at March 31, 2023 and December 31, 2022, respectively 207,364 203,384
Inventories 344,042 334,006
Prepaid expenses and other current assets 35,987 30,279
Total current assets 786,490 755,699
Property and equipment, net 65,224 65,015
Operating lease right-of-use assets 189,839 192,636
Finance lease right-of-use assets 32,569 33,323
Intangible assets, net 78,669 81,161
Goodwill 166,161 166,046
Deferred taxes 65,173 64,213
Other non-current assets 11,173 12,793
Total assets 1,395,298 1,370,886
Current liabilities:    
Accounts payable 28,199 26,679
Accrued liabilities 105,869 106,300
Current operating lease liabilities 10,303 10,033
Current finance lease liabilities 1,957 1,920
Total current liabilities 146,328 144,932
Non-current operating lease liabilities 196,837 198,955
Non-current finance lease liabilities 24,423 24,865
Other non-current liabilities 3,241 3,276
Total liabilities 370,829 372,028
Commitments and contingencies
Stockholders’ equity:    
Common stock 38 38
Additional paid-in capital 978,826 963,040
Accumulated other comprehensive loss (6,861) (8,124)
Retained earnings 52,466 43,904
Total Penumbra, Inc. stockholders’ equity 1,024,469 998,858
Total liabilities and stockholders’ equity $ 1,395,298 $ 1,370,886
v3.23.1
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Allowance for credit losses $ 937 $ 862
v3.23.1
Condensed Consolidated Statements of Operations - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Statement [Abstract]    
Revenue $ 241,398 $ 203,895
Cost of revenue 90,326 76,477
Gross profit 151,072 127,418
Operating expenses:    
Research and development 19,986 20,564
Sales, general and administrative 123,078 110,900
Total operating expenses 143,064 131,464
Income (loss) from operations 8,008 (4,046)
Interest income (expense), net 554 (47)
Other income (expense), net 90 (1,011)
Income (loss) before income taxes 8,652 (5,104)
Provision for (benefit from) income taxes 90 (5,183)
Net income $ 8,562 $ 79
Net income per share:    
Basic (in dollars per share) $ 0.22 $ 0.00
Diluted (in dollars per share) $ 0.22 $ 0.00
Weighted average shares outstanding:    
Basic (in shares) 38,186,342 37,646,122
Diluted (in shares) 39,075,388 38,708,657
v3.23.1
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Statement of Comprehensive Income [Abstract]    
Net income $ 8,562 $ 79
Other comprehensive income (loss), net of tax:    
Foreign currency translation adjustments, net of tax 403 (868)
Net change in unrealized gains (losses) on available-for-sale securities, net of tax 860 (2,474)
Total other comprehensive income (loss), net of tax 1,263 (3,342)
Comprehensive income (loss) $ 9,825 $ (3,263)
v3.23.1
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings (Accumulated Deficit)
Beginning balance (in shares) at Dec. 31, 2021   37,578,483      
Beginning balance at Dec. 31, 2021 $ 953,927 $ 37 $ 910,614 $ (2,630) $ 45,906
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock (in shares)   103,984      
Issuance of common stock 1,103 $ 1 1,102    
Shares held for tax withholdings (in shares)   (14,243)      
Shares held for tax withholdings (3,181)   (3,181)    
Stock-based compensation 10,716   10,716    
Other comprehensive income (loss) (3,342)     (3,342)  
Net income (loss) 79       79
Ending balance (in shares) at Mar. 31, 2022   37,668,224      
Ending balance at Mar. 31, 2022 959,302 $ 38 919,251 (5,972) 45,985
Beginning balance (in shares) at Dec. 31, 2022   38,107,977      
Beginning balance at Dec. 31, 2022 998,858 $ 38 963,040 (8,124) 43,904
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock (in shares)   134,936      
Issuance of common stock 2,209   2,209    
Shares held for tax withholdings (in shares)   (813)      
Shares held for tax withholdings (204)   (204)    
Stock-based compensation 13,781   13,781    
Other comprehensive income (loss) 1,263     1,263  
Net income (loss) 8,562       8,562
Ending balance (in shares) at Mar. 31, 2023   38,242,100      
Ending balance at Mar. 31, 2023 $ 1,024,469 $ 38 $ 978,826 $ (6,861) $ 52,466
v3.23.1
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Statement of Cash Flows [Abstract]    
Net income $ 8,562 $ 79
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization 6,575 5,726
Stock-based compensation 12,766 8,893
Inventory write-downs 1,009 593
Deferred taxes (953) (4,378)
Other 140 (1,012)
Changes in operating assets and liabilities:    
Accounts receivable (3,540) (8,710)
Inventories (10,641) (11,764)
Prepaid expenses and other current and non-current assets (3,994) (3,809)
Accounts payable 2,074 1,389
Accrued expenses and other non-current liabilities 1,131 8,249
Proceeds from lease incentives 0 230
Net cash provided by (used in) operating activities 13,129 (4,514)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Proceeds from maturities of marketable investments 14,605 20,668
Purchases of property and equipment (3,894) (4,957)
Net cash provided by (used in) investing activities 10,711 15,711
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from exercises of stock options 2,209 1,102
Payment of employee taxes related to vested stock (204) (3,181)
Payments of finance lease obligations (474) (425)
Other (155) (137)
Net cash provided by (used in) financing activities 1,376 (2,641)
Effect of foreign exchange rate changes on cash and cash equivalents (386) 228
NET INCREASE IN CASH AND CASH EQUIVALENTS 24,830 8,784
CASH AND CASH EQUIVALENTS—Beginning of period 69,858 59,379
CASH AND CASH EQUIVALENTS—End of period 94,688 68,163
NONCASH INVESTING AND FINANCING ACTIVITIES:    
Right-of-use assets obtained in exchange for lease obligations 341 47,678
Right-of-use assets obtained in exchange for finance lease obligations 68 81
Purchase of property and equipment funded through accounts payable and accrued liabilities 1,781 1,626
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid for amounts included in the measurement of operating lease liabilities 4,706 4,266
Cash paid for income taxes $ 1,413 $ 1,798
v3.23.1
Organization and Description of Business
3 Months Ended
Mar. 31, 2023
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 novel products and has a broad portfolio that addresses challenging medical conditions in markets with significant unmet need. The Company focuses on developing, manufacturing and marketing novel products for use by specialist physicians and other healthcare providers to drive improved clinical and health outcomes. The Company believes that the cost-effectiveness of our products is attractive to our customers.
v3.23.1
Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
2. Summary of Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022, and the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the audited financial statements as of that date.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2023, the results of its operations for the three months ended March 31, 2023 and 2022, the changes in its comprehensive income (loss) and stockholders’ equity for the three months ended March 31, 2023 and 2022, and its cash flows for the three months ended March 31, 2023 and 2022. The results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2023, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, except for the granting of restricted stock units with performance conditions to senior management during the three months ended March 31, 2023. Refer to Note “9. Stockholders’ Equity” for information on the Company’s accounting policy.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, intangibles, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other contingencies, including the probability of achieving performance targets associated with equity awards with performance conditions, 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 products, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance.
v3.23.1
Investments and Fair Value of Financial Instruments
3 Months Ended
Mar. 31, 2023
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 following table presents the Company’s marketable investments as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023
Securities with net gains or losses in accumulated other comprehensive income (loss)    
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 for
 Credit Loss
Fair Value
U.S. treasury$11,987 $— $(321)$— $11,666 
U.S. agency and government sponsored securities6,998 — (102)— 6,896 
U.S. states and municipalities13,355 — (358)— 12,997 
Corporate bonds74,710 — (1,860)— 72,850 
Total$107,050 $— $(2,641)$— $104,409 
December 31, 2022
Securities with net gains or losses in accumulated other comprehensive income (loss)
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 for
 Credit Loss
Fair Value
U.S. treasury$14,482 $— $(478)$— $14,004 
U.S. agency and government sponsored securities6,999 — (176)— 6,823 
U.S. states and municipalities23,460 — (501)— 22,959 
Corporate bonds76,731 — (2,345)— 74,386 
Total$121,672 $— $(3,500)$— $118,172 
As of March 31, 2023, the total amortized cost basis of the Company’s available-for-sale securities in an unrealized loss position exceeded its fair value by $2.6 million, which was primarily attributable to widening credit spreads and rising interest rates since purchase. The Company reviewed its available-for-sale securities in an unrealized loss position and concluded that the decline in fair value was not related to credit losses and is recoverable. During the three months ended March 31, 2023, no allowance for credit losses was recorded and instead the unrealized losses are reported as a component of accumulated other comprehensive income (loss).
The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months or for twelve months or more as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. treasury$— $— $11,666 $(321)$11,666 $(321)
U.S. agency and government sponsored securities— — 6,896 (102)6,896 (102)
U.S. states and municipalities— — 12,997 (358)12,997 (358)
Corporate bonds10,812 (77)62,038 (1,783)72,850 (1,860)
Total$10,812 $(77)$93,597 $(2,564)$104,409 $(2,641)
December 31, 2022
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. treasury— — 14,004 (478)14,004 (478)
U.S. agency and government sponsored securities— — 6,823 (176)6,823 (176)
U.S. states and municipalities4,567 (68)13,772 (433)18,339 (501)
Corporate bonds15,327 (101)59,059 (2,244)74,386 (2,345)
Total$19,894 $(169)$93,658 $(3,331)$113,552 $(3,500)
The following table presents the contractual maturities of the Company’s marketable investments as of March 31, 2023 (in thousands):
March 31, 2023
 Amortized CostFair Value
Due in less than one year$66,527 $65,133 
Due in one to five years40,523 39,276 
Total$107,050 $104,409 
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 measurement 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 Company did not hold any Level 3 marketable investments as of March 31, 2023 or December 31, 2022. During the three months ended March 31, 2023 and 2022, 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 March 31, 2023 or December 31, 2022.
The following tables set forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022 (in thousands):
 As of March 31, 2023
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$32,384 $— $— $32,384 
Marketable investments:
U.S. treasury11,666 — — 11,666 
U.S. agency and government sponsored securities— 6,896 — 6,896 
U.S. states and municipalities— 12,997 — 12,997 
Corporate bonds— 72,850 — 72,850 
Total$44,050 $92,743 $— $136,793 
 As of December 31, 2022
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$21,521 $— $— $21,521 
Marketable investments:
U.S. treasury14,004 — — 14,004 
U.S. agency and government sponsored securities— 6,823 — 6,823 
U.S. states and municipalities— 22,959 — 22,959 
Corporate bonds— 74,386 — 74,386 
Total$35,525 $104,168 $— $139,693 
v3.23.1
Balance Sheet Components
3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Components
4. Balance Sheet Components
Inventories
The following table shows the components of inventories as of March 31, 2023 and December 31, 2022 (in thousands):
 March 31, 2023December 31, 2022
Raw materials$90,980 $90,786 
Work in process32,761 26,793 
Finished goods220,301 216,427 
Inventories$344,042 $334,006 
Accrued Liabilities
The following table shows the components of accrued liabilities as of March 31, 2023 and December 31, 2022 (in thousands):
 March 31, 2023December 31, 2022
Payroll and employee-related cost$59,685 $60,480 
Accrued expenses11,147 10,902 
Deferred revenue9,114 9,158 
Other accrued liabilities25,923 25,760 
Total accrued liabilities$105,869 $106,300 
The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, for the three months ended March 31, 2023 and twelve months ended December 31, 2022, respectively (in thousands):
 March 31, 2023December 31, 2022
Balance at the beginning of the period$5,370 $4,310 
Accruals of warranties issued500 2,451 
Settlements of warranty claims(282)(1,391)
Balance at the end of the period$5,588 $5,370 
v3.23.1
Intangible Assets
3 Months Ended
Mar. 31, 2023
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Intangible Assets
5. Intangible Assets
Acquired Intangible Assets
The following tables present details of the Company’s acquired finite-lived intangible assets as of March 31, 2023 and December 31, 2022 (in thousands, except weighted-average amortization period):
As of March 31, 2023Weighted-Average Amortization PeriodGross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$83,289 $(12,495)$70,794 
Customer relationships15.0 years6,484 (2,485)3,999 
Trade secrets and processes20.0 years5,256 (1,380)3,876 
Total intangible assets 9.6 years$95,029 $(16,360)$78,669 
As of December 31, 2022Weighted-Average
Amortization Period
Gross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$83,289 $(10,113)$73,176 
Customer relationships15.0 years6,383 (2,340)4,043 
Trade secrets and processes20.0 years5,256 (1,314)3,942 
Other5.0 years1,646 (1,646)— 
Total intangible assets9.6 years$96,574 $(15,413)$81,161 
The gross carrying amount and accumulated amortization of the customer relationships are the only intangible assets subject to foreign currency translation effects.
The Company reviews indefinite-lived intangible assets for impairment annually during the fourth quarter or more frequently if events or circumstances indicate that an impairment loss may have occurred. The Company determined that there were no impairment indicators as of March 31, 2023.
The following table presents the amortization expense recorded related to the Company’s finite-lived intangible assets for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Cost of revenue$66 $66 
Sales, general and administrative2,486 1,982 
Total$2,552 $2,048 
v3.23.1
Goodwill
3 Months Ended
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill
6. Goodwill
The following table presents the changes in goodwill during the three months ended March 31, 2023 (in thousands):
Total Company
Balance as of December 31, 2022$166,046 
Foreign currency translation 115 
Balance as of March 31, 2023$166,161 
Goodwill Impairment Review
The Company reviews goodwill for impairment annually during the fourth quarter or more frequently if events or circumstances indicate that an impairment loss may have occurred. The Company determined there were no impairment indicators as of March 31, 2023.
v3.23.1
Debt
3 Months Ended
Mar. 31, 2023
Debt Disclosure [Abstract]  
Indebtedness
7. Indebtedness
Credit Agreement
On April 24, 2020, the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and lender, and Bank of America, N.A. and Citibank, N.A. as lenders. The Credit Agreement is secured and provides for up to $100 million in available revolving borrowing capacity with an option, subject to certain conditions, for the Company to increase the aggregate borrowing capacity to up to $150 million, and originally matured on April 23, 2021. During the three months ended March 31, 2021 and 2022, the Credit Agreement was amended to extend the maturity date and make other changes to the terms of the Credit Agreement.
In the first quarter of 2023, the Company and JPMorgan Chase Bank, N.A., as administrative agent and lender, and Bank of America, N.A. and Citibank, N.A., as lenders, entered into Amendment No. 3 to the Credit Agreement. Pursuant to the amendment, (i) the maturity date of the Credit Agreement was extended from February 17, 2023 to February 16, 2024, (ii) certain changes were made to the reference benchmark interest rates, applicable margins and borrowing mechanics under the Credit Agreement, which have the overall effect of increasing the interest rates payable by the Company on amounts borrowed
under the Credit Agreement, and (iii) the commitment fee payable on the average daily unused amount under the Credit Agreement was increased to 0.35% per annum.
The Credit Agreement requires the Company to maintain a minimum fixed charge coverage ratio and to not exceed a maximum leverage ratio. As of March 31, 2023, the Company was in compliance with these requirements.
As of March 31, 2023 and December 31, 2022, there were no borrowings outstanding under the Credit Agreement.
v3.23.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
8. Commitments and Contingencies
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. In July 2019, the Company amended the license agreement to extend its term for an additional ten years and to increase the required minimum annual royalty payments by $0.2 million. As of both March 31, 2023 and December 31, 2022, the amended license agreement required minimum quarterly royalty payments of $0.3 million. Unless terminated earlier, the term of the amended license agreement shall expire June 30, 2029.
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.
Royalty expense included in cost of revenue for the three months ended March 31, 2023 and 2022 was $0.7 million and $0.6 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.
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.
v3.23.1
Stockholder's Equity
3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stockholder's Equity 9. Stockholders’ Equity
Stock-based Compensation
Stock-based compensation expense is associated with restricted stock units (“RSUs”), RSUs with performance conditions (“PSUs”), stock options, and the Company’s Employee Stock Purchase Plan.
Certain RSUs granted to senior management during the three months ended March 31, 2023, will vest subject to the achievement of pre-established financial performance targets for the year ending December 31, 2023, and continued service. The fair value of these PSUs is based on the closing price of the Company's common stock on the date of grant. Stock-based compensation costs associated with these PSUs are recognized over the requisite service period of 4.25 years using graded vesting which results in more accelerated expense recognition compared to traditional time-based vesting over the same vesting period. Each reporting period, the Company monitors the probability of achieving the performance targets and may adjust periodic stock-based compensation expense based on its determination of the likelihood of achieving these performance targets and the estimated number of shares of common stock that will vest. The actual number of PSUs awarded is based on the actual performance during the performance period compared to the performance targets.
The following table sets forth the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Cost of revenue$1,191 $856 
Research and development2,278 1,386 
Sales, general and administrative9,297 6,651 
Total$12,766 $8,893 
As of March 31, 2023, total unrecognized compensation cost related to unvested share-based compensation arrangements, excluding PSUs, was $76.4 million, which is expected to be recognized over a weighted average period of 3.0 years.
As of March 31, 2023, total unrecognized compensation cost related to unvested PSU share-based compensation arrangements was $18.5 million, which is expected to be recognized over a weighted average period of 4.0 years.
The total stock-based compensation cost capitalized in inventory was $2.2 million and $2.2 million as of March 31, 2023 and December 31, 2022, respectively.
v3.23.1
Accumulated Other Comprehensive Income (Loss)
3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
10. Accumulated Other Comprehensive Income (Loss)
Other comprehensive income (loss) consists of two components: unrealized gains or losses on the Company’s available-for-sale marketable investments and gains or losses from foreign currency translation adjustments. Until realized and reported as a component of consolidated net income, these comprehensive income (loss) items accumulate and are included within accumulated other comprehensive income (loss). Unrealized gains and losses on the Company’s marketable investments are reclassified from accumulated other comprehensive income (loss) into earnings when realized upon sale, and are determined based on specific identification of securities sold. Gains and losses from the translation of assets and liabilities denominated in non-U.S. dollar functional currencies are included in accumulated other comprehensive income (loss).
The following table summarizes the changes in the accumulated balances during the period and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income (loss) into earnings affect the Company’s condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss) (in thousands):    
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
 Marketable
Investments
 Currency Translation
Adjustments
 Total Marketable
Investments
 Currency Translation
Adjustments
 Total
Balance, beginning of the period$(3,500)$(4,624)$(8,124)$(595)$(2,035)$(2,630)
Other comprehensive income (loss) before reclassifications:
Unrealized gains (losses) — marketable investments860 — 860 (2,474)— (2,474)
Foreign currency translation gains (losses)— 403 403 — (868)(868)
Net of tax860 403 1,263 (2,474)(868)(3,342)
Net current-year other comprehensive income (loss)860 403 1,263 (2,474)(868)(3,342)
Balance, end of the period$(2,640)$(4,221)$(6,861)$(3,069)$(2,903)$(5,972)
v3.23.1
Income Taxes
3 Months Ended
Mar. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
11. Income Taxes
The Company’s income tax expense (benefit), 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 judgment and estimates are required in determining the consolidated income tax expense (benefit).
During interim periods, the Company generally utilizes the estimated annual effective tax rate (“AETR”) method which involves the use of forecasted information. Under the AETR method, the provision is calculated by applying the estimated AETR for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Jurisdictions with tax assets for which the Company believes a tax benefit cannot be realized are excluded from the computation of its AETR.
The Company’s provision for income taxes for the three months ended March 31, 2023 was $0.1 million, which was primarily due to tax expenses attributable to its worldwide profits offset by excess tax benefits from stock-based compensation attributable to its U.S. jurisdiction. The Company’s benefit from income taxes for the three months ended March 31, 2022 was $5.2 million, which was primarily due to tax benefits attributable to its worldwide losses combined with excess tax benefits from stock-based compensation attributable to its U.S. jurisdiction.
The Company’s effective tax rate was 1.0% for the three months ended March 31, 2023, compared to 101.5% for the three months ended March 31, 2022. The Company’s change in effective tax rate was primarily attributable to small tax expenses over relatively large worldwide profits for the three months ended March 31, 2023, when compared to large tax benefits over relatively small worldwide losses for the three months ended March 31, 2022.
Significant domestic deferred tax assets (“DTAs”) were generated in recent years, primarily due to excess tax benefits from stock option exercises and vesting of restricted stock units. The Company evaluates all available positive and negative evidence, objective and subjective in nature, in each reporting period to determine if sufficient taxable income will be generated to realize the benefits of its DTAs and, if not, a valuation allowance to reduce the DTAs is recorded.
As of March 31, 2023 and 2022, the Company maintains a valuation allowance against its Federal Research and Development Tax Credit DTAs as the Company could not conclude at the required more-likely-than-not level of certainty, that the benefit of these tax attributes would be realized prior to expiration. The Company intends to continue maintaining this full valuation allowance until there is sufficient evidence to reverse it. However, considering current earnings and anticipated future earnings, as well as the impact of IRC Section 174 requiring qualified research expenditures to be capitalized and amortized over 5 or 15 years, the Company anticipates net operating loss (“NOL”) utilization may be accelerated. As a consequence, the Company believes there is a reasonable possibility that sufficient positive evidence may become available to conclude this valuation allowance may no longer be needed within the next 12 months. Release of the valuation allowance will result in the recognition of Federal Research and Development Tax Credit DTAs and a decrease to income tax expenses for the period in which the release is recorded. The exact timing and amount of the valuation allowance release are highly dependent on the level of taxable income in future years. The Company will continue to closely monitor the need for this valuation allowance in each subsequent reporting period.
As of March 31, 2023 and 2022, the company maintains a full valuation allowance against its California DTAs as the Company does not expect to generate sufficient future taxable income in California to realize the tax benefit due to the computation of California taxes under the single sales factor and non-conformity of the Section 174 capitalization rule.
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 United States and therefore deferred taxes attributable to such earnings are not provided for in the Company’s condensed consolidated financial statements as of March 31, 2023.
v3.23.1
Net Income per Share
3 Months Ended
Mar. 31, 2023
Earnings Per Share [Abstract]  
Net income per Share
12. Net Income per Share
The Company computed basic net income per share based on the weighted average number of shares of common stock outstanding during the period. The Company computed diluted net income per share based on the weighted average number of shares of common stock outstanding plus potentially dilutive common stock equivalents outstanding during the period using the treasury stock method. For the purposes of this calculation, stock options, restricted stock units and stock sold through the Company’s employee stock purchase plan are considered common stock equivalents.
A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income per share is as follows (in thousands, except share and per share amounts):
 Three Months Ended March 31,
 20232022
Numerator:
Net income$8,562 $79 
Denominator:
Weighted average shares used to compute net income attributable to common stockholders:
Basic38,186,342 37,646,122 
Potential dilutive stock-based options and awards889,046 1,062,535 
Diluted39,075,388 38,708,657 
Net income per share:
Basic$0.22 $0.00 
Diluted$0.22 $0.00 
For the three months ended March 31, 2023 and 2022, outstanding stock-based awards of 26 thousand and 123 thousand shares, respectively, were excluded from the computation of diluted net income per share because their effect would have been anti-dilutive.
v3.23.1
Revenues
3 Months Ended
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]  
Revenues
13. Revenues
Revenue Recognition
Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services. All revenue recognized in the condensed consolidated statements of operations is considered to be revenue from contracts with customers.
The following table presents the Company’s revenues disaggregated by geography, based on the destination to which the Company ships its products, for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
United States$171,879 $144,308 
International69,519 59,587 
Total$241,398 $203,895 
The following table presents the Company’s revenues disaggregated by product category for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Vascular$142,849 $122,809 
Neuro98,549 81,086 
Total$241,398 $203,895 
China Distribution and Technology Licensing Agreement
In December 2020, the Company entered into a distribution and technology licensing arrangement with its existing distribution partner in China. In addition to modifying the Company’s standard distribution agreement with its partner in China, the Company agreed to license the technology for certain products to its partner in China to permit the manufacturing and commercialization of such products in China as well as provide certain regulatory support. During the three months ended March 31, 2022, the Company further amended the distribution agreement and entered into an additional license agreement, pursuant to which the Company agreed to license the technology for additional products to its partner in China on substantially the same terms as the existing license agreement. Apart from the standard distribution agreement, the Company will receive
fixed payments upon transferring its distinct licensed technology and providing related regulatory support and royalty payments on the down-stream sale of the licensed products.
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 - The Company’s 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 March 31, 2023.
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. During the three months ended March 31, 2023, 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.
Contract liabilities, net
The following information summarizes the Company’s contract assets and liabilities, net as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023December 31, 2022
Contract liabilities, net$8,297 $8,783 
Contract liabilities 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 and is recognized as the associated performance obligations are satisfied. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied and the contractual billing terms in the arrangements. Revenue recognized during the three months ended March 31, 2023 relating to contract liabilities as of December 31, 2022 was $0.5 million.
v3.23.1
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation and Consolidation
The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022, and the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The condensed consolidated balance sheet data as of December 31, 2022 was derived from the audited financial statements as of that date.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company’s financial position as of March 31, 2023, the results of its operations for the three months ended March 31, 2023 and 2022, the changes in its comprehensive income (loss) and stockholders’ equity for the three months ended March 31, 2023 and 2022, and its cash flows for the three months ended March 31, 2023 and 2022. The results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future annual or interim period.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2023, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, except for the granting of restricted stock units with performance conditions to senior management during the three months ended March 31, 2023. Refer to Note “9. Stockholders’ Equity” for information on the Company’s accounting policy.
Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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, allowances for credit losses, the amount of variable consideration included in the transaction price, warranty reserve, valuation of inventories, useful lives of property and equipment, intangibles, operating and financing lease right-of-use (“ROU”) assets and liabilities, income taxes, contingent consideration and other contingencies, including the probability of achieving performance targets associated with equity awards with performance conditions, 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 products, and operates as one operating segment. The Company’s chief operating decision-maker, its Chief Executive Officer, reviews its consolidated operating results for the purpose of allocating resources and evaluating financial performance.
Marketable Investments Marketable InvestmentsThe Company’s marketable investments have been classified and accounted for as available-for-sale.
Performance Shares The fair value of these PSUs is based on the closing price of the Company's common stock on the date of grant. Stock-based compensation costs associated with these PSUs are recognized over the requisite service period of 4.25 years using graded vesting which results in more accelerated expense recognition compared to traditional time-based vesting over the same vesting period. Each reporting period, the Company monitors the probability of achieving the performance targets and may adjust periodic stock-based compensation expense based on its determination of the likelihood of achieving these performance targets and the estimated number of shares of common stock that will vest. The actual number of PSUs awarded is based on the actual performance during the performance period compared to the performance targets.
v3.23.1
Investments and Fair Value of Financial Instruments (Tables)
3 Months Ended
Mar. 31, 2023
Fair Value Disclosures [Abstract]  
Schedule of Marketable Investments The following table presents the Company’s marketable investments as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023
Securities with net gains or losses in accumulated other comprehensive income (loss)    
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 for
 Credit Loss
Fair Value
U.S. treasury$11,987 $— $(321)$— $11,666 
U.S. agency and government sponsored securities6,998 — (102)— 6,896 
U.S. states and municipalities13,355 — (358)— 12,997 
Corporate bonds74,710 — (1,860)— 72,850 
Total$107,050 $— $(2,641)$— $104,409 
December 31, 2022
Securities with net gains or losses in accumulated other comprehensive income (loss)
Amortized CostGross Unrealized GainsGross Unrealized LossesAllowance
 for
 Credit Loss
Fair Value
U.S. treasury$14,482 $— $(478)$— $14,004 
U.S. agency and government sponsored securities6,999 — (176)— 6,823 
U.S. states and municipalities23,460 — (501)— 22,959 
Corporate bonds76,731 — (2,345)— 74,386 
Total$121,672 $— $(3,500)$— $118,172 
Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value
The following tables present the gross unrealized losses and the fair value for those marketable investments that were in an unrealized loss position for less than twelve months or for twelve months or more as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. treasury$— $— $11,666 $(321)$11,666 $(321)
U.S. agency and government sponsored securities— — 6,896 (102)6,896 (102)
U.S. states and municipalities— — 12,997 (358)12,997 (358)
Corporate bonds10,812 (77)62,038 (1,783)72,850 (1,860)
Total$10,812 $(77)$93,597 $(2,564)$104,409 $(2,641)
December 31, 2022
Less than 12 months12 months or moreTotal
Fair ValueGross Unrealized LossesFair ValueGross Unrealized LossesFair ValueGross Unrealized Losses
U.S. treasury— — 14,004 (478)14,004 (478)
U.S. agency and government sponsored securities— — 6,823 (176)6,823 (176)
U.S. states and municipalities4,567 (68)13,772 (433)18,339 (501)
Corporate bonds15,327 (101)59,059 (2,244)74,386 (2,345)
Total$19,894 $(169)$93,658 $(3,331)$113,552 $(3,500)
Schedule of Contractual Maturities of Marketable Investments The following table presents the contractual maturities of the Company’s marketable investments as of March 31, 2023 (in thousands):
March 31, 2023
 Amortized CostFair Value
Due in less than one year$66,527 $65,133 
Due in one to five years40,523 39,276 
Total$107,050 $104,409 
Schedule of Fair Value of Assets and Liabilities
The following tables set forth the Company’s financial assets measured at fair value by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022 (in thousands):
 As of March 31, 2023
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$32,384 $— $— $32,384 
Marketable investments:
U.S. treasury11,666 — — 11,666 
U.S. agency and government sponsored securities— 6,896 — 6,896 
U.S. states and municipalities— 12,997 — 12,997 
Corporate bonds— 72,850 — 72,850 
Total$44,050 $92,743 $— $136,793 
 As of December 31, 2022
 Level 1Level 2Level 3Fair Value
Financial Assets
Cash equivalents:
Money market funds$21,521 $— $— $21,521 
Marketable investments:
U.S. treasury14,004 — — 14,004 
U.S. agency and government sponsored securities— 6,823 — 6,823 
U.S. states and municipalities— 22,959 — 22,959 
Corporate bonds— 74,386 — 74,386 
Total$35,525 $104,168 $— $139,693 
v3.23.1
Balance Sheet Components Balance Sheet Components (Tables)
3 Months Ended
Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Inventories
The following table shows the components of inventories as of March 31, 2023 and December 31, 2022 (in thousands):
 March 31, 2023December 31, 2022
Raw materials$90,980 $90,786 
Work in process32,761 26,793 
Finished goods220,301 216,427 
Inventories$344,042 $334,006 
Schedule of Accrued Liabilities The following table shows the components of accrued liabilities as of March 31, 2023 and December 31, 2022 (in thousands):
 March 31, 2023December 31, 2022
Payroll and employee-related cost$59,685 $60,480 
Accrued expenses11,147 10,902 
Deferred revenue9,114 9,158 
Other accrued liabilities25,923 25,760 
Total accrued liabilities$105,869 $106,300 
Schedule of Estimated Product Warranty Accrual
The following table shows the changes in the Company’s estimated product warranty accrual, included in accrued liabilities, for the three months ended March 31, 2023 and twelve months ended December 31, 2022, respectively (in thousands):
 March 31, 2023December 31, 2022
Balance at the beginning of the period$5,370 $4,310 
Accruals of warranties issued500 2,451 
Settlements of warranty claims(282)(1,391)
Balance at the end of the period$5,588 $5,370 
v3.23.1
Intangible Assets Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2023
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Schedule of Finite-lived Intangible Assets
The following tables present details of the Company’s acquired finite-lived intangible assets as of March 31, 2023 and December 31, 2022 (in thousands, except weighted-average amortization period):
As of March 31, 2023Weighted-Average Amortization PeriodGross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$83,289 $(12,495)$70,794 
Customer relationships15.0 years6,484 (2,485)3,999 
Trade secrets and processes20.0 years5,256 (1,380)3,876 
Total intangible assets 9.6 years$95,029 $(16,360)$78,669 
As of December 31, 2022Weighted-Average
Amortization Period
Gross Carrying AmountAccumulated AmortizationNet
Finite-lived intangible assets:
Developed technology8.8 years$83,289 $(10,113)$73,176 
Customer relationships15.0 years6,383 (2,340)4,043 
Trade secrets and processes20.0 years5,256 (1,314)3,942 
Other5.0 years1,646 (1,646)— 
Total intangible assets9.6 years$96,574 $(15,413)$81,161 
Finite-lived Intangible Assets Amortization Expense
The following table presents the amortization expense recorded related to the Company’s finite-lived intangible assets for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Cost of revenue$66 $66 
Sales, general and administrative2,486 1,982 
Total$2,552 $2,048 
v3.23.1
Goodwill (Tables)
3 Months Ended
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill The following table presents the changes in goodwill during the three months ended March 31, 2023 (in thousands):
Total Company
Balance as of December 31, 2022$166,046 
Foreign currency translation 115 
Balance as of March 31, 2023$166,161 
v3.23.1
Stockholder's Equity (Tables)
3 Months Ended
Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Schedule of Stock-based Compensation Expense The following table sets forth the stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Cost of revenue$1,191 $856 
Research and development2,278 1,386 
Sales, general and administrative9,297 6,651 
Total$12,766 $8,893 
v3.23.1
Accumulated Other Comprehensive Income (Loss) (Tables)
3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the accumulated balances during the period and includes information regarding the manner in which the reclassifications out of accumulated other comprehensive income (loss) into earnings affect the Company’s condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss) (in thousands):    
Three Months Ended March 31, 2023Three Months Ended March 31, 2022
 Marketable
Investments
 Currency Translation
Adjustments
 Total Marketable
Investments
 Currency Translation
Adjustments
 Total
Balance, beginning of the period$(3,500)$(4,624)$(8,124)$(595)$(2,035)$(2,630)
Other comprehensive income (loss) before reclassifications:
Unrealized gains (losses) — marketable investments860 — 860 (2,474)— (2,474)
Foreign currency translation gains (losses)— 403 403 — (868)(868)
Net of tax860 403 1,263 (2,474)(868)(3,342)
Net current-year other comprehensive income (loss)860 403 1,263 (2,474)(868)(3,342)
Balance, end of the period$(2,640)$(4,221)$(6,861)$(3,069)$(2,903)$(5,972)
v3.23.1
Net Income per Share (Tables)
3 Months Ended
Mar. 31, 2023
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 per share is as follows (in thousands, except share and per share amounts):
 Three Months Ended March 31,
 20232022
Numerator:
Net income$8,562 $79 
Denominator:
Weighted average shares used to compute net income attributable to common stockholders:
Basic38,186,342 37,646,122 
Potential dilutive stock-based options and awards889,046 1,062,535 
Diluted39,075,388 38,708,657 
Net income per share:
Basic$0.22 $0.00 
Diluted$0.22 $0.00 
v3.23.1
Revenues Revenues (Tables)
3 Months Ended
Mar. 31, 2023
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following table presents the Company’s revenues disaggregated by geography, based on the destination to which the Company ships its products, for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
United States$171,879 $144,308 
International69,519 59,587 
Total$241,398 $203,895 
The following table presents the Company’s revenues disaggregated by product category for the three months ended March 31, 2023 and 2022 (in thousands):
 Three Months Ended March 31,
 20232022
Vascular$142,849 $122,809 
Neuro98,549 81,086 
Total$241,398 $203,895 
Summary of Contract Assets and Liabilities
The following information summarizes the Company’s contract assets and liabilities, net as of March 31, 2023 and December 31, 2022 (in thousands):
March 31, 2023December 31, 2022
Contract liabilities, net$8,297 $8,783 
v3.23.1
Summary of Significant Accounting Policies - Additional Disclosures (Details)
3 Months Ended
Mar. 31, 2023
activity
segment
Accounting Policies [Abstract]  
Number of business activities | activity 1
Number of operating segments | segment 1
v3.23.1
Investments and Fair Value of Financial Instruments - Gains and Losses of Marketable Investments (Details) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 107,050 $ 121,672
Gross Unrealized Gains 0 0
Gross Unrealized Losses (2,641) (3,500)
Allowance for Credit Loss 0 0
Fair Value 104,409 118,172
U.S. treasury    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 11,987 14,482
Gross Unrealized Gains 0 0
Gross Unrealized Losses (321) (478)
Allowance for Credit Loss 0 0
Fair Value 11,666 14,004
U.S. agency and government sponsored securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 6,998 6,999
Gross Unrealized Gains 0 0
Gross Unrealized Losses (102) (176)
Allowance for Credit Loss 0 0
Fair Value 6,896 6,823
U.S. states and municipalities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 13,355 23,460
Gross Unrealized Gains 0 0
Gross Unrealized Losses (358) (501)
Allowance for Credit Loss 0 0
Fair Value 12,997 22,959
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 74,710 76,731
Gross Unrealized Gains 0 0
Gross Unrealized Losses (1,860) (2,345)
Allowance for Credit Loss 0 0
Fair Value $ 72,850 $ 74,386
v3.23.1
Investments and Fair Value of Financial Instruments - Narrative (Details) - USD ($)
3 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Fair Value Disclosures [Abstract]    
Gross Unrealized Losses $ (2,641,000) $ (3,500,000)
Allowance for credit loss $ 0  
v3.23.1
Investments and Fair Value of Financial Instruments - Marketable Securities in an Unrealized Loss Position (Details) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months: Fair Value $ 10,812 $ 19,894
Less than 12 months: Gross Unrealized Losses (77) (169)
12 Months of more: Fair Value 93,597 93,658
12 months or more: Gross Unrealized Losses (2,564) (3,331)
Total: Fair Value 104,409 113,552
Total: Gross Unrealized Losses (2,641) (3,500)
U.S. treasury    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months: Fair Value 0 0
Less than 12 months: Gross Unrealized Losses 0 0
12 Months of more: Fair Value 11,666 14,004
12 months or more: Gross Unrealized Losses (321) (478)
Total: Fair Value 11,666 14,004
Total: Gross Unrealized Losses (321) (478)
U.S. agency and government sponsored securities    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months: Fair Value 0 0
Less than 12 months: Gross Unrealized Losses 0 0
12 Months of more: Fair Value 6,896 6,823
12 months or more: Gross Unrealized Losses (102) (176)
Total: Fair Value 6,896 6,823
Total: Gross Unrealized Losses (102) (176)
U.S. states and municipalities    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months: Fair Value 0 4,567
Less than 12 months: Gross Unrealized Losses 0 (68)
12 Months of more: Fair Value 12,997 13,772
12 months or more: Gross Unrealized Losses (358) (433)
Total: Fair Value 12,997 18,339
Total: Gross Unrealized Losses (358) (501)
Corporate bonds    
Debt Securities, Available-for-sale [Line Items]    
Less than 12 months: Fair Value 10,812 15,327
Less than 12 months: Gross Unrealized Losses (77) (101)
12 Months of more: Fair Value 62,038 59,059
12 months or more: Gross Unrealized Losses (1,783) (2,244)
Total: Fair Value 72,850 74,386
Total: Gross Unrealized Losses $ (1,860) $ (2,345)
v3.23.1
Investments and Fair Value of Financial Instruments - Contractual Maturities of Marketable Investments (Details) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Amortized Cost    
Due in less than one year $ 66,527  
Due in one to five years 40,523  
Total 107,050 $ 121,672
Fair Value    
Due in less than one year 65,133  
Due in one to five years 39,276  
Total $ 104,409 $ 118,172
v3.23.1
Investments and Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value (Details) - Recurring - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Financial Assets    
Assets, Fair Value Disclosure $ 136,793 $ 139,693
U.S. treasury    
Financial Assets    
Marketable investments 11,666 14,004
U.S. agency and government sponsored securities    
Financial Assets    
Marketable investments 6,896 6,823
U.S. states and municipalities    
Financial Assets    
Marketable investments 12,997 22,959
Corporate bonds    
Financial Assets    
Marketable investments 72,850 74,386
Money market funds    
Financial Assets    
Cash equivalents 32,384 21,521
Level 1    
Financial Assets    
Assets, Fair Value Disclosure 44,050 35,525
Level 1 | U.S. treasury    
Financial Assets    
Marketable investments 11,666 14,004
Level 1 | U.S. agency and government sponsored securities    
Financial Assets    
Marketable investments 0 0
Level 1 | U.S. states and municipalities    
Financial Assets    
Marketable investments 0 0
Level 1 | Corporate bonds    
Financial Assets    
Marketable investments 0 0
Level 1 | Money market funds    
Financial Assets    
Cash equivalents 32,384 21,521
Level 2    
Financial Assets    
Assets, Fair Value Disclosure 92,743 104,168
Level 2 | U.S. treasury    
Financial Assets    
Marketable investments 0 0
Level 2 | U.S. agency and government sponsored securities    
Financial Assets    
Marketable investments 6,896 6,823
Level 2 | U.S. states and municipalities    
Financial Assets    
Marketable investments 12,997 22,959
Level 2 | Corporate bonds    
Financial Assets    
Marketable investments 72,850 74,386
Level 2 | Money market funds    
Financial Assets    
Cash equivalents 0 0
Level 3    
Financial Assets    
Assets, Fair Value Disclosure 0 0
Level 3 | U.S. treasury    
Financial Assets    
Marketable investments 0 0
Level 3 | U.S. agency and government sponsored securities    
Financial Assets    
Marketable investments 0 0
Level 3 | U.S. states and municipalities    
Financial Assets    
Marketable investments 0 0
Level 3 | Corporate bonds    
Financial Assets    
Marketable investments 0 0
Level 3 | Money market funds    
Financial Assets    
Cash equivalents $ 0 $ 0
v3.23.1
Balance Sheet Components - Inventories (Details) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Raw materials $ 90,980 $ 90,786
Work in process 32,761 26,793
Finished goods 220,301 216,427
Inventories $ 344,042 $ 334,006
v3.23.1
Balance Sheet Components - Accrued Liabilities (Details) - USD ($)
$ in Thousands
Mar. 31, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Payroll and employee-related cost $ 59,685 $ 60,480
Accrued expenses 11,147 10,902
Deferred revenue 9,114 9,158
Other accrued liabilities 25,923 25,760
Total accrued liabilities $ 105,869 $ 106,300
v3.23.1
Balance Sheet Components - Product Warranty (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Product Warranty, Increase (Decrease) [Roll Forward]    
Balance at the beginning of the period $ 5,370 $ 4,310
Accruals of warranties issued 500 2,451
Settlements of warranty claims (282) (1,391)
Balance at the end of the period $ 5,588 $ 5,370
v3.23.1
Intangible Assets - Intangible Assets (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period 9 years 7 months 6 days   9 years 7 months 6 days
Finite lived intangible assets: gross carrying amount $ 95,029   $ 96,574
Accumulated amortization (16,360)   (15,413)
Finite lived intangible assets: net 78,669   81,161
Intangible assets, net 78,669   $ 81,161
Total amortization of finite lived intangible assets $ 2,552 $ 2,048  
Developed technology      
Finite-Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period 8 years 9 months 18 days   8 years 9 months 18 days
Finite lived intangible assets: gross carrying amount $ 83,289   $ 83,289
Accumulated amortization (12,495)   (10,113)
Finite lived intangible assets: net $ 70,794   $ 73,176
Customer relationships      
Finite-Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period 15 years   15 years
Finite lived intangible assets: gross carrying amount $ 6,484   $ 6,383
Accumulated amortization (2,485)   (2,340)
Finite lived intangible assets: net $ 3,999   $ 4,043
Trade secrets and processes      
Finite-Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period 20 years   20 years
Finite lived intangible assets: gross carrying amount $ 5,256   $ 5,256
Accumulated amortization (1,380)   (1,314)
Finite lived intangible assets: net 3,876   $ 3,942
Other      
Finite-Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period     5 years
Finite lived intangible assets: gross carrying amount     $ 1,646
Accumulated amortization     (1,646)
Finite lived intangible assets: net     $ 0
Cost of revenue      
Finite-Lived Intangible Assets [Line Items]      
Total amortization of finite lived intangible assets 66 66  
Sales, general and administrative      
Finite-Lived Intangible Assets [Line Items]      
Total amortization of finite lived intangible assets $ 2,486 $ 1,982  
v3.23.1
Goodwill (Details)
3 Months Ended
Mar. 31, 2023
USD ($)
Goodwill [Roll Forward]  
Goodwill $ 166,046,000
Foreign currency translation and other adjustments 115,000
Goodwill 166,161,000
Goodwill impairment $ 0
v3.23.1
Debt (Details) - Revolving Credit Facility - USD ($)
3 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Apr. 24, 2020
Line of Credit Facility [Line Items]      
Borrowing capacity     $ 100,000,000
Line of credit, increase limit     $ 150,000,000
Borrowings outstanding $ 0 $ 0  
Bank Of America And Citibank | Line of Credit      
Line of Credit Facility [Line Items]      
Line of credit facility, unused capacity, commitment fee percentage 0.35%    
v3.23.1
Commitments and Contingencies - Royalty Obligations (Details) - USD ($)
$ in Millions
1 Months Ended 3 Months Ended
Jul. 31, 2019
Mar. 31, 2023
Mar. 31, 2022
Cost of revenue      
Other Commitments [Line Items]      
Royalty expense   $ 0.7 $ 0.6
Royalty Agreement, March 2005      
Other Commitments [Line Items]      
Extended term of agreement 10 years    
Increase in minimum annual royalty payments $ 0.2    
Minimum quarterly royalty payments   $ 0.3  
Royalty Agreement, April 2012      
Other Commitments [Line Items]      
Royalty as a percent of sales   5.00%  
Term of agreement   15 years  
v3.23.1
Stockholder's Equity - Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Stock-based compensation expense $ 12,766 $ 8,893  
Share-based compensation expense, capitalized in inventory 2,200   $ 2,200
NonPerformanceShares [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Unrecognized compensation cost related to unvested share-based compensation arrangements $ 76,400    
Unrecognized compensation cost, expected recognition period (in years) 3 years    
Performance Shares      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Award requisite service period 4 years 3 months    
Unrecognized compensation cost related to unvested share-based compensation arrangements $ 18,500    
Unrecognized compensation cost, expected recognition period (in years) 4 years    
Cost of revenue      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Stock-based compensation expense $ 1,191 856  
Research and development      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Stock-based compensation expense 2,278 1,386  
Sales, general and administrative      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Stock-based compensation expense $ 9,297 $ 6,651  
v3.23.1
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]    
Beginning balance $ 998,858 $ 953,927
Other comprehensive income (loss) before reclassifications:    
Total other comprehensive (loss) income, net of tax 1,263 (3,342)
Ending balance 1,024,469 959,302
Marketable Investments    
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]    
Beginning balance (3,500) (595)
Other comprehensive income (loss) before reclassifications:    
Other comprehensive income before reclassifications 860 (2,474)
Foreign currency translation gains (losses) 0 0
Net of tax 860 (2,474)
Total other comprehensive (loss) income, net of tax 860 (2,474)
Ending balance (2,640) (3,069)
Currency Translation Adjustments    
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]    
Beginning balance (4,624) (2,035)
Other comprehensive income (loss) before reclassifications:    
Other comprehensive income before reclassifications 0 0
Foreign currency translation gains (losses) 403 (868)
Net of tax 403 (868)
Total other comprehensive (loss) income, net of tax 403 (868)
Ending balance (4,221) (2,903)
Total    
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]    
Beginning balance (8,124) (2,630)
Other comprehensive income (loss) before reclassifications:    
Other comprehensive income before reclassifications 860 (2,474)
Foreign currency translation gains (losses) 403 (868)
Net of tax 1,263 (3,342)
Total other comprehensive (loss) income, net of tax 1,263 (3,342)
Ending balance $ (6,861) $ (5,972)
v3.23.1
Income Taxes Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Tax Disclosure [Abstract]    
Provision for (benefit from) income taxes $ 90 $ (5,183)
Effective tax rate (1.00%) 101.50%
v3.23.1
Net Income per Share - Basic and Diluted Earnings per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Numerator:    
Net income $ 8,562 $ 79
Weighted average shares used to compute net income attributable to common stockholders:    
Basic (in shares) 38,186,342 37,646,122
Potential dilutive stock-based options and awards (in shares) 889,046 1,062,535
Diluted (in shares) 39,075,388 38,708,657
Net income per share:    
Basic (in dollars per share) $ 0.22 $ 0.00
Diluted (in dollars per share) $ 0.22 $ 0.00
v3.23.1
Net Income per Share - Antidilutive Securities (Details) - shares
shares in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Earnings Per Share [Abstract]    
Antidilutive securities excluded from the computation of earnings per share (in shares) 26 123
v3.23.1
Revenues - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer $ 241,398 $ 203,895
United States    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer 171,879 144,308
International    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer 69,519 59,587
Neuro    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer 98,549 81,086
Vascular    
Disaggregation of Revenue [Line Items]    
Revenue from contract with customer $ 142,849 $ 122,809
v3.23.1
Revenues - Summary of Contract Assets and Liabilities (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2023
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]    
Contract liabilities, net $ 8,297 $ 8,783
Revenue recognized relating to contract liabilities $ 500