December 31, | |||||||
2018 | 2017 | ||||||
Salaries, commissions, incentive compensation and benefits | $ | 4,107 | $ | 3,608 | |||
Customer rebates and sales incentives | 8,527 | 8,988 | |||||
Freight | 7,286 | 3,853 | |||||
Other | 9,090 | 5,998 | |||||
Total accrued liabilities | $ | 29,010 | $ | 22,447 |
Cash consideration | $ | 25,000 | ||
Common stock issued | 32,319 | |||
Total | $ | 57,319 |
Intangible assets | $ | 36,200 | ||
Goodwill | 21,119 | |||
Net assets acquired | $ | 57,319 |
Preliminary fair value (in thousands) | Useful life (in years) | |||||
Developed technology | $ | 13,100 | 6 | |||
Customer relationship | 23,100 | 9 | ||||
Total identifiable intangible assets | $ | 36,200 |
Cash Purchase Price | Issuance of Common Stock | Total Consideration | % of Total Consideration | |||||||||||
Developed technology and goodwill | $ | 15,000 | $ | 19,219 | $ | 34,219 | 60 | % | ||||||
Customer relationship | 10,000 | 13,100 | 23,100 | 40 | % | |||||||||
Total consideration | $ | 25,000 | $ | 32,319 | $ | 57,319 | 100 | % |
Minimum Lease Payments | |||
Fiscal year due: | |||
2019 | $ | 3,738 | |
2020 | 3,532 | ||
2021 | 3,276 | ||
2022 | 1,810 | ||
2023 | 945 | ||
Thereafter | 1,252 | ||
Total operating lease minimum payments | 14,553 | ||
Sublease income to be recognized in the future under noncancelable subleases | (922 | ) | |
Net operating leases | $ | 13,631 |
Contract Liabilities | |||
Balance on January 1, 2018 | $ | 116,830 | |
Revenue recognized | (45,381 | ) | |
Increase due to billings | 38,581 | ||
Balance as of December 31, 2018 | $ | 110,030 |
Contract Assets | |||
Balance on January 1, 2018 | $ | 47,862 | |
Amount recognized | (14,964 | ) | |
Increase | 14,766 | ||
Balance as of December 31, 2018 | $ | 47,664 |
December 31, 2018 | |||
Receivables | $ | 78,938 | |
Short-term contract assets (Prepaid expenses and other assets) | 13,516 | ||
Long-term contract assets (Other assets) | 34,148 | ||
Short-term contract liabilities (Deferred revenues) | 33,119 | ||
Long-term contract liabilities (Deferred revenues) | 76,911 |
December 31, 2018 | |||
Primary geographical markets: | |||
United States | $ | 219,600 | |
International | 96,559 | ||
Total | $ | 316,159 | |
Timing of revenue recognition: | |||
Products delivered at a point in time | $ | 270,778 | |
Products and services delivered over time | 45,381 | ||
Total | $ | 316,159 |
• | Expected term—The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of stock option exercise activity, to determine the expected term for its option grants. |
• | Expected volatility—The expected volatility was calculated based on the Company’s historical stock prices, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. |
• | Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. |
• | Dividend yield—The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Weighted average grant date fair value | $ | 2.83 | $ | 0.76 | $ | 1.29 | |||||
Expected term (in years) | 4.0 | 4.4 | 4.5 | ||||||||
Expected volatility | 88.5 | % | 83.9 | % | 80.0 | % | |||||
Annual risk-free rate of return | 2.6 | % | 1.8 | % | 1.1 | % | |||||
Dividend yield | — | % | — | % | — | % |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cost of revenues | $ | 1,071 | $ | 1,072 | $ | 1,188 | |||||
Research and development | 2,940 | 2,573 | 3,879 | ||||||||
Sales and marketing | 3,074 | 1,157 | 2,144 | ||||||||
General and administrative | 4,347 | 1,925 | 3,115 | ||||||||
Total | $ | 11,432 | $ | 6,727 | $ | 10,326 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock options, RSUs, and PSUs | $ | 10,691 | $ | 5,559 | $ | 8,384 | |||||
Employee stock purchase plan | 741 | 1,168 | 1,942 | ||||||||
Total | $ | 11,432 | $ | 6,727 | $ | 10,326 |
Number of Shares Outstanding | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2015 | 8,170 | $ | 5.36 | |||||||||
Granted | 2,440 | 2.12 | ||||||||||
Exercised | (375 | ) | 0.39 | $ | 729 | |||||||
Canceled | (1,505 | ) | 6.01 | |||||||||
Outstanding at December 31, 2016 | 8,730 | 4.55 | ||||||||||
Granted | 4,500 | 1.22 | ||||||||||
Exercised | (425 | ) | 0.51 | 544 | ||||||||
Canceled | (4,379 | ) | 6.91 | |||||||||
Outstanding at December 31, 2017 | 8,426 | 1.77 | ||||||||||
Granted | 213 | 4.43 | ||||||||||
Exercised | (1,346 | ) | 1.75 | 5,096 | ||||||||
Canceled | (521 | ) | 2.94 | |||||||||
Outstanding at December 31, 2018 | 6,772 | 1.76 | 4.2 | $ | 21,547 | |||||||
Vested and expected to vest at December 31, 2018 | 6,772 | 1.76 | 4.2 | $ | 21,547 | |||||||
Exercisable at December 31, 2018 | 4,645 | 1.87 | 3.5 | $ | 14,670 |
(1) | The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of December 31, 2018 is based on the closing price of the Company’s stock fair value on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Prices | Number of Shares (in thousands) | Weighted- Average Remaining Life (in years) | Weighted- Average Exercise Price | Number of Shares (in thousands) | Weighted- Average Exercise Price | |||||||||||
$0.27 —– $0.79 | 1,551 | 2.9 | $ | 0.49 | 1,349 | $ | 0.45 | |||||||||
$0.79 —– $1.29 | 1,352 | 5.9 | 1.22 | 433 | 1.21 | |||||||||||
$1.31 —– $1.31 | 1,751 | 5.3 | 1.31 | 1,167 | 1.31 | |||||||||||
$1.37 —– $2.61 | 1,388 | 3.0 | 1.87 | 1,150 | 1.86 | |||||||||||
$2.76 —– $12.57 | 730 | 3.6 | 6.32 | 546 | 7.15 | |||||||||||
Total | 6,772 | 4.2 | 1.76 | 4,645 | 1.87 |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2015 | 1,313 | $ | 9.31 | |||||||||
Granted | 54 | 1.99 | ||||||||||
Vested | (464 | ) | 9.06 | $ | 875 | |||||||
Canceled | (297 | ) | 8.32 | |||||||||
Outstanding at December 31, 2016 | 606 | 9.33 | ||||||||||
Granted | 5,418 | 1.46 | ||||||||||
Vested | (885 | ) | 3.81 | 932 | ||||||||
Canceled | (1,634 | ) | 1.90 | |||||||||
Outstanding at December 31, 2017 | 3,505 | 2.03 | ||||||||||
Granted | 3,152 | 4.45 | ||||||||||
Vested | (1,399 | ) | 2.75 | 6,657 | ||||||||
Canceled | (906 | ) | 2.17 | |||||||||
Outstanding at December 31, 2018 | 4,352 | 3.52 | 1.4 | $ | 20,586 | |||||||
Expected to vest at December 31, 2018 | 4,351 | 3.52 | 1.4 | $ | 20,581 |
(1) | The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of December 31, 2018 is based on the closing price of the Company’s stock on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2017 | — | |||||||||||
Granted | 1,477 | $ | 4.65 | |||||||||
Vested | — | |||||||||||
Canceled | (147 | ) | ||||||||||
Outstanding at December 31, 2018 | 1,330 | 4.66 | 0.3 | $ | 6,291 | |||||||
Expected to vest at December 31, 2018 | 1,330 | 4.66 | 0.3 | $ | 6,291 |
(1) | The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of December 31, 2018 is based on the closing price of the Company’s stock on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Proceeds from common stock issued under ESPP | $ | 397 | $ | 313 | $ | 999 | |||||
Shares of common stock issued | 439 | 478 | 659 | ||||||||
Weighted-average price per share | $ | 0.90 | $ | 0.65 | $ | 1.52 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (11,627 | ) | $ | (45,192 | ) | $ | (67,462 | ) | ||
Denominator: | |||||||||||
Weighted average common shares outstanding | 99,619 | 82,939 | 50,519 | ||||||||
Net loss per share, basic and diluted | $ | (0.12 | ) | $ | (0.54 | ) | $ | (1.34 | ) |
Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Employee stock options | 7,710 | 8,433 | 8,981 | |||||
RSUs and PSUs | 5,273 | 3,029 | 906 | |||||
Warrants to purchase common stock | — | 1,083 | — | |||||
Convertible notes | 11,701 | — | — | |||||
Total | 24,684 | 12,545 | 9,887 |
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | Percent Used (Weighted-Average) | |||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | 16.25% | |||
Credit-adjusted risk-free rate | 18.75% |
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | Percent Used (Weighted-Average) | |||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | 17% | |||
Credit-adjusted risk-free rate | 17% | |||||
Third party option to purchase receivables at a discount | Discounted cash flows | Counter party credit-adjusted risk-free rate | 4% |
• | Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. |
• | Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
• | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Fair Value Hierarchy | Years Ended December 31, | ||||||||
2018 | 2017 | ||||||||
Warranty obligations | Level 3 | $ | 11,757 | $ | 9,791 | ||||
Third party option to purchase receivables at a discount | Level 3 | — | 700 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of period | $ | 9,791 | $ | 10,332 | $ | 6,182 | |||||
Accruals for warranties issued during period | 3,040 | 3,591 | 4,091 | ||||||||
Changes in estimates | 2,455 | (4,551 | ) | (1,616 | ) | ||||||
Settlements | (4,030 | ) | (1,956 | ) | (1,023 | ) | |||||
Increase due to accretion expense | 1,989 | 2,053 | 1,772 | ||||||||
Other | (1,488 | ) | 322 | 926 | |||||||
Balance at end of period | $ | 11,757 | $ | 9,791 | $ | 10,332 |
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | Percent Used (Weighted-Average) | |||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | 16.25% | |||
Credit-adjusted risk-free rate | 18.75% |
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | Percent Used (Weighted-Average) | |||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | 17% | |||
Credit-adjusted risk-free rate | 17% | |||||
Third party option to purchase receivables at a discount | Discounted cash flows | Counter party credit-adjusted risk-free rate | 4% |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of period | $ | 9,791 | $ | 10,332 | $ | 6,182 | |||||
Accruals for warranties issued during period | 3,040 | 3,591 | 4,091 | ||||||||
Changes in estimates | 2,455 | (4,551 | ) | (1,616 | ) | ||||||
Settlements | (4,030 | ) | (1,956 | ) | (1,023 | ) | |||||
Increase due to accretion expense | 1,989 | 2,053 | 1,772 | ||||||||
Other | (1,488 | ) | 322 | 926 | |||||||
Balance at end of period | $ | 11,757 | $ | 9,791 | $ | 10,332 |
• | Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. |
• | Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
• | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Cash Purchase Price | Issuance of Common Stock | Total Consideration | % of Total Consideration | |||||||||||
Developed technology and goodwill | $ | 15,000 | $ | 19,219 | $ | 34,219 | 60 | % | ||||||
Customer relationship | 10,000 | 13,100 | 23,100 | 40 | % | |||||||||
Total consideration | $ | 25,000 | $ | 32,319 | $ | 57,319 | 100 | % |
Preliminary fair value (in thousands) | Useful life (in years) | |||||
Developed technology | $ | 13,100 | 6 | |||
Customer relationship | 23,100 | 9 | ||||
Total identifiable intangible assets | $ | 36,200 |
December 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||
Gross | Additions | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||
Goodwill | $ | 3,664 | $ | 21,119 | $ | — | $ | 24,783 | $ | 3,664 | $ | — | $ | 3,664 | |||||||||||||
Intangible assets: | |||||||||||||||||||||||||||
Other indefinite-lived intangibles | $ | 286 | $ | — | $ | — | $ | 286 | $ | 286 | $ | — | $ | 286 | |||||||||||||
Intangible assets with finite live: | |||||||||||||||||||||||||||
Patents and licensed technology | 1,665 | — | (1,665 | ) | — | 1,665 | (1,436 | ) | 229 | ||||||||||||||||||
Developed technology | — | 13,100 | (909 | ) | 12,191 | — | — | — | |||||||||||||||||||
Customer relationships | — | 23,100 | (271 | ) | 22,829 | — | — | — | |||||||||||||||||||
Total purchased intangible assets | $ | 1,951 | $ | 36,200 | $ | (2,845 | ) | $ | 35,306 | $ | 1,951 | $ | (1,436 | ) | $ | 515 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
United States | $ | (14,322 | ) | $ | (47,882 | ) | $ | (67,631 | ) | ||
Foreign | 4,093 | 2,541 | 1,644 | ||||||||
Loss before income taxes | $ | (10,229 | ) | $ | (45,341 | ) | $ | (65,987 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 42 | 21 | 36 | ||||||||
Foreign | 1,233 | 1,224 | 785 | ||||||||
1,275 | 1,245 | 821 | |||||||||
Deferred: | |||||||||||
Federal | (35 | ) | (1,092 | ) | 594 | ||||||
State | (21 | ) | (21 | ) | 59 | ||||||
Foreign | 179 | (281 | ) | 1 | |||||||
123 | (1,394 | ) | 654 | ||||||||
Provision for (benefit from) income taxes | $ | 1,398 | $ | (149 | ) | $ | 1,475 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Income tax benefit at statutory federal rate | $ | (2,148 | ) | $ | (15,416 | ) | $ | (22,435 | ) | ||
State taxes, net of federal benefit | 17 | (64 | ) | 63 | |||||||
Change in valuation allowance | 8,198 | (20,571 | ) | 21,370 | |||||||
Foreign tax rate and tax law differential | 313 | (133 | ) | 27 | |||||||
Tax credits | (378 | ) | (382 | ) | (1,179 | ) | |||||
Stock-based compensation | (953 | ) | 761 | 1,775 | |||||||
Other permanent items | 235 | 479 | 776 | ||||||||
Other nondeductible/nontaxable items | (5,112 | ) | 930 | 920 | |||||||
Uncertain tax positions | 107 | 106 | 158 | ||||||||
Tax law changes | — | 34,141 | — | ||||||||
GILTI | 917 | — | — | ||||||||
Section 162(m) | 202 | — | — | ||||||||
Provision for (benefit from) income taxes | $ | 1,398 | $ | (149 | ) | $ | 1,475 |
December 31, | |||||||
2018 | 2017 | ||||||
Deferred tax assets: | |||||||
Allowances and reserves | $ | 10,022 | $ | 9,748 | |||
Net operating loss and tax credit carryforwards | 71,568 | 66,243 | |||||
Stock-based compensation | 3,662 | 2,528 | |||||
Deferred revenue | 19,562 | 7,210 | |||||
Fixed assets and intangibles | 3,836 | 4,369 | |||||
Sec. 163(j) interest carryforward | 2,064 | — | |||||
Other | 2,084 | 278 | |||||
Subtotal | 112,798 | 90,376 | |||||
Less valuation allowance | (98,631 | ) | (88,789 | ) | |||
Total deferred tax assets, net of valuation allowance | 14,167 | 1,587 | |||||
Deferred tax liabilities: | |||||||
Goodwill | (1,070 | ) | (992 | ) | |||
Unremitted foreign earnings | (16 | ) | (10 | ) | |||
Deferred cost of goods sold | (12,655 | ) | — | ||||
Total deferred tax liabilities | (13,741 | ) | (1,002 | ) | |||
Net deferred tax asset | $ | 426 | $ | 585 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Unrecognized tax benefits—at beginning of year | $ | 6,106 | $ | 6,016 | $ | 5,482 | |||||
Decreases in balances related to tax positions taken in prior years | — | (135 | ) | — | |||||||
Increases in balances related to tax positions taken in current year | 329 | 306 | 571 | ||||||||
Lapses in statutes of limitations | (110 | ) | (81 | ) | (37 | ) | |||||
Unrecognized tax benefits—at end of year | $ | 6,325 | $ | 6,106 | $ | 6,016 |
December 31, | |||||||
2018 | 2017 | ||||||
Raw materials | $ | 970 | $ | 2,341 | |||
Finished goods | 15,297 | 23,658 | |||||
Total inventory | $ | 16,267 | $ | 25,999 |
December 31, | |||||||
2018 | 2017 | ||||||
Convertible Notes due 2023 | $ | 65,000 | $ | — | |||
Less unamortized issuance costs | (2,361 | ) | — | ||||
Carrying amount of Convertible Notes due 2023 | 62,639 | — | |||||
Term loan | 41,524 | 50,000 | |||||
Less unamortized discount and issuance costs | (1,059 | ) | (2,111 | ) | |||
Carrying amount of term loan | 40,465 | 47,889 | |||||
Sale of long-term financing receivable recorded as debt | 6,679 | 2,562 | |||||
Less value of future purchase option | — | (700 | ) | ||||
Carrying amount of sale of long-term financing receivable recorded as debt | 6,679 | 1,862 | |||||
Total carrying amount of debt | 109,783 | 49,751 | |||||
Less current portion term loan | (25,417 | ) | (15,715 | ) | |||
Less current portion of long-term financing receivable recorded as debt | (2,738 | ) | (1,714 | ) | |||
Long-term debt | $ | 81,628 | $ | 32,322 |
Year Due | Principal Payments | |||
2019 | $ | 25,317 | ||
2020 | 16,207 | |||
Total | $ | 41,524 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Warranty obligations, beginning of period | $ | 29,816 | $ | 31,414 | $ | 30,547 | |||||
Accruals for warranties issued during period | 3,040 | 3,797 | 4,130 | ||||||||
Changes in estimates | 6,515 | (732 | ) | 2,562 | |||||||
Settlements | (8,579 | ) | (7,037 | ) | (8,523 | ) | |||||
Increase due to accretion expense | 1,989 | 2,053 | 1,772 | ||||||||
Other | (1,487 | ) | 321 | 926 | |||||||
Warranty obligations, end of period | 31,294 | 29,816 | 31,414 | ||||||||
Less current portion | (8,083 | ) | (7,427 | ) | (8,596 | ) | |||||
Noncurrent | $ | 23,211 | $ | 22,389 | $ | 22,818 |
Estimated Useful Life (Years) | December 31, | ||||||||
2018 | 2017 | ||||||||
Equipment and machinery | 3-10 | $ | 43,566 | $ | 41,148 | ||||
Furniture and fixtures | 5-10 | 2,239 | 2,188 | ||||||
Computer equipment | 3-5 | 2,958 | 2,627 | ||||||
Capitalized software costs | 3-5 | 12,114 | 11,749 | ||||||
Leasehold improvements | 3-10 | 8,482 | 8,537 | ||||||
Construction in process | 3,536 | 4,672 | |||||||
Total | 72,895 | 70,921 | |||||||
Less accumulated depreciation and amortization | (51,897 | ) | (44,438 | ) | |||||
Property and equipment, net | $ | 20,998 | $ | 26,483 |
Estimated Useful Life (Years) | December 31, | ||||||||
2018 | 2017 | ||||||||
Equipment and machinery | 3-10 | $ | 43,566 | $ | 41,148 | ||||
Furniture and fixtures | 5-10 | 2,239 | 2,188 | ||||||
Computer equipment | 3-5 | 2,958 | 2,627 | ||||||
Capitalized software costs | 3-5 | 12,114 | 11,749 | ||||||
Leasehold improvements | 3-10 | 8,482 | 8,537 | ||||||
Construction in process | 3,536 | 4,672 | |||||||
Total | 72,895 | 70,921 | |||||||
Less accumulated depreciation and amortization | (51,897 | ) | (44,438 | ) | |||||
Property and equipment, net | $ | 20,998 | $ | 26,483 |
Year Ended December 31, 2018* | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
Net revenues | $ | 69,972 | $ | 75,896 | $ | 78,002 | $ | 92,289 | |||||||
Cost of revenues | 51,657 | 53,195 | 52,738 | 64,124 | |||||||||||
Gross profit | 18,315 | 22,701 | 25,264 | 28,165 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 7,620 | 9,462 | 8,165 | 7,340 | |||||||||||
Sales and marketing | 6,227 | 6,828 | 7,375 | 6,617 | |||||||||||
General and administrative | 6,943 | 6,969 | 7,510 | 7,664 | |||||||||||
Restructuring charges | — | — | 2,588 | 1,541 | |||||||||||
Total operating expenses | 20,790 | 23,259 | 25,638 | 23,162 | |||||||||||
Income (loss) from operations | (2,475 | ) | (558 | ) | (374 | ) | 5,003 | ||||||||
Other expense, net | (2,418 | ) | (2,841 | ) | (2,848 | ) | (3,718 | ) | |||||||
Income (loss) before income taxes | (4,893 | ) | (3,399 | ) | (3,222 | ) | 1,285 | ||||||||
Provision for income taxes | (235 | ) | (339 | ) | (248 | ) | (576 | ) | |||||||
Net income (loss) | $ | (5,128 | ) | $ | (3,738 | ) | $ | (3,470 | ) | $ | 709 | ||||
Net income (loss) per share, basic | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | 0.01 | ||||
Net income (loss) per share, diluted | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | 0.01 |
* | Amounts include the impact of the adoption of Accounting Standards Codification (“ASC”) No. 606, “Revenue Recognition,” on January 1, 2018. See Note 3, “Revenue Recognition” (“ASC 606” or “Topic 606”) of the notes to consolidated financial statements included in Item 8 of this Form 10-K. |
Year Ended December 31, 2017 | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
Net revenues | $ | 54,751 | $ | 74,704 | $ | 77,038 | $ | 79,674 | |||||||
Cost of revenues | 47,703 | 61,157 | 60,577 | 60,685 | |||||||||||
Gross profit | 7,048 | 13,547 | 16,461 | 18,989 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 9,605 | 7,947 | 7,397 | 8,208 | |||||||||||
Sales and marketing | 6,458 | 6,274 | 5,453 | 4,940 | |||||||||||
General and administrative | 5,833 | 4,964 | 5,441 | 5,983 | |||||||||||
Restructuring charges | 7,247 | 3,609 | 4,071 | 1,991 | |||||||||||
Total operating expenses | 29,143 | 22,794 | 22,362 | 21,122 | |||||||||||
Loss from operations | (22,095 | ) | (9,247 | ) | (5,901 | ) | (2,133 | ) | |||||||
Other expense, net | (1,079 | ) | (1,992 | ) | (1,137 | ) | (1,755 | ) | |||||||
Loss before income taxes | (23,174 | ) | (11,239 | ) | (7,038 | ) | (3,888 | ) | |||||||
Income tax benefit (provision) | (131 | ) | (854 | ) | 184 | 948 | |||||||||
Net loss | $ | (23,305 | ) | $ | (12,093 | ) | $ | (6,854 | ) | $ | (2,940 | ) | |||
Net loss per share, basic and diluted | $ | (0.30 | ) | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.03 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Redundancy and employee severance and benefit arrangements | $ | 2,228 | $ | 2,827 | $ | 1,263 | |||||
Asset impairments | 1,601 | 522 | 2,575 | ||||||||
Consultants engaged in restructuring activities | — | 12,100 | — | ||||||||
Lease loss reserves | 300 | 1,468 | 579 | ||||||||
Gain on business divestiture | — | — | (640 | ) | |||||||
Total restructuring | $ | 4,129 | $ | 16,917 | $ | 3,777 |
Year Ended December 31, 2018 | |||
Redundancy and employee severance and benefit arrangements | $ | 2,228 | |
Asset impairments | 1,636 | ||
Lease loss reserves | 340 | ||
Total restructuring | $ | 4,204 |
Redundancy and Employee Severance and Benefits | Lease Loss Reserves and Contractual Obligations | Total | |||||||||
Charges | $ | 2,228 | $ | 340 | $ | 2,568 | |||||
Cash payments | (1,336 | ) | (61 | ) | (1,397 | ) | |||||
Non-cash settlement and other | 12 | 9 | 21 | ||||||||
Balance as of December 31, 2018 | $ | 904 | $ | 288 | $ | 1,192 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Employee severance and benefit arrangements | $ | — | $ | 2,827 | $ | 1,263 | |||||
Asset impairments | (35 | ) | 522 | 2,575 | |||||||
Consultants engaged in restructuring activities | — | 12,100 | — | ||||||||
Lease loss reserves and contract termination costs | (40 | ) | 1,468 | 579 | |||||||
Gain on business divestiture | — | — | (640 | ) | |||||||
Total restructuring | $ | (75 | ) | $ | 16,917 | $ | 3,777 |
Consideration | $ | 1,375 | |
Identifiable assets | (979 | ) | |
Contingent consideration | 244 | ||
Gain on business divestiture | $ | 640 |
Employee Severance and Benefits | Lease Loss Reserves and Contractual Obligations | Total | |||||||||
Balance as of December 31, 2016 | $ | 198 | $ | 484 | $ | 682 | |||||
Charges | 2,827 | 13,568 | 16,395 | ||||||||
Cash payments | (2,796 | ) | (12,958 | ) | (15,754 | ) | |||||
Balance as of December 31, 2017 | 229 | 1,094 | 1,323 | ||||||||
Charges and adjustments | — | (40 | ) | (40 | ) | ||||||
Cash payments and receipts, net | (229 | ) | 537 | 308 | |||||||
Balance as of December 31, 2018 | $ | — | $ | 1,591 | $ | 1,591 |
• | Products Delivered at a Point in Time. The Company sells its products to customers in accordance with the terms of the related customer contracts. The Company generates revenues from sales of its solutions, which include microinverter units and related accessories, an Envoy communications gateway and Enlighten service, communications accessories and AC Battery™ storage solutions to distributors, large installers, OEMs and strategic partners. Microinverter units, microinverter accessories, and AC Battery storage solutions are delivered to customers at a point in time, and the Company recognizes revenue for these products when the Company transfers control of the product to the customer, which is generally upon shipment. |
• | Products Delivered Over Time. The sale of an Envoy communications gateway includes the Company’s Enlighten cloud-based monitoring service. The full consideration for these products represents a single performance obligation and is deferred at the sale date and recognized over the estimated service period. The Company also sells certain communication accessories that are delivered over time. The revenue from these products is recognized over the related service period. |
• | Products Delivered at a Point in Time. Cost of revenue from these products is recognized when the Company transfers control of the product to the customer, which is generally upon shipment. |
• | Products Delivered Over Time. Cost of revenue from these products is recognized over the related service period. |
December 31, 2018 | |||
Primary geographical markets: | |||
United States | $ | 219,600 | |
International | 96,559 | ||
Total | $ | 316,159 | |
Timing of revenue recognition: | |||
Products delivered at a point in time | $ | 270,778 | |
Products and services delivered over time | 45,381 | ||
Total | $ | 316,159 |
December 31, 2018 | |||
Receivables | $ | 78,938 | |
Short-term contract assets (Prepaid expenses and other assets) | 13,516 | ||
Long-term contract assets (Other assets) | 34,148 | ||
Short-term contract liabilities (Deferred revenues) | 33,119 | ||
Long-term contract liabilities (Deferred revenues) | 76,911 |
Contract Liabilities | |||
Balance on January 1, 2018 | $ | 116,830 | |
Revenue recognized | (45,381 | ) | |
Increase due to billings | 38,581 | ||
Balance as of December 31, 2018 | $ | 110,030 |
Contract Assets | |||
Balance on January 1, 2018 | $ | 47,862 | |
Amount recognized | (14,964 | ) | |
Increase | 14,766 | ||
Balance as of December 31, 2018 | $ | 47,664 |
Years | December 31, 2018 | |||
2019 | $ | 33,119 | ||
2020 | 26,303 | |||
2021 | 20,124 | |||
2022 | 15,084 | |||
2023 | 9,282 | |||
Thereafter | 6,118 | |||
Total | $ | 110,030 |
Year Ended December 31, 2018 | |||||||||||
As Reported | Adjustments | Without Adoption of Topic 606 | |||||||||
Net revenues | $ | 316,159 | $ | (2,251 | ) | $ | 313,908 | ||||
Cost of revenues | 221,714 | (13 | ) | 221,701 | |||||||
Gross profit | 94,445 | (2,238 | ) | 92,207 | |||||||
Operating expenses: | |||||||||||
Research and development | 32,587 | — | 32,587 | ||||||||
Sales and marketing | 27,047 | (117 | ) | 26,930 | |||||||
General and administrative | 29,086 | — | 29,086 | ||||||||
Restructuring charges | 4,129 | — | 4,129 | ||||||||
Total operating expenses | 92,849 | (117 | ) | 92,732 | |||||||
Income (loss) from operations | 1,596 | (2,121 | ) | (525 | ) | ||||||
Other expense, net | |||||||||||
Interest expense | (9,635 | ) | — | (9,635 | ) | ||||||
Other expense | (2,190 | ) | — | (2,190 | ) | ||||||
Total other expense, net | (11,825 | ) | — | (11,825 | ) | ||||||
Loss before income taxes | (10,229 | ) | (2,121 | ) | (12,350 | ) | |||||
Income tax provision | (1,398 | ) | — | (1,398 | ) | ||||||
Net loss | $ | (11,627 | ) | $ | (2,121 | ) | $ | (13,748 | ) | ||
Net loss per share: | |||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.02 | ) | $ | (0.14 | ) | ||
Shares used in per share calculation: | |||||||||||
Basic and diluted | 99,619 | — | 99,619 |
December 31, 2018 | |||||||||||
As Reported | Adjustments | Without Adoption of Topic 606 | |||||||||
Prepaid expenses and other | $ | 20,860 | $ | (10,788 | ) | $ | 10,072 | ||||
Other assets | 36,548 | (28,766 | ) | 7,782 | |||||||
Accrued liabilities | 29,010 | (4,257 | ) | 24,753 | |||||||
Deferred revenues, current | 33,119 | (20,800 | ) | 12,319 | |||||||
Deferred revenues, noncurrent | 76,911 | (50,044 | ) | 26,867 | |||||||
Accumulated deficit | (346,302 | ) | 35,547 | (310,755 | ) |
Years | December 31, 2018 | |||
2019 | $ | 33,119 | ||
2020 | 26,303 | |||
2021 | 20,124 | |||
2022 | 15,084 | |||
2023 | 9,282 | |||
Thereafter | 6,118 | |||
Total | $ | 110,030 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance, at beginning of year | $ | 2,378 | $ | 2,921 | $ | 1,808 | |||||
Net charges to expenses | 711 | 476 | 3,097 | ||||||||
Write-offs, net of recoveries | (951 | ) | (1,019 | ) | (1,984 | ) | |||||
Balance, at end of year | $ | 2,138 | $ | 2,378 | $ | 2,921 |
December 31, | |||||||
2018 | 2017 | ||||||
Salaries, commissions, incentive compensation and benefits | $ | 4,107 | $ | 3,608 | |||
Customer rebates and sales incentives | 8,527 | 8,988 | |||||
Freight | 7,286 | 3,853 | |||||
Other | 9,090 | 5,998 | |||||
Total accrued liabilities | $ | 29,010 | $ | 22,447 |
Years Ended December 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Employee stock options | 7,710 | 8,433 | 8,981 | |||||
RSUs and PSUs | 5,273 | 3,029 | 906 | |||||
Warrants to purchase common stock | — | 1,083 | — | |||||
Convertible notes | 11,701 | — | — | |||||
Total | 24,684 | 12,545 | 9,887 |
Cash Purchase Price | Issuance of Common Stock | Total Consideration | % of Total Consideration | |||||||||||
Developed technology and goodwill | $ | 15,000 | $ | 19,219 | $ | 34,219 | 60 | % | ||||||
Customer relationship | 10,000 | 13,100 | 23,100 | 40 | % | |||||||||
Total consideration | $ | 25,000 | $ | 32,319 | $ | 57,319 | 100 | % |
Cash consideration | $ | 25,000 | ||
Common stock issued | 32,319 | |||
Total | $ | 57,319 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock options, RSUs, and PSUs | $ | 10,691 | $ | 5,559 | $ | 8,384 | |||||
Employee stock purchase plan | 741 | 1,168 | 1,942 | ||||||||
Total | $ | 11,432 | $ | 6,727 | $ | 10,326 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Current: | |||||||||||
Federal | $ | — | $ | — | $ | — | |||||
State | 42 | 21 | 36 | ||||||||
Foreign | 1,233 | 1,224 | 785 | ||||||||
1,275 | 1,245 | 821 | |||||||||
Deferred: | |||||||||||
Federal | (35 | ) | (1,092 | ) | 594 | ||||||
State | (21 | ) | (21 | ) | 59 | ||||||
Foreign | 179 | (281 | ) | 1 | |||||||
123 | (1,394 | ) | 654 | ||||||||
Provision for (benefit from) income taxes | $ | 1,398 | $ | (149 | ) | $ | 1,475 |
December 31, | |||||||
2018 | 2017 | ||||||
Convertible Notes due 2023 | $ | 65,000 | $ | — | |||
Less unamortized issuance costs | (2,361 | ) | — | ||||
Carrying amount of Convertible Notes due 2023 | 62,639 | — | |||||
Term loan | 41,524 | 50,000 | |||||
Less unamortized discount and issuance costs | (1,059 | ) | (2,111 | ) | |||
Carrying amount of term loan | 40,465 | 47,889 | |||||
Sale of long-term financing receivable recorded as debt | 6,679 | 2,562 | |||||
Less value of future purchase option | — | (700 | ) | ||||
Carrying amount of sale of long-term financing receivable recorded as debt | 6,679 | 1,862 | |||||
Total carrying amount of debt | 109,783 | 49,751 | |||||
Less current portion term loan | (25,417 | ) | (15,715 | ) | |||
Less current portion of long-term financing receivable recorded as debt | (2,738 | ) | (1,714 | ) | |||
Long-term debt | $ | 81,628 | $ | 32,322 |
December 31, | |||||||
2018 | 2017 | ||||||
Deferred tax assets: | |||||||
Allowances and reserves | $ | 10,022 | $ | 9,748 | |||
Net operating loss and tax credit carryforwards | 71,568 | 66,243 | |||||
Stock-based compensation | 3,662 | 2,528 | |||||
Deferred revenue | 19,562 | 7,210 | |||||
Fixed assets and intangibles | 3,836 | 4,369 | |||||
Sec. 163(j) interest carryforward | 2,064 | — | |||||
Other | 2,084 | 278 | |||||
Subtotal | 112,798 | 90,376 | |||||
Less valuation allowance | (98,631 | ) | (88,789 | ) | |||
Total deferred tax assets, net of valuation allowance | 14,167 | 1,587 | |||||
Deferred tax liabilities: | |||||||
Goodwill | (1,070 | ) | (992 | ) | |||
Unremitted foreign earnings | (16 | ) | (10 | ) | |||
Deferred cost of goods sold | (12,655 | ) | — | ||||
Total deferred tax liabilities | (13,741 | ) | (1,002 | ) | |||
Net deferred tax asset | $ | 426 | $ | 585 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Numerator: | |||||||||||
Net loss | $ | (11,627 | ) | $ | (45,192 | ) | $ | (67,462 | ) | ||
Denominator: | |||||||||||
Weighted average common shares outstanding | 99,619 | 82,939 | 50,519 | ||||||||
Net loss per share, basic and diluted | $ | (0.12 | ) | $ | (0.54 | ) | $ | (1.34 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Income tax benefit at statutory federal rate | $ | (2,148 | ) | $ | (15,416 | ) | $ | (22,435 | ) | ||
State taxes, net of federal benefit | 17 | (64 | ) | 63 | |||||||
Change in valuation allowance | 8,198 | (20,571 | ) | 21,370 | |||||||
Foreign tax rate and tax law differential | 313 | (133 | ) | 27 | |||||||
Tax credits | (378 | ) | (382 | ) | (1,179 | ) | |||||
Stock-based compensation | (953 | ) | 761 | 1,775 | |||||||
Other permanent items | 235 | 479 | 776 | ||||||||
Other nondeductible/nontaxable items | (5,112 | ) | 930 | 920 | |||||||
Uncertain tax positions | 107 | 106 | 158 | ||||||||
Tax law changes | — | 34,141 | — | ||||||||
GILTI | 917 | — | — | ||||||||
Section 162(m) | 202 | — | — | ||||||||
Provision for (benefit from) income taxes | $ | 1,398 | $ | (149 | ) | $ | 1,475 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Cost of revenues | $ | 1,071 | $ | 1,072 | $ | 1,188 | |||||
Research and development | 2,940 | 2,573 | 3,879 | ||||||||
Sales and marketing | 3,074 | 1,157 | 2,144 | ||||||||
General and administrative | 4,347 | 1,925 | 3,115 | ||||||||
Total | $ | 11,432 | $ | 6,727 | $ | 10,326 |
Fair Value Hierarchy | Years Ended December 31, | ||||||||
2018 | 2017 | ||||||||
Warranty obligations | Level 3 | $ | 11,757 | $ | 9,791 | ||||
Third party option to purchase receivables at a discount | Level 3 | — | 700 |
Minimum Lease Payments | |||
Fiscal year due: | |||
2019 | $ | 3,738 | |
2020 | 3,532 | ||
2021 | 3,276 | ||
2022 | 1,810 | ||
2023 | 945 | ||
Thereafter | 1,252 | ||
Total operating lease minimum payments | 14,553 | ||
Sublease income to be recognized in the future under noncancelable subleases | (922 | ) | |
Net operating leases | $ | 13,631 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
United States | $ | (14,322 | ) | $ | (47,882 | ) | $ | (67,631 | ) | ||
Foreign | 4,093 | 2,541 | 1,644 | ||||||||
Loss before income taxes | $ | (10,229 | ) | $ | (45,341 | ) | $ | (65,987 | ) |
December 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||
Gross | Additions | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||
Goodwill | $ | 3,664 | $ | 21,119 | $ | — | $ | 24,783 | $ | 3,664 | $ | — | $ | 3,664 | |||||||||||||
Intangible assets: | |||||||||||||||||||||||||||
Other indefinite-lived intangibles | $ | 286 | $ | — | $ | — | $ | 286 | $ | 286 | $ | — | $ | 286 | |||||||||||||
Intangible assets with finite live: | |||||||||||||||||||||||||||
Patents and licensed technology | 1,665 | — | (1,665 | ) | — | 1,665 | (1,436 | ) | 229 | ||||||||||||||||||
Developed technology | — | 13,100 | (909 | ) | 12,191 | — | — | — | |||||||||||||||||||
Customer relationships | — | 23,100 | (271 | ) | 22,829 | — | — | — | |||||||||||||||||||
Total purchased intangible assets | $ | 1,951 | $ | 36,200 | $ | (2,845 | ) | $ | 35,306 | $ | 1,951 | $ | (1,436 | ) | $ | 515 |
December 31, | |||||||
2018 | 2017 | ||||||
Raw materials | $ | 970 | $ | 2,341 | |||
Finished goods | 15,297 | 23,658 | |||||
Total inventory | $ | 16,267 | $ | 25,999 |
Year Due | Principal Payments | |||
2019 | $ | 25,317 | ||
2020 | 16,207 | |||
Total | $ | 41,524 |
Year Ended December 31, 2018 | |||||||||||
As Reported | Adjustments | Without Adoption of Topic 606 | |||||||||
Net revenues | $ | 316,159 | $ | (2,251 | ) | $ | 313,908 | ||||
Cost of revenues | 221,714 | (13 | ) | 221,701 | |||||||
Gross profit | 94,445 | (2,238 | ) | 92,207 | |||||||
Operating expenses: | |||||||||||
Research and development | 32,587 | — | 32,587 | ||||||||
Sales and marketing | 27,047 | (117 | ) | 26,930 | |||||||
General and administrative | 29,086 | — | 29,086 | ||||||||
Restructuring charges | 4,129 | — | 4,129 | ||||||||
Total operating expenses | 92,849 | (117 | ) | 92,732 | |||||||
Income (loss) from operations | 1,596 | (2,121 | ) | (525 | ) | ||||||
Other expense, net | |||||||||||
Interest expense | (9,635 | ) | — | (9,635 | ) | ||||||
Other expense | (2,190 | ) | — | (2,190 | ) | ||||||
Total other expense, net | (11,825 | ) | — | (11,825 | ) | ||||||
Loss before income taxes | (10,229 | ) | (2,121 | ) | (12,350 | ) | |||||
Income tax provision | (1,398 | ) | — | (1,398 | ) | ||||||
Net loss | $ | (11,627 | ) | $ | (2,121 | ) | $ | (13,748 | ) | ||
Net loss per share: | |||||||||||
Basic and diluted | $ | (0.12 | ) | $ | (0.02 | ) | $ | (0.14 | ) | ||
Shares used in per share calculation: | |||||||||||
Basic and diluted | 99,619 | — | 99,619 |
December 31, 2018 | |||||||||||
As Reported | Adjustments | Without Adoption of Topic 606 | |||||||||
Prepaid expenses and other | $ | 20,860 | $ | (10,788 | ) | $ | 10,072 | ||||
Other assets | 36,548 | (28,766 | ) | 7,782 | |||||||
Accrued liabilities | 29,010 | (4,257 | ) | 24,753 | |||||||
Deferred revenues, current | 33,119 | (20,800 | ) | 12,319 | |||||||
Deferred revenues, noncurrent | 76,911 | (50,044 | ) | 26,867 | |||||||
Accumulated deficit | (346,302 | ) | 35,547 | (310,755 | ) |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Warranty obligations, beginning of period | $ | 29,816 | $ | 31,414 | $ | 30,547 | |||||
Accruals for warranties issued during period | 3,040 | 3,797 | 4,130 | ||||||||
Changes in estimates | 6,515 | (732 | ) | 2,562 | |||||||
Settlements | (8,579 | ) | (7,037 | ) | (8,523 | ) | |||||
Increase due to accretion expense | 1,989 | 2,053 | 1,772 | ||||||||
Other | (1,487 | ) | 321 | 926 | |||||||
Warranty obligations, end of period | 31,294 | 29,816 | 31,414 | ||||||||
Less current portion | (8,083 | ) | (7,427 | ) | (8,596 | ) | |||||
Noncurrent | $ | 23,211 | $ | 22,389 | $ | 22,818 |
Year Ended December 31, 2018* | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
Net revenues | $ | 69,972 | $ | 75,896 | $ | 78,002 | $ | 92,289 | |||||||
Cost of revenues | 51,657 | 53,195 | 52,738 | 64,124 | |||||||||||
Gross profit | 18,315 | 22,701 | 25,264 | 28,165 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 7,620 | 9,462 | 8,165 | 7,340 | |||||||||||
Sales and marketing | 6,227 | 6,828 | 7,375 | 6,617 | |||||||||||
General and administrative | 6,943 | 6,969 | 7,510 | 7,664 | |||||||||||
Restructuring charges | — | — | 2,588 | 1,541 | |||||||||||
Total operating expenses | 20,790 | 23,259 | 25,638 | 23,162 | |||||||||||
Income (loss) from operations | (2,475 | ) | (558 | ) | (374 | ) | 5,003 | ||||||||
Other expense, net | (2,418 | ) | (2,841 | ) | (2,848 | ) | (3,718 | ) | |||||||
Income (loss) before income taxes | (4,893 | ) | (3,399 | ) | (3,222 | ) | 1,285 | ||||||||
Provision for income taxes | (235 | ) | (339 | ) | (248 | ) | (576 | ) | |||||||
Net income (loss) | $ | (5,128 | ) | $ | (3,738 | ) | $ | (3,470 | ) | $ | 709 | ||||
Net income (loss) per share, basic | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | 0.01 | ||||
Net income (loss) per share, diluted | $ | (0.06 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | 0.01 |
* | Amounts include the impact of the adoption of Accounting Standards Codification (“ASC”) No. 606, “Revenue Recognition,” on January 1, 2018. See Note 3, “Revenue Recognition” (“ASC 606” or “Topic 606”) of the notes to consolidated financial statements included in Item 8 of this Form 10-K. |
Year Ended December 31, 2017 | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
Net revenues | $ | 54,751 | $ | 74,704 | $ | 77,038 | $ | 79,674 | |||||||
Cost of revenues | 47,703 | 61,157 | 60,577 | 60,685 | |||||||||||
Gross profit | 7,048 | 13,547 | 16,461 | 18,989 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 9,605 | 7,947 | 7,397 | 8,208 | |||||||||||
Sales and marketing | 6,458 | 6,274 | 5,453 | 4,940 | |||||||||||
General and administrative | 5,833 | 4,964 | 5,441 | 5,983 | |||||||||||
Restructuring charges | 7,247 | 3,609 | 4,071 | 1,991 | |||||||||||
Total operating expenses | 29,143 | 22,794 | 22,362 | 21,122 | |||||||||||
Loss from operations | (22,095 | ) | (9,247 | ) | (5,901 | ) | (2,133 | ) | |||||||
Other expense, net | (1,079 | ) | (1,992 | ) | (1,137 | ) | (1,755 | ) | |||||||
Loss before income taxes | (23,174 | ) | (11,239 | ) | (7,038 | ) | (3,888 | ) | |||||||
Income tax benefit (provision) | (131 | ) | (854 | ) | 184 | 948 | |||||||||
Net loss | $ | (23,305 | ) | $ | (12,093 | ) | $ | (6,854 | ) | $ | (2,940 | ) | |||
Net loss per share, basic and diluted | $ | (0.30 | ) | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.03 | ) |
Intangible assets | $ | 36,200 | ||
Goodwill | 21,119 | |||
Net assets acquired | $ | 57,319 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Redundancy and employee severance and benefit arrangements | $ | 2,228 | $ | 2,827 | $ | 1,263 | |||||
Asset impairments | 1,601 | 522 | 2,575 | ||||||||
Consultants engaged in restructuring activities | — | 12,100 | — | ||||||||
Lease loss reserves | 300 | 1,468 | 579 | ||||||||
Gain on business divestiture | — | — | (640 | ) | |||||||
Total restructuring | $ | 4,129 | $ | 16,917 | $ | 3,777 |
Year Ended December 31, 2018 | |||
Redundancy and employee severance and benefit arrangements | $ | 2,228 | |
Asset impairments | 1,636 | ||
Lease loss reserves | 340 | ||
Total restructuring | $ | 4,204 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Employee severance and benefit arrangements | $ | — | $ | 2,827 | $ | 1,263 | |||||
Asset impairments | (35 | ) | 522 | 2,575 | |||||||
Consultants engaged in restructuring activities | — | 12,100 | — | ||||||||
Lease loss reserves and contract termination costs | (40 | ) | 1,468 | 579 | |||||||
Gain on business divestiture | — | — | (640 | ) | |||||||
Total restructuring | $ | (75 | ) | $ | 16,917 | $ | 3,777 |
Consideration | $ | 1,375 | |
Identifiable assets | (979 | ) | |
Contingent consideration | 244 | ||
Gain on business divestiture | $ | 640 |
Redundancy and Employee Severance and Benefits | Lease Loss Reserves and Contractual Obligations | Total | |||||||||
Charges | $ | 2,228 | $ | 340 | $ | 2,568 | |||||
Cash payments | (1,336 | ) | (61 | ) | (1,397 | ) | |||||
Non-cash settlement and other | 12 | 9 | 21 | ||||||||
Balance as of December 31, 2018 | $ | 904 | $ | 288 | $ | 1,192 |
Employee Severance and Benefits | Lease Loss Reserves and Contractual Obligations | Total | |||||||||
Balance as of December 31, 2016 | $ | 198 | $ | 484 | $ | 682 | |||||
Charges | 2,827 | 13,568 | 16,395 | ||||||||
Cash payments | (2,796 | ) | (12,958 | ) | (15,754 | ) | |||||
Balance as of December 31, 2017 | 229 | 1,094 | 1,323 | ||||||||
Charges and adjustments | — | (40 | ) | (40 | ) | ||||||
Cash payments and receipts, net | (229 | ) | 537 | 308 | |||||||
Balance as of December 31, 2018 | $ | — | $ | 1,591 | $ | 1,591 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
United States | $ | 219,600 | $ | 199,565 | $ | 259,080 | |||||
International | 96,559 | 86,601 | 63,511 | ||||||||
Total | $ | 316,159 | $ | 286,166 | $ | 322,591 |
December 31, | |||||||
2018 | 2017 | ||||||
United States | $ | 13,146 | $ | 16,899 | |||
China | 5,504 | 7,164 | |||||
Other | 2,348 | 2,420 | |||||
Total | $ | 20,998 | $ | 26,483 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Proceeds from common stock issued under ESPP | $ | 397 | $ | 313 | $ | 999 | |||||
Shares of common stock issued | 439 | 478 | 659 | ||||||||
Weighted-average price per share | $ | 0.90 | $ | 0.65 | $ | 1.52 |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2015 | 1,313 | $ | 9.31 | |||||||||
Granted | 54 | 1.99 | ||||||||||
Vested | (464 | ) | 9.06 | $ | 875 | |||||||
Canceled | (297 | ) | 8.32 | |||||||||
Outstanding at December 31, 2016 | 606 | 9.33 | ||||||||||
Granted | 5,418 | 1.46 | ||||||||||
Vested | (885 | ) | 3.81 | 932 | ||||||||
Canceled | (1,634 | ) | 1.90 | |||||||||
Outstanding at December 31, 2017 | 3,505 | 2.03 | ||||||||||
Granted | 3,152 | 4.45 | ||||||||||
Vested | (1,399 | ) | 2.75 | 6,657 | ||||||||
Canceled | (906 | ) | 2.17 | |||||||||
Outstanding at December 31, 2018 | 4,352 | 3.52 | 1.4 | $ | 20,586 | |||||||
Expected to vest at December 31, 2018 | 4,351 | 3.52 | 1.4 | $ | 20,581 |
(1) | The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of December 31, 2018 is based on the closing price of the Company’s stock on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Prices | Number of Shares (in thousands) | Weighted- Average Remaining Life (in years) | Weighted- Average Exercise Price | Number of Shares (in thousands) | Weighted- Average Exercise Price | |||||||||||
$0.27 —– $0.79 | 1,551 | 2.9 | $ | 0.49 | 1,349 | $ | 0.45 | |||||||||
$0.79 —– $1.29 | 1,352 | 5.9 | 1.22 | 433 | 1.21 | |||||||||||
$1.31 —– $1.31 | 1,751 | 5.3 | 1.31 | 1,167 | 1.31 | |||||||||||
$1.37 —– $2.61 | 1,388 | 3.0 | 1.87 | 1,150 | 1.86 | |||||||||||
$2.76 —– $12.57 | 730 | 3.6 | 6.32 | 546 | 7.15 | |||||||||||
Total | 6,772 | 4.2 | 1.76 | 4,645 | 1.87 |
Number of Shares Outstanding | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2015 | 8,170 | $ | 5.36 | |||||||||
Granted | 2,440 | 2.12 | ||||||||||
Exercised | (375 | ) | 0.39 | $ | 729 | |||||||
Canceled | (1,505 | ) | 6.01 | |||||||||
Outstanding at December 31, 2016 | 8,730 | 4.55 | ||||||||||
Granted | 4,500 | 1.22 | ||||||||||
Exercised | (425 | ) | 0.51 | 544 | ||||||||
Canceled | (4,379 | ) | 6.91 | |||||||||
Outstanding at December 31, 2017 | 8,426 | 1.77 | ||||||||||
Granted | 213 | 4.43 | ||||||||||
Exercised | (1,346 | ) | 1.75 | 5,096 | ||||||||
Canceled | (521 | ) | 2.94 | |||||||||
Outstanding at December 31, 2018 | 6,772 | 1.76 | 4.2 | $ | 21,547 | |||||||
Vested and expected to vest at December 31, 2018 | 6,772 | 1.76 | 4.2 | $ | 21,547 | |||||||
Exercisable at December 31, 2018 | 4,645 | 1.87 | 3.5 | $ | 14,670 |
(1) | The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of December 31, 2018 is based on the closing price of the Company’s stock fair value on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Weighted average grant date fair value | $ | 2.83 | $ | 0.76 | $ | 1.29 | |||||
Expected term (in years) | 4.0 | 4.4 | 4.5 | ||||||||
Expected volatility | 88.5 | % | 83.9 | % | 80.0 | % | |||||
Annual risk-free rate of return | 2.6 | % | 1.8 | % | 1.1 | % | |||||
Dividend yield | — | % | — | % | — | % |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
United States | $ | 219,600 | $ | 199,565 | $ | 259,080 | |||||
International | 96,559 | 86,601 | 63,511 | ||||||||
Total | $ | 316,159 | $ | 286,166 | $ | 322,591 |
December 31, | |||||||
2018 | 2017 | ||||||
United States | $ | 13,146 | $ | 16,899 | |||
China | 5,504 | 7,164 | |||||
Other | 2,348 | 2,420 | |||||
Total | $ | 20,998 | $ | 26,483 |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (1) | |||||||||
Outstanding at December 31, 2017 | — | |||||||||||
Granted | 1,477 | $ | 4.65 | |||||||||
Vested | — | |||||||||||
Canceled | (147 | ) | ||||||||||
Outstanding at December 31, 2018 | 1,330 | 4.66 | 0.3 | $ | 6,291 | |||||||
Expected to vest at December 31, 2018 | 1,330 | 4.66 | 0.3 | $ | 6,291 |
(1) | The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of December 31, 2018 is based on the closing price of the Company’s stock on December 31, 2018 or the earlier of the last trading day prior to December 31, 2018, if December 31, 2018 is a non-trading day. The Company’s stock fair value used in this computation was $4.73 per share. |
• | Products Delivered at a Point in Time. The Company sells its products to customers in accordance with the terms of the related customer contracts. The Company generates revenues from sales of its solutions, which include microinverter units and related accessories, an Envoy communications gateway and Enlighten service, communications accessories and AC Battery™ storage solutions to distributors, large installers, OEMs and strategic partners. Microinverter units, microinverter accessories, and AC Battery storage solutions are delivered to customers at a point in time, and the Company recognizes revenue for these products when the Company transfers control of the product to the customer, which is generally upon shipment. |
• | Products Delivered Over Time. The sale of an Envoy communications gateway includes the Company’s Enlighten cloud-based monitoring service. The full consideration for these products represents a single performance obligation and is deferred at the sale date and recognized over the estimated service period. The Company also sells certain communication accessories that are delivered over time. The revenue from these products is recognized over the related service period. |
• | Products Delivered at a Point in Time. Cost of revenue from these products is recognized when the Company transfers control of the product to the customer, which is generally upon shipment. |
• | Products Delivered Over Time. Cost of revenue from these products is recognized over the related service period. |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance, at beginning of year | $ | 2,378 | $ | 2,921 | $ | 1,808 | |||||
Net charges to expenses | 711 | 476 | 3,097 | ||||||||
Write-offs, net of recoveries | (951 | ) | (1,019 | ) | (1,984 | ) | |||||
Balance, at end of year | $ | 2,138 | $ | 2,378 | $ | 2,921 |
Years Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Unrecognized tax benefits—at beginning of year | $ | 6,106 | $ | 6,016 | $ | 5,482 | |||||
Decreases in balances related to tax positions taken in prior years | — | (135 | ) | — | |||||||
Increases in balances related to tax positions taken in current year | 329 | 306 | 571 | ||||||||
Lapses in statutes of limitations | (110 | ) | (81 | ) | (37 | ) | |||||
Unrecognized tax benefits—at end of year | $ | 6,325 | $ | 6,106 | $ | 6,016 |