Amortized cost and estimated fair market value of investments classified as available-for-sale, excluding cash equivalents, as of October 1, 2023, and December 31, 2022, were as follows:


	October 1, 2023
(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. treasury securities	$	88,764	$	—	$	(71	)	$	88,693
Convertible debt (1)		173		—		—			173
Total	$	88,937	$	—	$	(71	)	$	88,866



	December 31, 2022
(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
U.S. treasury securities	$	74,120	$	—	$	(320	)	$	73,800
Convertible debt (1)		346		—		—			346
Certificates of deposit		6		—		—			6
Total	$	74,472	$	—	$	(320	)	$	74,152

(1)

On the Company’s unaudited condensed consolidated balance sheets, $173,000 included in Short-term investments as of October 1, 2023, and December 31, 2022, respectively, and $173,000 included in Other non-current assets as of December 31, 2022.

The contractual maturities on the U.S. treasury securities as of October 1, 2023, are all due within one year. Accrued interest receivable as of October 1, 2023, was $0.3 million and was recorded within Prepaid expenses and other current assets on the unaudited condensed consolidated balance sheet.

The following table summarizes investments classified as available-for-sale in a continuous unrealized loss position for which an allowance for credit losses was not recorded as of October 1, 2023, and December 31, 2022:


	October 1, 2023
	Less Than 12 Months					12 Months or Longer				Total
(In thousands)	Estimated Fair Market Value		Gross Unrealized Losses			Estimated Fair Market Value		Gross Unrealized Losses		Estimated Fair Market Value		Gross Unrealized Losses
U.S. treasury securities	$	88,693	$	(71	)	$	—	$	—	$	88,693	$	(71	)
Total	$	88,693	$	(71	)	$	—	$	—	$	88,693	$	(71	)


	December 31, 2022
	Less Than 12 Months					12 Months or Longer				Total
(In thousands)	Estimated Fair Market Value		Gross Unrealized Losses			Estimated Fair Market Value		Gross Unrealized Losses		Estimated Fair Market Value		Gross Unrealized Losses
U.S. treasury securities	$	73,800	$	(320	)	$	—	$	—	$	73,800	$	(320	)
Total	$	73,800	$	(320	)	$	—	$	—	$	73,800	$	(320	)

In the three and nine months ended October 1, 2023, and October 2, 2022, no unrealized losses on available-for-sale securities were recognized in income. The Company does not intend to sell, and it is unlikely that it will be required to sell the investments in an unrealized loss position prior to their anticipated recovery. The investments are high-quality U.S. treasury securities and the decline in fair value is largely due to changes in interest rates and other market conditions with the fair value expected to recover as they reach maturity. There were no other-than-temporary impairments for these securities during the

three and nine months ended October 1, 2023, and October 2, 2022. Refer to Note 12, Fair Value Measurements, for detailed disclosures regarding fair value measurements.

Inventories


(In thousands)	October 1, 2023		December 31, 2022
Raw materials	$	10,466	$	4,549
Finished goods		270,452		295,065
Total	$	280,918	$	299,614

The Company records provisions for excess and obsolete inventory based on assumptions about future demand and market conditions and the amounts incurred were $1.2 million and $2.7 million for the three and nine months ended October 1, 2023, respectively, and $0.4 million and $3.0 million for the three and nine months ended October 2, 2022, respectively. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand.

Property and equipment, net


(In thousands)	October 1, 2023			December 31, 2022
Computer equipment	$	8,001		$	9,648
Furniture, fixtures, and leasehold improvements		18,041			18,642
Software		28,377			30,610
Machinery and equipment		65,665			76,806
Total property and equipment, gross		120,084			135,706
Accumulated depreciation		(111,810	)		(126,481	)
Total	$	8,274		$	9,225

Intangibles, net


	October 1, 2023										December 31, 2022
(In thousands)	Gross		Accumulated Amortization			Impairment			Net		Gross		Accumulated Amortization			Net
Technology	$	59,799	$	(58,906	)	$	(893	)	$	—	$	59,799	$	(58,692	)	$	1,107
Other		10,345		(10,167	)		(178	)		—		10,345		(10,123	)		222
Total	$	70,144	$	(69,073	)	$	(1,071	)	$	—	$	70,144	$	(68,815	)	$	1,329

Amortization of purchased intangibles was $0.3 million for the nine months ended October 1, 2023, and $0.1 million and $0.4 million for the three and nine months ended October 2, 2022, respectively.

During the three months ended October 1, 2023, the Company identified a triggering event indicating that the carrying amount of the intangibles may be impaired (Refer to below “Goodwill” for details of the triggering event). The Company performed a recoverability test of its intangible assets based on estimated future net undiscounted cash flows expected to be generated from the use of the long-lived asset group and determined that the carrying amount of such asset group was not recoverable. Therefore, in the third fiscal quarter of 2023, the Company recognized an intangible asset impairment charge of $1.1 million for its Connected Home reporting unit.

Each year on the first day of the fourth fiscal quarter, the Company assesses its goodwill for potential impairment. This impairment testing is applied more frequently than once a year if the Company is aware of changed conditions or circumstances since the last impairment testing that might call into question whether the current balances are fairly recorded. During the three months ended October 1, 2023, the Company reassessed the valuation allowance for the deferred tax assets and determined to establish a full valuation allowance on its U.S. deferred tax assets (refer to Note 7, Income Taxes for detailed disclosures regarding the valuation allowance on deferred tax assets). Additionally, the Company experienced a reduction in its market capitalization. Due to these factors, the Company determined that a triggering event had occurred, and an interim goodwill impairment assessment was performed. Prior to performing a goodwill impairment test, the Company assessed its long-lived assets and concluded the carrying amount of the intangible assets for its Connected Home reporting unit was not recoverable

as noted above. No other impairments of long-lived assets were identified. The Company elected to bypass the qualitative goodwill impairment assessment and proceeded directly to the quantitative test, measured as of October 1, 2023.

The fair values of the reporting units, namely Connected Home and SMB, were determined using an income and market approach. Under the income approach, the Company calculated the fair values of its reporting units based on the present value of estimated future cash flows. Cash flow projections were based on management's estimates of revenue growth rates and net operating income margins, taking into consideration market and industry conditions. The discount rate used was based on the weighted-average cost of capital adjusted for the risk, size premium, and business-specific characteristics related to the business's ability to execute on the projected cash flows. Under the market approach, the Company evaluated the fair value based on forward-looking earnings multiples derived from comparable publicly traded companies with similar market position and size as the reporting unit. The underlying unobservable inputs used to measure the fair value included projected revenue growth rates, the weighted average cost of capital, the normalized working capital level, capital expenditures assumptions, profitability projections, control premium, the determination of appropriate market comparison companies and terminal growth rates. The two approaches generated similar results and indicated that the fair value of the SMB reporting unit substantially exceeded its carrying amount, including goodwill, thus no goodwill impairment was recognized.

Other non-current assets


(In thousands)	October 1, 2023		December 31, 2022
Non-current deferred income taxes	$	3,450	$	85,704
Long-term investments		8,240		7,879
Other		5,873		4,210
Total	$	17,563	$	97,793

Long-term equity investments

The Company's long-term investments are comprised of equity investments without readily determinable fair values, investments in convertible debt securities and investments in limited partnership funds. The changes in the carrying value of equity investments without readily determinable fair values were as follows:


	Nine months ended
(In thousands)	October 1, 2023		October 2, 2022
Carrying value as of the beginning of the period (1)	$	6,053	$	6,303
Impairment		—		(250	)
Carrying value as of the end of the period (1)	$	6,053	$	6,053

For such equity investments without readily determinable fair values still held at October 1, 2023, there were no cumulative downward adjustments for price changes and impairment and the cumulative upward adjustments for price changes was $0.3 million.

Other accrued liabilities


(In thousands)	October 1, 2023		December 31, 2022
Current operating lease liabilities	$	11,379	$	11,012
Sales and marketing		74,813		98,690
Warranty obligations		7,038		6,320
Sales returns(1)		36,751		44,944
Freight and duty		2,478		7,243
Other		35,254		45,267
Total	$	167,713	$	213,476

(1)

Inventory expected to be received from future sales returns amounted to $17.6 million and $21.8 million as of October 1, 2023, and December 31, 2022, respectively. Provisions to write down expected returned inventory to net realizable value amounted to $10.7 million and $11.8 million as of October 1, 2023, and December 31, 2022, respectively.