Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2018

Employee Benefits and Share-based Compensation, Noncash [Abstract]

Schedule of Stock Option Activity

Stock option activity during the nine months ended September 30, 2018 was as follows:

	Number of shares		Weighted Average Exercise Price Per Share
	(In thousands)		(In dollars)
Outstanding as of December 31, 2017	1,879		$	34.08
Granted	378		69.70
Exercised	(226	)	23.02
Expired	(6	)	21.45
Outstanding as of September 30, 2018	2,025		$	42.00

Schedule of RSU Activity

RSU activity during the nine months ended September 30, 2018 was as follows:

	Number of shares		Weighted Average Grant Date Fair Value Per Share
	(In thousands)		(In dollars)
Outstanding as of December 31, 2017	1,130		$	43.22
Granted	933		68.27
Vested	(410	)	40.94
Cancelled	(53	)	54.78
Outstanding as of September 30, 2018	1,600		$	58.04

Schedule of Weighted Average Assumptions

The table below sets forth the weighted average assumptions used to estimate the fair value of Arlo's option grants during the three months ended September 30, 2018.

	Three Months Ended
	September 30, 2018
Expected life (in years)	6.3
Risk-free interest rate	2.86	%
Expected volatility	40.0	%
Dividend yield	—

The table below sets forth the weighted average assumptions used to estimate the fair value of option grants and purchase rights granted under the ESPP during the three and nine months ended September 30, 2018 and October 1, 2017.

	Three Months Ended							Nine Months Ended
	Stock Options			ESPP				Stock Options				ESPP
	September 30, 2018		October 1, 2017	September 30, 2018		October 1, 2017		September 30, 2018		October 1, 2017		September 30, 2018		October 1, 2017
Expected life (in years)	4.4		NA	0.5		0.5		4.4		4.4		0.5		0.5
Risk-free interest rate	2.79	%	NA	2.22	%	1.12	%	2.36	%	1.65	%	2.00	%	0.93	%
Expected volatility	33.5	%	NA	38.8	%	31.3	%	31.1	%	31.6	%	37.9	%	29.7	%
Dividend yield	—		NA	—		—		—		—		—		—

Schedule of Total Stock-Based Compensation Expense Resulting from Stock Options, Restricted Stock Awards, and the Employee Stock Purchase Plan

The following table sets forth the stock-based compensation expense resulting from stock options, RSUs and the ESPP included in the Company’s unaudited condensed consolidated statements of operations and includes $0.9 million expenses related to Arlo's equity grants described more fully in the section below:

	Three Months Ended				Nine Months Ended
	September 30, 2018		October 1, 2017		September 30, 2018		October 1, 2017
	(In thousands)
Cost of revenue	$	853	$	499	$	2,571	$	1,477
Research and development	1,907		1,056		5,431		3,748
Sales and marketing	2,728		1,654		7,847		4,339
General and administrative	4,066		2,374		10,825		6,848
Total stock-based compensation	$	9,554	$	5,583	$	26,674	$	16,412