Revenue Recognition

12 Months Ended

Dec. 28, 2019

Revenue from Contract with Customer [Abstract]

Effective December 31, 2017, the Company adopted Topic 606, using the modified retrospective method applied to those contracts that were not completed as of December 31, 2017. Results for the reporting periods after December 31, 2017 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historical accounting under Topic 605.

Capitalization of Costs to Obtain a Contract

The ending balance of the Company’s capitalized costs to obtain a contract as of December 28, 2019 and December 29, 2018 were $0.2 million and $0.4 million, respectively. The Company's amortization expense was not material for the year ended December 28, 2019 and December 29, 2018, respectively.

Disaggregation of Revenue

The following table presents the Company's revenue disaggregated by revenue source (in thousands):



	Years Ended
	December 28, 2019		December 29, 2018		December 30, 2017⁽¹⁾
Product	$	1,011,488	$	763,555	$	610,535
Services	287,377		179,824		130,204
Total revenue	$	1,298,865	$	943,379	$	740,739


⁽¹⁾	Prior period amounts have not been adjusted under the modified retrospective method of adopting Topic 606.

The Company sells its products directly to customers who are predominantly service providers and to channel partners that sell on its behalf. The following tables present the Company's revenue disaggregated by geography, based on the shipping address of the customer and by sales channel (in thousands):



	Years Ended
	December 28, 2019		December 29, 2018		December 30, 2017⁽¹⁾
United States	$	628,075	$	476,784	$	428,592
Other Americas	93,251		44,581		20,070
Europe, Middle East and Africa	418,333		309,989		234,972
Asia Pacific	159,206		112,025		57,105
Total revenue	$	1,298,865	$	943,379	$	740,739



	Years Ended
	December 28, 2019		December 29, 2018		December 30, 2017⁽¹⁾
Direct	$	1,032,527	$	838,931	$	693,472
Indirect	266,338		104,448		47,267
Total revenue	$	1,298,865	$	943,379	$	740,739


⁽¹⁾	Prior period amounts have not been adjusted under the modified retrospective method of adopting Topic 606.

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):



	December 28, 2019		December 29, 2018
Accounts receivable, net	$	349,645	$	317,115
Contract assets	$	22,814	$	24,981
Deferred revenue	$	139,820	$	120,302

Revenue recognized for the year ended December 28, 2019 and December 29, 2018 that was included in the deferred revenue balance at the beginning of the reporting period was $119.9 million and $44.4 million, respectively. Changes in the contract asset and liability balances during year ended December 28, 2019 were not materially impacted by other factors. Changes in the contract asset and liability balances during the year ended December 29, 2018 were primarily impacted by the Acquisition during the fourth quarter of 2018.

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied) at the end of the reporting period (in thousands):



	2020		2021		2022		2023		2024		Thereafter		Total
Revenue expected to be recognized in the future as of December 28, 2019	$	488,149	$	37,579	$	12,449	$	6,361	$	1,596	$	811	$	546,945

Impacts on Financial Statements

The following tables summarize the impact of adopting Topic 606 on the Company's consolidated statement of operations for the year ended December 29, 2018 and the Company's consolidated balance sheet as of December 31, 2017 (in thousands):



	Year Ended December 29, 2018
	As Reported			Adjustments			Balances Without Adoption of Topic 606
Income Statement
Revenue
Product	$	763,555		$	(10,680	)	$	752,875
Services	179,824			3,946			183,770
	$	943,379		$	(6,734	)	$	936,645
Costs and expenses
Cost of revenue	$	622,223		$	1,687		$	623,910
Net loss	$	(214,295	)	$	(8,421	)	$	(222,716	)
Net loss per share - basic and diluted	$	(1.36	)	$	(0.05	)	$	(1.41	)

The increase in revenue from the adoption of Topic 606 was primarily related to an increase in product revenue for certain customers as a result of recognition upon transfer of control in advance of milestone invoicing. The adoption of Topic 606 did not have a material impact to the Company's consolidated financial statements for the year ended December 29, 2018.