Balance Sheet Components

6 Months Ended

Apr. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Components

5. Balance Sheet Components

Accounts receivable, net of allowances

Accounts receivable, net of allowances, consist of the following:

	April 2, 2022			October 2, 2021
(In thousands)
Accounts receivable	$	128,989		$	121,486
Allowance for credit losses		(1,913	)		(1,547	)
Allowance for sales incentives		(15,688	)		(19,160	)
Accounts receivable, net of allowances	$	111,388		$	100,779

Inventories

Inventories, net, consist of the following:

	April 2, 2022		October 2, 2021
(In thousands)
Finished goods	$	208,476	$	154,608
Component parts		55,929		30,522
Inventories	$	264,405	$	185,130

The Company writes down inventory as a result of excess and obsolete inventories, or when it believes that the net realizable value of inventories is less than the carrying value.

Goodwill

The following table presents the changes in carrying amount of goodwill during the six months ended April 2, 2022:

(In thousands)
Balance as of October 2, 2021	$	15,545
Goodwill acquired		22,181
Balance as of April 2, 2022	$	37,726

Intangible assets

The following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity:

	April 2, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Weighted-Average Remaining Life
(In thousands, except weighted-average remaining life)
Technology	$	13,931	$	(5,143	)	$	8,788		2.63
Total finite-lived intangible assets		13,931		(5,143	)		8,788		2.63
In-process research and development not subject to amortization		20,100		—			20,100
Total intangible assets	$	34,031	$	(5,143	)	$	28,888

The following table summarizes the estimated future amortization expense of the Company's intangible assets as of April 2, 2022:

Fiscal years ending	Future Amortization Expense
(In thousands)
Remainder of fiscal 2022	$	1,931
2023		3,237
2024		3,024
2025		423
2026		94
2027 and there after		79
Total future amortization expense	$	8,788

Cloud Computing Arrangements

Beginning in fiscal 2020, and continuing through fiscal 2021, the Company began activities to replace its legacy enterprise resource management system in order to accommodate the Company's expanding operations. Capitalized costs were $22.6 million and $14.3 million as of April 2, 2022, and October 2, 2021, respectively, and are reported as a component of other assets on the Company's condensed consolidated balance sheets.

Accrued expenses

Accrued expenses consisted of the following:

	April 2, 2022		October 2, 2021
(In thousands)
Accrued advertising and marketing	$	13,751	$	19,989
Accrued taxes		13,710		16,941
Accrued inventory		25,971		37,117
Accrued manufacturing, logistics and product development		17,647		14,943
Accrued general and administrative expenses		20,010		13,066
Other accrued payables		9,255		5,973
Total accrued expenses	$	100,344	$	108,029

Deferred revenue

Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the condensed consolidated balance sheets. Deferred revenue primarily related to revenue allocated to unspecified software upgrades and cloud-based services. Recognition of revenue includes $18.8 million of deferred revenue from the fourth quarter of fiscal 2021 related to newly launched products sold to resellers not recognized as revenue until the date of general availability was reached, which was in the first quarter of fiscal 2022.

The following table presents the changes in the Company’s deferred revenue for the six months ended April 2, 2022, and April 3, 2021:

	April 2, 2022			April 3, 2021
(In thousands)
Deferred revenue, beginning of period	$	89,498		$	62,389
Recognition of revenue included in beginning of period deferred revenue		(28,927	)		(7,883	)
Revenue deferred, net of revenue recognized on contracts in the respective period		16,063			16,383
Deferred revenue, end of period	$	76,634		$	70,889

The Company expects the following recognition of deferred revenue as of April 2, 2022:

	For the fiscal years ending
	2022		2023		2024		2025		2026 and Beyond		Total
(In thousands)
Deferred revenue expected to be recognized	$	9,750	$	16,859	$	14,809	$	12,498	$	22,718	$	76,634

Other current liabilities

Other current liabilities consist of the following:

	April 2, 2022		October 2, 2021
(In thousands)
Reserve for returns	$	18,839	$	19,266
Short-term operating lease liabilities		9,923		10,724
Product warranty liability		8,756		5,604
Other		4,066		3,950
Total other current liabilities	$	41,584	$	39,544

The following table presents the changes in the Company’s warranty liability for the six months ended April 2, 2022, and April 3, 2021:

	April 2, 2022			April 3, 2021
(In thousands)
Warranty liability, beginning of period	$	5,604		$	3,628
Provision for warranties issued during the period		7,082			8,844
Settlements of warranty claims during the period		(3,930	)		(7,616	)
Warranty liability, end of period	$	8,756		$	4,856