Balance Sheet Information

Cash, Cash Equivalents and Restricted Cash

The following table summarizes our cash, cash equivalents and restricted cash by category (in thousands):



	As of August 31, 2017		As of February 28, 2017
Cash and cash equivalents:
Cash	$	109,582	$	103,726
Money market funds	16,003		16,468
Other non-current assets:
Restricted cash	660		643
	$	126,245	$	120,837

Restricted cash is primarily related to customs obligations and letters of credit associated with our leases.

Marketable Securities

The following tables summarize our marketable securities by category (in thousands):



	As of August 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Asset-backed securities	$	9,472	$	9	$	(13	)	$	9,468
Corporate debt securities	43,768		22		(94		)	43,696
Foreign government bonds	650		1		—			651
Mortgage-backed securities	3,404		2		(7		)	3,399
U.S. government agency securities	13,679		6		(38		)	13,647
U.S. government notes	10,136		6		(12		)	10,130
	$	81,109	$	46	$	(164	)	$	80,991

	As of February 28, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Asset-backed securities	$	9,597	$	6	$	(28	)	$	9,575
Corporate debt securities	41,822		11		(140		)	41,693
Foreign government bonds	650		—		(1		)	649
Mortgage-backed securities	3,324		—		(22		)	3,302
U.S. government agency securities	12,707		1		(77		)	12,631
U.S. government notes	12,092		2		(29		)	12,065
	$	80,192	$	20	$	(297	)	$	79,915

We use the specific-identification method to determine any realized gains or losses from the sale of our marketable securities classified as available-for-sale. For the three and six months ended August 31, 2017, realized gross gains and losses were insignificant. For the three and six months ended August 31, 2016, we realized gross gains of $0.7 million and $1.1 million, respectively, and an insignificant amount of gross losses. We reflect these gains and losses as a component of other income, net in our condensed consolidated statements of income.

The following tables present gross unrealized losses and fair values for those marketable securities that were in an unrealized loss position aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):



	As of August 31, 2017
	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Asset-backed securities	$	5,809	$	(13	)	$	—	$	—		$	5,809	$	(13	)
Corporate debt securities	30,297		(88		)	3,000		(7		)	33,297		(95		)
Mortgage-backed securities	1,914		(6		)	131		—			2,045		(6		)
U.S. government agency securities	7,817		(22		)	4,008		(16		)	11,825		(38		)
U.S. government notes	4,493		(9		)	398		(3		)	4,891		(12		)
	$	50,330	$	(138	)	$	7,537	$	(26	)	$	57,867	$	(164	)



	As of February 28, 2017
	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Asset-backed securities	$	6,086	$	(28	)	$	—	$	—		$	6,086	$	(28	)
Corporate debt securities	35,095		(140		)	—		—			35,095		(140		)
Foreign government bonds	650		(1		)	—		—			650		(1		)
Mortgage-backed securities	3,204		(22		)	—		—			3,204		(22		)
U.S. government agency securities	11,306		(65		)	731		(12		)	12,037		(77		)
U.S. government notes	7,265		(29		)	—		—			7,265		(29		)
	$	63,606	$	(285	)	$	731	$	(12	)	$	64,337	$	(297	)

We periodically review our marketable securities for other-than-temporary impairment. We consider factors such as the duration, severity and the reason for the decline in value, the potential recovery period and whether we intend to sell. For marketable debt securities, we also consider whether (i) it is more likely than not that we will be required to sell the debt securities before recovery of their amortized cost basis and (ii) the amortized cost basis cannot be recovered as a result of credit losses. Unrealized losses related to these investments are due to interest rate fluctuations as opposed to changes in credit quality. We do not intend to sell and it is not more likely than not that we would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. As of August 31, 2017, we have recognized no other-than-temporary impairment loss.

The following table summarizes the estimated fair value of our investments in marketable debt securities by contractual maturities (in thousands):



	As of August 31, 2017
Due in 1 year	$	21,434
Due in 1 year through 5 years	52,893
Due in 5 years through 10 years	3,020
Due after 10 years	3,644
	$	80,991

Fair Value Measurements

We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:


Level 1:	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.


Level 2:	Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.


Level 3:	Inputs are unobservable inputs based on our assumptions.

Cash equivalents and marketable equity securities are classified within Level 1 because they are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Marketable debt securities and derivative assets are classified within Level 2 if the investments are valued using model driven valuations which use observable inputs such as quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models.

We estimated the fair value of our Level 3 contingent consideration liabilities based on a weighted probability assessment of achieving the milestones related to certain of our acquisitions. Significant increases (decreases) in the probability assumptions in isolation would result in a significantly higher (lower) fair value measurement. In developing these estimates, we considered unobservable inputs that are supported by little or no market activity and reflect our own assumptions.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):



	As of August 31, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	16,003	$	—	$	—	$	16,003
Marketable securities:
Asset-backed securities	$	—	$	9,468	$	—	$	9,468
Corporate debt securities	$	—	$	43,696	$	—	$	43,696
Foreign government bonds	$	—	$	651	$	—	$	651
Mortgage-backed securities	$	—	$	3,399	$	—	$	3,399
U.S. government agency securities	$	—	$	13,647	$	—	$	13,647
U.S. government notes	$	—	$	10,130	$	—	$	10,130

	As of February 28, 2017
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	16,468	$	—	$	—	$	16,468
Marketable securities:
Asset-backed securities	$	—	$	9,575	$	—	$	9,575
Corporate debt securities	$	—	$	41,693	$	—	$	41,693
Foreign government bonds	$	—	$	649	$	—	$	649
Mortgage-backed securities	$	—	$	3,302	$	—	$	3,302
U.S. government agency securities	$	—	$	12,631	$	—	$	12,631
U.S. government notes	$	—	$	12,065	$	—	$	12,065
Other accrued liabilities (current):
Contingent consideration	$	—	$	—	$	902	$	902

The following table summarizes the change in fair value of our Level 3 contingent consideration amounts (in thousands):



Balance as of February 28, 2017	$	902
Total remeasurement recognized in earnings	(160		)
Settlements	(742		)
Balance as of August 31, 2017	$	—

For the six months ended August 31, 2017, the contingent consideration remeasurement was recognized within research and development expense in our condensed consolidated statements of income.

Inventories, Net

Inventories, net consisted of the following (in thousands):



	As of August 31, 2017			As of February 28, 2017
Raw materials	$	3,787		$	3,479
Finished goods	3,275			2,878
Reserves	(542		)	(510		)
	$	6,520		$	5,847

Deferred Costs

Deferred costs consisted of the following (in thousands):



	As of August 31, 2017		As of February 28, 2017
Appliance	$	40,561	$	39,474
Commissions	23,891		20,409
	$	64,452	$	59,883

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):



	As of August 31, 2017			As of February 28, 2017
Land	$	9,849		$	9,849
Building	6,549			6,549
Computer hardware and software	39,923			32,850
Vehicles, machinery and equipment	4,799			4,797
Leasehold improvements	4,492			4,379
	65,612			58,424
Accumulated depreciation and amortization	(33,569		)	(28,445		)
	$	32,043		$	29,979

Depreciation and amortization expense related to property and equipment was $2.6 million and $5.1 million for the three and six months ended August 31, 2017, respectively, and $2.3 million and $4.7 million for the three and six months ended August 31, 2016, respectively.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) ("AOCI"), net of tax, were as follows (in thousands):



	Foreign Currency Translation Adjustments			Unrealized Gains (Losses) on Available-for- Sale Investments			Total
Balance as of February 28, 2017	$	(4,954	)	$	(272	)	$	(5,226	)
Other comprehensive income before reclassifications	1,991			149			2,140
Amounts reclassified from AOCI	—			10			10
Other comprehensive income	1,991			159			2,150
Balance as of August 31, 2017	$	(2,963	)	$	(113	)	$	(3,076	)