(Mark One) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company |
Page | ||
As of | |||||||
June 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash | |||||||
Accounts receivable, net of allowances of $296 and $564 at June 30, 2020 and December 31, 2019, respectively | |||||||
Inventory | |||||||
Prepaid expenses and other assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Operating lease, right of use asset | |||||||
Intangible assets, net | |||||||
Goodwill | |||||||
Other assets | |||||||
Deferred tax assets, net | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued liabilities | |||||||
Deferred revenues, current | |||||||
Warranty obligations, current (includes $6,917 and $6,794 measured at fair value at June 30, 2020 and December 31, 2019, respectively) | |||||||
Debt, current | |||||||
Total current liabilities | |||||||
Long-term liabilities: | |||||||
Deferred revenues, noncurrent | |||||||
Warranty obligations, noncurrent (includes $14,215 and $13,012 measured at fair value at June 30, 2020 and December 31, 2019, respectively) | |||||||
Other liabilities | |||||||
Debt, noncurrent | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 9) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.00001 par value, 200,000 shares and 150,000 shares authorized; and 125,979 shares and 123,109 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | |||||||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net revenues | $ | $ | $ | $ | |||||||||||
Cost of revenues | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses: | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Restructuring charges | |||||||||||||||
Total operating expenses | |||||||||||||||
Income from operations | |||||||||||||||
Other expense, net | |||||||||||||||
Interest income | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other (expense) income, net | ( | ) | ( | ) | ( | ) | |||||||||
Change in fair value of derivatives | ( | ) | ( | ) | |||||||||||
Total other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income (loss) before income taxes | ( | ) | |||||||||||||
Income tax benefit (provision) | ( | ) | ( | ) | |||||||||||
Net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | ( | ) | $ | $ | $ | |||||||||
Diluted | $ | ( | ) | $ | $ | $ | |||||||||
Shares used in per share calculation: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Other comprehensive loss: | |||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income (loss) | $ | ( | ) | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Common stock and paid-in capital | |||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | |||||||||||
Cumulative-effect adjustment to additional paid in capital(1) | |||||||||||||||
Issuance of common stock from exercise of equity awards | |||||||||||||||
Payment of withholding taxes related to net share settlement of equity awards | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Conversion of convertible notes due 2023, net | |||||||||||||||
Equity component of convertible notes | |||||||||||||||
Cost of convertible notes hedge related to the convertible notes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Sale of warrants related to the convertible notes | |||||||||||||||
Stock-based compensation expense and other | |||||||||||||||
Balance, end of period | $ | $ | $ | $ | |||||||||||
Accumulated deficit | |||||||||||||||
Balance, beginning of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Cumulative-effect adjustment to accumulated deficit(1) and other | ( | ) | ( | ) | |||||||||||
Net income (loss) | ( | ) | |||||||||||||
Balance, end of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Accumulated other comprehensive income (loss) | |||||||||||||||
Balance, beginning of period | $ | ( | ) | $ | $ | ( | ) | $ | |||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance, end of period | $ | ( | ) | $ | $ | ( | ) | $ | |||||||
Total stockholders' equity, ending balance | $ | $ | $ | $ |
(1) |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Provision for doubtful accounts | |||||||
Non-cash interest expense | |||||||
Financing fees on extinguishment of debt | |||||||
Fees paid for repurchase and exchange of convertible notes due 2023 | |||||||
Stock-based compensation | |||||||
Change in fair value of derivatives | |||||||
Deferred income taxes | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | |||||
Inventory | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Accounts payable, accrued and other liabilities | ( | ) | |||||
Warranty obligations | |||||||
Deferred revenues | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Issuance of convertible notes, net of issuance costs | |||||||
Purchase of convertible note hedges | ( | ) | ( | ) | |||
Sale of warrants | |||||||
Fees paid for repurchase and exchange of convertible notes due 2023 | ( | ) | |||||
Principal payments and financing fees on debt | ( | ) | ( | ) | |||
Proceeds from exercise of equity awards and employee stock purchase plan | |||||||
Payment of withholding taxes related to net share settlement of equity awards | ( | ) | ( | ) | |||
Net cash provided by financing activities | |||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | |||||
Net increase in cash and cash equivalents | |||||||
Cash, cash equivalents and restricted cash—Beginning of period | |||||||
Cash and cash equivalents—End of period | $ | $ | |||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of fixed assets included in accounts payable | $ | $ | |||||
Accrued interest payable unpaid upon exchange of convertible notes due 2023 | $ | $ |
1. | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
2. | REVENUE RECOGNITION |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Primary geographical markets: | |||||||||||||||
United States | $ | $ | $ | $ | |||||||||||
International | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Timing of revenue recognition: | |||||||||||||||
Products delivered at a point in time | $ | $ | $ | $ | |||||||||||
Products and services delivered over time | |||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Receivables | $ | $ | |||||
Short-term contract assets (Prepaid expenses and other assets) | |||||||
Long-term contract assets (Other assets) | |||||||
Short-term contract liabilities (Deferred revenues) | |||||||
Long-term contract liabilities (Deferred revenues) |
Contract Assets | |||
Balance on December 31, 2019 | $ | ||
Amount recognized | ( | ) | |
Increase | |||
Balance as of June 30, 2020 | $ |
Contract Liabilities | |||
Balance on December 31, 2019 | $ | ||
Revenue recognized | ( | ) | |
Increase due to billings | |||
Balance as of June 30, 2020 | $ |
June 30, 2020 | |||
(In thousands) | |||
Fiscal year: | |||
2020 (remaining six months) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
3. | OTHER FINANCIAL INFORMATION |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Accounts receivable | $ | $ | |||||
Allowance for doubtful accounts | ( | ) | ( | ) | |||
Accounts receivable, net | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2020 | |||||||
(In thousands) | |||||||
Balance, at beginning of the period | $ | $ | |||||
Net charges to expenses | |||||||
Write-offs, net of recoveries | ( | ) | ( | ) | |||
Balance, at end of the period | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Raw materials | $ | $ | |||||
Finished goods | |||||||
Total inventory | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Salaries, commissions, incentive compensation and benefits | $ | $ | |||||
Customer rebates and sales incentives | |||||||
Freight | |||||||
Operating lease liabilities, current | |||||||
Other | |||||||
Total accrued liabilities | $ | $ |
4. | GOODWILL AND INTANGIBLE ASSETS |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Goodwill | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Other indefinite-lived intangibles | $ | $ | — | $ | $ | $ | — | $ | |||||||||||||||
Intangible assets with finite lives: | |||||||||||||||||||||||
Developed technology | ( | ) | ( | ) | |||||||||||||||||||
Customer relationships | ( | ) | ( | ) | |||||||||||||||||||
Total purchased intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Developed technology, and patents and licensed technology | $ | $ | $ | $ | |||||||||||
Customer relationships | |||||||||||||||
Total amortization expense | $ | $ | $ | $ |
5. | WARRANTY OBLIGATIONS |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Warranty obligations, beginning of period | $ | $ | $ | $ | |||||||||||
Accruals for warranties issued during period | |||||||||||||||
Changes in estimates | |||||||||||||||
Settlements | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Increase due to accretion expense | |||||||||||||||
Other | ( | ) | ( | ) | |||||||||||
Warranty obligations, end of period | |||||||||||||||
Less: current portion | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Noncurrent | $ | $ | $ | $ |
6. | FAIR VALUE MEASUREMENTS |
• | Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of such assets or liabilities do not entail a significant degree of judgment. |
• | Level 2—Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. |
• | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Level 3 | Level 3 | ||||||
Liabilities: | |||||||
Warranty obligations | |||||||
Current | $ | $ | |||||
Non-current | |||||||
Total warranty obligations measured at fair value | |||||||
Total liabilities measured at fair value | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Accruals for warranties issued during period | |||||||||||||||
Changes in estimates | |||||||||||||||
Settlements | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Increase due to accretion expense | |||||||||||||||
Other | ( | ) | ( | ) | |||||||||||
Balance at end of period | $ | $ | $ | $ |
Percent Used (Weighted Average) | ||||||||
Item Measured at Fair Value | Valuation Technique | Description of Significant Unobservable Input | June 30, 2020 | December 31, 2019 | ||||
Warranty obligations for microinverters sold since January 1, 2014 | Discounted cash flows | Profit element and risk premium | ||||||
Credit-adjusted risk-free rate |
7. | RESTRUCTURING |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Redundancy and employee severance and benefit arrangements | $ | $ | $ | $ | |||||||||||
Lease loss reserves | ( | ) | |||||||||||||
Total restructuring charges | $ | $ | $ | $ |
8. | DEBT |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Convertible notes | |||||||
Notes due 2025 | $ | $ | |||||
Less: unamortized discount and issuance costs | ( | ) | |||||
Carrying amount of Notes due 2025 | |||||||
Notes due 2024 | |||||||
Less: unamortized discount and issuance costs | ( | ) | ( | ) | |||
Carrying amount of Notes due 2024 | |||||||
Notes due 2023 | |||||||
Less: unamortized issuance costs | ( | ) | ( | ) | |||
Carrying amount of Notes due 2023 | |||||||
Sale of long-term financing receivable recorded as debt | |||||||
Total carrying amount of debt | |||||||
Less: current portion of convertible notes and long-term financing receivable recorded as debt | ( | ) | ( | ) | |||
Long-term debt | $ | $ |
Convertible note embedded derivative | |||
(In thousands) | |||
Fair value as of March 9, 2020 | $ | ||
Change in the fair value | ( | ) | |
Fair value as of March 31, 2020 | |||
Change in the fair value | |||
Fair value as of May 20, 2020 | $ |
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||
(In thousands) | |||||||
Contractual interest expense | $ | $ | |||||
Amortization of debt discount | |||||||
Amortization of debt issuance costs | |||||||
Total interest cost recognized | $ | $ |
Convertible notes hedge | Warrants liability | ||||||
(In thousands) | |||||||
Fair value as of March 9, 2020 | $ | $ | |||||
Change in the fair value | ( | ) | ( | ) | |||
Fair value as of March 31, 2020 | |||||||
Change in the fair value | |||||||
Fair value as of May 20, 2020 | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Contractual interest expense | $ | $ | $ | $ | |||||||||||
Amortization of debt discount | |||||||||||||||
Amortization of debt issuance costs | |||||||||||||||
Total interest cost recognized | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Contractual interest expense | $ | $ | $ | $ | |||||||||||
Amortization of debt issuance costs | |||||||||||||||
Total interest costs recognized | $ | $ | $ | $ |
9. | COMMITMENTS AND CONTINGENCIES |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Operating lease costs | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
Operating lease liabilities, current (Accrued liabilities) | $ | $ | |||||
Operating lease liabilities, noncurrent (Other liabilities) | |||||||
Total operating lease liabilities | $ | $ | |||||
Supplemental lease information: | |||||||
Weighted average remaining lease term | |||||||
Weighted average discount rate |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | $ | |||||||||||
Non-cash investing activities: | |||||||||||||||
Lease liabilities arising from obtaining right-of-use assets | $ | $ | $ | $ |
Lease Amounts | |||
(In thousands) | |||
Year: | |||
2020 (remaining six months) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total lease payments | |||
Less: imputed lease interest | ( | ) | |
Total lease liabilities | $ |
10. | STOCK-BASED COMPENSATION |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Cost of revenues | $ | $ | $ | $ | |||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Restructuring | |||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands) | |||||||||||||||
Stock options, RSUs, and PSUs | $ | $ | $ | $ | |||||||||||
Employee stock purchase plan | |||||||||||||||
Total | $ | $ | $ | $ |
• | Expected term—The expected term of the option awards represents the period of time between the grant date of the option awards and the date the option awards are either exercised, converted or canceled, including an estimate for those option awards still outstanding. The Company used the simplified method, as permitted by the SEC for companies with a limited history of stock option exercise activity, to determine the expected term for its option grants. |
• | Expected volatility—The expected volatility was calculated based on the Company’s historical stock prices, supplemented as necessary with historical volatility of the common stock of several peer companies with characteristics similar to those of the Company. |
• | Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the Company’s expected term. |
• | Dividend yield—The dividend yield was based on the Company’s dividend history and the anticipated dividend payout over its expected term. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Weighted average grant date fair value | $ | $ | $ | $ | |||||||||||
Expected term (in years) | |||||||||||||||
Expected volatility | % | % | % | % | |||||||||||
Annual risk-free rate of return | % | % | % | % | |||||||||||
Dividend yield | % | % | % | % |
Number of Shares Outstanding | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value (1) | |||||||||
(In thousands) | (Years) | (In thousands) | ||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||
Granted | ||||||||||||
Exercised | ( | ) | $ | |||||||||
Canceled | ( | ) | ||||||||||
Outstanding at June 30, 2020 | $ | $ | ||||||||||
Vested and expected to vest at June 30, 2020 | $ | $ | ||||||||||
Exercisable at June 30, 2020 | $ | $ |
(1) | The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of June 30, 2020 is based on the closing price of the Company’s stock fair value on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $ |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Prices | Number of Shares | Weighted- Average Remaining Life | Weighted- Average Exercise Price | Number of Shares | Weighted- Average Exercise Price | |||||||||||
(In thousands) | (Years) | (In thousands) | ||||||||||||||
$0.70 —– $1.11 | $ | $ | ||||||||||||||
$1.29 —– $1.29 | ||||||||||||||||
$1.31 —– $1.31 | ||||||||||||||||
$1.37 —– $14.58 | ||||||||||||||||
$64.17 —– $64.17 | ||||||||||||||||
Total | $ | $ |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value (1) | |||||||||
(In thousands) | (Years) | (In thousands) | ||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||
Granted | ||||||||||||
Vested | ( | ) | $ | |||||||||
Canceled | ( | ) | ||||||||||
Outstanding at June 30, 2020 | $ | $ | ||||||||||
Expected to vest at June 30, 2020 | $ | $ |
(1) | The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $ |
Number of Shares Outstanding | Weighted- Average Fair Value per Share at Grant Date | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value (1) | |||||||||
(In thousands) | (Years) | (In thousands) | ||||||||||
Outstanding at December 31, 2019 | $ | |||||||||||
Granted | ||||||||||||
Vested | ( | ) | $ | |||||||||
Canceled | ||||||||||||
Outstanding at June 30, 2020 | $ | $ |
(1) | The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $ |
11. | INCOME TAXES |
12. | NET INCOME (LOSS) PER SHARE |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Notes due 2023 interest and financing costs, net | |||||||||||||||
Adjusted net income (loss) | $ | ( | ) | $ | $ | $ | |||||||||
Denominator: | |||||||||||||||
Shares used in basic per share amounts: | |||||||||||||||
Weighted average common shares outstanding | |||||||||||||||
Shares used in diluted per share amounts: | |||||||||||||||
Weighted average common shares outstanding | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock-based awards | |||||||||||||||
Warrants (issued in conjunction with Notes due 2024) | |||||||||||||||
Notes due 2024 | |||||||||||||||
Notes due 2023 | |||||||||||||||
Weighted average common shares outstanding for diluted calculation | |||||||||||||||
Basic and diluted net income (loss) per share | |||||||||||||||
Net income (loss) per share, basic | $ | ( | ) | $ | $ | $ | |||||||||
Net income per share, diluted | $ | ( | ) | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
(In thousands) | |||||||||||
Employee stock-based awards | |||||||||||
Warrants (issued in conjunction with Notes due 2024) | |||||||||||
Notes due 2024 | |||||||||||
Warrants (issued in conjunction with Notes due 2025) | |||||||||||
Notes due 2025 | |||||||||||
Notes due 2023 | |||||||||||
Total |
13. | RELATED PARTY |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Net revenues | $ | 125,538 | $ | 134,094 | $ | (8,556 | ) | (6 | )% | $ | 331,083 | $ | 234,244 | $ | 96,839 | 41 | % |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Cost of revenues | $ | 77,151 | $ | 88,775 | $ | (11,624 | ) | (13 | )% | $ | 202,021 | $ | 155,586 | $ | 46,435 | 30 | % | ||||||||||||
Gross profit | 48,387 | 45,319 | 3,068 | 7 | % | 129,062 | 78,658 | 50,404 | 64 | % | |||||||||||||||||||
Gross margin | 38.5 | % | 33.8 | % | 39.0 | % | 33.6 | % |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Research and development | $ | 13,192 | $ | 9,604 | $ | 3,588 | 37 | % | $ | 25,068 | $ | 18,128 | $ | 6,940 | 38 | % | |||||||||||||
Percentage of net revenues | 11 | % | 7 | % | 8 | % | 8 | % |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Sales and marketing | $ | 12,371 | $ | 9,054 | $ | 3,317 | 37 | % | $ | 24,143 | $ | 16,487 | $ | 7,656 | 46 | % | |||||||||||||
Percentage of net revenues | 10 | % | 7 | % | 7 | % | 7 | % |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
General and administrative | $ | 11,970 | $ | 8,583 | $ | 3,387 | 39 | % | $ | 24,285 | $ | 18,463 | $ | 5,822 | 32 | % | |||||||||||||
Percentage of net revenues | 10 | % | 6 | % | 7 | % | 8 | % |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Restructuring charges | $ | — | $ | 631 | $ | (631 | ) | (100 | )% | $ | — | $ | 999 | $ | (999 | ) | (100 | )% |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||
Interest income | $ | 282 | $ | 593 | $ | (311 | ) | (52 | )% | $ | 1,373 | $ | 804 | $ | 569 | 71 | % | ||||||||||||
Interest expense | (5,952 | ) | (1,351 | ) | (4,601 | ) | 341 | % | (9,107 | ) | (5,102 | ) | (4,005 | ) | 78 | % | |||||||||||||
Other (expense) income, net | 653 | (5,480 | ) | 6,133 | (112 | )% | (271 | ) | (5,961 | ) | 5,690 | (95 | )% | ||||||||||||||||
Change in fair value of derivatives | (59,692 | ) | — | (59,692 | ) | ** | $ | (44,348 | ) | $ | — | $ | (44,348 | ) | ** | ||||||||||||||
Total other expense, net | $ | (64,709 | ) | $ | (6,238 | ) | $ | (58,471 | ) | (937 | )% | $ | (52,353 | ) | $ | (10,259 | ) | $ | (42,094 | ) | (410 | )% |
Three Months Ended June 30, | Change in | Six Months Ended June 30, | Change in | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||
Income tax benefit (provision) | $ | 6,561 | $ | (591 | ) | $ | 7,152 | ** | $ | 18,429 | $ | (939 | ) | $ | 19,368 | ** |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Net cash provided by operating activities | $ | 64,653 | $ | 31,835 | |||
Net cash used in investing activities | (7,804 | ) | (3,176 | ) | |||
Net cash provided by financing activities | 254,477 | 70,956 | |||||
Effect of exchange rate changes on cash | (181 | ) | 107 | ||||
Net increase in cash and cash equivalents | $ | 311,145 | $ | 99,722 |
Payments Due by Period | |||||||||||||||||||
Total | 2020 (remaining six months) | 2021-2022 | 2023-2024 | Beyond 2024 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Operating leases | $ | 16,393 | $ | 2,307 | $ | 8,044 | $ | 4,093 | $ | 1,949 | |||||||||
Notes due 2023 principal and interest | 5,800 | 200 | 400 | 5,200 | — | ||||||||||||||
Notes due 2024 principal and interest | 137,298 | 660 | 2,640 | 133,998 | — | ||||||||||||||
Notes due 2025 principal and interest | 323,984 | 382 | 1,600 | 1,600 | 320,402 | ||||||||||||||
Purchase obligations (1) | 75,230 | 75,230 | — | — | — | ||||||||||||||
Total | $ | 558,705 | $ | 78,779 | $ | 12,684 | $ | 144,891 | $ | 322,351 |
(1) | Purchase obligations include amounts related to component inventory that our primary contract manufacturer procures on our behalf in accordance with our production forecast as well as other inventory related purchase commitments. The timing of purchases in future periods could differ materially from estimates presented above due to fluctuations in demand requirements related to varying sales levels as well as changes in economic conditions. |
• | $5.0 million aggregate principal amount of the Notes due 2023 were outstanding; |
• | $132.0 million aggregate principal amount of the Notes due 2024 were outstanding; and |
• | $320.0 million aggregate principal amount of the Notes due 2025 were outstanding (the foregoing, collectively, the “Convertible Notes”) |
Incorporation by Reference | ||||||||||||
Exhibit Number | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | Filed Herewith | ||||||
8-K | 001-35480 | 3.1 | 4/6/2012 | |||||||||
10-Q | 001-35480 | 3.1 | 8/9/2017 | |||||||||
10-Q | 001-35480 | 2.1 | 8/6/2018 | |||||||||
8-K | 001-35480 | 3.1 | 5/27/2020 | |||||||||
S-1/A | 333-174925 | 3.5 | 3/12/2012 | |||||||||
S-1/A | 333-174925 | 4.1 | 3/12/2012 | |||||||||
8-K | 001-35480 | 4.1 | 8/17/2018 | |||||||||
8-K | 001-35480 | 4.1 | 8/17/2018 | |||||||||
8-K | 001-35480 | 4.1 | 6/5/2019 | |||||||||
8-K | 001-35480 | 4.1 | 6/5/2019 | |||||||||
8-K | 001-35480 | 4.1 | 3/9/2020 | |||||||||
8-K | 001-35480 | 4.2 | 3/9/2020 | |||||||||
X | ||||||||||||
X | ||||||||||||
32.1* | X | |||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document. | X | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Document. | X | ||||||||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). | X |
* | The certifications attached as Exhibit 32.1 accompany this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by Enphase Energy, Inc. for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
ENPHASE ENERGY, INC. | ||||
By: | /s/ Eric Branderiz | |||
Eric Branderiz | ||||
Executive Vice President and Chief Financial Officer | ||||
(Duly Authorized Officer) |
1. | I have reviewed this Form 10-Q of Enphase Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ BADRINARAYANAN KOTHANDARAMAN | |
Badrinarayanan Kothandaraman | |
President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Form 10-Q of Enphase Energy, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ERIC BRANDERIZ | |
Eric Branderiz | |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ BADRINARAYANAN KOTHANDARAMAN | /s/ ERIC BRANDERIZ | |
Badrinarayanan Kothandaraman | Eric Branderiz | |
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer |
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowances, accounts receivable | $ 296 | $ 564 |
Warranty obligations, current at fair value | 6,917 | 6,794 |
Warranty obligations, non-current at fair value | $ 14,215 | $ 13,012 |
Common stock, par value (in usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 200,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 125,979,000 | 123,109,000 |
Common stock, shares outstanding (in shares) | 125,979,000 | 123,109,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Statement [Abstract] | ||||
Net revenues | $ 125,538 | $ 134,094 | $ 331,083 | $ 234,244 |
Cost of revenues | 77,151 | 88,775 | 202,021 | 155,586 |
Gross profit | 48,387 | 45,319 | 129,062 | 78,658 |
Operating expenses: | ||||
Research and development | 13,192 | 9,604 | 25,068 | 18,128 |
Sales and marketing | 12,371 | 9,054 | 24,143 | 16,487 |
General and administrative | 11,970 | 8,583 | 24,285 | 18,463 |
Restructuring charges | 0 | 631 | 0 | 999 |
Total operating expenses | 37,533 | 27,872 | 73,496 | 54,077 |
Income from operations | 10,854 | 17,447 | 55,566 | 24,581 |
Other expense, net | ||||
Interest income | 282 | 593 | 1,373 | 804 |
Interest expense | (5,952) | (1,351) | (9,107) | (5,102) |
Other (expense) income, net | 653 | (5,480) | (271) | (5,961) |
Change in fair value of derivatives | (59,692) | 0 | (44,348) | 0 |
Total other expense, net | (64,709) | (6,238) | (52,353) | (10,259) |
Income (loss) before income taxes | (53,855) | 11,209 | 3,213 | 14,322 |
Income tax benefit (provision) | 6,561 | (591) | 18,429 | (939) |
Net income (loss) | $ (47,294) | $ 10,618 | $ 21,642 | $ 13,383 |
Net income (loss) per share: | ||||
Basic (in USD per share) | $ (0.38) | $ 0.09 | $ 0.17 | $ 0.12 |
Diluted (in USD per share) | $ (0.38) | $ 0.08 | $ 0.16 | $ 0.11 |
Shares used in per share calculation: | ||||
Basic (in shares) | 125,603 | 113,677 | 124,567 | 110,951 |
Diluted (in shares) | 125,603 | 130,737 | 138,910 | 129,400 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (47,294) | $ 10,618 | $ 21,642 | $ 13,383 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (62) | (249) | (230) | (328) |
Comprehensive income (loss) | $ (47,356) | $ 10,369 | $ 21,412 | $ 13,055 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Cash flows from operating activities: | |||||
Net income | $ (47,294) | $ 10,618 | $ 21,642 | $ 13,383 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 7,985 | 7,694 | |||
Provision for doubtful accounts | 81 | 185 | 207 | ||
Non-cash interest expense | 8,094 | 2,266 | |||
Financing fees on extinguishment of debt | 0 | 2,152 | |||
Fees paid for repurchase and exchange of convertible notes due 2023 | 0 | 6,000 | |||
Stock-based compensation | 19,815 | 8,224 | |||
Change in fair value of derivatives | 59,692 | 0 | 44,348 | 0 | |
Deferred income taxes | (19,567) | 0 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | 56,166 | (19,104) | |||
Inventory | 870 | (3,827) | |||
Prepaid expenses and other assets | (9,534) | (9,568) | |||
Accounts payable, accrued and other liabilities | (35,389) | 16,805 | |||
Warranty obligations | 809 | 1,699 | |||
Deferred revenues | (30,771) | 5,904 | |||
Net cash provided by operating activities | 64,653 | 31,835 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (7,804) | (3,176) | |||
Net cash used in investing activities | (7,804) | (3,176) | |||
Cash flows from financing activities: | |||||
Issuance of convertible notes, net of issuance costs | 312,420 | 128,040 | |||
Purchase of convertible note hedges | (89,056) | (36,313) | |||
Sale of warrants | 71,552 | 29,819 | |||
Fees paid for repurchase and exchange of convertible notes due 2023 | 0 | (6,000) | |||
Principal payments and financing fees on debt | (1,633) | (45,122) | |||
Proceeds from exercise of equity awards and employee stock purchase plan | 4,846 | 2,622 | |||
Payment of withholding taxes related to net share settlement of equity awards | (43,652) | (2,090) | |||
Net cash provided by financing activities | 254,477 | 70,956 | |||
Effect of exchange rate changes on cash and cash equivalents | (181) | 107 | |||
Net increase in cash and cash equivalents | 311,145 | 99,722 | |||
Cash, cash equivalents and restricted cash—Beginning of period | 296,109 | 106,237 | $ 106,237 | ||
Cash and cash equivalents—End of period | $ 607,254 | $ 205,959 | 607,254 | 205,959 | 296,109 |
Supplemental disclosures of non-cash investing and financing activities: | |||||
Purchases of fixed assets included in accounts payable | 1,636 | $ 1,194 | |||
Accrued interest payable unpaid upon exchange of convertible notes due 2023 | $ 0 | $ 833 |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Enphase Energy, Inc. (the “Company”) is a global energy technology company. The Company delivers smart, easy-to-use solutions that manage solar generation, storage and communication on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology and produces a fully integrated solar-plus-storage solution. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“U.S.”), or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information These accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for interim financial reporting. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, considered necessary to present fairly the Company’s financial condition, results of operations, comprehensive income (loss), stockholders’ equity and cash flows for the interim periods indicated. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results for the full year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, allowance for doubtful accounts, stock-based compensation, inventory valuation, accrued warranty obligations, fair value of debt derivatives, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability, legal contingencies, and tax valuation allowance. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. The worldwide spread of the COVID-19 virus has resulted in a global slowdown of economic activity which decreased demand for a broad variety of goods and services, including from our customers, while also disrupting sales channels and marketing activities for an unknown period of time and may continue to create significant uncertainty in future operational and financial performance. The Company expects this to result in negative impact on its sales and its results of operations. In preparing the Company’s condensed consolidated financial statements in accordance with GAAP, the Company is required to make estimates, assumptions and judgments that affect the amounts reported in its financial statements and the accompanying disclosures. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements. Summary of Significant Accounting Policies There have been no significant changes to the Company’s significant accounting policies in Note 2. “Summary of Significant Accounting Policies,” of the notes to consolidated financial statements included in Item 8 of the Company’s 2019 Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 allows entities to apply the guidance in the ASC 350-40, “Intangibles–Goodwill and Other–Internal-Use Software,” to determine which implementation costs are eligible to be capitalized as assets in a cloud computing arrangement that is considered a service contract. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively and are required to make certain disclosures in the interim and annual period of adoption. The Company adopted the new standard effective January 1, 2020 on a prospective basis and the adoption of this guidance did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with a current expected credit loss (CECL) model which will result in earlier recognition of credit losses. On January 1, 2020, the Company on a prospective basis adopted Topic 326, the measurement of expected credit losses under the CECL model is applicable to financial assets measured at amortized cost, including accounts receivable. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
|
REVENUE RECOGNITION |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Disaggregated Revenue The Company has one business activity, which is the design, manufacture and sale of solutions for the solar photovoltaic (“PV”) industry. Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows:
Contract Balances Receivables, and contract assets and contract liabilities from contracts with customers are as follows:
The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets include deferred product costs and commissions associated with the deferred revenue and will be amortized along with the associated revenue. The Company had no asset impairment charges related to contract assets in the three and six months ended June 30, 2020. Significant changes in the balances of contract assets (prepaid expenses and other assets) during the period are as follows (in thousands):
Contract liabilities are recorded as deferred revenue on the accompanying condensed consolidated balance sheets and include payments received in advance of performance obligations under the contract and are realized when the associated revenue is recognized under the contract. Significant changes in the balances of contract liabilities (deferred revenues) during the period are as follows (in thousands):
Remaining Performance Obligations Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows:
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OTHER FINANCIAL INFORMATION |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Financial Information | OTHER FINANCIAL INFORMATION Accounts Receivable, Net The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Accounts receivable, net consist of the following:
Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for uncollectible accounts receivable. Management estimates anticipated losses from doubtful accounts based on financial health of customers, days past due, collection history and existing economic conditions. The following table sets forth activities in the allowance for doubtful accounts for the periods indicated.
Inventory Inventory consist of the following:
Accrued Liabilities Accrued liabilities consist of the following:
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company’s goodwill and purchased intangible assets as of June 30, 2020 and December 31, 2019 are as follows:
Amortization expense related to finite-lived intangible assets are as follows:
Amortization of developed technology, patents and licensed technology is recorded to sales and marketing expense. The developed technology acquired from the Company’s acquisition of SunPower Corporation’s (“SunPower”) microinverter business in August 2018 was embedded in the microinverters that SunPower sold to its customers. The Company does not actively use the developed technology acquired from SunPower and holds the developed technology to prevent others from using it. Accordingly, the Company accounts for the developed technology as a defensive intangible asset and amortizes the associated value over a period of six years from the date of acquisition. The master supply agreement (“MSA”) entered into with SunPower in August 2018 provides the Company with the exclusive right to supply SunPower with module level power electronics for a period of five years, with options for renewals. The exclusivity arrangement extends throughout the term of the MSA, which comprises all of the expected cash flows from the customer relationship intangible asset, and was a condition to, and was an essential part of the acquisition of SunPower’s microinverter business by the Company. As the fair value ascribed to the customer relationship intangible asset represents payments to a customer, the Company amortizes the value of the customer relationship intangible asset as a reduction to revenue using a pattern of economic benefit method over a useful life of nine years.
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WARRANTY OBLIGATIONS |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WARRANTY OBLIGATIONS | WARRANTY OBLIGATIONS The Company’s warranty activities were as follows:
Changes in Estimates For the three and six months ended June 30, 2020, the Company recorded additional warranty expense of $1.7 million and $3.4 million, respectively, based on continuing analysis of field performance data and diagnostic root-cause failure analysis primarily relating to its prior generation products.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1. The Company considers all highly liquid investments, such as certificates of deposit and money market instruments with maturities of three months or less at the time of acquisition to be cash equivalents. For all periods presented, its cash balances consist of amounts held in non-interest-bearing and interest-bearing deposits and money market accounts and are within Level 1 of the fair value hierarchy because they are valued using quoted market prices for identical instruments in active markets. As of June 30, 2020, cash and cash equivalents balance includes money market funds of $598.5 million. Level 2. Convertible Notes due 2025 Derivatives On March 9, 2020, the Company issued $320 million aggregate principal amount of 0.25% convertible senior notes due 2025 (the “Notes due 2025”). Concurrently with the issuance of Notes due 2025, the Company entered into privately-negotiated convertible note hedge and warrant transactions which in combination are intended to reduce the potential dilution from the conversion of the Notes due 2025. On May 20, 2020, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to its certificate of incorporation to increase the number of authorized shares of the Company’s common stock. As a result, the Company satisfied the share reservation condition (as defined in the relevant indenture associated with the Notes due 2025). The Company will now be able to settle the Notes due 2025, convertible notes hedge and warrants through payment or delivery, as the case may be, of cash, shares of its common stock or a combination thereof, at the Company’s election. Accordingly, on May 20, 2020, the embedded derivative liability, convertible notes hedge and warrants liability were remeasured at a fair value of $116.3 million, $117.1 million and $96.4 million, respectively, and were then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and are no longer remeasured as long as they continue to meet the conditions for equity classification. See Note 8. “Debt” for additional information related to these transactions. The fair value of the Convertible notes embedded derivative was estimated using Binomial Lattice model and the fair value of Convertible notes hedge and Warrants liability was estimated using Black-Scholes-Merton model. The significant observable inputs, either directly or indirectly, and assumptions used in the models to calculate the fair value of the derivatives include the Company’s common stock price, exercise price of the derivatives, risk-free interest rate, volatility, annual coupon rate and remaining contractual term. Notes due 2025 and Notes due 2024. The Company carries the Notes due 2025 and Notes due 2024 (as defined below) at face value less unamortized discount and issuance costs on its condensed consolidated balance sheets. The fair value of the Notes due 2025 and Notes due 2024 of $288.9 million and $350.5 million, respectively, was determined based on the closing trading prices per $100 principal amount as of the last day of trading for the period. The Company considers the fair value of the Notes due 2025 and Notes due 2024 to be a Level 2 measurement as they are not actively traded. Level 3. Warranty Obligations. The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy.
Fair Value Option for Warranty Obligations Related to Microinverters Sold Since January 1, 2014 The Company estimates the fair value of warranty obligations by calculating the warranty obligations in the same manner as for sales prior to January 1, 2014 and applying an expected present value technique to that result. The expected present value technique, an income approach, converts future amounts into a single current discounted amount. In addition to the key estimates of failure rates, claim rates and replacement costs, the Company used certain Level 3 inputs which are unobservable and significant to the overall fair value measurement. Such additional assumptions included a discount rate based on the Company’s credit-adjusted risk-free rate and compensation comprised of a profit element and risk premium required of a market participant to assume the obligation. The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated.
Quantitative and Qualitative Information about Level 3 Fair Value Measurements As of June 30, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows:
Sensitivity of Level 3 Inputs - Warranty Obligations Each of the significant unobservable inputs is independent of the other. The profit element and risk premium are estimated based on requirements of a third-party participant willing to assume the Company’s warranty obligations. The credit‑adjusted risk‑free rate (“discount rate”) is determined by reference to the Company’s own credit standing at the fair value measurement date. Increasing the profit element and risk premium input by 100 basis points would result in a $0.2 million increase to the liability. Decreasing the profit element and risk premium by 100 basis points would result in a $0.2 million reduction of the liability. Increasing the discount rate by 100 basis points would result in a $0.9 million reduction of the liability. Decreasing the discount rate by 100 basis points would result in a $1.0 million increase to the liability.
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RESTRUCTURING |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | RESTRUCTURING Restructuring expense consist of the following:
2018 Plan In the third quarter of 2018, the Company began implementing restructuring actions (the “2018 Plan”) to lower its operating expenses. The restructuring actions include reorganization of the Company’s global workforce, elimination of certain non-core projects and consolidation of facilities. The Company completed its restructuring activities under the 2018 Plan in 2019.
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT The following table provides information regarding the Company’s long-term debt.
Convertible Senior Notes due 2025 On March 9, 2020, the Company issued $320.0 million aggregate principal amount of the Notes due 2025. The Notes due 2025 are general unsecured obligations and bear interest at an annual rate of 0.25% per year, payable semi-annually on March 1 and September 1 of each year, beginning September 1, 2020. The Notes due 2025 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2025 will mature on March 1, 2025, unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. The Notes due 2025 may be converted, under certain circumstances as described below, based on an initial conversion rate of 12.2637 shares of common stock per $1,000 principal amount (which represents an initial conversion price of $81.54 per share). The conversion rate for the Notes due 2025 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company received approximately $313.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2025. The Notes due 2025 may be converted prior to the close of business on the business day immediately preceding September 1, 2024, in multiples of $1,000 principal amount, at the option of the holder only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the relevant indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On and after September 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date of March 1, 2025, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon the occurrence of a fundamental change (as defined in the relevant indenture), holders may require the Company to repurchase all or a portion of their Notes due 2025 for cash at a price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. For the period from March 9, 2020, the issuance date, through May 19, 2020, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes was less than the maximum number of underlying shares that would be required to settle the Notes due 2025 into equity. Accordingly, unless and until the Company had a number of authorized shares that were not issued or reserved for any other purpose that equaled or exceeded the maximum number of underlying shares (“share reservation condition”), the Company would be required to pay to the converting holder in respect of each $1,000 principal amount of notes being converted solely in cash in an amount equal to the sum of the daily conversion values for each of the 20 consecutive trading days during the related observation period. However, following satisfaction of the share reservation condition, the Company could settle conversions of notes through payment or delivery, as the case may be, of cash, shares of the Company’s common stock or a combination of cash and shares of its common stock, at the Company’s election. In accounting for the issuance of the Notes due 2025, on March 9, 2020, the conversion option of the Notes due 2025 was deemed an embedded derivative requiring bifurcation from the Notes due 2025 (“host contract”) and separate accounting as an embedded derivative liability, as a result of the Company not having the necessary number of authorized but unissued shares of its common stock available to settle the conversion option of the Notes due 2025 in shares. The proceeds from the Notes due 2025 were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On March 9, 2020, the carrying amount of the embedded derivative liability of $68.7 million representing the conversion option was determined using the Binomial Lattice model and the remaining $251.3 million was allocated to the host contract. The difference between the principal amount of the Notes due 2025 and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes due 2025. On May 20, 2020, at the Company’s annual meeting of stockholders, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock, par value $0.00001 per share, from 150,000,000 shares to 200,000,000 shares (the “Amendment”). The Amendment became effective upon filing with the Secretary of State of Delaware on May 20, 2020. As a result, the Company satisfied the share reservation condition. The Company may now settle the Notes due 2025 and warrants issued in conjunction with the Notes due 2025 through payment or delivery, as the case may be, of cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. Accordingly, on May 20, 2020, the embedded derivative liability was remeasured at a fair value of $116.3 million and was then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and is no longer remeasured as long as it continues to meet the conditions for equity classification. The Company recorded the change in the fair value of the embedded derivative in other expense, net in the condensed consolidated statement of operations during the three and six months ended June 30, 2020. The following table presents the fair value and the change in fair value for the convertible note embedded derivative (in thousands):
Debt issuance costs for the issuance of the Notes due 2025 were approximately $7.6 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the Notes due 2025 host contract. Transaction costs were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2025. The following table presents the total amount of interest cost recognized relating to the Notes due 2025:
The derived effective interest rate on the Notes due 2025 host contract was determined to be 5.18%, which remain unchanged from the date of issuance. The remaining unamortized debt discount was $64.9 million as of June 30, 2020, will be amortized over approximately 4.7 years. Notes due 2025 Hedge and Warrant Transactions In connection with the offering of the Notes due 2025, the Company entered into privately-negotiated convertible note hedge transactions pursuant to which the Company has the option to purchase a total of approximately 3.9 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the notes, at a price of $81.54 per share, which is the initial conversion price of the Notes due 2025. The total cost of the convertible note hedge transactions was approximately $89.1 million. The convertible note hedge transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2025 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. As of June 30, 2020, the Company had not purchased any shares under the convertible note hedge transactions. Additionally, the Company separately entered into privately-negotiated warrant transactions (the “Warrants”) whereby the Company sold warrants to acquire approximately 3.9 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $106.94 per share. The Company received aggregate proceeds of approximately $71.6 million from the sale of the Warrants. If the market value per share of the Company’s common stock, as measured under the Warrants, exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. Taken together, the purchase of the convertible note hedges and the sale of the Warrants are intended to reduce potential dilution from the conversion of the Notes due 2025 and to effectively increase the overall conversion price from $81.54 to $106.94 per share. The Warrants are only exercisable on the applicable expiration dates in accordance with the agreements relating to each of the Warrants. Subject to the other terms of the Warrants, the first expiration date applicable to the Warrants is June 1, 2025, and the final expiration date applicable to the Warrants is September 23, 2025. As of June 30, 2020, the Warrants had not been exercised and remained outstanding. For the period from March 9, 2020, the issuance date of the convertible notes hedge and warrant transactions, through May 19, 2020, the number of authorized and unissued shares of the Company’s common stock that are not reserved for other purposes was less than the maximum number of underlying shares that will be required to settle the Notes due 2025 through the delivery of shares of the Company’s common stock. Accordingly, the convertibles note hedge and the warrant transactions could only be settled on net cash settlement basis. As a result the convertible note hedge and the warrants transaction were classified as a Convertible notes hedge asset and Warrants liability, respectively, in the condensed consolidated balance sheet and the change in fair value of derivatives was included in other expense, net in the condensed consolidated statement of operations. On May 20, 2020, at the Company’s annual meeting of stockholders, the stockholders approved the Amendment, and as a result, the Convertible notes hedge asset and Warrants liabilities were remeasured at a fair value of $117.1 million and $96.4 million, respectively, and were then reclassified to additional paid-in-capital in the condensed consolidated balance sheet in the second quarter of 2020 and is no longer remeasured as long as they continue to meet the conditions for equity classification. The change in the fair value of the Convertible notes hedge asset and Warrants liability were recorded in other expense, net in the condensed consolidated statements of operations during the three and six months ended June 30, 2020. The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability:
Convertible Senior Notes due 2024 On June 5, 2019, the Company issued $132.0 million aggregate principal amount of 1.0% convertible senior notes due 2024 (the “Notes due 2024”). The Notes due 2024 are general unsecured obligations and bear interest at an annual rate of 1.0% per year, payable semi-annually on June 1 and December 1 of each year, beginning December 1, 2019. The Notes due 2024 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Notes due 2024 will mature on June 1, 2024, unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. The Notes due 2024 may be converted, under certain circumstances as described below, based on an initial conversion rate of 48.7781 shares of common stock per $1,000 principal amount (which represents an initial conversion price of $20.5010 per share). The conversion rate for the Notes due 2024 will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the relevant indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its notes in connection with such make-whole fundamental change. The Company received approximately $128.0 million in net proceeds, after deducting the initial purchasers’ discount, from the issuance of the Notes due 2024. The Notes due 2024 may be converted on any day prior to the close of business on the business day immediately preceding December 1, 2023, in multiples of $1,000 principal amount, at the option of the holder only under any of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to $26.6513 (130% of the conversion price) on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the relevant indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On and after December 1, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date of June 1, 2024, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon the occurrence of a fundamental change (as defined in the relevant indenture), holders may require the Company to repurchase all or a portion of their Notes due 2024 for cash at a price equal to 100% of the principal amount of the notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of June 30, 2020, the sale price of the Company’s common stock was greater than or equal to $26.6513 (130% of the notes conversion price) for at least 20 trading days (whether consecutive or not) during a period of 30 consecutive trading days preceding the quarter-ended June 30, 2020. As a result, as of June 30, 2020, the Notes due 2024 are convertible at the holders’ option through September 30, 2020. Accordingly, the Company classified the net carrying amount of the Notes due 2024 of $99.7 million as Debt, current on the condensed consolidated balance sheet as of June 30, 2020. In accounting for the issuance of the Notes due 2024, on June 5, 2019, the Company separated the Notes due 2024 into liability and equity components. The carrying amount of the liability component of approximately $95.6 million was calculated by using a discount rate of 7.75%, which was the Company’s borrowing rate on the date of the issuance of the notes for a similar debt instrument without the conversion feature. The carrying amount of the equity component of approximately $36.4 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes due 2024. The equity component of the Notes due 2024 is included in additional paid-in capital in the condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The difference between the principal amount of the Notes due 2024 and the liability component (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the Notes due 2024. The Company separated the Notes due 2024 into liability and equity components, this resulted in a tax basis difference associated with the liability component that represents a temporary difference. The Company recognized the deferred taxes of $0.3 million for the tax effect of that temporary difference as an adjustment to the equity component included in additional paid-in capital in the condensed consolidated balance sheet. Debt issuance costs for the issuance of the Notes due 2024 were approximately $4.6 million, consisting of initial purchasers' discount and other issuance costs. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Notes due 2024. Transaction costs attributable to the liability component were approximately $3.3 million, were recorded as debt issuance cost (presented as contra debt in the condensed consolidated balance sheet) and are being amortized to interest expense over the term of the Notes due 2024. The transaction costs attributable to the equity component were approximately $1.3 million and were netted with the equity component in stockholders’ equity. As of June 30, 2020 and December 31, 2019, the unamortized deferred issuance cost for the Notes due 2024 was $2.6 million and $2.9 million, respectively, on the condensed consolidated balance sheets. The following table presents the total amount of interest cost recognized relating to the Notes due 2024:
The effective interest rate on the liability component Notes due 2024 was 7.75% for the three and six months ended June 30, 2020, which remains unchanged from the date of issuance. The remaining unamortized debt discount was $29.7 million and $32.9 million as of June 30, 2020 and December 31, 2019, respectively, will be amortized over approximately 3.9 years from June 30, 2020. Notes due 2024 Hedge and Warrant Transactions In connection with the offering of the Notes due 2024, the Company entered into privately-negotiated convertible note hedge transactions pursuant to which the Company has the option to purchase a total of approximately 6.4 million shares of its common stock (subject to anti-dilution adjustments), which is the same number of shares initially issuable upon conversion of the notes, at a price of $20.5010 per share, which is the initial conversion price of the Notes due 2024. The total cost of the convertible note hedge transactions was approximately $36.3 million. The convertible note hedge transactions are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes due 2024 and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be. As of June 30, 2020, and through the date of this quarterly report, the Company had not purchased any shares under the convertible note hedge transactions. Additionally, the Company separately entered into privately-negotiated warrant transactions (the “Warrants”) whereby the Company sold warrants to acquire approximately 6.4 million shares of the Company’s common stock (subject to anti-dilution adjustments) at an initial strike price of $25.2320 per share. The Company received aggregate proceeds of approximately $29.8 million from the sale of the Warrants. If the market value per share of the Company’s common stock, as measured under the Warrants, exceeds the strike price of the Warrants, the Warrants will have a dilutive effect on the Company’s earnings per share, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. Taken together, the purchase of the convertible note hedges and the sale of the Warrants are intended to reduce potential dilution from the conversion of the Notes due 2024 and to effectively increase the overall conversion price from $20.5010 to $25.2320 per share. The Warrants are only exercisable on the applicable expiration dates in accordance with the Warrants. Subject to the other terms of the Warrants, the first expiration date applicable to the Warrants is September 1, 2024, and the final expiration date applicable to the Warrants is April 22, 2025. As of June 30, 2020, and through the report date, the Warrants had not been exercised and remained outstanding. Given that the transactions meet certain accounting criteria, the Notes due 2024 hedge and the warrants transactions are recorded in stockholders’ equity, and they are not accounted for as derivatives and are not remeasured each reporting period. Convertible Senior Notes due 2023 In August 2018, the Company sold $65.0 million aggregate principal amount of 4.0% convertible senior notes due 2023 (the “Notes due 2023”) in a private placement. On May 30, 2019, the Company entered into separately and privately negotiated transactions with certain holders of the Notes due 2023 resulting in the repurchase and exchange, as of June 5, 2019, of $60.0 million aggregate principal amount of the notes in consideration for the issuance of 10,801,080 shares of common stock and separate cash payments totaling $6.0 million. As of both June 30, 2020 and December 31, 2019, $5.0 million aggregate principal amount of the Notes due 2023 remain outstanding. The remaining outstanding Notes due 2023 are general unsecured obligations and bear interest at a rate of 4.0% per year, payable semi-annually on February 1 and August 1 of each year. The Notes due 2023 are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The remaining outstanding Notes due 2023 will mature on August 1, 2023, unless earlier repurchased by the Company or converted at the option of the holders. The Company may not redeem the remaining Notes due 2023 prior to the maturity date, and no sinking fund is provided for such notes. The remaining Notes due 2023 are convertible, at a holder’s election, in multiples of $1,000 principal amount, into shares of the Company’s common stock based on the applicable conversion rate. The initial conversion rate for such notes is 180.0180 shares of common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $5.56 per share). The conversion rate and the corresponding conversion price are subject to adjustment upon the occurrence of certain events but will not be adjusted for any accrued and unpaid interest. Holders of the remaining Notes due 2023 who convert their notes in connection with a make-whole fundamental change (as defined in the applicable indenture) are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change, holders of the remaining Notes due 2023 may require the Company to repurchase all or a portion of their notes at a price equal to 100% of the principal amount of notes, plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. Holders may convert all or any portion of their Notes due 2023 at their option at any time prior to the close of business on the business day immediately preceding the maturity date, in multiples of $1,000 principal amount. The following table presents the amount of interest cost recognized relating to the contractual interest coupon and the amortization of debt issuance costs of the Notes due 2023.
Sale of Long-Term Financing Receivables The Company entered into an agreement with a third party in the fourth quarter of 2017 to sell certain current and future receivables at a discount. In December 2017, the third party made an initial purchase of receivables that resulted in net proceeds to the Company of $2.8 million. This transaction was recorded as debt on the accompanying consolidated balance sheets, and the debt balance was relieved in January 2019 as the underlying receivables were settled. During the year ended December 31, 2018, the third party made three additional purchases of receivables that resulted in total net proceeds to the Company of $5.6 million. These transactions were recorded as debt on the accompanying condensed consolidated balance sheets, and the total associated debt balance will be relieved by September 2021 as the underlying receivables are settled.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases office facilities under noncancelable operating leases that expire on various dates through 2028, some of which may include options to extend the leases for up to 12 years. The components of lease expense are presented as follows:
The components of lease liabilities are presented as follows:
Supplemental cash flow and other information related to operating leases, are as follows:
Undiscounted cash flows of operating lease liabilities as of June 30, 2020 are as follows:
Purchase Obligations The Company has contractual obligations related to component inventory that its primary contract manufacturer procures on its behalf in accordance with its production forecast as well as other inventory related purchase commitments. As of June 30, 2020, these purchase obligations totaled approximately $75.2 million. Letter of Credits The Company had a standby letter of credit in the aggregate amount of $44.7 million, primarily in connection with one of its customer contracts. The letter of credit served as a performance security for product delivered to the customer in the first quarter of 2020 and expired on April 30, 2020. No amounts were drawn against this letter of credit. As of June 30, 2020, the Company has no letter of credit outstanding. Litigation The Company is subject to various legal proceedings relating to claims arising out of its operations that have not been fully resolved. The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s business, results of operations, financial position and cash flows for that reporting period could be materially adversely affected. As of August 4, 2020, the Company is not currently a party to any matters that the management expects will have an adverse material effect on the Company’s consolidated financial position, results of operations or cash flows. Contingencies Since late September 2018, the Company has paid tariffs imposed on its microinverters by the China Section 301 Tariff Actions (“Section 301 Tariffs”) taken by the Office of the United States Trade Representative (the “USTR”). The Company has sought refunds on tariffs previously paid on certain microinverter products that fit the dimensions and weight limits within a Section 301 Tariff exclusion under U.S. note 20(ss)(40) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (the “Tariff Exclusion”). There is no material impact on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2020. The Company expects there will be a material positive impact on the Company’s financial statements if all of the requested refunds are approved in the future, totaling approximately $39 million plus accrued interest. The Tariff Exclusion expires on August 7, 2020, and the Company has filed a comment with the USTR supporting an extension of the Tariff Exclusion. The Company continues to pay Section 301 Tariffs on its storage and communication products and other accessories imported from China which are not subject to the Tariff Exclusion.
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based Compensation Expense Stock-based compensation expense for all stock-based awards expected to vest is measured at fair value on the date of grant and recognized ratably over the requisite service period. The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented.
The following table summarizes the various types of stock-based compensation expense for the periods presented.
As of June 30, 2020, there was approximately $76.9 million of total unrecognized stock-based compensation expense related to unvested equity awards, which are expected to be recognized over a weighted-average period of 2.1 years. Valuation of Equity Awards Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model.
Restricted Stock Units The fair value of the Company’s restricted stock units (“RSU”) awards granted is based upon the closing price of the Company’s stock price on the date of grant. Performance Stock Units The fair value of the Company’s non-market performance stock units (“PSU”) awards granted was based upon the closing price of the Company’s stock price on the date of grant. The fair value of awards of the Company’s PSU awards containing market conditions was determined using a Monte Carlo simulation model based upon the terms of the conditions, the expected volatility of the underlying security, and other relevant factors. Equity Awards Activity Stock Options The following is a summary of stock option activity.
(1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of June 30, 2020 is based on the closing price of the Company’s stock fair value on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share. The following table summarizes information about stock options outstanding at June 30, 2020.
Restricted Stock Units The following is a summary of RSU activity.
(1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share. Performance Stock Units The following is a summary of PSU activity.
(1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share.
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INCOME TAXES |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three and six months ended June 30, 2020, the Company’s income tax benefit of $6.6 million and $18.4 million, respectively, on a net loss before income taxes of $53.9 million and on a net income before income taxes of $3.2 million, respectively, calculated using the annualized effective tax rate method, was primarily due to tax deduction from employee stock compensation as a discrete event, partially offset by projected tax expense in the U.S. and foreign jurisdictions that are profitable. For the three and six months ended June 30, 2019, the Company’s income tax provision of $0.6 million and $0.9 million, respectively, on income before income taxes of $11.2 million and $14.3 million, respectively, calculated using the discrete tax approach, was primarily related to income taxes attributable to its foreign operations. For the three and six months ended June 30, 2020, in accordance with FASB guidance for interim reporting of income tax, the Company has computed its provision for income taxes based on a projected annual effective tax rate while excluding loss jurisdictions which cannot be benefited. The Company used the discrete tax approach in calculating the tax expense for the three and six months ended June 30, 2019 due to the fact that a relatively small change in the Company’s projected pre-tax net income (loss) could result in a volatile effective tax rate. Under the discrete method, the Company determines its tax (expense) benefit based upon actual results as if the interim period was an annual period. The tax provision recorded was primarily related to income taxes attributable to its foreign operations.
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NET INCOME (LOSS) PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include Stock Options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023, the Notes due 2024, Warrants issued in conjunction with the Notes due 2024, and from May 20, 2020 to the end of the reporting period, the Notes due 2025 and Warrants issued in conjunction with the Notes due 2025. See Note 8. “Debt” for additional information. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method for stock options, RSUs, PSUs, Notes due 2024, warrants issued in conjunction with the Notes due 2024, Notes due 2025, warrants issued in conjunction with the Notes due 2025 and shares to be purchased under the ESPP, and by application of the if-converted method for the Notes due 2023. To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income (loss) per share. The following table presents the computation of basic and diluted net income (loss) per share for the periods presented.
The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income (loss) per share attributable to common stockholders because their effect would have been antidilutive.
The Company had a net loss for the three months ended June 30, 2020, hence all common stock issuable under stock options, RSUs, PSUs, and shares to be purchased under the ESPP, the Notes due 2023, the Notes due 2024 and, warrants issued in conjunction with the Notes due 2024, Notes due 2025 and warrants issued in conjunction with the Notes due 2025 were excluded because including such shares would have been antidilutive. Diluted earnings per share for the six months ended June 30, 2020 includes the dilutive effect of stock options, RSUs, PSUs, and shares to be purchased under the ESPP, the Notes due 2023, the Notes due 2024 and warrants issued in conjunction with the Notes due 2024. Certain common stock issuable under stock options, RSUs, PSUs, Notes due 2025 and warrants issued in conjunction with the Notes due 2025 have been omitted from the diluted net income per share calculation because including such shares would have been antidilutive. Diluted earnings per share for the three and six months ended June 30, 2019 includes the dilutive effect of stock options, RSUs, PSUs, and shares to be purchased under the ESPP and the Notes due 2023. Certain common stock issuable under stock options, RSUs and PSUs have been omitted from the diluted net income per share calculation because including such shares would have been antidilutive. Since the Company has the intent and ability to settle the aggregate principal amount of the Notes due 2024 and Notes due 2025 in cash and any excess in shares of the Company’s common stock, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. In order to compute the dilutive effect, the number of shares included in the denominator of diluted net income per share is determined by dividing the conversion spread value of the “in-the-money” Notes due 2024 and Notes due 2025 by the Company’s average share price during the period and including the resulting share amount in the diluted net income per share denominator. The conversion spread will have a dilutive impact on net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of $20.50 per share and $81.54 per share for the Notes due 2024 and Notes due 2025, respectively.
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RELATED PARTY |
6 Months Ended |
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Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY | RELATED PARTY In 2018, a member of the Company’s board of directors and one of its principal stockholders, Thurman John Rodgers, purchased $5.0 million aggregate principal amount of the Notes due 2023 in a concurrent private placement. As of both June 30, 2020 and December 31, 2019, $5.0 million aggregate principal amount of the Notes due 2023 were outstanding. See Note 8. “Debt” for additional information related to this purchase.
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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Policy (Policies) |
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Jun. 30, 2020 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“U.S.”), or GAAP. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include revenue recognition, allowance for doubtful accounts, stock-based compensation, inventory valuation, accrued warranty obligations, fair value of debt derivatives, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, incremental borrowing rate for right-of-use assets and lease liability, legal contingencies, and tax valuation allowance. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions. The worldwide spread of the COVID-19 virus has resulted in a global slowdown of economic activity which decreased demand for a broad variety of goods and services, including from our customers, while also disrupting sales channels and marketing activities for an unknown period of time and may continue to create significant uncertainty in future operational and financial performance. The Company expects this to result in negative impact on its sales and its results of operations. In preparing the Company’s condensed consolidated financial statements in accordance with GAAP, the Company is required to make estimates, assumptions and judgments that affect the amounts reported in its financial statements and the accompanying disclosures. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements.
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” to reduce diversity in practice in accounting for the costs of implementing cloud computing arrangements that are service contracts. ASU 2018-15 allows entities to apply the guidance in the ASC 350-40, “Intangibles–Goodwill and Other–Internal-Use Software,” to determine which implementation costs are eligible to be capitalized as assets in a cloud computing arrangement that is considered a service contract. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively and are required to make certain disclosures in the interim and annual period of adoption. The Company adopted the new standard effective January 1, 2020 on a prospective basis and the adoption of this guidance did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with a current expected credit loss (CECL) model which will result in earlier recognition of credit losses. On January 1, 2020, the Company on a prospective basis adopted Topic 326, the measurement of expected credit losses under the CECL model is applicable to financial assets measured at amortized cost, including accounts receivable. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
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Fair Value Measurement | The accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
• Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
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Earnings Per Share | Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include Stock Options, RSUs, PSUs, shares to be purchased under the Company’s ESPP, the Notes due 2023, the Notes due 2024, Warrants issued in conjunction with the Notes due 2024, and from May 20, 2020 to the end of the reporting period, the Notes due 2025 and Warrants issued in conjunction with the Notes due 2025. See Note 8. “Debt” for additional information. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method for stock options, RSUs, PSUs, Notes due 2024, warrants issued in conjunction with the Notes due 2024, Notes due 2025, warrants issued in conjunction with the Notes due 2025 and shares to be purchased under the ESPP, and by application of the if-converted method for the Notes due 2023. To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income (loss) per share.
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REVENUE RECOGNITION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Revenue Disaggregation | Disaggregated revenue by primary geographical market and timing of revenue recognition for the Company’s single product line are as follows:
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Summary of Contract Assets and Contract Liabilities, and Changes in Balances from Contracts with Customers | Significant changes in the balances of contract liabilities (deferred revenues) during the period are as follows (in thousands):
Receivables, and contract assets and contract liabilities from contracts with customers are as follows:
Significant changes in the balances of contract assets (prepaid expenses and other assets) during the period are as follows (in thousands):
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Summary of Estimated Revenue Expected to be Recognized in Future Periods | Estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period are as follows:
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OTHER FINANCIAL INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | Accounts receivable, net consist of the following:
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Schedule of Allowance for Doubtful Accounts | The following table sets forth activities in the allowance for doubtful accounts for the periods indicated.
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Schedule of Inventory | Inventory consist of the following:
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Schedule of Accrued Liabilities | Accrued liabilities consist of the following:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill and Intangible Assets | The Company’s goodwill and purchased intangible assets as of June 30, 2020 and December 31, 2019 are as follows:
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Schedule of Amortization Expense | Amortization expense related to finite-lived intangible assets are as follows:
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WARRANTY OBLIGATIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Warranty Activities | The Company’s warranty activities were as follows:
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy.
The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability:
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Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs | The following table provides information regarding changes in nonfinancial liabilities related to the Company’s warranty obligations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated.
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Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 | As of June 30, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurement of the Company’s liabilities designated as Level 3 are as follows:
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RESTRUCTURING (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Restructuring expense consist of the following:
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DEBT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table presents the fair value and the change in fair value for the convertible note embedded derivative (in thousands):
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Schedule of Debt | The following table provides information regarding the Company’s long-term debt.
The following table presents the total amount of interest cost recognized relating to the Notes due 2025:
The following table presents the total amount of interest cost recognized relating to the Notes due 2024:
The following table presents the amount of interest cost recognized relating to the contractual interest coupon and the amortization of debt issuance costs of the Notes due 2023.
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Schedule of Fair Value Of Convertible Notes Hedge and Warrants Liability | The following table presents the Company’s warranty obligation that were measured at fair value on a recurring basis and its categorization within the fair value hierarchy.
The following table presents the fair value and the change in fair value for the Convertible notes hedge asset and Warrants liability:
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COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease | The components of lease expense are presented as follows:
The components of lease liabilities are presented as follows:
Supplemental cash flow and other information related to operating leases, are as follows:
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Schedule of Future Minimum Rental Payments for Operating Leases | Undiscounted cash flows of operating lease liabilities as of June 30, 2020 are as follows:
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STOCK-BASED COMPENSATION (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the Components of Total Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented.
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Summary of Stock-Based Compensation Associated with Each Type of Award | The following table summarizes the various types of stock-based compensation expense for the periods presented.
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table presents the weighted-average grant date fair value of options granted for the periods presented and the assumptions used to estimate those values using a Black-Scholes option pricing model.
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Share-based Compensation, Performance Shares Award Outstanding Activity | The following is a summary of PSU activity.
(1) The intrinsic value of PSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of PSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share.
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Summary of Stock Option Activity | The following is a summary of stock option activity.
(1) The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise. The intrinsic value of options outstanding, vested and expected to vest, and exercisable as of June 30, 2020 is based on the closing price of the Company’s stock fair value on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share.
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Summary of Stock Option Outstanding | The following table summarizes information about stock options outstanding at June 30, 2020.
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Summary of Restricted Stock Unit Activity | The following is a summary of RSU activity.
(1) The intrinsic value of RSUs vested is based upon the value of the Company’s stock when vested. The intrinsic value of RSUs outstanding and expected to vest as of June 30, 2020 is based on the closing price of the Company’s stock on June 30, 2020 or the earlier of the last trading day prior to June 30, 2020, if June 30, 2020 is a non-trading day. The Company’s stock fair value used in this computation was $47.57 per share.
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NET INCOME (LOSS) PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share | The following table presents the computation of basic and diluted net income (loss) per share for the periods presented.
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Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Loss Per Share | The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net income (loss) per share attributable to common stockholders because their effect would have been antidilutive.
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REVENUE RECOGNITION - Summary of Disaggregated Revenue by Primary Geographical Market and Timing of Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | $ 125,538 | $ 134,094 | $ 331,083 | $ 234,244 |
Products delivered at a point in time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 114,299 | 124,336 | 308,978 | 214,736 |
Products and services delivered over time | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 11,239 | 9,758 | 22,105 | 19,508 |
United States | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | 100,791 | 99,909 | 280,391 | 177,595 |
International | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net revenues | $ 24,747 | $ 34,185 | $ 50,692 | $ 56,649 |
REVENUE RECOGNITION - Summary of Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 89,504 | $ 145,413 |
Short-term contract assets (Prepaid expenses and other assets) | 16,416 | 15,055 |
Long-term contract assets (Other assets) | 46,960 | 42,087 |
Short-term contract liabilities (Deferred revenues) | 40,256 | 81,783 |
Long-term contract liabilities (Deferred revenues) | $ 110,977 | $ 100,204 |
REVENUE RECOGNITION - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
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Revenue from Contract with Customer [Abstract] | ||
Contract asset impairment charges | $ 0 | $ 0 |
REVENUE RECOGNITION - Summary of Significant Changes in the Balances of Contract Liabilities and Assets (Details) $ in Thousands |
6 Months Ended |
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Jun. 30, 2020
USD ($)
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Contract Assets | |
Balance, beginning of period | $ 57,142 |
Revenue recognized | (8,439) |
Increase | 14,673 |
Balance, end of period | 63,376 |
Contract Liabilities | |
Balance, beginning of period | 181,987 |
Revenue recognized | (66,841) |
Increase due to billings | 36,087 |
Balance, end of period | $ 151,233 |
REVENUE RECOGNITION - Summary of Estimated Revenue Expected to be Recognized in Future Periods (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
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Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 151,233 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 21,679 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 36,389 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 31,357 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 25,564 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 20,373 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total estimated revenue expected to be recognized in future periods | $ 15,871 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Total estimated revenue expected to be recognized in future periods, expected timing |
OTHER FINANCIAL INFORMATION - Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 89,800 | $ 145,977 |
Allowance for doubtful accounts | (296) | (564) |
Accounts receivable, net | $ 89,504 | $ 145,413 |
OTHER FINANCIAL INFORMATION - Accounts Receivable, Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Balance, at beginning of year | $ 374 | $ 564 | |
Provision for doubtful accounts | 81 | 185 | $ 207 |
Write-offs, net of recoveries | (159) | (453) | |
Balance, at end of year | $ 296 | $ 296 |
OTHER FINANCIAL INFORMATION - Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 5,800 | $ 4,197 |
Finished goods | 25,386 | 27,859 |
Total inventory | $ 31,186 | $ 32,056 |
OTHER FINANCIAL INFORMATION - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Salaries, commissions, incentive compensation and benefits | $ 3,607 | $ 5,524 |
Customer rebates and sales incentives | 20,741 | 24,198 |
Freight | 2,640 | 4,908 |
Operating lease liabilities, current | 3,570 | 3,170 |
Other | 16,133 | 9,292 |
Total accrued liabilities | $ 46,691 | $ 47,092 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill, Gross | $ 24,783 | $ 24,783 |
Goodwill, Net | 24,783 | 24,783 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Other indefinite-lived intangibles, Gross | 286 | 286 |
Intangible assets with finite lives: | ||
Gross | 36,486 | 36,486 |
Accumulated Amortization | (8,400) | (5,907) |
Net | 28,086 | 30,579 |
Developed technology | ||
Intangible assets with finite lives: | ||
Gross | 13,100 | 13,100 |
Accumulated Amortization | (4,185) | (3,093) |
Net | 8,915 | 10,007 |
Customer relationship | ||
Intangible assets with finite lives: | ||
Gross | 23,100 | 23,100 |
Accumulated Amortization | (4,215) | (2,814) |
Net | $ 18,885 | $ 20,286 |
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 09, 2018 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 1,246 | $ 1,181 | $ 2,493 | $ 2,363 | |
Developed technology, and patents and licensed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 546 | 546 | 1,092 | 1,092 | |
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 700 | $ 635 | $ 1,401 | $ 1,271 | |
SunPower’s | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Agreement for exclusive supplier rights, period | 5 years | ||||
SunPower’s | Developed technology, and patents and licensed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period for acquired intangible assets | 6 years | ||||
SunPower’s | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization period for acquired intangible assets | 9 years |
WARRANTY OBLIGATIONS - Summary of Warranty Activities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
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Changes in the Company's product warranty liability | |||||
Warranty obligations, beginning of period | $ 37,501 | $ 31,042 | $ 37,098 | $ 31,294 | |
Accruals for warranties issued during period | 766 | 1,312 | 2,290 | 2,170 | |
Changes in estimates | 1,748 | 699 | 3,425 | 1,503 | |
Settlements | (2,578) | (2,206) | (5,848) | (4,502) | |
Increase due to accretion expense | 804 | 550 | 1,578 | 1,101 | |
Other | (334) | 1,597 | (636) | 1,428 | |
Warranty obligations, end of period | 37,907 | 32,994 | 37,907 | 32,994 | |
Less: current portion | (10,170) | (7,468) | (10,170) | (7,468) | $ (10,078) |
Noncurrent | $ 27,737 | $ 25,526 | $ 27,737 | $ 25,526 | $ 27,020 |
WARRANTY OBLIGATIONS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Product Warranties Disclosures [Abstract] | ||||
Additional warranty expense | $ 1,748 | $ 699 | $ 3,425 | $ 1,503 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) |
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2020 |
May 20, 2020 |
Mar. 31, 2020 |
Mar. 09, 2020 |
Jun. 05, 2019 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Warrants obligations measured at fair value | $ 96,400,000 | ||||
Increase in liability as a result of increasing the profit element and risk premium input by 100 basis points | $ 200,000 | ||||
Decrease in liability as a result of decreasing the profit element and risk premium input by 100 basis points | 200,000 | ||||
Decrease in liability as a result of increasing the discount rate by 100 basis points | 900,000 | ||||
Increase in liability as a result of decreasing the discount rate by 100 basis points | 1,000,000.0 | ||||
Convertible Notes | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Convertible notes embedded derivative | 117,100,000 | ||||
Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument face amount | $ 320,000,000.0 | ||||
Interest rate | 0.25% | ||||
Convertible notes embedded derivative | 116,300,000 | $ 45,100,000 | $ 68,700,000 | ||
Warrants obligations measured at fair value | $ 96,352,000 | $ 38,637,000 | $ 71,552,000 | ||
Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Debt instrument face amount | $ 132,000,000.0 | ||||
Interest rate | 1.00% | ||||
Level 1 | Money market funds | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 598,500,000 | ||||
Level 2 | Recurring | Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notes payable fair value | 288,900,000 | ||||
Level 2 | Recurring | Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Notes payable fair value | $ 350,500,000 |
FAIR VALUE MEASUREMENTS - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
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Liabilities: | ||||||
Warranty obligations, current | $ 10,170 | $ 10,078 | $ 7,468 | |||
Warranty obligations, non-current | 27,737 | 27,020 | 25,526 | |||
Total warranty obligations measured at fair value | 37,907 | $ 37,501 | 37,098 | $ 32,994 | $ 31,042 | $ 31,294 |
Recurring | Level 3 | ||||||
Liabilities: | ||||||
Warranty obligations, current | 6,917 | 6,794 | ||||
Warranty obligations, non-current | 14,215 | 13,012 | ||||
Total warranty obligations measured at fair value | 21,132 | 19,806 | ||||
Total liabilities measured at fair value | $ 21,132 | $ 19,806 |
FAIR VALUE MEASUREMENTS - Schedule of Changes in Nonfinancial Liabilities Related to Warrant Obligations Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Level 3 - Recurring - Total warranty obligations measured at fair value - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 20,425 | $ 12,065 | $ 19,806 | $ 11,757 |
Accruals for warranties issued during period | 766 | 1,312 | 2,290 | 2,170 |
Changes in estimates | 983 | 519 | 1,598 | 860 |
Settlements | (1,511) | (1,188) | (3,504) | (2,460) |
Increase due to accretion expense | 804 | 550 | 1,578 | 1,101 |
Other | (335) | 1,598 | (636) | 1,428 |
Balance at end of period | $ 21,132 | $ 14,856 | $ 21,132 | $ 14,856 |
FAIR VALUE MEASUREMENTS - Summary of Significant Unobservable Inputs used in the Fair Value Measurement of Liabilities Designated as Level 3 (Details) - Recurring - Level 3 - Warranty obligations for microinverters sold since January 1, 2014 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Profit element and risk premium | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 0.15 | 0.14 |
Credit-adjusted risk-free rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warranty obligations, measurement input | 0.16 | 0.16 |
RESTRUCTURING - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 0 | $ 631 | $ 0 | $ 999 |
Redundancy and employee severance and benefit arrangements | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 631 | 0 | 1,099 |
Lease loss reserves | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring reserve, accrual adjustment | $ 0 | $ 0 | $ 0 | $ (100) |
DEBT - Long-term debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
May 20, 2020 |
Mar. 31, 2020 |
Mar. 09, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Total carrying amount of debt | $ 355,445 | $ 105,543 | |||
Less: current portion of convertible notes and long-term financing receivable recorded as debt | (102,271) | (2,884) | |||
Long-term debt | 253,174 | 102,659 | |||
Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Convertible notes embedded derivative | $ 117,100 | ||||
Convertible Notes | Convertible Senior Notes Due 2025 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 320,000 | 0 | |||
Less unamortized discount and issuance costs | (72,000) | 0 | |||
Total carrying amount of debt | 248,000 | 0 | |||
Convertible notes embedded derivative | $ 116,300 | $ 45,100 | $ 68,700 | ||
Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 132,000 | 132,000 | |||
Less unamortized discount and issuance costs | (32,301) | (35,815) | |||
Total carrying amount of debt | 99,699 | 96,185 | |||
Convertible Notes | Convertible Senior Notes Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | 5,000 | 5,000 | |||
Less unamortized discount and issuance costs | (122) | (143) | |||
Total carrying amount of debt | 4,878 | 4,857 | |||
Financing Receivable | Financing Receivable Recorded as Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 2,868 | $ 4,501 |
DEBT - Convertible Senior Notes due in 2025 Narrative (Details) |
6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 09, 2020
USD ($)
trading_day
$ / shares
shares
|
Jun. 05, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Jun. 30, 2019
USD ($)
|
May 20, 2020
USD ($)
$ / shares
shares
|
May 19, 2020
shares
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
$ / shares
shares
|
|
Debt Instrument [Line Items] | ||||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock, shares authorized (in shares) | shares | 200,000,000 | 200,000,000 | 150,000,000 | 150,000,000 | ||||
Payment for bonds hedge | $ 89,056,000 | $ 36,313,000 | ||||||
Proceeds from sale of warrants | $ 29,800,000 | $ 71,552,000 | $ 29,819,000 | |||||
Warrants obligations measured at fair value | $ 96,400,000 | |||||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible notes embedded derivative | 117,100,000 | |||||||
Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument face amount | $ 320,000,000.0 | |||||||
Interest rate | 0.25% | |||||||
Conversion ratio | 0.0122637 | |||||||
Debt conversion price (in USD per share) | $ / shares | $ 81.54 | |||||||
Proceeds from convertible debt | $ 313,000,000.0 | |||||||
Convertible notes embedded derivative | 68,700,000 | 116,300,000 | $ 45,100,000 | |||||
Embedded derivative, host contract | 251,300,000 | |||||||
Debt issuance costs | $ 7,600,000 | |||||||
Effective percentage rate | 5.18% | |||||||
Unamortized discount | $ 64,900,000 | |||||||
Remaining discount amortization period | 4 years 8 months 12 days | |||||||
Conversion shares (in shares) | shares | 3,900,000 | |||||||
Payment for bonds hedge | $ 89,100,000 | |||||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 106.94 | |||||||
Proceeds from sale of warrants | $ 71,600,000 | |||||||
Warrants obligations measured at fair value | $ 71,552,000 | $ 96,352,000 | $ 38,637,000 | |||||
Period One | Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of threshold trading days | trading_day | 20 | |||||||
Number of consecutive trading days | trading_day | 30 | |||||||
Threshold percentage | 130.00% | |||||||
Period Two | Convertible Notes | Convertible Senior Notes Due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of consecutive trading days | trading_day | 5 | |||||||
Threshold percentage | 100.00% | |||||||
Measurement period percentage of stock price trigger | 98.00% |
DEBT - Schedule of Convertible Senior Notes due in 2025 (Details) - Convertible Notes - Convertible Senior Notes Due 2025 - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 200 | $ 249 |
Amortization of debt discount | 3,069 | 3,812 |
Amortization of debt issuance costs | 381 | 468 |
Total interest cost recognized | $ 3,650 | $ 4,529 |
DEBT - Convertible Note Embedded Derivative (Details) - Convertible Notes - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended |
---|---|---|
Mar. 31, 2020 |
May 20, 2020 |
|
Debt Instrument [Line Items] | ||
Embedded derivative, ending balance | $ 117,100 | |
Convertible Senior Notes Due 2025 | ||
Debt Instrument [Line Items] | ||
Embedded derivative, beginning balance | $ 68,700 | 45,100 |
Embedded derivative, change in the fair value | (23,600) | 71,200 |
Embedded derivative, ending balance | $ 45,100 | $ 116,300 |
DEBT - Convertible Notes Hedge and Warrant Liability (Details) - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|---|
Mar. 31, 2020 |
May 20, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Instrument [Line Items] | ||||||
Convertible notes hedge, change in the fair value | $ (59,692) | $ 0 | $ (44,348) | $ 0 | ||
Warrants liability, ending balance | $ 96,400 | |||||
Convertible Notes | Convertible Senior Notes Due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Convertible notes hedge, beginning balance | $ 89,056 | 47,885 | 47,885 | |||
Convertible notes hedge, change in the fair value | (41,171) | 69,223 | ||||
Convertible notes hedge, ending balance | 47,885 | 117,108 | ||||
Warrants liability, beginning balance | 71,552 | 38,637 | $ 38,637 | |||
Warrants liability, change in fair value | (32,915) | 57,715 | ||||
Warrants liability, ending balance | $ 38,637 | $ 96,352 |
DEBT - Convertible Senior Notes due 2024 Narrative (Details) $ / shares in Units, shares in Millions |
6 Months Ended | ||||
---|---|---|---|---|---|
Mar. 09, 2020
trading_day
|
Jun. 05, 2019
USD ($)
trading_day
$ / shares
shares
|
Jun. 30, 2020
USD ($)
trading_day
$ / shares
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Debt, current | $ 355,445,000 | $ 105,543,000 | |||
Deferred tax assets, net | 93,872,000 | 74,531,000 | |||
Payment for bonds hedge | 89,056,000 | $ 36,313,000 | |||
Proceeds from sale of warrants | $ 29,800,000 | 71,552,000 | $ 29,819,000 | ||
Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument face amount | $ 132,000,000.0 | ||||
Interest rate | 1.00% | ||||
Debt conversion price (in USD per share) | $ / shares | $ 20.5010 | ||||
Proceeds from convertible debt | $ 128,000,000.0 | ||||
Conversion ratio | 0.0487781 | ||||
Debt, current | $ 99,699,000 | 96,185,000 | |||
Convertible note, liability component | $ 95,600,000 | ||||
Effective percentage rate | 7.75% | 7.75% | |||
Convertible note, equity component | $ 36,400,000 | ||||
Deferred tax assets, net | 300,000 | ||||
Debt issuance costs | 4,600,000 | ||||
Unamortized debt issuance costs | 3,300,000 | $ 2,600,000 | 2,900,000 | ||
Debt issuance costs, allocated to capital | $ 1,300,000 | ||||
Unamortized discount | $ 29,700,000 | $ 32,900,000 | |||
Remaining discount amortization period | 3 years 10 months 24 days | ||||
Conversion shares (in shares) | shares | 6.4 | ||||
Payment for bonds hedge | $ 36,300,000 | ||||
Warrants sold (in shares) | shares | 6.4 | ||||
Warrants issued, strike price (in USD per share) | $ / shares | $ 25.2320 | ||||
Period One | Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Number of threshold trading days | trading_day | 20 | ||||
Number of consecutive trading days | trading_day | 30 | ||||
Stock trigger price (in USD per share) | $ / shares | $ 26.6513 | ||||
Threshold percentage | 130.00% | ||||
Measurement period percentage of stock price trigger | 98.00% | ||||
Period Two | Convertible Notes | Convertible Senior Notes Due 2024 | |||||
Debt Instrument [Line Items] | |||||
Number of consecutive trading days | trading_day | 5 | ||||
Threshold percentage | 100.00% |
DEBT - Schedule of Convertible Senior Notes due 2024 (Details) - Convertible Notes - Convertible Senior Notes Due 2024 - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 330 | $ 92 | $ 660 | $ 92 |
Amortization of debt discount | 1,621 | 416 | 3,183 | 416 |
Amortization of debt issuance costs | 166 | 45 | 332 | 45 |
Total interest cost recognized | $ 2,117 | $ 553 | $ 4,175 | $ 553 |
DEBT - Convertible Senior Notes due 2023 Narrative (Details) - Convertible Senior Notes Due 2023 |
1 Months Ended | |||
---|---|---|---|---|
Jun. 05, 2019
USD ($)
shares
|
Aug. 31, 2018
USD ($)
$ / shares
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | ||||
Conversion shares (in shares) | shares | 10,801,080 | |||
Fees paid for repurchase and exchange of convertible notes | $ 6,000,000.0 | |||
Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 65,000,000.0 | $ 5,000,000.0 | $ 5,000,000.0 | |
Interest rate | 4.00% | |||
Debt converted | $ 60,000,000.0 | |||
Debt conversion price (in USD per share) | $ / shares | $ 5.56 | |||
Redemption price percentage | 100.00% | |||
Conversion ratio | 0.180018 |
DEBT - Schedule of Convertible Senior Notes due 2023 (Details) - Convertible Notes - Convertible Senior Notes Due 2023 - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 50 | $ 483 | $ 100 | $ 1,133 |
Amortization of debt issuance costs | 10 | 96 | 20 | 225 |
Total interest cost recognized | $ 60 | $ 579 | $ 120 | $ 1,358 |
DEBT - Sale of Long - Term Financing Receivables (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2018 |
|
Financing Receivable | Financing Receivable Recorded As Debt | ||
Debt Instrument [Line Items] | ||
Proceeds from debt, net of issuance costs | $ 2.8 | $ 5.6 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Term of lease contract, maximum renewal term | 12 years | |
Purchase obligation | $ 75,200,000 | |
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding | 0 | |
Potential positive impact of approval of requested Tariff refunds | $ 39,000,000 | |
Letter of credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit | $ 44,700,000 |
COMMITMENTS AND CONTINGENCIES - Lease Expense Components (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease costs | $ 1,280 | $ 564 | $ 2,502 | $ 1,063 |
COMMITMENTS AND CONTINGENCIES - Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liabilities, current (Accrued liabilities) | $ 3,570 | $ 3,170 |
Operating lease liabilities, noncurrent (Other liabilities) | 10,202 | 9,542 |
Total operating lease liabilities | $ 13,772 | $ 12,712 |
Weighted average remaining lease term | 5 years 4 months 24 days | 5 years 6 months |
Weighted average discount rate | 8.30% | 8.60% |
COMMITMENTS AND CONTINGENCIES - Supplemental Cash Flow and Other Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating cash flows from operating leases | $ 1,145 | $ 857 | $ 2,159 | $ 1,594 |
Lease liabilities arising from obtaining right-of-use assets | $ 0 | $ 4,834 | $ 2,941 | $ 4,834 |
COMMITMENTS AND CONTINGENCIES - Schedule of Minimum Lease Payments Under Noncancelable Operating Leases (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 (remaining six months) | $ 2,307 | |
2021 | 4,679 | |
2022 | 3,365 | |
2023 | 2,648 | |
2024 | 1,445 | |
2025 and thereafter | 1,949 | |
Total lease payments | 16,393 | |
Less: imputed lease interest | (2,621) | |
Total lease liabilities | $ 13,772 | $ 12,712 |
STOCK-BASED COMPENSATION - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 12,300 | $ 4,935 | $ 19,815 | $ 8,224 |
Total unrecognized compensation cost | 76,900 | $ 76,900 | ||
Weighted-average recognition period for unrecognized compensation cost | 2 years 1 month 6 days | |||
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1,337 | 386 | $ 1,943 | 617 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 3,263 | 1,128 | 5,182 | 1,844 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 3,610 | 1,360 | 5,552 | 2,359 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 4,090 | 1,729 | 7,138 | 3,017 |
Restructuring | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 332 | $ 0 | $ 387 |
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Expense Associated with Each Type of Award (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 12,300 | $ 4,935 | $ 19,815 | $ 8,224 |
Stock options and RSUs and PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 11,557 | 4,760 | 18,634 | 7,982 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 743 | $ 175 | $ 1,181 | $ 242 |
STOCK-BASED COMPENSATION - Summary of the Weighted-Average Grant Date Fair Value of Options Granted (Details) - Stock options - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
The fair value of each option granted during the periods | ||||
Weighted average grant date fair value (in usd per share) | $ 38.45 | $ 9.16 | $ 38.45 | $ 9.16 |
Expected term | 3 years 9 months 18 days | 3 years 9 months 18 days | 3 years 9 months 18 days | 3 years 9 months 18 days |
Expected volatility | 86.40% | 89.10% | 86.40% | 89.10% |
Annual risk-free rate of return | 0.10% | 2.10% | 0.10% | 2.10% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
| |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 4,097 |
Granted (in shares) | shares | 11 |
Exercised (in shares) | shares | (968) |
Canceled (in shares) | shares | (75) |
Outstanding, ending balance (in shares) | shares | 3,065 |
Shares outstanding, vested and expected to vest (in shares) | shares | 3,065 |
Shares outstanding, exercisable (in shares) | shares | 2,270 |
Weighted- Average Exercise Price per Share | |
Outstanding, beginning balance (in usd per share) | $ 2.18 |
Granted (in usd per share) | 64.17 |
Exercised (in usd per share) | 2.08 |
Canceled (in usd per share) | 7.34 |
Outstanding, ending balance (in usd per share) | 2.30 |
Weighted-average exercise price, vested and expected (in usd per share) | 2.30 |
Weighted-average exercise price, exercisable (in usd per share) | $ 2.37 |
Weighted-Average Remaining Contractual Term | |
Outstanding | 4 years |
Vested and expected to vest | 3 years |
Exercisable | 3 years 10 months 24 days |
Aggregate Intrinsic Value | |
Exercised | $ | $ 50,611 |
Outstanding | $ | 138,877 |
Vested and expected to vest | $ | 138,877 |
Exercisable | $ | $ 102,649 |
Share price (in usd per share) | $ 47.57 |
STOCK-BASED COMPENSATION - Summary of Stock Options Outstanding (Details) shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
$ / shares
shares
| |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding, number of shares (shares) | shares | 3,065 |
Options outstanding - weighted- average remaining life | 4 years |
Options outstanding - weighted- average exercise price (usd per share) | $ 2.30 |
Options exercisable - number of shares exercisable (shares) | shares | 2,270 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 2.37 |
$0.70 —– $1.11 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 0.70 |
Exercise price range, upper limit (usd per share) | $ 1.11 |
Options outstanding, number of shares (shares) | shares | 706 |
Options outstanding - weighted- average remaining life | 4 years 7 months 6 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 0.82 |
Options exercisable - number of shares exercisable (shares) | shares | 546 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 0.80 |
$1.29 —– $1.29 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.29 |
Exercise price range, upper limit (usd per share) | $ 1.29 |
Options outstanding, number of shares (shares) | shares | 1,000 |
Options outstanding - weighted- average remaining life | 4 years 2 months 12 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.29 |
Options exercisable - number of shares exercisable (shares) | shares | 687 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 1.29 |
$1.31 —– $1.31 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.31 |
Exercise price range, upper limit (usd per share) | $ 1.31 |
Options outstanding, number of shares (shares) | shares | 709 |
Options outstanding - weighted- average remaining life | 3 years 9 months 18 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 1.31 |
Options exercisable - number of shares exercisable (shares) | shares | 500 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 1.31 |
$1.37 —– $14.58 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 1.37 |
Exercise price range, upper limit (usd per share) | $ 14.58 |
Options outstanding, number of shares (shares) | shares | 639 |
Options outstanding - weighted- average remaining life | 3 years 2 months 12 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 5.60 |
Options exercisable - number of shares exercisable (shares) | shares | 536 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 6.22 |
$64.17 —– $64.17 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit (usd per share) | 64.17 |
Exercise price range, upper limit (usd per share) | $ 64.17 |
Options outstanding, number of shares (shares) | shares | 11 |
Options outstanding - weighted- average remaining life | 6 years 10 months 24 days |
Options outstanding - weighted- average exercise price (usd per share) | $ 64.17 |
Options exercisable - number of shares exercisable (shares) | shares | 1 |
Options Exercisable - weighted-average exercise price (usd per share) | $ 64.17 |
STOCK-BASED COMPENSATION - Summary of Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
| |
Aggregate Intrinsic Value | |
Share price (in usd per share) | $ 47.57 |
Restricted stock units | |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 4,263 |
Granted (in shares) | shares | 1,077 |
Vested (in shares) | shares | (1,380) |
Canceled (in shares) | shares | (66) |
Outstanding, ending balance (in shares) | shares | 3,894 |
Number of shares outstanding, expected to vest (in shares) | shares | 3,894 |
Weighted Average Fair Value per Share at Grant Date | |
Outstanding, beginning balance (in usd per share) | $ 7.19 |
Granted (in usd per share) | 36.62 |
Vested (in usd per share) | 6.60 |
Canceled (in usd per share) | 16.15 |
Outstanding, ending balance (in usd per share) | 15.39 |
Weighted-Average Fair Value per Share at Grant Date, Expected to vest (in usd per share) | $ 15.39 |
Weighted-Average Remaining Contractual Term | |
Weighted- Average Remaining Contractual Term | 1 year 2 months 26 days |
Expected to vest | 1 year 2 months 26 days |
Aggregate Intrinsic Value | |
Vested | $ | $ 55,925 |
Outstanding | $ | 185,236 |
Aggregate intrinsic value, expected to vest | $ | $ 185,236 |
STOCK-BASED COMPENSATION - Summary of Performance Stock Unit Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
| |
Aggregate Intrinsic Value | |
Share price (in usd per share) | $ 47.57 |
Performance shares | |
Number of Shares Outstanding | |
Outstanding, beginning balance (in shares) | shares | 955 |
Granted (in shares) | shares | 974 |
Vested (in shares) | shares | (1,450) |
Canceled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 479 |
Weighted Average Fair Value per Share at Grant Date | |
Outstanding, beginning balance (in usd per share) | $ 9.83 |
Granted (in usd per share) | 30.45 |
Vested (in usd per share) | 10.20 |
Canceled (in usd per share) | 0 |
Outstanding, ending balance (in usd per share) | $ 50.37 |
Weighted-Average Remaining Contractual Term | |
Weighted- Average Remaining Contractual Term | 8 months 12 days |
Aggregate Intrinsic Value | |
Vested | $ | $ 52,144 |
Outstanding | $ | $ 22,777 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income taxes (benefit) provision | $ (6,561) | $ 591 | $ (18,429) | $ 939 |
(Loss) income before income taxes | $ (53,855) | $ 11,209 | $ 3,213 | $ 14,322 |
NET INCOME (LOSS) PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Numerator: | ||||
Net income (loss) | $ (47,294) | $ 10,618 | $ 21,642 | $ 13,383 |
Notes due 2023 interest and financing costs, net | 0 | 430 | 89 | 1,006 |
Adjusted net income (loss) | $ (47,294) | $ 11,048 | $ 21,731 | $ 14,389 |
Denominator: | ||||
Weighted average common shares outstanding (in shares) | 125,603 | 113,677 | 124,567 | 110,951 |
Employee stock-based awards (in shares) | 0 | 8,326 | 7,449 | 8,240 |
Weighted average common shares outstanding for diluted calculation (in shares) | 125,603 | 130,737 | 138,910 | 129,400 |
Net income (loss) per share, basic (in USD per share) | $ (0.38) | $ 0.09 | $ 0.17 | $ 0.12 |
Net income per share, diluted (in USD per share) | $ (0.38) | $ 0.08 | $ 0.16 | $ 0.11 |
Convertible Senior Notes Due 2024 | ||||
Denominator: | ||||
Warrants (issued in conjunction with Notes due 2024) (in shares) | 0 | 0 | 2,641 | 0 |
Convertible Notes | Convertible Senior Notes Due 2024 | ||||
Denominator: | ||||
Notes due (in shares) | 0 | 0 | 3,353 | 0 |
Convertible Notes | Convertible Senior Notes Due 2023 | ||||
Denominator: | ||||
Notes due (in shares) | 0 | 8,734 | 900 | 10,209 |
NET INCOME (LOSS) PER SHARE - Schedule of Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 20,770 | 66 | 5,755 | 77 |
Employee stock-based awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 6,459 | 66 | 294 | 77 |
Warrants | Convertible Senior Notes Due 2024 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,039 | 0 | 0 | 0 |
Warrants | Convertible Senior Notes Due 2025 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,924 | 0 | 3,430 | 0 |
Notes due | Convertible Senior Notes Due 2024 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,677 | 0 | 0 | 0 |
Notes due | Convertible Senior Notes Due 2025 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,771 | 0 | 2,031 | 0 |
Notes due | Convertible Senior Notes Due 2023 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 900 | 0 | 0 | 0 |
NET INCOME (LOSS) PER SHARE - Narrative (Details) - Convertible Notes - $ / shares |
Mar. 09, 2020 |
Jun. 05, 2019 |
---|---|---|
Convertible Senior Notes Due 2024 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Debt conversion price (in USD per share) | $ 20.5010 | |
Convertible Senior Notes Due 2025 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Debt conversion price (in USD per share) | $ 81.54 |
RELATED PARTY - Narrative (Details) - Convertible Notes - Convertible Senior Notes Due 2023 - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 31, 2018 |
---|---|---|---|---|
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000.0 | $ 5,000,000.0 | $ 65,000,000.0 | |
Thurman John Rodgers | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument face amount | $ 5,000,000.0 | $ 5,000,000.0 | $ 5,000,000.0 |
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