3. Financial Statements Details

Cash, Cash Equivalents and Restricted Cash

The following table is a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets that sum to the total of the same such amounts shown in the accompanying condensed consolidated statements of cash flows (in thousands):



	March 31, 2018		March 31, 2017
Cash and cash equivalents	$	886,160	$	746,567
Restricted cash included in other assets	5,508		5,497
Total cash, cash equivalents and restricted cash	$	891,668	$	752,064

Restricted cash included in other assets as of March 31, 2018 and March 31, 2017 primarily included $4.0 million pledged as collateral representing a security deposit required for a facility lease and $1.1 million related to a letter of credit issued to a business partner.

Marketable Securities

The following table summarizes the unrealized gains and losses and fair value of our available-for-sale marketable securities (in thousands):



	March 31, 2018
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	21,820	$	—	$	—		$	21,820
U.S. government notes	207,359		—		(557		)	206,802
Corporate bonds	384,229		1		(2,065		)	382,165
Agency securities	242,114		—		(1,021		)	241,093
Total marketable securities	$	855,522	$	1	$	(3,643	)	$	851,880



	December 31, 2017
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial paper	$	11,924	$	—	$	—		$	11,924
U.S. government notes	137,025		—		(378		)	136,647
Corporate bonds	313,080		20		(616		)	312,484
Agency securities	215,923		2		(617		)	215,308
Total marketable securities	$	677,952	$	22	$	(1,611	)	$	676,363

We did not realize any other-than-temporary losses on our marketable securities for the three months ended March 31, 2018 and 2017. We invest in marketable securities that have maximum maturities of up to two years and are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these marketable securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those marketable securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of these investments upon maturity or sale and therefore, we do not consider any of our marketable securities to be other-than-temporarily impaired as of March 31, 2018.

As of March 31, 2018, the contractual maturities of our investments did not exceed 24 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands):



	March 31, 2018
Due in 1 year or less	$	559,733
Due in 1 year through 2 years	292,147
Total marketable securities	$	851,880

The weighted-average remaining duration of our current marketable securities is approximately 0.8 years as of March 31, 2018. As we view these securities as available to support current operations, we classify securities with maturities beyond 12 months as current assets under the caption marketable securities in the accompanying unaudited condensed consolidated balance sheets.

Accounts Receivable, Net

Accounts receivable, net consists of the following (in thousands):



	March 31, 2018			December 31, 2017
Accounts receivable	$	214,977		$	254,881
Allowance for doubtful accounts	(149		)	(112		)
Product sales rebate and returns reserve	(7,489		)	(7,423		)
Accounts receivable, net	$	207,339		$	247,346

Inventories

Inventories consist of the following (in thousands):



	March 31, 2018		December 31, 2017
Raw materials	$	62,305	$	69,673
Finished goods	205,826		236,525
Total inventories	$	268,131	$	306,198

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following (in thousands):



	March 31, 2018		December 31, 2017
Inventory deposit	$	24,423	$	34,141
Prepaid income taxes	41,048		38,134
Other current assets	82,837		96,215
Other prepaid expenses and deposits	17,356		8,840
Total prepaid expenses and other current assets	$	165,664	$	177,330

Property and Equipment, Net

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



	March 31, 2018			December 31, 2017
Equipment and machinery	$	49,470		$	47,711
Computer hardware and software	24,048			22,124
Furniture and fixtures	3,063			3,020
Leasehold improvements	30,567			30,548
Building	35,154			35,154
Construction-in-process	5,549			4,742
Property and equipment, gross	147,851			143,299
Less: accumulated depreciation	(74,026		)	(69,020		)
Property and equipment, net	$	73,825		$	74,279

Depreciation expense was $5.3 million and $4.8 million for the three months ended March 31, 2018 and 2017, respectively.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):



	March 31, 2018		December 31, 2017
Accrued payroll related costs	$	28,773	$	56,626
Accrued manufacturing costs	27,924		35,703
Accrued product development costs	10,520		21,201
Accrued warranty costs	7,434		7,415
Accrued professional fees	5,751		7,086
Accrued taxes	690		794
Other	4,636		5,002
Total accrued liabilities	$	85,728	$	133,827

Warranty Accrual

The following table summarizes the activity related to our accrued liability for estimated future warranty costs (in thousands):



	Three Months Ended March 31,
	2018			2017
Warranty accrual, beginning of period	$	7,415		$	6,744
Liabilities accrued for warranties issued during the period	1,557			1,859
Warranty costs incurred during the period	(1,538		)	(945		)
Warranty accrual, end of period	$	7,434		$	7,658

Deferred Revenue and Performance Obligations

Deferred revenue is comprised mainly of unearned revenue related to multi-year PCS contracts, services and product deferrals related to acceptance clauses. During the three months ended March 31, 2018 and 2017, $159.4 million and $171.4 million of deferred revenue was recognized, respectively, which was included in the deferred revenue balances at the beginning of the respective periods.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2018, approximately $475.0 million of revenue is expected to be recognized from remaining performance obligations for product and PCS contracts. We expect to recognize revenue on approximately 82% of these remaining performance obligations over the next 2 years and 18% during the 3rd to the 5th year. The remaining performance obligations as of March 31, 2018 included $18.8 million related to our prepaid subscription offerings which are recorded as other liabilities.