Delaware (State or other jurisdiction of incorporation or organization) | 74-1871327 (I.R.S. Employer Identification Number) | |
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11500 North MoPac Expressway Austin, Texas | 78759 | |
(address of principal executive offices) | (zip code) |
Large accelerated filer ☒ | Accelerated filer ☐ |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Emerging growth company ☐ |
Class | Outstanding at October 26, 2018 |
Common Stock - $0.01 par value | 132,432,594 |
Page No. | ||
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| September 30, 2018 (unaudited) and December 31, 2017 | |
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| (unaudited) for the three and nine months ended September 30, 2018 and 2017 | |
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| (unaudited) for the three and nine months ended September 30, 2018 and 2017 | |
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| (unaudited) for the three and nine months ended September 30, 2018 and 2017 | |
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| September 30, | December 31, | |||||
| 2018 | 2017 | |||||
Assets | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 311,381 | $ | 290,164 | |||
Short-term investments | 171,028 | 121,888 | |||||
Accounts receivable, net | 239,468 | 248,825 | |||||
Inventories, net | 192,412 | 184,592 | |||||
Prepaid expenses and other current assets | 62,447 | 48,621 | |||||
Total current assets | 976,736 | 894,090 | |||||
Property and equipment, net | 245,898 | 249,715 | |||||
Goodwill | 263,119 | 266,783 | |||||
Intangible assets, net | 116,061 | 123,293 | |||||
Other long-term assets | 28,106 | 32,553 | |||||
Total assets | $ | 1,629,920 | $ | 1,566,434 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 51,321 | $ | 49,733 | |||
Accrued compensation | 52,182 | 43,309 | |||||
Deferred revenue - current | 120,398 | 120,638 | |||||
Other current liabilities | 17,508 | 23,782 | |||||
Other taxes payable | 34,654 | 31,793 | |||||
Total current liabilities | 276,063 | 269,255 | |||||
Deferred income taxes | 36,638 | 33,609 | |||||
Liability for uncertain tax positions | 9,045 | 10,158 | |||||
Income tax payable - long-term | 74,015 | 81,515 | |||||
Deferred revenue - long-term | 31,762 | 33,742 | |||||
Other long-term liabilities | 5,488 | 10,134 | |||||
Total liabilities | 433,011 | 438,413 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock: par value $0.01; 5,000,000 shares authorized; none issued and outstanding | — | — | |||||
Common stock: par value $0.01; 360,000,000 shares authorized; 132,432,594 shares and 130,978,947 shares issued and outstanding, respectively | 1,324 | 1,310 | |||||
Additional paid-in capital | 881,417 | 829,979 | |||||
Retained earnings | 329,342 | 313,241 | |||||
Accumulated other comprehensive loss | (15,174 | ) | (16,509 | ) | |||
Total stockholders’ equity | 1,196,909 | 1,128,021 | |||||
Total liabilities and stockholders’ equity | $ | 1,629,920 | $ | 1,566,434 |
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
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Net sales: | ||||||||||||||||
Product | $ | 310,216 | $ | 291,891 | $ | 897,355 | $ | 853,219 | ||||||||
Software maintenance | 35,911 | 29,030 | 101,678 | 86,416 | ||||||||||||
Total net sales | 346,127 | 320,921 | 999,033 | 939,635 | ||||||||||||
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Cost of sales: | ||||||||||||||||
Product | 87,082 | 81,641 | 239,205 | 235,989 | ||||||||||||
Software maintenance | 1,933 | 2,110 | 6,493 | 6,744 | ||||||||||||
Total cost of sales | 89,015 | 83,751 | 245,698 | 242,733 | ||||||||||||
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Gross profit | 257,112 | 237,170 | 753,335 | 696,902 | ||||||||||||
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Operating expenses: | ||||||||||||||||
Sales and marketing | 118,220 | 116,661 | 365,474 | 358,335 | ||||||||||||
Research and development | 66,170 | 56,526 | 194,921 | 171,701 | ||||||||||||
General and administrative | 26,712 | 26,468 | 81,882 | 78,400 | ||||||||||||
Total operating expenses | 211,102 | 199,655 | 642,277 | 608,436 | ||||||||||||
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Operating income | 46,010 | 37,515 | 111,058 | 88,466 | ||||||||||||
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Other income: | ||||||||||||||||
Interest income | 1,539 | 657 | 3,845 | 1,509 | ||||||||||||
Net foreign exchange (loss) gain | (956 | ) | 1,096 | (2,082 | ) | 1,624 | ||||||||||
Other gain (loss), net | 1,782 | (1,153 | ) | 169 | (957 | ) | ||||||||||
Income before income taxes | 48,375 | 38,115 | 112,990 | 90,642 | ||||||||||||
Provision for income taxes | 5,181 | 4,726 | 14,474 | 13,949 | ||||||||||||
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Net income | $ | 43,194 | $ | 33,389 | $ | 98,516 | $ | 76,693 | ||||||||
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Basic earnings per share | $ | 0.33 | $ | 0.26 | $ | 0.75 | $ | 0.59 | ||||||||
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Weighted average shares outstanding - basic | 132,357 | 130,660 | 131,792 | 130,103 | ||||||||||||
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Diluted earnings per share | $ | 0.32 | $ | 0.25 | $ | 0.74 | $ | 0.59 | ||||||||
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Weighted average shares outstanding - diluted | 133,197 | 131,617 | 133,067 | 131,050 | ||||||||||||
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Dividends declared per share | $ | 0.23 | $ | 0.21 | $ | 0.69 | $ | 0.63 |
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
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Net income | $ | 43,194 | $ | 33,389 | $ | 98,516 | $ | 76,693 | ||||||||
Other comprehensive income, before tax and net of reclassification adjustments: | ||||||||||||||||
Foreign currency translation adjustment | (1,359 | ) | 6,226 | (7,360 | ) | 21,890 | ||||||||||
Unrealized gain (loss) on securities available-for-sale | 154 | 162 | (404 | ) | 187 | |||||||||||
Unrealized gain (loss) on derivative instruments | 3,316 | (3,136 | ) | 11,578 | (9,470 | ) | ||||||||||
Other comprehensive income, before tax | 2,111 | 3,252 | 3,814 | 12,607 | ||||||||||||
Tax expense (benefit) related to items of other comprehensive income | 720 | (1,186 | ) | 2,479 | (3,333 | ) | ||||||||||
Other comprehensive income, net of tax | 1,391 | 4,438 | 1,335 | 15,940 | ||||||||||||
Comprehensive income | $ | 44,585 | $ | 37,827 | $ | 99,851 | $ | 92,633 |
| Nine Months Ended | |||||||
| September 30, | |||||||
| 2018 | 2017 | ||||||
Cash flow from operating activities: | ||||||||
Net income | $ | 98,516 | $ | 76,693 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 53,735 | 54,794 | ||||||
Stock-based compensation | 27,492 | 21,272 | ||||||
Deferred income taxes | 732 | (4,290 | ) | |||||
Changes in operating assets and liabilities | 6,862 | (1,013 | ) | |||||
Net cash provided by operating activities | 187,337 | 147,456 | ||||||
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Cash flow from investing activities: | ||||||||
Capital expenditures | (27,373 | ) | (24,084 | ) | ||||
Capitalization of internally developed software | (13,152 | ) | (34,406 | ) | ||||
Additions to other intangibles | (5,165 | ) | (1,379 | ) | ||||
Purchases of short-term investments | (172,462 | ) | (62,845 | ) | ||||
Sales and maturities of short-term investments | 122,726 | 45,582 | ||||||
Net cash used in investing activities | (95,426 | ) | (77,132 | ) | ||||
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Cash flow from financing activities: | ||||||||
Principal payments on revolving line of credit | — | (10,000 | ) | |||||
Proceeds from issuance of common stock | 24,424 | 22,870 | ||||||
Dividends paid | (91,034 | ) | (82,051 | ) | ||||
Net cash used in financing activities | (66,610 | ) | (69,181 | ) | ||||
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Effect of exchange rate changes on cash | (4,084 | ) | 7,768 | |||||
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Net change in cash and cash equivalents | 21,217 | 8,911 | ||||||
Cash and cash equivalents at beginning of period | 290,164 | 285,283 | ||||||
Cash and cash equivalents at end of period | $ | 311,381 | $ | 294,194 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| (In thousands) | (In thousands) | ||||||||||
| (Unaudited) | (Unaudited) | ||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||
Weighted average shares outstanding-basic | 132,357 | 130,660 | 131,792 | 130,103 | ||||||||
Plus: Common share equivalents | ||||||||||||
RSUs | 840 | 957 | 1,275 | 947 | ||||||||
Weighted average shares outstanding-diluted | 133,197 | 131,617 | 133,067 | 131,050 |
(in thousands) | Balance at December 31, 2017 | Adjustments Due to ASU 2014-09 | Balance at January 1, 2018 | |||||
Balance Sheet | ||||||||
Assets | ||||||||
Accounts receivable, net | $ | 248,825 | 2,399 | $ | 251,224 | |||
Other long-term assets | 32,553 | (106 | ) | 32,447 | ||||
Liabilities and Stockholders' Equity | ||||||||
Deferred revenue - current | 120,638 | (9,067 | ) | 111,571 | ||||
Deferred revenue - long-term | 33,742 | (997 | ) | 32,745 | ||||
Other current liabilities | 23,782 | 2,100 | 25,882 | |||||
Deferred income taxes | 33,609 | 1,638 | 35,247 | |||||
Retained earnings | $ | 313,241 | 8,619 | $ | 321,860 |
(In thousands, except per share data) | For the three month period ended September 30, 2018 | For the nine month period ended September 30, 2018 | |||||
Increase / (Decrease) | Increase / (Decrease) | ||||||
Consolidated Statements of Income* | |||||||
Net Sales | |||||||
Products | $ | (626 | ) | $ | 6,828 | ||
Software Maintenance | — | — | |||||
Total net sales | (626 | ) | 6,828 | ||||
Operating Expenses | 8 | (198 | ) | ||||
Operating Income | (634 | ) | 7,026 | ||||
Provision for income taxes | (109 | ) | 1,173 | ||||
Net income | $ | (525 | ) | $ | 5,853 | ||
Basic earnings per share | — | 0.04 | |||||
Diluted earnings per share | — | 0.04 |
(in thousands) | September 30, 2018 | ||
Increase / (Decrease) | |||
Consolidated Balance Sheet* | |||
Assets | |||
Accounts receivable, net | $ | 2,093 | |
Other long-term assets | 92 | ||
Liabilities and Stockholder's Equity | |||
Deferred revenue - current | (14,521 | ) | |
Deferred revenue - long-term | (2,620 | ) | |
Other current liabilities | 3,273 | ||
Deferred income taxes | 1,638 | ||
Retained earnings | $ | 14,415 |
Performance Obligation | When performance obligation is typically satisfied | When payment is typically due | How standalone selling price is typically estimated |
Product revenue | |||
Modular hardware | When customer obtains control of the product (point in time) | Within 30-90 days of shipment | Observable in transactions without multiple performance obligations |
Software licenses | When software media is delivered to customer or made available for download electronically, and the applicable license period has begun (point-in-time) | Within 30-90 days of the beginning of license period | Established pricing practices for software licenses bundled with maintenance, which are separately observable in renewal transactions |
Extended hardware warranty | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
Other related support offerings | As work is performed (over time) or course is delivered (point in time) | Within 30-90 days of delivery | Observable in transactions without multiple performance obligations |
Software maintenance revenue | |||
Software maintenance | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
| Three Months Ended September 30, | |||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||
| 2018 | 2017 (1) | ||||||||||||||||
Net sales: | Point-in-Time | Over Time | Total | Point-in-Time | Over Time | Total | ||||||||||||
Americas | $ | 115,214 | 27,702 | $ | 142,916 | $ | 108,988 | 24,203 | $ | 133,191 | ||||||||
EMEIA | 79,952 | 19,461 | 99,413 | 73,459 | 19,818 | 93,277 | ||||||||||||
APAC | 95,837 | 7,961 | 103,798 | 84,678 | 9,775 | 94,453 | ||||||||||||
Total net sales (2) | $ | 291,003 | 55,124 | $ | 346,127 | $ | 267,125 | 53,796 | $ | 320,921 | ||||||||
(1) As discussed in "Note 1 - Basis of presentation", prior periods have not been adjusted for adoption of ASU 2014-09 | ||||||||||||||||||
(2) Net sales contains hedging gains and losses, which do not represent revenues recognized from customers. See "Note 5 - Derivative instruments and hedging activities" for more information on the impact of our hedging activities on our results of operations |
| Nine Months Ended September 30, | |||||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||||
| 2018 | 2017 (1) | ||||||||||||||||
Net sales: | Point-in-Time | Over Time | Total | Point-in-Time | Over Time | Total | ||||||||||||
Americas | $ | 317,426 | 75,003 | $ | 392,429 | $ | 300,043 | 73,234 | $ | 373,277 | ||||||||
EMEIA | 257,346 | 57,520 | 314,866 | 232,270 | 56,295 | 288,565 | ||||||||||||
APAC | 267,773 | 23,965 | 291,738 | 251,626 | 26,167 | 277,793 | ||||||||||||
Total net sales (2) | $ | 842,545 | 156,488 | $ | 999,033 | $ | 783,939 | 155,696 | $ | 939,635 | ||||||||
(1) As discussed in "Note 1 - Basis of presentation", prior periods have not been adjusted for adoption of ASU 2014-09 | ||||||||||||||||||
(2) Net sales contains hedging gains and losses, which do not represent revenues recognized from customers. See "Note 5 - Derivative instruments and hedging activities" for more information on the impact of our hedging activities on our results of operations |
| Amount | ||
| (In thousands) | ||
Deferred Revenue at December 31, 2017 | $ | 154,380 | |
Impact of adopting new revenue standard | (10,064 | ) | |
Deferred Revenue at January 1, 2018 | $ | 144,316 | |
Deferral of revenue billed in current period, net of recognition | 116,507 | ||
Recognition of revenue deferred in prior periods | (105,291 | ) | |
Foreign currency translation impact | (3,372 | ) | |
Balance as of September 30, 2018 (unaudited) | $ | 152,160 |
• | We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. |
• | We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
• | We do not consider the time value of money for contracts with original durations of one year or less. |
| As of September 30, 2018 | |||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||
| Gross | Gross | ||||||||||||||
| Adjusted Cost | Unrealized Gain | Unrealized Loss | Fair Value | ||||||||||||
Corporate bonds | $ | 147,158 | $ | 211 | $ | (823 | ) | $ | 146,546 | |||||||
U.S. treasuries and agencies | 24,468 | — | (5 | ) | 24,463 | |||||||||||
Time deposits | 19 | — | — | 19 | ||||||||||||
Total Short-term investments | $ | 171,645 | $ | 211 | $ | (828 | ) | $ | 171,028 |
(In thousands) | As of December 31, 2017 | |||||||||||||||
| Gross | Gross | ||||||||||||||
| Adjusted Cost | Unrealized Gain | Unrealized Loss | Fair Value | ||||||||||||
Corporate bonds | $ | 120,341 | $ | 182 | $ | (395 | ) | $ | 120,128 | |||||||
Time deposits | 1,760 | — | — | 1,760 | ||||||||||||
Total Short-term investments | $ | 122,101 | $ | 182 | $ | (395 | ) | $ | 121,888 |
| As of September 30, 2018 | |||||||
(In thousands) | (Unaudited) | |||||||
| Adjusted Cost | Fair Value | ||||||
Due in less than 1 year | $ | 67,609 | $ | 67,511 | ||||
Due in 1 to 5 years | 104,036 | 103,517 | ||||||
Total available-for-sale debt securities | $ | 171,645 | $ | 171,028 | ||||
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Due in less than 1 year | Adjusted Cost | Fair Value | ||||||
Corporate bonds | $ | 43,122 | $ | 43,029 | ||||
U.S. treasuries and agencies | 24,468 | 24,463 | ||||||
Time deposits | 19 | 19 | ||||||
Total available-for-sale debt securities | $ | 67,609 | $ | 67,511 | ||||
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Due in 1 to 5 years | Adjusted Cost | Fair Value | ||||||
Corporate bonds | $ | 104,036 | $ | 103,517 | ||||
Total available-for-sale debt securities | $ | 104,036 | $ | 103,517 |
| Fair Value Measurements at Reporting Date Using | |||||||||||||||
(In thousands) | (Unaudited) | |||||||||||||||
Description | September 30, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents available for sale: | ||||||||||||||||
Money Market Funds | $ | 120,395 | $ | 120,395 | $ | — | $ | — | ||||||||
Short-term investments available for sale: | ||||||||||||||||
Corporate bonds | 146,546 | — | 146,546 | — | ||||||||||||
U.S. treasuries and agencies | 24,463 | — | 24,463 | — | ||||||||||||
Time deposits | 19 | 19 | — | — | ||||||||||||
Derivatives | 9,296 | — | 9,296 | — | ||||||||||||
Total Assets | $ | 300,719 | $ | 120,414 | $ | 180,305 | $ | — | ||||||||
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Liabilities | ||||||||||||||||
Derivatives | $ | (1,724 | ) | $ | — | $ | (1,724 | ) | $ | — | ||||||
Total Liabilities | $ | (1,724 | ) | $ | — | $ | (1,724 | ) | $ | — |
(In thousands) | Fair Value Measurements at Reporting Date Using | |||||||||||||||
Description | December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents available for sale: | ||||||||||||||||
Money Market Funds | $ | 61,423 | $ | 61,423 | $ | — | $ | — | ||||||||
U.S. treasuries and agencies | 39,461 | — | 39,461 | — | ||||||||||||
Short-term investments available for sale: | ||||||||||||||||
Corporate bonds | 120,128 | — | 120,128 | — | ||||||||||||
Time deposits | 1,760 | 1,760 | — | — | ||||||||||||
Derivatives | 7,232 | — | 7,232 | — | ||||||||||||
Total Assets | $ | 230,004 | $ | 63,183 | $ | 166,821 | $ | — | ||||||||
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Liabilities | ||||||||||||||||
Derivatives | $ | (12,743 | ) | $ | — | $ | (12,743 | ) | $ | — | ||||||
Total Liabilities | $ | (12,743 | ) | $ | — | $ | (12,743 | ) | $ | — |
(In thousands) | US Dollar Equivalent | |||||||
| As of September 30, 2018 | As of December 31, | ||||||
| (Unaudited) | 2017 | ||||||
Chinese yuan | $ | 64,020 | $ | 39,197 | ||||
Euro | 164,488 | 177,406 | ||||||
Japanese yen | 10,754 | 22,857 | ||||||
Hungarian forint | 28,284 | 41,296 | ||||||
British pound | 16,197 | 9,931 | ||||||
Malaysian ringgit | 26,325 | 28,287 | ||||||
Korean won | 10,984 | — | ||||||
Total forward contracts notional amount | $ | 321,052 | $ | 318,974 |
| Asset Derivatives | |||||||||||
| September 30, 2018 | December 31, 2017 | ||||||||||
(In thousands) | (Unaudited) | |||||||||||
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| Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments | ||||||||||||
Foreign exchange contracts - ST forwards | Prepaid expenses and other current assets | $ | 6,717 | Prepaid expenses and other current assets | $ | 4,707 | ||||||
Foreign exchange contracts - LT forwards | Other long-term assets | 2,016 | Other long-term assets | 2,339 | ||||||||
Total derivatives designated as hedging instruments | $ | 8,733 | $ | 7,046 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||
Foreign exchange contracts - ST forwards | Prepaid expenses and other current assets | $ | 563 | Prepaid expenses and other current assets | $ | 187 | ||||||
Total derivatives not designated as hedging instruments | $ | 563 | $ | 187 | ||||||||
Total derivatives | $ | 9,296 | $ | 7,233 |
| Liability Derivatives | |||||||||||
| September 30, 2018 | December 31, 2017 | ||||||||||
(In thousands) | (Unaudited) | |||||||||||
| Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments | ||||||||||||
Foreign exchange contracts - ST forwards | Other current liabilities | $ | (1,078 | ) | Other current liabilities | $ | (7,487 | ) | ||||
| ||||||||||||
Foreign exchange contracts - LT forwards | Other long-term liabilities | (493 | ) | Other long-term liabilities | (3,959 | ) | ||||||
Total derivatives designated as hedging instruments | $ | (1,571 | ) | $ | (11,446 | ) | ||||||
| ||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||
| ||||||||||||
Foreign exchange contracts - ST forwards | Other current liabilities | $ | (153 | ) | Other current liabilities | $ | (1,297 | ) | ||||
Total derivatives not designated as hedging instruments | $ | (153 | ) | $ | (1,297 | ) | ||||||
| ||||||||||||
Total derivatives | $ | (1,724 | ) | $ | (12,743 | ) |
September 30, 2018 | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
Foreign exchange contracts - forwards | $ | 3,569 | Net sales | $ | 1,424 | Net foreign exchange gain/(loss) | $ | — | ||||||||
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Foreign exchange contracts - forwards | (96 | ) | Cost of sales | 74 | Net foreign exchange gain/(loss) | — | ||||||||||
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Foreign exchange contracts - forwards | (157 | ) | Operating expenses | 111 | Net foreign exchange gain/(loss) | — | ||||||||||
Total | $ | 3,316 | $ | 1,609 | $ | — |
September 30, 2017 | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
Foreign exchange contracts - forwards | $ | (5,804 | ) | Net sales | $ | (1,401 | ) | Net foreign exchange gain/(loss) | $ | — | ||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | 1,421 | Cost of sales | (105 | ) | Net foreign exchange gain/(loss) | — | ||||||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | 1,247 | Operating expenses | (148 | ) | Net foreign exchange gain/(loss) | — | ||||||||||
Total | $ | (3,136 | ) | $ | (1,654 | ) | $ | — |
(In thousands) | ||||||||||
Derivatives not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | |||||||
| September 30, 2018 | September 30, 2017 | ||||||||
| (Unaudited) | (Unaudited) | ||||||||
Foreign exchange contracts - forwards | Net foreign exchange gain/(loss) | $ | 865 | (887 | ) | |||||
| ||||||||||
Total | $ | 865 | $ | (887 | ) |
September 30, 2018 | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
Foreign exchange contracts - forwards | $ | 16,128 | Net sales | $ | (2,491 | ) | Net foreign exchange gain/(loss) | $ | — | |||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | (2,422 | ) | Cost of sales | 717 | Net foreign exchange gain/(loss) | — | ||||||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | (2,128 | ) | Operating expenses | 888 | Net foreign exchange gain/(loss) | — | ||||||||||
Total | 11,578 | $ | (886 | ) | $ | — |
September 30, 2017 | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationship | Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
Foreign exchange contracts - forwards | $ | (20,601 | ) | Net sales | $ | 1,348 | Net foreign exchange gain/(loss) | $ | — | |||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | 5,901 | Cost of sales | (1,083 | ) | Net foreign exchange gain/(loss) | — | ||||||||||
| ||||||||||||||||
Foreign exchange contracts - forwards | 5,230 | Operating expenses | (1,127 | ) | Net foreign exchange gain/(loss) | — | ||||||||||
Total | $ | (9,470 | ) | $ | (862 | ) | $ | — |
(In thousands) | ||||||||||
Derivatives not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | |||||||
| September 30, 2018 | September 30, 2017 | ||||||||
| (Unaudited) | (Unaudited) | ||||||||
Foreign exchange contracts - forwards | Net foreign exchange gain/(loss) | $ | 678 | (4,065 | ) | |||||
Total | $ | 678 | $ | (4,065 | ) |
| September 30, 2018 | December 31, | ||||||
(In thousands) | (Unaudited) | 2017 | ||||||
| ||||||||
Raw materials | $ | 100,603 | $ | 91,513 | ||||
Work-in-process | 10,291 | 8,938 | ||||||
Finished goods | 81,518 | 84,141 | ||||||
Total | $ | 192,412 | $ | 184,592 |
| September 30, 2018 | |||||||||||||||||||||||
(In thousands) | (Unaudited) | December 31, 2017 | ||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Capitalized software development costs | $ | 118,424 | $ | (38,154 | ) | $ | 80,270 | $ | 116,691 | $ | (30,345 | ) | $ | 86,346 | ||||||||||
Acquired technology | 95,691 | (89,507 | ) | 6,184 | 96,198 | (87,341 | ) | 8,857 | ||||||||||||||||
Patents | 34,248 | (21,264 | ) | 12,984 | 33,163 | (19,931 | ) | 13,232 | ||||||||||||||||
Other | 51,049 | (34,426 | ) | 16,623 | 45,565 | (30,707 | ) | 14,858 | ||||||||||||||||
Total | $ | 299,412 | $ | (183,351 | ) | $ | 116,061 | $ | 291,617 | $ | (168,324 | ) | $ | 123,293 |
| Amount | ||
| (In thousands) | ||
Balance as of December 31, 2017 | $ | 266,783 | |
Foreign currency translation impact | (3,664 | ) | |
Balance as of September 30, 2018 (unaudited) | $ | 263,119 |
| September 30, 2018 | |||||||||||||||
| (Unaudited) | |||||||||||||||
(In thousands) | Currency translation adjustment | Investments | Derivative instruments | Accumulated other comprehensive income/(loss) | ||||||||||||
Balance as of December 31, 2017 | $ | (12,717 | ) | $ | (782 | ) | (3,010 | ) | $ | (16,509 | ) | |||||
Current-period other comprehensive (loss) income | (7,360 | ) | (404 | ) | 10,692 | 2,928 | ||||||||||
Reclassified from accumulated OCI into income | — | — | 886 | 886 | ||||||||||||
Income tax expense | — | 30 | 2,449 | 2,479 | ||||||||||||
Balance as of September 30, 2018 | $ | (20,077 | ) | $ | (1,216 | ) | $ | 6,119 | $ | (15,174 | ) |
| September 30, 2017 | |||||||||||||||
| (Unaudited) | |||||||||||||||
(In thousands) | Currency translation adjustment | Investments | Derivative instruments | Accumulated other comprehensive income/(loss) | ||||||||||||
Balance as of December 31, 2016 | $ | (37,174 | ) | $ | (669 | ) | 3,222 | $ | (34,621 | ) | ||||||
Current-period other comprehensive income (loss) | 21,890 | 187 | (10,332 | ) | 11,745 | |||||||||||
Reclassified from accumulated OCI into income | — | — | 862 | 862 | ||||||||||||
Income tax expense (benefit) | 13 | 14 | (3,360 | ) | (3,333 | ) | ||||||||||
Balance as of September 30, 2017 | $ | (15,297 | ) | $ | (496 | ) | $ | (2,888 | ) | $ | (18,681 | ) |
| Nine Months Ended September 30, | |||||||
(In thousands) | (Unaudited) | |||||||
| 2018 | 2017 | ||||||
Balance at the beginning of the period | $ | 2,846 | $ | 2,686 | ||||
Accruals for warranties issued during the period | 2,224 | 1,929 | ||||||
Accruals related to pre-existing warranties | 335 | 193 | ||||||
Settlements made (in cash or in kind) during the period | (2,235 | ) | (1,983 | ) | ||||
Balance at the end of the period | $ | 3,170 | $ | 2,825 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
(In thousands) | (Unaudited) | (Unaudited) | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
Cost of sales | $ | (179 | ) | 79 | $ | (150 | ) | 986 | ||||||
Research and development | 631 | 86 | 1,607 | 1,382 | ||||||||||
Sales and marketing | 3,676 | 1,618 | 8,354 | 7,997 | ||||||||||
General and Administration | 373 | 207 | 1,538 | 801 | ||||||||||
Total restructuring and other related costs | $ | 4,501 | 1,990 | $ | 11,349 | 11,166 |
| Restructuring Liability | ||
| (in thousands) | ||
Balance as of December 31, 2017 | $ | 5,408 | |
Income statement expense | 11,349 | ||
Cash payments | (12,923 | ) | |
Balance as of September 30, 2018 | $ | 3,834 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| (Unaudited) | (Unaudited) | ||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||
Net sales: | ||||||||||||
Americas | 41.3 | % | 41.5 | % | 39.3 | % | 39.7 | % | ||||
EMEIA | 28.7 | 29.1 | 31.5 | 30.7 | ||||||||
APAC | 30.0 | 29.4 | 29.2 | 29.6 | ||||||||
Total net sales | 100.0 | 100.0 | 100.0 | 100.0 | ||||||||
Cost of sales | 25.7 | 26.1 | 24.6 | 25.8 | ||||||||
Gross profit | 74.3 | 73.9 | 75.4 | 74.2 | ||||||||
Operating expenses: | ||||||||||||
Sales and marketing | 34.2 | 36.4 | 36.6 | 38.1 | ||||||||
Research and development | 19.1 | 17.6 | 19.5 | 18.3 | ||||||||
General and administrative | 7.7 | 8.2 | 8.2 | 8.3 | ||||||||
Total operating expenses | 61.0 | 62.2 | 64.3 | 64.7 | ||||||||
Operating income | 13.3 | 11.7 | 11.1 | 9.4 | ||||||||
Other income (expense): | ||||||||||||
Interest income | 0.4 | 0.2 | 0.4 | 0.2 | ||||||||
Net foreign exchange loss | (0.3 | ) | 0.3 | (0.2 | ) | 0.2 | ||||||
Other gain (loss), net | 0.5 | (0.4 | ) | — | (0.1 | ) | ||||||
Income before income taxes | 14.0 | 11.8 | 11.3 | 9.7 | ||||||||
Provision for income taxes | 1.5 | 1.5 | 1.4 | 1.5 | ||||||||
Net income | 12.5 | % | 10.4 | % | 9.9 | % | 8.2 | % |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Change | Change | ||||||||||||||||||||||
(In millions) | 2018 | 2017 | Dollars | Percentage | 2018 | 2017 | Dollars | Percentage | ||||||||||||||||
| ||||||||||||||||||||||||
Product sales | $ | 310.2 | $ | 291.9 | 18.3 | 6% | $ | 897.4 | $ | 853.2 | 44.2 | 5% | ||||||||||||
Software maintenance sales | 35.9 | 29.0 | 6.9 | 24% | 101.7 | 86.4 | 15.3 | 18% | ||||||||||||||||
Total net sales | $ | 346.1 | $ | 320.9 | 25.2 | 8% | $ | 999.0 | $ | 939.6 | 59.4 | 6% |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Change | Change | ||||||||||||||||||||||
(In millions) | 2018 | 2017 | Dollars | Percentage | 2018 | 2017 | Dollars | Percentage | ||||||||||||||||
| ||||||||||||||||||||||||
Americas | $142.9 | $ | 133.2 | 9.7 | 7% | $ | 392.4 | $ | 373.3 | 19.1 | 5% | |||||||||||||
Percentage of total net sales | 41.3 | % | 41.5 | % | 39.3 | % | 39.7 | % | ||||||||||||||||
| ||||||||||||||||||||||||
EMEIA | 99.4 | $ | 93.3 | 6.1 | 7% | 314.9 | 288.6 | 26.3 | 9% | |||||||||||||||
Percentage of total net sales | 28.7 | % | 29.1 | % | 31.5 | % | 30.7 | % | ||||||||||||||||
| ||||||||||||||||||||||||
APAC | $ | 103.8 | $ | 94.5 | 9.3 | 10% | 291.7 | 277.8 | 13.9 | 5% | ||||||||||||||
Percentage of total net sales | 30.0 | % | 29.4 | % | 29.2 | % | 29.6 | % |
| Three Months Ended September 30, 2017 | Change in Constant Dollars | Impact of changes in foreign currency exchange rates on net sales | Three Months Ended September 30, 2018 | ||||||||||||||
(In millions) | GAAP Net Sales | Dollars | Percentage | Dollars | Percentage | GAAP Net Sales | ||||||||||||
| ||||||||||||||||||
Americas | $ | 133.2 | 9.7 | 7.3% | — | —% | $ | 142.9 | ||||||||||
EMEIA | $ | 93.3 | 5.2 | 5.6% | 0.9 | 1.0% | $ | 99.4 | ||||||||||
APAC | $ | 94.5 | 8.3 | 8.7% | 1.1 | 1.2% | $ | 103.8 | ||||||||||
Total net sales | $ | 320.9 | 23.2 | 7.2% | 2.0 | 0.6% | $ | 346.1 | ||||||||||
| ||||||||||||||||||
| ||||||||||||||||||
| Nine Months Ended September 30, 2017 | Change in Constant Dollars | Impact of changes in foreign currency exchange rates on net sales | Nine Months Ended September 30, 2018 | ||||||||||||||
(In millions) | GAAP Net Sales | Dollars | Percentage | Dollars | Percentage | GAAP Net Sales | ||||||||||||
| ||||||||||||||||||
Americas | $ | 373.3 | 18.2 | 4.9% | 0.9 | —% | $ | 392.4 | ||||||||||
EMEIA | $ | 288.6 | 10.9 | 3.8% | 15.4 | 5.3% | $ | 314.9 | ||||||||||
APAC | $ | 277.8 | 5.4 | 1.9% | 8.6 | 3.1% | $ | 291.7 | ||||||||||
Total net sales | $ | 939.6 | 34.5 | 3.7% | 24.9 | 2.7% | $ | 999.0 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
| (Unaudited) | (Unaudited) | ||||||
| ||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||
| ||||||||
Gross Profit | $257.1 | $237.2 | $753.3 | $696.9 | ||||
% change compared with prior period | 8.4% | 8.1% | ||||||
Gross Profit as a percentage of net sales | 74.3% | 73.9% | 75.4% | 74.2% |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||
(In thousands) | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||
| ||||||||||||||||||||
Sales and marketing | $ | 118,220 | $ | 116,661 | 1% | $ | 365,474 | $ | 358,335 | 2% | ||||||||||
Percentage of total net sales | 34% | 36% | 37% | 38% | ||||||||||||||||
| ||||||||||||||||||||
Research and development | $ | 66,170 | $ | 56,526 | 17% | $ | 194,921 | $ | 171,701 | 14% | ||||||||||
Percentage of total net sales | 19% | 18% | 20% | 18% | ||||||||||||||||
| ||||||||||||||||||||
General and Administrative | $ | 26,712 | $ | 26,468 | 1% | $ | 81,882 | $ | 78,400 | 4% | ||||||||||
Percentage of total net sales | 8% | 8% | 8% | 8% | ||||||||||||||||
| ||||||||||||||||||||
Total operating expenses | $ | 211,102 | $ | 199,655 | 6% | $ | 642,277 | $ | 608,436 | 6% | ||||||||||
Percentage of total net sales | 61% | 62% | 64% | 65% |
| Three Months Ended | Nine Months Ended | ||||
| September 30, 2018 | September 30, 2018 | ||||
| (Unaudited) | (Unaudited) | ||||
Effective tax rate at September 30, 2017 | 12 | % | 15 | % | ||
Change in federal statutory rate | (14 | )% | (14 | )% | ||
Change in profit in foreign jurisdictions with reduced tax rates | 8 | % | 9 | % | ||
Change in U.S. tax on global intangible low-taxed income | 2 | % | 2 | % | ||
Change in deduction for foreign-derived deduction eligible income | (1 | )% | (1 | )% | ||
Change in unrecognized tax benefits | 7 | % | 3 | % | ||
Change in foreign tax on undistributed earnings | (4 | )% | (2 | )% | ||
Other | 1 | % | 1 | % | ||
Effective tax rate at September 30, 2018 | 11 | % | 13 | % |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
Stock-based compensation | ||||||||||||||||
Cost of sales | $ | 844 | $ | 689 | $ | 2,415 | $ | 1,914 | ||||||||
Sales and marketing | 3,452 | 3,014 | 10,408 | 8,523 | ||||||||||||
Research and development | 3,318 | 2,328 | 9,091 | 6,552 | ||||||||||||
General and administrative | 1,942 | 1,514 | 5,578 | 4,358 | ||||||||||||
Provision for income taxes | (1,455 | ) | (2,369 | ) | (6,115 | ) | (7,388 | ) | ||||||||
Total | $ | 8,101 | $ | 5,176 | $ | 21,377 | $ | 13,959 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
Amortization of acquired intangibles | ||||||||||||||||
Cost of sales | $ | 701 | $ | 1,502 | $ | 2,448 | $ | 4,648 | ||||||||
Sales and marketing | 510 | 515 | 1,580 | 1,479 | ||||||||||||
Research and development | 28 | 283 | 84 | 813 | ||||||||||||
Provision for income taxes | (149 | ) | (546 | ) | (518 | ) | (1,656 | ) | ||||||||
Total | $ | 1,090 | $ | 1,754 | $ | 3,594 | $ | 5,284 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
Acquisition transaction costs, restructuring charges, and other | ||||||||||||||||
Cost of sales | $ | 1,784 | $ | 79 | $ | 1,813 | $ | 988 | ||||||||
Sales and marketing | 3,676 | 1,618 | 8,354 | 8,018 | ||||||||||||
Research and development | 692 | 235 | 1,794 | 1,816 | ||||||||||||
General and administrative | 373 | 207 | 1,538 | 803 | ||||||||||||
Other (income) loss, net | — | — | 709 | — | ||||||||||||
Provision for income taxes | (1,800 | ) | (720 | ) | (3,983 | ) | (3,655 | ) | ||||||||
Total | $ | 4,725 | $ | 1,419 | $ | 10,225 | $ | 7,970 |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
Capitalization and amortization of internally developed software costs | ||||||||||||||||
Cost of sales | $ | 6,412 | $ | 5,332 | $ | 18,736 | $ | 15,521 | ||||||||
Research and development | (1,808 | ) | (9,590 | ) | (13,152 | ) | (34,406 | ) | ||||||||
Provision for income taxes | (967 | ) | 1,490 | (1,173 | ) | 6,610 | ||||||||||
Total | $ | 3,637 | $ | (2,768 | ) | $ | 4,411 | $ | (12,275 | ) |
Domestic | International | Total | |
Cash and cash equivalents | $100.6 | $210.8 | $311.4 |
32% | 68% | ||
Short-term investments | $71.1 | $99.9 | $171 |
42% | 58% | ||
Total cash, cash equivalents and short-term investments total | $171.7 | $310.7 | $482.4 |
36% | 64% |
| September 30, 2018 | December 31, | Increase/ | |||||||||
(In thousands) | (unaudited) | 2017 | (Decrease) | |||||||||
| ||||||||||||
Working capital | $ | 700,673 | $ | 624,835 | $ | 75,838 | ||||||
Cash and cash equivalents (1) | 311,381 | 290,164 | 21,217 | |||||||||
Short-term investments (1) | 171,028 | 121,888 | 49,140 | |||||||||
Total cash, cash equivalents and short-term investments | $ | 482,409 | $ | 412,052 | $ | 70,357 | ||||||
| ||||||||||||
(1) Included in working capital |
◦ | "Accounts receivable, net" decreased by $9 million. The decrease is primarily attributable to the decrease in days sales outstanding (“DSO”) to 66 days at September 30, 2018, compared to 68 days at December 31, 2017. |
◦ | Inventory increased by $8 million to $192 million at September 30, 2018, from $185 million at December 31, 2017. Inventory turns were 1.8 and 1.7 at September 30, 2018 and December 31, 2017, respectively. The increase in inventory was primarily attributable to an increase in raw materials due to increased lead times and higher global demand for certain electronic components. |
◦ | Prepaid expenses and other current assets increased by $14 million which which was primarily related to an increase in prepaid freight costs in addition to the timing of insurance and maintenance renewals and an increase in the fair value of our foreign currency forward exchange contracts. |
◦ | Accrued compensation increased to $52 million which can be attributed to a $7 million increase related to a potential payment under our company profit sharing plan and a $2 million increase for accrued variable compensation costs related to our sales growth. |
◦ | The current portion of deferred revenue remained relatively flat, primarily due to a $12 million increase in our current deferred revenue during the first nine months of 2018, related to increased software billings, and the timing of renewals of certain enterprise-wide software licensing agreements. This increase was mostly offset by a $9 million decrease due to the adoption of the new revenue standard on January 1, 2018 and a $3 million decrease related to changes in foreign currency exchange rates. (See “Note 1 – Basis of presentation” and "Note 2 - Revenue" of Notes to Consolidated Financial Statements for additional details on our adoption of the new revenue standard). |
◦ | Other current liabilities decreased by $6 million which was primarily related to changes in the fair value of our foreign currency forward exchange contracts. |
| ||||||||
| Nine Months Ended September 30, | |||||||
(In thousands) | (unaudited) | |||||||
| 2018 | 2017 | ||||||
Cash provided by operating activities | $ | 187,337 | $ | 147,456 | ||||
Cash used in investing activities | (95,426 | ) | (77,132 | ) | ||||
Cash used in financing activities | (66,610 | ) | (69,181 | ) | ||||
Effect of exchange rate changes on cash | (4,084 | ) | 7,768 | |||||
Net change in cash and cash equivalents | 21,217 | 8,911 | ||||||
Cash and cash equivalents at beginning of year | 290,164 | 285,283 | ||||||
Cash and cash equivalents at end of period | $ | 311,381 | $ | 294,194 |
• | payment of dividends to our stockholders; |
• | our levels of research and development and other operating costs; |
• | our business, product, capital expenditure and research and development plans, and product and technology roadmaps; |
• | acquisitions of other businesses, assets, products or technologies; |
• | the overall levels of sales of our products and gross profit margins; |
• | the levels of inventory and accounts receivable that we maintain; |
• | general economic and political uncertainty and specific conditions in the markets we address, including any volatility in the industrial economy in the various geographic regions in which we do business; |
• | the inability of certain of our customers who depend on credit to have access to their traditional sources of credit to finance the purchase of products from us, which may lead them to reduce their level of purchases or to seek credit or other accommodations from us; |
• | capital improvements for facilities; |
• | repurchases of our common stock; |
• | our relationships with suppliers and customers; and |
• | the level of stock purchases under our employee stock purchase plan. |
• | fluctuations in foreign currencies relative to the U.S. dollar; |
• | unexpected changes to currency policy or currency restrictions in foreign jurisdictions; |
• | delays in collecting trade receivable balances from customers in developing economies; |
• | tariffs and other trade barriers; |
• | unexpected changes in regulatory requirements; |
• | fluctuations in local economies; |
• | disparate and changing employment laws in foreign jurisdictions; |
• | difficulties in staffing and managing foreign operations; |
• | costs and risks of localizing products for foreign countries; |
• | government actions throughout the world; and, |
• | the burdens of complying with a wide variety of foreign laws. |
• | the volatility of the Hungarian forint and the Malaysian ringgit relative to the U.S. dollar; |
• | changing and potentially unstable political environments; |
• | significant and frequent changes in corporate tax laws; |
• | difficulty in managing manufacturing operations in foreign countries; |
• | challenges in expanding capacity to meet increased demand; |
• | difficulty in achieving or maintaining product quality; |
• | interruption to transportation flows for delivery of components to us and finished goods to our customers; |
• | restrictive labor codes; and, |
• | increasing labor costs. |
• | burdens of complying with additional or more complex VAT and customs regulations; and, |
• | concentration of inventory increasing the risks associated with fire, natural disasters and logistics disruptions to customer order fulfillment. |
• | continued foreign currency fluctuations; |
• | increased manufacturing costs resulting from component supply shortages or component price fluctuations; |
• | additional marketing costs for new product introductions or for conferences and tradeshows; |
• | the timing, cost or outcome of any future intellectual property litigation or commercial disputes; |
• | additional unanticipated costs related to acquisitions we may make; or |
• | increased component costs resulting from vendors increasing their sales prices. |
• | general market and economic conditions; |
• | our ability to maintain and grow our business with our very large customers; |
• | our ability to meet the volume and service requirements of our large customers; |
• | success in developing and selling new products; |
• | industry consolidation, including acquisitions by us or our competitors; |
• | capacity utilization and the efficiency of manufacturing operations; |
• | timing of our new product introductions; |
• | new product introductions by competitors; |
• | product pricing, including the impact of currency exchange rates; |
• | the ability of competitors to more fully leverage low cost geographies for manufacturing or distribution; |
• | effectiveness of sales and marketing resources and strategies; |
• | adequate manufacturing capacity and supply of components and materials; |
• | strategic relationships with our suppliers; |
• | product quality and performance; |
• | protection of our products by effective use of intellectual property laws; |
• | the financial strength of our competitors; |
• | the outcome of any future litigation or commercial dispute; |
• | barriers to entry imposed by competitors with significant market power in new markets; and, |
• | government actions throughout the world. |
• | fluctuations in foreign currency exchange rates; |
• | changes in global economic conditions; |
• | changes in the amount of revenue derived from very large orders (including orders from our very large customers) and the pricing, margins, and other terms of such orders; |
• | changes in the capacity utilization including at our facility in Malaysia; |
• | changes in the mix of products sold; |
• | the availability and pricing of components from third parties (especially limited sources); |
• | the difficulty in maintaining margins, including the higher margins traditionally achieved in international sales; |
• | changes in pricing policies by us, our competitors or suppliers; |
• | the timing, cost or outcome of any future intellectual property litigation or commercial disputes; |
• | delays in product shipments caused by human error or other factors; or, |
• | disruptions in transportation channels. |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | |||||||||
| |||||||||||||
July 1, 2018 to July 31, 2018 | — | — | — | 1,134,247 | |||||||||
| |||||||||||||
August 1, 2018 to August 31, 2018 | — | — | — | 1,134,247 | |||||||||
| |||||||||||||
September 1, 2018 to September 30, 2018 | — | — | — | 1,134,247 | |||||||||
Total | — | $ | — | — | 1,134,247 |
ITEM 6 | EXHIBITS |
4.1(4) | Specimen of Common Stock certificate of the Company. |
10.1(4) | Form of Indemnification Agreement. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
(1) | Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 10-K for the fiscal year ended December 31, 2013. |
(2) | Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 10-K for the fiscal year ended December 31, 2007 (File No. 000-25426). |
(3) | Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 8-A on April 27, 2004 (File No. 000-25426). |
(4) | Incorporated by reference to the Company’s Form S-1 (Reg. No. 33-88386) declared effective March 13, 1995. |
(5) | Incorporated by reference to exhibit B of the Company’s Proxy Statement filed on March 30, 2017. |
(6) | Incorporated by reference to the same-numbered exhibit filed with the Company’s Form 10-K for the fiscal year ended December 31, 2016. |
(7) | Incorporated by reference to exhibit A of the Company’s Proxy Statement filed on April 4, 2005 (File No. 000-25426). |
(8) | Incorporated by reference to exhibit 10.8 filed with the Company’s Form 10-Q on August 2, 2006 (File No. 000-25426). |
(9) | Incorporated by reference to exhibit 10.9 filed with the Company’s Form 10-Q on August 2, 2006 (File No. 000-25426). |
(10) | Incorporated by reference to exhibit 10.10 filed with the Company’s Form 10-Q on August 2, 2006 (File No. 000-25426). |
(11) | Incorporated by reference to exhibit 10.11 filed with the Company’s Form 10-Q on August 2, 2006 (File No. 000-25426). |
(12) | Incorporated by reference to exhibit 10.1 filed with the Company’s Form 8-K filed on May 17, 2010 (File No. 000-25426). |
(13) | Incorporated by reference to exhibit 10.2 filed with the Company’s Form 8-K filed on June 24, 2010 (File No. 000-25426). |
(14) | Incorporated by reference to exhibit 10.3 filed with the Company’s Form 8-K filed on June 24, 2010 (File No. 000-25426). |
(15) | Incorporated by reference to exhibit 10.4 filed with the Company’s Form 8-K filed on June 24, 2010 (File No. 000-25426). |
(16) | Incorporated by reference to exhibit 10.5 filed with the Company’s Form 8-K filed on June 24, 2010 (File No. 000-25426). |
(17) | Incorporated by reference to exhibit 10.1 filed with the Company’s Form 8-K filed on April 25, 2014. |
(18) | Incorporated by reference to exhibit 10.16 filed with the Company’s Form 10-K for the fiscal year ended December 31, 2014. |
(19) | Incorporated by reference to exhibit 10.1 filed with the Company’s Form 8-K filed on May 13, 2013. |
(20) | Incorporated by reference to exhibit B of the Company’s Proxy Statement filed on April 1, 2015. |
(21) | Incorporated by reference to exhibit 10.18 filed with the Company’s Form 10-Q filed on July 31, 2015. |
(22) | Incorporated by reference to exhibit 10.19 filed with the Company’s Form 10-Q filed on July 31, 2015. |
(23) | Incorporated by reference to exhibit 10.20 filed with the Company’s Form 10-Q filed on July 31, 2015. |
(24) | Incorporated by reference to exhibit 10.21 filed with the Company’s Form 10-Q filed on July 31, 2015. |
(25) | Incorporated by reference to exhibit 10.22 filed with the Company’s Form 10-Q filed on July 31, 2015. |
(26) | Incorporated by reference to exhibit 10.1 filed with the Company’s Form 8-K filed on December 16, 2016. |
(27) | Incorporated by reference to exhibit C of the Company’s Proxy Statement filed on April 1, 2015. |
(28) | Incorporated by reference to exhibit 10.1 filed with the Company’s Form 8-K filed on October 30, 2015. |
(29) | Incorporated by reference to exhibit 10.26 filed with the Company’s Form 10-Q filed on May 2, 2016. |
(30) | Incorporated by reference to exhibit 10.27 filed with the Company’s Form 10-Q filed on October 31, 2016. |
(31) | Incorporated by reference to exhibit 10.29 filed with the Company’s Form 10-Q filed on May 1, 2017. |
(32) | Incorporated by reference to exhibit 10.30 filed with the Company's Form 10-Q filed on May 1, 2018 (File No. 000-25426). |
* | Management Contract or Compensatory Plan or Arrangement |
† | Confidential treatment has been granted for portions of this exhibit. These portions have been omitted and submitted separately with the Securities and Exchange Commission. |
+ | Confidential treatment has been requested for portions of this exhibit. These portions have been omitted and submitted separately with the Securities and Exchange Commission. |
NATIONAL INSTRUMENTS CORPORATION |
By: /s/ Karen Rapp |
Karen Rapp |
EVP, Chief Financial Officer |
(Principal Financial Officer) |
Best Regards, | |
/s/ Alexander M. Davern | |
Alexander M. Davern |
1. | Non-Competition and Non-Solicitation. |
1. | I have reviewed this report on Form 10-Q of National Instruments Corporation; |
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 15d-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. |
By: | /s/ Alex M. Davern |
| Alex M. Davern |
| Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of National Instruments Corporation; |
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 15d-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. |
By: | /s/ Karen Rapp |
| Karen Rapp |
| Chief Financial Officer |
By: /s/ Alex M. Davern |
Alex M. Davern |
Chief Executive Officer |
Date: October 31, 2018 |
By: /s/ Karen Rapp |
Karen Rapp |
Chief Financial Officer |
Date: October 31, 2018 |
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Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Oct. 26, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NATIONAL INSTRUMENTS CORP | |
Entity Central Index Key | 0000935494 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 132,432,594 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value per share (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 360,000,000 | 360,000,000 |
Common stock, issued (in shares) | 132,432,594 | 130,978,947 |
Common stock, outstanding (in shares) | 132,432,594 | 130,978,947 |
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Net sales: | ||||
Total net sales | $ 346,127 | $ 320,921 | $ 999,033 | $ 939,635 |
Cost of sales: | ||||
Total cost of sales | 89,015 | 83,751 | 245,698 | 242,733 |
Gross profit | 257,112 | 237,170 | 753,335 | 696,902 |
Operating expenses: | ||||
Sales and marketing | 118,220 | 116,661 | 365,474 | 358,335 |
Research and development | 66,170 | 56,526 | 194,921 | 171,701 |
General and administrative | 26,712 | 26,468 | 81,882 | 78,400 |
Total operating expenses | 211,102 | 199,655 | 642,277 | 608,436 |
Operating income | 46,010 | 37,515 | 111,058 | 88,466 |
Other income: | ||||
Interest income | 1,539 | 657 | 3,845 | 1,509 |
Net foreign exchange (loss) gain | (956) | 1,096 | (2,082) | 1,624 |
Other gain (loss), net | 1,782 | (1,153) | 169 | (957) |
Income before income taxes | 48,375 | 38,115 | 112,990 | 90,642 |
Provision for income taxes | 5,181 | 4,726 | 14,474 | 13,949 |
Net income | $ 43,194 | $ 33,389 | $ 98,516 | $ 76,693 |
Basic earnings per share (in dollars per share) | $ 0.33 | $ 0.26 | $ 0.75 | $ 0.59 |
Weighted average shares outstanding - basic | 132,357 | 130,660 | 131,792 | 130,103 |
Diluted earnings per share (in dollars per share) | $ 0.32 | $ 0.25 | $ 0.74 | $ 0.59 |
Weighted average shares outstanding - diluted | 133,197 | 131,617 | 133,067 | 131,050 |
Dividends declared per share (in dollars per share) | $ 0.23 | $ 0.21 | $ 0.69 | $ 0.63 |
Product | ||||
Net sales: | ||||
Total net sales | $ 310,216 | $ 291,891 | $ 897,355 | $ 853,219 |
Cost of sales: | ||||
Total cost of sales | 87,082 | 81,641 | 239,205 | 235,989 |
Software maintenance | ||||
Net sales: | ||||
Total net sales | 35,911 | 29,030 | 101,678 | 86,416 |
Cost of sales: | ||||
Total cost of sales | $ 1,933 | $ 2,110 | $ 6,493 | $ 6,744 |
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 43,194 | $ 33,389 | $ 98,516 | $ 76,693 |
Other comprehensive income, before tax and net of reclassification adjustments: | ||||
Foreign currency translation adjustment | (1,359) | 6,226 | (7,360) | 21,890 |
Unrealized gain (loss) on securities available-for-sale | 154 | 162 | (404) | 187 |
Unrealized gain (loss) on derivative instruments | 3,316 | (3,136) | 11,578 | (9,470) |
Other comprehensive income, before tax | 2,111 | 3,252 | 3,814 | 12,607 |
Tax expense (benefit) related to items of other comprehensive income | 720 | (1,186) | 2,479 | (3,333) |
Other comprehensive income, net of tax | 1,391 | 4,438 | 1,335 | 15,940 |
Comprehensive income | $ 44,585 | $ 37,827 | $ 99,851 | $ 92,633 |
Basis of presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2017, included in our annual report on Form 10-K, filed with the Securities and Exchange Commission. In our opinion, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly our financial position at September 30, 2018 and December 31, 2017, the results of our operations and comprehensive income for three and nine months ended September 30, 2018 and 2017, and the cash flows for the nine months ended September 30, 2018 and 2017. Our operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States. Out of Period Adjustments During the three months ended September 30, 2018, we recorded a non-cash out of period adjustment of $2.3 million related to the deferral of gross profit associated with intercompany purchases from our equity-method investee that should have been recognized when realized, through transactions with third-parties, beginning in January 2011. This adjustment was recorded as an increase to "Other long-term assets" on our consolidated balance sheet and an increase to "Other gain (loss), net" on our consolidated statements of income. We evaluated the adjustment from a qualitative and quantitative perspective and concluded that the amount of income was not material to any individual prior quarter or year and that the cumulative out of period adjustment was not expected to be material to our full year 2018 results. Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net income by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which includes restricted stock units (“RSUs”), is computed using the treasury stock method. The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three and nine months ended September 30, 2018 and 2017, are as follows:
Stock awards to acquire 36,600 shares and 40,700 shares for the three months ended September 30, 2018 and 2017, respectively, and 537,000 shares and 22,300 shares for the nine months ended September 30, 2018 and 2017, respectively, were excluded in the computations of diluted EPS because the effect of including the stock awards would have been anti-dilutive. Summary of Significant Accounting Policies We adopted ASU 2014-09, Revenue from Contracts with Customers and all the related amendments ("new revenue standard") as of January 1, 2018. The impact of this new guidance on our accounting policies and operating results is described below. There were no other significant changes in our accounting policies during the nine months ended September 30, 2018 compared to the significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2017. Accounts Receivable, net Accounts receivable are recorded net of allowances for doubtful accounts. Our allowance for doubtful accounts is based on historical experience. We analyze historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. Unbilled receivables represent amounts for which revenue has been recognized but which have not yet been invoiced to the customer. The current portion of unbilled receivables is included in "accounts receivable, net" on the consolidated balance sheet and is not material. Sales Tax Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected from our customers, are excluded from revenue. Shipping and Handling Costs Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of sales. Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers On January 1, 2018, we adopted the new revenue standard using the modified retrospective transition method. Under this method, we evaluated all contracts that were in effect at the beginning of 2018 as if those contracts had been accounted for under the new revenue standard. We did not evaluate individual modifications for those periods prior to the adoption date, but the aggregate effect of all modifications as of the adoption date and such effects are provided below. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical GAAP. A cumulative catch-up adjustment was recorded to beginning retained earnings to reflect the impact of all existing arrangements under the new revenue standard. We do not expect the impact of the adoption of the new revenue standard to be material to our annual net income on an ongoing basis. A majority of our sales revenue continues to be recognized when products are shipped from our manufacturing facilities. Historically, we have had to defer revenue for certain types of licenses arrangements and recognize revenue for such licenses ratably over the license term. Under the new revenue standard, we are no longer required to establish vendor-specific objective evidence ("VSOE") to recognize software license revenue separately from the other elements, and we are able to recognize all software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands):
The following tables present the amounts by which financial statement line items were affected in the current period due to the adoption of ASU 2014-09. Our historical net cash flows are not impacted by this accounting change.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09. Balance sheet line item amounts include the cumulative-effect adjustment recorded on January 1, 2018. Recently Issued Accounting Pronouncements In August 2018, the SEC issued Release No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial reporting will be the inclusion of the annual disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation S-X to interim periods. We will adopt this new rule beginning with our financial reporting for the quarter ended March 31, 2019. Upon adoption, we will include our Consolidated Statements of Stockholders' Equity with each quarterly filing on Form 10-Q. In January 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which gives entities the option to reclassify to retained earnings tax effects resulting from the Tax Cuts and Jobs Act (the "Act") related to items that the FASB refers to as having been stranded in accumulated other comprehensive income ("OCI"). The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized or in the period of adoption. We must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in accumulated OCI and permit the company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in accumulated OCI. The adoption of ASU 2018-02 is not expected to have a material effect on our consolidated financial statements. We do not plan to adopt the new standard prior to the required effective date and we do not plan to elect the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in accumulated OCI. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item in order to align financial reporting of hedge relationships with the associated economic results. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. Our effective date for adoption of this guidance is our fiscal year beginning January 1, 2019. We are currently evaluating the effect that this guidance will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The guidance requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted.We do not expect to adopt the new standard prior to the required effective date. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. Based on our initial assessment, we expect that the adoption of this standard will have a material impact on our balance sheet but that it will not have a material impact on our consolidated statements of income, comprehensive income, or cash flows. We have completed a qualitative and quantitative assessment of our lease portfolio and are in the process of testing our new real estate lease accounting system, collecting data for leases entered into during 2018 and implementing new processes and controls to account for our leases in accordance with the new standard. As permitted by ASU 2018-11, Leases (Topic 842): Targeted Improvements, we do not expect to adjust comparative-period financial statements. |
Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Revenue Recognition Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of our products or services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Goods and Services We derive revenues from two primary sources: products and software maintenance. Product revenues are primarily generated from the sale of off-the-shelf modular test and measurement hardware components and related drivers, and application software licenses. Sales of most hardware components may also include optional extended hardware warranties, which typically provide additional service-type coverage for three years from the purchase date. Our software licenses typically provide for a perpetual right to use our software. We also offer some term-based software licenses that expire, which are referred to as subscription arrangements. We do not customize software for customers and installation services are not required. The software is delivered before related services are provided and is functional without professional services, updates and technical support. We sell our customer support contracts as a percentage of net software purchases the support is related. Revenues from offerings related to our hardware and software products such as extended hardware warranties, training, consulting and installation services are not significant and presented within product revenues, as further discussed below. Software maintenance revenues consists of post contract customer support that provides the customer with unspecified upgrades and technical support. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software licenses are estimated based on our established pricing practices and maximize the use of observable inputs. Standalone selling prices of hardware products are typically estimated based on observable transactions when these services are sold on a standalone basis. Our typical performance obligations include the following:
Significant Judgments Judgment is required to determine the standalone selling price ("SSP") for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including perpetual and term licenses sold with software maintenance. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative SSP of the various products and services. Due to the various benefits from and the nature of our enterprise agreement program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers. Additionally, whether a renewal option represents a distinct performance obligation could significantly impact the timing of revenue recognized. Our products are generally sold with a right of return which is accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. During the first quarter of 2018, we began to reclassify our allowance for sales returns to "other current liabilities" from "accounts receivable, net" due to the adoption of the new revenue standard. Disaggregation of Revenues We disaggregate revenue from contracts with customers based on the timing of transfer of goods or services to customers (point-in-time or over time) and geographic region based on the billing location of the customer. The geographic regions that are tracked are the Americas (United States, Canada and Latin America), EMEIA (Europe, Middle East, India and Africa) and APAC (Australia, New Zealand, Southeast Asia and China). Total net sales based on the disaggregation criteria described above are as follows:
Information about Contract Balances Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of our deferred revenue balance is related to extended hardware and software maintenance contracts. Payment terms and conditions vary by contract type, although payment is typically due within 30 to 90 days of contract inception. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers, such as invoicing at the beginning of a subscription term with a portion of the revenue recognized ratably over the contract period, or to provide customers with financing, such as multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. Changes in deferred revenue, current and long-term, during the nine months ended September 30, 2018 were as follows:
For the nine months ended September 30, 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables which are anticipated to be invoiced in the next twelve months are included in "accounts receivable, net" on the consolidated balance sheet. Based on the nature of our contracts with customers, we do not typically recognize unbilled receivables related to revenues recognized in excess of amounts billed. For the nine months ended September 30, 2018, amounts recognized related to unbilled receivables were not material. Unsatisfied Performance Obligations Revenue expected to be recognized in any future period related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, and excluding contracts where revenue is recognized as invoiced, was approximately $54.9 million as of September 30, 2018. Since we typically invoice customers at contract inception, this amount is included in our current and non-current deferred revenue balances. As of September 30, 2018, we expect to recognize approximately 12% of the revenue related to these unsatisfied performance obligations during the remainder of 2018, 44% during 2019, and 44% thereafter. Assets Recognized from the Costs to Obtain a Contract with a Customer We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Capitalized incremental costs related to initial contracts and renewals are amortized over the same period because the commissions paid on both the initial contract and renewals are commensurate with one another. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other long-term assets on our consolidated balance sheets. Practical Expedients As discussed in "Note 1 - Basis of presentation" and elsewhere in "Note 2 - Revenue," we have elected the following practical expedients in accordance with the new revenue standard:
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Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments | Short-term investments The following tables summarize unrealized gains and losses related to our short-term investments designated as available-for-sale:
The following tables summarize the contractual maturities of our short-term investments designated as available-for-sale:
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Fair value measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements We define fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market that market participants may use when pricing the asset or liability. We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following: Level 1 – Quoted prices in active markets for identical assets or liabilities Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 – Inputs that are not based on observable market data Assets and liabilities measured at fair value on a recurring basis are summarized below:
We value our available-for-sale short-term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. We believe all of these sources reflect the credit risk associated with each of our available-for-sale short-term investments. Short-term investments available-for-sale consists of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government organizations and agencies. All of our short-term investments available-for-sale have contractual maturities of less than 60 months. Derivatives include foreign currency forward contracts. Our foreign currency forward contracts are valued using an income approach (Level 2) based on the spot rate less the contract rate multiplied by the notional amount. We consider counterparty credit risk in the valuation of our derivatives. However, counterparty credit risk did not impact the valuation of our derivatives during the nine months ended September 30, 2018. There were no transfers in or out of Level 1 or Level 2 during the nine months ended September 30, 2018. As of September 30, 2018, our short-term investments did not include sovereign debt from any country other than the United States. We did not have any items that were measured at fair value on a nonrecurring basis at September 30, 2018 and December 31, 2017. The carrying value of net accounts receivable, accounts payable, and long-term debt contained in the consolidated balance sheets approximates fair value. |
Derivative instruments and hedging activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments and hedging activities | Derivative instruments and hedging activities We recognize all of our derivative instruments as either assets or liabilities in our statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation. We have operations in approximately 50 countries. Sales outside of the Americas accounted for approximately 59% and 58% of our net sales during the three months ended September 30, 2018 and 2017, and approximately 61% and 60% of our net sales during the nine months ended September 30, 2018 and 2017, respectively. Our activities expose us to a variety of market risks, including the effects of changes in foreign currency exchange rates. These financial risks are monitored and managed by us as an integral part of our overall risk management program. We maintain a foreign currency risk management strategy that uses derivative instruments (foreign currency forward contracts) to help protect our earnings and cash flows from fluctuations caused by the volatility in currency exchange rates. Movements in foreign currency exchange rates pose a risk to our operations and competitive position, in that exchange rate changes may affect our profitability and cash flow, and the business or pricing strategies of our non-U.S. based competitors. The vast majority of our foreign sales are denominated in the customers’ local currency. We purchase foreign currency forward contracts as hedges of forecasted sales that are denominated in foreign currencies and as hedges of foreign currency denominated financial assets or liabilities. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash inflows resulting from such sales or firm commitments will be adversely affected by changes in exchange rates. We also purchase foreign currency forward contracts as hedges of forecasted expenses that are denominated in foreign currencies. These contracts are entered into to help protect against the risk that the eventual dollar-net-cash outflows resulting from foreign currency operating and cost of sales expenses will be adversely affected by changes in exchange rates. We designate foreign currency forward contracts as cash flow hedges of forecasted net sales or forecasted expenses. In addition, we hedge our foreign currency denominated balance sheet exposures using foreign currency forward contracts that are not designated as hedging instruments. None of our derivative instruments contain a credit-risk-related contingent feature. Cash flow hedges To help protect against the reduction in value caused by a fluctuation in foreign currency exchange rates of forecasted foreign currency cash flows resulting from international sales over the next one to three years, we have instituted a foreign currency cash flow hedging program. We hedge portions of our forecasted net sales and forecasted expenses denominated in foreign currencies with forward contracts. For forward contracts, when the dollar strengthens significantly against the foreign currencies, the change in the present value of future foreign currency cash flows may be offset by the change in the fair value of the forward contracts designated as hedges. We purchase foreign currency forward contracts for up to 100% of our forecasted exposures in selected currencies (primarily in Euro, Japanese yen, Hungarian forint, British pound, Malaysian ringgit, Korean won and Chinese yuan) and limit the duration of these contracts to 36 months or less. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (“OCI”) and reclassified into earnings in the same line item (net sales, operating expenses, or cost of sales) associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings or expenses during the current period and are classified as a component of “net foreign exchange gain (loss).” Hedge effectiveness of foreign currency forwards designated as cash flow hedges are measured by comparing the hedging instrument’s cumulative change in fair value from inception to maturity to the forecasted transaction’s terminal value. We held forward contracts designated as cash flow hedges with the following notional amounts:
The contracts in the foregoing table had contractual maturities of 27 months or less and 24 months or less at September 30, 2018 and December 31, 2017, respectively. At September 30, 2018, we expect to reclassify $5.1 million of gains on derivative instruments from accumulated OCI to net sales during the next twelve months when the hedged international sales occur, $0.2 million of gains on derivative instruments from accumulated OCI to cost of sales during the next twelve months when the cost of sales are incurred and $0.3 million of gains on derivative instruments from accumulated OCI to operating expenses during the next twelve months when the hedged operating expenses occur. Expected amounts are based on derivative valuations at September 30, 2018. Actual results may vary materially as a result of changes in the corresponding exchange rates subsequent to this date. The gains and losses recognized in earnings due to hedge ineffectiveness were not material for each of the nine months ended September 30, 2018 and 2017 and are included as a component of net income under the line item “net foreign exchange gain (loss).” Other Derivatives Other derivatives not designated as hedging instruments consist primarily of foreign currency forward contracts that we use to hedge our foreign denominated net receivable or net payable positions to help protect against the change in value caused by a fluctuation in foreign currency exchange rates. We typically attempt to hedge up to 90% of our outstanding foreign denominated net receivables or net payables and typically limit the duration of these foreign currency forward contracts to approximately 90 days or less. The gain or loss on the derivatives as well as the offsetting gain or loss on the hedge item attributable to the hedged risk is recognized in current earnings under the line item “net foreign exchange gain (loss).” As of September 30, 2018 and December 31, 2017, we held foreign currency forward contracts that were not designated as hedging instruments with a notional amount of $52 million and $63 million, respectively. The following tables present the fair value of derivative instruments on our Consolidated Balance Sheets at September 30, 2018 and December 31, 2017, respectively.
The following tables present the effect of derivative instruments on our Consolidated Statements of Income for three months ended September 30, 2018 and 2017, respectively:
The following tables present the effect of derivative instruments on our Consolidated Statements of Income for the nine months ended September 30, 2018 and 2017, respectively:
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Inventories, net |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, net | Inventories, net Inventories, net consist of the following:
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Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets, net | Intangible assets, net Intangible assets at September 30, 2018 and December 31, 2017 are as follows:
Software development costs capitalized for the three months ended September 30, 2018 and 2017 were $1.9 million and $10.1 million, respectively, and related amortization expense was $6.9 million and $5.7 million, respectively. For the nine months ended September 30, 2018 and 2017, capitalized software development costs were $13.8 million and $35.8 million, respectively, and related amortization expense was $19.9 million and $16.5 million, respectively. Capitalized software development costs for the three months ended September 30, 2018 and 2017 included costs related to stock based compensation of $0.1 million and $0.5 million, respectively. For the nine months ended September 30, 2018 and 2017, capitalized software development costs included costs related to stock based compensation of $0.6 million and $1.4 million, respectively. The related amounts in the table above are net of fully amortized assets. Amortization of capitalized software development costs is computed on an individual product basis for those products available for market and is recognized based on the product’s estimated economic life, generally three to six years. Acquired technology and other intangible assets are amortized over their useful lives, which range from three to eight years. Patents are amortized using the straight-line method over their estimated period of benefit, generally 10 to 17 years. Total intangible assets amortization expenses were $9.0 million and $8.7 million for the three months ended September 30, 2018 and 2017, respectively, and $26.4 million and $25.7 million for the nine months ended September 30, 2018 and 2017, respectively. |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill | Goodwill The carrying amount of goodwill as of September 30, 2018, was as follows:
The excess purchase price over the fair value of assets acquired is recorded as goodwill. As we have one operating segment comprised of components with similar economic characteristics, we allocate goodwill to one reporting unit for goodwill impairment testing. Goodwill is tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach based on the market capitalization of the reporting unit. Effective for the annual goodwill impairment test for 2018 and for future testing, we will perform the required annual testing as of November 30 of each year rather than on February 28. In anticipation of this change, we reperformed our annual goodwill impairment test as of November 30, 2017 and determined that it was more likely than not that the estimated fair value for the reporting unit exceeded the carrying amount and that no impairment existed as of the assessment date. We do not believe that the change in the date of the annual goodwill impairment test is a material change in the method of applying an accounting principle nor do we expect that it will result in any delay, acceleration or impact to the results of the impairment testing. We believe this date is preferable because it aligns with the timing of our annual planning process which largely occurs during the fourth quarter. Retrospective application to prior periods is impracticable as we are unable to objectively determine, without the use of hindsight, the assumptions that would be used in those earlier periods. No impairment of goodwill was identified during the nine months ended September 30, 2018 or the twelve months ended December 31, 2017. |
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Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Valuation allowances are established when necessary to reduce deferred tax assets to amounts which are more likely than not to be realized. We had a valuation allowance of $78 million at September 30, 2018 and December 31, 2017. A majority of the valuation allowance is related to the deferred tax assets of National Instruments Hungary Kft. (“NI Hungary”). We account for uncertainty in income taxes recognized in our financial statements using prescribed recognition thresholds and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on our tax returns. We had $9.0 million and $10.2 million of unrecognized tax benefits at September 30, 2018 and December 31, 2017, respectively, all of which would affect our effective income tax rate if recognized. We recorded a gross increase in unrecognized tax benefits of $1 million and $1.6 million for the three and nine months ended September 30, 2018, respectively, as a result of the tax positions taken during these and prior periods. We recorded a gross decrease in unrecognized tax benefits of $3.1 million for each of the three-and nine-month periods ended September 30, 2018 as a result of closing open tax years and the enactment-date effects of the Tax Cuts and Jobs Act. As of September 30, 2018, it is reasonably possible that we will recognize tax benefits in the amount of $3.4 million in the next twelve months due to the closing of open tax years. The nature of the uncertainty is related to deductions taken on returns that have not been examined by the applicable tax authority. Our continuing policy is to recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2018, we had approximately $1.2 million accrued for interest related to uncertain tax positions. The tax years 2009 through 2018 remain open to examination by the major taxing jurisdictions to which we are subject. Our provision for income taxes reflected an effective tax rate of 11% and 12% for the three months ended September 30, 2018 and 2017, respectively, and 13% and 15% for the nine months ended September 30, 2018 and 2017, respectively. For the three and nine months ended September 30, 2018, our effective tax rate was lower than the U.S. federal statutory rate of 21% as a result of an enhanced deduction for certain research and development expenses, profits in foreign jurisdictions with reduced income tax rates, the research and development tax credit, a tax benefit from disqualifying dispositions of equity awards that do not ordinarily result in a tax benefit, excess tax benefits from share-based compensation, and the deduction for foreign-derived deduction eligible income, offset by the U.S. tax on global intangible low-taxed income. For the three and nine months ended September 30, 2017, our effective tax rate was lower than the U.S. federal statutory rate of 35% as a result of an enhanced deduction for certain research and development expenses, profits in foreign jurisdictions with reduced income tax rates, the research and development tax credit, a tax benefit from disqualifying dispositions of equity awards that do not ordinarily result in a tax benefit, and excess tax benefits from share-based compensation. Our earnings in Hungary are subject to a statutory tax rate of 9%. In addition, our research and development activities in Hungary benefit from a tax law in Hungary that provides for an enhanced deduction for qualified research and development expenses. The tax position of our Hungarian operations resulted in income tax benefits of $2.6 million and $4.3 million for the three months ended September 30, 2018 and 2017, respectively, and $7.1 million and $11.6 million for the nine months ended September 30, 2018 and 2017, respectively. Earnings from our operations in Malaysia are free of tax under a tax holiday effective January 1, 2013. This tax holiday expires in 2027. If we fail to satisfy the conditions of the tax holiday, this tax benefit may be terminated early. The income tax benefits of the tax holiday for the three and nine months ended September 30, 2018 were approximately $0.8 million and $1.9 million, respectively. The impact of the tax holiday on a per share basis for each of the three and nine months ended September 30, 2018 was a benefit of $0.01 per share. The income tax benefits of the tax holiday for the three and nine months ended September 30, 2017 were approximately $0.8 million and $1.9 million, respectively. The impact of the tax holiday on a per share basis for each of the three and nine months ended September 30, 2017 was a benefit of $0.01 per share. No other taxing jurisdictions had a significant impact on our effective tax rate. We have not entered into any advanced pricing or other agreements with the IRS with regard to any foreign jurisdictions. The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduced the federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Act. As of September 30, 2018, we had not completed our accounting for the tax effects of enactment of the Act. However, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. At December 31, 2017, we recognized a provisional amount of $69.9 million, which is included as a component of income tax expense from continuing operations. During the three month period ended September 30, 2018, we recognized a $(1.8) million adjustment to the provisional amounts recorded at December 31, 2017, primarily related to foreign withholding and distribution taxes. We expect to finalize our calculation during the fourth quarter of 2018. The Act subjects a U.S. shareholder to tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. The FASB staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the years the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. At September 30, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI related to current-year operations only in our estimated annual effective tax rate and have not provided additional GILTI on deferred items. |
Comprehensive Income |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | Comprehensive income Our comprehensive income is comprised of net income, foreign currency translation, unrealized gains and losses on forward contracts and securities classified as available-for-sale. The accumulated OCI, net of tax, for the nine months ended September 30, 2018 and 2017, consisted of the following:
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Authorized shares of common and preferred stock and stock-based compensation plans |
9 Months Ended |
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Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Authorized shares of common and preferred stock and stock-based compensation plans | Authorized shares of common and preferred stock and stock-based compensation plans Authorized shares of common and preferred stock Following approval by the Company’s Board of Directors and stockholders, on May 14, 2013, the Company’s certificate of incorporation was amended to increase the authorized shares of common stock by 180,000,000 shares to a total of 360,000,000 shares. As a result of this amendment, the total number of shares which the Company is authorized to issue is 365,000,000 shares, consisting of (i) 5,000,000 shares of preferred stock, par value $0.01 per share, and (ii) 360,000,000 shares of common stock, par value $0.01 per share. Restricted stock plan Our stockholders approved our 2005 Incentive Plan (the “2005 Plan”) in May 2005. At the time of approval, 4,050,000 shares of our common stock were reserved for issuance under this plan, as well as the number of shares which had been reserved but not issued under our 1994 Incentive Plan which terminated in May 2005 (the “1994 Plan”), and any shares that returned to the 1994 Plan as a result of termination of options or repurchase of shares issued under such plan. The 2005 Plan, administered by the Compensation Committee of the Board of Directors, provided for granting of incentive awards in the form of restricted stock and RSUs to directors, executive officers and employees of the Company and its subsidiaries. Awards vest over a three, five or ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company’s previous year’s earnings and growth but ten year awards cannot accelerate to vest over a period of less than five years. The 2005 Plan terminated on May 11, 2010, except with respect to outstanding awards previously granted thereunder. There were 3,362,304 shares of common stock that were reserved but not issued under the 2005 Plan as of May 11, 2010. Our stockholders approved our 2010 Incentive Plan (the “2010 Plan”) on May 11, 2010. At the time of approval, 3,000,000 shares of our common stock were reserved for issuance under this plan, as well as the 3,362,304 shares of common stock that were reserved but not issued under the 1994 Plan and the 2005 Plan as of May 11, 2010, and any shares that are returned to the 1994 Plan and the 2005 Plan as a result of the forfeiture or termination of options or RSUs or repurchase of shares issued under these plans. The 2010 Plan, administered by the Compensation Committee of the Board of Directors, provides for granting of incentive awards in the form of restricted stock and RSUs to employees, directors and consultants of the Company and employees and consultants of any parent or subsidiary of the Company. Awards vest over a three, five or ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company’s previous year’s earnings and growth but ten year awards cannot accelerate to vest over a period of less than five years. The 2010 Plan terminated on May 12, 2015, except with respect to the outstanding awards previously granted thereunder. There were 2,518,416 shares of common stock that were reserved but not issued under the 2010 Plan as of May 12, 2015. Our stockholders approved our 2015 Equity Incentive Plan (the “2015 Plan”) on May 12, 2015. At the time of approval, 3,000,000 shares of our common stock were reserved for issuance under this plan, as well as the 2,518,416 shares of common stock that were reserved but not issued under the 2010 Plan as of May 12, 2015, and any shares that were returned to the 1994, 2005, and the 2010 Plans as a result of the forfeiture or termination of options or RSUs or repurchase of shares issued under these plans. The 2015 Plan, administered by the Compensation Committee of the Board of Directors, provides for the granting of incentive awards in the form of restricted stock and RSUs to employees, directors and consultants of the Company and employees and consultants of any parent or subsidiary of the Company. Awards vest over a three, four, five or ten-year period, beginning on the date of grant. Vesting of ten year awards may accelerate based on the Company’s previous year’s earnings and growth but ten year awards cannot accelerate to vest over a period of less than five years. There were 3,026,600 shares available for grant under the 2015 Plan at September 30, 2018. During the three months ended September 30, 2018, we did not make any changes in accounting principles or methods of estimates related to the 2005, 2010 and 2015 Plans. Employee stock purchase plan Our employee stock purchase plan permits substantially all domestic employees and employees of designated subsidiaries to acquire our common stock at a purchase price of 85% of the lower of the market price at the beginning or the end of the purchase period. The plan has quarterly purchase periods generally beginning on February 1, May 1, August 1 and November 1 of each year. Employees may designate up to 15% of their compensation for the purchase of common stock under this plan. On May 9, 2017, our stockholders approved an additional 3,000,000 shares for issuance under our employee stock purchase plan. At September 30, 2018, we had 2,187,766 shares of common stock reserved for future issuance under this plan. We issued 680,131 shares under this plan in the nine months ended September 30, 2018 and the weighted average purchase price of the employees’ purchase rights was $35.91 per share. During the nine months ended September 30, 2018, we did not make any changes in accounting principles or methods of estimates with respect to such plan. Authorized Preferred Stock and Preferred Stock Purchase Rights Plan We have 5,000,000 authorized shares of preferred stock. On January 21, 2004, our Board of Directors designated 750,000 of these shares as Series A Participating Preferred Stock in conjunction with the adoption of a Preferred Stock Rights Agreement which expired on May 10, 2014. There were no shares of preferred stock issued and outstanding at September 30, 2018. Stock repurchases and retirements From time to time, our Board of Directors has authorized various programs for our repurchase of shares of our common stock depending on market conditions and other factors. Under the current program, we did not make any share repurchases during the nine months ended September 30, 2018 or the nine months ended September 30, 2017. At September 30, 2018, there were 1,134,247 shares remaining available for repurchase under this program. This repurchase program does not have an expiration date. |
Segment and geographic information |
9 Months Ended |
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Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment and geographic information | Segment and geographic information We operate as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker evaluates our financial information and resources and assesses the performance of these resources on a consolidated basis. Since we operate in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements and the notes thereto. We sell our products in three geographic regions which consist of Americas; Europe, Middle East, India, and Africa (EMEIA); and Asia-Pacific (APAC). Our sales to these regions share similar economic characteristics, similar product mix, similar customers, and similar distribution methods. Revenue from the sale of our products, which are similar in nature, and software maintenance is reflected as total net sales in our Consolidated Statements of Income. (See "Note 2 -Revenue" of Notes to consolidated financial statements for total net sales by the major geographic areas in which we operate). Based on the billing location of the customer, total sales outside the U.S. for the three months ended September 30, 2018 and 2017 were $213 million and $195 million, respectively, and $635 million and $588 million for the nine months ended September 30, 2018 and 2017, respectively. Total property and equipment, net, outside the U.S. was $132 million as of September 30, 2018 and $132 million at December 31, 2017. |
Debt |
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Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On May 9, 2013, we entered into a Loan Agreement (the “Loan Agreement”) with Wells Fargo Bank (the “Lender”). The Loan Agreement provided for a $50 million unsecured revolving line of credit with a scheduled maturity date of May 9, 2018 (the “Maturity Date”). On October 29, 2015, we entered into a First Amendment to Loan Agreement (the “Amendment”) with the Lender, which amended our Loan Agreement to among other things, (i) increase the unsecured revolving line of credit from $50 million to $125 million, (ii) extend the Maturity Date of the line of credit from May 9, 2018 to October 29, 2020, and (iii) provide us with an option to request increases to the line of credit of up to an additional $25 million in the aggregate, subject to consent of the Lender and terms and conditions to be mutually agreed between us and the Lender. On April 27, 2018, we entered into a Second Amendment to Loan Agreement (the "Second Amendment") which amended the Loan Agreement, as amended by the Amendment to, among other things, (i) reduce the revolving line of credit from $125.0 million to $5.0 million, (ii) reduce the letter of credit sublimit under the line of credit from $10.0 million to $5.0 million and (iii) require us and our subsidiaries to comply with certain of the affirmative and negative covenants under the Loan Agreement only if loans are outstanding under the Loan Agreement or if we have not reimbursed any drawing under a letter of credit issued under the Loan Agreement within five business days following the request of the Lender. The loans bear interest, at our option, at a base rate determined in accordance with the Loan Agreement, plus a spread of 0.0% to 0.50%, or a LIBOR rate plus a spread of 1.13% to 2.00%, in each case with such spread determined based on a ratio of consolidated indebtedness to EBITDA, determined in accordance with the Loan Agreement. Principal, together with all accrued and unpaid interest, is due and payable on the Maturity Date. We are also obligated to pay a quarterly commitment fee, payable in arrears, based on the available commitments at a rate of 0.18% to 0.30%, with such rate determined based on the ratio described above. The Loan Agreement contains customary affirmative and negative covenants. The affirmative covenants include, among other things, delivery of financial statements, compliance certificates and notices; payment of taxes and other obligations; maintenance of existence; maintenance of properties and insurance; and compliance with applicable laws and regulations. The negative covenants include, among other things, limitations on indebtedness, liens, mergers, consolidations, acquisitions and sales of assets, investments, changes in the nature of the business, affiliate transactions and certain restricted payments. The Loan Agreement also requires us to maintain a ratio of consolidated indebtedness to EBITDA equal to or less than 3.25 to 1.00, and a ratio of consolidated EBITDA to interest expense greater than or equal to 3.00 to 1.00, in each case determined in accordance with the Loan Agreement. As of September 30, 2018, we were in compliance with all applicable covenants in the Loan Agreement. The Loan Agreement contains customary events of default including, among other things, payment defaults, breaches of covenants or representations and warranties, cross-defaults with certain other indebtedness, bankruptcy and insolvency events, judgment defaults and change in control events, subject to grace periods in certain instances. Upon an event of default, the lender may declare all or a portion of the outstanding obligations payable by us to be immediately due and payable and exercise other rights and remedies provided for under the Loan Agreement. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Loan Agreement at a per annum rate of interest equal to 2.00% above the otherwise applicable interest rate. Proceeds of loans made under the Loan Agreement may be used for working capital and other general corporate purposes. We may prepay the loans under the Loan Agreement in whole or in part at any time without premium or penalty. Certain of our existing and future material domestic subsidiaries are required to guaranty our obligations under the Loan Agreement. As of September 30, 2018, we had no outstanding borrowings under this line of credit. During the three months ended September 30, 2018 and September 30, 2017, we incurred interest expense related to our outstanding borrowings of $0 and $176,000, respectively. During the nine months ended September 30, 2018 and September 30, 2017, we incurred interest expense related to our outstanding borrowings of $0 and $519,000, respectively. As of September 30, 2018 and September 30, 2017, the weighted-average interest rate on the revolving line of credit was 3.4% and 2.4%, respectively. These charges are included in “Other income (loss), net” in our Consolidated Statements of Income. |
Commitments and contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | Commitments and contingencies We offer a one-year limited warranty on most hardware products which is included in the terms of sale of such products. We also offer optional extended warranties on our hardware products for which the related revenue is recognized ratably over the warranty period. Provision is made for estimated future warranty costs at the time of the sale for the estimated costs that may be incurred under the standard warranty. Our estimate is based on historical experience and product sales during the period. The warranty reserve for the nine months ended September 30, 2018 and 2017 was as follows:
As of September 30, 2018, we had non-cancelable purchase commitments with various suppliers of customized inventory and inventory components totaling approximately $7.3 million over the next twelve months. As of September 30, 2018, we had outstanding guarantees for payment of customs and foreign grants totaling less than $0.1 million, which are generally payable over the next twelve months. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring Since the first quarter of 2017, we have been taking steps to optimize our processes, reduce job duplication, evaluate where we should shift and centralize activities, improve efficiencies, and rebalance our resources on higher return activities. This has led to headcount reductions. The timing and scope of our headcount reductions will vary. A summary of the charges in our consolidated statement of operations resulting from our restructuring activities is shown below:
A summary of balances and activity related to our restructuring activity is shown below:
The restructuring liability of $3.8 million at September 30, 2018 relating to our restructuring activity is recorded in the “accrued compensation” line item of our consolidated balance sheet. |
Litigation |
9 Months Ended |
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Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation We are not currently a party to any material litigation. However, in the ordinary course of our business, we have in the past, are currently and will likely become involved in various legal proceedings, claims, and regulatory, tax or government inquiries and investigations, and could incur uninsured liability in any one or more of them. We also periodically receive notifications from various third parties related to alleged infringement of patents or intellectual property rights, commercial disputes or other matters. No assurances can be given with respect to the extent or outcome of any investigation, litigation or dispute. |
Subsequent Events |
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Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent events On October 24, 2018, our Board of Directors declared a quarterly cash dividend of $0.23 per common share, payable on December 3, 2018, to stockholders of record on November 12, 2018. |
Basis of presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are recorded net of allowances for doubtful accounts. Our allowance for doubtful accounts is based on historical experience. We analyze historical bad debts, customer concentrations, customer creditworthiness and current economic trends when evaluating the adequacy of our allowance for doubtful accounts. Unbilled receivables represent amounts for which revenue has been recognized but which have not yet been invoiced to the customer. The current portion of unbilled receivables is included in "accounts receivable, net" on the consolidated balance sheet and is not material. |
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Sales Tax | Sales Tax Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected from our customers, are excluded from revenue. |
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of sales. |
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Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers On January 1, 2018, we adopted the new revenue standard using the modified retrospective transition method. Under this method, we evaluated all contracts that were in effect at the beginning of 2018 as if those contracts had been accounted for under the new revenue standard. We did not evaluate individual modifications for those periods prior to the adoption date, but the aggregate effect of all modifications as of the adoption date and such effects are provided below. Under the modified retrospective transition approach, periods prior to the adoption date were not adjusted and continue to be reported in accordance with historical GAAP. A cumulative catch-up adjustment was recorded to beginning retained earnings to reflect the impact of all existing arrangements under the new revenue standard. We do not expect the impact of the adoption of the new revenue standard to be material to our annual net income on an ongoing basis. A majority of our sales revenue continues to be recognized when products are shipped from our manufacturing facilities. Historically, we have had to defer revenue for certain types of licenses arrangements and recognize revenue for such licenses ratably over the license term. Under the new revenue standard, we are no longer required to establish vendor-specific objective evidence ("VSOE") to recognize software license revenue separately from the other elements, and we are able to recognize all software license revenue once the customer obtains control of the license, which will generally occur at the start of each license term. The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands):
The following tables present the amounts by which financial statement line items were affected in the current period due to the adoption of ASU 2014-09. Our historical net cash flows are not impacted by this accounting change.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09. Balance sheet line item amounts include the cumulative-effect adjustment recorded on January 1, 2018. Recently Issued Accounting Pronouncements In August 2018, the SEC issued Release No. 33-10532 that amends and clarifies certain financial reporting requirements. The principal change to our financial reporting will be the inclusion of the annual disclosure requirement of changes in stockholders’ equity in Rule 3-04 of Regulation S-X to interim periods. We will adopt this new rule beginning with our financial reporting for the quarter ended March 31, 2019. Upon adoption, we will include our Consolidated Statements of Stockholders' Equity with each quarterly filing on Form 10-Q. In January 2018, the FASB issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which gives entities the option to reclassify to retained earnings tax effects resulting from the Tax Cuts and Jobs Act (the "Act") related to items that the FASB refers to as having been stranded in accumulated other comprehensive income ("OCI"). The new guidance may be applied retrospectively to each period in which the effect of the Act is recognized or in the period of adoption. We must adopt this guidance for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for periods for which financial statements have not yet been issued or made available for issuance, including the period the Act was enacted. The guidance, when adopted, will require new disclosures regarding a company’s accounting policy for releasing the tax effects in accumulated OCI and permit the company the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in accumulated OCI. The adoption of ASU 2018-02 is not expected to have a material effect on our consolidated financial statements. We do not plan to adopt the new standard prior to the required effective date and we do not plan to elect the option to reclassify to retained earnings the tax effects resulting from the Act that are stranded in accumulated OCI. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU simplifies certain aspects of hedge accounting and improves disclosures of hedging arrangements through the elimination of the requirement to separately measure and report hedge ineffectiveness. The ASU generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item in order to align financial reporting of hedge relationships with the associated economic results. Entities must apply the amendments to cash flow and net investment hedge relationships that exist on the date of adoption using a modified retrospective approach. The presentation and disclosure requirements must be applied prospectively. Our effective date for adoption of this guidance is our fiscal year beginning January 1, 2019. We are currently evaluating the effect that this guidance will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases. The guidance requires lessees to recognize most lease liabilities on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The update states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The update is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted.We do not expect to adopt the new standard prior to the required effective date. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures. Based on our initial assessment, we expect that the adoption of this standard will have a material impact on our balance sheet but that it will not have a material impact on our consolidated statements of income, comprehensive income, or cash flows. We have completed a qualitative and quantitative assessment of our lease portfolio and are in the process of testing our new real estate lease accounting system, collecting data for leases entered into during 2018 and implementing new processes and controls to account for our leases in accordance with the new standard. As permitted by ASU 2018-11, Leases (Topic 842): Targeted Improvements, we do not expect to adjust comparative-period financial statements. |
Basis of presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of The Denominators Used To Calculate Basic EPS And Diluted EPS | The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the three and nine months ended September 30, 2018 and 2017, are as follows:
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Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effects of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASU 2014-09, Revenue - Revenue from Contracts with Customers were as follows (in thousands):
The following tables present the amounts by which financial statement line items were affected in the current period due to the adoption of ASU 2014-09. Our historical net cash flows are not impacted by this accounting change.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09.
* Excludes line items that were not materially affected by our adoption of ASU 2014-09. Balance sheet line item amounts include the cumulative-effect adjustment recorded on January 1, 2018. |
Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Performance Obligations | Our typical performance obligations include the following:
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Schedule of Disaggregation of Revenue | Total net sales based on the disaggregation criteria described above are as follows:
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Schedule of Changes in Deferred Revenue, Current and Non-Current | Changes in deferred revenue, current and long-term, during the nine months ended September 30, 2018 were as follows:
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Short-term investments (Tables) |
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Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation | The following tables summarize unrealized gains and losses related to our short-term investments designated as available-for-sale:
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Investments Classified by Contractual Maturity Date | The following tables summarize the contractual maturities of our short-term investments designated as available-for-sale:
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Fair value measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below:
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Derivative instruments and hedging activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notional Amounts of Derivative Instruments | We held forward contracts designated as cash flow hedges with the following notional amounts:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Derivative Instruments on Consolidated Balance Sheets | The following tables present the fair value of derivative instruments on our Consolidated Balance Sheets at September 30, 2018 and December 31, 2017, respectively.
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Summary of Derivative Instruments, Gain (Loss) | The following tables present the effect of derivative instruments on our Consolidated Statements of Income for the nine months ended September 30, 2018 and 2017, respectively:
The following tables present the effect of derivative instruments on our Consolidated Statements of Income for three months ended September 30, 2018 and 2017, respectively:
|
Inventories, net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories, net consist of the following:
|
Intangible assets, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Intangible assets at September 30, 2018 and December 31, 2017 are as follows:
|
Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Goodwill | The carrying amount of goodwill as of September 30, 2018, was as follows:
|
Comprehensive income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Comprehensive Income (Loss) | The accumulated OCI, net of tax, for the nine months ended September 30, 2018 and 2017, consisted of the following:
|
Commitments and contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The warranty reserve for the nine months ended September 30, 2018 and 2017 was as follows:
|
Restructuring (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring Related Costs | A summary of the charges in our consolidated statement of operations resulting from our restructuring activities is shown below:
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Schedule of Restructuring Reserve | A summary of balances and activity related to our restructuring activity is shown below:
|
Basis of presentation - Schedule of Earnings Per Share (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other income (expense) | $ 1,782 | $ (1,153) | $ 169 | $ (957) |
Weighted average shares outstanding - basic | 132,357,000 | 130,660,000 | 131,792,000 | 130,103,000 |
RSUs (in shares) | 840,000 | 957,000 | 1,275,000 | 947,000 |
Weighted average shares outstanding-diluted | 133,197,000 | 131,617,000 | 133,067,000 | 131,050,000 |
Anti-dilutive securities excluded from the computation of diluted EPS (in shares) | 36,600 | 40,700 | 537,000 | 22,300 |
Restatement Adjustment | Recognized Deferral of Gross Profit [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other current assets | $ 2,300 | $ 2,300 | ||
Other income (expense) | $ 2,300 |
Revenue - Change in Deferred Revenue (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Movement in Deferred Revenue [Roll Forward] | |
Deferral of revenue billed in current period, net of recognition | $ 116,507 |
Recognition of revenue deferred in prior periods | (105,291) |
Foreign currency translation impact | (3,372) |
Deferred revenue | 152,160 |
Before ASC 606 | |
Movement in Deferred Revenue [Roll Forward] | |
Deferred revenue | $ 154,380 |
Derivative instruments and hedging activities - Summary Of Notional Amounts Of Derivative Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative [Line Items] | ||
Total forward contracts notional amount | $ 321,052 | $ 318,974 |
Chinese yuan | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 64,020 | 39,197 |
Euro | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 164,488 | 177,406 |
Japanese yen | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 10,754 | 22,857 |
Hungarian forint | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 28,284 | 41,296 |
British pound | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 16,197 | 9,931 |
Malaysian ringgit | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | 26,325 | 28,287 |
Korean won | ||
Derivative [Line Items] | ||
Total forward contracts notional amount | $ 10,984 | $ 0 |
Inventories, net (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 100,603 | $ 91,513 |
Work-in-process | 10,291 | 8,938 |
Finished goods | 81,518 | 84,141 |
Total | $ 192,412 | $ 184,592 |
Goodwill - Schedule Of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 266,783 |
Foreign currency translation impact | (3,664) |
Balance at end of period | $ 263,119 |
Goodwill - Narrative (Details) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018
USD ($)
segment
reporting_unit
|
Dec. 31, 2017
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Number of operating segments | segment | 1 | |
Number of reporting units | reporting_unit | 1 | |
Goodwill impairment | $ | $ 0 | $ 0 |
Segment and geographic information (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
segment
region
|
Sep. 30, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Number of geographic regions company operates in | region | 3 | ||||
Total revenue | $ 346,127 | $ 320,921 | $ 999,033 | $ 939,635 | |
Property and equipment, net | 245,898 | 245,898 | $ 249,715 | ||
Outside The United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenue | 213,000 | $ 195,000 | 635,000 | $ 588,000 | |
Property and equipment, net | $ 132,000 | $ 132,000 | $ 132,000 |
Commitments and contingencies - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Limited warranty on most hardware products (in number of years) | 1 year |
Non-cancelable purchase commitments | $ 7.3 |
Outstanding guarantees for payment of customs and foreign grants (less than) | $ 0.1 |
Commitments and contingencies - Schedule Of Warranty Reserve (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at the beginning of the period | $ 2,846 | $ 2,686 |
Accruals for warranties issued during the period | 2,224 | 1,929 |
Accruals related to pre-existing warranties | 335 | 193 |
Settlements made (in cash or in kind) during the period | (2,235) | (1,983) |
Balance at the end of the period | $ 3,170 | $ 2,825 |
Restructuring - Schedule of Restructuring Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other related costs | $ 4,501 | $ 1,990 | $ 11,349 | $ 11,166 |
Cost of sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other related costs | (179) | 79 | (150) | 986 |
Research and development | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other related costs | 631 | 86 | 1,607 | 1,382 |
Sales and marketing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other related costs | 3,676 | 1,618 | 8,354 | 7,997 |
General and Administration | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other related costs | $ 373 | $ 207 | $ 1,538 | $ 801 |
Restructuring - Schedule of Restructuring Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Restructuring Reserve [Roll Forward] | ||||
December 31, 2017 | $ 5,408 | |||
Income statement expense | $ 4,501 | $ 1,990 | 11,349 | $ 11,166 |
Cash payments | (12,923) | |||
September 30, 2018 | $ 3,834 | $ 3,834 |
Restructuring - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Restructuring and Related Activities [Abstract] | ||
Restructuring accrual | $ 3,834 | $ 5,408 |
Subsequent Events (Details) |
Oct. 24, 2018
$ / shares
|
---|---|
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividend payable (in dollars per share) | $ 0.23 |
Label | Element | Value |
---|---|---|
Contract with Customer, Liability | us-gaap_ContractWithCustomerLiability | $ 144,316,000 |
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Contract with Customer, Liability | us-gaap_ContractWithCustomerLiability | $ (10,064,000) |
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