Commitments and Contingencies

6 Months Ended

Jun. 29, 2025

Commitments and Contingencies Disclosure [Abstract]

Operating Leases

Our operating lease obligations mostly include offices, equipment, and distribution centers, with various expiration dates through June 2033. Certain lease agreements include options to renew or terminate the lease, which are generally not reasonably certain to be exercised and therefore are not factored into our determination of lease payments. The terms of certain leases provide for rental payments on a graduated scale.

Gross lease expense was $1.4 million and $2.8 million for the three and six months ended June 29, 2025, respectively, and $1.3 million and $2.8 million for the three and six months ended June 30, 2024, respectively. We recorded sublease income as reduction of lease expense, in the amount of $0.7 million and $1.3 million for each of the three and six months ended June 29, 2025 and June 30, 2024, respectively.

Supplemental cash flow information related to operating leases is as follows:


	Six Months Ended
	June 29, 2025		June 30, 2024
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,075	$	3,001
Right-of-use assets obtained in exchange for lease liabilities
Operating leases	$	65	$	—

Weighted average remaining lease term and weighted average discount rate related to operating leases are as follows:


	As of
	June 29, 2025		December 31, 2024
Weighted average remaining lease term	4.7 years		5.4 years
Weighted average discount rate	6.59	%	6.66	%

The future minimum undiscounted lease payments under operating leases and future non-cancelable rent payments from our subtenants for each of the next five years and thereafter as of June 29, 2025 are as follows:


	Operating Lease Payments		Sublease Payments		Net
	(In thousands)
2025 (Remaining six months)	$	2,332	$	(1,097)	$	1,235
2026	5,591		(2,066)		3,525
2027	5,562		(2,322)		3,240
2028	4,596		(2,392)		2,204
2029	2,715		(1,228)		1,487
Thereafter	3,616		—		3,616
Total future lease payments	$	24,412	$	(9,105)	$	15,307
Less: imputed interest	(3,853)
Present value of future minimum lease payments	$	20,559

Accrued liabilities	$	3,956
Non-current operating lease liabilities	16,603
Total lease liabilities	$	20,559

Lease Early Termination

In July 2025, we entered into a conditional termination agreement for our office lease located in San Jose, California. The termination will be effective following the landlord’s exercise of its termination option, which exercise notice was provided in late July. Our obligation stipulated in the termination agreement includes a termination fee of $1.0 million and base rent through the effective date of termination, as well as vacating the premises timely. We expect to record the derecognition of right-of-use assets and lease liabilities in the third quarter of 2025, and to recognize a gain which is currently being evaluated.

Letters of Credit

In connection with the lease agreement for our office space located in San Jose, California, we executed a letter of credit with the landlord as the beneficiary. As of June 29, 2025, we had $3.6 million of unused letters of credit outstanding, of which $3.1 million pertains to the lease arrangement in San Jose, California. Following the effectiveness of the early termination agreement, this letter of credit will be terminated.

Purchase Obligations

We have entered into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 50% of orders are cancelable by giving notice 46 to 60 days prior to the expected shipment date and 25% of orders are cancelable by giving notice 31 to 45 days prior to the expected shipment date. Orders are non-cancelable within 30 days prior to the expected shipment date. As of June 29, 2025, we had $36.6 million in non-cancelable purchase commitments with suppliers which is expected to be paid over the next twelve months.

As of June 29, 2025, an additional $31.3 million of purchase orders beyond contractual termination periods have been issued to supply chain partners in anticipation of demand requirements. Consequently, we may incur expenses for the materials and components, such as chipsets already purchased by the supplier to fulfill our orders if the purchase order is cancelled. Expenses incurred have historically not been material relative to the original order value.

Litigation and Other Legal Matters

From time to time, we may become involved in disputes, litigation, and other legal actions. In all cases, at each reporting period, we evaluate whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. In such cases, we accrue for the amount or, if a range, we accrue the low end of the range, only if there is not a better estimate than any other amount within the range, as a component of legal expense within general and administrative expenses. We monitor developments in these legal matters that could affect the estimate we had previously accrued. We currently believe that there are no existing claims or proceedings that are likely to have a material adverse effect on our financial position within the next 12 months. There are many uncertainties associated with any litigation, and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. In addition, the resolution of any intellectual property litigation may require us to make royalty payments, which could have an adverse effect in future periods. If any of those events were to occur, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, which could result in the need to adjust the liability and record additional expenses.

Indemnifications

In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, distributors, resellers, vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with members of our Board of Directors and certain of our executive officers that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments we could be required to make under these indemnification agreements is, in many cases, unlimited. As of June 29, 2025 and December 31, 2024, we have not incurred any material costs as a result of such indemnification obligations and we are not currently aware of any indemnification claims.