Other Financial Statement Information

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventory

Inventory was comprised of the following as of the dates indicated (in thousands):


	June 30, 2020		December 31, 2019
Purchased materials	$	8,175	$	6,436
Work in progress	6,403		3,996
Finished goods	7,180		4,838
Inventory	$	21,758	$	15,270

Intangible Assets, Net

Intangible assets, net, which are recorded within other assets in the condensed consolidated balance sheets, consisted of the following (in thousands):


	June 30, 2020												December 31, 2019
	Remaining Useful Life in Years	Gross Carrying Amount		Accumulated Amortization		Intangibles, Net		Remaining Useful Life in Years	Gross Carrying Amount		Accumulated Amortization		Intangibles, Net
Technology licenses	14.2	$	22,504	$	(1,207)	$	21,297	14.7	$	22,504	$	(440)	$	22,064
Customer relationships	5.4	204		(46)		158		5.9	204		(32)		172
Trademarks	1.4	204		(108)		96		1.9	204		(74)		130
Total intangible assets, net		$	22,912	$	(1,361)	$	21,551		$	22,912	$	(546)	$	22,366

The estimated annual amortization of intangible assets for the next five years is shown below (in thousands):


	Estimated Annual Amortization
2020 (excluding the six months ended June 30, 2020)	$	815
2021	1,625
2022	1,562
2023	1,533
2024	1,503
Thereafter	14,513
Total	$	21,551

Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures and asset impairments, among other factors.

Accrued Compensation and Related Benefits

Accrued compensation and related benefits were comprised of the following as of the dates indicated (in thousands):


	June 30, 2020		December 31, 2019
Accrued payroll and related costs	$	2,405	$	470
Employee stock purchase program liability	1,114		1,862
Accrued bonus	2,828		6,154
Accrued commissions	1,845		2,473
Other	2,084		1,435
Accrued compensation and related benefits	$	10,276	$	12,394

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were comprised of the following as of the dates indicated (in thousands):


	June 30, 2020		December 31, 2019
Accrued legal expenses	$	2,894	$	4,375
Accrued license fee	5,575		6,183
Accrued royalties for licensed technologies	980		2,025
Accrued property and equipment	2,149		3,885
Accrued consulting	2,137		1,173
Product warranties	345		467
Customer deposits	925		1,304
Taxes payable	954		1,087
Other	3,483		3,949
Accrued expenses and other current liabilities	$	19,442	$	24,448

Product Warranties

Changes in the reserve for product warranties were as follows for the periods indicated (in thousands):


	June 30, 2020		December 31, 2019
Beginning of period	$	467	$	804
Additions charged to cost of revenue	197		741
Repairs and replacements	(319)		(1,078)
End of period	$	345	$	467

Revenue and Deferred Revenue

As of June 30, 2020, the aggregate amount of remaining performance obligations related to separately sold extended warranty service agreements, or allocated amounts for extended warranty service agreements bundled with sales of Chromium instruments, was $4.6 million, of which approximately 74% is expected to be recognized to revenue in the next 12 months, with the remainder thereafter. The contract liabilities of $4.6 million and $4.1 million as of June 30, 2020 and December 31, 2019, respectively, consisted of deferred revenue related to extended warranty service agreements, and as of June 30, 2020, the short-term portion was $3.4 million. Revenue recorded during the three and six months ended June 30, 2020 included $1.1 million and $2.1 million, respectively, of previously deferred revenue that was included in contract liabilities as of December 31, 2019. Contract assets as of June 30, 2020 and December 31, 2019 were not material.

The following table represents revenue by source for the periods indicated (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Instruments	$	7,291	$	8,302	$	16,432	$	15,150
Consumables	34,164		46,538		95,592		92,389
Services	1,450		979		2,786		1,858
Total revenue	$	42,905	$	55,819	$	114,810	$	109,397

The following table presents revenue by geography based on the location of the customer for the periods indicated (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
North America	$	20,261	$	32,946	$	59,993	$	61,455
Europe, Middle East and Africa	11,715		12,243		24,873		24,498
China	7,628		7,293		18,625		15,407
Asia-Pacific¹	3,301		3,337		11,319		8,037
Total revenue	$	42,905	$	55,819	$	114,810	$	109,397

¹ Asia-Pacific excludes China which is disclosed separately.

Revenue for the United States, which is included in North America in the table above, was 45% and 53% of consolidated revenue for the three months ended June 30, 2020 and 2019, respectively, and 50% and 57% of consolidated revenue for the six months ended June 30, 2020 and 2019, respectively.