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Balance Sheet Components | 12 Months Ended
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Oct. 01, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Balance Sheet Components | 5. Balance Sheet Components The following tables show the Company’s balance sheet component details. Accounts Receivable Allowances The following table summarizes changes in the allowance for credit losses for fiscal 2022 and 2021, and the allowance for doubtful accounts for fiscal 2020:
|  | October 1, 2022 |  |  | October 2, 2021 |  |  | October 3, 2020 |
(In thousands) |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 1,547 |  |  | $ | 1,307 |  |  | $ | 1,255 |
Increases |  |  | 2,098 |  |  |  | 1,529 |  |  |  | 1,127 |
Write-offs |  |  | (901 | ) |  |  | (1,289 | ) |  |  | (1,075 | )
Ending balance |  | $ | 2,744 |  |  | $ | 1,547 |  |  | $ | 1,307 |
The following table summarizes the changes in the allowance for sales incentives for fiscal 2022, 2021 and 2020:
|  | October 1, 2022 |  |  | October 2, 2021 |  |  | October 3, 2020 |
(In thousands) |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 19,160 |  |  | $ | 17,515 |  |  | $ | 20,051 |
Charged to revenue |  |  | 51,225 |  |  |  | 95,249 |  |  |  | 108,843 |
Utilization of sales incentive allowance |  |  | (46,812 | ) |  |  | (93,604 | ) |  |  | (111,379 | )
Ending balance |  | $ | 23,573 |  |  | $ | 19,160 |  |  | $ | 17,515 |
Inventories Inventories, net, consist of the following:
|  | October 1, 2022 |  |  | October 2, 2021 |
(In thousands) |  |  |  |  |  |
Finished goods |  | $ | 406,657 |  |  | $ | 154,608 |
Components |  |  | 47,631 |  |  |  | 30,522 |
Inventories |  | $ | 454,288 |  |  | $ | 185,130 |
The Company writes down inventory as a result of excess and obsolete inventories, or when it believes that the net realizable value of inventories is less than the carrying value. As of October 1, 2022, and October 2, 2021, inventory write-downs were $8.8 million and $4.8 million, respectively. Property and Equipment, Net Property and equipment, net consist of the following:
|  | October 1, 2022 |  |  | October 2, 2021 |
(In thousands) |  |  |  |  |  |
Computer hardware and software |  | $ | 42,000 |  |  | $ | 40,098 |
Furniture and fixtures |  |  | 7,511 |  |  |  | 7,483 |
Tooling and production line test equipment |  |  | 100,337 |  |  |  | 76,210 |
Leasehold improvements |  |  | 49,656 |  |  |  | 49,846 |
Product displays |  |  | 56,885 |  |  |  | 57,863 |
Total property and equipment |  |  | 256,389 |  |  |  | 231,500 |
Accumulated depreciation and amortization |  |  | (170,221 | ) |  |  | (160,159 | )
Property and equipment, net |  | $ | 86,168 |  |  | $ | 71,341 |
Depreciation expense was $33.3 million, $31.8 million and $34.9 million for fiscal 2022, 2021 and 2020, respectively. During fiscal 2022, 2021 and 2020, the Company abandoned and disposed of gross fixed assets of $18.9 million, $32.9 million and $18.5 million, with accumulated depreciation of $18.8 million, $32.2 million and $14.2 million, respectively. Disposals of fixed assets were recorded in operating expenses in the consolidated statements of operations and comprehensive income (loss) and resulted in losses of $0.1 million, $0.7 million and $4.3 million for fiscal 2022, 2021 and 2020, respectively. Goodwill The following table presents the changes in carrying amount of goodwill for the fiscal year ended October 1, 2022:
(In thousands) |  |  |
Balance as of October 2, 2021 |  | $ | 15,545 |
Goodwill acquired |  |  | 66,078 |
Effect of exchange rate changes on goodwill |  |  | (4,323 | )
Balance as of October 1, 2022 |  | $ | 77,300 |
Intangible Assets As part of the acquisition of Mayht Holding BV ("Mayht"), the Company recognized $71.8 million in intangible assets related to in-process research and development activity, which is not subject to amortization for the current period. The following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity:
|  | October 1, 2022 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Impact of FX |  |  | Net Carrying Value |  |  | Weighted-Average Remaining Life |
(In thousands, except weighted-average remaining life) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tradename |  | $ | 451 |  |  | $ | (23 | ) |  | $ | (44 | ) |  | $ | 384 |  |  |  | 5.50 |
Technology-based |  |  | 34,032 |  |  |  | (8,032 | ) |  |  | 0 |  |  |  | 26,000 |  |  |  | 5.50 |
Total finite-lived intangible assets |  |  | 34,483 |  |  |  | (8,055 | ) |  |  | (44 | ) |  |  | 26,384 |  |  |  | 5.50 |
In-process research and development and other intangible assets not subject to amortization |  |  | 71,759 |  |  |  | 0 |  |  |  | (7,079 | ) |  |  | 64,680 |  |  |  |
Total intangible assets |  | $ | 106,242 |  |  | $ | (8,055 | ) |  | $ | (7,123 | ) |  | $ | 91,064 |  |  |  |
The following table summarizes the estimated future amortization expense of the Company's intangible assets as October 1, 2022:
Fiscal years ending |  | Future Amortization Expense |
(In thousands) |  |  |
2023 |  | $ | 6,176 |
2024 |  |  | 5,963 |
2025 |  |  | 3,363 |
2026 |  |  | 3,033 |
2027 and thereafter |  |  | 7,849 |
Total future amortization expense |  | $ | 26,384 |
Accrued Expenses Accrued expenses consisted of the following:
|  | October 1, 2022 |  |  | October 2, 2021 |
(In thousands) |  |  |  |  |  |
Accrued advertising and marketing |  | $ | 21,292 |  |  | $ | 19,989 |
Accrued taxes |  |  | 7,081 |  |  |  | 16,941 |
Accrued inventory and supply chain costs |  |  | 51,011 |  |  |  | 48,672 |
Accrued product development |  |  | 8,168 |  |  |  | 7,101 |
Accrued general and administrative expenses |  |  | 21,634 |  |  |  | 14,243 |
Other accrued payables |  |  | 104 |  |  |  | 1,083 |
Total accrued expenses |  | $ | 109,290 |  |  | $ | 108,029 |
Deferred Revenue Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the consolidated balance sheets. For the fiscal year ended October 1, 2022, deferred revenue included revenue allocated to unspecified software upgrades and cloud-based services of $73.8 million, as well as current deferred revenue related to newly launched products sold to resellers not recognized as revenue until the date of general availability was reached. The following table presents the changes in the Company's deferred revenue balances for the fiscal years ended October 1, 2022, October 2, 2021, and October 3, 2020:
|  | October 1, 2022 |  |  | October 2, 2021 |  |  | October 3, 2020 |
(In thousands) |  |  |  |  |  |  |  |  |
Deferred revenue, beginning of period |  | $ | 89,498 |  |  | $ | 62,389 |  |  | $ | 56,449 |
Recognition of revenue included in beginning of period deferred revenue |  |  | (41,438 | ) |  |  | (19,175 | ) |  |  | (13,052 | )
Revenue deferred, net of revenue recognized on contracts in the respective period |  |  | 35,410 |  |  |  | 46,284 |  |  |  | 18,992 |
Deferred revenue, end of period |  | $ | 83,470 |  |  | $ | 89,498 |  |  | $ | 62,389 |
The Company expects the following recognition of deferred revenue as of October 1, 2022:
|  | For the fiscal years ending |  |  |  |
|  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | 2027 and Beyond |  |  | Total |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue expected to be recognized |  | $ | 27,318 |  |  | $ | 15,587 |  |  | $ | 13,330 |  |  | $ | 11,029 |  |  | $ | 16,206 |  |  | $ | 83,470 |
Other Current Liabilities Other current liabilities consist of the following:
|  | October 1, 2022 |  |  | October 2, 2021 |
(In thousands) |  |  |  |  |  |
Reserve for returns |  | $ | 18,263 |  |  | $ | 19,266 |
Short-term operating lease liabilities |  |  | 10,532 |  |  |  | 10,724 |
Warranty liability |  |  | 5,771 |  |  |  | 5,604 |
Other |  |  | 5,083 |  |  |  | 3,950 |
Total other current liabilities |  | $ | 39,649 |  |  | $ | 39,544 |
The following table presents the changes in the Company’s warranty liability for the fiscal years ended October 1, 2022, and October 2, 2021:
|  | October 1, 2022 |  |  | October 2, 2021 |
(In thousands) |  |  |  |  |  |
Warranty liability, beginning of period |  | $ | 5,604 |  |  | $ | 3,628 |
Provision for warranties issued during the period |  |  | 13,033 |  |  |  | 15,304 |
Settlements of warranty claims during the period |  |  | (12,866 | ) |  |  | (13,328 | )
Warranty liability, end of period |  | $ | 5,771 |  |  | $ | 5,604 |

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- Definition The entire disclosure for supplemental balance sheet disclosures, including descriptions and amounts for assets, liabilities, and equity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -URI https://asc.fasb.org/topic&trid=2122208 + Details
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