The following table sets forth our unaudited quarterly Consolidated Statement of Operations data for each of the eight quarters ended December 31, 2017. In management’s opinion, the data has been prepared on the same basis as the audited Consolidated Financial Statements included in this report, and reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of this data.



	Fiscal 2017
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	(In thousands, except per share amounts)
Quarterly Data:
Net revenue	$	82,943		$	82,315		$	92,014		$	100,974
Gross profit ⁽⁴⁾	40,408			33,815			47,025			48,572
Net loss ^{(2) (5) (6)}	$	(24,027	)	$	(31,500	)	$	(15,583	)	$	(11,516	)
Net loss per share:
Basic and diluted	$	(0.30	)	$	(0.39	)	$	(0.19	)	$	(0.14	)
Shares used in per share calculations:
Basic and diluted	79,810			80,590			81,445			82,014
	Fiscal 2016 ⁽¹⁾
	1st Quarter ⁽⁶⁾			2nd Quarter			3rd Quarter			4th Quarter ⁽³⁾
	(In thousands, except per share amounts)
Quarterly Data:
Net revenue	$	81,832		$	109,571		$	101,406		$	113,102
Gross profit	40,654			51,040			51,363			57,693
Net loss ^{(2) (5) (6)}	$	(25,180	)	$	(20,679	)	$	(16,012	)	$	(10,443	)
Net loss per share:
Basic and diluted	$	(0.33	)	$	(0.27	)	$	(0.21	)	$	(0.13	)
Shares used in per share calculations:
Basic and diluted	76,996			77,342			78,092			78,389

(1) On February 29, 2016, the Company completed the acquisition of TVN and applied the acquisition method of accounting for the business combination. The selected quarterly financial data for the year ended December 31, 2016 of the combined entity includes 10 months of operating results of TVN beginning March 1, 2016.

(2) As a result of the TVN acquisition, in 2016 and 2017, the Company incurred acquisition- and integration-related expenses of $3.0 million, $3.4 million, $5.3 million and $5.2 million, in the first through fourth quarter of 2016, respectively, and $2.2 million, $0.5 million, $0.1 million and $0.1 million in the first through fourth quarter of 2017. These costs consisted of acquisition-related costs which include outside legal, accounting and other professional services as well as integration-related costs which include incremental costs resulting from the TVN acquisition that are not expected to generate future benefits once the integration is fully consummated. These costs are expensed as incurred and the Company does not expect to incur any TVN acquisition- and integration-related expenses after 2017.

(3) In 2016, as part of the TVN integration plan, the Company established the TVN VDP to enable the French employees of TVN to voluntarily terminate with certain benefits. The Company recorded a charge of $13.1 million for TVN VDP in the fourth quarter of 2016.

(4) Gross margin decreased to 41.1% in the second quarter of 2017 compared to 48.7% in the first quarter of 2017, primarily due to lower service margins and higher inventory obsolescence charges for the Company’s legacy broadcast video inventory due to reduced demand, as well as higher inventory obsolescence charge for our older Cable Edge product lines. The factors negatively impacting the gross margin in the second quarter of 2017 were mostly absent in the third quarter of 2017, and together with a more favorable product mix, the gross margin increased to 51.1% in the third quarter of 2017 compared to 41.1% in the second quarter of 2017. Gross margin increased to 50.7% in the third quarter of 2016 compared to 46.6% in the second quarter of 2016 primarily due to the absence of the Cable Edge inventory obsolescence charge in the third quarter of 2016.

(5) In the fourth quarter of 2016 and 2017, the Company recorded additional valuation allowances of $18.3 and $9.0 million against all of the U.S. deferred tax assets, respectively. These increases in valuation allowances were offset partially by the release of $8.4 million and $5.8 million in the fourth quarter of 2016 and 2017, respectively, of valuation allowances associated with the Company’s foreign subsidiaries, including a one-time benefit associated with the alternative minimum tax refund related to the TCJA in the fourth quarter of 2017.

(6) In the first and third quarter of 2016 and the fourth quarter of 2017, the Company recorded impairment charges of $1.5 million, $1.2 million, and $0.5 million, respectively, for its investment in Vislink. (See Note 3, “Investments in Other Equity Securities,” of the notes to the Consolidated Financial Statements for additional information).