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Balance Sheet Components | 9 Months Ended
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Oct. 01, 2017
Balance Sheet Related Disclosures [Abstract] |
Balance Sheet Components | Balance Sheet Components Available-for-sale short-term investments
| As of
| October 1, 2017 |  | December 31, 2016
| Cost |  | Unrealized Gains |  | Unrealized Losses |  | Estimated Fair Value |  | Cost |  | Unrealized Gains |  | Unrealized Losses |  | Estimated Fair Value
| (In thousands)
U.S. treasuries | $ | 124,159 |  |  | $ | — |  |  | $ | (72 | ) |  | $ | 124,087 |  |  | $ | 123,869 |  |  | $ | 9 |  |  | $ | (40 | ) |  | $ | 123,838 |
Certificates of deposit | 162 |  |  | — |  |  | — |  |  | 162 |  |  | 148 |  |  | — |  |  | — |  |  | 148 |
Total | $ | 124,321 |  |  | $ | — |  |  | $ | (72 | ) |  | $ | 124,249 |  |  | $ | 124,017 |  |  | $ | 9 |  |  | $ | (40 | ) |  | $ | 123,986 |
The Company’s short-term investments are primarily comprised of marketable securities that are classified as available-for-sale and consist of government securities with an original maturity or remaining maturity at the time of purchase of greater than three months and no more than twelve months. Accordingly, none of the available-for-sale securities have unrealized losses greater than twelve months. Cost method investments The carrying value of the Company's cost method investments was $3.0 million and $0.1 million as of October 1, 2017 and December 31, 2016. These investments are accounted under the cost method because the Company does not have a controlling interest or the ability to exercise significant influence over these companies and these investments do not have readily determinable fair values. These investments are included in other non-current assets in the unaudited condensed consolidated balance sheets and are carried at cost, adjusted for any impairment. The Company monitors these investments for impairment on a quarterly basis, and adjusts carrying value for any impairment charges recognized. There were no impairments recognized during the nine months ended October 1, 2017 and October 2, 2016, respectively. Realized gains and losses on these investments are reported in other income (expense), net in the unaudited condensed consolidated statements of operations. The Company did not recognize any material realized gains or losses during the nine months ended October 1, 2017 and October 2, 2016. Accounts receivable, net
| As of
| October 1, 2017 |  | December 31, 2016
| (In thousands)
Gross accounts receivable | $ | 317,206 |  |  | $ | 333,080 |
Allowance for doubtful accounts | (1,257 | ) |  | (1,255 | )
Allowance for sales returns | (17,025 | ) |  | (13,506 | )
Allowance for price protection | (3,333 | ) |  | (4,480 | )
Total allowances | (21,615 | ) |  | (19,241 | )
Total accounts receivable, net | $ | 295,591 |  |  | $ | 313,839 |
Inventories
| As of
| October 1, 2017 |  | December 31, 2016
| (In thousands)
Raw materials | $ | 5,171 |  |  | $ | 4,596 |
Finished goods | 243,907 |  |  | 243,266 |
Total inventories | $ | 249,078 |  |  | $ | 247,862 |
The Company records provisions for excess and obsolete inventory based on assumptions about future demand and market conditions. While management believes the estimates and assumptions underlying its current forecasts are reasonable, there is risk that additional charges may be necessary if current forecasts are greater than actual demand. Property and equipment, net
| As of
| October 1, 2017 |  | December 31, 2016
| (In thousands)
Computer equipment | $ | 10,725 |  |  | $ | 10,557 |
Furniture, fixtures and leasehold improvements | 22,599 |  |  | 20,827 |
Software | 28,973 |  |  | 28,663 |
Machinery and equipment | 59,047 |  |  | 63,446 |
Total property and equipment, gross | 121,344 |  |  | 123,493 |
Accumulated depreciation and amortization | (101,116 | ) |  | (104,020 | )
Total property and equipment, net | $ | 20,228 |  |  | $ | 19,473 |
Depreciation and amortization expense pertaining to property and equipment was $3.3 million and $9.8 million for the three and nine months ended October 1, 2017, respectively, and $3.4 million and $11.5 million for the three and nine months ended October 2, 2016, respectively. Intangibles, net
| As of October 1, 2017
| Gross |  | Accumulated Amortization |  | Net
| (In thousands)
Technology | $ | 66,599 |  |  | $ | (61,620 | ) |  | $ | 4,979 |
Customer contracts and relationships | 56,500 |  |  | (35,674 | ) |  | 20,826 |
Other | 11,045 |  |  | (9,323 | ) |  | 1,722 |
Total intangibles, net | $ | 134,144 |  |  | $ | (106,617 | ) |  | $ | 27,527 |
| As of December 31, 2016
| Gross |  | Accumulated Amortization |  | Net
| (In thousands)
Technology | $ | 66,599 |  |  | $ | (57,381 | ) |  | $ | 9,218 |
Customer contracts and relationships | 56,500 |  |  | (30,375 | ) |  | 26,125 |
Other | 11,045 |  |  | (8,489 | ) |  | 2,556 |
Total intangibles, net | $ | 134,144 |  |  | $ | (96,245 | ) |  | $ | 37,899 |
Amortization of intangibles was $2.7 million and $10.4 million for the three and nine months ended October 1, 2017, respectively, and $4.2 million and $12.7 million for the three and nine months ended October 2, 2016, respectively. Estimated amortization expense related to intangibles for each of the next five years and thereafter is as follows:
| As of October 1, 2017
| (In thousands)
2017 (remaining three months) | $ | 2,539 |
2018 | 9,396 |
2019 | 7,544 |
2020 | 6,622 |
2021 | 1,413 |
Thereafter | 13 |
Total estimated amortization expense | $ | 27,527 |
Goodwill As discussed in Note 11, Segment Information, during the first quarter of fiscal 2017, the Company's Chief Operating Decision Maker requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. With these changes, the Company revised its reportable segments. Beginning fiscal 2017, the Company operates and reports in three segments: Arlo, Connected Home, and Small and Medium Business ("SMB"). Goodwill was reallocated to the reportable segments using a relative fair value approach. As a result, the Company completed assessments of any potential goodwill impairment for all reportable segments immediately prior to and after the reallocation and determined that no impairment existed. The carrying amount of goodwill under these segments during the nine months ended October 1, 2017 are as follows:
| Arlo |  | Connected Home |  | SMB |  | Total
| (In thousands)
Goodwill as of January 1, 2017 | $ | 21,149 |  |  | $ | 28,035 |  |  | $ | 36,279 |  |  | $ | 85,463 |
Goodwill as of October 1, 2017 | $ | 21,149 |  |  | $ | 28,035 |  |  | $ | 36,279 |  |  | $ | 85,463 |
Other non-current assets
| As of
| October 1, 2017 |  | December 31, 2016
| (In thousands)
Non-current deferred income taxes | $ | 72,022 |  |  | $ | 70,859 |
Other | 10,751 |  |  | 7,977 |
Total other non-current assets | $ | 82,773 |  |  | $ | 78,836 |
Other accrued liabilities
| As of
| October 1, 2017 |  | December 31, 2016
| (In thousands)
Sales and marketing | $ | 73,975 |  |  | $ | 74,330 |
Warranty obligation | 67,550 |  |  | 58,520 |
Freight | 6,232 |  |  | 8,980 |
Other | 39,776 |  |  | 28,844 |
Total other accrued liabilities | $ | 187,533 |  |  | $ | 170,674 |

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