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Segment Information | 9 Months Ended
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Oct. 03, 2021
Segment Reporting [Abstract] |
Segment Information | Note 11. Segment Information Operating segments are components of an enterprise about which separate financial information is available and is evaluated quarterly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company has identified its CEO as the CODM. The Company operates and reports in two segments: Connected Home and SMB:
| • | Connected Home: Focused on consumers and consists of high-performance, dependable and easy-to-use WiFi internet networking solutions such as WiFi 6 and WiFi 6E Tri Band mesh systems, routers, 4G/5G mobile products, smart devices such as Meural digital canvasses, and subscription services, offering consumers a range of value added services focused on performance, security, privacy and premium support; and
| • | SMB: Focused on small and medium-sized businesses and consists of business networking, wireless LAN, audio and video over Ethernet for Pro AV applications, security and remote management solutions that bring enterprise-class functionality to small and medium-sized businesses at an affordable price.
The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. The leadership team of each segment is focused on product and service development efforts, both from a product marketing and engineering standpoint, to service the unique needs of their customers. The results of the reportable segments are derived directly from the Company's management reporting system. The results are based on the Company's method of internal reporting and are not necessarily in conformity with accounting principles generally accepted in the United States. Management measures the performance of each segment based on several metrics, including contribution income. Segment contribution income includes all product line segment revenues less the related cost of sales, research and development and sales and marketing costs. Contribution income is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Certain operating expenses are not allocated to segments because they are separately managed at the corporate level. These unallocated indirect costs include corporate costs, such as corporate research and development, corporate marketing expense and general and administrative costs, amortization of intangibles, stock-based compensation expense, change in fair value of contingent consideration, restructuring and other charges, litigation rese rves, net, and other income (expense), net. Financial information for each reportable segment and a reconciliation of segment contribution income to income before income taxes is as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | October 3, 2021 |  |  | September 27, 2020 |  |  | October 3, 2021 |  |  | September 27, 2020 |
Net Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Connected Home |  | $ | 208,539 |  |  | $ | 316,739 |  |  | $ | 679,320 |  |  | $ | 711,419 |
SMB |  |  | 81,611 |  |  |  | 61,375 |  |  |  | 237,566 |  |  |  | 176,710 |
Total net revenue |  | $ | 290,150 |  |  | $ | 378,114 |  |  | $ | 916,886 |  |  | $ | 888,129 |
Contribution Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Connected Home |  | $ | 22,558 |  |  | $ | 55,964 |  |  | $ | 101,189 |  |  | $ | 105,738 |
Contribution margin |  |  | 10.8 | % |  |  | 17.7 | % |  |  | 14.9 | % |  |  | 14.9 | %
SMB |  | $ | 17,137 |  |  | $ | 8,721 |  |  | $ | 49,831 |  |  | $ | 26,573 |
Contribution margin |  |  | 21.0 | % |  |  | 14.2 | % |  |  | 21.0 | % |  |  | 15.0 | %
Total segment contribution income |  | $ | 39,695 |  |  | $ | 64,685 |  |  | $ | 151,020 |  |  | $ | 132,311 |
Corporate and unallocated costs |  |  | (20,203 | ) |  |  | (23,293 | ) |  |  | (62,744 | ) |  |  | (61,744 | )
Amortization of intangibles (1) |  |  | (145 | ) |  |  | (1,470 | ) |  |  | (1,768 | ) |  |  | (4,508 | )
Stock-based compensation expense |  |  | (6,210 | ) |  |  | (7,218 | ) |  |  | (20,072 | ) |  |  | (22,726 | )
Change in fair value of contingent consideration |  |  | — |  |  |  | (187 | ) |  |  | 3,003 |  |  |  | (276 | )
Restructuring and other charges |  |  | (222 | ) |  |  | (329 | ) |  |  | (3,378 | ) |  |  | (1,311 | )
Litigation reserves, net |  |  | — |  |  |  | (22 | ) |  |  | (315 | ) |  |  | (44 | )
Other income (expense), net (2) |  |  | (132 | ) |  |  | (417 | ) |  |  | 15 |  |  |  | (4,378 | )
Income before income taxes |  | $ | 12,783 |  |  | $ | 31,749 |  |  | $ | 65,761 |  |  | $ | 37,324 |
(1) | Amounts excluded amortization expense related to patents within purchased intangibles in cost of revenue.
(2) | Amounts included gain/loss on investments, net, of $(166,000) and $(174,000) for the three and nine months ended October 3, 2021, respectively, and $(0.9) million and $(5.4) million for the three and nine months ended September 27, 2020, respectively.
The CODM does not evaluate operating segments using discrete asset information. Operations by Geographic Region For reporting purposes, revenue is generally attributed to each geographic region based on the location of the customer. The following table shows net revenue by geography for the periods indicated:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | October 3, 2021 |  |  | September 27, 2020 |  |  | October 3, 2021 |  |  | September 27, 2020 |
|  | (In thousands) |
United States (U.S.) |  | $ | 188,009 |  |  | $ | 271,683 |  |  | $ | 606,735 |  |  | $ | 624,321 |
Americas (excluding U.S.) |  |  | 7,114 |  |  |  | 6,208 |  |  |  | 20,172 |  |  |  | 14,006 |
EMEA |  |  | 56,940 |  |  |  | 63,705 |  |  |  | 179,802 |  |  |  | 154,212 |
APAC |  |  | 38,087 |  |  |  | 36,518 |  |  |  | 110,177 |  |  |  | 95,590 |
Total net revenue |  | $ | 290,150 |  |  | $ | 378,114 |  |  | $ | 916,886 |  |  | $ | 888,129 |
Long-lived assets by Geographic Region The following table presents the Company's long-lived assets located in geographic areas, which consist of property and equipment, net and operating lease right-of-use assets, net:
|  | As of |
|  | October 3, 2021 |  |  | December 31, 2020 |
|  | (In thousands) |
United States (U.S.) |  | $ | 15,787 |  |  | $ | 19,173 |
Americas (excluding U.S.) |  |  | 3,563 |  |  |  | 2,845 |
EMEA |  |  | 2,762 |  |  |  | 3,215 |
Singapore |  |  | 4,870 |  |  |  | 5,964 |
APAC (excluding Singapore) (1) |  |  | 12,904 |  |  |  | 14,294 |
Total |  | $ | 39,886 |  |  | $ | 45,491 |
(1) | No individual country, other than disclosed above, represented more than 10% of the Company's total long-lived assets in the periods presented.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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