0001628280-24-036513 | 10-Q | XBRL Viewer

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Cash, Cash Equivalents, Restricted Cash and Marketable Investments	6 Months Ended
	Jun. 30, 2024
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents, Restricted Cash and Marketable Investments	Cash, Cash Equivalents, Restricted Cash and Marketable Investments The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. The Company’s marketable securities have been classified and accounted for as available-for-sale securities. Investments with remaining maturities of more than one year are viewed by the Company as available to support current operations and are classified as current assets under the caption marketable investments in the accompanying consolidated balance sheets. Investments in available-for-sale debt securities are measured at fair value under the guidance in ASC 320. Credit losses on impaired available-for-sale debt securities are recognized through an allowance for credit losses. Under ASC 326, credit losses recognized on an available-for-sale debt security should not reduce the net carrying amount of the available-for-sale debt security below its fair value. Any changes in fair value unrelated to credit are recognized as an unrealized gain or loss in other comprehensive income. The Company's cash, cash equivalents, and restricted cash were $84.3 million and $143.6 million as of June 30, 2024 and December 31, 2023, respectively. There were no marketable investments as of those dates. There was $1.2 million of restricted cash as of June 30, 2024.

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Lessee

The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s material operating leases consist of office space, as well as storage facilities and finance leases consist of automobile leases. The Company’s leases generally have remaining terms of one to 7 years, some of which include options to renew the leases for up to five years. The Company leases space for operations in the United States, Japan, Belgium, France, and Spain.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

Tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term.

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	June 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	11,388	$	10,055
Finance lease	Property and equipment, net	1,309		2,516
Total leased assets		$	12,697	$	12,571


Liabilities	Classification	June 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,382	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	9,223		8,887
Total Operating lease liabilities		$	12,605	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	714	$	825
Finance lease liabilities, non-current	Other long-term liabilities	723		1,064
Total Finance lease liabilities		$	1,437	$	1,889

Lease costs during the three and six months ended June 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	250	$	148	$	524	$	298
Finance lease cost	Interest for finance lease	$	37	$	18	$	79	$	38
Operating lease cost	Operating lease expense	$	1,093	$	889	$	2,062	$	1,780

Cash paid for amounts included in the measurement of lease liabilities during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


		Six Months Ended June 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	36	$	38
Financing cash flow	Finance lease	$	189	$	237
Operating cash flow	Operating lease	$	986	$	686

Operating leases

Maturities of operating facility leases were as follows as of June 30, 2024 (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	1,969
2025	4,059
2026	4,034
2027	3,295
2028	323
2029 and thereafter	142
Total lease payments	13,822
Less: imputed interest	1,217
Present value of lease liabilities	$	12,605

Finance Leases

As of June 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	433
2025	697
2026	424
2027	17
Total lease payments	1,571
Less: imputed interest	134
Present value of lease liabilities	$	1,437

Weighted-average remaining lease term and discount rate, as of June 30, 2024, were as follows:


Lease Term and Discount Rate	June 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.5
Finance leases	2.0
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The Company leases the AviClear device to customers and receives a fixed annual license fee over the term of the arrangement and variable revenue related to the number of treatments performed by the lessee. The contractual term of the lease agreement is three years with a one-year auto-renewal feature. Certain lease agreements' terms in excess of one year can be terminated without financial penalty, and these agreements are accounted for as having a lease term of one year. The AviClear lease agreements are accounted for as operating leases. The fixed annual license fee is recognized evenly throughout the period of the lease agreement on a straight-line basis. The treatment revenue is recognized in the period the lessee has the ability to perform the patient treatment.

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	432	$	1,367	$	1,594	$	2,592
AviClear operating lease revenue	715		3,236		1,901		5,939
Total AviClear revenue	$	1,147	$	4,603	$	3,495	$	8,531

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of June 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	3,941
2025	3,050
Total	$	6,991

Practical Expedients

The Company elected to apply a practical expedient to operating leases and elected not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer. As such, updates or upgrades on a when-and-if available basis to the AviClear device are combined with the operating lease revenue. The combined component is being accounted for under ASC 842. Additionally, the Company made an accounting policy election to present AviClear revenue net of sales and other similar taxes.

Capitalized sales commissions

Sales commissions related to obtaining AviClear lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Amortization expenses for these assets were $0.5 million and $0.8 million for the three and six-month periods ended June 30, 2024, and $1.1 million and $2.2 million for the comparative periods ended June 30, 2023, and were included in sales and marketing expense on the Company’s condensed consolidated statement of operations. Total capitalized commissions as of June 30, 2024, and December 31, 2023, were $1.9 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet.

Lease installment costs

The Company capitalizes fulfillment costs incurred before AviClear lease commencement and these costs include freight, installation, and training costs. Amortization expenses for these assets were $0.4 million and $1.0 million for the three and six-month periods ended June 30, 2024 and $0.5 million and $1.0 million for the comparative periods ended June 30, 2023, and were included in cost of revenue on the Company’s condensed consolidated statement of operations. Total lease installment costs as of June 30, 2024, and December 31, 2023, were $1.1 million and $2.1 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet.

Leases

Lessee

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	June 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	11,388	$	10,055
Finance lease	Property and equipment, net	1,309		2,516
Total leased assets		$	12,697	$	12,571


Liabilities	Classification	June 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,382	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	9,223		8,887
Total Operating lease liabilities		$	12,605	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	714	$	825
Finance lease liabilities, non-current	Other long-term liabilities	723		1,064
Total Finance lease liabilities		$	1,437	$	1,889

Lease costs during the three and six months ended June 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	250	$	148	$	524	$	298
Finance lease cost	Interest for finance lease	$	37	$	18	$	79	$	38
Operating lease cost	Operating lease expense	$	1,093	$	889	$	2,062	$	1,780

Cash paid for amounts included in the measurement of lease liabilities during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


		Six Months Ended June 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	36	$	38
Financing cash flow	Finance lease	$	189	$	237
Operating cash flow	Operating lease	$	986	$	686

Operating leases

Maturities of operating facility leases were as follows as of June 30, 2024 (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	1,969
2025	4,059
2026	4,034
2027	3,295
2028	323
2029 and thereafter	142
Total lease payments	13,822
Less: imputed interest	1,217
Present value of lease liabilities	$	12,605

Finance Leases

As of June 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	433
2025	697
2026	424
2027	17
Total lease payments	1,571
Less: imputed interest	134
Present value of lease liabilities	$	1,437

Weighted-average remaining lease term and discount rate, as of June 30, 2024, were as follows:


Lease Term and Discount Rate	June 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.5
Finance leases	2.0
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	432	$	1,367	$	1,594	$	2,592
AviClear operating lease revenue	715		3,236		1,901		5,939
Total AviClear revenue	$	1,147	$	4,603	$	3,495	$	8,531

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of June 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	3,941
2025	3,050
Total	$	6,991

Practical Expedients

Capitalized sales commissions

Lease installment costs

Leases

Lessee

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	June 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	11,388	$	10,055
Finance lease	Property and equipment, net	1,309		2,516
Total leased assets		$	12,697	$	12,571


Liabilities	Classification	June 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,382	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	9,223		8,887
Total Operating lease liabilities		$	12,605	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	714	$	825
Finance lease liabilities, non-current	Other long-term liabilities	723		1,064
Total Finance lease liabilities		$	1,437	$	1,889

Lease costs during the three and six months ended June 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	250	$	148	$	524	$	298
Finance lease cost	Interest for finance lease	$	37	$	18	$	79	$	38
Operating lease cost	Operating lease expense	$	1,093	$	889	$	2,062	$	1,780

Cash paid for amounts included in the measurement of lease liabilities during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


		Six Months Ended June 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	36	$	38
Financing cash flow	Finance lease	$	189	$	237
Operating cash flow	Operating lease	$	986	$	686

Operating leases

Maturities of operating facility leases were as follows as of June 30, 2024 (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	1,969
2025	4,059
2026	4,034
2027	3,295
2028	323
2029 and thereafter	142
Total lease payments	13,822
Less: imputed interest	1,217
Present value of lease liabilities	$	12,605

Finance Leases

As of June 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	433
2025	697
2026	424
2027	17
Total lease payments	1,571
Less: imputed interest	134
Present value of lease liabilities	$	1,437

Weighted-average remaining lease term and discount rate, as of June 30, 2024, were as follows:


Lease Term and Discount Rate	June 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.5
Finance leases	2.0
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Lessor - AviClear

Lessor revenue

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	432	$	1,367	$	1,594	$	2,592
AviClear operating lease revenue	715		3,236		1,901		5,939
Total AviClear revenue	$	1,147	$	4,603	$	3,495	$	8,531

The AviClear device being leased has an estimated useful life of seven years.

The following is the minimum future lease payments as of June 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	3,941
2025	3,050
Total	$	6,991

Practical Expedients

Capitalized sales commissions

Lease installment costs

Leases - Lease Information (Details)	Jun. 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3 years 6 months
Finance leases	2 years
Weighted-average discount rate
Operating leases	5.60%
Finance leases	9.50%

Deferred Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance, amount	$ 10,300		$ 10,300
Deferred revenue balance	10,305	$ 14,007	10,305	$ 14,007	$ 10,455	$ 11,916	$ 13,699	$ 13,498
Costs for extended service contracts	2,200	$ 2,100	$ 3,800	$ 3,700
Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			1 year
Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			3 years
Service \| Minimum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			1 year
Service \| Maximum
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Extended service contract term			3 years
Deferred License Fee
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance	$ 900		$ 900			$ 2,100
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue balance, percentage	85.00%		85.00%
Expected timing of satisfaction, period	12 months		12 months

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 83,115	$ 143,612
Accounts receivable, net of allowance for credit losses of $14,811 and $9,878, respectively	34,554	43,121
Inventories	80,353	62,600
Other current assets and prepaid expenses	12,961	19,852
Total current assets	210,983	269,185
Long-term inventories	13,825	16,283
Property and equipment, net	28,140	37,275
Deferred tax assets	508	579
Restricted cash	1,196	0
Goodwill	1,339	1,339
Operating lease right-of-use assets, net	11,388	10,055
Other long-term assets	8,916	11,575
Total assets	276,295	346,291
Current liabilities:
Accounts payable	17,617	19,829
Accrued liabilities	30,356	55,055
Operating lease liabilities	3,382	2,441
Deferred revenue	8,798	10,422
Total current liabilities	60,153	87,747
Deferred revenue, net of current portion	1,507	1,494
Operating lease liabilities, net of current portion	9,223	8,887
Convertible notes, net of unamortized debt issuance costs of $9,284 and $10,430, respectively	419,841	418,695
Other long-term liabilities	1,242	1,298
Total liabilities	491,966	518,121
Commitments and Contingencies (Note 12)
Stockholders’ deficit:
Common stock, $0.001 par value; authorized: 50,000,000 shares; issued and outstanding: 20,108,406 and 19,960,622 shares at June 30, 2024 and December 31, 2023, respectively	20	20
Additional paid-in capital	135,114	131,496
Accumulated deficit	(350,805)	(303,346)
Total stockholders’ deficit	(215,671)	(171,830)
Total liabilities and stockholders’ deficit	$ 276,295	$ 346,291

Commitments and Contingencies - Narrative (Details) $ in Thousands		1 Months Ended
	May 31, 2024 USD ($)	Mar. 31, 2023 patent	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Loss Contingencies [Line Items]
Number of patents allegedly infringed \| patent		6
Inventory purchase obligation			$ 5,700
Pending Litigation
Loss Contingencies [Line Items]
Payments for Legal Settlements	$ 5,750
Accrued litigation liabilities			$ 2,500	$ 3,300

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

Convertible notes, net of unamortized debt issuance costs

The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands):


	June 30, 2024		December 31, 2023
Notes due in 2026
Outstanding principal amount	$	69,125	$	69,125
Unamortized debt issuance costs	(845)		(1,084)
Carrying Value	$	68,280	$	68,041

Notes due in 2028
Outstanding principal amount	$	240,000	$	240,000
Unamortized debt issuance costs	(5,105)		(5,714)
Carrying Value	$	234,895	$	234,286

Notes due in 2029
Outstanding principal amount	$	120,000	$	120,000
Unamortized debt issuance costs	(3,334)		(3,632)
Carrying Value	$	116,666	$	116,368

Convertible notes, net	$	419,841	$	418,695

Issuance of convertible notes due in 2026

In March 2021, the Company issued $138.3 million aggregate principal amount of 2026 Notes in a private placement offering. In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes. Following the exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding.

The 2026 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on March 15 and September 15 of each year. Upon conversion, the 2026 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The Convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $133.6 million, net of issuance costs, including initial purchaser fees.

Each $1,000 principal amount of the 2026 Notes is initially convertible into 30.1427 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $33.18 per share. The conversion rate for the 2026 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2026 Notes. The 2026 Notes will mature on March 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2026 Notes.

Issuance of convertible notes due in 2028

In May 2022, the Company issued $240.0 million aggregate principal amount of 2028 Notes. A total of $230.0 million of aggregate principal amount of 2028 Notes was issued in a private placement offering and concurrently with this private placement, the Company entered into a purchase agreement with Voce Capital Management LLC ("Voce"), an entity affiliated with J. Daniel Plants, the Company’s former Executive Chairperson, pursuant to which the Company issued to Voce $10.0 million aggregate principal amount of 2028 Notes on the same terms and conditions. The 2028 Notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering of 2028 Notes were approximately $232.4 million, net of issuance costs, including initial purchaser fees.

The 2028 Notes bear interest at a rate of 2.25% per year payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2022. Upon conversion, the 2028 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. Each $1,000 principal amount of the 2028 Notes is initially convertible into 18.9860 shares of the Company’s common stock, which is equivalent to an initial conversion price of approximately $52.67 per share. The conversion rate for the 2028 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2028 Notes. The 2028 Notes will mature on June 1, 2028, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2028 Notes.

Issuance of convertible notes due in 2029

In December 2022, the Company issued $120.0 million aggregate principal amount of 2029 Notes in a private placement offering. The 2029 Notes bear interest at a rate of 4.00% per year payable semiannually in arrears on June 1 and December 1 of each year. Upon conversion, the 2029 Notes will be convertible into either cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The convertible notes are presented as Convertible notes, net of unamortized debt issuance costs, on the condensed consolidated balance sheet. The aggregate proceeds from the offering were approximately $115.8 million, net of issuance costs, including initial purchaser fees.

Each $1,000 principal amount of the 2029 Notes is initially convertible into 17.1378 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $58.35 per share. The conversion rate for the 2029 Notes is subject to adjustment for certain events as set forth in the indenture governing the 2029 Notes. The 2029 Notes will mature on June 1, 2029, unless earlier converted, redeemed, or repurchased in accordance with the terms of the 2029 Notes.

2026 Notes exchange

In May 2022, the Company entered into privately-negotiated exchange agreements with certain holders of the Company’s outstanding 2026 Notes with respect to the exchange of $45.8 million in cash (excluding $0.3 million in cash for the payment of accrued interest) and 1,354,348 shares of common stock for $69.1 million in aggregate principal amount of the Company’s outstanding 2026 Notes (the “2026 Notes Exchange”). Immediately following the closing of the 2026 Notes Exchange, approximately $69.1 million in aggregate principal amount of the 2026 Notes remained outstanding.

Conversion and other features

2026 Notes:

Holders may convert their 2026 Notes at their option prior to the close of business on the business day immediately preceding December 15, 2025, in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2026 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after December 15, 2025, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2026 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets of the paragraph above were not met during the second quarter of 2024. As of June 30, 2024, the 2026 Notes are not convertible. The 2026 Notes may become convertible in future periods. Upon any conversion requests of the 2026 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such

conversion requests. To the extent there are any conversion requests during the twelve months ending June 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of June 30, 2024, the 2026 Notes have been included as Long-term debt on the condensed consolidated balance sheet.

On or after March 20, 2024, the Company may redeem for cash all or any portion of the 2026 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2026 Notes, at least $50.0 million aggregate principal amount of 2026 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, 2026 Note holders have the option to require the Company to repurchase any portion or all of their 2026 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2026 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2026 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2026 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2026 Notes. The 2026 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2026 Notes (including the 2028 Notes and 2029 Notes). The 2026 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2026 Notes was approximately $23.3 million as of June 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

2028 Notes:

Holders may convert their 2028 Notes at their option, in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ending on September 30, 2022 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2028 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2028 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after March 1, 2028, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2028 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets in the paragraph above were not met during the second quarter of 2024. As of June 30, 2024, the 2028 Notes are not convertible. The 2028 Notes may become convertible in future periods. Upon any conversion requests of the 2028 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending June 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of June 30, 2024, the 2028 Notes have been included as long-term debt on the condensed consolidated balance sheet.

The Company may not redeem the 2028 Notes prior to June 5, 2025. On or after June 5, 2025, the Company may redeem for cash all or any portion of the 2028 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2028 Notes, at least $100.0 million aggregate principal amount of 2028 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, note holders have the option to require the Company to repurchase any portion or all of their 2028 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2028 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2028 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2028 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2028 Notes. The 2028 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2028 Notes (including the 2026 Notes and 2029 Notes). The 2028 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2028 Notes was approximately $48.1 million as of June 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

2029 Notes:

Holders may convert their 2029 Notes at their option prior to the close of business on the business day immediately preceding March 1, 2029 in multiples of $1,000 principal amount, only under the following circumstances:

•During any fiscal quarter commencing after the fiscal quarter ending March 31, 2023 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding fiscal quarter, is greater than or equal to 130% of the conversion price for the 2029 Notes on each applicable trading day;

•During the five-business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2029 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day;

•The Company calls such 2029 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or

•Upon the occurrence of specified corporate events.

On or after March 1, 2029, and until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The circumstances described in the bullets of the paragraph above were not met during the second quarter of 2024. As of June 30, 2024, the 2029 Notes are not convertible. The 2029 Notes may become convertible in future periods. Upon any conversion requests of the 2029 Notes, the Company would be required to pay or deliver, as the case may be, cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election with respect to such conversion requests. To the extent there are any conversion requests during the twelve months ending June 30, 2025, the Company intends to settle such conversion requests in shares of common stock. Therefore, as of June 30, 2024, the 2029 Notes have been included as Long-term debt on the consolidated balance sheet.

The Company may not redeem the 2029 Notes prior to December 5, 2025. On or after December 5, 2025, the Company may redeem for cash all or any portion of the 2029 Notes, at the Company’s option, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a

redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company elects to redeem fewer than all of the outstanding 2029 Notes, at least $100.0 million aggregate principal amount of 2029 Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If a specified corporate event occurs, 2029 Note holders have the option to require the Company to repurchase any portion or all of their 2029 Notes in $1,000 principal increments for cash. The price for such repurchase is calculated as 100% of the principal amounts of 2029 Notes, plus accrued and unpaid interest to the day immediately preceding the Fundamental Change repurchase date. Additionally, holders of the 2029 Notes who convert in connection with a fundamental change are, under certain circumstances, entitled to an increase in conversion rate.

The 2029 Notes are general senior unsecured obligations that rank senior to any of the Company’s indebtedness that is explicitly subordinated to the 2029 Notes. The 2029 Notes have equal rank in right of payment with all existing and future unsecured indebtedness that is not subordinated to the 2029 Notes (including the 2026 Notes and 2028 Notes). The 2029 Notes will be junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness.

The estimated fair value of the 2029 Notes was approximately $22.0 million as of June 30, 2024, which the Company determined through consideration of market prices. The fair value measurement is classified as Level 2, as defined in Note 3.

Certain Covenants for the Convertible Notes

Pursuant to the terms of the indentures that govern the Convertible Notes, the Company is required to file with U.S. Bank Trust Company, National Association (the “Trustee”), as trustee under each of the indentures governing the Convertible Notes, within 15 days after the same are required to be filed with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), copies of any annual report on Form 10-K or quarterly reports on Form 10-Q that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. To the extent the Company elects, the sole remedy for an event of default under the indenture governing a series of Convertible Notes relating to its failure to comply with this obligation (which shall occur upon failure by the Company for 60 days after receipt of written notice from the Trustee or the holders of 25% in aggregate principal amount the Convertible Notes of such series to comply with this obligation) shall, for the first 360 days after the occurrence of such an event of default, consist exclusively of the right for the holders of Convertible Notes of such series to receive additional interest on their Convertible Notes at a rate equal to (i) 0.25% per year for each day during the first 180 days after the occurrence and during the continuance of such event of default and (ii) 0.50% per year for each day from, and including, the 181st day to, but excluding, the 360th day after the occurrence and during the continuance of such event of default. On the 361st day after such event of default, if not previously cured or waived, the Convertible Notes of the applicable series shall be subject to acceleration pursuant to the terms of the indenture governing the Convertible Notes of such series. In the event the Company does not elect to pay additional interest on a series of Convertible Notes prior to the occurrence of an event of default relating to the Company’s failure to comply with this obligation, or the Company elects to make such payment but does not pay the additional interest on such Convertible Notes when due, the Convertible Notes of such series shall be immediately subject to acceleration at the election of either the Trustee or the holders of at least 25% in aggregate principal amount of the Convertible Notes of such series.

Additionally, if at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of a series of Convertible Notes, the Company fails to timely file any document or report that it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace period thereunder and other than reports on Form 8-K), or the Convertible Notes of such series are not otherwise freely tradable pursuant to Rule 144 as promulgated under the Securities Act of 1933, as amended, the Company shall pay additional interest on such Convertible Notes at a rate of 0.50% per year for each day during such period for which the Company’s failure to file has occurred and is continuing or such Convertible Notes are not otherwise freely tradable pursuant to Rule 144. Additional interest pursuant to the foregoing accrued on the outstanding principal amount of the 2029 Notes from November 24, 2023 to the one-year anniversary of the last date of original issuance of the 2029 Notes on December 12, 2023 was not material.

The Convertible Notes contain additional customary operating covenants, which include restrictions on the Company’s ability to undergo a merger or consolidation transaction, or transfer or lease substantially all of the consolidated properties and assets of the Company. The Convertible Notes do not contain any financial covenants or restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company.

Capped Call Transactions

In connection with the issuance of each series of the Convertible Notes, the Company entered into capped call transactions with certain option counterparties. The capped call transactions are generally intended to reduce the potential dilution of the Company's common stock upon any conversion or settlement of the applicable series of Convertible Notes or to offset any cash payment the Company is required to make in excess of the principal amount upon conversion of the applicable series of Convertible Notes, as the case may be, with such reduction or offset subject to a cap based on the cap price. If the market price per share of the Company’s common stock exceeds the cap price of the applicable capped call transactions, then the Company’s stock would experience some dilution and/or such capped call transactions would not fully offset the potential cash payments, in each case, to the extent the then-market price per share of its common stock exceeds the applicable cap price.

In connection with the offering of the 2026 Notes, the Company purchased from the option counterparties capped call options that in the aggregate relate to the total number of shares of the Company's common stock underlying the convertible notes, with a strike price equal to the conversion price of the convertible notes and with an initial cap price equal to $45.535, which represented a 75% premium over the last reported sale price of the Company's common stock of $26.02 per share on March 4, 2021, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. The capped call transactions expire over 40 consecutive scheduled trading days ended on March 12, 2026. The capped calls were purchased for $16.1 million.

In connection with the offering of the 2028 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2028 Notes sold to the initial purchasers in the offering of 2028 Notes, with a strike price equal to the conversion price of the 2028 Notes and with an initial cap price equal to $82.62, which represents a 100% premium over the last reported sale price of the Company's common stock of $41.31 per share on May 24, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2028. The capped calls were purchased for $32.0 million, net of issuance costs.

In connection with the offering of the 2029 Notes, the Company purchased from the option counterparties capped call options that in the aggregate related to the total number of shares of the Company's common stock underlying the 2029 Notes sold to the initial purchasers in the offering of 2029 Notes, with a strike price equal to the conversion price of the 2029 Notes and with an initial cap price equal to $99.21, which represents a 100% premium over the last reported sale price of the Company's common stock of $49.66 per share on December 7, 2022, with certain adjustments to the settlement terms that reflect standard anti-dilution provisions. These capped call transactions expire over 40 consecutive scheduled trading days ended on May 30, 2029. The capped calls were purchased for $25.1 million, net of issuance costs.

The Company evaluated the capped call transactions under authoritative accounting guidance and determined that they should be accounted for as a separate transaction and classified as a net reduction to Additional paid-in capital within stockholders’ equity with no recurring fair value measurement recorded.

The Company early adopted ASU 2020-6, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2021. In accordance with Subtopic 470-20 and 815-40, as revised by ASU 2020-6, the Company records the convertible notes in long-term debt with no separation between the Notes and the conversion option. Each reporting period, the Company will determine whether any criteria is met for the note holders to have the option to redeem the Notes early, which could result in a change in the classification of the Notes to current liabilities.

Debt Issuance Cost

The issuance costs related to the Convertible Notes are presented in the condensed consolidated balance sheet as a direct deduction from the carrying amount of the Convertible Notes. The issuance costs are amortized using an effective interest method basis over the term of the Convertible Notes. The effective interest rates on the 2026 Notes, 2028 Notes, and 2029 Notes are 2.98%, 2.82%, and 4.63%, respectively. Interest expense for the three month periods ended June 30, 2024 and 2023, including the amortization of debt issuance cost, totaled approximately $3.5 million for both periods.

Loan and Security Agreement

On July 9, 2020, the Company entered into a Loan and Security Agreement with Silicon Valley Bank for a four-year secured revolving loan facility (“SVB Revolving Line of Credit”) in an aggregate principal amount of up to $30.0 million. The Revolving Line of Credit, originally set to mature on July 9, 2024, was terminated by the Company on April 3, 2024.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

The Company measures certain financial assets at fair value, including cash and cash equivalents.

The fair value hierarchy contains the following three levels of inputs that may be used to measure fair value, in accordance with ASC 820:

•Level 1 inputs, which include quoted prices in active markets for identical assets or liabilities;

•Level 2 inputs, which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and

•Level 3 inputs, which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques, as well as significant management judgment or estimation.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considering counterparty credit risk in its assessment of fair value.

As of June 30, 2024, financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

June 30, 2024

Level 1

Cash equivalents:

Money market funds

61,498

As of December 31, 2023, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

December 31, 2023

Level 1

Cash equivalents:

Money market funds

123,387

The Company's cash and cash equivalents, accounts receivable, and accounts payable are reflected on the accompanying consolidated balance sheets at cost, which approximated estimated fair value due to short-term nature of such accounts, using Level 1 inputs.

See Note 13. Debt for the carrying amount and estimated fair value of the Company’s 2.25% Convertible Senior Notes due 2026 (the “2026 Notes”), the 2.25% Convertible Senior Notes due 2028 (the “2028 Notes”), and the 4.00% Convertible Senior Notes due 2029 (the “2029 Notes”).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event At the Company’s Annual Stockholder Meeting on July 15, 2024, the Company’s stockholders voted to reprice all outstanding stock option grants. A total of 2,159,425 stock options consisting of 265 grants attributable to 114 different employees and directors were repriced to an exercise price of $1.54, the closing price of the Company’s common stock on July 15, 2024. The weighted average exercise price of these stock option grants prior to repricing was $9.25.

Subsequent Event (Details)	Jul. 15, 2024 grant employeeAndDirector $ / shares shares	Jul. 14, 2024 $ / shares	Jun. 30, 2024 $ / shares shares	Dec. 31, 2023 $ / shares shares
Subsequent Event [Line Items]
Stock options (in shares) \| shares			2,527,803	3,554,537
Weighted average exercise price (in dollars per share) \| $ / shares			$ 10.00	$ 17.97
Subsequent Event
Subsequent Event [Line Items]
Stock options (in shares) \| shares	2,159,425
Number of grants \| grant	265
Number of different employees and directors \| employeeAndDirector	114
Weighted average exercise price (in dollars per share) \| $ / shares	$ 1.54	$ 9.25

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities
Net loss	$ (47,459)	$ (61,326)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	3,702	4,936
Depreciation and amortization	3,795	3,238
Amortization of contract acquisition costs	2,769	4,069
Amortization of discount on convertible notes and debt issuance costs	1,146	1,109
Accretion of discount on investment securities and investment income, net	0	146
Deferred tax assets	71	43
Provision for credit losses	4,808	1,914
Changes in assets and liabilities:
Accounts receivable	3,634	(10,031)
Inventories	(8,582)	(536)
Other current assets and prepaid expenses	6,892	(776)
Other long-term assets	(330)	(4,782)
Accounts payable	(2,212)	(1,666)
Accrued liabilities	(24,441)	(3,806)
Operating leases, net	(56)	(30)
Deferred revenue	(1,611)	509
Net cash used in operating activities	(57,874)	(66,989)
Cash flows from investing activities
Acquisition of property and equipment	(1,217)	(25,108)
Proceeds from disposal of property and equipment	63	0
Proceeds from maturities of marketable investments	0	152,859
Purchase of marketable investments	0	(23,467)
Net cash provided by (used in) investing activities	(1,154)	104,284
Cash flows from financing activities
Proceeds from exercise of stock options and employee stock purchase plan	0	858
Taxes paid related to net share settlement of equity awards	(84)	(3,186)
Payments on finance lease obligations	(189)	(237)
Net cash used in financing activities	(273)	(2,565)
Net increase (decrease) in cash, cash equivalents and restricted cash	(59,301)	34,730
Cash, cash equivalents, and restricted cash at beginning of period	143,612	146,624
Cash, cash equivalents, and restricted cash at end of period	84,311	181,354
Supplemental non-cash operating, investing, and financing activities:
Assets acquired under finance lease	0	68
Assets acquired under operating lease	2,749	57
Acquisition of property and equipment	0	6,301
Supplemental disclosure of cash flow information:
Cash paid for interest	3,553	5,731
Cash paid for income taxes	$ 986	$ 483

Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Finance lease cost, Amortization expense	$ 250	$ 148	$ 524	$ 298
Finance lease cost, Interest for finance lease	37	18	79	38
Operating lease cost	$ 1,093	$ 889	$ 2,062	$ 1,780

Product Warranty

6 Months Ended

Jun. 30, 2024

Product Warranties Disclosures [Abstract]

Product Warranty

The Company has a direct field service organization in North America (including Canada). Internationally, the Company provides direct service support in Australia, Austria, Belgium, France, Germany, Hong Kong, Japan, the Netherlands, New Zealand, Spain, and Switzerland. In several other countries, where the Company does not have a direct presence, the Company provides service through a network of distributors and third-party service providers.

After the original warranty period, maintenance and support are offered on an extended service contract basis or on a time and materials basis. The Company estimates cost to repair or replace products under standard warranty at the time of sale. Costs incurred in connection with extended service contracts are generally recognized at the time when costs are incurred.

The following table provides the changes in the product warranty accrual for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning Balance	$	2,472	$	3,154	$	2,593	$	3,254
Add: Accruals for warranties issued during the period	1,463		1,534		2,619		2,550
Less: Settlements made during the period	(925)		(1,584)		(2,202)		(2,700)
Ending Balance	$	3,010	$	3,104	$	3,010	$	3,104

Leases - Non-cancellable Operating Lease Income (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
Remainder of 2024	$ 3,941
2025	3,050
Total	$ 6,991

Net Loss Per Share - Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net loss used in calculating net loss per share, basic	$ (24,681)	$ (33,278)	$ (47,459)	$ (61,326)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic (in shares)	20,091	19,858	20,041	19,819
Dilutive effect of incremental shares and share equivalents:
Weighted average shares of common stock outstanding used in computing net loss per share, diluted (in shares)	20,091	19,858	20,041	19,819
Net loss per share:
Net loss per share, basic (in USD per share)	$ (1.23)	$ (1.68)	$ (2.37)	$ (3.09)
Net loss per share, diluted (in USD per share)	$ (1.23)	$ (1.68)	$ (2.37)	$ (3.09)
Convertible notes
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
Options
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
RSUs
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
PSUs
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0
ESPP
Dilutive effect of incremental shares and share equivalents:
Dilutive effect of share-based payment arrangements (in shares)	0	0	0	0

Debt - Outstanding Debt and Carrying Value (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 01, 2022
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ (9,284)	$ (10,430)
Convertible notes
Debt Instrument [Line Items]
Carrying Value	419,841	418,695
Convertible Senior Notes Due 2026 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	69,125	69,125
Unamortized debt issuance costs	(845)	(1,084)
Carrying Value	68,280	68,041	$ 69,100
Convertible Senior Notes Due 2028 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	240,000	240,000
Unamortized debt issuance costs	(5,105)	(5,714)
Carrying Value	234,895	234,286
Convertible Senior Notes Due 2029 \| Convertible notes
Debt Instrument [Line Items]
Outstanding principal amount	120,000	120,000
Unamortized debt issuance costs	(3,334)	(3,632)
Carrying Value	$ 116,666	$ 116,368

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Revenue	6 Months Ended
Revenue	Jun. 30, 2024
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for promised goods or services. The Company’s performance obligations are satisfied either over time or at a point in time. Revenue from performance obligations that are transferred to customers over time accounted for approximately 14% and 13%, respectively, of the Company's total revenue for the three and six months ended June 30, 2024, and 9% for each of the three and six months ended June 30, 2023. The Company has certain system sale arrangements that contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct. The Company’s products and services are distinct if a customer can benefit from the product or service on its own or with other resources that are readily available to the customer, and if the Company’s promise to transfer the products or service to the customer is separately identifiable from other promises in the sale arrangements. The Company’s system sale arrangements can include all or a combination of the following performance obligations: the system and software license (considered one performance obligation), system accessories (hand pieces), training, AviClear license agreements, other accessories, extended service contracts, marketing services, and time and materials services. For the Company’s system sale arrangements that include an extended service contract, the period of service commences at the expiration of the Company’s standard warranty offered at the time of the system sale. The Company considers the extended service contracts terms in the arrangements that are legally enforceable to be performance obligations. Other than extended service contracts and marketing services, which are satisfied over time, the Company generally satisfies all performance obligations at a point in time. Systems, system accessories (hand pieces), service contracts, training, and time and materials services are also sold on a stand-alone basis. For contracts with multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation on a relative standalone selling price basis. Nature of Products and Services Systems Systems revenue is generated from the sale of systems and from the sale of upgrades to existing systems. A system consists of a console that incorporates a universal graphic user interface, a laser or other energy-based module, control system software and high voltage electronics, as well as one or more hand pieces. In certain applications, the laser or other energy-based module is contained in the hand piece, rather than within the console. The Company offers customers the ability to select the system that best fits their practice at the time of purchase and then to cost-effectively add applications to their system as their practice grows. This provides customers the flexibility to upgrade their systems whenever they choose and provides the Company with a source of additional Systems revenue. The system or upgrade and the right to use the embedded software represent a single performance obligation as the software license is integral to the functionality of the system or upgrade. For systems sold directly to end-customers that are credit approved, revenue is recognized when the Company transfers control to the end-customer, which occurs when the product is shipped to the customer or when the customer receives the product, depending on the nature of the arrangement. When collectability is not established in advance of receipt of payment from the customer, revenue is recognized upon the later of the receipt of payment or the satisfaction of the performance obligation. For systems sold through credit approved distributors, revenue is recognized at the time of shipment to the distributor. The Company leases certain AviClear devices to customers and receives a fixed annual license fee over the term of the arrangement and variable lease income related to treatments performed by the lessee. In the fourth quarter of 2023, the Company announced a change in the AviClear business strategy and moved towards a direct sales model rather than a leasing model, whereby certain existing lessees were offered an option to purchase the leased AviClear device. The Company classifies its lease income and direct sales as product revenue and classifies the AviClear lease contracts as operating leases for the devices under the leasing model. The fixed annual license fee is recognized evenly over the period of the lease contract on a straight-line basis. The treatment fee is recognized as consumable revenue in the period the treatment protocol is initiated. The Company's payment terms for its system consoles and other accessories require payment within 30 days of shipment. Certain international distributor arrangements allow for longer payment terms. Consumables and other accessories The Company classifies its customers' purchases of replacement cycles for truSculpt and truFlex, as well as replacement hand pieces, xeo and truSculpt 3D hand pieces, AviClear treatment fee revenue, and single use disposable tips applicable to Secret PRO, and Secret RF as Consumable revenue. The Secret PRO, Secret DUO, and Secret RF products' single use disposable tips must be replaced after every treatment. The Company’s systems offer multiple hand pieces and applications, which allow customers to upgrade their systems. Revenue for consumables and other accessories is recognized when products are shipped to customers. Skincare products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market to medical offices and licensed physicians. The Company warranted that the skincare products are free of significant defects in workmanship and materials for 90 days from shipment. The Company acted as the principal in this arrangement, as the Company determined the price to charge customers for the skincare products and controlled the products before they were transferred to the customer. The Company recognized revenue for skincare products at a point in time upon shipment. On February 28, 2024, the Company entered into a termination agreement with ZO, which terminated all agreements related to the distribution by the Company of ZO’s products in Japan, as disclosed in Note 1. During the three months ended June 30, 2024, revenue from the distribution of skincare products was nil due to the termination of all agreements. Extended service contract The Company offers post-warranty services to its customers through extended service contracts that cover parts and labor for a term of one to three years. Service contract revenue is recognized over time, using a time-based measure of progress, as customers benefit from the service throughout the service period. The Company also offers services on a time and materials basis for systems and detachable hand piece replacements. Revenue related to services performed on a time and materials basis is recognized when performed. Training Sales of systems to customers include training on the use of the system to be provided within 90 days of purchase. The Company considers training a separate performance obligation as customers can immediately benefit from the training, and training is also sold separately from systems. The Company recognizes revenue for training when the training is provided. Significant Judgments The Company determines standalone selling price ("SSP") for each performance obligation as follows: •Systems: The SSPs for systems are based on directly observable sales in similar circumstances to similar customers. •Extended warranty/Service contracts: SSP is based on observable price when sold on a standalone basis to similar customers. Deferred Sales Commissions Incremental costs of obtaining a contract related to the sale of a system, which consist primarily of commissions and related payroll taxes, are capitalized, and amortized on a straight-line basis over the expected period of benefit, except for costs that are recognized when the product is sold. The Company uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two to three years. Total capitalized commissions as of June 30, 2024 and December 31, 2023 were $1.9 million and $2.4 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Amortization expense for these assets was $0.4 million and $1.0 million during the three and six months ended June 30, 2024, respectively, and $0.6 million and $1.3 million for the three and six months ended June 30, 2023, respectively. The amortization related to these capitalized costs is included in sales and marketing expense on the Company’s condensed consolidated statement of operations.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 9
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+ Details

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Aug. 05, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	000-50644
Entity Registrant Name	Cutera, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0492262
Entity Address, Address Line One	3240 Bayshore Blvd.
Entity Address, City or Town	Brisbane
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94005
City Area Code	415
Local Phone Number	657-5500
Title of 12(b) Security	Common Stock ($0.001 par value)
Trading Symbol	CUTR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		20,127,842
Entity Central Index Key	0001162461
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024

Stockholders' Equity and Stock-based Compensation Expense - Activity of Stock Awards Outstanding Under the 2019 Plans (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of Awards Outstanding
Stock awards canceled / forfeited / expired (in shares)	(142,537)
Stock awards
Number of Awards Outstanding
Beginning balance (in shares)	909,862
Stock awards granted (in shares)	127,739
Awards vested (in shares)	(188,072)
Stock awards canceled / forfeited / expired (in shares)	(132,537)
Ending balance (in shares)	716,992
Weighted Average Grant Date Fair Value per Share
Beginning balance (in dollars per share) \| $ / shares	$ 20.46
Stock awards granted (in dollars per share) \| $ / shares	2.13
Awards released (in dollars per share) \| $ / shares	25.38
Stock awards canceled / forfeited / expired (in dollars per share) \| $ / shares	22.16
Ending balance (in dollars per share) \| $ / shares	$ 15.66

Leases - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Leases - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Lessee, Lease, Description [Line Items]
Operating leases renewal terms (up to)	5 years		5 years
Finance leases renewal terms (up to)	5 years		5 years
Lease term (in years)	3 years		3 years
Duration of autorenewal features			1 year
Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	$ 0.4	$ 0.6	$ 1.0	$ 1.3
AviClear Device
Lessee, Lease, Description [Line Items]
Cloud computing arrangement expected contract renewals (in years)	7 years		7 years
Capitalized Cloud Computing Set-up Cost \| Other long-term assets
Lessee, Lease, Description [Line Items]
Capitalized contract costs	$ 1.9		$ 1.9		$ 2.7
Capitalized Cloud Computing Set-up Cost \| Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	0.5	1.1	0.8	2.2
Lease Installment Costs \| Other long-term assets
Lessee, Lease, Description [Line Items]
Capitalized contract costs	1.1		1.1		$ 2.1
Lease Installment Costs \| Sales and marketing
Lessee, Lease, Description [Line Items]
Amortization expense	$ 0.4	$ 0.5	$ 1.0	$ 1.0
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms of operating leases	1 year		1 year
Remaining lease terms of finance leases	1 year		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms of operating leases	7 years		7 years
Remaining lease terms of finance leases	7 years		7 years

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net loss	$ (24,681)	$ (33,278)	$ (47,459)	$ (61,326)
Other comprehensive income:
Net change in unrealized gain on available-for-sale investments, net of tax	0	12	0	98
Other comprehensive income, net of tax	0	12	0	98
Comprehensive loss	$ (24,681)	$ (33,266)	$ (47,459)	$ (61,228)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Segment Reporting - Summary of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total net revenue	$ 34,377	$ 61,825	$ 73,170	$ 116,351
Total product revenue
Disaggregation of Revenue [Line Items]
Total net revenue	28,357	56,175	61,472	105,296
Systems
Disaggregation of Revenue [Line Items]
Total net revenue	23,900	39,262	48,160	73,804
Consumables
Disaggregation of Revenue [Line Items]
Total net revenue	4,457	7,491	9,112	13,938
Skincare
Disaggregation of Revenue [Line Items]
Total net revenue	0	9,422	4,200	17,554
Service
Disaggregation of Revenue [Line Items]
Total net revenue	6,020	5,650	11,698	11,055
United States
Disaggregation of Revenue [Line Items]
Total net revenue	12,757	25,602	26,827	48,104
Japan
Disaggregation of Revenue [Line Items]
Total net revenue	3,829	12,810	11,427	25,718
Asia, excluding Japan
Disaggregation of Revenue [Line Items]
Total net revenue	5,281	4,323	10,193	11,054
Europe
Disaggregation of Revenue [Line Items]
Total net revenue	5,021	5,495	9,596	10,613
Rest of the World
Disaggregation of Revenue [Line Items]
Total net revenue	$ 7,489	$ 13,595	$ 15,127	$ 20,862

Product Warranty (Tables)

6 Months Ended

Jun. 30, 2024

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability Accrual

The following table provides the changes in the product warranty accrual for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning Balance	$	2,472	$	3,154	$	2,593	$	3,254
Add: Accruals for warranties issued during the period	1,463		1,534		2,619		2,550
Less: Settlements made during the period	(925)		(1,584)		(2,202)		(2,700)
Ending Balance	$	3,010	$	3,104	$	3,010	$	3,104

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company is named from time to time as a party to other legal proceedings, product liability, intellectual property disputes, commercial disputes, employee disputes, and contractual lawsuits. A liability and related charge are recorded to earnings in the Company’s consolidated financial statements for legal contingencies when the loss is considered probable and the amount can be reasonably estimated. The assessment is re-evaluated each accounting period and is based on all available information, including discussion with outside legal counsel. If a reasonable estimate of a known or probable loss cannot be made, but a range of probable losses can be estimated, the low-end of the range of losses is recognized if no amount within the range is a better estimate than any other. If a material loss is reasonably possible, but not probable and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. The Company expenses legal fees as incurred. Certain of the cases below are still in the preliminary stages, and the Company is not able to quantify the extent of its potential liability, if any, other than as described. The outcome of litigation is inherently unpredictable and subject to significant uncertainties. If any of these matters are resolved adversely to the Company, this could have a material adverse effect on its business, financial condition, results of operations, and cash flows. In addition, defending these legal proceedings is likely to be costly, which may have a material adverse effect on the Company's financial condition, results of operations and cash flows, and may divert management's attention from the day-to-day operations of its business. On January 31, 2020, the Company filed a lawsuit against Lutronic Aesthetics in the United States District Court for the Eastern District of California. Lutronic employs numerous former Cutera employees. The complaint against Lutronic generally alleges claims for (1) misappropriation of trade secrets in violation of state and federal law; (2) violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"); (3) interference with contractual relations; (4) interference with prospective economic advantage; (5) unfair competition; and (6) aiding and abetting. On March 13, 2020, the court entered a temporary restraining order ("TRO") against Lutronic generally prohibiting it from using or disseminating the Company's confidential, proprietary, or trade secret information. The order also prohibited Lutronic, for two years, from using such information for the purpose of soliciting, or conducting business with, certain specified customers. On April 9, 2020, the parties stipulated to the entry of a preliminary injunction providing for the same relief afforded by the TRO. On August 4, 2022, Cutera filed a second amended complaint. In addition to the above referenced claims, Cutera alleged claims for violation of the Lanham Act, unlawful business practices, false advertising and trademark infringement. On April 27, 2023, Lutronic filed a complaint for trade libel, intentional interference with prospective economic advantage, misappropriation of trade secrets and unfair business practices against Cutera in California State Court. On May 31, 2024 (the “Settlement Date”), Cutera, Inc. (the “Company”) reached a settlement agreement with Lutronic Aesthetics, Inc., regarding all outstanding litigation and arbitration matters involving the parties, Larry Laber and James Bartholomeusz. Under the terms of the settlement agreement, Lutronic agreed to pay the Company $5.75 million within thirty days of the Settlement Date and was recorded in General and Administrative expenses. Both parties agreed to the dismissal with prejudice of all pending actions and a mutual release, but denied all allegations of wrongful acts or omissions alleged in the pending actions against each party and agreed that the settlement was not an acknowledgement of any liability, fault, part or present wrongdoing, or violation of any law, rule, regulation or policy by either party or their respective affiliates, representatives or agents. As of July 3, 2024, all cases were officially dismissed. In March 2023, Serendia, LLC (“Serendia”), filed patent infringement complaints against the Company with the International Trade Commission (“ITC”) and in U.S. District Court for the District of Delaware alleging infringement of six Serendia patents by the Secret RF and Secret Pro systems, which the Company distributes in the U.S. on behalf of Ilooda Co. Ltd., a Korean company (“ilooda”). The manufacturer of these products, ilooda, is obligated to defend the Company against these claims and, as a result, the Company has not incurred significant external legal costs. Serendia and ilooda have agreed to a settlement of the ITC investigation, the Delaware litigation and any other past, present and future suits or claims related to the six Serendia patents and the Secret RF and Secret Pro systems. The settlement of these matters includes a non-exclusive, worldwide, fully paid up license from Serendia to ilooda to the six Serendia patents related to the Secret RF and Secret Pro systems, which are distributed by the Company. The ITC investigation as to ilooda and the Company was terminated as of April 10, 2024 and the Delaware litigation was dismissed as of April 3, 2024. On April 11, 2023, J. Daniel Plants, the Company’s former Executive Chairperson, and David Mowry, the Company’s former Chief Executive Officer, filed a complaint in the Delaware Court of Chancery against directors Gregory Barrett, Sheila Hopkins, Timothy O’Shea, Juliane Park and Janet Widmann, as defendants, and the Company, as nominal defendant (the “Delaware Litigation”) seeking a declaration that the individual defendants breached their fiduciary duties and enjoining them from enforcing the nomination deadline under the Company’s Amended and Restated Bylaws in connection with the 2023 annual meeting of stockholders, or in the alternative, a declaration that the Company must hold a special meeting of the stockholders on June 2, 2023. Mr. Plants and Mr. Mowry filed a motion for expedited proceedings with their complaint. Mr. Plants and Mr. Mowry subsequently agreed that the determination made by the Special Committee of the Board to hold a special meeting of the stockholders on June 9, 2023 mooted their request in the Delaware Litigation for a declaration that the Company hold a special meeting of the stockholders. On April 18, 2023, the Court of Chancery denied Mr. Plants and Mr. Mowry’s motion for expedited proceedings. On May 16, 2023, Mr. Mowry filed a letter with the Court of Chancery disclosing that he had resolved his dispute with the defendants and agreed to dismiss his claims with prejudice. On May 17, 2023, the Court of Chancery granted an order for voluntary dismissal of Mr. Mowry as a plaintiff in the Delaware Litigation. Mr. Plants subsequently publicly voiced opposition to certain aspects of the Company's corporate governance and strategy but did not submit a notice of nomination of director candidates for the Company’s 2023 annual meeting of stockholders and did not purport to nominate any director candidates at the Company’s annual meeting of stockholders held on July 13, 2023. Due to Plaintiff’s failure to amend his Complaint within the time required by the Court’s order dated October 6, 2023, the Delaware Litigation was dismissed with prejudice. On October 5, 2023, Mr. Plants filed a Sarbanes-Oxley (“SOX”) discrimination claim (the “SOX Whistleblower Complaint”) with the U.S. Department of Labor Occupational Safety and Health Administration (“OSHA”). Mr. Plants alleges that he was terminated on April 11, 2023, in retaliation for reporting to the Board of Directors (the “Board”) his concerns that budgeting and guiding to higher forecasts for 2023 would be misleading to shareholders. The SOX Whistleblower Complaint referenced the April 3, 2023 letter from Mr. Plants to the Company’s Board that articulated Mr. Plants’ concerns. The Company received notice of the SOX Whistleblower Complaint on November 8, 2023. On December 7, 2023, Mr. Plants made an arbitration demand in JAMS against the Company, Mr. Barrett, Ms. Hopkins, Mr. O’Shea, Ms. Park and Ms. Widmann for claims related to the termination of his employment (the “Arbitration Demand”). Mr. Plants alleges several claims: breach of his change of control and severance agreement; wrongful termination; retaliation in violation of California’s whistleblower laws; retaliation in violation of SOX; defamation/libel; tortious interference with prospective economic advantage; and breach of oral contract. He seeks compensatory, special, and punitive damages, as well as reinstatement, civil penalties, and attorneys’ fees and costs. Mr. Plants and the Company have agreed to a settlement of all claims against the Company and the parties listed in the Arbitration Demand. The OSHA investigation was officially closed on April 26, 2024, and the JAMS arbitration was dismissed as of April 19, 2024. As of June 30, 2024, and December 31, 2023, the Company had accrued $2.5 million and $3.3 million, respectively, related to various pending commercial and product liability lawsuits. The Company does not believe that a material loss in excess of accrued amounts is reasonably likely. As of June 30, 2024, the Company had $5.7 million of non-cancelable inventory purchase obligations with a certain vendor due in 2024.

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases was as follows (in thousands):


Leases	Classification	June 30, 2024		December 31, 2023
Assets
Right-of-use assets	Operating lease right-of-use assets	$	11,388	$	10,055
Finance lease	Property and equipment, net	1,309		2,516
Total leased assets		$	12,697	$	12,571


Liabilities	Classification	June 30, 2024		December 31, 2023
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	3,382	$	2,441
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	9,223		8,887
Total Operating lease liabilities		$	12,605	$	11,328

Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	714	$	825
Finance lease liabilities, non-current	Other long-term liabilities	723		1,064
Total Finance lease liabilities		$	1,437	$	1,889

Weighted-average remaining lease term and discount rate, as of June 30, 2024, were as follows:


Lease Term and Discount Rate	June 30, 2024
Weighted-average remaining lease term (years)
Operating leases	3.5
Finance leases	2.0
Weighted-average discount rate
Operating leases	5.6	%
Finance leases	9.5	%

Schedule of Lease Costs

Lease costs during the three and six months ended June 30, 2024 and 2023 (in thousands) was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,
Lease costs	Classification	2024		2023		2024		2023
Finance lease cost	Amortization expense	$	250	$	148	$	524	$	298
Finance lease cost	Interest for finance lease	$	37	$	18	$	79	$	38
Operating lease cost	Operating lease expense	$	1,093	$	889	$	2,062	$	1,780

Cash paid for amounts included in the measurement of lease liabilities during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


		Six Months Ended June 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2024		2023
Operating cash flow	Finance lease	$	36	$	38
Financing cash flow	Finance lease	$	189	$	237
Operating cash flow	Operating lease	$	986	$	686

Schedule of Maturities of Facility Leases

Maturities of operating facility leases were as follows as of June 30, 2024 (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	1,969
2025	4,059
2026	4,034
2027	3,295
2028	323
2029 and thereafter	142
Total lease payments	13,822
Less: imputed interest	1,217
Present value of lease liabilities	$	12,605

Schedule of Minimum Finance Lease Payments

As of June 30, 2024, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	433
2025	697
2026	424
2027	17
Total lease payments	1,571
Less: imputed interest	134
Present value of lease liabilities	$	1,437

Schedule of Operating Lease Income

The following table summarizes the amount of operating lease income included in product revenue in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
AviClear operating lease license fee revenue	$	432	$	1,367	$	1,594	$	2,592
AviClear operating lease revenue	715		3,236		1,901		5,939
Total AviClear revenue	$	1,147	$	4,603	$	3,495	$	8,531

Schedule of Minimum Future Lease Payments

The following is the minimum future lease payments as of June 30, 2024, under non-cancelable operating leases, assuming the minimum contractual lease term (in thousands):


As of June 30, 2024	Amount
Remainder of 2024	$	3,941
2025	3,050
Total	$	6,991

Deferred Revenue (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Deferred Service Contract Revenue

The following table provides changes in the deferred revenue balance for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	10,455	$	13,699	$	11,916	$	13,498
Add: Payments received from current period sales	6,460		5,939		9,480		11,087
Less: Revenue recognized from current period sales	(1,725)		(589)		(1,882)		(2,291)
Less: Revenue recognized from beginning balance	(3,170)		(5,042)		(7,494)		(8,287)
Pending lease cancellations	(1,715)		—		(1,715)		—
Ending balance	$	10,305	$	14,007	$	10,305	$	14,007

Balance Sheet Details - Schedule of Other Current Assets and Prepaid Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deposits with vendors	$ 5,630	$ 9,501
Prepayments	4,559	3,819
Sale tax and VAT receivable	2,392	6,307
Other	380	225
Other current assets and prepaid expenses	$ 12,961	$ 19,852

Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Bonus and payroll-related accruals	$ 10,970	$ 13,949
Sales and marketing accruals	4,080	4,929
Product warranty	3,010	2,593
Accrued sales tax	2,597	6,325
Accrued interest	1,485	1,304
Jabil settlement obligation, net	0	8,908
Liability for inventory in transit	0	5,461
Other accrued liabilities	8,214	11,586
Total	$ 30,356	$ 55,055

Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Revenue by Geography

The following table presents a summary of revenue by geography and product category for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue mix by geography:
United States	$	12,757	$	25,602	$	26,827	$	48,104
Japan	3,829		12,810		11,427		25,718
Asia, excluding Japan	5,281		4,323		10,193		11,054
Europe	5,021		5,495		9,596		10,613
Rest of the World	7,489		13,595		15,127		20,862
Total consolidated revenue	$	34,377	$	61,825	$	73,170	$	116,351
Revenue mix by product category:
Systems	$	23,900	$	39,262	$	48,160	$	73,804
Consumables	4,457		7,491		9,112		13,938
Skincare	—		9,422		4,200		17,554
Total product revenue	28,357		56,175		61,472		105,296
Service	6,020		5,650		11,698		11,055
Total consolidated revenue	$	34,377	$	61,825	$	73,170	$	116,351

Net Loss Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Loss Per Share

As of June 30, 2024, the Company’s Convertible Notes were potentially convertible into 8,696,792 shares of common stock.

The denominator for diluted net loss per share does not include any effect from the capped call transactions the Company entered into concurrently with the issuances of convertible notes, as this effect would be anti-dilutive. In the event of conversion of a convertible note, shares delivered to the Company under the capped call will offset the dilutive effect of the shares that the Company would issue under the convertible notes. In the six months ended June 30, 2024 and June 30, 2023, the if-converted method was not applied as the effect would have been anti-dilutive.

For the six months ended June 30, 2024 and June 30, 2023, a basic loss per common share and diluted loss per common share are the same in each period as the inclusion of any potentially issuable shares would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net loss used in calculating net loss per share, basic	$	(24,681)	$	(33,278)	$	(47,459)	$	(61,326)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic	20,091		19,858		20,041		19,819
Dilutive effect of incremental shares and share equivalents:
Convertible notes	—		—		—		—
Options	—		—		—		—
RSUs	—		—		—		—
PSUs	—		—		—		—
ESPP	—		—		—		—
Weighted average shares of common stock outstanding used in computing net loss per share, diluted	20,091		19,858		20,041		19,819
Net loss per share:
Net loss per share, basic	$	(1.23)	$	(1.68)	$	(2.37)	$	(3.09)
Net loss per share, diluted	$	(1.23)	$	(1.68)	$	(2.37)	$	(3.09)

The following numbers of shares outstanding, prior to the application of the treasury stock method and the if-converted method, were excluded from the computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Capped call	10,780	10,780	10,780	10,780
Convertible notes	8,697	8,697	8,697	8,697
Options	2,302	694	2,302	694
RSU's	527	489	527	489
PSU's	190	265	190	265
ESPP	—	45	—	45
Total	22,496	20,970	22,496	20,970

Leases - Cash Paid for Amounts Included in the Measurement of Lease Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Leases [Abstract]
Operating cash flow, Finance lease	$ 36	$ 38
Financing cash flow, Finance lease	189	237
Operating cash flow, Operating lease	$ 986	$ 686

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Operations and Principles of Consolidation	Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes third-party manufactured skincare products, until the termination of distribution agreement in February 2024, and Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue); and the distribution of third-party manufactured skincare products (“Skincare”) revenue are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in select locations across the U.S. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets, sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, New Zealand, Austria, France, Germany, Hong Kong, Japan, Switzerland, the United Kingdom and the Republic of Ireland. Sales and services outside of these direct markets are made through a worldwide distributor network in over 38 countries. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances.
Liquidity and Management's Plans	Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for at least the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $47.5 million for the six months ended June 30, 2024 and $162.8 million for the year ended December 31, 2023. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023 and implementing further cost savings initiatives, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities.
Basis of Presentation	Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three and six months ended June 30, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024.
Reclassification	Reclassification The Company reclassified the interest expense portion previously recorded in interest income (expense), net to other income (expense), net on the condensed consolidated statement of operations. Corresponding reclassifications of prior period amounts have been made in the Company's condensed consolidated statement of operations to conform to the current period presentation. These reclassifications had no effect on the reported net loss.
Risks and Uncertainties	Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals.
Accounting Policies	Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the SEC applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company uses the same accounting policies in preparing quarterly and annual financial statements.
Leases	Leases The Company incurred costs to fulfill its lease agreement obligations with its AviClear device lessees. These costs consisted of freight, installation, and training. In addition to these mobilization costs, the Company incurred commission costs associated with the placement of the AviClear device. The Company capitalized commission costs and made a policy election to capitalize the mobilization costs.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, fair value of investments, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, assumptions used in operating and sales-type lease classifications, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
Distribution of Third-Party Products	Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three and six months ended June 30, 2024, revenue from the distribution of skincare products was nil and $4.2 million, respectively. In the six months ended June 30, 2023, revenue from the distribution of skincare products was $17.6 million, representing 15% of the Company’s consolidated revenue. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. In the three months ended March 31, 2024, the Company recorded a net gain of $9.7 million resulting from the early termination proceeds received and transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. The Company generates revenue from the distribution of the Secret systems, which are manufactured by ilooda Co. Ltd. (“ilooda”). The Company is the exclusive distributor for all systems sold in the United States, Canada, the United Kingdom; the exclusive distributor for certain systems in France, and Spain; and the non-exclusive distributor for systems sold in Austria and Germany. In the three months ended June 30, 2024, and June 30, 2023, revenue from the distribution of Secret products represented 7% and 2%, respectively, of the Company’s consolidated revenue. The Company‘s ilooda distribution agreement expires in June 30, 2026.

Stockholders' Equity and Stock-based Compensation Expense - Activity Of Options Outstanding Under the 2019 Plans (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Shares Available for Grant
Beginning balance (in shares)	3,554,537
Stock awards canceled / forfeited / expired (in shares)	142,537
Options canceled / forfeited / expired (in shares)	135,107
Ending balance (in shares)	2,527,803	3,554,537
Number of Stock Options Outstanding
Beginning balance (in shares)	1,282,240
Options granted in period (in shares)	1,154,500
Options exercised (in shares)	0
Options canceled / forfeited / expired (in shares)	(135,107)
Ending balance (in shares)	2,301,633	1,282,240
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 17.97
Granted (in dollars per share)	2.18
Options exercised (in dollars per share)	0
Options canceled / forfeited / expired (in dollars per share)	18.86
Ending balance (in dollars per share)	$ 10.00	$ 17.97
Weighted Average Remaining Term (in Years)
Weighted average remaining term (in years)	7 years 5 months 15 days	8 years 2 months 15 days
RSUs
Shares Available for Grant
Options and stock awards granted (in shares)	(1,304,378)

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Measured and Recognized at Fair Value on a Recurring Basis

June 30, 2024

Level 1

Cash equivalents:

Money market funds

61,498

December 31, 2023

Level 1

Cash equivalents:

Money market funds

123,387

Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 1,969
2025	4,059
2026	4,034
2027	3,295
2028	323
2029 and thereafter	142
Total lease payments	13,822
Less: imputed interest	1,217
Present value of lease liabilities	$ 12,605	$ 11,328

Balance Sheet Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 39,704	$ 47,602
Less: Accumulated depreciation	(11,564)	(10,327)
Property and equipment, net	28,140	37,275
AviClear devices
Property, Plant and Equipment [Line Items]
Property and equipment, gross	30,369	38,490
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,545	4,944
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,537	1,884
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,294	1,010
Assets under construction
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 959	$ 1,274

Deferred Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Deferred Revenue

The Company records deferred revenue when revenue is to be recognized subsequent to invoicing. For extended service contracts, the Company generally invoices customers at the beginning of the extended service contract term. The Company’s extended service contracts typically have one to three-year terms. Deferred revenue also includes payments for training not yet delivered.

The following table provides changes in the deferred revenue balance for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Beginning balance	$	10,455	$	13,699	$	11,916	$	13,498
Add: Payments received from current period sales	6,460		5,939		9,480		11,087
Less: Revenue recognized from current period sales	(1,725)		(589)		(1,882)		(2,291)
Less: Revenue recognized from beginning balance	(3,170)		(5,042)		(7,494)		(8,287)
Pending lease cancellations	(1,715)		—		(1,715)		—
Ending balance	$	10,305	$	14,007	$	10,305	$	14,007

Approximately 85% of the Company’s deferred revenue balance of $10.3 million as of June 30, 2024 will be recognized over the next 12 months.

The fixed annual license fees received related to the AviClear contracts are deferred and recognized over the annual lease periods. The AviClear deferred license fee balance included in the total deferred revenue balance at June 30, 2024, and December 31, 2023 was $0.9 million and $2.1 million, respectively.

Costs for extended service contracts were $2.2 million and $3.8 million for the three and six months ended June 30, 2024, respectively, and were $2.1 million and $3.7 million for the three and six months ended June 30, 2023, respectively, and were recorded in cost of revenue on the condensed consolidated statements of operations

Balance Sheet Details - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventories
Raw materials	$ 48,462	$ 36,970
Work in process	4,030	889
Finished goods	27,861	24,741
Total	80,353	62,600
Inventories valuation	16,300	13,000
Long-term inventories
Raw materials	9,175	8,672
Work in process	0	2,049
Finished goods	4,650	5,562
Total	13,825	16,283
Inventories valuation	$ 16,500	$ 12,800

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Dec. 31, 2022	May 31, 2022	Mar. 31, 2021
Convertible Senior Notes Due 2026 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	2.25%				2.25%
Convertible Senior Notes Due 2028 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	2.25%			2.25%
Convertible Senior Notes Due 2029 \| Convertible notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate	4.00%		4.00%
Money market funds \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents:	$ 61,498	$ 123,387

Stockholders' Equity and Stock-based Compensation Expense - Stock-based Compensation Expense By Department (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 1,593	$ 1,550	$ 3,702	$ 4,936
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	144	361	293	725
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	404	1,283	970	2,431
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	264	415	569	1,108
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 781	$ (509)	$ 1,870	$ 672

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Section 50
-Paragraph 2
-Subparagraph (a)(2)
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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (a)(3)
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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (c)(1)(i)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)
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-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(01)
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (c)(1)(iv)(03)
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(04)
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (c)(2)(i)
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480429/718-10-50-2

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Allowance for credit loss, current	$ 14,811	$ 9,878
Unamortized debt issuance costs	$ 9,284	$ 10,430
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	50,000,000	50,000,000
Common stock issued (in shares)	20,108,406	19,960,622
Common stock outstanding (in shares)	20,108,406	19,960,622

- Definition

Amount of unamortized debt discount (premium) and debt issuance costs.

+ References + Details

Condensed Consolidated Statements of Changes In Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Balance (in shares) at Dec. 31, 2022		19,668,603
Balance at Dec. 31, 2022	$ (15,181)	$ 20	$ 125,406	$ (140,513)	$ (94)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		9,234
Exercise of stock options	147		147
Issuance of common stock for employee purchase plan (in shares)		51,786
Issuance of common stock for employee purchase plan	711		711
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares)		171,977
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(3,186)		(3,186)
Stock-based compensation expense	4,936		4,936
Net change in unrealized gain on available-for-sale investments	98				98
Net loss	(61,326)			(61,326)
Balance (in shares) at Jun. 30, 2023		19,901,600
Balance at Jun. 30, 2023	(73,801)	$ 20	128,014	(201,839)	4
Balance (in shares) at Dec. 31, 2022		19,668,603
Balance at Dec. 31, 2022	(15,181)	$ 20	125,406	(140,513)	(94)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (162,800)
Balance (in shares) at Dec. 31, 2023	19,960,622	19,960,622
Balance at Dec. 31, 2023	$ (171,830)	$ 20	131,496	(303,346)	0
Balance (in shares) at Mar. 31, 2023		19,785,107
Balance at Mar. 31, 2023	(42,045)	$ 20	126,504	(168,561)	(8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)		3,459
Exercise of stock options	38		38
Issuance of common stock for employee purchase plan (in shares)		51,786
Issuance of common stock for employee purchase plan	711		711
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares)		61,248
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(789)		(789)
Stock-based compensation expense	1,550		1,550
Net change in unrealized gain on available-for-sale investments	12				12
Net loss	(33,278)			(33,278)
Balance (in shares) at Jun. 30, 2023		19,901,600
Balance at Jun. 30, 2023	$ (73,801)	$ 20	128,014	(201,839)	4
Balance (in shares) at Dec. 31, 2023	19,960,622	19,960,622
Balance at Dec. 31, 2023	$ (171,830)	$ 20	131,496	(303,346)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	0
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares)		147,784
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	$ (84)		(84)
Stock-based compensation expense	3,702		3,702
Net change in unrealized gain on available-for-sale investments	0
Net loss	$ (47,459)			(47,459)
Balance (in shares) at Jun. 30, 2024	20,108,406	20,108,406
Balance at Jun. 30, 2024	$ (215,671)	$ 20	135,114	(350,805)	0
Balance (in shares) at Mar. 31, 2024		20,067,941
Balance at Mar. 31, 2024	(192,563)	$ 20	133,541	(326,124)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in settlement of restricted and performance stock unites, net of shares withheld for employee taxes (in shares)		40,465
Issuance of common stock in settlement of restricted and performance stock units, net of shares withheld for employee taxes	(20)		(20)
Stock-based compensation expense	1,593		1,593
Net change in unrealized gain on available-for-sale investments	0
Net loss	$ (24,681)			(24,681)
Balance (in shares) at Jun. 30, 2024	20,108,406	20,108,406
Balance at Jun. 30, 2024	$ (215,671)	$ 20	$ 135,114	$ (350,805)	$ 0

Balance Sheet Details

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Details

Inventories

Inventories consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	48,462	$	36,970
Work in process	4,030		889
Finished goods	27,861		24,741
Total	$	80,353	$	62,600

Valuation adjustments for excess and obsolete inventory, reflected as a reduction of inventories at June 30, 2024 and December 31, 2023, were $16.3 million and $13.0 million, respectively.

Other current assets and prepaid expenses

Other current assets and a prepaid expenses consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Deposits with vendors	$	5,630	$	9,501

Prepayments	4,559		3,819
Sale tax and VAT receivable	2,392		6,307
Other	380		225
Total	$	12,961	$	19,852

Long-term inventories

The Company’s long-term inventories relate to AviClear devices, and parts for device manufacturing, not expected to be sold in the twelve months ended June 30, 2025. Long-term inventories consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	9,175	$	8,672
Work in process	—		2,049
Finished goods	4,650		5,562
Total	$	13,825	$	16,283

Valuation adjustments for excess and obsolete inventory, reflected as a reduction of long-term inventories at June 30, 2024 and December 31, 2023, were $16.5 million and $12.8 million, respectively.

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	June 30, 2024		December 31, 2023
AviClear devices	$	30,369	$	38,490

Machinery and equipment	5,545		4,944
Office equipment and furniture	1,537		1,884
Leasehold improvements	1,294		1,010
Assets under construction	959		1,274
	39,704		47,602
Less: Accumulated depreciation	(11,564)		(10,327)
Property and equipment, net	$	28,140	$	37,275

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Bonus and payroll-related accruals	$	10,970	$	13,949
Sales and marketing accruals	4,080		4,929
Product warranty	3,010		2,593
Accrued sales tax	2,597		6,325
Accrued interest	1,485		1,304
Jabil settlement obligation, net	—		8,908
Liability for inventory in transit	—		5,461
Other accrued liabilities	8,214		11,586
Total	$	30,356	$	55,055

Balance Sheet Details (Tables)

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	48,462	$	36,970
Work in process	4,030		889
Finished goods	27,861		24,741
Total	$	80,353	$	62,600

Long-term inventories consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Raw materials	$	9,175	$	8,672
Work in process	—		2,049
Finished goods	4,650		5,562
Total	$	13,825	$	16,283

Schedule of Other Current Assets and Prepaid Expenses

Other current assets and a prepaid expenses consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Deposits with vendors	$	5,630	$	9,501

Prepayments	4,559		3,819
Sale tax and VAT receivable	2,392		6,307
Other	380		225
Total	$	12,961	$	19,852

Schedule of Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):


	June 30, 2024		December 31, 2023
AviClear devices	$	30,369	$	38,490

Machinery and equipment	5,545		4,944
Office equipment and furniture	1,537		1,884
Leasehold improvements	1,294		1,010
Assets under construction	959		1,274
	39,704		47,602
Less: Accumulated depreciation	(11,564)		(10,327)
Property and equipment, net	$	28,140	$	37,275

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	June 30, 2024		December 31, 2023
Bonus and payroll-related accruals	$	10,970	$	13,949
Sales and marketing accruals	4,080		4,929
Product warranty	3,010		2,593
Accrued sales tax	2,597		6,325
Accrued interest	1,485		1,304
Jabil settlement obligation, net	—		8,908
Liability for inventory in transit	—		5,461
Other accrued liabilities	8,214		11,586
Total	$	30,356	$	55,055

Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands				2 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Apr. 01, 2024 USD ($)	Feb. 29, 2024 USD ($)	Feb. 28, 2024 USD ($)	Feb. 28, 2024 USD ($)	Jun. 30, 2024 USD ($) country	Mar. 31, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) country	Jun. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Capitalized Contract Cost [Line Items]
Number of countries in which entity operates \| country					38			38
Net loss					$ 24,681		$ 33,278	$ 47,459	$ 61,326	$ 162,800
Total net revenue					34,377		61,825	73,170	116,351
Percent net revenue reduction to termination fee receivable				42.20%
Termination fee offset	$ 1,600
Gain on early termination of distribution agreement					0	$ 9,700	0	9,708	0
Jabil settlement obligation, net					0			0		8,908
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party			$ 19,500
Settlement agreement, amount awarded from other party			1,300
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Receipt of Inventories
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party			13,500
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Purchased Equipment
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party			300
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Compensation for Previously Incurred Expenses
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party			5,700
Settlement Agreement, Non-Renewal Of Manufacturing Service Agreement \| Compensation for Previously Incurred Expenses \| Cost of revenue
Capitalized Contract Cost [Line Items]
Settlement agreement, amount awarded to other party										5,700
Within three business days of execution of agreement
Capitalized Contract Cost [Line Items]
Termination fee receivable			5,750	$ 5,750
Proceeds from termination fees		$ 5,750
Between January 1st and February 23rd
Capitalized Contract Cost [Line Items]
Termination fee receivable			$ 5,750	$ 5,750
Between January 1st And February 28th
Capitalized Contract Cost [Line Items]
Proceeds from termination fees	$ 2,370
Skincare
Capitalized Contract Cost [Line Items]
Total net revenue					$ 0		$ 9,422	4,200	$ 17,554
ZO Skin Health \| Revenue Benchmark \| Customer Concentration Risk
Capitalized Contract Cost [Line Items]
Concentration risk, percentage									15.00%
Ilooda Co. Ltd. \| Revenue Benchmark \| Customer Concentration Risk
Capitalized Contract Cost [Line Items]
Concentration risk, percentage					7.00%		2.00%
Mobilization Costs \| Other long-term assets
Capitalized Contract Cost [Line Items]
Capitalized contract costs					$ 1,100			1,100		2,100
Capitalized Cloud Computing Set-up Cost \| Other long-term assets
Capitalized Contract Cost [Line Items]
Capitalized contract costs					$ 1,900			$ 1,900		2,700
Accrued liabilities
Capitalized Contract Cost [Line Items]
Jabil settlement obligation, net										19,500
Litigation settlement receivable										$ 15,100

Deferred Revenue - Summary of Deferred Service Contract Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Change in Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 10,455	$ 13,699	$ 11,916	$ 13,498
Add: Payments received from current period sales	6,460	5,939	9,480	11,087
Less: Revenue recognized from current period sales	(1,725)	(589)	(1,882)	(2,291)
Less: Revenue recognized from beginning balance	(3,170)	(5,042)	(7,494)	(8,287)
Pending lease cancellations	(1,715)	0	(1,715)	0
Ending balance	$ 10,305	$ 14,007	$ 10,305	$ 14,007

Stockholders' Equity and Stock-based Compensation Expense

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stockholders' Equity and Stock-based Compensation Expense

Stockholders’ Equity and Stock-based Compensation Expense

The Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align stockholder and employee interests. The 2019 Equity Incentive Plan (the "2019 Plan") and the 2023 Inducement Equity Plan (the "2023 Plan") provides for the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”), performance stock units ("PSUs"), and other stock or cash awards.

Activity under the Company's equity incentive plans is summarized as follows:



			Shares Available for Grant
Balance, December 31, 2023			3,554,537
Options and stock awards granted			(1,304,378)
Stock awards canceled / forfeited / expired			142,537
Options canceled / forfeited / expired			135,107
Balance, June 30, 2024			2,527,803

The equity plans deduct the shares available for issuance by the gross number of shares for which an award is exercised or vests, not the net number of shares actually issued upon exercise, in the event the exercise price is paid in shares of the Company's common stock or shares are withheld to satisfy tax withholding obligations. Any RSU or PSU shares granted on or after July 13, 2023 were counted against the shares available for grant at a ratio of 1.65 shares for every one share granted.

At the Company’s Annual Stockholder Meeting on July 15, 2024, the Company’s stockholders voted to increase the total number of shares of common stock available for issuance under the 2019 Plan by 2,395,273 shares. The 2023 Plan was terminated effective July 15, 2024, and had 2,304,580 shares available for issuance at that date.

On May 22, 2024, the Company’s Compensation Committee approved a modification of the vesting targets related to three PSU grants and one stock option grant issued to senior management employees. The original vesting targets were based on the closing price of the Company’s common stock. These targets were modified to targets based on the Company’s market capitalization. The incremental stock compensation expense related to this modification was not material.


	Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)
Balance, December 31, 2023	1,282,240	$	17.97	8.21
Options granted	1,154,500	$	2.18
Options exercised	—	$	—
Options canceled / forfeited / expired	(135,107)	$	18.86
Balance, June 30, 2024	2,301,633	$	10.00	7.46


	Stock Awards Outstanding
	Number of Awards Outstanding	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2023	909,862	$	20.46
Stock awards granted	127,739	$	2.13
Awards vested	(188,072)	$	25.38
Stock awards canceled / forfeited / expired	(132,537)	$	22.16
Balance, June 30, 2024	716,992	$	15.66

Stock-based Compensation Expense

Stock-based compensation expense by financial statement line item recognized during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	144	$	361	$	293	$	725
Sales and marketing	404		1,283		970		2,431
Research and development	264		415		569		1,108
General and administrative	781		(509)		1,870		672
Total stock-based compensation expense	$	1,593	$	1,550	$	3,702	$	4,936

Leases - Maturities of Finance Leases Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Leases [Abstract]
Remainder of 2024	$ 433
2025	697
2026	424
2027	17
Total lease payments	1,571
Less: imputed interest	134
Present value of lease liabilities	$ 1,437	$ 1,889

Segment Reporting

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Reporting

Segment reporting is based on the “management approach,” following the method that management organizes the Company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer ("CEO"), who makes decisions on allocating resources and assessing performance.

In the three months ended December 31, 2023, the Company concluded a realignment of its operating segments to further drive its long-term strategic objectives. At the direction of the CEO, management reorganized its management reporting structure and began to manage its operations under one segment structure. The CEO, in making operating decisions, reviews consolidated financial information, accompanied by disaggregated information about revenues by geography and product. All of the Company’s principal operations and decision-making functions are located in the U.S. Substantially all of the Company's long-lived assets are located in the U.S.

The Company reassessed its reportable segments in the fourth quarter of fiscal year 2023 and determined it had one consolidated reportable segment beginning in the three months ended December 31, 2023.

The following table presents a summary of revenue by geography and product category for the three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue mix by geography:
United States	$	12,757	$	25,602	$	26,827	$	48,104
Japan	3,829		12,810		11,427		25,718
Asia, excluding Japan	5,281		4,323		10,193		11,054
Europe	5,021		5,495		9,596		10,613
Rest of the World	7,489		13,595		15,127		20,862
Total consolidated revenue	$	34,377	$	61,825	$	73,170	$	116,351
Revenue mix by product category:
Systems	$	23,900	$	39,262	$	48,160	$	73,804
Consumables	4,457		7,491		9,112		13,938
Skincare	—		9,422		4,200		17,554
Total product revenue	28,357		56,175		61,472		105,296
Service	6,020		5,650		11,698		11,055
Total consolidated revenue	$	34,377	$	61,825	$	73,170	$	116,351

- 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.

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+ Details

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income tax benefit	$ 100		$ 100
Income tax (benefit) expense	$ (19)	$ 326	$ (44)	$ 598

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

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+ Details

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Convertible Notes

The following table presents the outstanding principal amount and carrying value of the Company’s Convertible Notes (in thousands):


	June 30, 2024		December 31, 2023
Notes due in 2026
Outstanding principal amount	$	69,125	$	69,125
Unamortized debt issuance costs	(845)		(1,084)
Carrying Value	$	68,280	$	68,041

Notes due in 2028
Outstanding principal amount	$	240,000	$	240,000
Unamortized debt issuance costs	(5,105)		(5,714)
Carrying Value	$	234,895	$	234,286

Notes due in 2029
Outstanding principal amount	$	120,000	$	120,000
Unamortized debt issuance costs	(3,334)		(3,632)
Carrying Value	$	116,666	$	116,368

Convertible notes, net	$	419,841	$	418,695

Revenue - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Revenue - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Disaggregation of Revenue [Line Items]
Typical payment receipt, period post shipment			30 days
Total net revenue	$ 34,377	$ 61,825	$ 73,170	$ 116,351
Training provided with sale of system, period			90 days
Minimum
Disaggregation of Revenue [Line Items]
Extended service contract term			1 year
Capitalized costs, expected period of benefit	2 years		2 years
Maximum
Disaggregation of Revenue [Line Items]
Extended service contract term			3 years
Capitalized costs, expected period of benefit	3 years		3 years
Japan
Disaggregation of Revenue [Line Items]
Total net revenue	$ 3,829	12,810	$ 11,427	25,718
Sales and marketing
Disaggregation of Revenue [Line Items]
Amortization expense	400	600	1,000	1,300
Other Assets
Disaggregation of Revenue [Line Items]
Capitalized contract costs	1,900		1,900		$ 2,400
Service
Disaggregation of Revenue [Line Items]
Total net revenue	6,020	5,650	$ 11,698	11,055
Service \| Minimum
Disaggregation of Revenue [Line Items]
Extended service contract term			1 year
Service \| Maximum
Disaggregation of Revenue [Line Items]
Extended service contract term			3 years
Skincare
Disaggregation of Revenue [Line Items]
Total net revenue	$ 0	$ 9,422	$ 4,200	$ 17,554
Skincare \| Japan
Disaggregation of Revenue [Line Items]
Sale of third-party product, warranty period			90 days
Transferred over Time \| Service
Disaggregation of Revenue [Line Items]
Revenue from performance obligations transferred to customers, percent	14.00%	9.00%	13.00%	9.00%

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Loss


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net loss used in calculating net loss per share, basic	$	(24,681)	$	(33,278)	$	(47,459)	$	(61,326)
Denominator:
Weighted average shares of common stock outstanding used in computing net loss per share, basic	20,091		19,858		20,041		19,819
Dilutive effect of incremental shares and share equivalents:
Convertible notes	—		—		—		—
Options	—		—		—		—
RSUs	—		—		—		—
PSUs	—		—		—		—
ESPP	—		—		—		—
Weighted average shares of common stock outstanding used in computing net loss per share, diluted	20,091		19,858		20,041		19,819
Net loss per share:
Net loss per share, basic	$	(1.23)	$	(1.68)	$	(2.37)	$	(3.09)
Net loss per share, diluted	$	(1.23)	$	(1.68)	$	(2.37)	$	(3.09)

Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Capped call	10,780	10,780	10,780	10,780
Convertible notes	8,697	8,697	8,697	8,697
Options	2,302	694	2,302	694
RSU's	527	489	527	489
PSU's	190	265	190	265
ESPP	—	45	—	45
Total	22,496	20,970	22,496	20,970

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Description of Operations and Principles of Consolidation Cutera, Inc. (“Cutera” or the “Company”) develops, manufactures, distributes, and markets energy-based product platforms for medical practitioners, enabling them to offer treatments to their customers. In addition, the Company distributes third-party manufactured skincare products, until the termination of distribution agreement in February 2024, and Secret PRO and Secret RF systems and consumables. The Company currently markets the following system platforms: AviClear, enlighten, excel HR, excel V/V+, truSculpt, Secret PRO, Secret DUO, Secret RF, xeo, and xeo+ — each of which enables medical practitioners to perform procedures including treatment for acne, body contouring, skin resurfacing and revitalization, hair and tattoo removal, removal of benign pigmented lesions, and vascular conditions. Several of the Company’s systems offer multiple hand pieces and applications, providing customers the flexibility to upgrade their systems. The sale of systems, hand pieces, upgrade of systems, and leasing and direct sales of AviClear devices (collectively “Systems” revenue); replacement hand pieces, truSculpt cycle refills, truFlex cycle refills, AviClear treatment fees, and single use disposable tips applicable to Secret systems (collectively “Consumables” revenue); and the distribution of third-party manufactured skincare products (“Skincare”) revenue are collectively classified as “Products” revenue. In addition to Products revenue, the Company generates revenue from the sale of post-warranty service contracts and service parts and labor for the repair and maintenance of products that are out of warranty, all of which are collectively classified as “Service” revenue. The Company’s corporate headquarters and U.S. operations are located in Brisbane, California, where the Company conducts manufacturing, warehousing, research and development, regulatory, sales and marketing, service, and administrative activities. The Company also maintains regional distribution centers (“RDCs”) in select locations across the U.S. These RDCs serve as forward warehousing for systems and service parts in various geographies. The Company markets, sells and services the Company’s products through direct sales and service employees in North America (including Canada), Australia, New Zealand, Austria, France, Germany, Hong Kong, Japan, Switzerland, the United Kingdom and the Republic of Ireland. Sales and services outside of these direct markets are made through a worldwide distributor network in over 38 countries. The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of intercompany transactions and balances. Liquidity and Management’s Plans When preparing financial statements, management has the responsibility to evaluate if the Company has adequate liquidity to continue to operate for at least the next twelve months. In performing this assessment, management considered the Company's current financial condition and liquidity sources, including current funds, forecasted future cash flows and unconditional obligations due over the next twelve months. In addition, management evaluated the history of the Company's financial performance, and determined that the Company has had a historic trend of operating losses, which continues to have an unfavorable impact on the Company's overall liquidity. Most recently, the Company reported net losses of $47.5 million for the six months ended June 30, 2024 and $162.8 million for the year ended December 31, 2023. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company’s continued operations will depend on several factors, including but not limited to, growth of revenues from its revised business model for AviClear, which entails transitioning from a lease model to a direct sales model, maintaining or increasing revenues from sales of legacy systems, consumables and services, achieving cost savings as a result of workforce reductions implemented in the fourth quarter of 2023 and implementing further cost savings initiatives, restructuring of supplier and manufacturing relationships, and initiatives to improve inventory and receivables management. Failure to increase revenue, achieve cost savings, raise additional financing or re-finance the existing convertible notes when they become due, would adversely affect the Company’s ability to achieve its intended business objectives. There can be no assurances that financing will be available on terms favorable to the Company, if at all, and delays may occur in completing the operating activities. Basis of Presentation In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements included in this report reflect all adjustments necessary for a fair statement of its condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023, and its condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of changes in stockholders' deficit, and condensed consolidated statements of cash flows, for the three and six months ended June 30, 2024, and 2023, respectively. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The results for interim periods are not necessarily indicative of results for the entire year or any other interim period. All intercompany accounts and transactions have been eliminated upon consolidation. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s previously filed audited financial statements and the related notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on May 10, 2024. Reclassification The Company reclassified the interest expense portion previously recorded in interest income (expense), net to other income (expense), net on the condensed consolidated statement of operations. Corresponding reclassifications of prior period amounts have been made in the Company's condensed consolidated statement of operations to conform to the current period presentation. These reclassifications had no effect on the reported net loss. Risks and Uncertainties The Company's future results of operations involve a number of risks and uncertainties. Factors that could affect the Company's future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company's products, stability of global financial markets, cybersecurity breaches and other disruptions that could compromise the Company’s information or results, business disruptions that are caused by natural disasters or pandemic events, management of international activities, competition from substitute products and larger companies, the Company's ability to obtain and maintain regulatory approvals, government regulations and oversight, patent and other types of litigation, the Company's ability to protect proprietary technology from counterfeit versions of the Company's products and its intellectual property rights generally, the successful execution of new product launches, the continuation of strategic relationships, such as the Company's distribution of third-party products, and dependence on key individuals. Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with the rules and regulations of the SEC applicable to interim financial statements. While these statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Company uses the same accounting policies in preparing quarterly and annual financial statements. Leases The Company incurred costs to fulfill its lease agreement obligations with its AviClear device lessees. These costs consisted of freight, installation, and training. In addition to these mobilization costs, the Company incurred commission costs associated with the placement of the AviClear device. The Company capitalized commission costs and made a policy election to capitalize the mobilization costs. The Company determined to cease new leases of the AviClear device in 2023 and, therefore the Company no longer capitalizes additional mobilization costs and commission costs related to placements of the AviClear device, which were recorded in other long-term assets on the Company's condensed consolidated balance sheets and were amortized over the expected lease term. The amortization of the remaining mobilization costs and amortization of deferred commission costs are recorded in cost of revenue and sales and marketing, respectively, in the Company's condensed consolidated statement of operations. Total capitalized mobilization costs were $1.1 million and $2.1 million as of June 30, 2024 and December 31, 2023, respectively. Total capitalized commissions as of June 30, 2024, and December 31, 2023, were $1.9 million and $2.7 million, respectively, and are included in other long-term assets on the Company’s condensed consolidated balance sheet. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenue and expenses during the reported periods. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its estimates, including those related to warranty obligations, sales commissions, allowance for credit losses, sales allowances, fair value of investments, valuation of inventories, fair value of goodwill, useful lives of property and equipment, impairment testing for long-lived assets, implicit and incremental borrowing rates related to the Company’s leases, variables used in calculating the fair value of the Company's equity awards, expected achievement of performance-based vesting criteria and management performance bonuses, assumptions used in operating and sales-type lease classifications, the standalone selling price of the Company's products and services, the period of benefit used to capitalize and amortize contract acquisition costs, variable considerations, contingent liabilities, recoverability of deferred tax assets, residual value of leased equipment, lease term and effective income tax rates. Management bases estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Distribution of Third-Party Products The Company generated revenue from the distribution of skincare products, which were manufactured by ZO Skin Health, Inc. (“ZO”), and sold in the Japanese market. In the three and six months ended June 30, 2024, revenue from the distribution of skincare products was nil and $4.2 million, respectively. In the six months ended June 30, 2023, revenue from the distribution of skincare products was $17.6 million, representing 15% of the Company’s consolidated revenue. On February 28, 2024, the Company and its Japanese subsidiary, Cutera KK, entered into a termination agreement (the “Termination Agreement”) with ZO USA and its Japanese subsidiary, ZO Skin Health GK (“ZO Japan” and together with ZO USA and their affiliates, “ZO”), which, among other things, (i) terminates all agreements related to the distribution by the Company of ZO’s products in Japan effective immediately, (ii) provides for the orderly transition of the distribution of ZO products to ZO, (iii) transfers certain Company employees dedicated to the distribution of ZO products to ZO, (iv) transfers certain customer contracts related to ZO products from the Company to ZO and (v) transfers certain inventory and assets related to the distribution of ZO products from the Company to ZO. The Termination Agreement requires ZO to pay the Company $5.75 million within three business days of the execution of the Termination Agreement and make a second payment of $5.75 million, less any offsets under the Termination Agreement (including, but not limited to, 42.2% of the Company’s net revenue for sales of ZO products under the Distribution Agreement between January 1, 2024 and February 28, 2024), upon the earlier of (a) the completion the transition of regulatory and distribution activities such that ZO is able to fulfill product orders by customers in Japan, as determined by ZO and the Company, and (b) June 14, 2024. The Company received the first payment of $5.75 million on February 29, 2024, and received a second payment of $2.37 million on April 1, 2024, which was net of $1.6 million in amounts owed by Cutera. In the three months ended March 31, 2024, the Company recorded a net gain of $9.7 million resulting from the early termination proceeds received and transfer of certain assets and liabilities as gain on early termination of distribution agreement on the Company's condensed consolidated statement of operations. The Company generates revenue from the distribution of the Secret systems, which are manufactured by ilooda Co. Ltd. (“ilooda”). The Company is the exclusive distributor for all systems sold in the United States, Canada, the United Kingdom; the exclusive distributor for certain systems in France, and Spain; and the non-exclusive distributor for systems sold in Austria and Germany. In the three months ended June 30, 2024, and June 30, 2023, revenue from the distribution of Secret products represented 7% and 2%, respectively, of the Company’s consolidated revenue. The Company‘s ilooda distribution agreement expires in June 30, 2026. Termination of Manufacturing Service Agreement In November 2023, the Company communicated its intention not to renew its existing manufacturing service agreement (“Manufacturing Service Agreement”) with Jabil Inc. (“Jabil”), a third-party manufacturing provider that manufactured excel V+ and AviClear devices for the Company. At the time of the communication of non-renewal, the Company concluded that it would have an obligation to purchase unshipped inventory from Jabil. The Company subsequently received claims from Jabil related to other amounts associated with the termination and entered into settlement discussions with Jabil. On February 28, 2024, the Company and Jabil signed a settlement agreement (“Settlement Agreement”) for the non-renewal of its existing Manufacturing Service Agreement. The Settlement Agreement provided for a payment by Cutera to Jabil of $19.5 million, to be offset by $1.3 million in amounts owed by Jabil. The $19.5 million payment to Jabil relates to the Company's receipt of $13.5 million of inventories, $0.3 million of equipment, and the payment of $5.7 million for expenses either previously incurred by Jabil or associated with the non-renewal of the Manufacturing Services Agreement. The Company recorded the net balance of the $19.5 million payment owed to Jabil and the $15.1 million aggregate of inventories, equipment, and other amounts owed to Cutera, in accrued liabilities on the consolidated balance sheet at December 31, 2023. The $5.7 million for expenses incurred by Jabil was recorded in cost of revenue on the consolidated statements of operations in the twelve months ended December 31, 2023. As of June 30, 2024, all amounts owed to Jabil have been paid and inventories have been received.

Cash, Cash Equivalents, Restricted Cash and Marketable Investments - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Abstract]
Cash, cash equivalents, and restricted cash	$ 84,311	$ 143,612	$ 181,354	$ 146,624
Marketable investments	0	0
Restricted cash	$ 1,196	$ 0

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three and six months ended June 30, 2024, the Company's income tax benefit for both periods was less than $0.1 million, compared to income tax expense of $0.3 million and $0.6 million respectively, for the three and six months ended June 30, 2023. The Company's income tax (benefit) expense for the six months ended June 30, 2024 and 2023 is due to income taxes in foreign jurisdictions. The Company continues to maintain a full valuation allowance on its U.S. deferred tax assets.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Segment Reporting - Narrative (Details)	3 Months Ended
Segment Reporting - Narrative (Details)	Dec. 31, 2023 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

Leases - Operating Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
AviClear operating lease license fee revenue
Disaggregation of Revenue [Line Items]
Operating lease income	$ 432	$ 1,367	$ 1,594	$ 2,592
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue
AviClear operating lease revenue
Disaggregation of Revenue [Line Items]
Operating lease income	715	3,236	$ 1,901	$ 5,939
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue
Total AviClear revenue
Disaggregation of Revenue [Line Items]
Operating lease income	$ 1,147	$ 4,603	$ 3,495	$ 8,531
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]			Total net revenue	Total net revenue

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Net Loss Per Share - Narrative (Details)	6 Months Ended
Net Loss Per Share - Narrative (Details)	Jun. 30, 2024 shares
Convertible Senior Notes Due 2026 \| Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Debt convertible to common shares (in shares)	8,696,792

Product Warranty - Summary of Warranties (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning Balance	$ 2,472	$ 3,154	$ 2,593	$ 3,254
Add: Accruals for warranties issued during the period	1,463	1,534	2,619	2,550
Less: Settlements made during the period	(925)	(1,584)	(2,202)	(2,700)
Ending Balance	$ 3,010	$ 3,104	$ 3,010	$ 3,104

Stockholders' Equity and Stock-based Compensation Expense (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Activity under the 2019 Plan

Activity under the Company's equity incentive plans is summarized as follows:



			Shares Available for Grant
Balance, December 31, 2023			3,554,537
Options and stock awards granted			(1,304,378)
Stock awards canceled / forfeited / expired			142,537
Options canceled / forfeited / expired			135,107
Balance, June 30, 2024			2,527,803


	Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Term (in Years)
Balance, December 31, 2023	1,282,240	$	17.97	8.21
Options granted	1,154,500	$	2.18
Options exercised	—	$	—
Options canceled / forfeited / expired	(135,107)	$	18.86
Balance, June 30, 2024	2,301,633	$	10.00	7.46


	Stock Awards Outstanding
	Number of Awards Outstanding	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2023	909,862	$	20.46
Stock awards granted	127,739	$	2.13
Awards vested	(188,072)	$	25.38
Stock awards canceled / forfeited / expired	(132,537)	$	22.16
Balance, June 30, 2024	716,992	$	15.66

Schedule of Stock-based Compensation Expense

Stock-based compensation expense by financial statement line item recognized during the six months ended June 30, 2024 and 2023 was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	144	$	361	$	293	$	725
Sales and marketing	404		1,283		970		2,431
Research and development	264		415		569		1,108
General and administrative	781		(509)		1,870		672
Total stock-based compensation expense	$	1,593	$	1,550	$	3,702	$	4,936

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net revenue:
Total net revenue	$ 34,377	$ 61,825	$ 73,170	$ 116,351
Cost of revenue:
Total cost of revenue	26,733	35,742	53,107	68,636
Gross profit	7,644	26,083	20,063	47,715
Operating expenses:
Sales and marketing	20,664	33,271	44,341	62,783
Research and development	4,463	5,784	9,464	12,252
General and administrative	4,321	18,191	17,202	30,444
Gain on early termination of distribution agreement	0	0	(9,708)	0
Total operating expenses	29,448	57,246	61,299	105,479
Loss from operations	(21,804)	(31,163)	(41,236)	(57,764)
Interest and other expense, net:
Amortization of debt issuance costs	(575)	(557)	(1,146)	(1,109)
Interest on convertible notes	(2,959)	(2,958)	(5,898)	(5,897)
Interest income	1,025	2,179	2,480	4,658
Other expense, net	(387)	(453)	(1,703)	(616)
Total interest and other expense, net	(2,896)	(1,789)	(6,267)	(2,964)
Loss before income taxes	(24,700)	(32,952)	(47,503)	(60,728)
Income tax (benefit) expense	(19)	326	(44)	598
Net loss	$ (24,681)	$ (33,278)	$ (47,459)	$ (61,326)
Net loss per share:
Basic (in USD per share)	$ (1.23)	$ (1.68)	$ (2.37)	$ (3.09)
Diluted (in USD per share)	$ (1.23)	$ (1.68)	$ (2.37)	$ (3.09)
Weighted-average number of shares used in per share calculation:
Basic (in shares)	20,091	19,858	20,041	19,819
Diluted (in shares)	20,091	19,858	20,041	19,819
Products
Net revenue:
Total net revenue	$ 28,357	$ 56,175	$ 61,472	$ 105,296
Cost of revenue:
Total cost of revenue	23,765	32,051	47,054	62,110
Service
Net revenue:
Total net revenue	6,020	5,650	11,698	11,055
Cost of revenue:
Total cost of revenue	$ 2,968	$ 3,691	$ 6,053	$ 6,526

Stockholders' Equity and Stock-based Compensation Expense - Narrative (Details)			6 Months Ended
	Jul. 15, 2024 shares	May 22, 2024 grant	Jun. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax withholding ratio			1.65
Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Modification of vesting targets, number of grants \| grant		3
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Modification of vesting targets, number of grants \| grant		1
2019 Plan \| Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional shares authorized (in shares) \| shares	2,395,273
2023 Plan \| Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares) \| shares	2,304,580

Debt - Narrative (Details)		1 Months Ended			3 Months Ended		6 Months Ended
Debt - Narrative (Details)	Jul. 09, 2020 USD ($)	Dec. 31, 2022 USD ($) $ / shares	May 31, 2022 USD ($) day $ / shares $ / item shares	Mar. 31, 2021 USD ($) day $ / shares $ / item	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) day	Dec. 31, 2023 USD ($)	Dec. 07, 2022 $ / shares	Jun. 01, 2022 USD ($)	May 04, 2022 $ / shares	Mar. 04, 2021 $ / shares
Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Convertible debt, conversion ratio							0.0301427
Cap price (in USD per per share) \| $ / item				45.535
Premium over stock price (percent)				75.00%
Stock price (in USD per share) \| $ / shares												$ 26.02
Capped-call transaction term, consecutive trading days \| day				40
Purchase of capped call				$ 16,100,000
Convertible Senior Notes Due 2026 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares				$ 33.18
Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Convertible debt, conversion ratio							0.018986
Cap price (in USD per per share) \| $ / item			82.62
Premium over stock price (percent)			100.00%
Stock price (in USD per share) \| $ / shares											$ 41.31
Capped-call transaction term, consecutive trading days \| day			40
Purchase of capped call			$ 32,000,000.0
Convertible Senior Notes Due 2028 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares			$ 52.67
Convertible Senior Notes Due 2029
Debt Instrument [Line Items]
Cap price (in USD per per share) \| $ / item			99.21
Premium over stock price (percent)			100.00%
Stock price (in USD per share) \| $ / shares									$ 49.66
Capped-call transaction term, consecutive trading days \| day			40
Purchase of capped call			$ 25,100,000
Convertible Senior Notes Due 2029 \| Common Stock
Debt Instrument [Line Items]
Conversion price (in dollars per share) \| $ / shares		$ 58.35
Loan and Security Agreement \| Silicon Valley Bank \| Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument term	4 years
Maximum borrowing capacity	$ 30,000,000.0
Convertible notes
Debt Instrument [Line Items]
Carrying amount					$ 419,841,000		$ 419,841,000	$ 418,695,000
Number of days to file annual report					15 days		15 days
Number of days, written notice					60 days		60 days
Percentage of note holders					0.25		0.25
Number of days with additional interest, after default					360 days		360 days
Interest expense					$ 3,500,000	$ 3,500,000
Convertible notes \| Convertible Senior Notes Due 2026
Debt Instrument [Line Items]
Notes issued				$ 138,300,000
Carrying amount of convertible debt				$ 69,100,000
Interest rate				2.25%	2.25%		2.25%
Proceeds from convertible notes, net of unamortized debt issuance costs				$ 133,600,000
Cash exchanged			45,800,000
Payment of accrued interest			300,000
Extinguishment of debt			$ 69,100,000
Shares issued in debt conversion (in shares) \| shares			1,354,348
Carrying amount					$ 68,280,000		$ 68,280,000	68,041,000		$ 69,100,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					50,000,000.0		$ 50,000,000.0
Incremental repurchase amount					1,000		$ 1,000
Effective interest rate during period							2.98%
Convertible notes \| Convertible Senior Notes Due 2026 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Redemption price, percentage							100.00%
Incremental repurchase amount					1,000		$ 1,000
Convertible notes \| Convertible Senior Notes Due 2026 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					23,300,000		$ 23,300,000
Convertible notes \| Convertible Senior Notes Due 2026, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Conversion threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2026, Second Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Incremental repurchase amount					$ 1,000		$ 1,000
Convertible notes \| Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Notes issued			$ 240,000,000
Interest rate			2.25%		2.25%		2.25%
Proceeds from convertible notes, net of unamortized debt issuance costs			$ 232,400,000
Additional principal			10,000,000
Carrying amount					$ 234,895,000		$ 234,895,000	234,286,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					100,000,000		$ 100,000,000
Incremental repurchase amount					1,000		$ 1,000
Effective interest rate during period							2.82%
Convertible notes \| Convertible Senior Notes Due 2028 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Redemption price, percentage							100.00%
Incremental repurchase amount					1,000		$ 1,000
Convertible notes \| Convertible Senior Notes Due 2028 \| Voce Capital Management LLC
Debt Instrument [Line Items]
Notes issued			$ 230,000,000
Convertible notes \| Convertible Senior Notes Due 2028 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					48,100,000		$ 48,100,000
Convertible notes \| Convertible Senior Notes Due 2028, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Redemption threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2028, Second Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Incremental repurchase amount					$ 1,000		$ 1,000
Convertible notes \| Convertible Senior Notes Due 2029
Debt Instrument [Line Items]
Notes issued		$ 120,000,000
Interest rate		4.00%			4.00%		4.00%
Proceeds from convertible notes, net of unamortized debt issuance costs		$ 115,800,000
Convertible debt, conversion ratio							0.0171378
Carrying amount					$ 116,666,000		$ 116,666,000	$ 116,368,000
Redemption threshold percentage of stock price trigger							130.00%
Redemption threshold trading days \| day							20
Redemption threshold consecutive trading days \| day							30
Redemption price, percentage							100.00%
Required outstanding amount not subject to redemption					100,000,000		$ 100,000,000
Incremental repurchase amount					1,000		$ 1,000
Effective interest rate during period							4.63%
Convertible notes \| Convertible Senior Notes Due 2029 \| Occurrence of Fundamental Change
Debt Instrument [Line Items]
Redemption price, percentage							100.00%
Incremental repurchase amount					1,000		$ 1,000
Convertible notes \| Convertible Senior Notes Due 2029 \| Level 2
Debt Instrument [Line Items]
Convertible debt at fair value					$ 22,000,000		$ 22,000,000
Convertible notes \| Convertible Senior Notes Due 2029, First Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							20
Threshold consecutive trading days \| day							30
Conversion threshold percentage of stock price trigger							130.00%
Convertible notes \| Convertible Senior Notes Due 2029, Second Conversion Trigger
Debt Instrument [Line Items]
Conversion threshold trading days \| day							5
Threshold consecutive trading days \| day							5
Conversion threshold percentage of stock price trigger							98.00%
Convertible notes \| Convertible Senior Notes, Additional Interest, Up To 180 Days
Debt Instrument [Line Items]
Interest rate					0.25%		0.25%
Convertible notes \| Convertible Senior Notes, Additional Interest, 181 Days - 360 Days
Debt Instrument [Line Items]
Interest rate					0.50%		0.50%

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Assets
Right-of-use assets	$ 11,388	$ 10,055
Finance lease	$ 1,309	$ 2,516
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property and equipment, net	Property and equipment, net
Total leased assets	$ 12,697	$ 12,571
Operating lease liabilities
Operating lease liabilities, current	3,382	2,441
Operating lease liabilities, non-current	9,223	8,887
Total Operating lease liabilities	12,605	11,328
Finance lease liabilities
Finance lease liabilities, current	$ 714	$ 825
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Finance lease liabilities, non-current	$ 723	$ 1,064
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other long-term liabilities	Other long-term liabilities
Total Finance lease liabilities	$ 1,437	$ 1,889

Net Loss Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	22,496	20,970	22,496	20,970
Capped call
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	10,780	10,780	10,780	10,780
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	8,697	8,697	8,697	8,697
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	2,302	694	2,302	694
RSU's
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	527	489	527	489
PSU's
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	190	265	190	265
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	0	45	0	45