SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

The Company’s typical performance obligations are:



Performance Obligation	How Standalone Selling Price is Typically Determined	When Performance Obligation is Typically Satisfied	When Payment is Typically Due
Perpetual license	Residual approach	Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time)	Effective date of the license
Term license	Residual approach	Upon transfer of control to the client, defined when the client can use and benefit from the license (point in time)	Annually, or more frequently, over the term of the license
Maintenance	Consistent pricing relationship as a percentage of the related license and observable in stand-alone renewal transactions ⁽¹⁾	Ratably over the term of the maintenance (over time)	Annually, or more frequently, over the term of maintenance
Consulting - time and materials	Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes	Based on hours incurred to date	Monthly
Consulting - fixed price	Observable hourly rate for time and materials-based services in similar geographies for similar contract sizes multiplied by estimated hours for the project	Based on hours incurred as a percentage of total estimated hours	As contract milestones are achieved
Cloud	Residual approach	Ratably over the term of the service (over time)	Annually, or more frequently, over the term of the service

⁽¹⁾ Technical support and software updates are considered distinct services but accounted for as a single performance obligation, as they have the same pattern of transfer to the client.

Revenue for the remaining performance obligations on existing contracts is expected to be recognized as follows:



	December 31, 2018
(Dollars in thousands)	Perpetual license		Term license		Maintenance		Cloud		Consulting		Total
1 year or less	$	14,665	$	72,378	$	192,274	$	103,354	$	17,235	$	399,906	63	%
1-2 years	2,343		10,355		10,436		80,214		2,810		106,158		17	%
2-3 years	1,661		1,414		3,644		61,906		940		69,565		11	%
Greater than 3 years	—		233		1,560		53,343		208		55,344		9	%
	$	18,669	$	84,380	$	207,914	$	298,817	$	21,193	$	630,973	100	%

Schedule of the Impact of New Accounting Standards and Accounting Standards Not Yet Adopted

The impact of the adoption of ASC 606 and ASC 340-40 on the Company’s consolidated balance sheet and consolidated statement of operations is:



	December 31, 2017
(in thousands)	Previously Reported			Adjustments			As Adjusted
Assets
Accounts receivable, unbilled receivables, and contract assets	$	248,331		$	135,402		$	383,733
Long-term unbilled receivables	—			160,708			160,708
Deferred income taxes	57,127			(42,887		)	14,240
Deferred contract costs	—			37,924			37,924
Other assets ⁽¹⁾	416,148			—			416,148
Total assets	$	721,606		$	291,147		$	1,012,753
Liabilities and stockholders’ equity
Deferred revenue	$	195,073		$	(29,223	)	$	165,850
Long-term deferred revenue	6,591			(2,885		)	3,706
Deferred income tax liabilities	—			38,463			38,463
Other liabilities ⁽²⁾	148,864			—			148,864
Total liabilities	350,528			6,355			356,883
Foreign currency translation adjustments	(3,494		)	(2,979		)	(6,473		)
Retained earnings	221,926			287,771			509,697
Other equity ⁽³⁾	152,646			—			152,646
Total stockholders’ equity	371,078			284,792			655,870
Total liabilities and stockholders’ equity	$	721,606		$	291,147		$	1,012,753

⁽¹⁾ Includes cash, cash equivalents, marketable securities, income taxes receivable, other current assets, property and equipment, intangible assets, goodwill, and other long-term assets (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017).

⁽²⁾ Includes accounts payable, accrued expenses, accrued compensation, and related expenses, income taxes payable, and other long-term liabilities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017).

⁽³⁾Includes common stock, additional paid-in capital, and net unrealized loss on available-for-sale marketable securities (as reflected in the consolidated balance sheets in the Annual Report on Form 10-K for the year ended December 31, 2017).



	2017									2016
(in thousands, except per share amounts)	Previously Reported			Adjustments			As Adjusted			Previously Reported			Adjustments			As Adjusted
Revenue:
Software license	$	288,334		$	50,960		$	339,294		$	279,995		$	17,289		$	297,284
Maintenance	244,347			(2,027		)	242,320			220,336			(1,701		)	218,635
Services	307,901			(1,048		)	306,853			249,935			(3,625		)	246,310
Total revenue	840,582			47,885			888,467			750,266			11,963			762,229
Cost of revenue:
Software license	5,085			—			5,085			4,943			—			4,943
Maintenance	27,905			—			27,905			25,505			—			25,505
Services	246,683			—			246,683			208,808			—			208,808
Total cost of revenue	279,673			—			279,673			239,256			—			239,256
Gross profit	560,909			47,885			608,794			511,010			11,963			522,973
Operating expenses:
Selling and marketing	307,210			(6,632		)	300,578			278,849			(922		)	277,927
Research and development	162,886			—			162,886			145,548			—			145,548
General and administrative	52,153			—			52,153			45,951			—			45,951
Acquisition-related	—			—			—			2,903			—			2,903
Total operating expenses	522,249			(6,632		)	515,617			473,251			(922		)	472,329
Income from operations	38,660			54,517			93,177			37,759			12,885			50,644
Foreign currency transaction (loss) gain	(900		)	(5,513		)	(6,413		)	2,247			7,113			9,360
Interest income, net	731			131			862			776			135			911
Other expense, net	(1,391		)	—			(1,391		)	(5,580		)	—			(5,580		)
Income before provision (benefit) for income taxes	37,100			49,135			86,235			35,202			20,133			55,335
Provision (benefit) for income taxes	4,166			(16,479		)	(12,313		)	8,216			2,104			10,320
Net income	$	32,934		$	65,614		$	98,548		$	26,986		$	18,029		$	45,015
Earnings per share:
Basic	$	0.43					$	1.27		$	0.35					$	0.59
Diluted	$	0.40					$	1.19		$	0.34					$	0.56
Weighted-average number of common shares outstanding:
Basic	77,431						77,431			76,343						76,343
Diluted	82,832						82,832			79,732						79,732

Accounting standards not yet adopted



Standard	Description	Effective Date
ASU No. 2016-02, “Leases (Topic 842)”	This standard requires lessees to record most leases on their balance sheets. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either: (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company implemented a new lease management system, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operation. The Company will use the effective date as the date of initial application. As part of adoption the Company does not expect to utilize the hindsight practical expedient but does expect to utilize the package of transition practical expedients available under the standard to not: 1. Reassess whether any expired or existing contracts are or contain leases. 2. Reassess the lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in accordance with Topic 840 will be classified as operating leases, and all existing leases that were classified as capital leases in accordance with Topic 840 will be classified as finance leases). 3. Reassess initial direct costs for any existing leases. On adoption, the Company expects to recognize additional operating liabilities for the Company’s existing operating leases, principally composed of office leases, that are currently not recognized on the Company’s consolidated balance sheets with a corresponding right of use assets based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The Company does not expect a material impact to its results of operations from adoption.	January 1, 2019
ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	This standard requires the measurement and recognition of expected credit losses for financial assets measured at amortized cost, including trade accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model for credit losses. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of “other-than-temporary” impairments. The Company is currently evaluating the effect this ASU will have on its consolidated financial statements and related disclosures.	January 1, 2020 ⁽¹⁾

⁽¹⁾ Early adoption is permitted