Discontinued Operations and Disposal Groups

12 Months Ended

Feb. 28, 2025

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

DISCONTINUED OPERATIONS

On December 15, 2024 the Company entered into an Equity and Asset Purchase Agreement (the “Equity and Asset Purchase Agreement”) with Arctic Wolf Networks, Inc. (“Arctic Wolf”) whereby Arctic Wolf would acquire the Company’s Cylance endpoint security assets and related liabilities.

On February 3, 2025, the Company completed the sale of Cylance endpoint security assets and related liabilities to Arctic Wolf for $160.0 million of cash, subject to certain adjustments of approximately $39.1 million, and 5.5 million common shares of Arctic Wolf, pursuant to the equity and asset purchase agreement. The proceeds at closing were a combination of $79.8 million in net cash after purchase price adjustments, and equity in Arctic Wolf with an estimated fair value of $24.6 million. The Company’s determination of the fair value of the common shares of Arctic Wolf required the use of significant unobservable inputs relating to the current and future operations of Arctic Wolf, and as a result, the non-marketable equity investment was classified as Level 3. The Equity and Asset Purchase Agreement requires a subsequent cash payment to the Company of approximately $41.1 million one year following the closing. This deferred consideration has been initially recorded at fair value at the date of close, and included as “Other Receivables” in the Consolidated Balance Sheets. In connection with the sale, the Company recognized a gain on disposal of discontinued operation before taxes of 10.4 million.

Assets Held for Sale

The following table sets forth the aggregate carrying amounts of assets and liabilities classified as held for sale relating to the discontinued operation of Cylance as of February 29, 2024:

	For the Year Ended
	February 29, 2024
Assets
Other current assets	11.6
Total currents assets of discontinued operations	11.6
Other long-term assets	2.3
Operating lease right-of-use assets, net	0.5
Intangible assets, net	96.8
Goodwill	87.0
Total long-term assets of discontinued operations	186.6
Liabilities
Accounts payable	0.1
Accrued liabilities	3.7
Deferred revenue, current	45.5
Total current liabilities of discontinued operations	49.3
Deferred revenue, non-current	13.3
Total long-term liabilities of discontinued operations	13.3

The financial results of Cylance are presented as “loss from discontinued operations, net of tax” in the Consolidated Statements of Operations and have been removed from the presentation of results from continuing operations. The following table represents the financial results of Cylance for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

	For the Years Ended
	February 28, 2025		February 29, 2024		February 28, 2023
Revenue	$	71.2	$	93.6	$	129.6
Cost of sales	42.8		55.7		67.6
Gross margin	28.4		37.9		62.0
Operating expenses
Research and development	30.4		46.0		60.2
Sales and marketing	42.5		59.9		65.8
General and administrative	15.7		21.7		22.4
Amortization	20.5		27.2		68.2
Impairment of long-lived assets	—		—		231.0
Impairment of goodwill	—		18.9		133.3
Gain on disposal of discontinued operation	(10.4)		—		—
	98.7		173.7		580.9
Operating loss	(70.3)		(135.8)		(518.9)
Provision for income taxes	0.2		—		—
Net loss from discontinued operations, net of tax	$	(70.5)	$	(135.8)	$	(518.9)
Basic loss per share from discontinued operations	$	(0.12)	$	(0.23)	$	(0.90)
Diluted loss per share from discontinued operations	$	(0.12)	$	(0.23)	$	(0.81)

The following table represents the amortization, stock-based compensation (representing the significant non-cash operating item) and acquisition of property, plant and equipment of the discontinued operations for the years ended February 28, 2025, February 29, 2024 and February 28, 2023:

	For the Years Ended
	February 28, 2025		February 29, 2024		February 28, 2023
Amortization	$	20.5	$	27.2	$	68.2
Stock based compensation	$	5.0	$	4.3	$	3.7
Acquisition of property, plant and equipment	$	—	$	—	$	—