QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered: | ||||||
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | Defaults Upon Senior Securities | |||||||
Item 4. | Mine Safety Disclosures | |||||||
Item 5. | Other Information | |||||||
Item 6. | ||||||||
September 30, 2020 | March 31, 2020 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $ | |||||||||||
Inventories and deferred costs | |||||||||||
Prepaid income taxes | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Fixed assets, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Long-term marketable securities | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation | |||||||||||
Accrued other | |||||||||||
Income taxes payable | |||||||||||
Deferred revenue and customer deposits | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Total current liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Deferred tax liability | |||||||||||
Accrued long-term retirement benefits | |||||||||||
Long-term deferred revenue and customer deposits | |||||||||||
Operating lease liabilities, net of current portion | |||||||||||
Long-term debt | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock at cost, | ( | ( | |||||||||
Retained earnings | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Product | $ | $ | $ | $ | |||||||||||||||||||
Service | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Product | |||||||||||||||||||||||
Service | |||||||||||||||||||||||
Total cost of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Amortization of acquired intangible assets | |||||||||||||||||||||||
Restructuring charges | ( | ||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income (loss) from operations | ( | ( | ( | ||||||||||||||||||||
Interest and other expense, net: | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
Total interest and other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income tax expense | ( | ( | ( | ||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Basic net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average common shares outstanding used in computing: | |||||||||||||||||||||||
Net loss per share - basic | |||||||||||||||||||||||
Net loss per share - diluted |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Cumulative translation adjustments | ( | ( | |||||||||||||||||||||
Changes in market value of investments: | |||||||||||||||||||||||
Changes in unrealized (losses) gains, net of (benefit) taxes of ($ | ( | ( | |||||||||||||||||||||
Total net change in market value of investments | ( | ( | |||||||||||||||||||||
Changes in market value of derivatives: | |||||||||||||||||||||||
Changes in market value of derivatives, net of taxes (benefit) of $ | ( | ( | |||||||||||||||||||||
Reclassification adjustment for net gains included in net loss, net of (benefit) taxes of ($ | ( | ( | |||||||||||||||||||||
Total net change in market value of derivatives | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Voting | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Stated Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net investment losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net gains on derivative financial instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to vesting of restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense for restricted stock units granted to employees | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ |
Six Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Voting | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Stated Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net investment losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net gains on derivative financial instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustments | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to vesting of restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense for restricted stock units granted to employees | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ |
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Voting | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Stated Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net investment gains | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized net gains on derivative financial instruments | |||||||||||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustments | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to vesting of restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense for restricted stock units granted to employees | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Six Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Voting | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Retained Earnings | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Stated Value | ||||||||||||||||||||||||||||||||||||||||||||
Balance, March 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Unrealized net investment gains | |||||||||||||||||||||||||||||||||||||||||||||||
Unrealized net losses on derivative financial instruments | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustments | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock pursuant to vesting of restricted stock units | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense for restricted stock units granted to employees | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of treasury stock | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ |
Six Months Ended | |||||||||||
September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to cash provided by operating activities, net of the effects of acquisitions: | |||||||||||
Depreciation and amortization | |||||||||||
Operating lease right-of-use assets | |||||||||||
Loss on disposal of fixed assets | |||||||||||
Share-based compensation expense | |||||||||||
Net change in fair value of contingent and contractual liabilities | |||||||||||
Accretion of contingent consideration | ( | ||||||||||
Deferred income taxes | ( | ( | |||||||||
Other gains | ( | ||||||||||
Changes in assets and liabilities | |||||||||||
Accounts receivable and unbilled costs | |||||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued compensation and other expenses | ( | ||||||||||
Operating lease liabilities | ( | ( | |||||||||
Income taxes payable | ( | ( | |||||||||
Deferred revenue | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of marketable securities | ( | ( | |||||||||
Proceeds from sales and maturity of marketable securities | |||||||||||
Purchase of fixed assets | ( | ( | |||||||||
Purchase of intangible assets | ( | ||||||||||
Decrease (increase) in deposits | ( | ||||||||||
Acquisition of businesses | ( | ||||||||||
Net cash provided by investing activities | |||||||||||
Cash flows from financing activities: | |||||||||||
Issuance of common stock under stock plans | |||||||||||
Payment of contingent consideration | ( | ||||||||||
Repayment of long-term debt | ( | ||||||||||
Treasury stock repurchases | ( | ||||||||||
Tax withholding on restricted stock units | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||
Cash and cash equivalents and restricted cash, beginning of period | |||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosures: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Non-cash transactions: | |||||||||||
Transfers of inventory to fixed assets | $ | $ | |||||||||
Additions to property, plant and equipment included in accounts payable | $ | $ | |||||||||
Issuance of common stock under employee stock plans | $ | $ | |||||||||
Contingent consideration related to acquisition, included in accrued other | $ | $ | |||||||||
Balance at March 31, 2020 | $ | ||||
Provision for allowance for doubtful accounts | |||||
Recoveries and other adjustments | ( | ||||
Write off charged against the allowance for doubtful accounts | ( | ||||
Balance at September 30, 2020 | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cost of product revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of service revenue | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
$ | $ | $ | $ |
September 30, 2020 | March 31, 2020 | September 30, 2019 | March 31, 2019 | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Restricted cash | |||||||||||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | $ | $ |
Amortized Cost | Unrealized Gains | Fair Value | |||||||||||||||
Type of security: | |||||||||||||||||
U.S. government and municipal obligations | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate bonds | |||||||||||||||||
Total short-term marketable securities | |||||||||||||||||
Total long-term marketable securities | |||||||||||||||||
Total marketable securities | $ | $ | $ |
Amortized Cost | Unrealized Gains | Fair Value | |||||||||||||||
Type of security: | |||||||||||||||||
U.S. government and municipal obligations | $ | $ | $ | ||||||||||||||
Commercial paper | |||||||||||||||||
Corporate bonds | |||||||||||||||||
Total short-term marketable securities | |||||||||||||||||
U.S. government and municipal obligations | |||||||||||||||||
Total long-term marketable securities | |||||||||||||||||
Total marketable securities | $ | $ | $ |
September 30, 2020 | March 31, 2020 | ||||||||||
Available-for-sale securities: | |||||||||||
Due in 1 year or less | $ | $ | |||||||||
Due after 1 year through 5 years | |||||||||||
$ | $ |
Fair Value Measurements at | |||||||||||||||||||||||
September 30, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
U.S. government and municipal obligations | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Derivative financial instruments | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Contingent purchase consideration | $ | $ | $ | ( | $ | ( | |||||||||||||||||
$ | $ | $ | ( | $ | ( |
Fair Value Measurements at | |||||||||||||||||||||||
March 31, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
U.S. government and municipal obligations | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Contingent purchase consideration | $ | $ | $ | ( | $ | ( | |||||||||||||||||
Derivative financial instruments | ( | ( | |||||||||||||||||||||
$ | $ | ( | $ | ( | $ | ( |
Contingent Purchase Consideration | |||||
Balance at March 31, 2020 | $ | ( | |||
Payments made | |||||
Balance at September 30, 2020 | $ | ( |
September 30, 2020 | March 31, 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Deferred costs | |||||||||||
$ | $ |
Balance at March 31, 2020 | $ | ||||
Foreign currency translation impact | ( | ||||
Balance at September 30, 2020 | $ |
Cost | Accumulated Amortization | Net | |||||||||||||||
Developed technology | $ | $ | ( | $ | |||||||||||||
Customer relationships | ( | ||||||||||||||||
Distributor relationships and technology licenses | ( | ||||||||||||||||
Definite-lived trademark and trade name | ( | ||||||||||||||||
Core technology | ( | ||||||||||||||||
Net beneficial leases | ( | ||||||||||||||||
Non-compete agreements | ( | ||||||||||||||||
Leasehold interest | ( | ||||||||||||||||
Backlog | ( | ||||||||||||||||
Capitalized software | ( | ||||||||||||||||
Other | ( | ||||||||||||||||
$ | $ | ( | $ |
Cost | Accumulated Amortization | Net | |||||||||||||||
Developed technology | $ | $ | ( | $ | |||||||||||||
Customer relationships | ( | ||||||||||||||||
Distributor relationships and technology licenses | ( | ||||||||||||||||
Definite-lived trademark and trade name | ( | ||||||||||||||||
Core technology | ( | ||||||||||||||||
Net beneficial leases | ( | ||||||||||||||||
Non-compete agreements | ( | ||||||||||||||||
Leasehold interest | ( | ||||||||||||||||
Backlog | ( | ||||||||||||||||
Capitalized software | ( | ||||||||||||||||
Other | ( | ||||||||||||||||
$ | $ | ( | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Amortization of intangible assets included as: | |||||||||||||||||||||||
Cost of product revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating expense | |||||||||||||||||||||||
$ | $ | $ | $ |
2021 (remaining six months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
$ |
Notional Amounts (a) | Prepaid Expenses and Other Current Assets | Accrued Other | |||||||||||||||||||||||||||||||||
September 30, 2020 | March 31, 2020 | September 30, 2020 | March 31, 2020 | September 30, 2020 | March 31, 2020 | ||||||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||
Forward contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments: | |||||||||||||||||||||||||||||||||||
Forward contracts | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
Gain (Loss) Recognized in OCI on Derivative (a) | Gain (Loss) Reclassified from Accumulated OCI into Income (b) | ||||||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | Location | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||||
Forward contracts | $ | $ | ( | Research and development | $ | ( | $ | ( | |||||||||||||||||||||
Sales and marketing | ( | ||||||||||||||||||||||||||||
$ | $ | ( | $ | ( | $ |
Gain Recognized in Income (a) | |||||||||||||||||
Location | September 30, 2020 | September 30, 2019 | |||||||||||||||
Forward contracts | General and administrative | $ | $ | ||||||||||||||
$ | $ |
Gain (Loss) Recognized in OCI on Derivative (a) | Gain (Loss) Reclassified from Accumulated OCI into Income (b) | ||||||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | Location | September 30, 2020 | September 30, 2019 | |||||||||||||||||||||||||
Forward contracts | $ | $ | ( | Research and development | $ | ( | $ | ( | |||||||||||||||||||||
Sales and marketing | ( | ||||||||||||||||||||||||||||
$ | $ | ( | $ | ( | $ |
Gain Recognized in Income (a) | |||||||||||||||||
Location | September 30, 2020 | September 30, 2019 | |||||||||||||||
Forward contracts | General and administrative | $ | $ | ||||||||||||||
$ | $ |
Q2FY20 Plan | Q4FY20 Plan | ||||||||||||||||
Employee-Related | Employee-Related | Total | |||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ||||||||||||||
Restructuring charges to operations | |||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Other adjustments | |||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Lease cost under long-term operating leases | $ | $ | $ | $ | |||||||||||||||||||
Lease cost under short-term operating leases | |||||||||||||||||||||||
Variable lease cost under short-term and long-term operating leases | |||||||||||||||||||||||
Total operating lease cost | $ | $ | $ | $ |
September 30, 2020 | September 30, 2019 | ||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ |
September 30, 2020 | March 31, 2020 | ||||||||||
Weighted average remaining lease term in years - operating leases | |||||||||||
Weighted average discount rate - operating leases | % | % |
Year ending March 31: | |||||
2021 (remaining six months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less imputed interest | ( | ||||
Present value of lease liabilities | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Net periodic pension cost | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Denominator for basic net loss per share - weighted average common shares outstanding | |||||||||||||||||||||||
Dilutive common equivalent shares: | |||||||||||||||||||||||
Weighted average restricted stock units | |||||||||||||||||||||||
Denominator for diluted net loss per share - weighted average shares outstanding | |||||||||||||||||||||||
Net loss per share: | |||||||||||||||||||||||
Basic net loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted net loss per share | ( | ( | ( | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Restricted stock units |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Europe | |||||||||||||||||||||||
Asia | |||||||||||||||||||||||
Rest of the world | |||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
GAAP revenue | $ | 205,339 | $ | 216,421 | $ | 389,154 | $ | 402,445 | |||||||||||||||
Service deferred revenue fair value adjustment | 1 | 48 | 3 | 96 | |||||||||||||||||||
Non-GAAP revenue | $ | 205,340 | $ | 216,469 | $ | 389,157 | $ | 402,541 | |||||||||||||||
GAAP gross profit | $ | 146,439 | $ | 157,289 | $ | 277,274 | $ | 288,570 | |||||||||||||||
Service deferred revenue fair value adjustment | 1 | 48 | 3 | 96 | |||||||||||||||||||
Share-based compensation expense | 2,154 | 2,187 | 3,749 | 3,921 | |||||||||||||||||||
Amortization of acquired intangible assets | 4,765 | 6,225 | 9,500 | 12,455 | |||||||||||||||||||
Acquisition related depreciation expense | 5 | 6 | 11 | 19 | |||||||||||||||||||
Non-GAAP gross profit | $ | 153,364 | $ | 165,755 | $ | 290,537 | $ | 305,061 | |||||||||||||||
GAAP income (loss) from operations | $ | 3,779 | $ | (7,295) | $ | (10,708) | $ | (31,743) | |||||||||||||||
Service deferred revenue fair value adjustment | 1 | 48 | 3 | 96 | |||||||||||||||||||
Share-based compensation expense | 15,736 | 15,857 | 27,832 | 28,600 | |||||||||||||||||||
Amortization of acquired intangible assets | 20,128 | 22,357 | 40,124 | 44,730 | |||||||||||||||||||
Business development and integration expense | — | 39 | 16 | 18 | |||||||||||||||||||
New standard implementation expense | — | — | — | 9 | |||||||||||||||||||
Compensation for post-combination services | 63 | 135 | 127 | 328 | |||||||||||||||||||
Restructuring charges | (31) | 150 | 62 | 273 | |||||||||||||||||||
Acquisition related depreciation expense | 60 | 69 | 121 | 190 | |||||||||||||||||||
Transitional service agreement income | 101 | 275 | 101 | 1,184 | |||||||||||||||||||
Legal judgments expense | — | — | 2,804 | — | |||||||||||||||||||
Non-GAAP income from operations | $ | 39,837 | $ | 31,635 | $ | 60,482 | $ | 43,685 | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
GAAP net loss | $ | (3,686) | $ | (17,472) | $ | (21,106) | $ | (46,815) | |||||||||||||||
Service deferred revenue fair value adjustment | 1 | 48 | 3 | 96 | |||||||||||||||||||
Share-based compensation expense | 15,736 | 15,857 | 27,832 | 28,600 | |||||||||||||||||||
Amortization of acquired intangible assets | 20,128 | 22,357 | 40,124 | 44,730 | |||||||||||||||||||
Business development and integration expense | — | 39 | 16 | 18 | |||||||||||||||||||
New standard implementation expense | — | — | — | 9 | |||||||||||||||||||
Compensation for post-combination services | 63 | 135 | 127 | 328 | |||||||||||||||||||
Restructuring charges | (31) | 150 | 62 | 273 | |||||||||||||||||||
Acquisition-related depreciation expense | 60 | 69 | 121 | 190 | |||||||||||||||||||
Change in contingent consideration | — | (6) | — | 517 | |||||||||||||||||||
Legal judgments expense | — | — | 2,804 | — | |||||||||||||||||||
Income tax adjustments | (4,027) | 181 | (9,523) | (994) | |||||||||||||||||||
Non-GAAP net income | $ | 28,244 | $ | 21,358 | $ | 40,460 | $ | 26,952 | |||||||||||||||
GAAP diluted net loss per share | $ | (0.05) | $ | (0.23) | $ | (0.29) | $ | (0.61) | |||||||||||||||
Per share impact of non-GAAP adjustments identified above | 0.43 | 0.51 | 0.84 | 0.96 | |||||||||||||||||||
Non-GAAP diluted net income per share | $ | 0.38 | $ | 0.28 | $ | 0.55 | $ | 0.35 | |||||||||||||||
GAAP income (loss) from operations | $ | 3,779 | $ | (7,295) | $ | (10,708) | $ | (31,743) | |||||||||||||||
Previous adjustments to determine non-GAAP income from operations | 36,058 | 38,930 | 71,190 | 75,428 | |||||||||||||||||||
Non-GAAP income from operations | 39,837 | 31,635 | 60,482 | 43,685 | |||||||||||||||||||
Depreciation excluding acquisition related | 6,955 | 6,905 | 12,907 | 13,746 | |||||||||||||||||||
Non-GAAP EBITDA from operations | $ | 46,792 | $ | 38,540 | $ | 73,389 | $ | 57,431 |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Product | $ | 91,979 | 45 | % | $ | 102,775 | 47 | % | $ | (10,796) | (11) | % | |||||||||||||||||||||||
Service | 113,360 | 55 | 113,646 | 53 | (286) | — | % | ||||||||||||||||||||||||||||
Total revenue | $ | 205,339 | 100 | % | $ | 216,421 | 100 | % | $ | (11,082) | (5) | % |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
United States | $ | 120,027 | 58 | % | $ | 139,544 | 64 | % | $ | (19,517) | (14) | % | |||||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||||||
Europe | 37,990 | 19 | 33,901 | 16 | 4,089 | 12 | % | ||||||||||||||||||||||||||||
Asia | 13,878 | 7 | 13,138 | 6 | 740 | 6 | % | ||||||||||||||||||||||||||||
Rest of the world | 33,444 | 16 | 29,838 | 14 | 3,606 | 12 | % | ||||||||||||||||||||||||||||
Subtotal international | 85,312 | 42 | 76,877 | 36 | 8,435 | 11 | % | ||||||||||||||||||||||||||||
Total revenue | $ | 205,339 | 100 | % | $ | 216,421 | 100 | % | $ | (11,082) | (5) | % |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||||||||||||||
Product | $ | 26,977 | 13 | % | $ | 29,368 | 14 | % | $ | (2,391) | (8) | % | |||||||||||||||||||||||
Service | 31,923 | 16 | 29,764 | 14 | 2,159 | 7 | % | ||||||||||||||||||||||||||||
Total cost of revenue | $ | 58,900 | 29 | % | $ | 59,132 | 28 | % | $ | (232) | — | % | |||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
Product $ | $ | 65,002 | 32 | % | $ | 73,407 | 34 | % | $ | (8,405) | (11) | % | |||||||||||||||||||||||
Product gross profit % | 71 | % | 71 | % | |||||||||||||||||||||||||||||||
Service $ | $ | 81,437 | 40 | % | $ | 83,882 | 39 | % | $ | (2,445) | (3) | % | |||||||||||||||||||||||
Service gross profit % | 72 | % | 74 | % | |||||||||||||||||||||||||||||||
Total gross profit $ | $ | 146,439 | $ | 157,289 | $ | (10,850) | (7) | % | |||||||||||||||||||||||||||
Total gross profit % | 71 | % | 73 | % |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Research and development | $ | 46,455 | 23 | % | $ | 50,058 | 23 | % | $ | (3,603) | (7) | % | |||||||||||||||||||||||
Sales and marketing | 60,300 | 29 | 73,067 | 34 | (12,767) | (17) | |||||||||||||||||||||||||||||
General and administrative | 20,573 | 10 | 25,177 | 12 | (4,604) | (18) | |||||||||||||||||||||||||||||
Amortization of acquired intangible assets | 15,363 | 7 | 16,132 | 7 | (769) | (5) | |||||||||||||||||||||||||||||
Restructuring charges | (31) | — | 150 | — | (181) | (121) | |||||||||||||||||||||||||||||
Total operating expenses | $ | 142,660 | 69 | % | $ | 164,584 | 76 | % | $ | (21,924) | (13) | % |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Interest and other expense, net | $ | (3,394) | (2) | % | $ | (3,616) | (2) | % | $ | 222 | 6 | % |
Three Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Income tax expense | $ | 4,071 | 2 | % | $ | 6,561 | 3 | % | $ | (2,490) | (38) | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Product | $ | 163,672 | 42 | % | $ | 178,494 | 44 | % | $ | (14,822) | (8) | % | |||||||||||||||||||||||
Service | 225,482 | 58 | % | 223,951 | 56 | % | 1,531 | 1 | % | ||||||||||||||||||||||||||
Total revenue | $ | 389,154 | 100 | % | $ | 402,445 | 100 | % | $ | (13,291) | (3) | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
United States | $ | 227,350 | 58 | % | $ | 246,647 | 61 | % | $ | (19,297) | (8) | % | |||||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||||||
Europe | 72,748 | 19 | 65,210 | 16 | 7,538 | 12 | % | ||||||||||||||||||||||||||||
Asia | 27,574 | 7 | 25,690 | 7 | 1,884 | 7 | % | ||||||||||||||||||||||||||||
Rest of the world | 61,482 | 16 | 64,898 | 16 | (3,416) | (5) | % | ||||||||||||||||||||||||||||
Subtotal international | 161,804 | 42 | 155,798 | 39 | 6,006 | 4 | % | ||||||||||||||||||||||||||||
Total revenue | $ | 389,154 | 100 | % | $ | 402,445 | 100 | % | $ | (13,291) | (3) | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||||||||||||||
Product | $ | 48,129 | 12 | % | $ | 56,303 | 14 | % | $ | (8,174) | (15) | % | |||||||||||||||||||||||
Service | 63,751 | 16 | 57,572 | 14 | 6,179 | 11 | % | ||||||||||||||||||||||||||||
Total cost of revenue | $ | 111,880 | 28 | % | $ | 113,875 | 28 | % | $ | (1,995) | (2) | % | |||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
Product $ | $ | 115,543 | 30 | % | $ | 122,191 | 30 | % | $ | (6,648) | (5) | % | |||||||||||||||||||||||
Product gross profit % | 71 | % | 68 | % | |||||||||||||||||||||||||||||||
Service $ | $ | 161,731 | 42 | % | $ | 166,379 | 41 | % | $ | (4,648) | (3) | % | |||||||||||||||||||||||
Service gross profit % | 72 | % | 74 | % | |||||||||||||||||||||||||||||||
Total gross profit $ | $ | 277,274 | $ | 288,570 | $ | (11,296) | (4) | % | |||||||||||||||||||||||||||
Total gross profit % | 71 | % | 72 | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Research and development | $ | 91,836 | 24 | % | $ | 93,785 | 23 | % | $ | (1,949) | (2) | % | |||||||||||||||||||||||
Sales and marketing | 119,734 | 31 | 146,592 | 36 | (26,858) | (18) | |||||||||||||||||||||||||||||
General and administrative | 45,726 | 12 | 47,388 | 12 | (1,662) | (4) | |||||||||||||||||||||||||||||
Amortization of acquired intangible assets | 30,624 | 8 | 32,275 | 8 | (1,651) | (5) | |||||||||||||||||||||||||||||
Restructuring charges | 62 | — | 273 | — | (211) | (77) | |||||||||||||||||||||||||||||
Total operating expenses | $ | 287,982 | 75 | % | $ | 320,313 | 79 | % | $ | (32,331) | (10) | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Interest and other expense, net | $ | (8,174) | (2) | % | $ | (8,015) | (2) | % | $ | (159) | (2) | % |
Six Months Ended | Change | ||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||
% of Revenue | % of Revenue | $ | % | ||||||||||||||||||||||||||||||||
Income tax expense | $ | 2,224 | 1 | % | $ | 7,057 | 2 | % | $ | (4,833) | (68) | % |
September 30, 2020 | March 31, 2020 | ||||||||||
Cash and cash equivalents | $ | 415,719 | $ | 338,489 | |||||||
Short-term marketable securities | 12,127 | 47,969 | |||||||||
Long-term marketable securities | — | 2,613 | |||||||||
Cash, cash equivalents and marketable securities | $ | 427,846 | $ | 389,071 |
Six Months Ended | |||||||||||
September 30, | |||||||||||
(in thousands) | |||||||||||
2020 | 2019 | ||||||||||
Net cash provided by operating activities | $ | 56,646 | $ | 48,456 | |||||||
Net cash provided by investing activities | $ | 28,114 | $ | 1,431 | |||||||
Net cash used in financing activities | $ | (13,599) | $ | (211,375) |
Six Months Ended | |||||||||||
September 30, | |||||||||||
(in thousands) | |||||||||||
2020 | 2019 | ||||||||||
Cash provided by investing activities included the following: | |||||||||||
Purchase of marketable securities | $ | (6,780) | $ | (83,502) | |||||||
Proceeds from sales and maturity of marketable securities | 45,094 | 98,147 | |||||||||
Purchase of fixed assets | (5,769) | (9,056) | |||||||||
Purchase of intangible assets | (4,537) | — | |||||||||
Decrease (increase) in deposits | 106 | (4) | |||||||||
Acquisition of businesses | — | (4,154) | |||||||||
$ | 28,114 | $ | 1,431 |
Six Months Ended | |||||||||||
September 30, | |||||||||||
(in thousands) | |||||||||||
2020 | 2019 | ||||||||||
Cash used in financing activities included the following: | |||||||||||
Issuance of common stock under stock plans | $ | 1 | $ | 2 | |||||||
Payment of contingent consideration | (1,000) | — | |||||||||
Repayment of long-term debt | — | (100,000) | |||||||||
Treasury stock repurchases | — | (100,000) | |||||||||
Tax withholding on restricted stock units | (12,600) | (11,377) | |||||||||
$ | (13,599) | $ | (211,375) |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet be Purchased Under the Program | |||||||||||||||||||
7/1/2020-7/31/2020 | — | $ | — | — | 7,243,431 | ||||||||||||||||||
8/1/2020-8/31/2020 | 368,033 | 25.77 | — | 7,243,431 | |||||||||||||||||||
9/1/2020-9/30/2020 | 543 | 22.99 | — | 7,243,431 | |||||||||||||||||||
Total | 368,576 | $ | 25.77 | — | 7,243,431 |
Composite conformed copy of Third Amended and Restated Certificate of Incorporation of NetScout (as amended) (filed as Exhibit 3.2 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on September 21, 2016, and incorporated herein by reference). | |||||||||||
Amended and Restated By-laws of NetScout (filed as Exhibit 3.1 to NetScout's current report on Form 8-K, SEC File No. 000-26251, filed on May 11, 2020 and incorporated herein by reference). | |||||||||||
NetScout Systems, Inc. 2019 Equity Incentive Plan, as amended and restated (filed as Exhibit 99.1 to NetScout’s Registration Statement on Form S-8, SEC File No. 333-248786, filed on September 14, 2020 and incorporated herein by reference). | |||||||||||
+ | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
+ | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||||
++ | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
++ | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||||
101.INS | + | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
101.SCH | + | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
101.CAL | + | Inline XBRL Taxonomy Extension Calculation Linkbase document. | |||||||||
101.DEF | + | Inline XBRL Taxonomy Extension Definition Linkbase document. | |||||||||
101.LAB | + | Inline XBRL Taxonomy Extension Label Linkbase document. | |||||||||
101.PRE | + | Inline XBRL Taxonomy Extension Presentation Linkbase document. | |||||||||
104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 formatted in Inline XBRL |
+ | Filed herewith. | ||||
++ | Exhibit has been furnished, is not deemed filed and is not to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, irrespective of any general incorporation language contained in any such filing. |
NETSCOUT SYSTEMS, INC. | ||||||||
Date: November 3, 2020 | /s/ Anil K. Singhal | |||||||
Anil K. Singhal | ||||||||
President, Chief Executive Officer and Chairman | ||||||||
(Principal Executive Officer) | ||||||||
Date: November 3, 2020 | /s/ Jean Bua | |||||||
Jean Bua | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
(Principal Accounting Officer) |
/s/ Anil K. Singhal | |||||
Anil K. Singhal | |||||
President, Chief Executive Officer and Chairman | |||||
(Principal Executive Officer) |
/s/ Jean Bua | |||||
Jean Bua | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
(Principal Accounting Officer) |
/s/ Anil K. Singhal | |||||
Anil K. Singhal | |||||
President, Chief Executive Officer and Chairman | |||||
Principal Executive Officer |
/s/ Jean Bua | |||||
Jean Bua | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
(Principal Accounting Officer) |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 782 | $ 1,350 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 123,840,945 | 122,006,077 |
Common stock, shares outstanding (in shares) | 73,574,035 | 72,220,906 |
Treasury stock, shares (in shares) | 50,266,910 | 49,785,171 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Revenue: | ||||
Total revenue | $ 205,339 | $ 216,421 | $ 389,154 | $ 402,445 |
Cost of revenue: | ||||
Total cost of revenue | 58,900 | 59,132 | 111,880 | 113,875 |
Gross profit | 146,439 | 157,289 | 277,274 | 288,570 |
Operating expenses: | ||||
Research and development | 46,455 | 50,058 | 91,836 | 93,785 |
Sales and marketing | 60,300 | 73,067 | 119,734 | 146,592 |
General and administrative | 20,573 | 25,177 | 45,726 | 47,388 |
Amortization of acquired intangible assets | 15,363 | 16,132 | 30,624 | 32,275 |
Restructuring charges | (31) | 150 | 62 | 273 |
Total operating expenses | 142,660 | 164,584 | 287,982 | 320,313 |
Income (loss) from operations | 3,779 | (7,295) | (10,708) | (31,743) |
Interest and other expense, net: | ||||
Interest income | 171 | 1,214 | 437 | 2,872 |
Interest expense | (2,715) | (5,173) | (5,789) | (11,538) |
Other income (expense), net | (850) | 343 | (2,822) | 651 |
Total interest and other expense, net | (3,394) | (3,616) | (8,174) | (8,015) |
Income (loss) before income tax expense | 385 | (10,911) | (18,882) | (39,758) |
Income tax expense | 4,071 | 6,561 | 2,224 | 7,057 |
Net loss | $ (3,686) | $ (17,472) | $ (21,106) | $ (46,815) |
Basic net loss per share (in dollars per share) | $ (0.05) | $ (0.23) | $ (0.29) | $ (0.61) |
Diluted net loss per share (in dollars per share) | $ (0.05) | $ (0.23) | $ (0.29) | $ (0.61) |
Weighted average common shares outstanding used in computing: | ||||
Net loss per share - basic (in shares) | 73,058 | 75,687 | 72,682 | 76,490 |
Net loss per share - diluted (in shares) | 73,058 | 75,687 | 72,682 | 76,490 |
Product | ||||
Revenue: | ||||
Total revenue | $ 91,979 | $ 102,775 | $ 163,672 | $ 178,494 |
Cost of revenue: | ||||
Total cost of revenue | 26,977 | 29,368 | 48,129 | 56,303 |
Service | ||||
Revenue: | ||||
Total revenue | 113,360 | 113,646 | 225,482 | 223,951 |
Cost of revenue: | ||||
Total cost of revenue | $ 31,923 | $ 29,764 | $ 63,751 | $ 57,572 |
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Changes in unrealized (losses) gains, (benefit) tax | $ (10) | $ 5 | $ (33) | $ 11 |
Changes in market value of derivatives, tax (benefit) | 55 | (22) | 59 | (41) |
Reclassification adjustment for net gains included in net income (loss), tax | $ (32) | $ 11 | $ (22) | $ 21 |
BASIS OF PRESENTATION |
6 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc. (NetScout or the Company). Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position and stockholders' equity, results of operations and cash flows. The year-end consolidated balance sheet data and statement of stockholders' equity were derived from the Company's audited financial statements, but do not include all disclosures required by GAAP. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 filed with the Securities and Exchange Commission on May 20, 2020. COVID-19 Risks and Uncertainties The Company is closely monitoring the impact of COVID-19 on all aspects of its business. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020 and the President of the United States declared the COVID-19 outbreak a national emergency. While the COVID-19 pandemic has not had a material adverse impact on the Company’s operations to date, the future impacts of the pandemic and any resulting economic impact are largely unknown and rapidly evolving. It is possible that the COVID-19 pandemic, the measures taken by the governments of countries affected and the resulting economic impact may materially and adversely affect the Company’s results of operations, cash flows and financial position as well as its customers. Under Accounting Standards Update (ASU) 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40), or ASC 205-40, the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. The Company is taking precautionary actions to reduce costs and spending across the organization. This includes limiting discretionary spending and reducing hiring activities. In addition, based on covenant levels at September 30, 2020, the Company has an incremental $317 million available under the $1.0 billion revolving credit facility. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) was enacted. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company has elected to defer the employer-paid portion of social security taxes. As of September 30, 2020, the Company had deferred $7.4 million of employer payroll taxes, of which 50% are required to be deposited by December 2021 and the remaining 50% by December 2022. The Company expects net cash provided by operating activities combined with cash, cash equivalents, and marketable securities and borrowing availability under the Company's revolving credit facility to provide sufficient liquidity to fund current obligations, capital spending, debt service requirements and working capital requirements over at least the next twelve months. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption is not expected to have a material impact on the Company's financial position, results of operations, and disclosures. In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. Early adoption is permitted. ASU 2020-01 is effective for NetScout beginning April 1, 2021. The Company is currently assessing the effect that ASU 2020-01 will have on its financial position, results of operations, and disclosures. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. ASU 2019-12 is effective for NetScout beginning April 1, 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently assessing the effect that ASU 2019-12 will have on its financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Company adopted the guidance as of April 1, 2020. The adoption has not had a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. The Company adopted the guidance as of April 1, 2020. The adoption has not had a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The Company adopted the guidance prospectively as of April 1, 2020. The adoption did not result in a cumulative adjustment to retained earnings and has not had an impact on the Company's consolidated financial statements other than with respect to the updated disclosure requirements.
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REVENUE |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Revenue Recognition Policy The Company exercises judgment and uses estimates in connection with determining the amounts of product and service revenues to be recognized in each accounting period. The Company derives revenues primarily from the sale of network management tools and security solutions for service provider and enterprise customers, which include hardware, software and service offerings. The majority of the Company's product sales consist of hardware appliances with embedded software that are essential to providing customers the intended functionality of the solutions. The Company also sells software offerings decoupled from the underlying hardware and software solutions to provide customers with enhanced functionality. The Company accounts for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by the Company as an arrangement with commercial substance identifying payment terms, each party’s rights and obligations regarding the products or services to be transferred and the amount the Company deems probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services. Product revenue is typically recognized upon shipment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software; and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. The Company's service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, stand-ready software-as-a-service (SAAS) and other professional services including consulting and training. The Company generally provides software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training. Generally, the Company's contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. Bundled arrangements are concurrent customer purchases of a combination of the Company's product and service offerings that may be delivered at various points in time. The Company allocates the transaction price among the performance obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately based on the element’s historical pricing. The Company also considers its overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, the Company has established SSP for a majority of its service elements based on historical standalone sales. In certain instances, the Company has established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. Further, for certain service engagements, the Company considers quoted prices as part of multi-element arrangements of those engagements as a basis for establishing SSP. SSP has been established for product elements as the average or median selling price the element was recently sold for, whether sold alone or sold as part of a multiple element transaction. The Company reviews sales of the product elements on a quarterly basis and updates, when appropriate, its SSP for such elements to ensure that it reflects recent pricing experience. The Company's products are distributed through its direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. The Company records consideration given to a customer as a reduction of revenue to the extent they have recorded revenue from the customer. With limited exceptions, the Company's return policy does not allow product returns for a refund. Returns have been insignificant to date. In addition, the Company has a history of successfully collecting receivables from its resellers and distributors. During the six months ended September 30, 2020, the Company recognized revenue of $165.7 million related to the Company's deferred revenue balance reported at March 31, 2020. Performance Obligations Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. The transaction price is allocated among performance obligations in bundled contracts in an amount that depicts the relative standalone selling prices of each obligation. For contracts involving distinct hardware and software licenses, the performance obligations are satisfied at a point in time when control is transferred to the customer. For standalone maintenance and post-contract support (PCS) the performance obligation is satisfied ratably over the contract term as a stand-ready obligation. For consulting and training services, the performance obligation may be satisfied over the contract term as a stand-ready obligation, satisfied over a period of time as those services are delivered, or satisfied at the completion of the service when control has transferred, or the services have expired unused. Payments for hardware, software licenses, one-year maintenance, PCS and consulting services, are typically due up front with payment terms of 30 to 90 days. However, the Company does have contracts pursuant to which billings occur ratably over a period of years following the transfer of control for the contracted performance obligations. Payments on multi-year maintenance, PCS and consulting services are typically due in annual installments over the contract term. The Company did not have any material variable consideration such as obligations for returns, refunds or warranties at September 30, 2020. At September 30, 2020, the Company had total deferred revenue of $335.8 million, which represents the aggregate total contract price allocated to undelivered performance obligations. The Company expects to recognize $236.2 million, or 70%, of this revenue during the next 12 months, and expects to recognize the remaining $99.6 million, or 30%, of this revenue thereafter. Because of NetScout's revenue recognition policies, there are circumstances for which the Company does not recognize revenue relating to sales transactions that have been billed, and the related account receivable has not been collected. While the receivable represents an enforceable obligation, for balance sheet presentation purposes, the Company has not recognized the deferred revenue, or the related account receivable and no amounts appear in the consolidated balance sheets for such transactions because control of the underlying deliverable has not transferred. The aggregate amount of unrecognized accounts receivable and deferred revenue was $5.7 million and $11.1 million at September 30, 2020 and March 31, 2020, respectively. NetScout expects that the amount of billed and unbilled deferred revenue will change from quarter to quarter for several reasons, including the specific timing, duration and size of large customer support and service agreements, varying billing cycles of such agreements, the specific timing of customer renewals, and foreign currency fluctuations. The Company did not have any significant financing components, or variable consideration or performance obligations satisfied in a prior period recognized during the six months ended September 30, 2020. Contract Balances The Company may receive payments from customers based on a billing schedule as established by the Company's contracts. Contract assets relate to performance obligations where control has transferred to the customer in advance of scheduled billings. The Company records unbilled accounts receivable representing the right to consideration in exchange for goods or services that have been transferred to a customer conditional on the passage of time. Deferred revenue relates to payments received in advance of performance under the contract. Costs to Obtain Contracts The Company has determined that the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are sales commissions paid to its employees. Sales commissions are recorded as an asset and amortized to expense ratably over the remaining performance periods of the related contracts with remaining performance obligations. The Company expenses costs as incurred for sales commissions when the amortization period would have been one year or less. At September 30, 2020, the consolidated balance sheet included $7.5 million in assets related to sales commissions to be expensed in future periods. A balance of $4.5 million was included in prepaid expenses and other current assets, and a balance of $3.0 million was included in other assets in the Company's consolidated balance sheet at September 30, 2020. At March 31, 2020, the consolidated balance sheet included $7.2 million in assets related to sales commissions to be expensed in future periods. A balance of $3.9 million was included in prepaid expenses and other current assets, and a balance of $3.3 million was included in other assets in the Company's consolidated balance sheet at March 31, 2020. During the three and six months ended September 30, 2020 and 2019, respectively, the Company recognized $1.5 million, $1.6 million, $3.1 million and $3.2 million of amortization related to this sales commission asset, which is included in the sales and marketing expense line in the Company's consolidated statements of operations. Allowance for Doubtful Accounts The Company continually monitors collections from its customers. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for doubtful accounts based on a combination of factors, including but not limited to, analysis of the aging schedules, past due balances, historical collection experience and prevailing economic conditions. The following table summarizes the activity in the allowance for doubtful accounts (in thousands):
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CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS |
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Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERSFinancial instruments that potentially subject the Company to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At September 30, 2020, the Company had one direct customer who accounted for more than 10% of the accounts receivable balance, while no indirect channel partner accounted for more than 10% of the accounts receivable balance. At March 31, 2020, the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. During the three and six months ended September 30, 2020 and 2019, no direct customers or indirect channel partners accounted for more than 10% of the Company's total revenue. Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company's assumptions are incorrect, there could be an adverse impact on its allowance for doubtful accounts.
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SHARE-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended (Amended 2007 Plan), and 2019 Equity Incentive Plan (2019 Plan) and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan, as amended, (ESPP), based on estimated fair values within the applicable cost and expense lines identified below (in thousands):
On September 12, 2019, the Company’s stockholders approved the 2019 Plan, which replaced the Company’s Amended 2007 Plan. The 2019 Plan permits the granting of incentive and nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other stock awards, collectively referred to as "share-based awards." On September 10, 2020, the Company's stockholders approved an amendment and restatement of the 2019 Equity Incentive Plan (the Amended 2019 Plan) to increase the number of shares of shares authorized for issuance under the Amended 2019 Plan by 4,700,000. A total of 11,494,651 shares are reserved for issuance under the Amended 2019 Plan. Periodically, the Company grants share-based awards to employees, officers, and directors of the Company and its subsidiaries. The Company accounts for these share-based awards in accordance with GAAP, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to its employees and directors. Share-based award grants are generally measured at fair value on the date of grant based on the number of shares granted and the quoted price of the Company’s common stock. Such value is recognized as a cost of revenue or an operating expense over the corresponding vesting period. Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company's Annual Report on Form 10-K for the year ended March 31, 2020. Under the ESPP, shares of the Company's common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the six months ended September 30, 2020, employees purchased 279,812 shares under the ESPP and the value per share was $23.14.
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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIESThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents consisted of money market instruments and cash at September 30, 2020 and U.S. government and municipal obligations, commercial paper, money market instruments and cash maintained with various financial institutions at March 31, 2020. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
The Company's restricted cash includes cash balances which are legally or contractually restricted. The Company's restricted cash is included within prepaid and other current assets and consists of amounts related to holdbacks associated with prior acquisitions. Marketable Securities The following is a summary of marketable securities held by NetScout at September 30, 2020, classified as short-term and long-term (in thousands):
The following is a summary of marketable securities held by NetScout at March 31, 2020, classified as short-term and long-term (in thousands):
Contractual maturities of the Company's marketable securities held at September 30, 2020 and March 31, 2020 were as follows (in thousands):
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2020 and March 31, 2020 (in thousands):
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments. The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. The Company's Level 2 investments are classified as such because fair value is calculated using market observable data for similar but not identical instruments, or a discounted cash flow model using the contractual interest rate as compared to the underlying interest yield curve. The Company classifies municipal obligations as Level 2 because the fair values are determined using quoted prices from markets the Company considers to be inactive. Commercial paper is classified as Level 2 because the Company uses market information from similar but not identical instruments and discounted cash flow models based on interest rate yield curves to determine fair value. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level 2 because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. The Company's Level 3 liabilities consists of contingent purchase considerations. The Company had a contingent liability at September 30, 2020 and March 31, 2020 for $0.7 million related to the acquisition of Gigavation Incorporated (Gigavation) in February 2020. The contingent purchase consideration represents amounts deposited into an escrow account which was established to cover damages NetScout may suffer related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the acquisition agreement. The $0.7 million of contingent purchase consideration was included in accrued other in the Company’s consolidated balance sheet at September 30, 2020 and March 31, 2020. Except to the extent that valid indemnification claims are made prior to such time, the $0.7 million will be paid to the seller in February 2021. The Company had a contingent liability at March 31, 2020 related to the acquisition of Eastwind Networks, Inc. (Eastwind) in April 2019. The contingent purchase consideration represented amounts deposited into an escrow account which was established to cover damages NetScout may have suffered related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the acquisition agreement. The contingent purchase consideration of $1.0 million was included as accrued other in the Company's consolidated balance sheet at March 31, 2020. The contingent purchase consideration of $1.0 million was paid to the seller in April 2020. The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial liabilities for the six months ended September 30, 2020 (in thousands):
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INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands):
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ACQUISITIONS & DIVESTITURES |
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Business Combinations [Abstract] | |
ACQUISITIONS & DIVESTITURES | ACQUISITIONS & DIVESTITURES Gigavation Acquisition On February 5, 2020 (the Gigavation Closing Date), the Company acquired 100% of the common stock of Gigavation Incorporated, a cybersecurity company for $8.0 million. Gigavation's solutions provide security to device communication protocols, end point protection and security analytics. The Gigavation technology and engineering talent have been integrated into our service assurance products in order to support the ongoing enhancement of that products portfolio. Goodwill of $3.8 million was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. Eastwind Acquisition On April 3, 2019 (the Eastwind Closing Date), the Company completed the acquisition of certain assets and liabilities of Eastwind for $5.2 million. Eastwind's breach analytics cloud analyzes data to identify malicious activity, insider threats and data leakage. Goodwill of $1.0 million was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill and intangible assets recorded as part of the acquisition are deductible for tax purposes. HNT Tools Business Divestiture On September 14, 2018 (the HNT Divestiture Date), the Company divested its Handheld Network Tools (HNT) business. As part of the divestiture, the Company recorded contingent consideration which represents potential future earnout payments of up to $4.0 million over two years that are contingent on the achievement of certain milestones by the HNT business. The Company recorded a $0.5 million change in the fair value of the contingent consideration, which is included in other income (expense), net within the Company’s consolidated statements of operations for the six months ended September 30, 2019. The fair value of the contingent consideration was $0 at September 30, 2020 and March 31, 2020. In connection with the divestiture, the Company entered into a transitional services agreement with the buyer to provide certain services for a period of up to eighteen months. The transitional services agreement ended in fiscal year 2020. Income associated with the transitional services agreement for the three and six months ended September 30, 2020 and 2019 was $0.1 million, $0.3 million, $0.1 million, and $1.2 million, respectively. Transitional services agreement income is included within other income (expense), net in the Company's consolidated statements of operations.
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company assesses goodwill for impairment at the reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. The Company completed its annual impairment test on January 31, 2020. During the fourth quarter of fiscal year 2020, the Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic to be a triggering event. As such, the Company performed a quantitative analysis as of March 31, 2020. The quantitative impairment test indicated goodwill was not impaired as of March 31, 2020. Reporting units are determined based on the components of a Company's operating segments that constitute a business for which financial information is available and for which operating results are regularly reviewed by segment management. Through the first half of fiscal year 2020, the Company had two reporting units: (1) Service Assurance and (2) Security. As part of its continued integration efforts, effective during the third quarter of fiscal year 2020, the Company reorganized its business units. As a result of this change, the Company reduced the number of reporting units from two reporting units to one reporting unit. The former Service Assurance and Security reporting units were combined as result of organizational changes made to fully integrate the resources and assets of the Service Assurance and Security business units. The Company completed an assessment of any potential impairment for all reporting units immediately prior to and after the reporting unit change and determined that no impairment existed. At September 30, 2020 and March 31, 2020, the carrying amount of goodwill was $1.7 billion. The change in the carrying amount of goodwill for the six months ended September 30, 2020 was due to the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2020 as follows (in thousands):
Intangible Assets The net carrying amounts of intangible assets were $551.8 million and $582.2 million at September 30, 2020 and March 31, 2020, respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite-lived trade name is evaluated for potential impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company completed its annual impairment test on January 31, 2020. During the fourth quarter of fiscal year 2020, the Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and concluded that it was not more likely than not that the trade name was impaired and therefore a quantitative Step 1 assessment was not performed as of March 31, 2020. Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2020 (in thousands):
Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2020 (in thousands):
Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and six months ended September 30, 2020 and 2019, respectively (in thousands):
The following is the expected future amortization expense at September 30, 2020 for the fiscal years ending March 31 (in thousands):
The weighted-average amortization period of developed technology and core technology is 11.2 years. The weighted-average amortization period for customer and distributor relationships is 15.9 years. The weighted-average amortization period for trademarks and trade names is 8.6 years. The weighted-average amortization period for capitalized software is 3.0 years. The weighted-average amortization period for amortizing all intangible assets is 14.6 years.
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception. NetScout also periodically enters into forward contracts to manage exchange rate risks associated with certain third-party transactions and for which the Company does not elect hedge accounting treatment as there is no difference in the timing of gain or loss recognition on the hedging instrument and the hedged item. All of the Company's derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity. The notional amounts and fair values of derivative instruments in the consolidated balance sheets at September 30, 2020 and March 31, 2020 were as follows (in thousands):
(a)Notional amounts represent the gross contract/notional amount of the derivatives outstanding. The following table provides the effect foreign exchange forward contracts designated as hedging instruments had on other comprehensive income (loss) (OCI) and results of operations for the three months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. The following table provides the effect foreign exchange forward contracts not designated as hedging instruments had on the Company’s results of operations for the three months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. The following table provides the effect foreign exchange forward contracts designated as hedging instruments had on other comprehensive income (loss) (OCI) and results of operations for the six months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. The following table provides the effect foreign exchange forward contracts not designated as hedging instruments had on the Company’s results of operations for the six months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates.
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LONG-TERM DEBT |
6 Months Ended |
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Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBTOn January 16, 2018, the Company amended and expanded its existing credit agreement (Amended Credit Agreement) with a syndicate of lenders by and among: the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Fifth Third Bank, Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Amended Credit Agreement provides for a five-year, $1.0 billion senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. The Company may elect to use the new credit facility for general corporate purposes or to finance the repurchase of up to twenty-five million shares of the Company's common stock under the Company's common stock repurchase plan. The commitments under the Amended Credit Agreement will expire on January 16, 2023, and any outstanding loans will be due on that date. At September 30, 2020, $450 million was outstanding under the Amended Credit Agreement. At the Company's election, revolving loans under the Amended Credit Agreement bear interest at either (a) an Alternate Base Rate per annum equal to the greatest of (1) JPMorgan's prime rate, (2) 0.50% in excess of the New York Federal Reserve Bank (NYFRB) rate, or (3) an adjusted one month LIBOR rate plus 1%; or (b) such adjusted LIBOR rate (for the interest period selected by the Company), in each case plus an applicable margin. For the period from the delivery of the Company's financial statements for the quarter ended June 30, 2020, until the Company has delivered financial statements for the quarter ended September 30, 2020, the applicable margin will be 1.50% per annum for LIBOR loans and 0.50% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company's leverage ratio, ranging from 1.00% per annum for Base Rate loans and 2.00% per annum for LIBOR loans if the Company's consolidated leverage ratio is greater than 3.50 to 1.00, down to 0.00% per annum for Alternate Base Rate loans and 1.00% per annum for LIBOR loans if the Company's consolidated leverage ratio is equal to or less than 1.50 to 1.00. On July 27, 2017, the U.K. Financial Conduct Authority (FCA) announced that it will no longer require banks to submit rates for the calculation of LIBOR after 2021. The Company's Amended Credit Agreement provides for the Administrative Agent to determine if (i) adequate and reasonable means do not exist for ascertaining the LIBOR rate or (ii) the FCA or Government Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBOR rate shall no longer be used for determining interest rates for loans and the Administrative Agent determines that (i) and (ii) above are unlikely to be temporary, then the Administrative Agent and the Company would agree to transition to an Alternate Base Rate borrowing as described above or amend the Credit Agreement to establish an alternate rate of interest to LIBOR that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time. The Company's consolidated leverage ratio is the ratio of its total funded debt compared to its consolidated adjusted EBITDA. Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the definition of consolidated adjusted EBITDA in the Amended Credit Agreement. Commitment fees will accrue on the daily unused amount of the credit facility. For the period from the delivery of the Company's financial statements for the quarter ended June 30, 2020 until the Company has delivered financial statements for the quarter ended September 30, 2020, the commitment fee will be 0.25% per annum, and thereafter the commitment fee will vary depending on the Company's consolidated leverage ratio, ranging from 0.30% per annum if the Company's consolidated leverage ratio is greater than 2.75 to 1.00, down to 0.15% per annum if the Company's consolidated leverage ratio is equal to or less than 1.50 to 1.00. Letter of credit participation fees are payable to each lender on the amount of such lender’s letter of credit exposure, during the period from the closing date of the Amended Credit Agreement to but excluding the date which is the later of (i) the date on which such lender’s commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for LIBOR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank. Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on LIBOR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. The Company may also prepay loans under the Amended Credit Agreement at any time, without penalty, subject to certain notice requirements. Debt is recorded at the amount drawn on the revolving credit facility plus interest based on floating rates reflective of changes in the market which approximates fair value. The loans and other obligations under the credit facility are (a) guaranteed by each of the Company's wholly owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) are secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Amended Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Amended Credit Agreement. The Amended Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. In addition, the Company is required to maintain certain consolidated leverage and interest coverage ratios. These covenants and limitations are more fully described in the Amended Credit Agreement. At September 30, 2020, the Company was in compliance with all of these covenants. The Amended Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Amended Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amount of the loans and commitments may, terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Amended Credit Agreement and the other loan documents. In connection with the Company's Amended Credit Agreement described above, the Company terminated its previous term loan dated as of July 14, 2015, by and among the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Company has capitalized debt issuance costs totaling $12.2 million at September 30, 2020, which are being amortized over the life of the revolving credit facility. The unamortized balance was $4.0 million as of September 30, 2020. The balance of $1.7 million was included as prepaid expenses and other current assets and a balance of $2.3 million was included as other assets in the Company's consolidated balance sheet.
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RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES During the second quarter of the fiscal year ended March 31, 2019, the Company implemented a voluntary separation program (VSP) for employees who met certain age and service requirements to reduce overall headcount resulting in a total restructuring charge for the program of $17.3 million. As a result of the related workforce reduction, one hundred fifty-five employees voluntarily terminated their employment with the Company. As a result of the related workforce reduction, during the six months ended September 30, 2019, the Company recorded restructuring charges totaling $0.1 million related to one-time termination benefits for employees who voluntarily terminated their employment with the Company during the period. The one-time termination benefits were paid in full by the end of the first quarter of the fiscal year ended March 31, 2020. During the fiscal year ended March 31, 2020, the Company approved two restructuring plans. During the second quarter of the fiscal year ended March 31, 2020, the Company restructured certain departments to better align functions resulting in a total restructuring charge for the program of $0.5 million. As a result of the workforce reduction, during the six months ended September 30, 2019, the Company recorded a restructuring charge totaling $0.2 million related to one-time termination benefits. The one-time termination benefits were paid in full during the first quarter of the fiscal year ending March 31, 2021. During the fourth quarter of the fiscal year ended March 31, 2020, the Company restructured certain departments to better align functions. As a result of the workforce reduction, the Company recorded a restructuring charge totaling $2.1 million during the fiscal year ended March 31, 2020 and an additional $0.1 million during the six months ended September 30, 2020. The one-time termination benefits were paid in full by the end of the second quarter of the fiscal year ending March 31, 2021. The following table provides a summary of the activity related to the restructuring plans and the related restructuring liabilities (in thousands):
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the duration of the lease term. Lease liabilities represent the Company’s contractual obligation to make lease payments over the lease term. ROU assets are recorded and recognized at commencement for the lease liability amount, plus initial direct costs incurred less lease incentives received. Lease liabilities are recorded at the present value of future lease payments over the lease term at commencement. The discount rate used is generally the Company’s estimated incremental borrowing rate unless the lessor’s implicit rate is readily determinable. Incremental borrowing rates are calculated periodically to estimate the rate the Company would pay to borrow the funds necessary to obtain an asset of similar value over a similar term. Lease expenses relating to operating leases are recognized on a straight-line basis over the lease term. The Company has operating leases for administrative, research and development, sales and marketing and manufacturing facilities and equipment under various non-cancelable lease agreements. The Company’s leases have remaining lease terms ranging from 1 year to 11 years. The Company’s lease terms may include options to extend or terminate the lease where it is reasonably certain that the Company will exercise those options. The Company considers several economic factors when making this determination, including but not limited to, the significance of leasehold improvements incurred in the office space, the difficulty in replacing the asset, underlying contractual obligations, or specific characteristics unique to a particular lease. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Most of the Company’s lease agreements contain variable payments, primarily for common area maintenance (CAM), which are expensed as incurred and not included in the measurement of the ROU assets and lease liabilities. The components of operating lease cost for the three and six months ended September 30, 2020 and 2019 were as follows (in thousands):
The table below presents supplemental cash flow information related to leases during the six months ended September 30, 2020 and 2019 (in thousands):
At September 30, 2020 and March 31, 2020, the weighted average remaining lease term in years and weighted average discount rate were as follows:
Future minimum payments under non-cancellable leases at September 30, 2020 are as follows (in thousands):
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition related - The Company had a contingent liability at September 30, 2020 for $0.7 million related to the acquisition of Gigavation in February 2020 for which an escrow account was established to cover damages NetScout may suffer related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the acquisition agreement. Except to the extent that valid indemnification claims are made prior to such time, the $0.7 million will be paid to the seller in February 2021. The contingent purchase consideration of $0.7 million was included as accrued other in the Company's consolidated balance sheet at September 30, 2020 and March 31, 2020. Legal – From time to time, NetScout is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, the amount of ultimate expense with respect to any current legal proceedings and claims, if determined adversely, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. As previously disclosed, in March 2016, Packet Intelligence LLC (Packet Intelligence or Plaintiff) filed a Complaint against NetScout and two subsidiary entities in the United States District Court for the Eastern District of Texas asserting infringement of five United States patents. Plaintiff’s Complaint alleged that legacy Tektronix GeoProbe products, including the G10 and GeoBlade products, infringed these patents. NetScout filed an Answer denying Plaintiff’s allegations and asserting that Plaintiff’s patents were, among other things, invalid, not infringed, and unenforceable due to inequitable conduct. In October 2017, a jury trial was held to address the parties’ claims and counterclaims regarding infringement of three patents by the G10 and GeoBlade products, invalidity of these patents, and damages. On October 13, 2017, the jury rendered a verdict finding in favor of the Plaintiff and that Plaintiff was entitled to $3,500,000 for pre-suit damages and $2,250,000 for post-suit damages. The jury indicated that the awarded damages amounts were intended to reflect a running royalty. In September 2018, the Court entered judgment and "enhanced" the jury verdict in the amount of $2.8 million as a result of a jury finding. The judgment also awards pre- and post-judgment interest, and a running royalty on the G10 and GeoBlade products until the expiration of the patents at issue, the last date being June 2022. Following the entry of final judgment, on June 12, 2019, NetScout filed its Notice of Appeal. On July 14, 2020, the Court of Appeals for the Federal Circuit issued a decision vacating the $3,500,000 pre-suit damages award, affirming the $2,250,000 post-suit damages award, and remanding to the district court to determine what, if any, enhancement should be awarded. NetScout continues to avail itself of its legal options. NetScout has concluded that the risk of loss associated with the post-suit damages award is "probable" in accounting terms, regardless of the options NetScout may pursue, and that the risk of loss associated with pre-suit damages is now remote. Accounting rules require NetScout to provide an estimate for the range of potential liability. NetScout currently estimates that the range of liability is the sum of post-suit damages, plus pre- and post-judgment interest amounts and royalties owed on post-trial sales of the accused G10 and GeoBlade products. Any potential enhancement is not reasonably estimable but is likely within the range of $0 to $2,800,000. Other Contingent Liability - During fiscal year 2020, one of the Company's subsidiaries, located in the United Kingdom (UK), determined that value added tax (VAT) was not properly applied to certain supplies of service to the UK. The Company filed a blank disclosure with HM Revenue & Customs (HMRC) notifying HMRC of these application differences, and subsequently filed a voluntary disclosure agreement (VDA). The VDA covered the period of March 1, 2016 through February 29, 2020. The penalties associated with the application differences can range from 0%-30% of the underpayment and are based on objective and subjective determinations to be made by HMRC. At March 31, 2020 and September 30, 2020 the Company had accrued the penalties that it believes are probable and estimable of assessment by HMRC. A majority of the difference in the Company's application of the VAT rules relates to services for which the subsidiary did not collect VAT from its customers and for which customers would have been eligible to reclaim under the UK VAT regime. Based on these facts, the Company currently believes that it is probable that it will be required to settle these amounts separately with its customers and HMRC; hence, the Company has recorded a liability, which is included as accrued other in the Company's consolidated balance sheet and an asset, which is included in prepaid expenses and other current assets in the Company's consolidated balance sheet at September 30, 2020 for approximately $6.3 million, respectively.
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PENSION BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS Certain of the Company's non-U.S. employees participate in noncontributory defined benefit pension plans. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan's funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors. The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2020 and 2019 (in thousands):
Expected Contributions During the six months ended September 30, 2020, the Company made contributions of $0.2 million to its defined benefit pension plans. During the fiscal year ending March 31, 2021, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million. As a majority of the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future.
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TREASURY STOCK |
6 Months Ended |
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Sep. 30, 2020 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On October 24, 2017, the Company’s Board of Directors approved a share repurchase program that enables the Company to repurchase up to twenty-five million shares of its common stock. This new program became effective when the Company’s previously disclosed twenty million share repurchase program was completed. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of this new share repurchase program. Through September 30, 2020, the Company has repurchased 17,756,569 shares for $468.7 million in the open market under the twenty-five million share repurchase program. At September 30, 2020, 7,243,431 shares of common stock remained available to be purchased under the current repurchase program. There were no share repurchases during the six months ended September 30, 2020. The Company repurchased 4,160,836 shares for $100.0 million under the twenty-five million share repurchase program during the six months ended September 30, 2019. In connection with the delivery of shares of the Company's common stock upon vesting of restricted stock units, the Company withheld 481,739 shares and 500,093 shares at a cost of $12.6 million and $11.4 million, respectively, related to minimum statutory tax withholding requirements on these restricted stock units during the six months ended September 30, 2020 and 2019, respectively. These withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the number of shares that are available for repurchase under that program.
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NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHARE Calculations of the basic and diluted net loss per share and potential common shares are as follows (in thousands, except for per share data):
The following table sets forth restricted stock units excluded from the calculation of diluted net loss per share, since their inclusion would be anti-dilutive (in thousands):
Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options and unrecognized compensation expense as additional proceeds. As the Company incurred a net loss during the three and six months ended September 30, 2020 and 2019, all outstanding restricted stock units have an anti-dilutive effect and are therefore excluded from the computation of diluted weighted average shares outstanding.
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INCOME TAXES |
6 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Generally, the Company's effective tax rate differs from the statutory tax rate due to state income taxes, foreign withholding taxes, and US taxation on foreign earnings, which are partially offset by research and development tax credits, foreign tax credits and the Foreign Derived Intangible Income deduction. The Company's effective income tax rates were 1,057.4% and 60.1% for the three months ended September 30, 2020 and 2019, respectively. The effective tax rate for the three months ended September 30, 2020 differed from the effective tax rate for the three months ended September 30, 2019, primarily due to generating a significant pre-tax loss in the three months ended September 30, 2019 when compared to the pre-tax income generated during the three months ended September 30, 2020. The Company's effective income tax rates were 11.8% and 17.7% for the six months ended September 30, 2020 and 2019, respectively. The effective tax rate for the six months ended September 30, 2020 differed from the effective tax rate for the six months ended September 30, 2019, primarily due to a significant discrete tax expense related to elections made to treat several of the Company's foreign subsidiaries as U.S. branches for federal income tax purposes in the six months ended September 30, 2019. As a result, the Company recorded additional tax expense for the three and six months ended September 30, 2019 due to establishing new U.S. net deferred tax liabilities resulting from the differences between the GAAP basis and the U.S. federal tax basis of the existing assets and liabilities of those foreign subsidiaries.
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SEGMENT AND GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company reports revenues and income under one reportable segment. The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. The Company's policies mandate compliance with economic sanctions and the export controls. Total revenue by geography is as follows (in thousands):
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BASIS OF PRESENTATION (Policies) |
6 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc. (NetScout or the Company). Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position and stockholders' equity, results of operations and cash flows. The year-end consolidated balance sheet data and statement of stockholders' equity were derived from the Company's audited financial statements, but do not include all disclosures required by GAAP. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 filed with the Securities and Exchange Commission on May 20, 2020.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The adoption is not expected to have a material impact on the Company's financial position, results of operations, and disclosures. In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This guidance addresses accounting for the transition into and out of the equity method and provides clarification of the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020. Early adoption is permitted. ASU 2020-01 is effective for NetScout beginning April 1, 2021. The Company is currently assessing the effect that ASU 2020-01 will have on its financial position, results of operations, and disclosures. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021. ASU 2019-12 is effective for NetScout beginning April 1, 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company is currently assessing the effect that ASU 2019-12 will have on its financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The Company adopted the guidance as of April 1, 2020. The adoption has not had a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. The Company adopted the guidance as of April 1, 2020. The adoption has not had a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11 and ASU 2020-02 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The Company adopted the guidance prospectively as of April 1, 2020. The adoption did not result in a cumulative adjustment to retained earnings and has not had an impact on the Company's consolidated financial statements other than with respect to the updated disclosure requirements.
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Revenue Recognition Policy | Revenue Recognition Policy The Company exercises judgment and uses estimates in connection with determining the amounts of product and service revenues to be recognized in each accounting period. The Company derives revenues primarily from the sale of network management tools and security solutions for service provider and enterprise customers, which include hardware, software and service offerings. The majority of the Company's product sales consist of hardware appliances with embedded software that are essential to providing customers the intended functionality of the solutions. The Company also sells software offerings decoupled from the underlying hardware and software solutions to provide customers with enhanced functionality. The Company accounts for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by the Company as an arrangement with commercial substance identifying payment terms, each party’s rights and obligations regarding the products or services to be transferred and the amount the Company deems probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services. Product revenue is typically recognized upon shipment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software; and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. The Company's service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, stand-ready software-as-a-service (SAAS) and other professional services including consulting and training. The Company generally provides software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training. Generally, the Company's contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. Bundled arrangements are concurrent customer purchases of a combination of the Company's product and service offerings that may be delivered at various points in time. The Company allocates the transaction price among the performance obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately based on the element’s historical pricing. The Company also considers its overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, the Company has established SSP for a majority of its service elements based on historical standalone sales. In certain instances, the Company has established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. Further, for certain service engagements, the Company considers quoted prices as part of multi-element arrangements of those engagements as a basis for establishing SSP. SSP has been established for product elements as the average or median selling price the element was recently sold for, whether sold alone or sold as part of a multiple element transaction. The Company reviews sales of the product elements on a quarterly basis and updates, when appropriate, its SSP for such elements to ensure that it reflects recent pricing experience. The Company's products are distributed through its direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. The Company records consideration given to a customer as a reduction of revenue to the extent they have recorded revenue from the customer. With limited exceptions, the Company's return policy does not allow product returns for a refund. Returns have been insignificant to date. In addition, the Company has a history of successfully collecting receivables from its resellers and distributors.
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||
Summary of Allowance for Doubtful Accounts | The following table summarizes the activity in the allowance for doubtful accounts (in thousands):
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SHARE-BASED COMPENSATION (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-Based Compensation Expense | The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended (Amended 2007 Plan), and 2019 Equity Incentive Plan (2019 Plan) and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan, as amended, (ESPP), based on estimated fair values within the applicable cost and expense lines identified below (in thousands):
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CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
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Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):
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Summary of Marketable Securities | The following is a summary of marketable securities held by NetScout at September 30, 2020, classified as short-term and long-term (in thousands):
The following is a summary of marketable securities held by NetScout at March 31, 2020, classified as short-term and long-term (in thousands):
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Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company's marketable securities held at September 30, 2020 and March 31, 2020 were as follows (in thousands):
|
FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets and Liabilities | The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at September 30, 2020 and March 31, 2020 (in thousands):
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Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets | The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial liabilities for the six months ended September 30, 2020 (in thousands):
|
INVENTORIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consist of the following (in thousands):
|
GOODWILL AND INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2020 as follows (in thousands):
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Schedule of Intangible Assets | Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at September 30, 2020 (in thousands):
Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2020 (in thousands):
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Finite-lived Intangible Assets Amortization Expense | The following table provides a summary of amortization expense for the three and six months ended September 30, 2020 and 2019, respectively (in thousands):
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Schedule of Expected Future Amortization Expense | The following is the expected future amortization expense at September 30, 2020 for the fiscal years ending March 31 (in thousands):
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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet | The notional amounts and fair values of derivative instruments in the consolidated balance sheets at September 30, 2020 and March 31, 2020 were as follows (in thousands):
(a)Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
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Summary of Effect of Foreign Exchange Forward Contracts on OCI and Results of Operations | The following table provides the effect foreign exchange forward contracts designated as hedging instruments had on other comprehensive income (loss) (OCI) and results of operations for the three months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. The following table provides the effect foreign exchange forward contracts not designated as hedging instruments had on the Company’s results of operations for the three months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. The following table provides the effect foreign exchange forward contracts designated as hedging instruments had on other comprehensive income (loss) (OCI) and results of operations for the six months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b)The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. The following table provides the effect foreign exchange forward contracts not designated as hedging instruments had on the Company’s results of operations for the six months ended September 30, 2020 and 2019 (in thousands):
(a)The amount represents the change in fair value of derivative contracts due to changes in spot rates.
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RESTRUCTURING CHARGES (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Liability | The following table provides a summary of the activity related to the restructuring plans and the related restructuring liabilities (in thousands):
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LEASES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Operating Lease Cost and Supplemental Cash Flow Information | The components of operating lease cost for the three and six months ended September 30, 2020 and 2019 were as follows (in thousands):
The table below presents supplemental cash flow information related to leases during the six months ended September 30, 2020 and 2019 (in thousands):
At September 30, 2020 and March 31, 2020, the weighted average remaining lease term in years and weighted average discount rate were as follows:
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Future Minimum Payments Under Non-Cancellable Leases | Future minimum payments under non-cancellable leases at September 30, 2020 are as follows (in thousands):
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PENSION BENEFIT PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and six months ended September 30, 2020 and 2019 (in thousands):
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NET LOSS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculations of the Basic and Diluted Net Loss Per Share and Potential Common Shares | Calculations of the basic and diluted net loss per share and potential common shares are as follows (in thousands, except for per share data):
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Summary of Antidilutive Securities Excluded from Computation of Diluted EPS | The following table sets forth restricted stock units excluded from the calculation of diluted net loss per share, since their inclusion would be anti-dilutive (in thousands):
|
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands):
|
BASIS OF PRESENTATION (Details) - USD ($) |
Sep. 30, 2020 |
Jan. 16, 2018 |
---|---|---|
Summary Of Significant Accounting Policies [Line Items] | ||
Deferred employer payroll taxes | $ 7,400,000 | |
Senior Secured Revolving Credit Facility | Line of Credit | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Current borrowing capacity | 317,000,000 | |
Credit facility | $ 1,000,000,000.0 | $ 1,000,000,000.0 |
REVENUE - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Mar. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | |||||
Revenue recognized | $ 165.7 | ||||
Deferred revenue | $ 335.8 | 335.8 | |||
Unrecognized accounts receivable and deferred revenue | 5.7 | 5.7 | $ 11.1 | ||
Capitalized contract cost | 7.5 | 7.5 | 7.2 | ||
Amortization of capitalized costs to obtain contracts | 1.5 | $ 1.6 | 3.1 | $ 3.2 | |
Prepaid Expenses and Other Current Assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost | 4.5 | 4.5 | 3.9 | ||
Other Assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Capitalized contract cost | $ 3.0 | $ 3.0 | $ 3.3 | ||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms | 30 days | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms | 90 days |
REVENUE - Allowance for Doubtful Accounts (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Accounts receivable beginning balance | $ 1,350 |
Provision for allowance for doubtful accounts | 25 |
Recoveries and other adjustments | (533) |
Write off charged against the allowance for doubtful accounts | (60) |
Accounts receivable ending balance | $ 782 |
SHARE-BASED COMPENSATION - Narrative (Details) - $ / shares |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 10, 2020 |
Sep. 30, 2020 |
Mar. 31, 2020 |
|
2019 Equity Incentive Plan | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Number of new shares (in shares) | 4,700,000 | ||
Number of shares reserved for issuance (in shares) | 11,494,651 | ||
ESPP | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Percentage of common stock price for employees | 85.00% | ||
Shares purchased by employees under ESPP (in shares) | 279,812 | ||
Share price (in USD per share) | $ 23.14 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Mar. 31, 2019 |
---|---|---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 415,719 | $ 338,489 | $ 245,064 | $ 409,632 |
Restricted cash | 748 | 1,748 | 1,000 | 188 |
Total cash, cash equivalents and restricted cash | $ 416,467 | $ 340,237 | $ 246,064 | $ 409,820 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|
Available-for-sale securities: | ||
Due in 1 year or less | $ 12,127 | $ 47,969 |
Due after 1 year through 5 years | 0 | 2,613 |
Available-for-sale Securities | $ 12,127 | $ 50,582 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2021 |
Apr. 30, 2020 |
Sep. 30, 2020 |
Mar. 31, 2020 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of contingent liability | $ 748 | $ 1,748 | ||
Gigavation | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of contingent liability | 700 | 700 | ||
Gigavation | Forecast | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of contingent liability | $ 700 | |||
Payments of contingent consideration | $ 700 | |||
Gigavation | Other Accrued Liabilities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of contingent liability | $ 700 | 700 | ||
Eastwind | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of contingent liability | $ 1,000 | |||
Payments of contingent consideration | $ 1,000 |
FAIR VALUE MEASUREMENTS - Reconciliation of Changes in Level 3 Liabilities (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at March 31, 2020 | $ (1,748) |
Payments made | 1,000 |
Balance at September 30, 2020 | $ (748) |
INVENTORIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 16,267 | $ 15,311 |
Work in process | 125 | 819 |
Finished goods | 6,057 | 5,376 |
Deferred costs | 3,774 | 721 |
Total inventories | $ 26,223 | $ 22,227 |
ACQUISITIONS & DIVESTITURES - Gigavation (Details) - USD ($) $ in Thousands |
Feb. 05, 2020 |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 1,718,595 | $ 1,725,680 | |
Gigavation | |||
Business Acquisition [Line Items] | |||
Percentage of common stock acquired | 100.00% | ||
Estimated purchase price | $ 8,000 | ||
Goodwill | $ 3,800 |
ACQUISITIONS & DIVESTITURES - Eastwind Acquisition (Details) - USD ($) $ in Thousands |
Apr. 03, 2019 |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 1,718,595 | $ 1,725,680 | |
Eastwind | |||
Business Acquisition [Line Items] | |||
Estimated purchase price | $ 5,200 | ||
Goodwill | $ 1,000 |
ACQUISITIONS & DIVESTITURES - HNT Tools Business Divestiture (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 14, 2018 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Business Acquisition [Line Items] | |||||
Transitional services, period (up to) | 18 months | ||||
Income from divestiture | $ 0.1 | $ 0.3 | $ 0.1 | $ 1.2 | |
HNT Tools Business | Disposed of by Sale | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration related to the divestiture, measurement period | 2 years | ||||
Change in fair value contingent consideration in other expense | $ 0.5 | ||||
HNT Tools Business | Disposed of by Sale | Maximum | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration related to the divestiture | $ 4.0 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at March 31, 2020 | $ 1,725,680 |
Foreign currency translation impact | (7,085) |
Balance at September 30, 2020 | $ 1,718,595 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 20,688 | $ 22,814 | $ 40,967 | $ 45,764 |
Cost of product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 5,320 | 6,677 | 10,333 | 13,479 |
Operating expense | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 15,368 | $ 16,137 | $ 30,634 | $ 32,285 |
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Mar. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 (remaining six months) | $ 40,544 | |
2022 | 71,466 | |
2023 | 63,731 | |
2024 | 55,485 | |
2025 | 48,421 | |
Thereafter | 253,536 | |
Net | $ 533,183 | $ 563,579 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) |
6 Months Ended |
---|---|
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Managing period of hedging forecasted cash flows for operating expenses denominated in foreign currencies | 12 months |
Contract maturity period | 12 months |
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
Employee
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Mar. 31, 2020
USD ($)
plan
|
|
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ (31) | $ 150 | $ 62 | $ 273 | ||
Restructuring plans | plan | 2 | |||||
Restructuring costs addition | $ 100 | |||||
VSP | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 17,300 | |||||
Number of employees terminated | Employee | 155 | |||||
VSP | Employee-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 100 | |||||
Q2FY20 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 500 | |||||
Q2FY20 Plan | Employee-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 200 | |||||
Q4FY20 Plan | Employee-Related | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 2,100 |
RESTRUCTURING CHARGES - Schedule of Restructuring Liability (Details) $ in Thousands |
6 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2020 | $ 1,720 |
Restructuring charges to operations | 62 |
Cash payments | (1,863) |
Other adjustments | 81 |
Balance at September 30, 2020 | 0 |
Q2FY20 Plan | Employee Related Restructuring Plan 2019 | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2020 | 3 |
Restructuring charges to operations | 0 |
Cash payments | (3) |
Other adjustments | 0 |
Balance at September 30, 2020 | 0 |
Q4FY20 Plan | Employee Related Restructuring Plan 2019 | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2020 | 1,717 |
Restructuring charges to operations | 62 |
Cash payments | (1,860) |
Other adjustments | 81 |
Balance at September 30, 2020 | $ 0 |
LEASES - Narrative (Details) |
Sep. 30, 2020 |
---|---|
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining lease terms | 11 years |
LEASES - Operating Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Lease cost under long-term operating leases | $ 3,263 | $ 3,276 | $ 6,525 | $ 6,521 |
Lease cost under short-term operating leases | 1,567 | 897 | 2,380 | 1,749 |
Variable lease cost under short-term and long-term operating leases | 1,068 | 1,063 | 1,950 | 2,275 |
Total operating lease cost | $ 5,898 | $ 5,236 | $ 10,855 | $ 10,545 |
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Mar. 31, 2020 |
|
Leases [Abstract] | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,794 | $ 2,049 | |
Weighted average remaining lease term in years - operating leases | 8 years 1 month 2 days | 8 years 7 months 2 days | |
Weighted average discount rate - operating leases | 4.10% | 4.10% |
LEASES - Future Minimum Payments Under Non-Cancellable Leases (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 (remaining six months) | $ 6,141 |
2022 | 14,507 |
2023 | 12,339 |
2024 | 10,216 |
2025 | 10,057 |
Thereafter | 38,364 |
Total lease payments | 91,624 |
Less imputed interest | (13,626) |
Present value of lease liabilities | $ 77,998 |
PENSION BENEFIT PLANS - Narrative (Details) $ in Millions |
6 Months Ended | |
---|---|---|
Sep. 30, 2020
USD ($)
Employee
|
Mar. 31, 2020
USD ($)
|
|
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions to defined benefit pension plans | $ 0.2 | |
Expected cash contribution requirements for defined benefit pension plans, less than | $ 1.0 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Number of employees participating in noncontributory defined benefit pension plans | Employee | 0 |
PENSION BENEFIT PLANS - Net Periodic Pension Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Retirement Benefits [Abstract] | ||||
Service cost | $ 52 | $ 45 | $ 104 | $ 86 |
Interest cost | 93 | 106 | 186 | 202 |
Net periodic pension cost | $ 145 | $ 151 | $ 290 | $ 288 |
TREASURY STOCK (Details) - USD ($) $ in Thousands |
6 Months Ended | 35 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Jan. 16, 2018 |
Oct. 24, 2017 |
|
Equity, Class of Treasury Stock [Line Items] | |||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | 20,000,000 | |||
Shares repurchased during the period, value | $ 0 | $ 100,000 | |||
Stock remaining to be purchased (in shares) | 7,243,431 | 7,243,431 | |||
Restricted Stock Units | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares paid for tax withholding (in shares) | 481,739 | 500,093 | |||
Cost related to tax withholding | $ 12,600 | $ 11,400 | |||
Share Repurchase Program, October 2017 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | |
Shares repurchased during the period (in shares) | 0 | 4,160,836 | 17,756,569 | ||
Shares repurchased during the period, value | $ 100,000 | $ 468,700 |
NET LOSS PER SHARE - Schedule of Calculations of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Numerator: | ||||
Net loss | $ (3,686) | $ (17,472) | $ (21,106) | $ (46,815) |
Denominator: | ||||
Denominator for basic net loss per share - weighted average common shares outstanding (in shares) | 73,058 | 75,687 | 72,682 | 76,490 |
Dilutive common equivalent shares: | ||||
Weighted average restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted net loss per share - weighted average shares outstanding (in shares) | 73,058 | 75,687 | 72,682 | 76,490 |
Net loss per share: | ||||
Basic net loss per share (in dollars per share) | $ (0.05) | $ (0.23) | $ (0.29) | $ (0.61) |
Diluted net loss per share (in dollars per share) | $ (0.05) | $ (0.23) | $ (0.29) | $ (0.61) |
NET LOSS PER SHARE - Antidilutive Securities Excluded from Computation (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 536 | 624 | 839 | 897 |
INCOME TAXES (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 1057.40% | 60.10% | 11.80% | 17.70% |
SEGMENT AND GEOGRAPHIC INFORMATION (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
Segment
|
Sep. 30, 2019
USD ($)
|
|
Segment Reporting [Abstract] | ||||
Number of segments | Segment | 1 | |||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 205,339 | $ 216,421 | $ 389,154 | $ 402,445 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 120,027 | 139,544 | 227,350 | 246,647 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 37,990 | 33,901 | 72,748 | 65,210 |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 13,878 | 13,138 | 27,574 | 25,690 |
Rest of the world | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 33,444 | $ 29,838 | $ 61,482 | $ 64,898 |
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