Revenue from Contracts with Customers (Tables)

12 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Contract Assets and Contract Liabilities



(in thousands)	As Reported		As Adjusted
	September 30, 2019		October 1, 2018
Contract asset	$	21,038	$	25,037
Deferred revenue	$	396,632	$	356,263

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue



	Year Ended September 30,
	As Reported ASC 606		ASC 605		As Reported ASC 605		As Reported ASC 605
Revenue (in thousands)	2019		2019		2018		2017
Subscription license	$	253,698
Subscription support & cloud services	348,452
Total subscription	602,150		$	667,597	$	482,027	$	279,246
Perpetual support	415,248		411,030		496,826		574,680
Total recurring revenue	1,017,398		1,078,627		978,853		853,926
Perpetual license	70,702		72,191		109,634		133,390
Total software revenue	1,088,100		1,150,818		1,088,487		987,316
Professional services	167,531		160,676		153,337		176,723
Total revenue	$	1,255,631	$	1,311,494	$	1,241,824	$	1,164,039

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The following tables present our Balance Sheets and Statements of Operations as reported under ASC 606 for the current period with comparative periods reported under ASC 605:



(in thousands)	September 30,
	As Reported ASC 606			ASC 605			As Reported ASC 605
	2019			2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	269,579		$	269,579		$	259,946
Short-term marketable securities	27,891			27,891			25,836
Accounts receivable⁽¹⁾	372,743			107,921			129,297
Prepaid expenses	52,701			54,384			48,997
Other current assets ⁽²⁾	59,707			199,513			169,708
Total current assets	782,621			659,288			633,784
Property and equipment, net	105,531			105,531			80,613
Goodwill	1,238,179			1,238,179			1,182,457
Acquired intangible assets, net	169,949			169,949			200,202
Long-term marketable securities	29,544			29,544			30,115
Deferred tax assets⁽³⁾	198,634			233,026			165,566
Other assets ⁽⁴⁾	140,130			36,391			36,285
Total assets	$	2,664,588		$	2,471,908		$	2,329,022
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	42,442		$	42,442		$	53,473
Accrued expenses and other current liabilities⁽⁵⁾	104,028			78,007			74,388
Accrued compensation and benefits	88,769			88,769			101,784
Accrued income taxes⁽³⁾	17,407			21,336			18,044
Deferred revenue⁽⁶⁾	385,509			569,171			487,590
Total current liabilities	638,155			799,725			735,279
Long-term debt	669,134			669,134			643,268
Deferred tax liabilities⁽³⁾	41,683			14,644			5,589
Deferred revenue⁽⁶⁾	11,123			9,577			11,852
Other liabilities	102,495			102,495			58,445
Total liabilities	1,462,590			1,595,575			1,454,433

Stockholders’ equity:
Preferred stock	—			—			—
Common stock	1,149			1,149			1,180
Additional paid-in capital	1,502,949			1,502,949			1,558,403
Accumulated deficit	(191,390		)	(524,169		)	(599,409		)
Accumulated other comprehensive loss	(110,710		)	(103,596		)	(85,585		)
Total stockholders’ equity	1,201,998			876,333			874,589
Total liabilities and stockholders’ equity	$	2,664,588		$	2,471,908		$	2,329,022

The changes in balance sheet accounts due to the adoption of ASC 606 are due primarily to the following:


(1)	Up front license recognition under our subscription contracts and billed but uncollected support and subscription receivables that had corresponding deferred revenue, which were included in other current assets prior to our adoption of ASC 606.

(2)

Support and subscription receivables previously included in other current assets described in note (1) above, offset by contract assets and capitalized commission costs. Under ASC 605, unearned billed deferred revenue, which is not yet paid is included in other current assets. Billed, but uncollected support and subscription amounts included in other current assets as of September 30, 2019 and 2018 were $185.7 million and $153.6 million, respectively.


(3)	The tax effect of the accumulated deficit impact related to the acceleration of revenue and deferral of costs (primarily commissions).


(4)	The long-term portion of unbilled receivables due to the acceleration of license revenue on multi-year subscription contracts and the long-term portion of capitalized commission costs.

(5) Refund liability, primarily associated with the annual right to exchange on-premise subscription software described above in Judgments and Estimates.

(6) The decrease in deferred revenue recorded to accumulated deficit upon adoption of ASC 606 primarily related to on-premise subscription software licenses.



(in thousands)	September 30,
	As Reported ASC 606			ASC 605			As Reported ASC 605			As Reported ASC 605
	2019			2019			2018			2017
Revenue:
License ⁽¹⁾	$	324,400		$	666,770		$	529,265		$	356,326
Support and cloud services⁽¹⁾	763,700			484,048			559,222			630,990
Total software revenue	1,088,100			1,150,818			1,088,487			987,316
Professional services	167,531			160,676			153,337			176,723
Total revenue	1,255,631			1,311,494			1,241,824			1,164,039
Cost of revenue:
Cost of license revenue	51,936			50,231			47,737			66,841
Cost of support and cloud services revenue	133,478			132,987			135,106			110,931
Total cost of software revenue	185,414			183,218			182,843			177,772
Cost of professional service revenue	139,964			134,936			143,659			150,730
Total cost of revenue: ⁽²⁾	325,378			318,154			326,502			328,502
Gross margin	930,253			993,340			915,322			835,537
Operating expenses:
Sales and marketing ⁽³⁾	417,449			441,958			414,764			372,702
Research and development	246,888			246,888			249,786			236,028
General and administrative	127,919			127,919			143,045			144,991
Amortization of acquired intangible assets	23,841			23,841			31,350			32,108
Restructuring and other charges, net	51,114			51,114			3,764			7,942
Total operating expenses	867,211			891,720			842,709			793,771
Operating income	63,042			101,620			72,613			41,766
Interest expense	(43,047		)	(43,047		)	(41,673		)	(42,400		)
Other income (expense), net	305			131			(2,284		)	(772		)
Income before income taxes	20,300			58,704			28,656			(1,406		)
Provision (benefit) for income taxes⁽⁴⁾	47,760			55,725			(23,331		)	(7,645		)
Net income (loss)	$	(27,460	)	$	2,979		$	51,987		$	6,239

(1)

The reduction in license revenue and increase in support revenue is a result of the support component of subscription licenses which is included in license revenue under ASC 605. For the year ended September 30, 2019, license revenue decreased by approximately $215.0 million as a result of the revenue recorded to accumulated deficit. This was partially offset by approximately $153.5 million as a result of revenue recognized in future fiscal periods.

(2) Cost of revenue under ASC 606 is higher than under ASC 605 due to the treatment of deferred professional services costs under the new accounting guidance, partially offset by the timing of revenue recognition under ASC 606 resulting in lower associated royalty costs.

(3) Sales and marketing costs are lower under ASC 606 due to the amortization of commissions costs capitalized upon adoption of ASC 606, offset by the deferral of ongoing commission expenses under the new accounting guidance.

(4) The benefit for income taxes under ASC 606 includes indirect effects of the adoption.