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 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | |||||||||||||||||
Emerging growth company |
PART I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
(In thousands, except share data) | August 31, 2021 | November 30, 2020 | |||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Total cash, cash equivalents and short-term investments | |||||||||||
Accounts receivable (less allowances of $ | |||||||||||
Unbilled receivables and contract assets | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Long-term unbilled receivables and contract assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Deferred tax assets | |||||||||||
Right-of-use lease assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt, net | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued compensation and related taxes | |||||||||||
Dividends payable to shareholders | |||||||||||
Short-term operating lease liabilities | |||||||||||
Income taxes payable | |||||||||||
Other accrued liabilities | |||||||||||
Short-term deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net | |||||||||||
Convertible senior notes, net | |||||||||||
Long-term operating lease liabilities | |||||||||||
Long-term deferred revenue | |||||||||||
Other noncurrent liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands, except per share data) | August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Software licenses | $ | $ | $ | $ | |||||||||||||||||||
Maintenance and services | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Costs of revenue: | |||||||||||||||||||||||
Cost of software licenses | |||||||||||||||||||||||
Cost of maintenance and services | |||||||||||||||||||||||
Amortization of acquired intangibles | |||||||||||||||||||||||
Total costs of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Amortization of acquired intangibles | |||||||||||||||||||||||
Restructuring expenses | |||||||||||||||||||||||
Acquisition-related expenses | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (expense) income: | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest income and other, net | |||||||||||||||||||||||
Foreign currency loss, net | ( | ( | ( | ( | |||||||||||||||||||
Total other expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Cash dividends declared per common share | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||||||||
Unrealized gain (loss) on hedging activity, net of tax provision of $ | ( | ||||||||||||||||||||||
Unrealized (loss) gain on investments, net of tax benefit of $ | ( | ( | |||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Nine Months Ended August 31, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, December 1, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Equity components of Notes, net of issuance costs and tax | — | — | — | — | |||||||||||||||||||||||||||||||
Purchase of capped calls, net of tax | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | $ | $ | $ | ( | $ |
Three Months Ended August 31, 2021 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, June 1, 2021 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Equity components of Notes, net of issuance costs and tax | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Purchase of capped calls, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | $ | $ | $ | ( | $ |
Nine Months Ended August 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, December 1, 2019 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | ( | — | — | ||||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Treasury stock repurchases and retirements | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | $ | $ | $ | ( | $ |
Three Months Ended August 31, 2020 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | |||||||||||||||||||||||||||||||
(in thousands) | Number of Shares | Amount | |||||||||||||||||||||||||||||||||
Balance, June 1, 2020 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | — | — | |||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of restricted stock units and release of deferred stock units | — | — | — | — | |||||||||||||||||||||||||||||||
Withholding tax payments related to net issuance of RSUs | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Dividends declared | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | |||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | $ | $ | $ | ( | $ |
Nine Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization of property and equipment | |||||||||||
Amortization of acquired intangibles and other | |||||||||||
Amortization of debt discount and issuance costs on Notes | |||||||||||
Stock-based compensation | |||||||||||
Non-cash lease expense | |||||||||||
Loss on disposal of property and equipment | |||||||||||
Deferred income taxes | ( | ||||||||||
Allowances for bad debt and sales credits | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Other assets | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Lease liabilities | ( | ( | |||||||||
Income taxes payable | |||||||||||
Deferred revenue | ( | ||||||||||
Net cash flows from operating activities | |||||||||||
Cash flows from (used in) investing activities: | |||||||||||
Purchases of investments | ( | ||||||||||
Sales and maturities of investments | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Decrease in escrow receivable and other | |||||||||||
Net cash flows from investing activities | |||||||||||
Cash flows from (used in) financing activities: | |||||||||||
Proceeds from stock-based compensation plans | |||||||||||
Payments for taxes related to net share settlements of equity awards | ( | ( | |||||||||
Repurchases of common stock | ( | ( | |||||||||
Proceeds from issuance of senior convertible notes, net of issuance costs of $ | |||||||||||
Purchase of capped calls | ( | ||||||||||
Dividend payments to shareholders | ( | ( | |||||||||
Payment of principal on long-term debt | ( | ( | |||||||||
Payment of debt issuance costs | ( | ||||||||||
Net cash flows from (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash | |||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Nine Months Ended | |||||||||||
August 31, 2021 | August 31, 2020 | ||||||||||
Supplemental disclosure: | |||||||||||
Cash paid for income taxes, net of refunds of $ | $ | $ | |||||||||
Cash paid for interest | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
Total fair value of restricted stock awards, restricted stock units and deferred stock units on date vested | $ | $ | |||||||||
Dividends declared | $ | $ |
Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
U.S. treasury bonds | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Amortized Cost Basis | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
Cash | $ | $ | — | $ | — | $ | |||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
U.S. treasury bonds | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
August 31, 2021 | November 30, 2020 | ||||||||||||||||||||||
Cash and Equivalents | Short-Term Investments | Cash and Equivalents | Short-Term Investments | ||||||||||||||||||||
Cash | $ | $ | — | $ | $ | — | |||||||||||||||||
Money market funds | — | — | |||||||||||||||||||||
U.S. treasury bonds | — | — | |||||||||||||||||||||
Corporate bonds | — | — | |||||||||||||||||||||
Total | $ | $ | $ | $ |
August 31, 2021 | November 30, 2020 | ||||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year(1) | |||||||||||
Total | $ | $ |
August 31, 2021 | November 30, 2020 | ||||||||||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | ||||||||||||||||||||
Interest rate swap contracts designated as cash flow hedges | $ | $ | ( | $ | $ | ( |
August 31, 2021 | November 30, 2020 | ||||||||||||||||||||||
Notional Value | Fair Value | Notional Value | Fair Value | ||||||||||||||||||||
Forward contracts to sell U.S. dollars | $ | $ | $ | $ | |||||||||||||||||||
Forward contracts to purchase U.S. dollars | ( | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements Using | |||||||||||||||||||||||
Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. treasury bonds | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Foreign exchange derivatives | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest rate swap | $ | ( | $ | $ | ( | $ |
Fair Value Measurements Using | |||||||||||||||||||||||
Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
U.S. treasury bonds | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Foreign exchange derivatives | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Interest rate swap | $ | ( | $ | $ | ( | $ |
August 31, 2021 | November 30, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Book Value | Gross Carrying Amount | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||
Purchased technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer-related | ( | ( | |||||||||||||||||||||||||||||||||
Trademarks and trade names | ( | ( | |||||||||||||||||||||||||||||||||
Non-compete agreement | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Remainder of 2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total | $ |
Balance, November 30, 2020 | $ | ||||
Measurement period adjustments | ( | ||||
Translation adjustments | |||||
Balance, August 31, 2021 | $ |
Initial Purchase Price Allocation | Measurement Period Adjustments | Adjusted Purchase Price Allocation | Life | ||||||||||||||||||||
Net working capital | $ | $ | $ | ||||||||||||||||||||
Property, plant and equipment | — | ||||||||||||||||||||||
Purchased technology | — | ||||||||||||||||||||||
Trade name | — | ||||||||||||||||||||||
Customer relationships | — | ||||||||||||||||||||||
Other assets | — | ||||||||||||||||||||||
Other noncurrent liabilities | ( | — | ( | ||||||||||||||||||||
Lease liabilities, net | ( | — | ( | ||||||||||||||||||||
Deferred taxes | ( | ( | |||||||||||||||||||||
Deferred revenue | ( | — | ( | ||||||||||||||||||||
Goodwill | ( | ||||||||||||||||||||||
Net assets acquired | $ | $ | $ |
(In thousands, except per share data) | Pro Forma Three Months Ended August 31, 2020 | ||||
Revenue | $ | ||||
Net income | $ | ||||
Net income per basic share | $ | ||||
Net income per diluted share | $ |
(In thousands, except per share data) | Pro Forma Nine Months Ended August 31, 2020 | ||||
Revenue | $ | ||||
Net income | $ | ||||
Net income per basic share | $ | ||||
Net income per diluted share | $ |
(In thousands) | 2026 Notes | Credit Facility Maturing in 2024 | Total | ||||||||||||||
Remainder of 2021 | $ | $ | $ | ||||||||||||||
2022 | |||||||||||||||||
2023 | |||||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
Total face value of long-term debt | |||||||||||||||||
Unamortized discount and issuance costs | ( | ( | ( | ||||||||||||||
Less current portion of long-term debt, net | ( | ( | |||||||||||||||
Long-term debt | $ | $ | $ |
(In thousands) | |||||
Principal | $ | ||||
Less: issuance costs | ( | ||||
$ |
(In thousands) | August 31, 2021 | ||||
Principal | $ | ||||
Conversion option allocated to equity | ( | ||||
Unamortized discount | ( | ||||
$ |
(In thousands) | August 31, 2021 | ||||
Conversion options(1) | $ | ||||
Capped call | ( | ||||
$ | |||||
(1) Net of issuance costs |
Three Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Contractual interest expense ( | $ | $ | |||||||||
Amortization of debt discount(1) | |||||||||||
Amortization of issuance costs(1) | |||||||||||
$ | $ | ||||||||||
(1) Amortized based upon an effective interest rate of |
Nine Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Contractual interest expense ( | $ | $ | |||||||||
Amortization of debt discount(1) | |||||||||||
Amortization of issuance costs(1) | |||||||||||
$ | $ | ||||||||||
(1) Amortized based upon an effective interest rate of |
Three Months Ended | Nine Months Ended | ||||||||||
August 31, 2021 | August 31, 2021 | ||||||||||
Lease costs under long-term operating leases | $ | $ | |||||||||
Lease costs under short-term operating leases | |||||||||||
Variable lease cost under short-term and long-term operating leases(1) | |||||||||||
Operating lease right-of-use asset impairment | |||||||||||
Total operating lease cost | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||
August 31, 2020 | August 31, 2020 | ||||||||||
Lease costs under long-term operating leases | $ | $ | |||||||||
Lease costs under short-term operating leases | |||||||||||
Variable lease cost under short-term and long-term operating leases(1) | |||||||||||
Operating lease right-of-use asset impairment | |||||||||||
Total operating lease cost | $ | $ |
Nine Months Ended | |||||||||||
August 31, 2021 | August 31, 2020 | ||||||||||
Cash paid for leases | $ | $ | |||||||||
Right-of-use assets recognized for new leases and amendments (non-cash) | $ | $ |
August 31, 2021 | November 30, 2020 | ||||||||||
Weighted average remaining lease term in years | |||||||||||
Weighted average discount rate | % | % |
August 31, 2021 | |||||
Remainder of 2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | |||||
Less imputed interest(1) | ( | ||||
Present value of lease liabilities | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | ||||||||||||||||||||
Cost of maintenance and services | $ | $ | $ | $ | |||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Foreign Currency Translation Adjustment | Unrealized Gains on Investments | Unrealized Losses on Hedging Activity | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
Balance, December 1, 2020 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive income before reclassifications, net of tax | ( | ||||||||||||||||||||||
Balance, August 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||||||||
Performance obligations transferred at a point in time: | |||||||||||||||||||||||
Software licenses | $ | $ | $ | $ | |||||||||||||||||||
Performance obligations transferred over time: | |||||||||||||||||||||||
Maintenance | |||||||||||||||||||||||
Services | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | |||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
EMEA | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
Total | $ |
Balance, December 1, 2020 | $ | ||||
Billings and other | |||||
Revenue recognized | ( | ||||
Balance, August 31, 2021 | $ |
Excess Facilities and Other Costs | Employee Severance and Related Benefits | Total | |||||||||||||||
Balance, December 1, 2020 | $ | $ | $ | ||||||||||||||
Costs incurred | |||||||||||||||||
Cash disbursements | ( | ( | ( | ||||||||||||||
Translation adjustments and other | |||||||||||||||||
Balance, August 31, 2021 | $ | $ | $ |
Excess Facilities and Other Costs | Employee Severance and Related Benefits | Total | |||||||||||||||
Balance, December 1, 2020 | $ | $ | $ | ||||||||||||||
Costs incurred | |||||||||||||||||
Cash disbursements | ( | ( | ( | ||||||||||||||
Translation adjustments and other | |||||||||||||||||
Balance, August 31, 2021 | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 31, 2021 | August 31, 2020 | August 31, 2021 | August 31, 2020 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Dilutive impact from common stock equivalents | |||||||||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Revenue | $ | 147,417 | $ | 109,699 | 34 | % | 33 | % |
Nine Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Revenue | $ | 391,185 | $ | 319,765 | 22 | % | 20 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Software Licenses | $ | 51,930 | $ | 27,514 | 89 | % | 87 | % | |||||||||||||||
As a percentage of total revenue | 35 | % | 25 | % |
Nine Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Software Licenses | $ | 115,354 | $ | 77,806 | 48 | % | 46 | % | |||||||||||||||
As a percentage of total revenue | 29 | % | 24 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Maintenance | $ | 82,875 | $ | 72,764 | 14 | % | 13 | % | |||||||||||||||
As a percentage of total revenue | 56 | % | 66 | % | |||||||||||||||||||
Services | 12,612 | 9,421 | 34 | % | 33 | % | |||||||||||||||||
As a percentage of total revenue | 9 | % | 9 | % | |||||||||||||||||||
Total maintenance and services revenue | $ | 95,487 | $ | 82,185 | 16 | % | 15 | % | |||||||||||||||
As a percentage of total revenue | 65 | % | 75 | % |
Nine Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
Maintenance | $ | 239,921 | $ | 214,506 | 12 | % | 10 | % | |||||||||||||||
As a percentage of total revenue | 61 | % | 67 | % | |||||||||||||||||||
Services | 35,910 | 27,453 | 31 | % | 29 | % | |||||||||||||||||
As a percentage of total revenue | 10 | % | 9 | % | |||||||||||||||||||
Total maintenance and services revenue | $ | 275,831 | $ | 241,959 | 14 | % | 12 | % | |||||||||||||||
As a percentage of total revenue | 71 | % | 76 | % |
Three Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
North America | $ | 93,880 | $ | 62,927 | 49 | % | 49 | % | |||||||||||||||
As a percentage of total revenue | 64 | % | 57 | % | |||||||||||||||||||
Europe, the Middle East and Africa ("EMEA") | $ | 40,999 | $ | 37,447 | 9 | % | 6 | % | |||||||||||||||
As a percentage of total revenue | 28 | % | 34 | % | |||||||||||||||||||
Latin America | $ | 5,298 | $ | 3,547 | 49 | % | 47 | % | |||||||||||||||
As a percentage of total revenue | 3 | % | 3 | % | |||||||||||||||||||
Asia Pacific | $ | 7,240 | $ | 5,778 | 25 | % | 23 | % | |||||||||||||||
As a percentage of total revenue | 5 | % | 6 | % |
Nine Months Ended | % Change | ||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | As Reported | Constant Currency | |||||||||||||||||||
North America | $ | 236,479 | $ | 184,904 | 28 | % | 28 | % | |||||||||||||||
As a percentage of total revenue | 60 | % | 58 | % | |||||||||||||||||||
Europe, the Middle East and Africa ("EMEA") | $ | 122,560 | $ | 106,592 | 15 | % | 9 | % | |||||||||||||||
As a percentage of total revenue | 31 | % | 33 | % | |||||||||||||||||||
Latin America | $ | 12,544 | $ | 10,893 | 15 | % | 20 | % | |||||||||||||||
As a percentage of total revenue | 3 | % | 4 | % | |||||||||||||||||||
Asia Pacific | $ | 19,602 | $ | 17,376 | 13 | % | 9 | % | |||||||||||||||
As a percentage of total revenue | 6 | % | 5 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | Change | August 31, 2021 | August 31, 2020 | Change | |||||||||||||||||||||||||||||||||||||||||
Cost of software licenses | $ | 1,574 | $ | 1,103 | $ | 471 | 43 | % | $ | 3,763 | $ | 3,302 | $ | 461 | 14 | % | |||||||||||||||||||||||||||||||
As a percentage of software license revenue | 3 | % | 4 | % | 3 | % | 4 | % | |||||||||||||||||||||||||||||||||||||||
As a percentage of total revenue | 1 | % | 1 | % | 1 | % | 1 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | Change | August 31, 2021 | August 31, 2020 | Change | |||||||||||||||||||||||||||||||||||||||||
Cost of maintenance and services | $ | 14,895 | $ | 11,971 | $ | 2,924 | 24 | % | $ | 42,887 | $ | 35,607 | $ | 7,280 | 20 | % | |||||||||||||||||||||||||||||||
As a percentage of maintenance and services revenue | 16 | % | 15 | % | 16 | % | 15 | % | |||||||||||||||||||||||||||||||||||||||
As a percentage of total revenue | 10 | % | 11 | % | 11 | % | 11 | % | |||||||||||||||||||||||||||||||||||||||
Components of cost of maintenance and services: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 10,056 | $ | 8,258 | $ | 1,798 | 22 | % | $ | 29,634 | $ | 25,105 | $ | 4,529 | 18 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 3,504 | 2,894 | 610 | 21 | % | 9,539 | 8,283 | 1,256 | 15 | % | |||||||||||||||||||||||||||||||||||||
Hosting and other | 1,335 | 819 | 516 | 63 | % | 3,714 | 2,219 | 1,495 | 67 | % | |||||||||||||||||||||||||||||||||||||
Total cost of maintenance and services | $ | 14,895 | $ | 11,971 | $ | 2,924 | 24 | % | $ | 42,887 | $ | 35,607 | $ | 7,280 | 20 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Amortization of intangibles | $ | 3,599 | $ | 1,664 | 116 | % | $ | 10,719 | $ | 4,974 | 116 | % | |||||||||||||||||||||||
As a percentage of total revenue | 2 | % | 2 | % | 3 | % | 2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Gross profit | $ | 127,349 | $ | 94,961 | 34 | % | $ | 333,816 | $ | 275,882 | 21 | % | |||||||||||||||||||||||
As a percentage of total revenue | 86 | % | 87 | % | 85 | % | 86 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | Change | August 31, 2021 | August 31, 2020 | Change | |||||||||||||||||||||||||||||||||||||||||
Sales and marketing | $ | 29,737 | $ | 22,186 | $ | 7,551 | 34 | % | $ | 88,468 | $ | 68,100 | $ | 20,368 | 30 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 20 | % | 20 | % | 23 | % | 21 | % | |||||||||||||||||||||||||||||||||||||||
Components of sales and marketing: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 25,538 | $ | 19,243 | $ | 6,295 | 33 | % | $ | 76,678 | $ | 58,472 | $ | 18,206 | 31 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 833 | 388 | 445 | 115 | % | 2,189 | 1,257 | 932 | 74 | % | |||||||||||||||||||||||||||||||||||||
Marketing programs and other | 3,366 | 2,555 | 811 | 32 | % | 9,601 | 8,371 | 1,230 | 15 | % | |||||||||||||||||||||||||||||||||||||
Total sales and marketing | $ | 29,737 | $ | 22,186 | $ | 7,551 | 34 | % | $ | 88,468 | $ | 68,100 | $ | 20,368 | 30 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | Change | August 31, 2021 | August 31, 2020 | Change | |||||||||||||||||||||||||||||||||||||||||
Product development costs | $ | 25,616 | $ | 20,676 | $ | 4,940 | 24 | % | $ | 76,579 | $ | 64,117 | $ | 12,462 | 19 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 17 | % | 19 | % | 20 | % | 20 | % | |||||||||||||||||||||||||||||||||||||||
Components of product development costs: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 24,550 | $ | 20,027 | $ | 4,523 | 23 | % | $ | 73,379 | $ | 62,139 | $ | 11,240 | 18 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 934 | 460 | 474 | 103 | % | 2,645 | 1,583 | 1,062 | 67 | % | |||||||||||||||||||||||||||||||||||||
Other product development costs | 132 | 189 | (57) | (30) | % | 555 | 395 | 160 | 41 | % | |||||||||||||||||||||||||||||||||||||
Total product development costs | $ | 25,616 | $ | 20,676 | $ | 4,940 | 24 | % | $ | 76,579 | $ | 64,117 | $ | 12,462 | 19 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | Change | August 31, 2021 | August 31, 2020 | Change | |||||||||||||||||||||||||||||||||||||||||
General and administrative | $ | 16,451 | $ | 13,514 | $ | 2,937 | 22 | % | $ | 46,335 | $ | 38,702 | $ | 7,633 | 20 | % | |||||||||||||||||||||||||||||||
As a percentage of total revenue | 11 | % | 12 | % | 12 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||
Components of general and administrative: | |||||||||||||||||||||||||||||||||||||||||||||||
Personnel related costs | $ | 12,732 | $ | 10,768 | $ | 1,964 | 18 | % | $ | 38,046 | $ | 31,121 | $ | 6,925 | 22 | % | |||||||||||||||||||||||||||||||
Contractors and outside services | 2,522 | 2,238 | 284 | 13 | % | 6,037 | 5,921 | 116 | 2 | % | |||||||||||||||||||||||||||||||||||||
Other general and administrative costs | 1,197 | 508 | 689 | 136 | % | 2,252 | 1,660 | 592 | 36 | % | |||||||||||||||||||||||||||||||||||||
Total cost of general and administrative | $ | 16,451 | $ | 13,514 | $ | 2,937 | 22 | % | $ | 46,335 | $ | 38,702 | $ | 7,633 | 20 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Amortization of intangibles | $ | 7,978 | $ | 4,176 | 91 | % | $ | 22,836 | $ | 12,484 | 83 | % | |||||||||||||||||||||||
As a percentage of total revenue | 5 | % | 4 | % | 6 | % | 4 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Restructuring expenses | $ | 40 | $ | 91 | (56) | % | $ | 1,133 | $ | 1,826 | (38) | % | |||||||||||||||||||||||
As a percentage of total revenue | — | % | — | % | — | % | 1 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Acquisition-related expenses | $ | 1,481 | $ | 1,125 | 32 | % | $ | 2,721 | $ | 1,439 | 89 | % | |||||||||||||||||||||||
As a percentage of total revenue | 1 | % | 1 | % | 1 | % | — | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Income from operations | $ | 46,046 | $ | 33,193 | 39 | % | $ | 95,744 | $ | 89,214 | 7 | % | |||||||||||||||||||||||
As a percentage of total revenue | 31 | % | 30 | % | 24 | % | 28 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Interest expense | $ | (6,510) | $ | (2,302) | (183) | % | $ | (13,625) | $ | (7,692) | (77) | % | |||||||||||||||||||||||
Interest income and other, net | 99 | 110 | (10) | % | 222 | 443 | (50) | % | |||||||||||||||||||||||||||
Foreign currency loss, net | (128) | (770) | 83 | % | (1,006) | (1,957) | 49 | % | |||||||||||||||||||||||||||
Total other expense, net | $ | (6,539) | $ | (2,962) | (121) | % | $ | (14,409) | $ | (9,206) | (57) | % | |||||||||||||||||||||||
As a percentage of total revenue | (4) | % | (3) | % | (4) | % | (3) | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Provision for income taxes | $ | 8,531 | $ | 6,254 | 36 | % | $ | 17,841 | $ | 17,947 | (1) | % | |||||||||||||||||||||||
As a percentage of total revenue | 6 | % | 6 | % | 5 | % | 6 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | % Change | August 31, 2021 | August 31, 2020 | % Change | |||||||||||||||||||||||||||||
Net income | $ | 30,976 | $ | 23,977 | 29 | % | $ | 63,494 | $ | 62,061 | 2 | % | |||||||||||||||||||||||
As a percentage of total revenue | 21 | % | 22 | % | 16 | % | 19 | % |
(In thousands) | August 31, 2021 | November 30, 2020 | |||||||||
Cash and cash equivalents | $ | 379,895 | $ | 97,990 | |||||||
Short-term investments | 3,782 | 8,005 | |||||||||
Total cash, cash equivalents and short-term investments | $ | 383,677 | $ | 105,995 |
Nine Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Net income | $ | 63,494 | $ | 62,061 | |||||||
Non-cash reconciling items included in net income | 69,191 | 48,391 | |||||||||
Changes in operating assets and liabilities | 1,917 | (8,367) | |||||||||
Net cash flows from operating activities | $ | 134,602 | $ | 102,085 |
Nine Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Net investment activity | $ | 4,150 | $ | 9,892 | |||||||
Purchases of property and equipment | (2,741) | (3,419) | |||||||||
Decrease in escrow receivable and other | 2,330 | — | |||||||||
Net cash flows from investing activities | $ | 3,739 | $ | 6,473 |
Nine Months Ended | |||||||||||
(In thousands) | August 31, 2021 | August 31, 2020 | |||||||||
Proceeds from stock-based compensation plans | $ | 9,247 | $ | 9,027 | |||||||
Repurchases of common stock | (35,000) | (20,000) | |||||||||
Payment of principal on long-term debt | (111,669) | (7,525) | |||||||||
Proceeds from issuance of senior convertible notes, net of issuance costs of $9,900 | 350,100 | — | |||||||||
Purchase of capped calls | (43,056) | — | |||||||||
Dividend payments to shareholders | (23,372) | (22,358) | |||||||||
Payment of debt issuance costs | (904) | — | |||||||||
Other financing activities | (2,398) | (4,072) | |||||||||
Net cash flows from (used in) financing activities | $ | 142,948 | $ | (44,928) |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
June 2021 | — | $ | — | — | $ | 155,000 | ||||||||||||||||||||
July 2021 | — | — | — | 155,000 | ||||||||||||||||||||||
August 2021 | — | — | — | 155,000 | ||||||||||||||||||||||
Total | — | $ | — | — | $ | 155,000 |
Exhibit No. | Description | |||||||
2.1*** | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
101* | The following materials from Progress Software Corporation’s Quarterly Report on Form 10-Q for the three and nine months ended August 31, 2021, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of August 31, 2021 and November 30, 2020; (ii) Condensed Consolidated Statements of Income for the three and nine months ended August 31, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended August 31, 2021 and 2020; (iv) Condensed Consolidated Statements of Shareholders' Equity for the three and nine months ended August 31, 2021 and 2020; (v) Condensed Consolidated Statements of Cash Flows for the three and nine months ended August 31, 2021 and 2020; and (vi) Notes to Condensed Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith | ||||
** | Furnished herewith | ||||
*** | Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed on September 27, 2021 |
Dated: | October 7, 2021 | /s/ YOGESH K. GUPTA | |||||||||
Yogesh K. Gupta | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Dated: | October 7, 2021 | /s/ ANTHONY FOLGER | |||||||||
Anthony Folger | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
/s/ YOGESH K. GUPTA | ||
Yogesh K. Gupta | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
/s/ ANTHONY FOLGER | ||
Anthony Folger | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
/s/ YOGESH K. GUPTA | /s/ ANTHONY FOLGER | |||||||||||||
President and Chief Executive Officer | Chief Financial Officer | |||||||||||||
Date: | October 7, 2021 | Date: | October 7, 2021 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Assets | ||
Allowance for accounts receivable | $ 578 | $ 1,315 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 43,842,539 | 44,240,635 |
Common stock, shares outstanding (in shares) | 43,842,539 | 44,240,635 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Revenue: | ||||
Total revenue | $ 147,417 | $ 109,699 | $ 391,185 | $ 319,765 |
Costs of revenue: | ||||
Amortization of acquired intangibles | 3,599 | 1,664 | 10,719 | 4,974 |
Total costs of revenue | 20,068 | 14,738 | 57,369 | 43,883 |
Gross profit | 127,349 | 94,961 | 333,816 | 275,882 |
Operating expenses: | ||||
Sales and marketing | 29,737 | 22,186 | 88,468 | 68,100 |
Product development | 25,616 | 20,676 | 76,579 | 64,117 |
General and administrative | 16,451 | 13,514 | 46,335 | 38,702 |
Amortization of acquired intangibles | 7,978 | 4,176 | 22,836 | 12,484 |
Restructuring expenses | 40 | 91 | 1,133 | 1,826 |
Acquisition-related expenses | 1,481 | 1,125 | 2,721 | 1,439 |
Total operating expenses | 81,303 | 61,768 | 238,072 | 186,668 |
Income from operations | 46,046 | 33,193 | 95,744 | 89,214 |
Other (expense) income: | ||||
Interest expense | (6,510) | (2,302) | (13,625) | (7,692) |
Interest income and other, net | 99 | 110 | 222 | 443 |
Foreign currency loss, net | (128) | (770) | (1,006) | (1,957) |
Total other expense, net | (6,539) | (2,962) | (14,409) | (9,206) |
Income before income taxes | 39,507 | 30,231 | 81,335 | 80,008 |
Provision for income taxes | 8,531 | 6,254 | 17,841 | 17,947 |
Net income | $ 30,976 | $ 23,977 | $ 63,494 | $ 62,061 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.71 | $ 0.53 | $ 1.45 | $ 1.38 |
Diluted (in dollars per share) | $ 0.70 | $ 0.53 | $ 1.43 | $ 1.37 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 43,762 | 45,036 | 43,896 | 44,941 |
Diluted (in shares) | 44,502 | 45,364 | 44,542 | 45,382 |
Cash dividends declared per common share (in dollars per share) | $ 0.175 | $ 0.165 | $ 0.525 | $ 0.495 |
Software licenses | ||||
Revenue: | ||||
Total revenue | $ 51,930 | $ 27,514 | $ 115,354 | $ 77,806 |
Costs of revenue: | ||||
Cost of revenue | 1,574 | 1,103 | 3,763 | 3,302 |
Maintenance and services | ||||
Revenue: | ||||
Total revenue | 95,487 | 82,185 | 275,831 | 241,959 |
Costs of revenue: | ||||
Cost of revenue | $ 14,895 | $ 11,971 | $ 42,887 | $ 35,607 |
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
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Statement of Comprehensive Income [Abstract] | ||||
Tax provision (benefit) on unrealized loss on hedging activity | $ 155 | $ 166 | $ 502 | $ (1,302) |
Tax provision (benefit) on accumulated unrealized gain on investments | $ (4) | $ (42) | $ (16) | $ 3 |
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
9 Months Ended | |
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Aug. 31, 2021 |
Aug. 31, 2020 |
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Statement of Cash Flows [Abstract] | ||
Payments of debt issuance costs | $ 9,900 | |
Proceeds from income tax refunds | $ 807 | $ 557 |
Basis of Presentation |
9 Months Ended |
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Aug. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Company Overview - Progress Software Corporation ("Progress," the "Company," "we," "us," or "our") provides the best products to develop, deploy and manage high-impact business applications. Our comprehensive product stack is designed to make technology teams more productive and we have a deep commitment to the developer community, both open source and commercial alike. With Progress, organizations can accelerate the creation and delivery of strategic business applications, automate the process by which applications are configured, deployed and scaled, and make critical data and content more accessible and secure - leading to competitive differentiation and business success. Over 1,700 independent software vendors ("ISVs"), 100,000 enterprise customers, and 3 million developers rely on Progress to power their applications. Our products are generally sold as perpetual licenses, but certain products also use term licensing models and our cloud-based offerings use a subscription-based model. More than half of our worldwide license revenue is realized through relationships with indirect channel partners, principally ISVs, original equipment manufacturers ("OEMs"), distributors and value-added resellers. ISVs develop and market applications using our technology and resell our products in conjunction with sales of their own products that incorporate our technology. OEMs are companies that embed our products into their own software products or devices. Value-added resellers are companies that add features or services to our product, then resell it as an integrated product or complete "turn-key" solution. We operate in North America and Latin America (the "Americas"); Europe, the Middle East and Africa ("EMEA"); and the Asia Pacific region, through local subsidiaries as well as independent distributors. Basis of Presentation and Significant Accounting Policies - We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2020, as amended by Form 10-K/A filed on March 30, 2021 (together, the "2020 10-K"). We made no material changes in the application of our significant accounting policies that were disclosed in our 2020 10-K. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our 2020 10-K, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and records changes in estimates in the period in which they become known. These estimates are based on historical data and experience, as well as various other assumptions that management believes to be reasonable under the circumstances. The most significant estimates relate to: the timing and amount of revenue recognition, including the determination of the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, and the transaction price allocated to performance obligations; the realization of tax assets and estimates of tax liabilities; fair values of investments in marketable securities; intangible assets and goodwill valuations; the recognition and disclosure of contingent liabilities; the collectability of accounts receivable; and assumptions used to determine the fair value of stock-based compensation. Actual results could differ from those estimates. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which requires measurement and recognition of expected credit losses for financial assets measured at amortized cost, including accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of "other-than-temporary" impairments. The Company adopted this standard effective December 1, 2020. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Convertible Debt In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present an embedded conversion feature for such debt in equity. Additionally, the debt discount resulting from the separation of the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. The standard also requires applying the if-converted method to calculate the impact of the convertible instrument on diluted earnings per share. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. The Company plans to adopt this standard in accordance with the full retrospective approach in the first quarter of fiscal year 2022. We have substantially completed our assessment of the retrospective application of this new standard to our historical financial statements. On a preliminary basis, we believe that the retrospective impact of the adoption of the standard on fiscal year 2021 results will be a decrease of interest expense of approximately $6.9 million, an increase of notes payable of approximately $56.0 million, a decrease of deferred tax liabilities of approximately $13.7 million, a decrease of additional paid-in capital of approximately $49.2 million, and an increase of retained earnings of approximately $6.9 million. We will finalize our retrospective presentation of our historical financial statements under the new standard in connection with our 10-Q filings during fiscal year 2022 and our 10-K for the fiscal year ending November 30, 2022.
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Cash, Cash Equivalents and Investments |
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Investments and Cash [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments A summary of our cash, cash equivalents and available-for-sale investments at August 31, 2021 is as follows (in thousands):
A summary of our cash, cash equivalents and available-for-sale investments at November 30, 2020 is as follows (in thousands):
Such amounts are classified on our condensed consolidated balance sheets as follows (in thousands):
The fair value of debt securities by contractual maturity is as follows (in thousands):
(1)Includes U.S. treasury bonds and corporate bonds, which are securities representing investments available for current operations and are classified as current on the condensed consolidated balance sheets. We did not hold any investments with continuous unrealized losses as of August 31, 2021 or November 30, 2020.
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Cash Flow Hedge On July 9, 2019, we entered into an interest rate swap contract with an initial notional amount of $150.0 million to manage the variability of cash flows associated with approximately one-half of our variable rate debt. The contract matures on April 30, 2024 and requires periodic interest rate settlements. Under this interest rate swap contract, we receive a floating rate based on the greater of 1-month LIBOR or 0.00%, and pay a fixed rate of 1.855% on the outstanding notional amount. We have designated the interest rate swap as a cash flow hedge and assess the hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative. To the extent that the interest rate swap is highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the derivative are included as a component of other comprehensive loss on our condensed consolidated balance sheets. Although we have determined at the onset of the hedge that the interest rate swap will be a highly effective hedge throughout the term of the contract, any portion of the fair value swap subsequently determined to be ineffective will be recognized in earnings. As of August 31, 2021, the fair value of the hedge was a loss of $4.8 million, which was included in other noncurrent liabilities on our condensed consolidated balance sheets. The following table presents our interest rate swap contract where the notional amount reflects the quarterly amortization of the interest rate swap, which is equal to approximately one-half of the corresponding reduction in the balance of our term loan as we make scheduled principal payments. The fair value of the derivative represents the discounted value of the expected future discounted cash flows for the interest rate swap, based on the amortization schedule and the current forward curve for the remaining term of the contract, as of the date of each reporting period (in thousands):
Forward Contracts We generally use forward contracts that are not designated as hedging instruments to hedge economically the impact of the variability in exchange rates on intercompany accounts receivable and loans receivable denominated in certain foreign currencies. We generally do not hedge the net assets of our international subsidiaries. All forward contracts are recorded at fair value on the consolidated balance sheets at the end of each reporting period and expire between 30 days and two years from the date the contract was entered. At August 31, 2021, $1.7 million was recorded in other current assets on our condensed consolidated balance sheets. At November 30, 2020, $1.4 million was recorded in other assets on our condensed consolidated balance sheets. In the three and nine months ended August 31, 2021, realized and unrealized losses of $2.3 million and realized and unrealized gains of $0.4 million, respectively, from our forward contracts were recognized in foreign currency loss, net, on our condensed consolidated statements of operations. In the three and nine months ended August 31, 2020, realized and unrealized gains of $4.5 million and $2.1 million, respectively, from our forward contracts were recognized in foreign currency loss, net, on our condensed consolidated statements of operations. These gains and losses were substantially offset by realized and unrealized losses and gains on the offsetting positions. The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at August 31, 2021 (in thousands):
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2020 (in thousands):
When developing fair value estimates, we maximize the use of observable inputs and minimize the use of unobservable inputs. When available, we use quoted market prices to measure fair value. The valuation technique used to measure fair value for our Level 1 and Level 2 assets is a market approach, using prices and other relevant information generated by market transactions involving identical or comparable assets. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates. In certain cases where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Fair Value of the Convertible Senior Notes The liability component of the Company’s Notes (as defined in Note 7: Debt) was recorded at $295.2 million upon issuance, which reflected the fair value of a similar debt instrument that does not have an associated convertible feature. The fair value was determined based on a discounted cash flow model and classified within Level 2 of the fair value hierarchy. The discount rate used reflected both the time value of money and credit risk inherent in the Notes. The carrying value of the liability component of the Notes will be accreted, over the remaining term to maturity, to their principal value of $360.0 million. The Notes’ fair value, inclusive of the conversion feature embedded in the Notes, was $364.7 million as of August 31, 2021. The fair value was determined based on the Notes’ quoted price in an over-the-counter market on the last trading day of the reporting period and classified within Level 1 in the fair value hierarchy. See Note 7: Debt for additional information.
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Intangible Assets and Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets Intangible assets are comprised of the following significant classes (in thousands):
In the three and nine months ended August 31, 2021, amortization expense related to intangible assets was $11.6 million and $33.6 million, respectively. In the three and nine months ended August 31, 2020, amortization expense related to intangible assets was $5.8 million and $17.5 million, respectively. Future amortization expense for intangible assets as of August 31, 2021, is as follows (in thousands):
Goodwill Changes in the carrying amount of goodwill in the nine months ended August 31, 2021 are as follows (in thousands):
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations Chef Acquisition On October 5, 2020, we completed the acquisition of Chef Software Inc. (“Chef”) pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 4, 2020. The acquisition was completed for a base purchase price of $220.0 million, subject to certain customary adjustments as further described in the Merger Agreement (the “Aggregate Consideration”), which was paid in cash. Pursuant to the Merger Agreement, $12.0 million of the Aggregate Consideration was deposited into an escrow account to secure certain indemnification and other potential obligations of the former Chef equity holders. Chef is a global leader in DevOps and DevSecOps, providing complete infrastructure automation to build, deploy, manage and secure applications in modern multi-cloud and hybrid environments, as well as on-premises. Chef has enhanced our position as a trusted provider of the best products to develop, deploy and manage high-impact business applications by providing industry-leading compliance and application automation products for multi-cloud and on-prem infrastructure. The acquisition bolstered our core offerings, enabling customers to respond faster to business demands and improve efficiency. We funded the acquisition through a combination of existing cash resources and by drawing down $98.5 million from our existing revolving credit facility (Note 7). The Aggregate Consideration has been allocated to Chef’s tangible assets, identifiable intangible assets, and assumed liabilities based on their estimated fair values. The preliminary fair value estimates of the net assets acquired were based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period (up to one year from the acquisition date). The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities was recorded as goodwill. We recorded measurement period adjustments based on our ongoing valuation and purchase price allocation procedures. We are still finalizing the valuation and purchase price allocation as it relates to the net working capital amount in the table below. The allocation of the purchase price is as follows (in thousands):
The fair value of the intangible assets was estimated using the income approach in which the after-tax cash flows are discounted to present value. The cash flows are based on estimates used to value the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model as well as the weighted average cost of capital. The valuation assumptions take into consideration our estimates of customer attrition, technology obsolescence, and revenue growth projections. Tangible assets acquired and assumed liabilities were recorded at fair value. The valuation of the assumed deferred revenue was based on our contractual commitment to provide post-contract customer support to Chef customers and future contractual performance obligations under existing hosting arrangements. The fair value of this assumed liability was based on the estimated cost plus a reasonable margin to fulfill these service obligations. A significant portion of the deferred revenue is expected to be recognized in the 12 months following the acquisition. We recorded the excess of the purchase price over the identified tangible and intangible assets as goodwill. We believe that the investment value of the future enhancement of our product and solution offerings created as a result of this acquisition has principally contributed to a purchase price that resulted in the recognition of $59.5 million of goodwill, which is not deductible for tax purposes. Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) and certain acquisition restructuring and related charges are not included as a component of consideration transferred but are required to be expensed as incurred. During the three and nine months ended August 31, 2021, we incurred approximately $0.1 million and $0.7 million of acquisition-related costs, respectively, which are included in acquisition-related expenses on our consolidated statement of operations. The operations of Chef were included in our operating results beginning on the date of acquisition. We determined that disclosing the amount of Chef related earnings included in the consolidated statements of operations is impracticable, as certain operations of Chef were integrated into the operations of the Company from the date of acquisition. Pro Forma Information The following pro forma financial information presents the combined results of operations of Progress and Chef as if the acquisition had occurred on December 1, 2018, after giving effect to certain pro forma adjustments. The pro forma adjustments reflected herein include only those adjustments that are directly attributable to the Chef acquisition and factually supportable. These pro forma adjustments include (i) a decrease in revenue from Chef due to the beginning balance of deferred revenue being adjusted to reflect the fair value of the acquired balance, (ii) a net increase in amortization expense to record amortization expense for the $141.3 million of acquired identifiable intangible assets, (iii) an increase in interest expense to record interest for the period presented as a result of drawing down our revolving credit facility in connection with the acquisition, and (iv) the income tax effect of the adjustments made at the statutory tax rate of the U.S. (approximately 24.5%). The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2018. These results are prepared in accordance with ASC 606.
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Debt |
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Line of Credit Facility [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt As of August 31, 2021, future maturities of the Company's long-term debt were as follows:
Notes Payable Convertible Senior Notes and Capped Calls In April 2021, the Company issued, in a private placement to certain initial purchasers in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act in transactions not involving any public offering, for resale by the initial purchasers to persons whom the initial purchasers believe are qualified institutional buyers pursuant to Rule144A under the Securities Act, Convertible Senior Notes (the "Notes") with an aggregate principal amount of $325 million, due April 15, 2026, unless earlier repurchased, redeemed or converted. The proceeds from the Notes were used or are anticipated to be used for the Capped Call Transactions (described below), working capital, and other general corporate purposes, including acquisitions. There are no required principal payments prior to the maturity of the Notes. In addition, the Company also granted the initial purchasers of the Notes an option to purchase up to an additional $50.0 million aggregate principal amount of the Notes, for settlement within a 13-day period beginning on, and including, April 13, 2021, of which $35 million of additional Notes were purchased for total proceeds of $360 million. The Notes bear interest at an annual rate of 1%, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021. Proceeds from the Notes:
Conversion Rights Before January 15, 2026, Noteholders may convert their Notes in the following circumstances: •During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ending on May 31, 2021, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least twenty trading days (whether or not consecutive) during the thirty consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter; •During the five consecutive business days immediately after any ten consecutive trading day period (the “Measurement Period”), if the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of Company’s common stock on such trading day and the conversion rate on such trading day; or •Upon the occurrence of certain corporate events or distributions on the Company’s common stock, or if the Company calls such Notes for redemption, then the Noteholder of any Note may convert such Note at any time before the close of business on the business day immediately before the related redemption date. From and after January 15, 2026, Noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted, by issuing shares of its common stock or a combination of cash and shares of its common stock, at its election. The initial conversion rate is 17.4525 shares of common stock per $1,000 principal amount of the Notes, representing an initial conversion price of approximately $57.30 per share of common stock. The conversion rate will be adjusted upon the occurrence of certain events, including spin-offs, tender offers, exchange offers, make-whole fundamental change and certain stockholder distributions. Repurchase Rights On or after April 20, 2024, and on or before the 50th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the Notes, subject to the partial redemption limitation, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest, if the last reported sale price per share of the Company’s common stock exceeded 130% of the conversion price on (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice and (2) the trading day immediately before the date the Company sends such notice. Pursuant to the partial redemption limitation, the Company may not elect to redeem less than all of the outstanding Notes unless at least $100.0 million aggregate principal amount of Notes are outstanding and not subject to redemption as of the time it sends the related redemption notice. If certain corporate events that constitute a “fundamental change” (as described below) occur at any time, holders may, subject to certain exceptions, require the Company to purchase their Notes in whole or in part for cash at a price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. A fundamental change relates to events such as business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. Capped Call Transactions On April 8, 2021, in connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions (“Capped Call Transactions”) with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions. The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, approximately 6.3 million shares (representing the number of shares of common stock initially underlying the Notes) of the Company’s common stock. The Capped Call Transactions are generally expected to reduce potential dilution to our common stock upon any conversion of Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be $89.88 per share of common stock, which represents a premium of 100% over the last reported sale price of the common stock of $44.94 per share on April 8, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions. The cost of the purchased capped calls of $43.1 million was recorded as a reduction to additional paid-in-capital. We elected to integrate the capped call options with the applicable Notes for federal income tax purposes pursuant to applicable U.S. Treasury Regulations. Accordingly, the $43.1 million gross cost of the purchased capped calls will be deductible for income tax purposes as original discount interest over the term of the Notes. We recorded deferred tax assets of $10.6 million with respect to the capped calls which represents the tax benefit of these deductions with an offsetting entry to additional paid-in capital. Accounting for the Notes In accounting for the transaction, the Notes have been separated into liability and equity components. •The conversion option of the Notes does not require bifurcation as an embedded derivative. •The initial carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The excess of the Notes’ principal amount over the initial carrying amount of the liability component, referred to as the debt discount, is amortized as interest expense over the Notes’ contractual term. •The equity component, which represents the difference between the gross proceeds and the initial liability component, was recorded as an increase to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification. The Company incurred issuance costs of $10.8 million related to the Notes, allocated between the Notes’ liability and equity components proportionate to the initial carrying amount of the liability and equity components. •Issuance costs attributable to the liability component of $8.9 million are recorded as an offset to the Notes’ principal balance. They are amortized as interest expense using the effective interest method over the contractual term of the Notes. •Issuance costs attributable to the equity component of $1.9 million are recorded as an offset to the equity component in additional paid-in capital and are not amortized. Net carrying amount of the liability component:
Net carrying amount of the equity component, included in additional paid-in capital:
Interest expense related to the Notes:
Credit Facility Our credit facility provides for a $301.0 million secured term loan and a $100.0 million secured revolving line of credit. The revolving line of credit is available in U.S. Dollars and certain other currencies and may be increased by up to an additional $125.0 million if the existing or additional lenders are willing to make such increased commitments. The revolving line of credit has sublimits for swing line loans up to $25.0 million and for the issuance of standby letters of credit in a face amount up to $25.0 million. The credit facility matures on April 30, 2024, when all amounts outstanding will be due and payable in full. The revolving line of credit does not require amortization of principal. The outstanding balance of the term loan as of August 31, 2021 was $272.8 million, with $24.5 million due in the next 12 months. The term loan requires repayment of principal at the end of each fiscal quarter, beginning with the fiscal quarter ended August 31, 2019. The principal repayment amounts are in accordance with the following schedule: (i) four payments of $1.9 million each, (ii) four payments of $3.8 million each, (iii) four payments of $5.6 million each, (iv) four payments of $7.5 million each, (v) three payments of $9.4 million each, and (vi) the last payment is of the remaining principal amount. Any amounts outstanding under the term loan thereafter would be due on the maturity date. The term loan may be prepaid before maturity in whole or in part at our option without penalty or premium. As of August 31, 2021, the carrying value of the term loan approximates the fair value, based on Level 2 inputs (observable market prices in less than active markets), as the interest rate is variable over the selected interest period and is similar to current rates at which we can borrow funds. The interest rate as of August 31, 2021 was 2.13%. Costs incurred to obtain our long-term debt of $2.9 million are recorded as debt issuance costs as a direct deduction from the carrying value of the debt liability on our condensed consolidated balance sheets as of August 31, 2021. These costs are being amortized over the term of the debt agreement using the effective interest rate method. Amortization expense related to the debt issuance costs was $0.1 million for each of the three months ended August 31, 2021 and August 31, 2020. Amortization expense related to the debt issuance costs was $0.4 million and for each of the nine months ended August 31, 2021 and August 31, 2020. These amounts are recorded in interest expense on our condensed consolidated statements of operations. Revolving loans may be borrowed, repaid, and reborrowed until April 30, 2024, at which time all amounts outstanding must be repaid. As of August 31, 2021, there were no amounts outstanding under the revolving line of credit and $2.4 million of letters of credit outstanding.
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Leases |
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Leases | Leases In February 2016, the FASB issued ASC 842 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASC 842 on December 1, 2019 using the modified retrospective method and as a result did not adjust comparative periods or modify disclosures in those comparative periods. The new guidance provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which does not require the reassessment of prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company elected the practical expedients to combine lease and non-lease components. Contracts may be comprised of lease components, non-lease components, and elements that are not components. Each lease component represents a lessee’s right to use an underlying asset in the contract if the lessee can benefit from the right-of-use of the asset either on its own or together with other readily available resources and if the right-of-use is neither highly dependent or highly interrelated with other rights-of-use. Non-lease components include items such as common area maintenance and utilities provided by the lessor. We also elected the practical expedient to not recognize right-of-use assets and lease liabilities for short-term leases. Leases with an initial term of 12 months or less are classified as short-term leases. Consideration in the contract is comprised of any fixed payments and variable payments that depend on an index or rate. Payments in the Company's operating lease arrangements primarily consist of base office rent. In accordance with ASC 842, variable payments in an agreement that are not dependent on an index or rate are excluded from the calculation of ROU assets and lease liabilities. The Company makes variable payments on certain of its leases related to taxes, insurance, common area maintenance, and utilities, among other things. The adoption of ASC 842 on December 1, 2019 resulted in the recognition of operating lease ROU assets of approximately $28.9 million and operating lease liabilities of approximately $29.9 million. The difference between the value of the ROU assets and lease liabilities is due to the reclassification of existing deferred rent, prepaid rent, and unamortized lease incentives as of December 1, 2019. Operating leases are included in ROU assets and lease liabilities on the Company’s balance sheets. ROU assets and lease liabilities are to be presented separately for operating and finance leases; however, the Company currently has no material finance leases. The adoption of ASC 842 did not have a material impact on the Company’s condensed consolidated statement of operations, consolidated statement of stockholders' equity, consolidated statement of comprehensive income (loss) or consolidated statement of cash flows. The adoption of ASC 842 had no impact on liquidity or the Company’s debt-covenant compliance under its current debt agreements. The Company has operating leases for administrative, product development, and sales and marketing facilities, vehicles, and equipment under various non-cancelable lease agreements. The Company’s leases have remaining lease terms ranging from 1 year to 6 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 the determination as to whether the Company will exercise options to extend or terminate the lease, 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. The components of operating lease cost for the three and nine months ended August 31, 2021 were as follows (in thousands):
(1) Lease costs that are not fixed at lease commencement. The components of operating lease cost for the three and nine months ended August 31, 2020 were as follows (in thousands):
(1) Lease costs that are not fixed at lease commencement. The table below presents supplemental cash flow information related to leases during the nine months ended August 31, 2021 and August 31, 2020 (in thousands):
Weighted average remaining lease term in years and weighted average discount rate are as follows:
Future payments under non-cancellable leases are as follows (in thousands):
(1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated as a result of a lease reassessment event.
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Common Stock Repurchases |
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Equity [Abstract] | |
Common Stock Repurchases | Common Stock RepurchasesIn January 2020, our Board of Directors increased the total share repurchase authorization from $75 million to $250 million. In the three months ended August 31, 2021 and August 31, 2020, we did not repurchase any shares of our common stock. In the nine months ended August 31, 2021 and August 31, 2020, we repurchased and retired 0.8 million shares for $35.0 million and 0.4 million shares for $20.0 million, respectively. The shares were repurchased in both periods as part of our Board of Directors authorized share repurchase program. As of August 31, 2021, there was $155.0 million remaining under the current authorization. |
Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation We issue restricted stock units, performance-based restricted stock units and stock options under our equity plans. We also issue common stock under our employee stock purchase plan that permits employees to purchase shares through accumulated payroll deductions. Stock-based compensation expense reflects the fair value of stock-based awards, less the present value of expected dividends when applicable, measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using the current market price of the stock, the Black-Scholes option valuation model, or the Monte Carlo Simulation valuation model. In 2019, 2020 and 2021, we granted performance-based restricted stock units that include two performance metrics under our Long-Term Incentive Plan ("LTIP") where the performance measurement period is three years. Vesting of the LTIP awards on the 2019 and 2020 plan is based on the following: (i) 50% is based on our level of attainment of specified total stockholder return ("TSR") targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods, and (ii) 50% is based on achievement of a three-year cumulative performance condition (operating income). For the 2021 plan, the vesting terms were changed to the following: (i) 25% is based on our level of attainment of specified TSR targets relative to the percentage appreciation of a specified index of companies for the respective three-year periods, and (ii) 75% is based on achievement of a three-year cumulative operating income. In order to estimate the fair value of such awards, we used a Monte Carlo Simulation valuation model for the market condition portion of the award, and used the closing price of our common stock on the date of grant for the portion related to the performance condition. The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected life of options or awards, a risk-free interest rate and dividend yield. We recognize stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally 4 years for options and 3 years for restricted stock units. We recognize stock-based compensation expense related to our employee stock purchase plan using an accelerated attribution method. The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations (in thousands):
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated balances of other comprehensive loss during the nine months ended August 31, 2021 (in thousands):
The tax effect on accumulated unrealized losses on hedging activity and unrealized gains on investments was $1.1 million and $1.6 million as of August 31, 2021 and November 30, 2020, respectively.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Timing of Revenue Recognition Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows (in thousands):
Geographic Revenue In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):
No single customer, partner, or country outside of the U.S. has accounted for more than 10% of our total revenue for the three and nine months ended August 31, 2021 and August 31, 2020. Contract Balances Unbilled Receivables and Contract Assets The timing of revenue recognition may differ from the timing of customer invoicing. When revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned only on the passage of time, we record an unbilled receivable on our condensed consolidated balance sheets. Our multi-year term license arrangements, which are typically billed annually, result in revenue recognition in advance of invoicing and the recognition of unbilled receivables. As of August 31, 2021, invoicing of our long-term unbilled receivables is expected to occur as follows (in thousands):
Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation, were $6.9 million as of August 31, 2021 and $11.3 million as of November 30, 2020. These amounts are included in unbilled receivables or long-term unbilled receivables on our condensed consolidated balance sheets. Deferred Revenue Deferred revenue is recorded when revenue is recognized subsequent to customer invoicing. Our deferred revenue balance is primarily made up of deferred maintenance. As of August 31, 2021, the changes in deferred revenue were as follows (in thousands):
Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of August 31, 2021, transaction price allocated to remaining performance obligations was $213.7 million. We expect to recognize approximately 81% of the revenue within the next year and the remainder thereafter. Deferred Contract Costs Deferred contract costs, which include certain sales incentive programs, are incremental and recoverable costs of obtaining a contract with a customer. Incremental costs of obtaining a contract with a customer are recognized as an asset if the expected benefit of those costs is longer than one year. We have applied the practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include a large majority of our sales incentive programs as we have determined that annual compensation is commensurate with annual sales activities. Certain of our sales incentive programs meet the requirements to be capitalized. Depending upon the sales incentive program and the related revenue arrangement, such capitalized costs are amortized over the longer of (i) the product life, which is generally to five years; or (ii) the term of the related revenue contract. We determined that a to five year product life represents the period of benefit that we receive from these incremental costs based on both qualitative and quantitative factors, which include customer contracts, industry norms, and product upgrades. Total deferred contract costs were $5.3 million and $2.5 million as of August 31, 2021 and November 30, 2020, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets. Amortization of deferred contract costs is included in sales and marketing expense on our condensed consolidated statement of operations and was minimal in all periods presented.
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Restructuring Charges |
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Restructuring Charges | Restructuring Charges The following table provides a summary of activity for our restructuring actions, which are detailed further below (in thousands):
During the fourth quarter of fiscal year 2020, we restructured our operations in connection with the acquisition of Chef (Note 6). This restructuring resulted in a reduction in redundant positions, primarily within administrative functions of Chef. For the three months ended August 31, 2021, we incurred minimal expenses related to this restructuring. For the nine months ended August 31, 2021, we incurred expenses of $0.9 million related to this restructuring. The expenses are recorded as restructuring expenses in the consolidated statements of operations. A summary of activity for this restructuring action is as follows (in thousands):
Cash disbursements for expenses incurred to date under this restructuring are expected to be made through fiscal year 2021. Accordingly, the balance of the restructuring reserve, which is not material, is included in other accrued liabilities on the consolidated balance sheet at August 31, 2021. We expect to incur additional expenses as part of this action related to employee costs and facility closures as we consolidate offices in various locations during fiscal year 2021. In September 2021, we closed a facility as part of this restructuring action and expect to incur restructuring charges of approximately $2.9 million during the fourth quarter of fiscal year 2021.
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Income Taxes |
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Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax provision for the third quarter of fiscal years 2021 and 2020 reflects our estimate of the effective tax rates expected to be applicable for the full fiscal years, adjusted for any discrete events, which are recorded in the period in which they occur. The estimates are reevaluated each quarter based on our estimated tax expense for the full fiscal year. Our effective tax rate was 22% in the third fiscal quarter of 2021, compared to 21% in the third fiscal quarter of 2020. The increase is due primarily to discrete tax benefits in the third fiscal quarter of 2020. There were no significant discrete tax items in the third fiscal quarter of 2021. Our federal income tax returns have been examined or are closed by statute for all years prior to fiscal year 2017. Our state income tax returns have been examined or are closed by statute for all years prior to fiscal year 2016. Tax authorities for certain non-U.S. jurisdictions are also examining returns. With some exceptions, we are generally not subject to tax examinations in non-U.S. jurisdictions for years prior to fiscal year 2014 because they are closed by statute.
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Earnings per share |
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Earnings per share | Earnings per share We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding plus the effect of outstanding dilutive stock options, restricted stock units and deferred stock units, using the treasury stock method. The following table sets forth the calculation of basic and diluted earnings per share on an interim basis (in thousands, except per share data):
We excluded stock awards representing approximately 1,250,000 and 1,241,000 shares of common stock from the calculation of diluted earnings per share in the three and nine months ended August 31, 2021, respectively, because these awards were anti-dilutive. In the three and nine months ended August 31, 2020, we excluded stock awards representing 1,450,000 shares and 1,216,000 shares of common stock, respectively, from the calculation of diluted earnings per share as they were anti-dilutive. In connection with the issuance of the Notes, we entered into Capped Calls (Note 7), which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been antidilutive.
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Segment Information |
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Aug. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer. Beginning in the second quarter of fiscal year 2021, we operate as one operating segment: software products to develop, deploy, and manage high-impact business applications. Our CODM evaluates financial information on a consolidated basis. As we operate as one operating segment, the required financial segment information can be found in the condensed consolidated financial statements.
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Subsequent Events |
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Aug. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn September 23, 2021, we entered into a definitive agreement to acquire MPC Kappa Holdings, Inc. (“MPC”), the ultimate beneficial owner of Kemp Technologies, Inc. and Flowmon Networks a.s. and their subsidiaries (collectively, “Kemp”), for approximately $258 million in cash (the “Purchase Price”), subject to customary adjustments. The closing of the acquisition (the “Closing”) is expected to occur during the fourth quarter of our fiscal year 2021. The acquisition will be funded with existing cash on hand at the Closing. Kemp is the always-on application experience company that helps enterprises deliver, optimize and secure applications and networks across any cloud or hybrid environment. With this acquisition, we will extend our portfolio of market-leading products in DevOps, Application Development, Data Connectivity and Digital Experience, adding Application Experience Management (AX). Results of operations for Kemp will be included in our consolidated financial statements from the date of the Closing. |
Basis of Presentation (Policies) |
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Aug. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies - We prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements and these unaudited financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2020, as amended by Form 10-K/A filed on March 30, 2021 (together, the "2020 10-K"). We made no material changes in the application of our significant accounting policies that were disclosed in our 2020 10-K. We have prepared the accompanying unaudited condensed consolidated financial statements on the same basis as the audited financial statements included in our 2020 10-K, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full fiscal year.
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Use of Estimates | Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an on-going basis, management evaluates its estimates and records changes in estimates in the period in which they become known. These estimates are based on historical data and experience, as well as various other assumptions that management believes to be reasonable under the circumstances. The most significant estimates relate to: the timing and amount of revenue recognition, including the determination of the nature and timing of the satisfaction of performance obligations, the standalone selling price of performance obligations, and the transaction price allocated to performance obligations; the realization of tax assets and estimates of tax liabilities; fair values of investments in marketable securities; intangible assets and goodwill valuations; the recognition and disclosure of contingent liabilities; the collectability of accounts receivable; and assumptions used to determine the fair value of stock-based compensation. Actual results could differ from those estimates.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements Financial Instruments - Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), which requires measurement and recognition of expected credit losses for financial assets measured at amortized cost, including accounts receivable, upon initial recognition of that financial asset using a forward-looking expected loss model, rather than an incurred loss model. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses when the fair value is below the amortized cost of the asset, removing the concept of "other-than-temporary" impairments. The Company adopted this standard effective December 1, 2020. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Convertible Debt In August 2020, the FASB issued Accounting Standards Update No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ("ASU 2020-06"), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present an embedded conversion feature for such debt in equity. Additionally, the debt discount resulting from the separation of the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. The standard also requires applying the if-converted method to calculate the impact of the convertible instrument on diluted earnings per share. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. It can be adopted on either a full retrospective or modified retrospective basis. The Company plans to adopt this standard in accordance with the full retrospective approach in the first quarter of fiscal year 2022. We have substantially completed our assessment of the retrospective application of this new standard to our historical financial statements. On a preliminary basis, we believe that the retrospective impact of the adoption of the standard on fiscal year 2021 results will be a decrease of interest expense of approximately $6.9 million, an increase of notes payable of approximately $56.0 million, a decrease of deferred tax liabilities of approximately $13.7 million, a decrease of additional paid-in capital of approximately $49.2 million, and an increase of retained earnings of approximately $6.9 million. We will finalize our retrospective presentation of our historical financial statements under the new standard in connection with our 10-Q filings during fiscal year 2022 and our 10-K for the fiscal year ending November 30, 2022.
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Cash, Cash Equivalents and Investments (Tables) |
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Summary of Cash, Cash Equivalents and Available-for-sale Investments | A summary of our cash, cash equivalents and available-for-sale investments at August 31, 2021 is as follows (in thousands):
A summary of our cash, cash equivalents and available-for-sale investments at November 30, 2020 is as follows (in thousands):
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Summary of Cash, Cash Equivalents and Available-for-sale Investments by Balance Sheet Classification | Such amounts are classified on our condensed consolidated balance sheets as follows (in thousands):
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Fair Value of Debt Securities by Contractual Maturity | The fair value of debt securities by contractual maturity is as follows (in thousands):
(1)Includes U.S. treasury bonds and corporate bonds, which are securities representing investments available for current operations and are classified as current on the condensed consolidated balance sheets.
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Derivative Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Foreign Currency Forward Contracts | The following table presents our interest rate swap contract where the notional amount reflects the quarterly amortization of the interest rate swap, which is equal to approximately one-half of the corresponding reduction in the balance of our term loan as we make scheduled principal payments. The fair value of the derivative represents the discounted value of the expected future discounted cash flows for the interest rate swap, based on the amortization schedule and the current forward curve for the remaining term of the contract, as of the date of each reporting period (in thousands):
The table below details outstanding foreign currency forward contracts where the notional amount is determined using contract exchange rates (in thousands):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements within the Fair Value Hierarchy of the Financial Assets | The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at August 31, 2021 (in thousands):
The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2020 (in thousands):
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Intangible Assets and Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | Intangible assets are comprised of the following significant classes (in thousands):
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Schedule of Future Amortization Expense from Intangible Assets Held | Future amortization expense for intangible assets as of August 31, 2021, is as follows (in thousands):
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Schedule of Goodwill | Changes in the carrying amount of goodwill in the nine months ended August 31, 2021 are as follows (in thousands):
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Business Combinations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The allocation of the purchase price is as follows (in thousands):
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Business Acquisition, Pro Forma Information |
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Debt (Tables) |
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | As of August 31, 2021, future maturities of the Company's long-term debt were as follows:
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Schedule of Proceeds From Notes | Proceeds from the Notes:
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Schedule of Net Carrying Amount of liability Component | Net carrying amount of the liability component:
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Schedule of Net Carrying Amount of Equity Component | Net carrying amount of the equity component, included in additional paid-in capital:
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Schedule of Interest Expense Related to Notes | Interest expense related to the Notes:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The components of operating lease cost for the three and nine months ended August 31, 2021 were as follows (in thousands):
(1) Lease costs that are not fixed at lease commencement. The components of operating lease cost for the three and nine months ended August 31, 2020 were as follows (in thousands):
(1) Lease costs that are not fixed at lease commencement. The table below presents supplemental cash flow information related to leases during the nine months ended August 31, 2021 and August 31, 2020 (in thousands):
Weighted average remaining lease term in years and weighted average discount rate are as follows:
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Lessee, Operating Lease, Liability, Maturity | Future payments under non-cancellable leases are as follows (in thousands):
(1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated as a result of a lease reassessment event.
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Classification of Stock-Based Compensation | The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated balances of other comprehensive loss during the nine months ended August 31, 2021 (in thousands):
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Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services | Our revenues are derived from licensing our products, and from related services, which consist of maintenance, hosting services, and consulting and education. Information relating to revenue from external customers by revenue type is as follows (in thousands):
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Revenue from External Customers from Different Geographical Areas | In the following table, revenue attributed to North America includes sales to customers in the U.S. and sales to certain multinational organizations. Revenue from EMEA, Latin America and the Asia Pacific region includes sales to customers in each region plus sales from the U.S. to distributors in these regions. Information relating to revenue from external customers from different geographical areas is as follows (in thousands):
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Schedule of Contract with Customer, Asset and Liability | As of August 31, 2021, invoicing of our long-term unbilled receivables is expected to occur as follows (in thousands):
As of August 31, 2021, the changes in deferred revenue were as follows (in thousands):
|
Restructuring Charges (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring Activity | The following table provides a summary of activity for our restructuring actions, which are detailed further below (in thousands):
A summary of activity for this restructuring action is as follows (in thousands):
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Earnings per share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Earnings Per Share | The following table sets forth the calculation of basic and diluted earnings per share on an interim basis (in thousands, except per share data):
|
Cash, Cash Equivalents and Investments - Summary Of Cash, Cash Equivalents And Available-For-Sale Investments (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | $ 379,895 | $ 97,990 |
Unrealized Gains | 29 | 99 |
Unrealized Losses | 0 | 0 |
Total Amortized Cost Basis | 383,648 | 105,896 |
Total Fair Value | 383,677 | 105,995 |
U.S. treasury bonds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Amortized Cost Basis | 2,248 | 4,993 |
Unrealized Gains | 15 | 58 |
Unrealized Losses | 0 | 0 |
Fair Value | 2,263 | 5,051 |
Corporate bonds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Amortized Cost Basis | 1,505 | 2,913 |
Unrealized Gains | 14 | 41 |
Unrealized Losses | 0 | 0 |
Fair Value | 1,519 | 2,954 |
Cash | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | 356,690 | 79,026 |
Money market funds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and cash equivalents | $ 23,205 | $ 18,964 |
Cash, Cash Equivalents and Investments - Summary of Cash, Cash Equivalents and Available-for-sale Investments by Balance Sheet Classification (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and Equivalents | $ 379,895 | $ 97,990 |
Short-Term Investments | 3,782 | 8,005 |
U.S. treasury bonds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Short-Term Investments | 2,263 | 5,051 |
Corporate bonds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Short-Term Investments | 1,519 | 2,954 |
Cash | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and Equivalents | 356,690 | 79,026 |
Money market funds | ||
Cash, Cash Equivalents and Investments [Line Items] | ||
Cash and Equivalents | $ 23,205 | $ 18,964 |
Cash, Cash Equivalents and Investments - Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Investments and Cash [Abstract] | ||
Due in one year or less | $ 3,021 | $ 5,998 |
Due after one year | 761 | 2,007 |
Total | $ 3,782 | $ 8,005 |
Derivative Instruments - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Nov. 30, 2020 |
Jul. 09, 2019 |
|
Other Noncurrent Liabilities | ||||||
Derivative [Line Items] | ||||||
Derivative liabilities | $ 4,800,000 | $ 4,800,000 | ||||
Interest Rate Swap | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 150,000,000 | |||||
Fixed interest rate | 1.855% | |||||
Interest Rate Swap | London Interbank Offered Rate (LIBOR) | ||||||
Derivative [Line Items] | ||||||
Basis spread on variable rate | 0.00% | |||||
Forward Contracts | ||||||
Derivative [Line Items] | ||||||
Minimum maturity period, foreign currency derivative | 30 days | |||||
Maximum maturity period, foreign currency derivative | 2 years | |||||
Derivative, gain (loss) on derivative, net | (2,300,000) | $ 4,500,000 | $ 400,000 | $ 2,100,000 | ||
Forward Contracts | Other Current Assets | ||||||
Derivative [Line Items] | ||||||
Derivative liabilities | $ 1,700,000 | $ 1,700,000 | ||||
Forward Contracts | Other Assets | ||||||
Derivative [Line Items] | ||||||
Derivative liabilities | $ 1,400,000 |
Derivative Instruments - Schedule of Derivatives (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Derivative [Line Items] | ||
Notional Value | $ 66,289 | $ 69,471 |
Fair Value | 1,728 | 1,442 |
Interest rate swap contracts designated as cash flow hedges | ||
Derivative [Line Items] | ||
Notional Value | 135,938 | 142,500 |
Fair Value | (4,802) | (6,855) |
Forward contracts to sell U.S. dollars | ||
Derivative [Line Items] | ||
Notional Value | 66,289 | 69,031 |
Fair Value | 1,728 | 1,445 |
Forward contracts to purchase U.S. dollars | ||
Derivative [Line Items] | ||
Notional Value | 0 | 440 |
Fair Value | $ 0 | $ (3) |
Fair Value Measurements - Narrative (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Principal value | $ 632,782 |
Convertible Debt | |
Debt Instrument [Line Items] | |
Aggregate principal amount | 295,200 |
Principal value | 360,000 |
Fair value notes | $ 364,700 |
Intangible Assets and Goodwill - Schedule Of Intangible Assets (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 437,268 | $ 437,268 |
Accumulated Amortization | (258,078) | (224,521) |
Net Book Value | 179,190 | 212,747 |
Purchased technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 173,486 | 173,486 |
Accumulated Amortization | (124,584) | (113,863) |
Net Book Value | 48,902 | 59,623 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 231,342 | 231,342 |
Accumulated Amortization | (111,273) | (91,326) |
Net Book Value | 120,069 | 140,016 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 30,440 | 30,440 |
Accumulated Amortization | (20,663) | (18,275) |
Net Book Value | 9,777 | 12,165 |
Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,000 | 2,000 |
Accumulated Amortization | (1,558) | (1,057) |
Net Book Value | $ 442 | $ 943 |
Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of acquired intangibles and other | $ 11.6 | $ 5.8 | $ 33.6 | $ 17.5 |
Intangible Assets and Goodwill - Schedule Of Future Amortization Expense (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2021 | $ 11,334 | |
2022 | 44,836 | |
2023 | 44,560 | |
2024 | 31,743 | |
2025 | 21,233 | |
Thereafter | 25,484 | |
Net Book Value | $ 179,190 | $ 212,747 |
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Aug. 31, 2021
USD ($)
| |
Goodwill [Roll Forward] | |
Balance, November 30, 2020 | $ 491,726 |
Measurement period adjustments | (326) |
Translation adjustments | 12 |
Balance, August 31, 2021 | $ 491,412 |
Business Combinations - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 05, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Nov. 30, 2020 |
|
Business Acquisition [Line Items] | ||||||
Goodwill | $ 491,412 | $ 491,412 | $ 491,726 | |||
Acquisition-related expenses | 1,481 | $ 1,125 | $ 2,721 | $ 1,439 | ||
Federal statutory income tax rate, percent | 24.50% | |||||
Credit Agreement | Credit Facility Maturing in 2024 | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from lines of credit | $ 98,500 | |||||
Chef Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Cash payments in business acquisition | 220,000 | |||||
Escrow deposit | 12,000 | |||||
Goodwill | $ 59,858 | 59,532 | $ 59,532 | |||
Acquisition-related expenses | 100 | 700 | ||||
Intangible assets | $ 141,300 | $ 141,300 |
Business Combinations - Pro Forma Information (Details) - Chef Acquisition - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Aug. 31, 2020 |
Aug. 31, 2020 |
|
Business Acquisition [Line Items] | ||
Revenue | $ 128,782 | $ 369,814 |
Net income | $ 22,830 | $ 47,444 |
Net income per basic share (in dollars per share) | $ 0.51 | $ 1.06 |
Net income per diluted share (in dollars per share) | $ 0.50 | $ 1.05 |
Debt - Future Maturities (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Remainder of 2021 | $ 5,644 | |
2022 | 26,338 | |
2023 | 33,863 | |
2024 | 206,937 | |
2025 | 0 | |
2026 | 360,000 | |
Principal | 632,782 | |
Unamortized discount and issuance costs | (70,238) | |
Less current portion of long-term debt, net | (23,886) | $ (18,242) |
Long-term debt | 538,658 | |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Remainder of 2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 360,000 | |
Principal | 360,000 | |
Unamortized discount and issuance costs | (68,717) | |
Less current portion of long-term debt, net | 0 | |
Long-term debt | 291,283 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Remainder of 2021 | 5,644 | |
2022 | 26,338 | |
2023 | 33,863 | |
2024 | 206,937 | |
2025 | 0 | |
2026 | 0 | |
Principal | 272,782 | |
Unamortized discount and issuance costs | (1,521) | |
Less current portion of long-term debt, net | (23,886) | |
Long-term debt | $ 247,375 |
Debt - Proceeds Notes (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Principal | $ 632,782 |
Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Less: issuance costs | (10,804) |
Long-term debt | 349,196 |
Convertible Debt | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Less: issuance costs | (10,800) |
Convertible Debt | Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Long-term debt | $ 291,283 |
Debt - Net Carrying Amount Of The Liability Component (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Principal | $ 632,782 |
Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Long-term debt | 349,196 |
Convertible Debt | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Convertible Debt | Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Principal | 360,000 |
Conversion option allocated to equity | (64,800) |
Unamortized discount | (3,917) |
Long-term debt | $ 291,283 |
Debt - Net Carrying Amount Of The Equity Component (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Line of Credit Facility [Abstract] | |
Conversion options | $ 62,855 |
Capped call | (43,056) |
Total | $ 19,799 |
Debt - Interest Expense Related To The Notes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Apr. 30, 2021 |
|
Debt Instrument [Line Items] | |||||
Contractual interest expense | $ 900 | $ 0 | $ 1,370 | $ 0 | |
Amortization of debt discount | 2,868 | 0 | 4,348 | 0 | |
Amortization of issuance costs | 392 | 0 | 594 | 0 | |
Interest expense, debt | $ 4,160 | $ 0 | $ 6,312 | $ 0 | |
Convertible Senior Notes | Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Annual interest rate | 1.00% | 1.00% | 1.00% | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.70% | 5.70% |
Leases - Narrative (Details) - USD ($) $ in Thousands |
Aug. 31, 2021 |
Nov. 30, 2020 |
Dec. 01, 2019 |
---|---|---|---|
Lessee, Lease, Description [Line Items] | |||
Right-of-use lease assets | $ 28,286 | $ 30,635 | |
Operating lease, liability | $ 31,279 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract (in years) | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract (in years) | 6 years | ||
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use lease assets | $ 28,900 | ||
Operating lease, liability | $ 29,900 |
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Nov. 30, 2020 |
|
Leases [Abstract] | |||||
Lease costs under long-term operating leases | $ 1,991 | $ 1,714 | $ 6,135 | $ 5,471 | |
Lease costs under short-term operating leases | 3 | 235 | 22 | 379 | |
Variable lease cost under short-term and long-term operating leases | 130 | 113 | 280 | 301 | |
Operating lease right-of-use asset impairment | 0 | 0 | 36 | 1,189 | |
Total operating lease cost | $ 2,124 | $ 2,062 | 6,473 | 7,340 | |
Cash paid for leases | 6,440 | 5,979 | |||
Right-of-use assets recognized for new leases and amendments (non-cash) | $ 3,222 | $ 204 | |||
Weighted average remaining lease term in years | 4 years 5 months 15 days | 4 years 5 months 15 days | 5 years 7 days | ||
Weighted average discount rate | 2.70% | 2.70% | 2.30% |
Leases - Schedule of Future Minimum Lease Payments After the Adoption of ASC 842 (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2021 | $ 2,013 |
2022 | 7,969 |
2023 | 7,833 |
2024 | 7,605 |
2025 | 4,885 |
Thereafter | 2,811 |
Total lease payments | 33,116 |
Less imputed interest | (1,837) |
Present value of lease liabilities | $ 31,279 |
Common Stock Repurchases (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
Jan. 31, 2020 |
Nov. 30, 2019 |
|
Equity [Abstract] | ||||||
Stock repurchase authorization | $ 250,000,000 | $ 75,000,000 | ||||
Common stock repurchased and retired (in shares) | 0 | 0 | 800,000 | 400,000 | ||
Common stock repurchased and retired | $ 35,000,000 | $ 20,000,000 | ||||
Remaining authorized repurchase amount | $ 155,000,000 | $ 155,000,000 |
Revenue Recognition - Timing of Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 147,417 | $ 109,699 | $ 391,185 | $ 319,765 |
Software licenses | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 51,930 | 27,514 | 115,354 | 77,806 |
Software licenses | Performance obligations transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 51,930 | 27,514 | 115,354 | 77,806 |
Maintenance | Performance obligations transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 82,875 | 72,764 | 239,921 | 214,506 |
Services | Performance obligations transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 12,612 | $ 9,421 | $ 35,910 | $ 27,453 |
Revenue Recognition - Geographic Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 147,417 | $ 109,699 | $ 391,185 | $ 319,765 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 93,880 | 62,927 | 236,479 | 184,904 |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 40,999 | 37,447 | 122,560 | 106,592 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,298 | 3,547 | 12,544 | 10,893 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 7,240 | $ 5,778 | $ 19,602 | $ 17,376 |
Revenue Recognition - Unbilled Receivables and Contract Assets (Details) $ in Thousands |
Aug. 31, 2021
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
2022 | $ 4,710 |
2023 | 8,329 |
2024 | 2,717 |
2025 | 1,493 |
Total | $ 17,249 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions |
Aug. 31, 2021 |
Nov. 30, 2020 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Contract asset | $ 6.9 | $ 11.3 |
Deferred contract costs | $ 5.3 | $ 2.5 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization period | 3 years | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Capitalized contract cost, amortization period | 5 years |
Revenue Recognition - Deferred Revenue (Details) $ in Thousands |
9 Months Ended |
---|---|
Aug. 31, 2021
USD ($)
| |
Contract With Customer, Liability [Roll Forward] | |
Beginning balance | $ 193,295 |
Billings and other | 400,910 |
Revenue recognized | (391,185) |
Ending balance | $ 203,020 |
Revenue Recognition - Performance Obligations (Details) $ in Millions |
Aug. 31, 2021
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 213.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing of satisfaction, period | 1 year |
Remaining performance obligation, percentage | 81.00% |
Restructuring Charges - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | $ 40 | $ 91 | $ 1,133 | $ 1,826 |
Chef Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses | 0 | 928 | ||
Restructuring and related cost, expected cost | $ 2,900 | $ 2,900 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 22.00% | 21.00% |
Earnings per share - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 30,976 | $ 23,977 | $ 63,494 | $ 62,061 |
Weighted average shares outstanding (in shares) | 43,762 | 45,036 | 43,896 | 44,941 |
Dilutive impact from common stock equivalents (in shares) | 740 | 328 | 646 | 441 |
Diluted weighted average shares outstanding (in shares) | 44,502 | 45,364 | 44,542 | 45,382 |
Basic earnings per share (in dollars per share) | $ 0.71 | $ 0.53 | $ 1.45 | $ 1.38 |
Diluted earnings per share (in dollars per share) | $ 0.70 | $ 0.53 | $ 1.43 | $ 1.37 |
Earnings per share - Narrative (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2021 |
Aug. 31, 2020 |
Aug. 31, 2021 |
Aug. 31, 2020 |
|
Earnings Per Share [Abstract] | ||||
Number of shares excluded from the calculation of diluted earnings per share (in shares) | 1,250 | 1,450 | 1,241 | 1,216 |
Segment Information - Narrative (Details) - segment |
3 Months Ended | |
---|---|---|
Aug. 31, 2021 |
May 31, 2021 |
|
Segment Reporting [Abstract] | ||
Number of operating segments | 1 | 1 |
Subsequent Events - (Details) $ in Millions |
Sep. 23, 2021
USD ($)
|
---|---|
Subsequent Event | Kemp Technologies, Inc | |
Subsequent Event [Line Items] | |
Cash payments in business acquisition | $ 258 |
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