Discontinued Operations

12 Months Ended

Oct. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On September 30, 2024, we completed the sale of our former Software Integrity business (the Software Integrity Divestiture) to entities controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners (together, the Sponsors). The aggregate consideration for the sale was $1.65 billion, comprised of (i) cash of $1.48 billion received upon closing; (ii) $121.5 million reflecting the present value of $125.0 million in deferred consideration receivable in equal installments over five fiscal quarters beginning on January 17, 2025, subject to acceleration at our option prior to the closing of the Ansys Merger; (iii) $22.2 million reflecting the fair value of contingent consideration of up to $475.0 million receivable upon the Sponsors achieving a specified rate of return in the event of one or more potential liquidity transactions; and (iv) additional consideration receivable of $27.1 million as a result of net working capital adjustments. As a result of the Software Integrity Divestiture, we derecognized net assets of $720.5 million and incurred transaction costs of $61.7 million, resulting in a pre-tax gain of $868.8 million in fiscal 2024.

In the second quarter of fiscal 2025, we finalized the working capital adjustments and received $20.0 million from the Sponsors. The remainder receivable balance of $7.1 million was recorded as a reduction to the previously recorded gain from the Software Integrity Divestiture. We recorded a total pre-tax gain, net of transaction costs, of $860.5 million from the Software Integrity Divestiture.

We have received the entire deferred consideration installment payments of $125.0 million in fiscal 2025. There was no material change to the fair value of the contingent consideration receivable as of October 31, 2025.

The financial results of the Software Integrity business are presented as income from discontinued operations, net of income taxes in our consolidated statements of income. The following table presents the major components of financial results of our Software Integrity business for the periods presented:

	Year Ended October 31,
	2025		2024		2023
	(in thousands)
Revenue	$	—	$	468,720	$	524,605
Cost of revenue	—		153,081		191,350
Operating expenses	—		265,029		337,235
Other income (expense), net	—		2,003		292
Income (loss) from discontinued operations	—		52,613		(3,688)
Gain (loss) on Software Integrity Divestiture	(8,299)		868,830		—
Income (loss) from discontinued operations before income taxes	(8,299)		921,443		(3,688)
Income tax provision (benefit)	(4,399)		99,773		(6,531)
Income (loss) from discontinued operations, net of income taxes	$	(3,900)	$	821,670	$	2,843

The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:

	Year Ended October 31,
	2025		2024		2023
	( in thousands)
Amortization and depreciation	$	—	$	16,317	$	51,971
Reduction of operating lease right-of-use assets	$	—	$	2,162	$	5,120
Amortization of capitalized costs to obtain revenue contracts	$	—	$	25,051	$	30,071
Stock-based compensation	$	—	$	34,381	$	50,198
Deferred income taxes	$	(6,933)	$	(31,679)	$	(3,136)
Purchases of property and equipment	$	—	$	1,487	$	3,232