Delaware | 22-3447504 | |
(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 |
Common Stock, $0.01 par value | CVLT | The NASDAQ Stock Market |
Preferred Stock Purchase Rights | The NASDAQ Stock Market |
Large accelerated filer | þ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
Emerging growth company | ☐ |
Page | ||
PART I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
Item 16. | ||
Item 1. | Business |
Commvault Complete™ Backup & Recovery – Backup and recovery for the enterprise with one solution. Commvault Complete Backup & Recovery, is a fully featured and comprehensive backup and recovery solution. Designed to meet the needs of any size business, it covers workloads across all locations: hybrid environments include on-premises and multiple cloud providers; physical servers; virtual machines; applications and databases; endpoint devices; cloud applications and more. Commvault Complete also includes disaster recovery capabilities, snapshot management, endpoint user protection, mailbox protection for on-premises, and SaaS offerings, replication, disaster recovery, reporting and integrated archiving. Historically, the vast majority of our licensing revenue has been generated by sales of our core backup and recovery products. | |
Commvault HyperScale™ Technology – Commvault HyperScale™ Technology delivers an on-premises, cloud-like infrastructure to support scale-out secondary storage with integrated data protection. This is available in two form factors: 1) a Commvault-branded integrated appliance, or 2) as a software solution that can be used with a customer’s preferred hardware provider. | |
Commvault Orchestrate™ – Automated service delivery technology that enables users to provision, sync and validate data in any environment for important IT needs such as disaster recovery ("DR") testing, development testing ("Dev/Test") operations and workload migrations. Commvault Orchestrate™ allows customers to extend the value of their data sitting in secondary storage. Secondary copies of data can now be used for activities like accelerating Dev/Test routines or performing application migrations. Operations that were previously manual can now be orchestrated and automated, saving customers time and money. | |
Commvault Activate™ – Discover and extract new business insights from data under management to better meet governance requirements like GDPR and deliver data to the business for analysis. Commvault Activate™ allows customers to comply with privacy regulations by detecting and taking action on data risks, use data insights to drive file efficiencies and accountability and gives an enterprise the tools to reveal and extend the value of data across the enterprise. | |
A Commvault Venture - Hedvig ® - Allows customers to tailor their storage environment to their application and data demands through a software-defined storage platform. Built on x86 servers, the Distributed Storage Platform provides the multi-protocol support required across block, file, and object storage with native application, hypervisor, container, and cloud integration to consolidation storage silos – eliminating data fragmentation issues. | |
A Commvault Venture - Metallic™ - A new offering launched in fiscal 2020, Metallic brings software-as-a-service ("SaaS") data protection to the market, delivering Commvault's powerful core technology simply through the cloud. Metallic offers a growing portfolio of SaaS backup and recovery solutions to help today's companies keep their data protected, compliant and safe from deletion, corruption and attack. Metallic revenue is recognized as Services revenue in the Consolidated Statements of Operations and was immaterial in fiscal 2020. |
• | Real-Time Support. Our support staff is available 24/7 by telephone to provide first response and manage the resolution of customer issues. In addition to phone support, our customers have access to an |
• | Significant Network and Hardware Expertise. Our support engineers have extensive knowledge of complex applications, servers and networks. We proactively take ownership of the customer’s problem, regardless of whether the issue is directly related to our products or to those of another vendor. We have also developed and maintain a knowledge library of storage systems and software products to further enable our support organization to quickly and effectively resolve customer problems. |
• | Global Operations. Our global customer support headquarters is located at our state-of-the-art technical support center in Tinton Falls, New Jersey. We also have established support operations in Reading, United Kingdom; Sydney, Australia; Bangalore, India; and Shanghai, China, which are complemented by regional support centers. Our cloud-based support system creates a virtual global support center combining these locations to allow for the fastest possible resolution times for customer incidents. We have designed our support infrastructure to be able to scale with the increasing globalization of our customers. |
• | Enhanced Support Options. We offer several enhanced customer support services such as Enterprise Support. Our Enterprise Support service is for customers with critical support needs and builds on our 24/7 real-time support deliverables and includes various levels of enhanced services to ensure dedicated support and customized reporting. Enterprise Support adds a specialized team of technical support engineers, an assigned support account manager and innovative tools to achieve our customers’ mission. |
• | Technology Consulting Services. Our technology consulting ensures that a customer’s software environment is designed for optimal results and will continue to deliver over the long term. We offer services such as architecture design; implementation; personalization; data migration; and health assessment. In addition, our residency services offer customers staff-augmentation options to assist with the rapid expert deployment of the Commvault software suite. |
• | Business Consulting Services. Our business consultants provide transformational insights that align to how specific businesses gather, retain and employ data. We offer services such as disaster recovery readiness and policy implementation; private cloud services design; data classification and archive policy implementation; and operational efficiency assessment. |
• | Education Services. We provide global onsite training, offsite training and self-paced online alternatives for our products. Packaged or customized customer training courses are available in instructor-led or computer-based formats. We offer in-depth training and certification for our resellers in pre- and post-sales support methodologies, including web access to customizable documentation and training materials. In addition, we offer a Commvault Certification Program that validates expertise and advanced knowledge in topics, including Commvault Core Fundamentals, Implementation and Maintenance. We also offer more advanced Specialist, Engineer and Master technologies certifications. We believe certified personnel can increase a company's productivity and reduce operating costs. |
• | Remote Managed Services. Commvault Remote Managed Services provides remote monitoring and management of the Commvault data management platform deployed on a customer's environment. Our engineers configure, maintain and optimize a customer's Commvault software environment remotely via a secure connection. |
• | Commvault Software-as-a-Service (Metallic). In fiscal 2020, we launched Metallic. Metallic brings SaaS data protection to the market, delivering Commvault's powerful core technology simply through the cloud. Metallic revenue, which was immaterial in fiscal 2020, is recognized as Services revenue in the Consolidated Statements of Operations. |
Name | Age | Position | |||
55 | |||||
Brian Carolan | 48 | Vice President, Chief Financial Officer | |||
48 |
Item 1A. | Risk Factors |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Common Stock | ||||||||||||||||
2016 | 2015 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First Quarter | $ | 47.46 | $ | 42.41 | $ | 70.80 | $ | 46.07 | ||||||||
Second Quarter | $ | 41.31 | $ | 33.96 | $ | 55.83 | $ | 47.13 | ||||||||
Third Quarter | $ | 42.91 | $ | 34.54 | $ | 54.03 | $ | 42.88 | ||||||||
Fourth Quarter | $ | 43.17 | $ | 30.41 | $ | 51.55 | $ | 43.45 |
3/31/2011 | 3/30/2012 | 3/28/2013 | 3/31/2014 | 3/31/2015 | 3/31/2016 | 3/31/2015 | 3/31/2016 | 3/31/2017 | 3/31/2018 | 3/31/2019 | 3/31/2020 | |||||||||||||
Commvault | 100.0 | 124.5 | 205.6 | 162.9 | 109.6 | 108.2 | 100.0 | 98.8 | 116.2 | 130.9 | 148.1 | 92.6 | ||||||||||||
NASDAQ Composite Index | 100.0 | 111.2 | 117.5 | 151.0 | 176.2 | 175.1 | 100.0 | 99.4 | 120.6 | 144.1 | 157.7 | 157.1 | ||||||||||||
NASDAQ Computer Index | 100.0 | 119.3 | 111.0 | 145.5 | 174.0 | 184.1 | 100.0 | 105.8 | 132.9 | 167.5 | 186.8 | 209.5 |
Period | Total number of shares purchased as part of publicly announced programs | Average price paid per share | Total of Purchases | Approximate dollar value of shares that may yet be purchased under the program | ||||||||||||
January 2016 | 476,967 | $ | 31.13 | $ | 14,847,884 | $ | 135,152,116 | |||||||||
February 2016 | 1,120,688 | $ | 37.52 | $ | 42,049,402 | $ | 93,102,714 | |||||||||
March 2016 | — | $ | — | — | $ | 93,102,714 | ||||||||||
Three months ended March 31, 2016 | 1,597,655 | $ | 35.61 | $ | 56,897,286 |
Period | Total number of shares purchased as part of publicly announced programs | Average price paid per share | Total of Purchases | Approximate dollar value of shares that may yet be purchased under the program | |||||||||||
January 2020 | 17,786 | $ | 43.96 | $ | 781,791 | $ | 199,218,209 | ||||||||
February 2020 | 361,100 | $ | 45.91 | $ | 16,577,950 | $ | 182,640,259 | ||||||||
March 2020 | 492,800 | $ | 40.20 | $ | 19,811,466 | $ | 162,828,793 | ||||||||
Three months ended March 31, 2020 | 871,686 | $ | 42.64 | $ | 37,171,207 |
Item 6. | Selected Financial Data |
Statement of Operations Data | Year Ended March 31, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||
Year Ended March 31, | ||||||||||||||||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Software | $ | 258,793 | $ | 283,254 | $ | 294,411 | $ | 251,508 | $ | 201,800 | ||||||||||||||||||||||||||||||
Software and products | $ | 275,308 | $ | 309,899 | $ | 311,745 | $ | 290,668 | $ | 258,091 | ||||||||||||||||||||||||||||||
Services | 336,333 | 324,289 | 291,929 | 244,342 | 204,839 | 395,577 | 401,058 | 387,648 | 354,337 | 335,676 | ||||||||||||||||||||||||||||||
Total revenues | 595,126 | 607,543 | 586,340 | 495,850 | 406,639 | 670,885 | 710,957 | 699,393 | 645,005 | 593,767 | ||||||||||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||||||||||
Software | 2,385 | 2,442 | 2,588 | 2,863 | 2,747 | |||||||||||||||||||||||||||||||||||
Software and products | 28,082 | 25,691 | 7,223 | 3,045 | 2,385 | |||||||||||||||||||||||||||||||||||
Services | 80,327 | 79,626 | 71,713 | 62,089 | 50,660 | 88,996 | 91,315 | 90,929 | 82,147 | 80,327 | ||||||||||||||||||||||||||||||
Total cost of revenues | 82,712 | 82,068 | 74,301 | 64,952 | 53,407 | 117,078 | 117,006 | 98,152 | 85,192 | 82,712 | ||||||||||||||||||||||||||||||
Gross margin | 512,414 | 525,475 | 512,039 | 430,898 | 353,232 | 553,807 | 593,951 | 601,241 | 559,813 | 511,055 | ||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||
Sales and marketing | 352,669 | 335,980 | 283,304 | 247,696 | 219,025 | 335,785 | 370,088 | 410,727 | 383,933 | 349,199 | ||||||||||||||||||||||||||||||
Research and development | 69,287 | 64,143 | 55,134 | 47,356 | 39,936 | 110,020 | 92,647 | 91,030 | 79,558 | 66,936 | ||||||||||||||||||||||||||||||
General and administrative | 78,848 | 78,063 | 67,106 | 50,119 | 40,619 | 92,130 | 100,946 | 90,709 | 88,929 | 81,199 | ||||||||||||||||||||||||||||||
Net change in contingent consideration | (3,783 | ) | — | |||||||||||||||||||||||||||||||||||||
Restructuring | 21,348 | 14,765 | — | — | — | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 9,611 | 8,505 | 6,075 | 4,832 | 4,353 | 15,815 | 10,597 | 9,721 | 8,635 | 9,611 | ||||||||||||||||||||||||||||||
Total operating expenses | 510,415 | 486,691 | 411,619 | 350,003 | 303,933 | 571,315 | 589,043 | 602,187 | 561,055 | 506,945 | ||||||||||||||||||||||||||||||
Income from operations | 1,999 | 38,784 | 100,420 | 80,895 | 49,299 | |||||||||||||||||||||||||||||||||||
Income (loss) from operations | (17,508 | ) | 4,908 | (946 | ) | (1,242 | ) | 4,110 | ||||||||||||||||||||||||||||||||
Other income and expenses: | ||||||||||||||||||||||||||||||||||||||||
Interest income | 4,962 | 5,519 | 2,228 | 1,163 | 862 | |||||||||||||||||||||||||||||||||||
Interest expense | (933 | ) | (665 | ) | — | — | (57 | ) | — | — | (1,161 | ) | (957 | ) | (933 | ) | ||||||||||||||||||||||||
Interest income | 862 | 773 | 890 | 1,059 | 750 | |||||||||||||||||||||||||||||||||||
Equity in loss of affiliate | (83 | ) | — | — | — | — | — | — | (3,621 | ) | (958 | ) | (83 | ) | ||||||||||||||||||||||||||
Income before income taxes | 1,845 | 38,892 | 101,310 | 81,954 | 49,992 | |||||||||||||||||||||||||||||||||||
Income tax expense | 1,709 | 13,242 | 37,246 | 28,745 | 18,052 | |||||||||||||||||||||||||||||||||||
Net income | $ | 136 | $ | 25,650 | $ | 64,064 | $ | 53,209 | $ | 31,940 | ||||||||||||||||||||||||||||||
Net income per common share: | ||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (12,546 | ) | 10,427 | (3,500 | ) | (1,994 | ) | 3,956 | ||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (6,901 | ) | 6,866 | 58,400 | (1,486 | ) | 2,236 | |||||||||||||||||||||||||||||||||
Net income (loss) | $ | (5,645 | ) | $ | 3,561 | $ | (61,900 | ) | $ | (508 | ) | $ | 1,720 | |||||||||||||||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.56 | $ | 1.36 | $ | 1.17 | $ | 0.72 | $ | (0.12 | ) | $ | 0.08 | $ | (1.37 | ) | $ | (0.01 | ) | $ | 0.04 | |||||||||||||||||
Diluted | $ | 0.00 | $ | 0.54 | $ | 1.29 | $ | 1.10 | $ | 0.68 | $ | (0.12 | ) | $ | 0.07 | $ | (1.37 | ) | $ | (0.01 | ) | $ | 0.04 | |||||||||||||||||
Weighted average shares used in computing per share amounts: | ||||||||||||||||||||||||||||||||||||||||
Basic | 45,159 | 45,464 | 46,976 | 45,463 | 44,089 | 45,793 | 45,827 | 45,242 | 44,700 | 45,159 | ||||||||||||||||||||||||||||||
Diluted | 46,489 | 47,222 | 49,642 | 48,330 | 47,201 | 45,793 | 47,601 | 45,242 | 44,700 | 46,489 |
Balance Sheet Data | As of March 31, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
As of March 31, | ||||||||||||||||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 288,107 | $ | 337,673 | $ | 457,733 | $ | 433,964 | $ | 297,088 | ||||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash (1) | $ | 296,082 | $ | 327,992 | $ | 330,784 | $ | 329,491 | $ | 288,107 | ||||||||||||||||||||||||||||||
Short-term investments | 99,072 | 49,936 | 24,976 | 1,948 | 3,146 | 43,645 | 130,338 | 131,637 | 120,693 | 99,072 | ||||||||||||||||||||||||||||||
Working capital | 252,413 | 267,480 | 387,004 | 343,094 | 222,301 | 185,132 | 328,656 | 322,615 | 318,142 | 252,413 | ||||||||||||||||||||||||||||||
Total assets | 714,573 | 713,466 | 755,384 | 604,854 | 432,688 | 845,076 | 822,453 | 818,642 | 829,878 | 714,573 | ||||||||||||||||||||||||||||||
Deferred revenue | 244,866 | 229,735 | 209,575 | 184,270 | 147,373 | 326,220 | 337,696 | 325,774 | 279,902 | 244,866 | ||||||||||||||||||||||||||||||
Total stockholders’ equity | 396,268 | 407,010 | 462,578 | 354,017 | 229,984 |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | Cost of Software and Products Revenue, consists primarily of the cost of appliance hardware, third-party royalties and other costs such as media, manuals, translation and distribution costs; and |
• | Cost of Services Revenue, consists primarily of salary and employee benefit costs in providing customer support and other professional services. |
• | Sales and Marketing, consists primarily of salaries, commissions, employee benefits, stock-based compensation and other direct and indirect business expenses, including travel and related expenses, sales promotion expenses, public relations expenses and costs for marketing materials and other marketing events (such as trade shows and advertising); |
• | Research and Development, which is primarily the expense of developing new software applications and modifying existing software applications, consists principally of salaries, stock-based compensation and benefits for research and development personnel and related expenses; contract labor expense and consulting fees as well as other expenses associated with the design, certification and testing of our software applications; and legal costs associated with the patent registration of such software applications; |
• | General and Administrative, consists primarily of salaries, stock-based compensation and benefits for our executive, accounting, human resources, legal, information systems and other administrative personnel. Also included in this category are other general corporate expenses, such as outside legal and accounting services, compliance costs and insurance; and |
• | Depreciation and Amortization, consists of depreciation expense primarily for our owned Corporate Campus Headquarters location and computer equipment we use for information services and in our development and test labs as well as amortization of intangible assets acquired through the purchase of Hedvig. |
Year Ended March 31, | ||||
2016 | 2015 | |||
Dividend yield | None | None | ||
Expected volatility | 39% - 43% | 41% - 47% | ||
Weighted average expected volatility | 41% | 46% | ||
Risk-free interest rates | 1.29% - 1.75% | 1.22% - 2.18% | ||
Weighted average expected life (in years) | 4.6 | 5.7 |
Performance Obligation | When Performance Obligation is Typically Satisfied | When Payment is Typically Due | How Standalone Selling Price is Typically Estimated |
Software and Products Revenue | |||
Software Licenses | Upon shipment or made available for download (point in time) | Within 90 days of shipment except for certain subscription licenses which are paid for over time | Residual approach |
Appliances | When control of the appliances passes to the customer; typically upon delivery | Within 90 days of delivery | Residual approach |
Customer Support Revenue | |||
Software Updates | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
Customer Support | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
Other Services Revenue | |||
Other Professional Services (except for education services) | As work is performed (over time) | Within 90 days of services being performed | Observable in transactions without multiple performance obligations |
Education Services | When the class is taught (point in time) | Within 90 days of services being performed | Observable in transactions without multiple performance obligations |
Software-as-a-service (Metallic) | Ratably over the course of the contract (over time) | Annual or monthly payments | Observable in transactions without multiple performance obligations |
Year Ended March 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Revenues: | |||||||||
Software | 43 | % | 47 | % | 50 | % | |||
Services | 57 | % | 53 | % | 50 | % | |||
Total revenues | 100 | % | 100 | % | 100 | % | |||
Cost of revenues: | |||||||||
Software | — | % | — | % | — | % | |||
Services | 13 | % | 13 | % | 12 | % | |||
Total cost of revenues | 14 | % | 14 | % | 13 | % | |||
Gross margin | 86 | % | 86 | % | 87 | % |
▪ | The decrease in Americas software and products revenue was the result of a 28% decrease in the number of enterprise transactions partially offset by a 15% increase in the average deal size of enterprise revenue transactions. |
▪ | EMEA software and products revenue decreased as a result of a 2% decline in non-enterprise transaction revenue partially offset by an increase of 1% in enterprise transaction revenue. On a constant currency basis, EMEA software and products revenue would have increased 2% versus the prior year. |
▪ | The decrease in APJ was the result of a 23% decrease in revenue from non-enterprise revenue transactions that was partially offset by a 2% increase in enterprise revenue transactions. On a constant currency basis, APJ software and products revenue would have declined 9% compared to prior year. |
Year Ended March 31, | Year Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2020 | 2019 | 2018 | |||||||||||||||||||
Net cash provided by operating activities | $ | 84,413 | $ | 123,847 | $ | 119,137 | $ | 88,464 | $ | 110,180 | $ | 84,169 | ||||||||||||
Net cash used in investing activities | (62,189 | ) | (90,041 | ) | (90,158 | ) | (74,005 | ) | (5,261 | ) | (17,991 | ) | ||||||||||||
Net cash used in financing activities | (69,970 | ) | (133,640 | ) | (4,078 | ) | (39,403 | ) | (90,713 | ) | (82,104 | ) | ||||||||||||
Effects of exchange rate — changes in cash | (1,820 | ) | (20,226 | ) | (1,132 | ) | (6,966 | ) | (16,998 | ) | 17,219 | |||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (49,566 | ) | $ | (120,060 | ) | $ | 23,769 | ||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | (31,910 | ) | $ | (2,792 | ) | $ | 1,293 |
• | Fiscal 2020: net loss adjusted for the impact of non-cash charges and decreases in accounts receivable |
• | Fiscal 2019: net income adjusted for the impact of non-cash charges and increases in deferred revenue and accrued expenses, partially offset by increase in accounts receivable |
• | Fiscal 2018: net loss adjusted for the impact of non-cash charges and increases in deferred services revenue as a result of customer support agreements from new customers and renewal agreements with our installed customer base, partially offset by an increase in accounts receivable |
Year Ended March 31, | Year Ended March 31, | |||||||||||||||||||||||||||||||
2016 | 2015 | 2014 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||
Cash used for repurchases (in thousands) | $ | 91,477 | $ | 155,125 | $ | 50,030 | $ | 77,198 | $ | 132,697 | $ | 112,218 | $ | 49,998 | $ | 91,477 | ||||||||||||||||
Shares repurchased (in thousands) | 2,563 | 3,171 | 775 | 1,701 | 2,115 | 2,098 | 982 | 2,563 | ||||||||||||||||||||||||
Average price per share | $ | 35.69 | $ | 48.92 | $ | 64.54 | $ | 45.37 | $ | 62.74 | $ | 53.49 | $ | 50.91 | $ | 35.69 |
Payments Due by Period | Payments Due by Period | ||||||||||||||||||||||||||||||||||
Total | Less Than 1 Year | 2-3 Years | 4-5 Years | More Than 5 Years | Total | Less Than 1 Year | 2-3 Years | 4-5 Years | More Than 5 Years | ||||||||||||||||||||||||||
Operating lease obligations | $ | 33,902 | $ | 8,540 | $ | 12,886 | $ | 8,848 | $ | 3,628 | 17,818 | 7,520 | 7,230 | 2,393 | 675 | ||||||||||||||||||||
Purchase obligations | 13,708 | 11,591 | 2,075 | 42 | — | 26,041 | 18,590 | 6,205 | 1,246 | — | |||||||||||||||||||||||||
Total | $ | 47,610 | $ | 20,131 | $ | 14,961 | $ | 8,890 | $ | 3,628 | 43,859 | 26,110 | 13,435 | 3,639 | 675 |
March 31, 2015 | |||||||
As Reported | As Adjusted | ||||||
Current assets: | |||||||
Deferred tax assets, net | $ | 16,142 | $ | — | |||
Total Current Assets | $ | 541,551 | $ | 525,409 | |||
Deferred tax assets, net | $ | 24,903 | $ | 41,045 |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
Item 8. | Financial Statements and Supplementary Data |
Page | |
Accounting for Revenue Recognition | ||
Description of the Matter | As described in Note 3 to the consolidated financial statements, the Company derives revenues from two primary sources: software and services. Most of the Company’s contracts with customers contain multiple performance obligations which are accounted for separately, if they are distinct. The transaction price is allocated to separate performance obligations on a relative standalone selling price basis. The standalone selling prices of software are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions when those services are sold on a standalone basis. Auditing the identification of performance obligations in a software contract requires significant judgment as it relates to the evaluation of the contractual terms of the arrangement. Auditing the allocation of the transaction price to performance obligations requires significant judgment in determining whether the use of the residual approach to estimate the standalone selling prices of software is appropriate. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition process, including the evaluation of the contractual terms of the revenue arrangements and the Company’s assessment of the appropriateness of the residual method for estimating the standalone selling prices of software. To test the amount of revenue recognized, we performed audit procedures that included, among others, testing a sample of revenue transactions during the year and evaluating the identification of performance obligations based on analysis of the contractual terms and independent confirmations of the terms and conditions of the contract directly with customers. Our testing of the application of the residual method to estimate standalone selling prices of software included inquiries with management and analysis of the variability of actual software pricing during the year by customer class. | |
Accounting for the Acquisition of Hedvig | ||
Description of the Matter | As discussed in Note 4 to the consolidated financial statements, on October 1, 2019, the Company completed its acquisition of Hedvig, Inc. (“Hedvig”) for a total purchase price of $163 million. The transaction was accounted for as a business combination and the assets acquired and liabilities assumed were recorded in the financial statements as of October 1, 2019. Auditing the Company's accounting for its acquisition of Hedvig was significant to our audit due to the higher extent of audit effort and because the amounts are material to the consolidated financial statements and related disclosures. The Company’s determination of the fair value of the developed technology asset involved significant estimation uncertainty, primarily due to projections of the acquired entity’s future financial performance used in the calculation and the discount rate assumption. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process of accounting for business combinations. We tested controls over the estimation process supporting the recognition and measurement of the developed technology asset, including management’s review of the valuation models and management’s evaluation of the underlying assumptions and estimates used to determine its fair value. To test the estimated fair value of the developed technology intangible asset, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions applied and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company, and we tested the significant assumptions, including the discount rate and the projected financial information used to estimate the fair value. |
March 31, | March 31, | |||||||||||||||
2016 | 2015 | 2020 | 2019 | ASSETS | ||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 288,107 | $ | 337,673 | $ | 288,082 | $ | 327,992 | ||||||||
Restricted cash | 8,000 | — | ||||||||||||||
Short-term investments | 99,072 | 49,936 | 43,645 | 130,338 | ||||||||||||
Trade accounts receivable, less allowance for doubtful accounts of $315 and $104 at March 31, 2016 and 2015, respectively | 113,429 | 117,716 | ||||||||||||||
Prepaid expenses and other current assets | 16,769 | 20,084 | ||||||||||||||
Trade accounts receivable, net | 146,990 | 176,836 | ||||||||||||||
Other current assets | 26,969 | 19,836 | ||||||||||||||
Total current assets | 517,377 | 525,409 | 513,686 | 655,002 | ||||||||||||
Deferred tax assets, net | 49,976 | 41,045 | ||||||||||||||
Property and equipment, net | 135,904 | 140,208 | 114,519 | 122,716 | ||||||||||||
Equity method investment | 4,579 | — | ||||||||||||||
Operating lease assets | 15,009 | — | ||||||||||||||
Deferred commissions cost | 31,394 | 33,619 | ||||||||||||||
Intangible assets, net | 46,350 | — | ||||||||||||||
Goodwill | 112,435 | — | ||||||||||||||
Other assets | 6,737 | 6,804 | 11,683 | 11,116 | ||||||||||||
Total assets | $ | 714,573 | $ | 713,466 | $ | 845,076 | $ | 822,453 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 309 | $ | 860 | $ | 307 | $ | 2,186 | ||||||||
Accrued liabilities | 69,678 | 72,757 | 87,051 | 85,721 | ||||||||||||
Current portion of operating lease liabilities | 7,699 | — | ||||||||||||||
Deferred revenue | 194,977 | 184,312 | 233,497 | 238,439 | ||||||||||||
Total current liabilities | 264,964 | 257,929 | 328,554 | 326,346 | ||||||||||||
Deferred revenue, less current portion | 49,889 | 45,423 | 92,723 | 99,257 | ||||||||||||
Deferred tax liabilities, net | 849 | 2,594 | ||||||||||||||
Long-term operating lease liabilities | 8,808 | — | ||||||||||||||
Other liabilities | 3,452 | 3,104 | 2,238 | 2,953 | ||||||||||||
Commitments and contingencies (Note 5) | ||||||||||||||||
Commitments and contingencies | ||||||||||||||||
Stockholders’ equity: | ||||||||||||||||
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding at March 31, 2016 and 2015 | — | — | ||||||||||||||
Common stock, $0.01 par value, 250,000 shares authorized, 44,134 shares and 45,122 shares issued and outstanding at March 31, 2016 and 2015, respectively | 440 | 451 | ||||||||||||||
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding | — | — | ||||||||||||||
Common stock, $0.01 par value, 250,000 shares authorized, 46,011 shares and 45,582 shares issued and outstanding at March 31, 2020 and 2019, respectively | 458 | 454 | ||||||||||||||
Additional paid-in capital | 602,999 | 539,565 | 978,659 | 887,907 | ||||||||||||
Accumulated deficit | (197,962 | ) | (125,502 | ) | (553,790 | ) | (485,490 | ) | ||||||||
Accumulated other comprehensive loss | (9,209 | ) | (7,504 | ) | (13,423 | ) | (11,568 | ) | ||||||||
Total stockholders’ equity | 396,268 | 407,010 | 411,904 | 391,303 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 714,573 | $ | 713,466 | $ | 845,076 | $ | 822,453 | ||||||||
Year Ended March 31, | Year Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2020 | 2019 | 2018 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Software | $ | 258,793 | $ | 283,254 | $ | 294,411 | ||||||||||||||||||
Software and products | $ | 275,308 | $ | 309,899 | $ | 311,745 | ||||||||||||||||||
Services | 336,333 | 324,289 | 291,929 | 395,577 | 401,058 | 387,648 | ||||||||||||||||||
Total revenues | 595,126 | 607,543 | 586,340 | 670,885 | 710,957 | 699,393 | ||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||
Software | 2,385 | 2,442 | 2,588 | |||||||||||||||||||||
Software and products | 28,082 | 25,691 | 7,223 | |||||||||||||||||||||
Services | 80,327 | 79,626 | 71,713 | 88,996 | 91,315 | 90,929 | ||||||||||||||||||
Total cost of revenues | 82,712 | 82,068 | 74,301 | 117,078 | 117,006 | 98,152 | ||||||||||||||||||
Gross margin | 512,414 | 525,475 | 512,039 | 553,807 | 593,951 | 601,241 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Sales and marketing | 352,669 | 335,980 | 283,304 | 335,785 | 370,088 | 410,727 | ||||||||||||||||||
Research and development | 69,287 | 64,143 | 55,134 | 110,020 | 92,647 | 91,030 | ||||||||||||||||||
General and administrative | 78,848 | 78,063 | 67,106 | 92,130 | 100,946 | 90,709 | ||||||||||||||||||
Net change in contingent consideration | (3,783 | ) | — | — | ||||||||||||||||||||
Restructuring | 21,348 | 14,765 | — | |||||||||||||||||||||
Depreciation and amortization | 9,611 | 8,505 | 6,075 | 15,815 | 10,597 | 9,721 | ||||||||||||||||||
Total operating expenses | 510,415 | 486,691 | 411,619 | 571,315 | 589,043 | 602,187 | ||||||||||||||||||
Income from operations | 1,999 | 38,784 | 100,420 | |||||||||||||||||||||
Income (loss) from operations | (17,508 | ) | 4,908 | (946 | ) | |||||||||||||||||||
Interest income | 4,962 | 5,519 | 2,228 | |||||||||||||||||||||
Interest expense | (933 | ) | (665 | ) | — | — | — | (1,161 | ) | |||||||||||||||
Interest income | 862 | 773 | 890 | |||||||||||||||||||||
Equity in loss of affiliate | (83 | ) | — | — | — | — | (3,621 | ) | ||||||||||||||||
Income before income taxes | 1,845 | 38,892 | 101,310 | |||||||||||||||||||||
Income tax expense | 1,709 | 13,242 | 37,246 | |||||||||||||||||||||
Net income | $ | 136 | $ | 25,650 | $ | 64,064 | ||||||||||||||||||
Net income per common share: | ||||||||||||||||||||||||
Income (loss) before income taxes | (12,546 | ) | 10,427 | (3,500 | ) | |||||||||||||||||||
Income tax expense (benefit) | (6,901 | ) | 6,866 | 58,400 | ||||||||||||||||||||
Net income (loss) | $ | (5,645 | ) | $ | 3,561 | $ | (61,900 | ) | ||||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||
Basic | $ | 0.00 | $ | 0.56 | $ | 1.36 | $ | (0.12 | ) | $ | 0.08 | $ | (1.37 | ) | ||||||||||
Diluted | $ | 0.00 | $ | 0.54 | $ | 1.29 | $ | (0.12 | ) | $ | 0.07 | $ | (1.37 | ) | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||
Basic | 45,159 | 45,464 | 46,976 | 45,793 | 45,827 | 45,242 | ||||||||||||||||||
Diluted | 46,489 | 47,222 | 49,642 | 45,793 | 47,601 | 45,242 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Net income | $ | 136 | $ | 25,650 | $ | 64,064 | ||||||
Other comprehensive loss: | ||||||||||||
Foreign currency translation adjustment | (1,705 | ) | (6,587 | ) | (628 | ) | ||||||
Comprehensive income (loss) | $ | (1,569 | ) | $ | 19,063 | 63,436 |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net income (loss) | $ | (5,645 | ) | $ | 3,561 | $ | (61,900 | ) | ||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustment | (1,855 | ) | (6,096 | ) | 6,843 | |||||||
Comprehensive loss | $ | (7,500 | ) | $ | (2,535 | ) | (55,057 | ) |
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2013 | 46,397 | $ | 464 | $ | 391,772 | $ | (37,930 | ) | $ | (289 | ) | $ | 354,017 | |||||||||||||||||||||||||||||||||
Balance at March 31, 2017 | 44,816 | $ | 447 | $ | 694,477 | $ | (215,677 | ) | $ | (12,315 | ) | $ | 466,932 | |||||||||||||||||||||||||||||||||
Cumulative effect of adoption of ASU 2016-09 | 435 | (271 | ) | 164 | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 49,124 | 49,124 | 74,129 | 74,129 | ||||||||||||||||||||||||||||||||||||||||||
Tax benefits relating to share-based payments | 28,416 | 28,416 | ||||||||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 2,400 | 24 | 30,090 | 30,114 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (2,098 | ) | (21 | ) | (16,367 | ) | (95,830 | ) | (112,218 | ) | ||||||||||||||||||||||||||||||||||||
Net loss | (61,900 | ) | (61,900 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | 6,843 | 6,843 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2018 | 45,118 | 450 | 782,764 | (373,678 | ) | (5,472 | ) | 404,064 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 80,487 | 80,487 | ||||||||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 1,472 | 15 | 17,600 | 17,615 | 2,579 | 25 | 41,959 | 41,984 | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (775 | ) | (8 | ) | (5,829 | ) | (44,193 | ) | (50,030 | ) | (2,115 | ) | (21 | ) | (17,303 | ) | (115,373 | ) | (132,697 | ) | ||||||||||||||||||||||||||
Net income | 64,064 | 64,064 | 3,561 | 3,561 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (628 | ) | (628 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2014 | 47,094 | 471 | 481,083 | (18,059 | ) | (917 | ) | 462,578 | ||||||||||||||||||||||||||||||||||||||
Other comprehensive income | (6,096 | ) | (6,096 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | 45,582 | 454 | 887,907 | (485,490 | ) | (11,568 | ) | 391,303 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 60,663 | 60,663 | 65,888 | 65,888 | ||||||||||||||||||||||||||||||||||||||||||
Tax benefits relating to share-based payments | 2,141 | 2,141 | ||||||||||||||||||||||||||||||||||||||||||||
Share issuances related to business combinations | 1,616 | 1,616 | ||||||||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 1,199 | 12 | 17,678 | 17,690 | 2,131 | 21 | 37,774 | 37,795 | ||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (3,171 | ) | (32 | ) | (22,000 | ) | (133,093 | ) | (155,125 | ) | (1,702 | ) | (17 | ) | (14,526 | ) | (62,655 | ) | (77,198 | ) | ||||||||||||||||||||||||||
Net income | 25,650 | 25,650 | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | (5,645 | ) | (5,645 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (6,587 | ) | (6,587 | ) | (1,855 | ) | (1,855 | ) | ||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2015 | 45,122 | 451 | 539,565 | (125,502 | ) | (7,504 | ) | 407,010 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 64,196 | 64,196 | ||||||||||||||||||||||||||||||||||||||||||||
Tax benefits relating to share-based payments | 3,265 | 3,265 | ||||||||||||||||||||||||||||||||||||||||||||
Share issuances related to stock-based compensation | 1,575 | 15 | 14,828 | 14,843 | ||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (2,563 | ) | (26 | ) | (18,855 | ) | (72,596 | ) | (91,477 | ) | ||||||||||||||||||||||||||||||||||||
Net income | 136 | 136 | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (1,705 | ) | (1,705 | ) | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2016 | 44,134 | $ | 440 | $ | 602,999 | $ | (197,962 | ) | $ | (9,209 | ) | $ | 396,268 | |||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | 46,011 | $ | 458 | $ | 978,659 | $ | (553,790 | ) | $ | (13,423 | ) | $ | 411,904 |
Year Ended March 31, | Year Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2020 | 2019 | 2018 | |||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||
Net income | $ | 136 | $ | 25,650 | $ | 64,064 | ||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (5,645 | ) | $ | 3,561 | $ | (61,900 | ) | ||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation and amortization | 11,179 | 9,046 | 6,207 | 17,065 | 12,060 | 11,785 | ||||||||||||||||||
Noncash stock-based compensation | 64,196 | 60,663 | 49,124 | 65,888 | 80,487 | 74,129 | ||||||||||||||||||
Excess tax benefits from stock-based compensation | (6,664 | ) | (5,057 | ) | (28,337 | ) | ||||||||||||||||||
Non-cash change in contingent consideration | (3,783 | ) | — | — | ||||||||||||||||||||
Deferred income taxes | (9,332 | ) | 4,072 | (6,430 | ) | (1,783 | ) | 164 | 53,737 | |||||||||||||||
Equity in loss of affiliate | 83 | — | — | — | — | 3,621 | ||||||||||||||||||
Amortization of deferred commissions cost | 17,717 | 17,348 | 16,587 | |||||||||||||||||||||
Impairment of operating lease assets | 2,761 | — | — | |||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||
Trade accounts receivable | 3,879 | (6,581 | ) | (33,482 | ) | 26,096 | (24,092 | ) | (25,082 | ) | ||||||||||||||
Prepaid expenses and other current assets | 3,414 | (11,907 | ) | 3,948 | ||||||||||||||||||||
Other assets | (571 | ) | 1,229 | (160 | ) | |||||||||||||||||||
Operating lease assets and liabilities, net | (1,226 | ) | — | — | ||||||||||||||||||||
Other current assets and Other assets | (1,246 | ) | 11,400 | (6,876 | ) | |||||||||||||||||||
Deferred commissions cost | (16,063 | ) | (18,967 | ) | (17,984 | ) | ||||||||||||||||||
Accounts payable | (454 | ) | (267 | ) | (2,695 | ) | (2,474 | ) | 1,485 | 618 | ||||||||||||||
Accrued liabilities | 1,972 | 13,221 | 43,187 | (1,997 | ) | 5,075 | 3,496 | |||||||||||||||||
Deferred revenue | 16,317 | 35,818 | 25,156 | (6,230 | ) | 21,719 | 33,971 | |||||||||||||||||
Other liabilities | 258 | (2,040 | ) | (1,445 | ) | (616 | ) | (60 | ) | (1,933 | ) | |||||||||||||
Net cash provided by operating activities | 84,413 | 123,847 | 119,137 | 88,464 | 110,180 | 84,169 | ||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||
Purchase of short-term investments | (99,071 | ) | (68,933 | ) | (28,976 | ) | (43,645 | ) | (130,338 | ) | (142,424 | ) | ||||||||||||
Proceeds from maturity of short-term investments | 49,935 | 43,973 | 5,948 | 130,338 | 131,637 | 131,480 | ||||||||||||||||||
Purchase of equity method investment | (4,662 | ) | — | — | ||||||||||||||||||||
Purchases for corporate campus headquarters | (2,111 | ) | (59,297 | ) | (62,214 | ) | ||||||||||||||||||
Purchase of property and equipment | (6,280 | ) | (5,784 | ) | (4,916 | ) | (3,203 | ) | (6,560 | ) | (7,047 | ) | ||||||||||||
Business combination, net of cash acquired | (157,495 | ) | — | — | ||||||||||||||||||||
Net cash used in investing activities | (62,189 | ) | (90,041 | ) | (90,158 | ) | (74,005 | ) | (5,261 | ) | (17,991 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||
Repurchase of common stock | (91,477 | ) | (155,125 | ) | (50,030 | ) | (77,198 | ) | (132,697 | ) | (112,218 | ) | ||||||||||||
Debt issuance costs | — | (1,262 | ) | — | ||||||||||||||||||||
Proceeds from the exercise of stock options and the Employee Stock Purchase Plan | 14,843 | 17,690 | 17,615 | |||||||||||||||||||||
Excess tax benefits from stock-based compensation | 6,664 | 5,057 | 28,337 | |||||||||||||||||||||
Proceeds from stock-based compensation plans | 37,795 | 41,984 | 30,114 | |||||||||||||||||||||
Net cash used in financing activities | (69,970 | ) | (133,640 | ) | (4,078 | ) | (39,403 | ) | (90,713 | ) | (82,104 | ) | ||||||||||||
Effects of exchange rate — changes in cash | (1,820 | ) | (20,226 | ) | (1,132 | ) | (6,966 | ) | (16,998 | ) | 17,219 | |||||||||||||
Net increase (decrease) in cash and cash equivalents | (49,566 | ) | (120,060 | ) | 23,769 | |||||||||||||||||||
Cash and cash equivalents at beginning of year | 337,673 | 457,733 | 433,964 | |||||||||||||||||||||
Cash and cash equivalents at end of year | $ | 288,107 | $ | 337,673 | $ | 457,733 | ||||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (31,910 | ) | (2,792 | ) | 1,293 | |||||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of year | 327,992 | 330,784 | 329,491 | |||||||||||||||||||||
Cash, cash equivalents and restricted cash at end of year | $ | 296,082 | $ | 327,992 | $ | 330,784 | ||||||||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||||||||||||
Interest paid | $ | 635 | $ | 475 | $ | — | $ | — | $ | — | $ | 592 | ||||||||||||
Income taxes paid, net | $ | 1,989 | $ | 15,590 | $ | 12,442 | ||||||||||||||||||
Purchases for corporate campus headquarters in accounts payable and accrued liabilities | $ | — | $ | 2,111 | $ | 6,805 | ||||||||||||||||||
Income taxes paid | $ | 6,002 | $ | 11,491 | $ | 6,448 |
Year Ended March 31, | |||||||||
2020 | 2019 | 2018 | |||||||
Basic weighted-average shares outstanding | 45,793 | 45,827 | 45,242 | ||||||
Dilutive effect of stock options, restricted stock units, and employee stock purchase plan | — | 1,774 | — | ||||||
Diluted weighted-average shares outstanding | 45,793 | 47,601 | 45,242 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Net income | $ | 136 | $ | 25,650 | $ | 64,064 | ||||||
Basic net income per common share: | ||||||||||||
Basic weighted average shares outstanding | 45,159 | 45,464 | 46,976 | |||||||||
Basic net income per common share | $ | 0.00 | $ | 0.56 | $ | 1.36 | ||||||
Diluted net income per common share: | ||||||||||||
Basic weighted average shares outstanding | 45,159 | 45,464 | 46,976 | |||||||||
Dilutive effect of stock options, restricted stock units, and employee stock purchase plan | 1,330 | 1,758 | 2,666 | |||||||||
Diluted weighted average shares outstanding | 46,489 | 47,222 | 49,642 | |||||||||
Diluted net income per common share | $ | 0.00 | $ | 0.54 | $ | 1.29 |
Year Ended March 31, | |||||||||
2020 | 2019 | 2018 | |||||||
Stock options, restricted stock units, and shares under the employee stock purchase plan | 4,933 | 998 | 7,312 |
Year Ended March 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Stock options, restricted stock units, and shares under the employee stock purchase plan | 4,183 | 3,136 | 964 |
March 31, 2020 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Short-term investments | — | $ | 44,484 | — | $ | 44,484 | |||||||||
Liabilities: | |||||||||||||||
Contingent consideration | — | — | $ | (217 | ) | $ | (217 | ) |
March 31, 2019 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Assets: | |||||||||||||||
Cash equivalents | $ | 102,702 | — | — | $ | 102,702 | |||||||||
Short-term investments | — | $ | 131,937 | — | $ | 131,937 | |||||||||
Total assets | 102,702 | $ | 131,937 | — | $ | 234,639 |
March 31, 2016 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents | $ | 95,735 | — | — | $ | 95,735 | |||||||||
Short-term investments | — | $ | 99,215 | — | $ | 99,215 |
March 31, 2015 | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents | $ | 204,939 | — | — | $ | 204,939 | |||||||||
Short-term investments | — | $ | 49,955 | — | $ | 49,955 |
March 31, | ||||||||
2016 | 2015 | |||||||
Current: | ||||||||
Deferred software revenue | $ | 1,578 | $ | 1,305 | ||||
Deferred services revenue | 193,399 | 183,007 | ||||||
194,977 | 184,312 | |||||||
Non-current: | ||||||||
Deferred services revenue | 49,889 | 45,423 | ||||||
Total Deferred Revenue | $ | 244,866 | $ | 229,735 |
Standard | Description | Effective Date | Effect on the Consolidated Financial Statements (or Other Significant Matters) |
Accounting Standards Update ("ASU") No. 2016-13 (Topic 326), Financial Instruments-Credit Losses | The standard amends guidance on the impairment of financial instruments. The ASU estimates credit losses based on expected losses and provides for a simplified accounting model for purchased financial assets with credit deterioration. The standard requires a modified retrospective basis adoption through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. | First quarter of fiscal 2021 | We will adopt the standard using a modified retrospective approach, on April 1, 2020. This standard is not expected to have a material impact on our consolidated financial statements. |
March 31, 2015 | |||||||
As Reported | As Adjusted | ||||||
Current assets: | |||||||
Deferred tax assets, net | $ | 16,142 | $ | — | |||
Total Current Assets | $ | 541,551 | $ | 525,409 | |||
Deferred tax assets, net | $ | 24,903 | $ | 41,045 |
Performance Obligation | When Performance Obligation is Typically Satisfied | When Payment is Typically Due | How Standalone Selling Price is Typically Estimated |
Software and Products Revenue | |||
Software Licenses | Upon shipment or made available for download (point in time) | Within 90 days of shipment except for certain subscription licenses which are paid for over time | Residual approach |
Appliances | When control of the appliances passes to the customer; typically upon delivery | Within 90 days of delivery | Residual approach |
Customer Support Revenue | |||
Software Updates | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
Customer Support | Ratably over the course of the support contract (over time) | At the beginning of the contract period | Observable in renewal transactions |
Other Services Revenue | |||
Other Professional Services (except for education services) | As work is performed (over time) | Within 90 days of services being performed | Observable in transactions without multiple performance obligations |
Education Services | When the class is taught (point in time) | Within 90 days of services being performed | Observable in transactions without multiple performance obligations |
Software-as-a-service (Metallic) | Ratably over the course of the contract (over time) | Annual or monthly payments | Observable in transactions without multiple performance obligations |
March 31, | ||||||||
2016 | 2015 | |||||||
Land | $ | 9,445 | $ | 9,445 | ||||
Buildings | 103,193 | 102,880 | ||||||
Computers, servers and other equipment | 33,120 | 33,914 | ||||||
Furniture and fixtures | 14,458 | 14,399 | ||||||
Leasehold improvements | 6,948 | 4,621 | ||||||
Purchased software | 1,279 | 2,463 | ||||||
Construction in process | 165 | 619 | ||||||
168,608 | 168,341 | |||||||
Less: Accumulated depreciation and amortization | (32,704 | ) | (28,133 | ) | ||||
$ | 135,904 | $ | 140,208 |
Year Ended March 31, 2020 | ||||||||||||
Americas | EMEA | APJ | Total | |||||||||
Software and Products Revenue | $ | 141,856 | $ | 95,356 | $ | 38,096 | $ | 275,308 | ||||
Customer Support Revenue | 230,226 | 88,965 | 40,939 | 360,130 | ||||||||
Professional Services | 18,778 | 10,459 | 6,210 | 35,447 | ||||||||
Total Revenue | $ | 390,860 | $ | 194,780 | $ | 85,245 | $ | 670,885 |
March 31, | ||||||||
2016 | 2015 | |||||||
Compensation and related payroll taxes | $ | 36,789 | $ | 38,518 | ||||
Other | 32,889 | 34,239 | ||||||
$ | 69,678 | $ | 72,757 |
Year Ending March 31, | |||
2017 | $ | 8,540 | |
2018 | 6,815 | ||
2019 | 6,071 | ||
2020 | 4,973 | ||
2021 and thereafter | 7,503 | ||
$ | 33,902 |
Year Ended March 31, 2019 | ||||||||||||
Americas | EMEA | APJ | Total | |||||||||
Software and Products Revenue | $ | 170,114 | $ | 95,913 | $ | 43,872 | $ | 309,899 | ||||
Customer Support Revenue | 237,190 | 82,895 | 38,662 | 358,747 | ||||||||
Professional Services | 23,076 | 12,380 | 6,855 | 42,311 | ||||||||
Total Revenue | $ | 430,380 | $ | 191,188 | $ | 89,389 | $ | 710,957 |
Year Ended March 31, 2018 | ||||||||||||
Americas | EMEA | APJ | Total | |||||||||
Software and Products Revenue | $ | 167,858 | $ | 100,452 | $ | 43,435 | $ | 311,745 | ||||
Customer Support Revenue | 233,991 | 75,807 | 36,257 | 346,055 | ||||||||
Professional Services | 23,453 | 11,289 | 6,851 | 41,593 | ||||||||
Total Revenue | $ | 425,302 | $ | 187,548 | $ | 86,543 | $ | 699,393 |
Accounts Receivable | Unbilled Receivable (current) | Unbilled Receivable (long-term) | Deferred Revenue (current) | Deferred Revenue (long-term) | |||||||||||
Opening Balance as of March 31, 2019 | $ | 161,570 | $ | 15,266 | $ | 7,216 | $ | 238,439 | $ | 99,257 | |||||
Increase/(decrease), net | (31,714 | ) | 1,868 | 641 | (4,942 | ) | (6,534 | ) | |||||||
Ending Balance as of March 31, 2020 | $ | 129,856 | $ | 17,134 | $ | 7,857 | $ | 233,497 | $ | 92,723 |
Purchase price allocation: | |||
Cash paid at closing | 157,589 | ||
Fair value of restricted stock units included in purchase price | 1,616 | ||
Fair value of contingent consideration | 4,000 | ||
Total purchase price | $ | 163,205 | |
Assets acquired and liabilities assumed: | |||
Cash | 94 | ||
Trade accounts receivable | 1,074 | ||
Other current assets | 104 | ||
Property and equipment | 202 | ||
Intangible assets | 52,000 | ||
Other assets | 682 | ||
Accounts payable and accrued liabilities | (1,060 | ) | |
Deferred revenue | (2,231 | ) | |
Operating lease liability, net of operating lease assets | (11 | ) | |
Deferred tax liability | (84 | ) | |
Total identifiable net assets acquired and liabilities assumed | 50,770 | ||
Goodwill | 112,435 | ||
Total purchase price | $ | 163,205 |
Unaudited | |||||||
Year Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenue | $ | 672,533 | $ | 714,252 | |||
Net loss | $ | (8,186 | ) | $ | (20,035 | ) |
Year Ended March 31, 2020 | |||||
Beginning balance | $ | — | |||
Acquisition | 112,435 | ||||
Ending balance | $ | 112,435 |
Gross | Accumulated Amortization | Net Carrying Value | Remaining Useful Life (months) | |||||||||||
Developed technology | $ | 49,000 | $ | (4,900 | ) | $ | 44,100 | 54 | ||||||
Customer relationships | 3,000 | (750 | ) | 2,250 | 18 | |||||||||
Total intangible assets | $ | 52,000 | $ | (5,650 | ) | $ | 46,350 |
2021 | $ | 11,300 | |
2022 | 10,550 | ||
2023 | 9,800 | ||
2024 | 9,800 | ||
2025 | 4,900 | ||
$ | 46,350 |
March 31, | ||||||||
2020 | 2019 | |||||||
Land | $ | 9,445 | $ | 9,445 | ||||
Buildings | 103,244 | 103,244 | ||||||
Computers, servers and other equipment | 40,044 | 38,551 | ||||||
Furniture and fixtures | 14,919 | 15,184 | ||||||
Leasehold improvements | 9,252 | 10,251 | ||||||
Purchased software | 1,637 | 1,473 | ||||||
Construction in process | 2,021 | 2,091 | ||||||
180,562 | 180,239 | |||||||
Less: Accumulated depreciation and amortization | (66,043 | ) | (57,523 | ) | ||||
$ | 114,519 | $ | 122,716 |
March 31, | ||||||||
2020 | 2019 | |||||||
Compensation and related payroll taxes | $ | 47,356 | �� | $ | 48,332 | |||
Other | 39,695 | 37,389 | ||||||
$ | 87,051 | $ | 85,721 |
2021 | 2022 | 2023 | 2024 and beyond | Total | ||||||||||||||||
Purchase commitments | $ | 18,590 | $ | 4,960 | $ | 1,245 | $ | 1,246 | $ | 26,041 |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Royalty expense | $ | 12,545 | $ | 12,319 | $ | 4,462 |
Year Ended March 31, | ||||||
2016 | 2015 | 2014 | ||||
Dividend yield | None | None | None | |||
Expected volatility | 39% - 43% | 41% - 47% | 42% - 47% | |||
Weighted average expected volatility | 41% | 46% | 45% | |||
Risk-free interest rates | 1.29% - 1.75% | 1.22% - 2.18% | 0.70% - 2.11% | |||
Weighted average expected life (in years) | 4.6 | 5.7 | 6.9 |
Options | Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||
Outstanding at March 31, 2017 | 5,300 | $ | 44.74 | ||||||||||
Options granted | — | — | |||||||||||
Options exercised | (842 | ) | 23.57 | ||||||||||
Options forfeited | (26 | ) | 43.30 | ||||||||||
Options expired | (30 | ) | 68.27 | ||||||||||
Outstanding at March 31, 2018 | 4,402 | 48.64 | |||||||||||
Options granted | — | — | |||||||||||
Options exercised | (1,091 | ) | 28.92 | ||||||||||
Options forfeited | (15 | ) | 44.55 | ||||||||||
Options expired | (84 | ) | 80.02 | ||||||||||
Outstanding at March 31, 2019 | 3,212 | 54.55 | |||||||||||
Options granted | — | — | |||||||||||
Options exercised | (860 | ) | 32.73 | ||||||||||
Options forfeited | — | — | |||||||||||
Options expired | (448 | ) | 73.15 | ||||||||||
Outstanding at March 31, 2020 | 1,904 | $ | 60.03 | 2.67 | $ | 1,080 | |||||||
Exercisable at March 31, 2020 | 1,904 | $ | 60.03 | 2.67 | $ | 1,080 |
Options | Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||
Outstanding at March 31, 2013 | 6,439 | $ | 28.31 | ||||||||||
Options granted | 1,035 | 85.91 | |||||||||||
Options exercised | (999 | ) | 17.62 | ||||||||||
Options forfeited | (87 | ) | 50.05 | ||||||||||
Options expired | — | — | |||||||||||
Outstanding at March 31, 2014 | 6,388 | 39.03 | |||||||||||
Options granted | 1,155 | 46.08 | |||||||||||
Options exercised | (504 | ) | 19.44 | ||||||||||
Options forfeited | (159 | ) | 65.93 | ||||||||||
Options expired | (27 | ) | 68.84 | ||||||||||
Outstanding at March 31, 2015 | 6,853 | 40.91 | |||||||||||
Options granted | 148 | 41.84 | |||||||||||
Options exercised | (764 | ) | 8.80 | ||||||||||
Options forfeited | (172 | ) | 59.79 | ||||||||||
Options expired | (126 | ) | 61.81 | ||||||||||
Outstanding at March 31, 2016 | 5,939 | $ | 44.07 | 5.63 | $ | 53,192 | |||||||
Vested or expected to vest at March 31, 2016 | 5,867 | $ | 43.96 | 5.60 | $ | 53,161 | |||||||
Exercisable at March 31, 2016 | 4,613 | $ | 40.25 | 4.94 | $ | 52,814 |
Range of Exercise Prices | Options Outstanding at March 31, 2016 | Weighted-Average | Options Exercisable at March 31, 2016 | Weighted- Average Exercise Price | ||||||||||||
Remaining Contractual Life | Exercise Price | |||||||||||||||
$11.12 - 13.81 | 918 | 2.31 | $ | 12.38 | 918 | $ | 12.38 | |||||||||
15.88 - 26.83 | 1,122 | 3.52 | 23.17 | 1,122 | 23.17 | |||||||||||
27.02 - 41.31 | 192 | 6.99 | 36.29 | 107 | 34.34 | |||||||||||
41.55 | 723 | 5.51 | 41.55 | 723 | 41.55 | |||||||||||
43.30 - 45.39 | 90 | 8.94 | 44.39 | 5 | 44.31 | |||||||||||
45.44 | 794 | 8.45 | 45.44 | 254 | 45.44 | |||||||||||
45.84 - 55.58 | 292 | 7.78 | 49.76 | 173 | 50.50 | |||||||||||
56.57 | 692 | 6.28 | 56.57 | 564 | 56.57 | |||||||||||
58.25 - 86.64 | 351 | 7.02 | 76.75 | 308 | 77.43 | |||||||||||
87.20 | 765 | 7.34 | 87.20 | 439 | 87.20 | |||||||||||
$11.12 - 87.20 | 5,939 | 5.63 | $ | 44.07 | 4,613 | $ | 40.25 |
Non-Vested Restricted Stock Units | Number of Awards | Weighted- Average Grant Date Fair Value | |||||
Non-vested as of March 31, 2017 | 2,396 | $ | 45.53 | ||||
Granted | 1,235 | 59.71 | |||||
Vested | (1,324 | ) | 46.74 | ||||
Forfeited | (141 | ) | 48.24 | ||||
Non-vested as of March 31, 2018 | 2,166 | 54.13 | |||||
Granted | 1,256 | 64.65 | |||||
Vested | (1,276 | ) | 51.38 | ||||
Forfeited | (315 | ) | 57.76 | ||||
Non-vested as of March 31, 2019 | 1,831 | 62.58 | |||||
Granted | 2,654 | 46.54 | |||||
Vested | (999 | ) | 60.10 | ||||
Forfeited | (249 | ) | 59.03 | ||||
Non-vested as of March 31, 2020 | 3,237 | $ | 50.47 |
Non-Vested Restricted Stock Units | Number of Awards | Weighted Average Grant Date Fair Value | |||||
Non-vested as of March 31, 2013 | 1,198 | $ | 46.45 | ||||
Granted | 562 | 84.66 | |||||
Vested | (473 | ) | 42.11 | ||||
Forfeited | (85 | ) | 53.57 | ||||
Non-vested as of March 31, 2014 | 1,202 | 65.63 | |||||
Granted | 815 | 46.62 | |||||
Vested | (491 | ) | 59.22 | ||||
Forfeited | (114 | ) | 63.70 | ||||
Non-vested as of March 31, 2015 | 1,412 | 56.82 | |||||
Granted | 1,543 | 37.27 | |||||
Vested | (547 | ) | 38.38 | ||||
Forfeited | (196 | ) | 49.24 | ||||
Non-vested as of March 31, 2016 | 2,212 | $ | 43.43 |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cost of services revenue | $ | 2,604 | $ | 2,922 | $ | 3,182 | ||||||
Sales and marketing | 31,779 | 34,874 | 36,917 | |||||||||
Research and development | 14,594 | 8,601 | 8,411 | |||||||||
General and administrative | 15,158 | 31,458 | 25,619 | |||||||||
Stock-based compensation expense | $ | 64,135 | $ | 77,855 | $ | 74,129 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Cost of services revenue | $ | 3,106 | $ | 2,930 | $ | 1,428 | ||||||
Sales and marketing | 28,557 | 26,853 | 20,813 | |||||||||
Research and development | 6,722 | 5,908 | 4,512 | |||||||||
General and administrative | 25,811 | 24,972 | 22,371 | |||||||||
Stock-based compensation expense | $ | 64,196 | $ | 60,663 | $ | 49,124 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Domestic | $ | (6,869 | ) | $ | 28,048 | $ | 89,946 | |||||
Foreign | 8,714 | 10,844 | 11,364 | |||||||||
$ | 1,845 | $ | 38,892 | $ | 101,310 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Current: | ||||||||||||
Federal | $ | 4,983 | $ | 1,777 | $ | 34,406 | ||||||
State | 1,076 | 2,533 | 4,063 | |||||||||
Foreign | 4,982 | 4,791 | 5,207 | |||||||||
Deferred: | ||||||||||||
Federal | (9,171 | ) | 4,237 | (5,453 | ) | |||||||
State | 324 | (24 | ) | (616 | ) | |||||||
Foreign | (485 | ) | (72 | ) | (361 | ) | ||||||
$ | 1,709 | $ | 13,242 | $ | 37,246 |
Year Ended March 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Statutory federal income tax expense rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
State and local income tax expense, net of federal income tax effect | 11.2 | % | 3.0 | % | 2.5 | % | |||
Impact of limit on executive compensation | — | % | 3.2 | % | 1.5 | % | |||
Foreign earnings taxed at different rates | 67.9 | % | 1.0 | % | 0.7 | % | |||
Domestic permanent differences | 116.8 | % | 4.1 | % | 0.3 | % | |||
Foreign tax credits | (54.1 | )% | (2.8 | )% | (1.3 | )% | |||
Research credits | (141.2 | )% | (4.9 | )% | (1.9 | )% | |||
Tax reserves | 8.7 | % | (5.3 | )% | (0.8 | )% | |||
Valuation allowance | 50.1 | % | — | % | — | % | |||
Statutory tax rate changes | (20.1 | )% | — | % | — | % | |||
Other differences, net | 18.3 | % | 0.7 | % | 0.8 | % | |||
Effective income tax expense | 92.6 | % | 34.0 | % | 36.8 | % |
March 31, | ||||||||
2016 | 2015 | |||||||
Deferred tax assets: | ||||||||
Stock-based compensation | $ | 40,033 | $ | 30,561 | ||||
Deferred revenue | 12,496 | 10,542 | ||||||
Tax credits | 6,970 | 6,229 | ||||||
Accrued expenses | 1,155 | 1,570 | ||||||
Allowance for doubtful accounts and other reserves | 753 | 697 | ||||||
Net operating losses | — | 26 | ||||||
Less: valuation allowance | (2,772 | ) | (1,343 | ) | ||||
Total deferred tax assets | 58,635 | 48,282 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation and amortization | (8,659 | ) | (7,237 | ) | ||||
Net deferred tax asset | $ | 49,976 | $ | 41,045 |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Domestic | $ | (16,670 | ) | $ | (1,762 | ) | $ | (18,159 | ) | |||
Foreign | 4,124 | 12,189 | 14,659 | |||||||||
$ | (12,546 | ) | $ | 10,427 | $ | (3,500 | ) |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Current: | ||||||||||||
Federal | $ | (10,071 | ) | $ | (1,772 | ) | $ | (1,036 | ) | |||
State | (613 | ) | 103 | (383 | ) | |||||||
Foreign | 5,566 | 8,371 | 7,307 | |||||||||
Deferred: | ||||||||||||
Federal | 284 | 144 | 57,582 | |||||||||
State | — | — | (4,601 | ) | ||||||||
Foreign | (2,067 | ) | 20 | (469 | ) | |||||||
$ | (6,901 | ) | $ | 6,866 | $ | 58,400 |
Year Ended March 31, | |||||||||
2020 | 2019 | 2018 | |||||||
Statutory federal income tax expense (benefit) rate | (21.0 | )% | 21.0 | % | (31.6 | )% | |||
State and local income tax expense, net of federal income tax effect | (4.9 | )% | 1.0 | % | 20.5 | % | |||
Foreign earnings taxed at different rates | 12.3 | % | 25.5 | % | 63.0 | % | |||
U.S. tax on Global Intangible Low-Taxed Income | 14.5 | % | 72.9 | % | — | % | |||
Domestic permanent differences including acquisition items | 7.7 | % | 7.8 | % | 65.6 | % | |||
Foreign tax credits | (19.3 | )% | (22.4 | )% | (39.2 | )% | |||
Research credits | (32.9 | )% | (51.8 | )% | (83.2 | )% | |||
Tax reserves | (0.6 | )% | (5.2 | )% | (7.0 | )% | |||
Valuation allowance | 64.0 | % | (76.7 | )% | 1,626.5 | % | |||
Enacted tax law changes | 10.6 | % | (7.8 | )% | 451.9 | % | |||
Stock-based compensation | (43.1 | )% | 97.2 | % | (377.6 | )% | |||
CARES Act Impact | (82.1 | )% | — | % | — | % | |||
Reduction of NOL for carryback | 59.2 | % | — | % | — | % | |||
Other differences, net | (19.4 | )% | 4.3 | % | (20.3 | )% | |||
Effective income tax expense (benefit) | (55.0 | )% | 65.8 | % | 1,668.6 | % |
March 31, | ||||||||
2020 | 2019 | |||||||
Deferred tax assets: | ||||||||
Net operating losses | $ | 16,075 | $ | 6,223 | ||||
Equity investment | 1,192 | 1,298 | ||||||
Stock-based compensation | 20,792 | 13,926 | ||||||
Deferred revenue | 16,027 | 15,144 | ||||||
Tax credits | 24,936 | 23,632 | ||||||
Accrued expenses | 4,675 | 2,138 | ||||||
Allowance for doubtful accounts and other reserves | 546 | 661 | ||||||
Less: valuation allowance | (61,702 | ) | (50,160 | ) | ||||
Total deferred tax assets | 22,541 | 12,862 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation and amortization | (16,349 | ) | (6,673 | ) | ||||
Deferred commissions and other | (7,041 | ) | (8,783 | ) | ||||
Total deferred tax liabilities | $ | (23,390 | ) | $ | (15,456 | ) | ||
Net deferred tax liability | $ | (849 | ) | $ | (2,594 | ) |
Tax Jurisdiction | Years Subject to Income Tax Examination |
U.S. Federal | |
Foreign jurisdictions | |
Balance at March 31, 2017 | $ | 2,098 | |
Additions for tax positions related to fiscal 2018 | — | ||
Additions for tax positions related to prior years | 150 | ||
Settlements and effective settlements with tax authorities and remeasurements | — | ||
Reductions related to the expiration of statutes of limitations | (397 | ) | |
Foreign currency translation adjustment | (111 | ) | |
Balance at March 31, 2018 | 1,740 | ||
Additions for tax positions related to fiscal 2019 | — | ||
Additions for tax positions related to prior years | 547 | ||
Settlements and effective settlements with tax authorities and remeasurements | — | ||
Reductions related to the expiration of statutes of limitations | (695 | ) | |
Foreign currency translation adjustment | — | ||
Balance at March 31, 2019 | 1,592 | ||
Additions for tax positions related to fiscal 2020 | 170 | ||
Additions for tax positions related to prior years | — | ||
Settlements and effective settlements with tax authorities and remeasurements | — | ||
Reductions related to the expiration of statutes of limitations | (100 | ) | |
Foreign currency translation adjustment | — | ||
Balance at March 31, 2020 | 1,662 |
Balance at March 31, 2013 | $ | 4,570 | |
Additions for tax positions related to fiscal 2014 | 316 | ||
Additions for tax positions related to prior years | 433 | ||
Settlements and effective settlements with tax authorities and remeasurements | (1,283 | ) | |
Reductions related to the expiration of statutes of limitations | — | ||
Foreign currency translation adjustment | 77 | ||
Balance at March 31, 2014 | 4,113 | ||
Additions for tax positions related to fiscal 2015 | 490 | ||
Additions for tax positions related to prior years | 252 | ||
Settlements and effective settlements with tax authorities and remeasurements | (2,838 | ) | |
Reductions related to the expiration of statutes of limitations | — | ||
Foreign currency translation adjustment | (12 | ) | |
Balance at March 31, 2015 | 2,005 | ||
Additions for tax positions related to fiscal 2016 | |||
Additions for tax positions related to prior years | 170 | ||
Settlements and effective settlements with tax authorities and remeasurements | (171 | ) | |
Reductions related to the expiration of statutes of limitations | (64 | ) | |
Foreign currency translation adjustment | 12 | ||
Balance at March 31, 2016 | $ | 1,952 |
Year Ended March 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 342,660 | $ | 379,221 | $ | 377,934 | ||||||
Other | 328,225 | 331,736 | 321,459 | |||||||||
$ | 670,885 | $ | 710,957 | $ | 699,393 |
Year Ended March 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Revenue: | ||||||||||||
United States | $ | 343,015 | $ | 344,931 | $ | 333,700 | ||||||
Other | 252,111 | 262,612 | 252,640 | |||||||||
$ | 595,126 | $ | 607,543 | $ | 586,340 |
March 31, | ||||||||
2020 | 2019 | |||||||
Long-lived assets: | ||||||||
United States | $ | 300,662 | $ | 143,591 | ||||
Other | 30,727 | 23,860 | ||||||
$ | 331,389 | $ | 167,451 |
March 31, | ||||||||
2016 | 2015 | |||||||
Long-lived assets: | ||||||||
United States | $ | 135,562 | $ | 143,975 | ||||
Other | 7,079 | 3,037 | ||||||
$ | 142,641 | $ | 147,012 |
Year Ended March 31, | ||||||||
2020 | 2019 | |||||||
Beginning balance | $ | 1,089 | $ | — | ||||
Restructuring charges, net (1) (2) | 18,587 | 13,731 | ||||||
Payments | (17,145 | ) | (12,642 | ) | ||||
Ending balance | $ | 2,531 | $ | 1,089 |
Year Ended March 31, 2020 | |||
Operating Lease Cost | $ | 8,795 | |
Short-term Lease Cost | 410 | ||
Variable Lease Cost | 2,088 | ||
Net Lease Cost | $ | 11,293 |
2021 | $ | 7,520 | |
2022 | 5,070 | ||
2023 | 2,160 | ||
2024 | 1,369 | ||
2025 | 1,024 | ||
Thereafter | 675 | ||
Total Minimum Lease Payments | $ | 17,818 | |
Less: Imputed Interest | (1,311 | ) | |
Present value of operating lease liabilities | $ | 16,507 | |
Less: Current Portion of operating lease liabilities | 7,699 | ||
Long-term operating lease liabilities | $ | 8,808 |
Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||
June 30 | September 30 | December 31 | March 31 | June 30 | September 30 | December 31 | March 31 | |||||||||||||||||||||||||
Fiscal 2016 | ||||||||||||||||||||||||||||||||
Fiscal 2020 | ||||||||||||||||||||||||||||||||
Total revenue | $ | 139,123 | $ | 140,742 | $ | 155,696 | $ | 159,565 | $ | 162,203 | $ | 167,582 | $ | 176,351 | $ | 164,749 | ||||||||||||||||
Gross margin | 118,576 | 119,803 | 135,267 | 138,768 | 133,483 | 136,341 | 145,828 | 138,155 | ||||||||||||||||||||||||
Net income (loss) | (1,300 | ) | (9,236 | ) | 4,878 | 5,794 | (6,846 | ) | (7,084 | ) | (650 | ) | 8,935 | |||||||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||||||||||
Basic (1) | $ | (0.03 | ) | $ | (0.20 | ) | $ | 0.11 | $ | 0.13 | $ | (0.15 | ) | $ | (0.16 | ) | $ | (0.01 | ) | $ | 0.19 | |||||||||||
Diluted (1) | $ | (0.03 | ) | $ | (0.20 | ) | $ | 0.10 | $ | 0.13 | $ | (0.15 | ) | $ | (0.16 | ) | $ | (0.01 | ) | $ | 0.19 | |||||||||||
Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||
June 30 | September 30 | December 31 | March 31 | June 30 | September 30 | December 31 | March 31 | |||||||||||||||||||||||||
Fiscal 2015 | ||||||||||||||||||||||||||||||||
Fiscal 2019 | ||||||||||||||||||||||||||||||||
Total revenue | $ | 152,643 | $ | 151,144 | $ | 153,021 | $ | 150,735 | $ | 176,177 | $ | 169,078 | $ | 184,275 | $ | 181,427 | ||||||||||||||||
Gross margin | 131,716 | 130,858 | 133,080 | 129,821 | 148,571 | 142,205 | 155,422 | 147,753 | ||||||||||||||||||||||||
Net income | 12,729 | 6,496 | 3,073 | 3,352 | ||||||||||||||||||||||||||||
Net income per common share: | ||||||||||||||||||||||||||||||||
Net income (loss) | (8,567 | ) | 891 | 13,400 | (2,163 | ) | ||||||||||||||||||||||||||
Net income (loss) per common share: | ||||||||||||||||||||||||||||||||
Basic (1) | $ | 0.28 | $ | 0.14 | $ | 0.07 | $ | 0.07 | $ | (0.19 | ) | $ | 0.02 | $ | 0.29 | $ | (0.05 | ) | ||||||||||||||
Diluted (1) | $ | 0.27 | $ | 0.14 | $ | 0.07 | $ | 0.07 | $ | (0.19 | ) | $ | 0.02 | $ | 0.28 | $ | (0.05 | ) |
(1) | Per common share amounts for the quarters and full year have been calculated separately. Accordingly, quarterly amounts do not add to the annual amount because of differences in the |
Item 9. | Changes |
Item 9A. | Controls and Procedures |
(a) | Evaluation of Disclosure Controls and Procedures |
(b) | Management’s Report on Internal Control over Financial Reporting |
(c) | Changes in Internal Control over Financial Reporting |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)(2) | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | |||||||||||||||
Equity compensation plans approved by security holders(1) | 8,150,000 | $ | 43.90 | 1,629,000 | ||||||||||||||||
Equity compensation plans approved by security holders (1) | 5,140,865 | $ | 54.01 | 2,904,675 | ||||||||||||||||
Equity compensation plans not approved by security holder | — | — | — | — | — | — | ||||||||||||||
Totals | 8,150,000 | $ | 43.90 | 1,629,000 | 5,140,865 | $ | 54.01 | 2,904,675 |
(1) | Consists of shares of common stock to be issued upon exercise of outstanding options and vesting of restricted stock awards under our |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits and Financial Statement Schedules |
Balance at Beginning of Year | Charged (Credited) to Costs and Expenses | Write-offs/Deductions | Balance at End of Year | |||||||||||||
(In thousands) | ||||||||||||||||
Year Ended March 31, 2018 | ||||||||||||||||
Allowance for doubtful accounts | $ | 103 | $ | 25 | $ | 24 | $ | 104 | ||||||||
Valuation allowance for deferred taxes | $ | 1,796 | $ | 56,554 | $ | — | $ | 58,350 | ||||||||
Year Ended March 31, 2019 | ||||||||||||||||
Allowance for doubtful accounts | $ | 104 | $ | 569 | $ | 184 | $ | 489 | ||||||||
Valuation allowance for deferred taxes | $ | 58,350 | $ | (8,190 | ) | $ | — | $ | 50,160 | |||||||
Year Ended March 31, 2020 | ||||||||||||||||
Allowance for doubtful accounts | $ | 489 | $ | (246 | ) | $ | 121 | $ | 122 | |||||||
Valuation allowance for deferred taxes | $ | 50,160 | $ | 11,542 | $ | — | $ | 61,702 |
Balance at Beginning of Year | Charged (Credited) to Costs and Expenses | Deductions | Balance at End of Year | |||||||||||||
(In thousands) | ||||||||||||||||
Year Ended March 31, 2014 | ||||||||||||||||
Allowance for doubtful accounts | $ | 103 | $ | 8 | $ | — | $ | 111 | ||||||||
Valuation allowance for deferred taxes | $ | 1,395 | $ | — | $ | 13 | $ | 1,382 | ||||||||
Year Ended March 31, 2015 | ||||||||||||||||
Allowance for doubtful accounts | $ | 111 | $ | 1 | $ | 8 | $ | 104 | ||||||||
Valuation allowance for deferred taxes | $ | 1,382 | $ | (39 | ) | $ | — | $ | 1,343 | |||||||
Year Ended March 31, 2016 | ||||||||||||||||
Allowance for doubtful accounts | $ | 104 | $ | 247 | $ | 36 | $ | 315 | ||||||||
Valuation allowance for deferred taxes | $ | 1,343 | $ | 1,429 | $ | — | $ | 2,772 |
Exhibit No. | Description |
Amended and Restated Certificate of Incorporation of Commvault Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Amended and Restated Bylaws of Commvault Systems, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K dated April 25, 2014). | |
Certification of Designation of Series A Junior Participating Preferred Stock of Commvault Systems, Inc. (Incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K dated November 14, 2008). | |
Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Rights Agreement between Commvault Systems, Inc. and Registrar and Transfer Company (Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K dated November 14, 2008). | |
Amendment No. 1 to Rights Agreement, dated as of August 1, 2018, by and between Commvault Systems, Inc. and Computershare Trust Company, N.A. (as successor to Registrar and Transfer Company), as rights agent. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K dated August 8, 2018) | |
Form of Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2007). | |
Employment Agreement, dated as of February 1, 2004, between Commvault Systems, Inc. and N. Robert Hammer (Incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Employment Agreement between Commvault Systems, Inc. and Alan G. Bunte and Louis F. Miceli (Incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Corporate Change of Control Agreement between Commvault Systems, Inc. and Alan G. Bunte and Louis F. Miceli (Incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Corporate Change of Control Agreement between Commvault Systems, Inc. and Brian Carolan, and Ron Miiller (Incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Form of Indemnity Agreement between Commvault Systems, Inc. and each of its current officers and directors (Incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550). | |
Commvault Systems, Inc. Employee Stock Purchase Plan dated December 9, 2013 (Incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2014). | |
The Commvault Systems, Inc. Omnibus Incentive Plan (As Amended Through the | |
Letter Agreement, by and among Commvault Systems, Inc., Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc., dated April 30, | |
Employment Agreement, dated January 8, 2019, between the Company and Sanjay Mirchandani. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K dated February 5, 2019) | |
Agreement and General Release, dated February 1, 2019, between the Company and N. Robert Hammer. (Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K dated February 5, 2019) | |
Executive Retention and Severance Agreement, dated March 5, 2019, between Commvault Systems, Inc. and Alan Bunte (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K dated February 1, 2019) | |
Executive Retention and Severance Agreement, dated April 1, 2019, between Commvault Systems, Inc. and Jay Whalen (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K dated March 31, 2019) |
* | Management contract or compensatory plan or arrangement. |
Exhibit No. | Description |
Description of Securities | |
List of Subsidiaries of Commvault Systems, Inc. | |
Consent of Ernst & Young LLP | |
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Item 16. | Form 10-K Summary |
COMMVAULT SYSTEMS, INC. | |
By: | /s/ |
Signature | Title | ||
/s/ | |||
/s/ BRIAN CAROLAN | Vice President, Chief Financial Officer | ||
Brian Carolan | |||
/s/ | Vice President, Chief Accounting Officer | ||
/s/ NICHOLAS ADAMO | Chairman of the Board | ||
Nicholas Adamo | |||
/s/ MARTHA H. BEJAR | Director | ||
Martha H. Bejar | |||
/s/ ALAN G. BUNTE | Director | ||
Alan G. Bunte | |||
/s/ FRANK J. FANZILLI, JR. | Director | ||
Frank J. Fanzilli, Jr. | |||
/s/ | |||
Director | |||
Keith Geeslin | |||
/s/ | Director | ||
/s/ CHARLES E. MORAN | Director | ||
Charles E. Moran | |||
/s/ DANIEL PULVER | Director | ||
Daniel Pulver | |||
/s/ GARY SMITH | Director | ||
Gary Smith | |||
/s/ DAVID F. WALKER | Director | ||
David F. Walker |