Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | May 23, 2018 | Sep. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | 8X8 INC /DE/ | ||
Entity Central Index Key | 1,023,731 | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --03-31 | ||
Is Entity a Well-known Seasoned Issuer? | Yes | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,200,000,000 | ||
Entity Common Stock, Shares Outstanding | 93,004,774 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 31,703 | $ 41,030 |
Short-term investments | 120,559 | 133,959 |
Accounts receivable, net | 16,296 | 14,264 |
Other current assets | 10,040 | 8,101 |
Total current assets | 178,598 | 197,354 |
Property and equipment, net | 35,732 | 24,061 |
Intangible assets, net | 11,958 | 17,038 |
Goodwill | 40,054 | 46,136 |
Non-current deferred tax asset | 0 | 48,859 |
Restricted cash | 8,100 | 0 |
Other assets | 2,767 | 407 |
Total assets | 277,209 | 333,855 |
Current liabilities: | ||
Accounts payable | 23,899 | 18,631 |
Accrued compensation | 17,412 | 11,508 |
Accrued taxes | 6,367 | 5,354 |
Deferred revenue | 2,559 | 2,144 |
Other accrued liabilities | 6,026 | 5,707 |
Total current liabilities | 56,263 | 43,344 |
Non-current liabilities | 2,153 | 1,850 |
Non-current deferred revenue | 19 | 60 |
Total liabilities | 58,435 | 45,254 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: no shares at March 31, 2018 and 2017 | 0 | 0 |
Common stock, $0.001 par value: Authorized: 200,000,000 shares; Issued and outstanding: 92,847,354 shares and 91,500,091 shares at March 31, 2018 and 2017, respectively | 93 | 91 |
Additional paid-in capital | 425,790 | 412,762 |
Accumulated other comprehensive loss | (5,645) | (9,642) |
Accumulated deficit | (201,464) | (114,610) |
Total stockholders' equity | 218,774 | 288,601 |
Total liabilities and stockholders' equity | $ 277,209 | $ 333,855 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2018 | Mar. 31, 2017 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 92,847,354 | 91,500,091 |
Common stock, shares outstanding | 92,847,354 | 91,500,091 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Consolidated Statements Of Operations | |||||||||||
Service revenue | $ 75,325 | $ 71,891 | $ 68,123 | $ 65,091 | $ 62,654 | $ 60,149 | $ 57,717 | $ 55,296 | $ 280,430 | $ 235,816 | $ 192,241 |
Product revenue | 4,019 | 3,684 | 4,360 | 4,007 | 3,834 | 3,527 | 5,466 | 4,745 | 16,070 | 17,572 | 17,095 |
Total revenue | 79,344 | 75,575 | 72,483 | 69,098 | 66,488 | 63,676 | 63,183 | 60,041 | 296,500 | 253,388 | 209,336 |
Operating expenses: | |||||||||||
Cost of service revenue | 13,952 | 12,318 | 12,757 | 11,662 | 10,803 | 10,525 | 10,837 | 10,235 | 50,689 | 42,400 | 37,078 |
Cost of product revenue | 5,826 | 4,675 | 5,098 | 4,884 | 4,187 | 4,240 | 5,782 | 5,505 | 20,482 | 19,714 | 20,168 |
Research and development | 10,016 | 8,527 | 8,311 | 7,943 | 7,142 | 7,095 | 6,505 | 6,710 | 34,797 | 27,452 | 24,040 |
Sales and marketing | 52,940 | 48,830 | 41,163 | 41,110 | 38,228 | 35,667 | 33,691 | 31,691 | 184,044 | 139,277 | 109,379 |
General and administrative | 10,340 | 10,003 | 9,616 | 8,956 | 9,814 | 7,852 | 6,747 | 6,801 | 38,915 | 31,214 | 25,745 |
Impairment of goodwill, intangible assets and equipment | 0 | 9,469 | 0 | 0 | 0 | 0 | 0 | 0 | 9,469 | 0 | 0 |
Total operating expenses | 93,074 | 93,822 | 76,945 | 74,555 | 70,174 | 65,379 | 63,562 | 60,942 | 338,396 | 260,057 | 216,410 |
Loss from operations | (13,730) | (18,247) | (4,462) | (5,457) | (3,686) | (1,703) | (379) | (901) | (41,896) | (6,669) | (7,074) |
Other income, net | 610 | 569 | 463 | 2,052 | 583 | 408 | 391 | 410 | 3,693 | 1,792 | 1,107 |
Loss before provision (benefit) for income taxes | (13,120) | (17,678) | (3,999) | (3,405) | (3,103) | (1,295) | 12 | (491) | (38,203) | (4,877) | (5,967) |
Provision (benefit) for income taxes | 142 | 70,842 | (3,453) | (1,236) | (178) | 30 | (15) | 37 | 66,294 | (126) | (847) |
Net loss | $ (13,262) | $ (88,520) | $ (546) | $ (2,169) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (104,497) | $ (4,751) | $ (5,120) |
Net loss per share: | |||||||||||
Basic | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Diluted | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Weighted average number of shares: | |||||||||||
Basic | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 89,987 | 89,434 | 92,017 | 90,340 | 88,477 |
Diluted | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 93,447 | 89,434 | 92,017 | 90,340 | 88,477 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (104,497) | $ (4,751) | $ (5,120) |
Other comprehensive loss, net of tax | |||
Unrealized gain (loss) on investments in securities | (259) | 70 | (50) |
Foreign currency translation adjustment | 4,256 | (5,528) | (2,025) |
Comprehensive loss | $ (100,500) | $ (10,209) | $ (7,195) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning balance, amount at Mar. 31, 2015 | $ 88 | $ 378,971 | $ (2,109) | $ (104,739) | $ 272,211 |
Beginning balance, shares at Mar. 31, 2015 | 88,065,528 | ||||
Issuance of common stock under stock plans | $ 2 | 5,386 | 0 | 0 | 5,388 |
Issuance of common stock under stock plans, shares | 2,218,470 | ||||
Withholding taxes from stock plans | $ 0 | (466) | 0 | 0 | (466) |
Withholding taxes from stock plans, shares | (30,702) | ||||
Issuance of common stock for acquisition of businesses, net of issuance costs | $ 0 | 0 | 0 | 0 | 0 |
Issuance of common stock for acquisition of businesses, net of issuance costs, shares | 352,044 | ||||
Repurchase of common stock | $ (1) | (11,189) | 0 | 0 | (11,190) |
Repurchase of common stock, shares | (1,392,135) | ||||
Stock-based compensation expense | $ 0 | 16,334 | 0 | 0 | 16,334 |
Income tax benefit from stock-based compensation | 0 | 224 | 0 | 0 | 224 |
Unrealized investment gain (loss) | 0 | 0 | (50) | 0 | (50) |
Foreign currency translation adjustment | 0 | 0 | (2,025) | 0 | (2,025) |
Net loss | 0 | 0 | 0 | (5,120) | (5,120) |
Ending balance, amount at Mar. 31, 2016 | $ 89 | 389,260 | (4,184) | (109,859) | 275,306 |
Ending balance, shares at Mar. 31, 2016 | 89,213,205 | ||||
Issuance of common stock under stock plans | $ 3 | 4,557 | 0 | 0 | 4,560 |
Issuance of common stock under stock plans, shares | 2,576,785 | ||||
Withholding taxes from stock plans | $ (1) | (3,003) | 0 | 0 | (3,004) |
Withholding taxes from stock plans, shares | (289,899) | ||||
Stock-based compensation expense | $ 0 | 21,462 | 0 | 0 | 21,462 |
Income tax benefit from stock-based compensation | 0 | 486 | 0 | 0 | 486 |
Unrealized investment gain (loss) | 0 | 0 | 70 | 0 | 70 |
Foreign currency translation adjustment | 0 | 0 | (5,528) | 0 | (5,528) |
Net loss | 0 | 0 | 0 | (4,751) | (4,751) |
Ending balance, amount at Mar. 31, 2017 | $ 91 | 412,762 | (9,642) | (114,610) | 288,601 |
Ending balance, shares at Mar. 31, 2017 | 91,500,091 | ||||
Adjustment from adoption of ASU 2016-9 | Update 201609 | 17,643 | ||||
Adjustment from adoption of ASU 2016-9 | $ 0 | 0 | 0 | 17,643 | |
Issuance of common stock under stock plans, less withholding taxes | $ 3 | 2,179 | 0 | 0 | 2,182 |
Issuance of common stock under stock plans, less withholding taxes,shares | 2,709,990 | ||||
Repurchase of common stock | $ (1) | (17,933) | 0 | 0 | (17,934) |
Repurchase of common stock, shares | (1,362,727) | ||||
Stock-based compensation expense | $ 0 | 28,782 | 0 | 0 | 28,782 |
Income tax benefit from stock-based compensation | 0 | ||||
Unrealized investment gain (loss) | 0 | 0 | (259) | 0 | (259) |
Foreign currency translation adjustment | 0 | 0 | 4,256 | 0 | 4,256 |
Net loss | 0 | 0 | 0 | (104,497) | (104,497) |
Ending balance, amount at Mar. 31, 2018 | $ 93 | $ 425,790 | $ (5,645) | $ (201,464) | $ 218,774 |
Ending balance, shares at Mar. 31, 2018 | 92,847,354 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | |||
Net loss | $ (104,497) | $ (4,751) | $ (5,120) |
Adjustments to reconcile net loss to net cash provided by operating activites: | |||
Depreciation | 8,171 | 6,084 | 4,994 |
Amortization of intangibles | 5,033 | 3,762 | 3,557 |
Impairment of goodwill and long-lived assets | 9,469 | 15 | 640 |
Amortization of capitalized software | 2,513 | 591 | 456 |
Stock-based compensation | 29,176 | 21,462 | 16,334 |
Tax benefit from stock-based compensation expense | 0 | (486) | (224) |
Deferred income tax expense (benefit) | 66,273 | (411) | (1,493) |
Gain on escrow settlement | (1,393) | 0 | 0 |
Other | 677 | 1,196 | 1,273 |
Changes in assets and liabilities: | |||
Accounts receivable | (2,402) | (4,799) | (4,539) |
Other current and non-current assets | (3,149) | (2,515) | (1,520) |
Accounts payable and accruals | 11,860 | 8,135 | 9,482 |
Deferred revenue | 310 | 195 | (273) |
Net cash provided by operating activities | 22,041 | 28,478 | 23,567 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (9,178) | (8,851) | (4,894) |
Cost of capitalized software | (12,486) | (5,516) | (2,095) |
Gain on escrow settlement | 1,393 | 0 | 0 |
Purchase of investments | (115,224) | (140,026) | (126,723) |
Sales of investments | 27,841 | 41,288 | 56,302 |
Proceeds from maturities of investments | 100,382 | 93,795 | 64,361 |
Acquisition of businesses, net of cash acquired | 0 | (2,884) | (23,246) |
Net cash used in investing activities | (7,272) | (22,194) | (36,295) |
Cash flows from financing activities: | |||
Capital lease payments | (1,079) | (674) | (446) |
Payment of contingent consideration | (150) | (300) | (200) |
Repurchase of common stock, including for withholding taxes | (22,440) | (3,003) | (11,653) |
Tax benefit from stock-based compensation expense | 0 | 486 | 224 |
Proceeds from issuance of common stock under employee stock plans | 7,229 | 5,087 | 4,827 |
Net cash (used in) provided by financing activities | (16,440) | 1,596 | (7,248) |
Effect of exchange rate changes on cash | 444 | (426) | 442 |
Net (decrease) increase in cash and cash equivalents | (1,227) | 7,454 | (19,534) |
Cash and cash equivalents,beginning of year | 41,030 | 33,576 | 53,110 |
Cash and cash equivalents, end of year | 39,803 | 41,030 | 33,576 |
Supplemental and non-cash disclosures: | |||
Acquisition of property and equipment, net in connection with acquisitions of businesses | 0 | 0 | 1,453 |
Acquisition of capital lease in connection with acquisitions of businesses | 0 | 0 | 1,332 |
Equipment acquired under capital leases | 765 | 1,152 | 573 |
Interest paid | 36 | 16 | 44 |
Income taxes paid | $ 38 | $ 460 | $ 445 |
THE COMPANY AND SIGNIFICANT ACC
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 12 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES - Note 1 | 1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES THE COMPANY 8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company is a leading provider of enterprise cloud communications solutions, including unified communications, team collaboration, contact center, and analytics, integrated over a single Software-as-a-Service (SaaS) platform. The 8x8 Communications Cloud TM The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2018 refers to the fiscal year ended March 31, 2018). PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. Reclassification Certain software development costs capitalized in accordance with ASC 350-40, Internal-Use Software Certain amounts previously reported within the Company's consolidated balance sheets and consolidated statements of cash flows have been reclassified within each financial statement section to conform to the current period presentation. The reclassification had no impact on the Company's previously reported net loss, cash flows, or basic or diluted net loss per share amounts. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions. Actual results could differ from those estimates under different assumptions or conditions. REVENUE RECOGNITION Service and Product Revenue The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably, over the course of the contract, as services are provided. Under the terms of the Company's typical subscription agreements, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that is not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. The Company recognizes revenue from product sales, mainly IP telephones, for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. Multiple Element Arrangements ASC 605-25, Revenue Recognition - Multiple Element Arrangements VSOE generally exists only when a Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. As the Company has historically been unable to establish a selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, among the products and subscriber services based on their relative selling prices. Arrangement consideration allocated to the sold products that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. CASH, CASH EQUIVALENTS AND INVESTMENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At March 31, 2018 and 2017, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income in the consolidated statements of operations and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of one major financial institution. ACCOUNTS RECEIVABLE ALLOWANCE The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment, software and software development costs and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Operations. Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2018. ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate the fair value of long-lived assets and asset groups through future cash flows. See Note 4 for further discussion on impairment charges incurred. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has three reporting units and allocates goodwill to the reporting units for the purposes of its annual impairment test. The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. WARRANTY EXPENSE The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. RESEARCH & DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS Software developed or obtained for internal use in accordance with ASC 350-40, Internal-Use Software ADVERTISING COSTS Advertising costs are expensed as incurred and were $14.5 million, $9.5 million and $8.5 million for the years ended March 31, 2018, 2017 and 2016, respectively. FOREIGN CURRENCY TRANSLATION The Company has determined that the functional currency of each of its foreign subsidiaries are the subsidiary's local currency. The Company believes this most appropriately reflects the current economic facts and circumstances of the Company's subsidiaries' operations. The assets and liabilities of the subsidiaries are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity. BUSINESS SEGMENTS The Company has two reportable segments, Americas and Europe. The Americas segment is primarily North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on geographical results. The Company's CODMs evaluate the performance of its operating segments based on revenues and net income. The Company does not allocate research and development, sales and marketing, general and administrative, amortization expense, stock-based compensation expense, and commitment and contingencies for each segment as management does not consider this information in its evaluation of the performance of each operating segment. Revenues are attributed to each segment based on the ordering location of the customer or ship to location. CONCENTRATIONS Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investments. The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2018 and 2017, no customer accounted for more than 10% of accounts receivable. The Company purchases all of its hardware products from suppliers that manufacturer the hardware directly. The inability of any supplier to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. The Company also relies primarily on third-party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. ACCOUNTING FOR STOCK-BASED COMPENSATION The Company accounts for its employee stock options and other stock awards under the provisions of ASC 718 - Stock Compensation To value option grants the Company uses the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk-free interest rates and future dividend payments. The Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk-free interest rates were based on the closing market bid yields of actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history of not paying dividends. The Company issued performance stock units (PSUs) to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2018: These PSUs vest (1) 50% on September 19, 2019 and (2) 50% on September 19, 2020, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease at the end of each respective performance measurement period by 2% of the target numbers. In the event the Company's common stock performance is below negative 30% relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2017: These PSUs vest (1) 50% on September 22, 2018 and (2) 50% on September 27, 2019, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event the Company's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. To value these market-based PSUs under the Equity Compensation Plans, the Company used a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk-free interest rates, and future dividend payments. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss), as defined, includes all changes in equity (net assets) during a period. The difference between net income (loss) and comprehensive income (loss) is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income (loss) per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method unless their effect is anti-dilutive. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. DEFERRED RENT The Company recognizes rent expense on a straight-line basis for all operating lease arrangements with the difference between required lease payments and rent expense recorded as deferred rent. The difference results from rent holidays, rent escalations and tenant improvement allowances, which are amortized over the lease term. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In January 2017, the FASB issued ASU No. 2017-04, Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 or ASC 606), which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are required within the revenue recognition process than are required under current GAAP (ASC 605). The new standard permits the use of either the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018 using the modified retrospective method. Under the retrospective method prior period financial information is not revised, but instead a cumulative impact is recorded on the day of adoption with a corresponding offset recorded to stockholder's equity. Under the new standard, the Company expects in some cases to recognize revenue earlier than under ASC 605 guidance when the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example the initial month's services or equipment are discounted, as a result of the elimination of contingent revenue guidance. Under ASC 605 guidance, amounts allocated to delivered items are limited to amounts that are not contingent on the provision of future services. The impact of adopting the new standard on the Company's total revenues and deferred revenue is not expected to be material. With the adoption of ASC 606 the Company also adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a customer contract which, under the old guidance, were expensed as incurred. Under the new standard, the Company will defer all incremental sales commission costs and amortize them over the expected period of benefit, which is estimated to be five years. The amortization cost will be charged to sales and marketing costs on the consolidated statements of operations. The Company expects the cumulative impact of these deferred costs to be approximately $35 million to $40 million with a corresponding decrease to accumulated deficit as of April 1, 2018. There will not be any significant tax impact to the Company's consolidated statements of operations and consolidated balance sheet relating to the adoption of the new standard due to the valuation allowance recorded against to the Company's deferred tax assets. The Company has established new accounting policies, is implementing processes, and implementing internal controls necessary to support the requirements of the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB has issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business |
FAIR VALUE MEASURESMENTS - Note
FAIR VALUE MEASURESMENTS - Note 2 | 12 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
FAIR VALUE MEASURESMENTS - Note 2 | 2. FAIR VALUE MEASURESMENTS Cash, cash equivalents, available-for-sale investments, and contingent consideration were (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ - Level 1: Money market funds 15,204 - - 15,204 15,204 - Subtotal 31,703 - - 31,703 31,703 - Level 2: Commercial paper 13,254 - (8) 13,246 - 13,246 Corporate debt 70,631 6 (296) 70,341 - 70,341 Municipal securities 3,385 3 (1) 3,387 - 3,387 Asset backed securities 27,063 1 (119) 26,945 - 26,945 Agency bond 4,183 - (35) 4,148 - 4,148 International government securities 2,497 - (5) 2,492 - 2,492 Subtotal 121,013 10 (464) 120,559 - 120,559 Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2017 Costs Gain Loss Fair Value Equivalents Investments Cash $ 29,122 $ - $ - $ 29,122 $ 29,122 $ - Level 1: Money market funds 11,908 - - 11,908 11,908 - Mutual funds 2,000 - (194) 1,806 - 1,806 Subtotal 43,030 - (194) 42,836 41,030 1,806 Level 2: Commercial paper 19,144 8 - 19,152 - 19,152 Corporate debt 83,995 61 (58) 83,998 - 83,998 Asset backed securities 26,906 4 (22) 26,888 - 26,888 Mortgage backed securities 116 - (1) 115 - 115 Agency bond 2,000 - - 2,000 - 2,000 Subtotal 132,161 73 (81) 132,153 - 132,153 Total assets $ 175,191 $ 73 $ (275) $ 174,989 $ 41,030 $ 133,959 Level 3: Contingent consideration $ - $ - $ - $ 148 $ - $ - Total liabilities $ - $ - $ - $ 148 $ - $ - Contractual maturities of investments as of March 31, 2018 are set forth below (in thousands): Estimated Fair Value Due within one year $ 69,721 Due after one year 50,838 Total $ 120,559 Contingent Consideration and Escrow Liability The Company's contingent consideration liability, included in other accrued liabilities on the consolidated balance sheets as of March 31, 2017, was associated with the Quality Software Corporation (QSC) acquisition made in the first quarter of fiscal year 2016. This contingent liability was classified as level 3 within the fair value hierarchy. The remaining liability of $0.1 million was settled and paid during the year ended March 31, 2018. |
PROPERTY AND EQUIPMENT - Note 3
PROPERTY AND EQUIPMENT - Note 3 | 12 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT - Note 3 | 3. PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): March 31, 2018 2017 Computer equipment $ 29,761 $ 24,293 Software development costs 20,144 8,265 Software licenses 8,663 7,380 Leasehold improvements 6,573 5,579 Furniture and fixtures 1,637 1,411 Construction in progress 2,394 689 69,172 47,617 Less: accumulated depreciation and amortization (33,440) (23,556) $ 35,732 $ 24,061 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL - Note 4 | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL - Note 4 | 4. INTANGIBLE ASSETS AND GOODWILL The carrying value of intangible assets consisted of the following (in thousands): March 31, 2018 March 31, 2017 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 19,702 $ (10,535) $ 9,167 $ 18,685 $ (7,010) $ 11,675 Customer relationships 9,776 (7,366) 2,410 9,419 (6,187) 3,232 Trade names/domains 2,108 (1,727) 381 2,036 - 2,036 In-process research and development 95 (95) - 95 - 95 Total acquired identifiable intangible assets $ 31,681 $ (19,723) $ 11,958 $ 30,235 $ (13,197) $ 17,038 At March 31, 2018, annual amortization of definite lived intangible assets, based upon existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount 2019 $ 4,002 2020 3,171 2021 2,790 2022 1,766 2023 229 Total $ 11,958 Impairment of Long-Lived Assets and Goodwill During the third quarter of fiscal year 2018, the Company changed its product and marketing strategy for the use of DXI's technology and re-assessed DXI's profitability outlook. This triggered the requirement that the Company test the recorded goodwill for impairment in accordance with ASC 350-20-35, as amended by ASU 2017-04 (see Footnote 1, Recently Adopted Accounting Pronouncements). First, the Company estimated the fair value of its three reporting units using the market approach. Under the market approach, the Company utilized the market capitalization of its publicly-traded shares and comparable company information to determine revenue multiples which were used to determine the fair value of the reporting unit. Based on this approach, the Company determined that there was an indication of impairment only for its DXI reporting unit, which is within the Company's Europe reporting segment, as the carrying value including goodwill exceeded the estimated fair value. As largely independent cash flows could not be attributed to any assets individually the Company evaluated DXI's assets and liabilities as one asset group. Then the Company estimated the fair value of DXI's asset group using discounted cash flow methods to determine the implied fair value of goodwill. The difference between this implied fair value of the goodwill and its carrying value was recorded as impairment. The outcome of the analysis resulted in a non-cash expense for impairment of property and equipment, intangible assets and goodwill of $0.3 million, $1.2 million and $8.0 million, respectively, which was recorded during the third quarter of fiscal year 2018 as a separate line item in the Company's Consolidated Statements of Operations. The following table provides a summary of the changes in the carrying amounts of goodwill by reporting segment (in thousands): Americas Europe Total Balance at March 31, 2016 $ 25,729 $ 21,691 $ 47,420 Additions due to acquisitions 1,580 - 1,580 Foreign currency translation - (2,864) (2,864) Balance at March 31, 2017 27,309 18,827 46,136 Impairment loss - (8,036) (8,036) Foreign currency translation - 1,954 1,954 Balance at March 31, 2018 $ 27,309 $ 12,745 $ 40,054 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 5 | 12 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES - Note 5 | 5. COMMITMENTS AND CONTINGENCIES Guarantees Indemnifications In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. Product Warranties The Company accrues for the estimated costs that may be incurred under its product warranties upon revenue recognition. Operating Leases The Company's operating lease obligations consist of the Company's principal facility and various leased facilities under operating lease agreements, which expire on various dates from fiscal 2018 through fiscal 2026. The Company leases its headquarters facility in San Jose, California under an operating lease agreement that expires in October 2019. On January 23, 2018, the Company entered into a 132-month lease to rent approximately 162,000 square feet for a new Company headquarters in San Jose, California. The lease term begins on January 1, 2019 or such earlier date on which the Company first commences to conduct business on the premises. The Company has the option to extend the lease for one additional five-year term, on substantially the same terms and conditions as the prior term but with the base rent rate adjusted to fair market value at that time. Base rent is approximately $512,000 per month for the first 12 months of the lease, and the rate increases 3% on each anniversary of the lease commencement date. The Company is entitled to full rent abatement during the first 10 months of the lease term and 50% rent abatement during the next four months of the lease term. The Company is also responsible for paying its proportionate share of building and common area operating expenses, property taxes and insurance costs. The Company is entitled to a one-time tenant improvement allowance of approximately $13.3 million, the full amount of which must be used within 12 months of the lease commencement date. The Company has procured a standby letter of credit (LOC) in the amount of $8.1 million for the benefit of the landlord, which may be drawn down in the event the Company defaults in the payment of its obligations under the lease. The LOC is disclosed as restricted cash on the Company's consolidated balance sheets for the year ending March 31, 2018. At March 31, 2018, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): Year ending March 31: 2019 $ 5,876 2020 6,754 2021 9,093 2022 8,970 2023 8,448 Thereafter 54,936 Total $ 94,077 Rent expense for the years ended March 31, 2018, 2017 and 2016 was $5.6 million, $5.1 million and $2.1 million, respectively. Capital Leases The Company has non-cancelable capital lease agreements for office and computer equipment bearing interest at various rates. At March 31, 2018, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): Year ending March 31: 2019 $ 1,054 2020 456 2021 53 2022 5 Total minimum payments 1,568 Less: Amount representing interest (60) 1,508 Less: Short-term portion of capital lease obligations (1,049) Long-term portion of capital lease obligations $ 459 Capital leases included in computer and office equipment were approximately $3.5 million and $2.7 million at March 31, 2018 and 2017, respectively. Total accumulated amortization was approximately $1.8 million and $1.0 million at March 31, 2018 and 2017, respectively. Minimum Third-Party Customer Support Commitments The Company's contract with third-party customer support vendors include minimum monthly commitments and the requirements to maintain the service level for several months. The total contractual minimum commitments were approximately $1.4 million at March 31, 2018. Minimum Third-Party Network Service Provider Commitments The Company entered into contracts with multiple vendors for third-party network service which expire on various dates through fiscal 2020. At March 31, 2018, future minimum annual payments under these third-party network service contracts were as follows (in thousands): Year ending March 31: 2019 $ 1,916 2020 8 Total minimum payments $ 1,924 Legal Proceedings The Company, from time to time, is involved in various legal claims or litigation, including patent infringement claims that can arise in the normal course of the Company's operations. Pending or future litigation could be costly, could cause the diversion of management's attention and could upon resolution, have a material adverse effect on the Company's business, results of operations, financial condition and cash flows. State and Municipal Taxes From time to time, the Company has received inquiries from a number of state and municipal taxing agencies with respect to the remittance of sales, use, telecommunications, excise, and income taxes. Several jurisdictions currently are conducting tax audits of the Company's records. The Company collects or has accrued for taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its accrual when facts relating to specific exposures warrant such adjustment. |
STOCKHOLDERS' EQUITY - Note 6
STOCKHOLDERS' EQUITY - Note 6 | 12 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY - Note 6 | 6. STOCKHOLDERS' EQUITY In May 2006, the Company's board of directors approved the 2006 Stock Plan ("2006 Plan"). The Company's stockholders subsequently adopted the 2006 Plan in September 2006, and became effective in October 2006. The Company reserved 7,000,000 shares of the Company's common stock for issuance under this plan. The 2006 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2006 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options generally vest over four years and expire ten years after grant. In 2009, the 2006 Plan was amended to provide for the granting of stock purchase rights. The 2006 Plan expired in May 2016. As of March 31, 2018, there are no shares available for future grants under the 2006 Plan. 2012 Equity Incentive Plan In June 2012, the Company's board of directors approved the 2012 Equity Incentive Plan ("2012 Plan"). The Company's stockholders subsequently adopted the 2012 Plan in July 2012, and became effective in August 2012. The Company reserved 4,100,000 shares of the Company's common stock for issuance under this plan. In August 2014 and 2016, the 2012 Plan was amended to allow for an additional 6,800,000 and 4,500,000 shares reserved for issuance, respectively. The 2012 Plan provides for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards and stock grants. The stock option price of incentive stock options granted may not be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2012 Plan may be granted at any price approved by the administrator, which generally will be the compensation committee of the board of directors. Options, restricted stock and restricted stock units generally vest over four years and expire ten years after grant. The 2012 Plan expires in June 2022. As of March 31, 2018, 0.3 million shares remained available under the 2012 Plan. 2013 New Employee Inducement Incentive Plan In September 2013, the Company's board of directors approved the 2013 New Employee Inducement Incentive Plan ("2013 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In November 2014, the 2013 Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In July 2015, the Plan was amended to allow for an additional 1,200,000 shares reserved for issuance. In connection with its approval of the August 2016 amendments to the 2012 Plan, the Board of Directors has approved the suspension of future grants under the 2013 Plan, which became effective immediately upon stockholder approval of the proposed 2012 Plan amendments in August 2016. In addition, the 2013 Plan was amended to reduce the number of shares reserved for issuance under the 2013 Plan to the number of shares that are then subject to outstanding awards under the 2013 Plan, leaving no shares available for future grant. The 2013 Plan provided for granting non-statutory stock options, stock appreciation rights, restricted stock, restricted stock and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options were granted at market value on the grant date under the 2013 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Options generally expire ten years after grant. 2017 New Employee Inducement Incentive Plan In October 2017, the Company's board of directors approved the 2017 New Employee Inducement Incentive Plan ("2017 Plan"). The Company reserved 1,000,000 shares of the Company's common stock for issuance under this plan. In January 2018, the 2017 Plan was amended to allow for an additional 1,500,000 shares reserved for issuance. The 2017 Plan provides for granting non-statutory stock options, stock appreciation rights, restricted stock, and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options are granted at market value on the grant date under the 2017 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Options generally expire ten years after grant. As of March 31, 2018, 1.3 million shares remained available under the 2017 plan. Stock-Based Compensation The following table summarizes stock-based compensation expense (in thousands): Years Ended March 31, 2018 2017 2016 Cost of service revenue $ 1,821 $ 1,732 $ 1,159 Cost of product revenue - - - Research and development 6,418 3,762 2,914 Sales and marketing 11,654 8,832 6,133 General and administrative 9,283 7,136 6,128 Total $ 29,176 $ 21,462 $ 16,334 Stock Options, Stock Purchase Right and Restricted Stock Unit Activity Stock Option activity under all the Company's stock option plans since March 31, 2015, is summarized as follows: Weighted Average Exercise Number of Price Shares Per Share Outstanding at March 31, 2015 5,327,907 $ 5.19 Granted 723,776 8.63 Exercised (1,162,175) 2.56 Canceled/Forfeited (96,242) 8.06 Outstanding at March 31, 2016 4,793,266 6.29 Granted 407,392 14.63 Exercised (603,998) 2.34 Canceled/Forfeited (134,248) 8.41 Outstanding at March 31, 2017 4,462,412 7.52 Granted 609,135 14.95 Exercised (773,897) 3.95 Canceled/Forfeited (299,365) 13.05 Outstanding at March 31, 2018 3,998,285 $ 8.93 Vested and expected to vest at March 31, 2018 3,998,285 $ 8.93 Exercisable at March 31, 2018 3,025,925 $ 7.66 Stock Purchase Right activity since March 31, 2015 is summarized as follows: Weighted Weighted Average Average Grant-Date Remaining Number of Fair Market Contractual Shares Value Term (in Years) Balance at March 31, 2015 223,835 $ 5.92 1.50 Granted - - Vested and released (115,789) 5.32 Forfeited (25,875) 7.40 Balance at March 31, 2016 82,171 6.30 0.76 Granted - - Vested and released (69,426) 6.00 Forfeited (1,375) 6.72 Balance at March 31, 2017 11,370 8.10 1.09 Granted - - Vested and released (6,395) 8.26 Forfeited - - Balance at March 31, 2018 4,975 $ 7.88 0.10 Restricted Stock Unit activity since March 31, 2015 is summarized as follows: Weighted Weighted Average Number of Average Grant Remaining Contractual Shares Date Fair Value Term (in Years) Balance at March 31, 2015 2,698,686 $ 7.33 1.88 Granted 2,681,997 8.78 Vested and released (589,788) 7.79 Forfeited (246,096) 8.15 Balance at March 31, 2016 4,544,799 8.08 1.67 Granted 2,491,877 15.15 Vested and released (1,600,831) 7.89 Forfeited (496,795) 9.56 Balance at March 31, 2017 4,939,050 11.57 1.55 Granted 3,481,870 14.41 Vested and released (1,833,038) 10.27 Forfeited (652,339) 12.73 Balance at March 31, 2018 5,935,543 $ 13.51 1.60 The total intrinsic value of options exercised in the years ended March 31, 2018, 2017 and 2016 was $9.0 million, $7.2 million and $9.2 million, respectively. As of March 31, 2018, there was $63.9 million of unamortized stock-based compensation expense related to unvested stock options and awards which is expected to be recognized over a weighted average period of approximately 2.5 years. 1996 Employee Stock Purchase Plan The Company's 1996 Stock Purchase Plan ("Employee Stock Purchase Plan") was adopted in June 1996 and became effective upon the closing of the Company's initial public offering in July 1997. Under the Employee Stock Purchase Plan, 500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance. In May 2006, the Company's board of directors approved a ten-year extension of the Employee Stock Purchase Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until August 2017. During fiscal 2018, 2017 and 2016, approximately 0.4 million, 0.3 million, and 0.4 million shares, respectively, were issued under the Employee Stock Purchase Plan. The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a price equal to 85% of the fair market value of the common stock at the beginning of each two-year offering period or the end of a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock Purchase Plan provides that a new exercise date will be set for each option under the plan which exercise date will occur before the date of the merger or asset sale. As of March 31, 2018, there was approximately $0.5 million of total unrecognized compensation cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.5 years. Assumptions Used to Calculate Stock-Based Compensation Expense The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: Years Ended March 31, 2018 2017 2016 Expected volatility 41% 44% 53% Expected dividend yield - - - Risk-free interest rate 1.8% to 2.4% 1.1% to 2.2% 1.5% to 1.8% Weighted average expected term (in years) 4.8 years 4.9 years 5.4 years Weighted average fair value of options granted $ 5.70 $ 5.74 $ 4.17 The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: Years Ended March 31, 2018 2017 2016 Expected volatility 40% 37% 43% Expected dividend yield - - - Risk-free interest rate 1.33% 0.65% 0.39% Weighted average expected term (in years) 0.8 years 0.8 years 0.8 years Weighted average fair value of rights granted $ 4.10 $ 4.19 $ 3.25 Stock Repurchases In October 2015, the Company's board of directors authorized the Company to purchase an additional $15.0 million of its common stock from time to time until October 20, 2016 under the 2015 Repurchase Plan. The plan expired in October 2016 with an unused authorized repurchase amount of $15.0 million. In May 2017, the Company's board of directors authorized the Company to purchase $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "2017 Plan"). The 2017 Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by the board of directors. The remaining amount available under the 2017 Plan at March 31, 2018 was approximately $7.1 million. |
INCOME TAXES - Note 7
INCOME TAXES - Note 7 | 12 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
INCOME TAXES - Note 7 | 7. INCOME TAXES The Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017. Among numerous provisions, the Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign sourced earnings. The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. Accordingly, deferred tax assets were adjusted down by about $23 million in the period ended December 31, 2017. However, because the Company recorded a full valuation allowance, the decrease in deferred tax assets from the tax rate change was fully offset by a corresponding decrease in valuation allowance, and therefore, resulted in no impact to the tax expense. The one-time transition tax is based on the Company's total post-1986 earnings and profits (E&P) for which U.S. income taxes have been previously deferred. The Company recorded no one-time transition tax liability for its foreign subsidiaries as the Company's preliminary calculations concluded it does not have any untaxed foreign accumulated earnings as of the measurement dates. In response to the Tax Act, the SEC staff issued guidance on accounting for the tax effects of the Tax Act. The guidance provides a one-year measurement period for companies to complete the accounting. The Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts. The Company has made a reasonable estimate of the effects on its existing deferred tax balances. The Company will continue to make and refine its calculations as additional analysis and more thorough understanding of the tax law is completed. For the years ended March 31, 2018, 2017 and 2016, the Company recorded a (benefit) provision for income taxes of approximately $66.3 million, ($0.1) million and ($0.8) million, respectively. The components of the consolidated (benefit) provision for income taxes for fiscal 2018, 2017 and 2016 consisted of the following (in thousands): March 31, Current: 2018 2017 2016 Federal $ (395) $ (7) $ 97 State 256 588 551 Foreign 185 112 71 Total current tax provision 46 693 719 Deferred Federal 59,837 1,506 95 State 6,664 (1,095) (854) Foreign (253) (1,230) (807) Total deferred tax (benefit) provision 66,248 (819) (1,566) Income tax (benefit) provision $ 66,294 $ (126) $ (847) The Company's income (loss) from continuing operations before income taxes included ($19.7) million, ($8.4) million and ($6.9) million of foreign subsidiary loss for the fiscal years ended March 31, 2018, 2017 and 2016, respectively. The Company is permanently reinvesting the earnings of its profitable foreign subsidiaries. The Company intends to reinvest these profits in expansion of overseas operations. If the Company were to remit these earnings, the tax impact would be immaterial. Deferred tax assets and (liabilities) were comprised of the following (in thousands): March 31, 2018 2017 Net operating loss carryforwards $ 40,465 $ 36,427 Research and development and other credit carryforwards 11,761 8,614 Stock-based compensation 6,389 6,942 Reserves and allowances 3,181 3,266 Fixed assets and intangibles 378 (3,688) Net non-current deferred tax assets 62,174 51,561 Valuation allowance (62,174) (2,934) Total $ - $ 48,627 The Company assesses the realizability of deferred tax assets based on the available evidence, including a history of taxable income and estimates of future taxable income. In assessing the realizability of deferred tax assets, The Company considers whether it is more likely than not that all or some portion of deferred tax assets will not be realized. During the year ended March 31, 2018, the Company recorded a full valuation allowance against its deferred tax assets as it considered the cumulative losses in recent periods to be a substantial negative evidence. At March 31, 2018, management determined that a valuation allowance of approximately $62.2 million was needed compared with approximately $2.9 million as of March 31, 2017. At March 31, 2018, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $157.6 million and $27.5 million, respectively, which expire at various dates between 2029 and 2037. In addition, at March 31, 2018, the Company had research and development credit carryforwards for federal and California tax reporting purposes of approximately $7.2 million and $9.1 million, respectively. The federal income tax credit carryforwards will expire at various dates between 2021 and 2038, while the California income tax credits will carry forward indefinitely. A reconciliation of the Company's provision (benefit) for income taxes to the amounts computed using the statutory U.S. federal income tax rate is as follows (in thousands): Years Ended March 31, 2018 2017 2016 Tax provision at statutory rate $ (11,790) $ (1,652) $ (2,029) State income taxes before valuation allowance, net of federal effect (1,042) 108 9 Foreign tax rate differential (1,188) 885 (769) Research and development credits (2,189) (1,484) (1,253) Change in valuation allowance 56,663 (287) (1,555) Compensation/option differences (4,965) (246) (471) Non-deductible compensation 1,132 1,079 944 Tax Act rate change impact 22,630 - - Acquisition costs - 54 230 Expiring California loss carry-forwards - - 1,626 Foreign loss not benefited 6,847 780 2,342 Other 196 637 79 Total income tax provision $ 66,294 $ (126) $ (847) For fiscal year ended March 31, 2018, a blended statutory U.S. federal income tax rate of 34% for 9 months and 21% for 3 months was used. For other years, the statutory federal rate of 34% was used. The Company recognizes the tax benefit from uncertain tax positions if it is more likely than not that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits 2018 2017 2016 Balance at beginning of year $ 3,331 $ 2,881 $ 2,420 Gross increases - tax position in prior period - - 82 Gross increases - tax position related to the current year 649 450 379 Balance at end of year $ 3,980 $ 3,331 $ 2,881 At March 31, 2018, the Company had a liability for unrecognized tax benefits of $4.0 million, all of which, if recognized, would favorably affect the company's effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. The Company's policy for recording interest and penalties associated with tax examinations is to record such items as a component of operating expense income before taxes. During the fiscal years ended March 31, 2018, 2017 and 2016, the Company did not recognize any interest or penalties related to unrecognized tax benefits. Utilization of the Company's net operating loss and tax credit carryforwards can become subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed an analysis of its changes in ownership under Section 382 of the Internal Revenue Code. The Company currently believes that the Section 382 limitation will not limit utilization of the carryforwards prior to their expiration, with the exception of certain acquired loss and tax credit carryforwards. The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations. The Company is currently under examination by the Internal Revenue Service for the fiscal year ended March 31, 2016 and by the Illinois Department of Revenue for the fiscal years ended March 31, 2015 and 2016. It is too early to predict the outcome of the ongoing examinations. The tax years fiscal 1999 through fiscal 2018 generally remain subject to examination by federal and most state tax authorities. |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Note 8 | 12 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
NET INCOME (LOSS) PER SHARE - Note 8 | 8. NET INCOME (LOSS) PER SHARE The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income (loss) per share (in thousands, except share and per share data): Years Ended March 31, 2018 2017 2016 Numerator: Net loss available to common stockholders $ (104,497) $ (4,751) $ (5,120) Denominator: Denominator for basic calculation 92,017 90,340 88,477 Denominator for diluted calculation 92,017 90,340 88,477 Net loss per share: Basic $ (1.14) $ (0.05) $ (0.06) Diluted $ (1.14) $ (0.05) $ (0.06) The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): Years Ended March 31, 2018 2017 2016 Common stock options 3,998 4,462 4,793 Stock units 5,940 4,950 4,628 9,938 9,412 9,421 |
SEGMENT REPORTING - Note 9
SEGMENT REPORTING - Note 9 | 12 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING - Note 9 | 9. SEGMENT REPORTING The following tables set forth the segment and geographic information for each period (in thousands): Revenue for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ 266,034 $ 227,914 $ 185,241 Europe (principally UK) 30,466 25,474 24,095 $ 296,500 $ 253,388 $ 209,336 Revenue is based upon the destination of shipments and the customers' service address. In fiscal 2018, 2017 and 2016 intersegment revenues of approximately $15.1 million, $4.9 million, $1.0 million, respectively, were eliminated in consolidation, and have been excluded from the table above. Depreciation and Amortization for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ 10,619 $ 6,842 $ 5,776 Europe (principally UK) 5,098 3,595 3,231 $ 15,717 $ 10,437 $ 9,007 Net Income (Loss) for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ (84,792) $ 2,557 $ 940 Europe (principally UK) (19,705) (7,308) (6,060) $ (104,497) $ (4,751) $ (5,120) March 31, 2018 2017 Total Assets Property and Equipment, net Total Assets Property and Equipment, net Americas (principally US) $ 240,099 $ 27,270 $ 284,011 $ 19,480 Europe (principally UK) 37,110 8,462 49,844 4,581 $ 277,209 $ 35,732 $ 333,855 $ 24,061 |
ACQUISITIONS - Note 10
ACQUISITIONS - Note 10 | 12 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS - Note 10 | 10. ACQUISITIONS LeChat, Inc. On January 5, 2017, the Company entered into an Agreement and Plan of Merger (the "Agreement") with the preferred and common shareholders LeChat Inc. (LeChat) for the purchase of all the outstanding preferred and common shares of LeChat. The transaction closed on January 6, 2017. The total aggregate purchase price was $3.1 million, consisting of approximately $2.4 million paid to the preferred shareholders at closing, $0.2 million paid to the common shareholders at closing, and approximately $0.5 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed was recorded as goodwill. The amount of goodwill recognized was primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible asset consisted of developed technology, with an estimated weighted-average useful life of two years. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using a cost approach method. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 231 Intangible assets 1,200 Other non-current assets 428 Total assets acquired 1,859 Liabilities assumed: Current liabilities (324) Total liabilities assumed (324) Net identifiable assets acquired 1,535 Goodwill 1,580 Total consideration transferred $ 3,115 None of the goodwill recognized is deductible for income tax purposes. Revenue from LeChat from the date of acquisition to March 31, 2017 was immaterial. Total acquisition related costs were immaterial. Pro forma information has not been presented as the impact to the Company's Consolidated Financial Statements was not material. DXI Group Limited On May 26, 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, and its wholly owned subsidiaries, (collectively DXI) for the purchase of the entire share capital of DXI. The transaction closed effective May 29, 2015. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The cash escrow is to be released in annual installments over two years. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of two and five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 13,374 Total assets acquired 18,161 Liabilities assumed: Current liabilities and non-current liabilities (5,734) Total liabilities assumed (5,734) Net identifiable assets acquired 12,427 Goodwill 10,125 Total consideration transferred $ 22,552 None of the goodwill recognized is deductible for income tax purposes. DXI contributed revenue of approximately $10.0 million and a net loss of approximately ($3.2) million for the period from the date of acquisition to March 31, 2016. Total acquisition related costs were approximately $0.9 million, which were included in general and administrative expenses. The Company determined that it is impractical to include pro forma information given the difficulty in obtaining the historical financial information of DXI. Inclusion of such information would require the Company to make estimates and assumptions regarding DXI's historical financial results that the Company believes may ultimately prove inaccurate. In the second quarter of fiscal 2016, the Company updated its analysis of the valuation of the assets and liabilities acquired, which resulted in an increase of approximately $1.1 million to goodwill, a decrease in intangible assets of approximately $1.3 million, and a decrease to current and non-current liabilities of $0.2 million, compared with the preliminary estimates recorded for the first quarter of fiscal 2016. The impact of the change in preliminary values on the first quarter of fiscal 2016 statement of operations was not material. Therefore, no measurement period adjustment was required. Quality Software Corporation On June 3, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which $2.2 million was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. The Company recorded the acquired identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of in-process research and development and a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 1,100 Goodwill 1,789 Total consideration transferred $ 2,889 QSC's contributions to revenue and income for the period from the date of acquisition to March 31, 2016 were not material. Total acquisition related costs were approximately $0.1 million, which were included in general and administrative expenses. The Company determined that the acquisition was not deemed to be a material business combination and it is impractical to include such pro forma information given the difficulty in obtaining the historical financial information of QSC. Inclusion of such information would require the Company to make estimates and assumptions regarding QSC's historical financial results that the Company believes may ultimately prove inaccurate. In the fourth quarter of fiscal 2016, the Company updated its analysis of the valuation of the assets and liabilities acquired, which resulted in an increase of approximately $0.1million to goodwill, and a decrease in intangible assets of approximately $0.1 million compared with what was recorded for the third quarter of fiscal 2016. The impact of the change in preliminary values on the first quarter of fiscal 2016 statement of operations was not material. Therefore, no measurement period adjustment was required. |
SUBSEQUENT EVENTS - Note 11
SUBSEQUENT EVENTS - Note 11 | 12 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS - Note 11 | 11. SUBSEQUENT EVENTS In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately $2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. |
CONSOLIDATED QUARTERLY FINANCIA
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 12 | 12 Months Ended |
Mar. 31, 2018 | |
Consolidated Quarterly Financial Data | |
CONSOLIDATED QUARTERLY FINANCIAL DATA (Unaudited) - Note 12 | 12. CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED) In thousands, except per share data amounts: QUARTER ENDED March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, 2018 2017 2017 2017 2017 2016 2016 2016 Service revenue $ 75,325 $ 71,891 $ 68,123 $ 65,091 $ 62,654 $ 60,149 $ 57,717 $ 55,296 Product revenue 4,019 3,684 4,360 4,007 3,834 3,527 5,466 4,745 Total revenue 79,344 75,575 72,483 69,098 66,488 63,676 63,183 60,041 Operating expenses: Cost of service revenue 13,952 12,318 12,757 11,662 10,803 10,525 10,837 10,235 Cost of product revenue 5,826 4,675 5,098 4,884 4,187 4,240 5,782 5,505 Research and development 10,016 8,527 8,311 7,943 7,142 7,095 6,505 6,710 Sales and marketing 52,940 48,830 41,163 41,110 38,228 35,667 33,691 31,691 General, and administrative 10,340 10,003 9,616 8,956 9,814 7,852 6,747 6,801 Impairment of goodwill, intangible assets and equipment - 9,469 - - - - - - Total operating expenses 93,074 93,822 76,945 74,555 70,174 65,379 63,562 60,942 Loss from operations (13,730) (18,247) (4,462) (5,457) (3,686) (1,703) (379) (901) Other income, net 610 569 463 2,052 583 408 391 410 Loss from operations before provision (benefit) for income taxes (13,120) (17,678) (3,999) (3,405) (3,103) (1,295) 12 (491) Provision (benefit) for income taxes 142 70,842 (3,453) (1,236) (178) 30 (15) 37 Net income (loss) $ (13,262) $ (88,520) $ (546) $ (2,169) $ (2,925) $ (1,325) $ 27 $ (528) Net income (loss) per share: Basic $ (0.14) $ (0.96) $ (0.01) $ (0.02) $ (0.03) $ (0.01) $ 0.00 $ (0.01) Diluted $ (0.14) $ (0.96) $ (0.01) $ (0.02) $ (0.03) $ (0.01) $ 0.00 $ (0.01) Shares used in per share calculations: Basic 92,526 92,029 91,689 91,643 91,175 90,774 89,987 89,434 Diluted 92,526 92,029 91,689 91,643 91,175 90,774 93,447 89,434 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2018 | |
Schedule Ii Valuation And Qualifying Accounts | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Additions Balance Beginning Charged to at End Description of Year Expenses Deductions (a) of Year Total Allowance for Doubtful Accounts: Year ended March 31, 2016: $ 416 $ 509 $ (339) $ 586 Year ended March 31, 2017: $ 586 $ 941 $ (573) $ 954 Year ended March 31, 2018: $ 954 $ 250 $ (300) $ 904 (a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2018 | |
Notes to Financial Statements | |
Company | THE COMPANY 8x8, Inc. ("8x8" or the "Company") was incorporated in California in February 1987 and was reincorporated in Delaware in December 1996. The Company is a leading provider of enterprise cloud communications solutions, including unified communications, team collaboration, contact center, and analytics, integrated over a single Software-as-a-Service (SaaS) platform. The 8x8 Communications Cloud TM |
Fiscal Period | The Company's fiscal year ends on March 31 of each calendar year. Each reference to a fiscal year in these notes to the consolidated financial statements refers to the fiscal year ended March 31 of the calendar year indicated (for example, fiscal 2018 refers to the fiscal year ended March 31, 2018). |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of 8x8 and its subsidiaries. All material intercompany accounts and transactions have been eliminated. |
Reclassification | Reclassification Certain software development costs capitalized in accordance with ASC 350-40, Internal-Use Software Certain amounts previously reported within the Company's consolidated balance sheets and consolidated statements of cash flows have been reclassified within each financial statement section to conform to the current period presentation. The reclassification had no impact on the Company's previously reported net loss, cash flows, or basic or diluted net loss per share amounts. |
Use of Estimates | USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to bad debts, returns reserve for expected cancellations, income and sales tax, and litigation and other contingencies. The Company bases its estimates on historical experience and on various other assumptions. Actual results could differ from those estimates under different assumptions or conditions. |
Service Revenue | Service Revenue The Company recognizes service revenue, mainly from subscription services to its cloud-based voice, call center, video and collaboration solutions, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed or determinable and collectability is reasonably assured. The Company defers recognition of service revenues in instances when cash receipts are received before services are delivered and recognizes deferred revenues ratably, over the course of the contract, as services are provided. Under the terms of the Company's typical subscription agreements, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that is not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. The Company recognizes revenue from product sales, mainly IP telephones, for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. |
Product Revenue | Under the terms of the Company's typical subscription agreements, new customers can terminate their service within 30 days of order placement and receive a full refund of fees previously paid. The Company has determined that it has sufficient history of subscriber conduct to make a reasonable estimate of cancellations within the 30-day trial period. Therefore, the Company recognizes new subscriber revenue that is fixed or determinable and that is not contingent on future performance or future deliverables in the month in which the new order was shipped, net of an allowance for expected cancellations. The Company recognizes revenue from product sales, mainly IP telephones, for which there are no related services to be rendered upon shipment to customers provided that persuasive evidence of an arrangement exists, the price is fixed or determinable, title has transferred, collection of resulting receivables is reasonably assured, there are no customer acceptance requirements, and there are no remaining significant obligations. Gross outbound shipping and handling charges are recorded as revenue, and the related costs are included in cost of goods sold. Reserves for returns and allowances for customer sales are recorded at the time of shipment. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 605, Revenue Recognition The Company records revenue net of any sales and service related taxes and mandatory government charges that are billed to its customers. The Company believes this approach results in consolidated financial statements that are more easily understood by users. |
Revenue Recognition for Multiple Element Arrangements | Multiple Element Arrangements ASC 605-25, Revenue Recognition - Multiple Element Arrangements VSOE generally exists only when a Company sells the deliverable separately, on more than a limited basis, at prices within a relatively narrow range. When VSOE cannot be established, the Company attempts to establish the selling price of deliverables based on relevant TPE. TPE is determined based on manufacturer's prices for similar deliverables when sold separately, when possible. As the Company has historically been unable to establish a selling price using VSOE or TPE, it uses a BESP for the allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service was sold on a stand-alone basis. BESP is generally used for offerings that are not typically sold on a stand-alone basis or for new or highly customized offerings. The Company determines BESP for a product or service by considering multiple factors including, but not limited to: the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements, including multiple element and stand-alone transactions. In accordance with the guidance of ASC 605-25, when the Company enters into revenue arrangements with multiple deliverables the Company allocates arrangement consideration, among the products and subscriber services based on their relative selling prices. Arrangement consideration allocated to the sold products that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized as product revenues during the period of the sale less the allowance for estimated returns during the 30-day trial period. Arrangement consideration allocated to subscriber services that is fixed or determinable and that is not contingent on future performance or future deliverables is recognized ratably as service revenues as the related services are provided, which is generally over the initial contract term. |
Cash, Cash Equivalents and Investments | CASH, CASH EQUIVALENTS AND INVESTMENTS The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At March 31, 2018 and 2017, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and losses, net of related tax, if any, included in other comprehensive income (loss) and disclosed as a separate component of stockholders' equity. Realized gains and losses on sales of all such investments are reported within the caption of other income in the consolidated statements of operations and computed using the specific identification method. The Company classifies its investments as current based on the nature of the investments and their availability for use in current operations. The Company's investments in marketable securities are monitored on a periodic basis for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. These available-for-sale investments are primarily held in the custody of one major financial institution. |
Accounts Receivable Allowance | ACCOUNTS RECEIVABLE ALLOWANCE The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers. Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible. |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method. Estimated useful lives of three years are used for equipment, software and software development costs and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. Maintenance, repairs and ordinary replacements are charged to expense. Expenditures for improvements that extend the physical or economic life of the property are capitalized. Gains or losses on the disposition of property and equipment are recorded in the Consolidated Statements of Operations. Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2018. |
Accounting for Long-Lived Assets | ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite lived intangibles or capitalized software, when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. Examples of such events could include a significant disposal of a portion of such assets, an adverse change in the market involving the business employing the related asset or a significant change in the operation or use of an asset. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset or asset group, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate the fair value of long-lived assets and asset groups through future cash flows. See Note 4 for further discussion on impairment charges incurred. |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. Goodwill and intangible assets with indefinite useful lives are not amortized but are tested annually for impairment and more often if there is an indicator of impairment. The Company has determined that it has three reporting units and allocates goodwill to the reporting units for the purposes of its annual impairment test. The Company's annual goodwill impairment test is performed on January 1 each year. No goodwill impairment charges were recorded in the periods presented. Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. Amortization expense for the customer relationship intangible asset is included in sales and marketing expenses. Amortization expense for technology is included in cost of service revenue. |
Warranty Expense | WARRANTY EXPENSE The Company accrues for estimated product warranty cost upon revenue recognition. Accruals for product warranties are calculated based on the Company's historical warranty experience adjusted for any specific requirements. |
Research, Development and Software Costs | RESEARCH & DEVELOPMENT AND SOFTWARE COSTS Software developed or obtained for internal use in accordance with ASC 350-40, Internal-Use Software |
Advertising Costs | ADVERTISING COSTS Advertising costs are expensed as incurred and were $14.5 million, $9.5 million and $8.5 million for the years ended March 31, 2018, 2017 and 2016, respectively. |
Foreign Currency Translation | FOREIGN CURRENCY TRANSLATION The Company has determined that the functional currency of each of its foreign subsidiaries are the subsidiary's local currency. The Company believes this most appropriately reflects the current economic facts and circumstances of the Company's subsidiaries' operations. The assets and liabilities of the subsidiaries are translated at the applicable exchange rate as of the end of the balance sheet period and revenue and expenses are translated at an average rate over the period presented. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss within the stockholder's equity. |
Business Segments | BUSINESS SEGMENTS The Company has two reportable segments, Americas and Europe. The Americas segment is primarily North America. The Europe segment is primarily the United Kingdom. Each operating segment provides similar products and services. The Company's chief operating decision makers, the Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer, evaluate performance of the Company and makes decisions regarding allocation of resources based on geographical results. The Company's CODMs evaluate the performance of its operating segments based on revenues and net income. The Company does not allocate research and development, sales and marketing, general and administrative, amortization expense, stock-based compensation expense, and commitment and contingencies for each segment as management does not consider this information in its evaluation of the performance of each operating segment. Revenues are attributed to each segment based on the ordering location of the customer or ship to location. |
Concentrations | CONCENTRATIONS Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, investments and trade accounts receivable. The Company has cash equivalents and investment policies that limit the amount of credit exposure to any one financial institution and restrict placement of these funds to financial institutions evaluated as highly credit-worthy. The Company has not experienced any material losses relating to its investments. The Company sells its products to business customers and distributors. The Company performs ongoing credit evaluations of its customers' financial condition and generally does not require collateral from its customers. At March 31, 2018 and 2017, no customer accounted for more than 10% of accounts receivable. The Company purchases all of its hardware products from suppliers that manufacturer the hardware directly. The inability of any supplier to fulfill supply requirements of the Company could materially impact future operating results, financial position or cash flows. The Company also relies primarily on third-party network service providers to provide telephone numbers and PSTN call termination and origination services for its customers. If these service providers failed to perform their obligations to the Company, such failure could materially impact future operating results, financial position and cash flows. |
Fair Values of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal market or the most advantageous market in which it would transact. The accounting guidance for fair value measurement requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability developed based on the best information available in the circumstances. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value by requiring that the most observable inputs be used when available. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets). Level 3 applies to assets or liabilities for which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company's own assumptions. The estimated fair value of financial instruments is determined by the Company using available market information and valuation methodologies considered to be appropriate. The carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to their short maturities. The Company's investments are carried at fair value. |
Accounting for Stock-Based Compensation | ACCOUNTING FOR STOCK-BASED COMPENSATION The Company accounts for its employee stock options and other stock awards under the provisions of ASC 718 - Stock Compensation To value option grants the Company uses the Black-Scholes option valuation model. Fair value determined using the Black-Scholes option valuation model varies based on assumptions used for the expected stock prices volatility, expected life, risk-free interest rates and future dividend payments. The Company used the historical volatility of its stock over a period equal to the expected life of the options. The expected life assumptions represent the weighted-average period stock-based awards are expecting to remain outstanding. These expected life assumptions were established through the review of historical exercise behavior of stock-based award grants with similar vesting periods. The risk-free interest rates were based on the closing market bid yields of actively traded U.S. treasury securities in the over-the-counter market for the expected term equal to the expected term of the option. The dividend yield assumption is based on the Company's history of not paying dividends. The Company issued performance stock units (PSUs) to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2018: These PSUs vest (1) 50% on September 19, 2019 and (2) 50% on September 19, 2020, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease at the end of each respective performance measurement period by 2% of the target numbers. In the event the Company's common stock performance is below negative 30% relative to the benchmark, no shares will be issued. The Company issued PSUs to a group of executives with vesting that is contingent on both market performance and continued service during the fiscal year ended March 31, 2017: These PSUs vest (1) 50% on September 22, 2018 and (2) 50% on September 27, 2019, in each case subject to the performance of the Company's common stock relative to the Russell 2000 Index (the benchmark) during the period from grant date through such vesting date. A 2x multiplier will be applied to the total shareholder returns (TSR) for each 1% of positive or negative relative TSR, and the number of shares earned will increase or decrease by 2% of the target numbers. In the event the Company's common stock performance is below negative 30%, relative to the benchmark, no shares will be issued. To value these market-based PSUs under the Equity Compensation Plans, the Company used a Monte Carlo simulation model on the date of grant. Fair value determined using the Monte Carlo simulation model varies based on the assumptions used for the expected stock price volatility, the correlation coefficient between the Company and the NASDAQ Composite Index, risk-free interest rates, and future dividend payments. |
Comprehensive Income (Loss) | COMPREHENSIVE (LOSS) INCOME Comprehensive income (loss), as defined, includes all changes in equity (net assets) during a period. The difference between net income (loss) and comprehensive income (loss) is due to foreign currency translation adjustments and unrealized gains or losses on investments classified as available-for-sale. |
Net Income (Loss) Per Share | NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of vested, unrestricted common shares outstanding during the period (denominator). Diluted net income (loss) per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method unless their effect is anti-dilutive. Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. |
Deferred Rent | DEFERRED RENT The Company recognizes rent expense on a straight-line basis for all operating lease arrangements with the difference between required lease payments and rent expense recorded as deferred rent. The difference results from rent holidays, rent escalations and tenant improvement allowances, which are amortized over the lease term. |
Recently Adopted Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740) In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230) In January 2017, the FASB issued ASU No. 2017-04, Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Accounting Standards Codification 606 or ASC 606), which replaces numerous requirements in U.S. GAAP and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are required within the revenue recognition process than are required under current GAAP (ASC 605). The new standard permits the use of either the full retrospective or modified retrospective transition method. The Company adopted the new standard effective April 1, 2018 using the modified retrospective method. Under the retrospective method prior period financial information is not revised, but instead a cumulative impact is recorded on the day of adoption with a corresponding offset recorded to stockholder's equity. Under the new standard, the Company expects in some cases to recognize revenue earlier than under ASC 605 guidance when the customer receives services or equipment for a reduced consideration at the onset of an arrangement, for example the initial month's services or equipment are discounted, as a result of the elimination of contingent revenue guidance. Under ASC 605 guidance, amounts allocated to delivered items are limited to amounts that are not contingent on the provision of future services. The impact of adopting the new standard on the Company's total revenues and deferred revenue is not expected to be material. With the adoption of ASC 606 the Company also adopted ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, which requires the deferral of incremental costs of obtaining a customer contract which, under the old guidance, were expensed as incurred. Under the new standard, the Company will defer all incremental sales commission costs and amortize them over the expected period of benefit, which is estimated to be five years. The amortization cost will be charged to sales and marketing costs on the consolidated statements of operations. The Company expects the cumulative impact of these deferred costs to be approximately $35 million to $40 million with a corresponding decrease to accumulated deficit as of April 1, 2018. There will not be any significant tax impact to the Company's consolidated statements of operations and consolidated balance sheet relating to the adoption of the new standard due to the valuation allowance recorded against to the Company's deferred tax assets. The Company has established new accounting policies, is implementing processes, and implementing internal controls necessary to support the requirements of the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB has issued ASU No. 2016-16 , Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In January 2017, the FASB has issued ASU No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business |
Indemnifications | Indemnifications In the normal course of business, the Company may agree to indemnify other parties, including customers, lessors and parties to other transactions with the Company, with respect to certain matters such as breaches of representations or covenants or intellectual property infringement or other claims made by third parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors. It is not possible to determine the maximum potential amount of the Company's exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on the Company's operating results, financial position or cash flows. Under some of these agreements, however, the Company's potential indemnification liability might not have a contractual limit. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Fair Value Measurements Tables | |
Fair Value Measurements, Recurring and Nonrecurring (Tables) | Cash, cash equivalents, available-for-sale investments, and contingent consideration were (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2018 Costs Gain Loss Fair Value Equivalents Investments Cash $ 16,499 $ - $ - $ 16,499 $ 16,499 $ - Level 1: Money market funds 15,204 - - 15,204 15,204 - Subtotal 31,703 - - 31,703 31,703 - Level 2: Commercial paper 13,254 - (8) 13,246 - 13,246 Corporate debt 70,631 6 (296) 70,341 - 70,341 Municipal securities 3,385 3 (1) 3,387 - 3,387 Asset backed securities 27,063 1 (119) 26,945 - 26,945 Agency bond 4,183 - (35) 4,148 - 4,148 International government securities 2,497 - (5) 2,492 - 2,492 Subtotal 121,013 10 (464) 120,559 - 120,559 Total assets $ 152,716 $ 10 $ (464) $ 152,262 $ 31,703 $ 120,559 Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term As of March 31, 2017 Costs Gain Loss Fair Value Equivalents Investments Cash $ 29,122 $ - $ - $ 29,122 $ 29,122 $ - Level 1: Money market funds 11,908 - - 11,908 11,908 - Mutual funds 2,000 - (194) 1,806 - 1,806 Subtotal 43,030 - (194) 42,836 41,030 1,806 Level 2: Commercial paper 19,144 8 - 19,152 - 19,152 Corporate debt 83,995 61 (58) 83,998 - 83,998 Asset backed securities 26,906 4 (22) 26,888 - 26,888 Mortgage backed securities 116 - (1) 115 - 115 Agency bond 2,000 - - 2,000 - 2,000 Subtotal 132,161 73 (81) 132,153 - 132,153 Total assets $ 175,191 $ 73 $ (275) $ 174,989 $ 41,030 $ 133,959 Level 3: Contingent consideration $ - $ - $ - $ 148 $ - $ - Total liabilities $ - $ - $ - $ 148 $ - $ - Contractual maturities of investments as of March 31, 2018 are set forth below (in thousands): Estimated Fair Value Due within one year $ 69,721 Due after one year 50,838 Total $ 120,559 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Property And Equipment Tables | |
Components of Property, Plant and Equipment | Property and equipment consisted of the following (in thousands): March 31, 2018 2017 Computer equipment $ 29,761 $ 24,293 Software development costs 20,144 8,265 Software licenses 8,663 7,380 Leasehold improvements 6,573 5,579 Furniture and fixtures 1,637 1,411 Construction in progress 2,394 689 69,172 47,617 Less: accumulated depreciation and amortization (33,440) (23,556) $ 35,732 $ 24,061 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Intangible Assets Tables | |
Carrying values of intangible assets | The carrying value of intangible assets consisted of the following (in thousands): March 31, 2018 March 31, 2017 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Technology $ 19,702 $ (10,535) $ 9,167 $ 18,685 $ (7,010) $ 11,675 Customer relationships 9,776 (7,366) 2,410 9,419 (6,187) 3,232 Trade names/domains 2,108 (1,727) 381 2,036 - 2,036 In-process research and development 95 (95) - 95 - 95 Total acquired identifiable intangible assets $ 31,681 $ (19,723) $ 11,958 $ 30,235 $ (13,197) $ 17,038 |
Finite-lived intangible assets - future amortization expense | At March 31, 2018, annual amortization of definite lived intangible assets, based upon existing intangible assets and current useful lives, is estimated to be the following (in thousands): Amount 2019 $ 4,002 2020 3,171 2021 2,790 2022 1,766 2023 229 Total $ 11,958 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Goodwill Tables | |
Carrying amounts of goodwill | The following table provides a summary of the changes in the carrying amounts of goodwill by reporting segment (in thousands): Americas Europe Total Balance at March 31, 2016 $ 25,729 $ 21,691 $ 47,420 Additions due to acquisitions 1,580 - 1,580 Foreign currency translation - (2,864) (2,864) Balance at March 31, 2017 27,309 18,827 46,136 Impairment loss - (8,036) (8,036) Foreign currency translation - 1,954 1,954 Balance at March 31, 2018 $ 27,309 $ 12,745 $ 40,054 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Tables | |
Future minimum annual operating lease payments | At March 31, 2018, future minimum annual lease payments under non-cancelable operating leases were as follows (in thousands): Year ending March 31: 2019 $ 5,876 2020 6,754 2021 9,093 2022 8,970 2023 8,448 Thereafter 54,936 Total $ 94,077 |
Future annual lease payments under noncancelable capital leases | At March 31, 2018, future minimum annual lease payments under non-cancelable capital leases were as follows (in thousands): Year ending March 31: 2019 $ 1,054 2020 456 2021 53 2022 5 Total minimum payments 1,568 Less: Amount representing interest (60) 1,508 Less: Short-term portion of capital lease obligations (1,049) Long-term portion of capital lease obligations $ 459 |
Minimum third party network service provider commitments | At March 31, 2018, future minimum annual payments under these third-party network service contracts were as follows (in thousands): Year ending March 31: 2019 $ 1,916 2020 8 Total minimum payments $ 1,924 |
Distribution of Stock-Based Com
Distribution of Stock-Based Compensation Plan Expense (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Distribution Of Stock-based Compensation Plan Expense Tables | |
Schedule Of Stock-Based Compensation Expense By Statement Of Operations Line Item | The following table summarizes stock-based compensation expense (in thousands): Years Ended March 31, 2018 2017 2016 Cost of service revenue $ 1,821 $ 1,732 $ 1,159 Cost of product revenue - - - Research and development 6,418 3,762 2,914 Sales and marketing 11,654 8,832 6,133 General and administrative 9,283 7,136 6,128 Total $ 29,176 $ 21,462 $ 16,334 |
Stock-Based Compensation And Em
Stock-Based Compensation And Employee Purchase Plan (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Employee Stock Purchase Plan | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: Years Ended March 31, 2018 2017 2016 Expected volatility 40% 37% 43% Expected dividend yield - - - Risk-free interest rate 1.33% 0.65% 0.39% Weighted average expected term (in years) 0.8 years 0.8 years 0.8 years Weighted average fair value of rights granted $ 4.10 $ 4.19 $ 3.25 |
Option Grants | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Option activity under all the Company's stock option plans since March 31, 2015, is summarized as follows: Weighted Average Exercise Number of Price Shares Per Share Outstanding at March 31, 2015 5,327,907 $ 5.19 Granted 723,776 8.63 Exercised (1,162,175) 2.56 Canceled/Forfeited (96,242) 8.06 Outstanding at March 31, 2016 4,793,266 6.29 Granted 407,392 14.63 Exercised (603,998) 2.34 Canceled/Forfeited (134,248) 8.41 Outstanding at March 31, 2017 4,462,412 7.52 Granted 609,135 14.95 Exercised (773,897) 3.95 Canceled/Forfeited (299,365) 13.05 Outstanding at March 31, 2018 3,998,285 $ 8.93 Vested and expected to vest at March 31, 2018 3,998,285 $ 8.93 Exercisable at March 31, 2018 3,025,925 $ 7.66 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: Years Ended March 31, 2018 2017 2016 Expected volatility 41% 44% 53% Expected dividend yield - - - Risk-free interest rate 1.8% to 2.4% 1.1% to 2.2% 1.5% to 1.8% Weighted average expected term (in years) 4.8 years 4.9 years 5.4 years Weighted average fair value of options granted $ 5.70 $ 5.74 $ 4.17 |
Stock Purchase Rights | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Stock Purchase Right activity since March 31, 2015 is summarized as follows: Weighted Weighted Average Average Grant-Date Remaining Number of Fair Market Contractual Shares Value Term (in Years) Balance at March 31, 2015 223,835 $ 5.92 1.50 Granted - - Vested and released (115,789) 5.32 Forfeited (25,875) 7.40 Balance at March 31, 2016 82,171 6.30 0.76 Granted - - Vested and released (69,426) 6.00 Forfeited (1,375) 6.72 Balance at March 31, 2017 11,370 8.10 1.09 Granted - - Vested and released (6,395) 8.26 Forfeited - - Balance at March 31, 2018 4,975 $ 7.88 0.10 |
Restricted Stock Units | |
Disclosure Of Share-Based Compensation Arrangements By Share-Based Payment Award | Restricted Stock Unit activity since March 31, 2015 is summarized as follows: Weighted Weighted Average Number of Average Grant Remaining Contractual Shares Date Fair Value Term (in Years) Balance at March 31, 2015 2,698,686 $ 7.33 1.88 Granted 2,681,997 8.78 Vested and released (589,788) 7.79 Forfeited (246,096) 8.15 Balance at March 31, 2016 4,544,799 8.08 1.67 Granted 2,491,877 15.15 Vested and released (1,600,831) 7.89 Forfeited (496,795) 9.56 Balance at March 31, 2017 4,939,050 11.57 1.55 Granted 3,481,870 14.41 Vested and released (1,833,038) 10.27 Forfeited (652,339) 12.73 Balance at March 31, 2018 5,935,543 $ 13.51 1.60 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Income Taxes Tables | |
Components of tax provision | The components of the consolidated (benefit) provision for income taxes for fiscal 2018, 2017 and 2016 consisted of the following (in thousands): March 31, Current: 2018 2017 2016 Federal $ (395) $ (7) $ 97 State 256 588 551 Foreign 185 112 71 Total current tax provision 46 693 719 Deferred Federal 59,837 1,506 95 State 6,664 (1,095) (854) Foreign (253) (1,230) (807) Total deferred tax (benefit) provision 66,248 (819) (1,566) Income tax (benefit) provision $ 66,294 $ (126) $ (847) |
Schedule of tax effects of temporary differences that give rise to deferred tax assets and liabilities | Deferred tax assets and (liabilities) were comprised of the following (in thousands): March 31, 2018 2017 Net operating loss carryforwards $ 40,465 $ 36,427 Research and development and other credit carryforwards 11,761 8,614 Stock-based compensation 6,389 6,942 Reserves and allowances 3,181 3,266 Fixed assets and intangibles 378 (3,688) Net non-current deferred tax assets 62,174 51,561 Valuation allowance (62,174) (2,934) Total $ - $ 48,627 |
Reconciliation of U.S. statutory income tax rate to company's effective tax rate | A reconciliation of the Company's provision (benefit) for income taxes to the amounts computed using the statutory U.S. federal income tax rate is as follows (in thousands): Years Ended March 31, 2018 2017 2016 Tax provision at statutory rate $ (11,790) $ (1,652) $ (2,029) State income taxes before valuation allowance, net of federal effect (1,042) 108 9 Foreign tax rate differential (1,188) 885 (769) Research and development credits (2,189) (1,484) (1,253) Change in valuation allowance 56,663 (287) (1,555) Compensation/option differences (4,965) (246) (471) Non-deductible compensation 1,132 1,079 944 Tax Act rate change impact 22,630 - - Acquisition costs - 54 230 Expiring California loss carry-forwards - - 1,626 Foreign loss not benefited 6,847 780 2,342 Other 196 637 79 Total income tax provision $ 66,294 $ (126) $ (847) |
Reconciliation of beginning and ending amount of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Unrecognized Tax Benefits 2018 2017 2016 Balance at beginning of year $ 3,331 $ 2,881 $ 2,420 Gross increases - tax position in prior period - - 82 Gross increases - tax position related to the current year 649 450 379 Balance at end of year $ 3,980 $ 3,331 $ 2,881 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Net Income Per Share Tables | |
Net Income Per Share | The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net income (loss) per share (in thousands, except share and per share data): Years Ended March 31, 2018 2017 2016 Numerator: Net loss available to common stockholders $ (104,497) $ (4,751) $ (5,120) Denominator: Denominator for basic calculation 92,017 90,340 88,477 Denominator for diluted calculation 92,017 90,340 88,477 Net loss per share: Basic $ (1.14) $ (0.05) $ (0.06) Diluted $ (1.14) $ (0.05) $ (0.06) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares attributable to outstanding stock options and restricted stock purchase rights were excluded from the calculation of diluted earnings per share because their inclusion would have been antidilutive (in thousands): Years Ended March 31, 2018 2017 2016 Common stock options 3,998 4,462 4,793 Stock units 5,940 4,950 4,628 9,938 9,412 9,421 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Segment Information Tables | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following tables set forth the segment and geographic information for each period (in thousands): Revenue for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ 266,034 $ 227,914 $ 185,241 Europe (principally UK) 30,466 25,474 24,095 $ 296,500 $ 253,388 $ 209,336 Depreciation and Amortization for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ 10,619 $ 6,842 $ 5,776 Europe (principally UK) 5,098 3,595 3,231 $ 15,717 $ 10,437 $ 9,007 Net Income (Loss) for the Years Ended March 31, 2018 2017 2016 Americas (principally US) $ (84,792) $ 2,557 $ 940 Europe (principally UK) (19,705) (7,308) (6,060) $ (104,497) $ (4,751) $ (5,120) March 31, 2018 2017 Total Assets Property and Equipment, net Total Assets Property and Equipment, net Americas (principally US) $ 240,099 $ 27,270 $ 284,011 $ 19,480 Europe (principally UK) 37,110 8,462 49,844 4,581 $ 277,209 $ 35,732 $ 333,855 $ 24,061 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
LeChat | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 231 Intangible assets 1,200 Other non-current assets 428 Total assets acquired 1,859 Liabilities assumed: Current liabilities (324) Total liabilities assumed (324) Net identifiable assets acquired 1,535 Goodwill 1,580 Total consideration transferred $ 3,115 |
DXI | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Cash $ 1,318 Current assets 2,016 Property and equipment 1,453 Intangible assets 13,374 Total assets acquired 18,161 Liabilities assumed: Current liabilities and non-current liabilities (5,734) Total liabilities assumed (5,734) Net identifiable assets acquired 12,427 Goodwill 10,125 Total consideration transferred $ 22,552 |
QSC | |
Schedule of Purchase Price Allocation | The fair values of the assets acquired and liabilities assumed are as follows (in thousands): Fair Value Assets acquired: Intangible assets $ 1,100 Goodwill 1,789 Total consideration transferred $ 2,889 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Consolidated Quarterly Financial Data | |
Quarterly Financial Data (Unaudited) | In thousands, except per share data amounts: QUARTER ENDED March 31, Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, 2018 2017 2017 2017 2017 2016 2016 2016 Service revenue $ 75,325 $ 71,891 $ 68,123 $ 65,091 $ 62,654 $ 60,149 $ 57,717 $ 55,296 Product revenue 4,019 3,684 4,360 4,007 3,834 3,527 5,466 4,745 Total revenue 79,344 75,575 72,483 69,098 66,488 63,676 63,183 60,041 Operating expenses: Cost of service revenue 13,952 12,318 12,757 11,662 10,803 10,525 10,837 10,235 Cost of product revenue 5,826 4,675 5,098 4,884 4,187 4,240 5,782 5,505 Research and development 10,016 8,527 8,311 7,943 7,142 7,095 6,505 6,710 Sales and marketing 52,940 48,830 41,163 41,110 38,228 35,667 33,691 31,691 General, and administrative 10,340 10,003 9,616 8,956 9,814 7,852 6,747 6,801 Impairment of goodwill, intangible assets and equipment - 9,469 - - - - - - Total operating expenses 93,074 93,822 76,945 74,555 70,174 65,379 63,562 60,942 Loss from operations (13,730) (18,247) (4,462) (5,457) (3,686) (1,703) (379) (901) Other income, net 610 569 463 2,052 583 408 391 410 Loss from operations before provision (benefit) for income taxes (13,120) (17,678) (3,999) (3,405) (3,103) (1,295) 12 (491) Provision (benefit) for income taxes 142 70,842 (3,453) (1,236) (178) 30 (15) 37 Net income (loss) $ (13,262) $ (88,520) $ (546) $ (2,169) $ (2,925) $ (1,325) $ 27 $ (528) Net income (loss) per share: Basic $ (0.14) $ (0.96) $ (0.01) $ (0.02) $ (0.03) $ (0.01) $ 0.00 $ (0.01) Diluted $ (0.14) $ (0.96) $ (0.01) $ (0.02) $ (0.03) $ (0.01) $ 0.00 $ (0.01) Shares used in per share calculations: Basic 92,526 92,029 91,689 91,643 91,175 90,774 89,987 89,434 Diluted 92,526 92,029 91,689 91,643 91,175 90,774 93,447 89,434 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Mar. 31, 2018 | |
Valuation And Qualifying Accounts Tables | |
Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets [Table Text Block] | SCHEDULE II Balance at Additions Balance Beginning Charged to at End Description of Year Expenses Deductions (a) of Year Total Allowance for Doubtful Accounts: Year ended March 31, 2016: $ 416 $ 509 $ (339) $ 586 Year ended March 31, 2017: $ 586 $ 941 $ (573) $ 954 Year ended March 31, 2018: $ 954 $ 250 $ (300) $ 904 (a) The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |
Description of the Business (Na
Description of the Business (Narrative) (Details) | 12 Months Ended |
Mar. 31, 2018 | |
Description Of Business Narrative Details | |
Year Founded | 1,987 |
Entity Incorporation, Date of Incorporation | Dec. 31, 1996 |
Entity Incorporation, State Country Name | Delaware |
Fiscal Year End Date | --03-31 |
Number of Countries in which Entity Operates | 100 |
Significant Accounting Policies
Significant Accounting Policies Service and Product Revenue (Narrative) (Details) | Mar. 31, 2018 |
Significant Accounting Policies Service And Product Revenue Narrative Details | |
Trial period offered with all new services, days | 30 |
Significant Accounting Polici37
Significant Accounting Policies (Advertising Costs) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Significant Accounting Policies Advertising Costs Narrative Details | |||
Advertising expense | $ 14.5 | $ 9.5 | $ 8.5 |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments with Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Amortized Costs | $ 152,716 | $ 175,191 |
Gross Unrealized Gains | 10 | 73 |
Gross Unrealized Loss | (464) | (275) |
Estimated Fair Value | 152,262 | 174,989 |
Cash and cash equivalents | 31,703 | 41,030 |
Short-term marketable investments | 120,559 | 133,959 |
Investments due within one year | 69,721 | |
Investments due after one year | 50,838 | |
Level 1 | ||
Amortized Costs | 31,703 | 43,030 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | (194) |
Estimated Fair Value | 31,703 | 42,836 |
Cash and cash equivalents | 31,703 | 41,030 |
Short-term marketable investments | 0 | 1,806 |
Level 2 | ||
Amortized Costs | 121,013 | 132,161 |
Gross Unrealized Gains | 10 | 73 |
Gross Unrealized Loss | (464) | (81) |
Estimated Fair Value | 120,559 | 132,153 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 120,559 | 132,153 |
Level 3 | ||
Amortized Costs | 0 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 148 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | 0 | |
Liabilities, Fair Value Disclosure | 148 | |
Cash | ||
Amortized Costs | 16,499 | 29,122 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 16,499 | 29,122 |
Cash and cash equivalents | 16,499 | 29,122 |
Short-term marketable investments | 0 | 0 |
Money Market Funds | Level 1 | ||
Amortized Costs | 15,204 | 11,908 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 15,204 | 11,908 |
Cash and cash equivalents | 15,204 | 11,908 |
Short-term marketable investments | 0 | 0 |
Mutual Funds | Level 1 | ||
Amortized Costs | 2,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | (194) | |
Estimated Fair Value | 1,806 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | 1,806 | |
Commercial Paper | Level 2 | ||
Amortized Costs | 13,254 | 19,144 |
Gross Unrealized Gains | 0 | 8 |
Gross Unrealized Loss | (8) | 0 |
Estimated Fair Value | 13,246 | 19,152 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 13,246 | 19,152 |
Corporate Debt | Level 2 | ||
Amortized Costs | 70,631 | 83,995 |
Gross Unrealized Gains | 6 | 61 |
Gross Unrealized Loss | (296) | (58) |
Estimated Fair Value | 70,341 | 83,998 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 70,341 | 83,998 |
Municipal Securities | Level 2 | ||
Amortized Costs | 3,385 | |
Gross Unrealized Gains | 3 | |
Gross Unrealized Loss | (1) | |
Estimated Fair Value | 3,387 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | 3,387 | |
Asset-backed Securities | Level 2 | ||
Amortized Costs | 27,063 | 26,906 |
Gross Unrealized Gains | 1 | 4 |
Gross Unrealized Loss | (119) | (22) |
Estimated Fair Value | 26,945 | 26,888 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 26,945 | 26,888 |
Mortgage backed Securities | Level 2 | ||
Amortized Costs | 116 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | (1) | |
Estimated Fair Value | 115 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | 115 | |
Agency Bond | Level 2 | ||
Amortized Costs | 4,183 | 2,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Loss | (35) | 0 |
Estimated Fair Value | 4,148 | 2,000 |
Cash and cash equivalents | 0 | 0 |
Short-term marketable investments | 4,148 | 2,000 |
International Government Securities | Level 2 | ||
Amortized Costs | 2,497 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | (5) | |
Estimated Fair Value | 2,492 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | $ 2,492 | |
Contingent Consideration | Level 3 | ||
Amortized Costs | 0 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Loss | 0 | |
Estimated Fair Value | 148 | |
Cash and cash equivalents | 0 | |
Short-term marketable investments | 0 | |
Liabilities, Fair Value Disclosure | $ 148 |
Fair Value Measurements (Contin
Fair Value Measurements (Contingent Consideration Liability) (Narrative) (Details) $ in Millions | 12 Months Ended |
Mar. 31, 2018USD ($) | |
Contingent consideration liabilities [Roll Forward] | |
Contingent consideration payments | $ 0.1 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Property And Equipment Details | ||
Computer equipment | $ 29,761 | $ 24,293 |
Software development costs | 20,144 | 8,265 |
Software licenses | 8,663 | 7,380 |
Leasehold improvements | 6,573 | 5,579 |
Furniture and fixtures | 1,637 | 1,411 |
Construction in progress | 2,394 | 689 |
Gross | 69,172 | 47,617 |
Less: accumulated depreciation and amortization | (33,440) | (23,556) |
Net | $ 35,732 | $ 24,061 |
Intangible Assets Schedule Of I
Intangible Assets Schedule Of Intangibles (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Gross Carrying Amount | $ 31,681 | $ 30,235 |
Accumulated Amortization | (19,723) | (13,197) |
Net Carrying Amount | 11,958 | 17,038 |
Technology | ||
Gross Carrying Amount | 19,702 | 18,685 |
Accumulated Amortization | (10,535) | (7,010) |
Net Carrying Amount | 9,167 | 11,675 |
Customer relationships | ||
Gross Carrying Amount | 9,776 | 9,419 |
Accumulated Amortization | (7,366) | (6,187) |
Net Carrying Amount | 2,410 | 3,232 |
Trade names/domains | ||
Gross Carrying Amount | 2,108 | 2,036 |
Accumulated Amortization | (1,727) | 0 |
Net Carrying Amount | 381 | 2,036 |
In-process research and development | ||
Gross Carrying Amount | 95 | 95 |
Accumulated Amortization | (95) | 0 |
Net Carrying Amount | $ 0 | $ 95 |
Intangible Assets Schedule Of F
Intangible Assets Schedule Of Future Amortization Of Intangibles (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Intangible Assets Schedule Of Future Amortization Of Intangibles Details | |
2,019 | $ 4,002 |
2,020 | 3,171 |
2,021 | 2,790 |
2,022 | 1,766 |
2,023 | 229 |
Total | $ 11,958 |
Intangible Assets Impairmrent o
Intangible Assets Impairmrent of Long-Lived Assets (Narrative) (Details) $ in Millions | 12 Months Ended |
Mar. 31, 2018USD ($) | |
Intangible Assets Impairmrent Of Long-lived Assets Narrative Details | |
Impaired Intangible Asset, Description | During the third quarter of fiscal year 2018, the Company changed its product and marketing strategy for the use of DXI's technology and re-assessed DXI's profitability outlook. This triggered the requirement that the Company test the recorded goodwill for impairment in accordance with ASC 350-20-35, as amended by ASU 2017-04 (see Footnote 1, Recently Adopted Accounting Pronouncements). First, the Company estimated the fair value of its three reporting units using the market approach. Under the market approach, the Company utilized the market capitalization of its publicly-traded shares and comparable company information to determine revenue multiples which were used to determine the fair value of the reporting unit. Based on this approach, the Company determined that there was an indication of impairment only for its DXI reporting unit in the UK as the carrying value including goodwill exceeded the estimated fair value. As largely independent cash flows could not be attributed to any assets individually the Company evaluated DXI's assets and liabilities as one asset group. Then the Company estimated the fair value of DXI's asset group using discounted cash flow methods to determine the implied fair value of goodwill. The difference between this implied fair value of the goodwill and its carrying value was recorded as impairment. The outcome of the analysis resulted in a non-cash expense for impairment of property and equipment, intangible assets and goodwill of $0.3 million, $1.2 million and $8.0 million, respectively, which was recorded during the third quarter of fiscal year 2018 as a separate line item in the Company's Consolidated Statements of Operations. |
Impairment of Equipment | $ 0.3 |
Impairment of Intangible Assets, Finite-lived | 1.2 |
Goodwill, Impairment Loss | $ 8 |
Impaired Intangible Asset, Income Statement Classification | The outcome of the analysis resulted in a non-cash expense for impairment of property and equipment, intangible assets and goodwill of $0.3 million, $1.2 million and $8.0 million, respectively, which was recorded during the third quarter of fiscal year 2018 as a separate line item in the Company's Consolidated Statements of Operations. |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill by Location (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill, beginning balance | $ 46,136 | $ 47,420 |
Additions due to acquisitions | 1,580 | |
Impairment loss | (8,036) | |
Foreign currency translation | 1,954 | (2,864) |
Goodwill, ending balance | 40,054 | 46,136 |
Americas | ||
Goodwill, beginning balance | 27,309 | 25,729 |
Additions due to acquisitions | 1,580 | |
Impairment loss | 0 | |
Foreign currency translation | 0 | 0 |
Goodwill, ending balance | 27,309 | 27,309 |
Europe | ||
Goodwill, beginning balance | 18,827 | 21,691 |
Additions due to acquisitions | 0 | 0 |
Impairment loss | (8,036) | |
Foreign currency translation | 1,954 | (2,864) |
Goodwill, ending balance | $ 12,745 | $ 18,827 |
Commitments and Contingencies45
Commitments and Contingencies (Operating Leases) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Year ending March 31: | |
2,019 | $ 5,876 |
2,020 | 6,754 |
2,021 | 9,093 |
2,022 | 8,970 |
2,023 | 8,448 |
Thereafter | 54,936 |
Total | $ 94,077 |
Commitments and Contingencies46
Commitments and Contingencies (Capital Leases) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Year ending March 31: | |
2,019 | $ 1,054 |
2,020 | 456 |
2,021 | 53 |
2,022 | 5 |
Total minimum payments | 1,568 |
Less: Amount representing interest | (60) |
Total payments, net of interest | 1,508 |
Less: Short-term portion of capital lease obligations | (1,049) |
Long-term portion of capital lease obligations | $ 459 |
Commitments and Contingencies47
Commitments and Contingencies (Service Provider Contracts) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Year ending March 31: | |
2,019 | $ 1,916 |
2,020 | 8 |
Total minimum payments | $ 1,924 |
Commitments and Contingencies48
Commitments and Contingencies (Leases - Rent Expense) (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Commitments And Contingencies Leases - Rent Expense Narrative Details | |||
Rent expense | $ 5.6 | $ 5.1 | $ 2.1 |
Commitments and Contingencies49
Commitments and Contingencies (CustomerSupport Commitments) (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Mar. 31, 2017 |
Commitments And Contingencies Customersupport Commitments Narrative Details | ||
Third party customer support vendor minimum obligation | $ 1.4 | |
Property and equipment under capital lease | 3.5 | $ 2.7 |
Accumulated depreciation related to assets under capital lease | $ 1.8 | $ 1 |
Stockholders' Equity Stock-Base
Stockholders' Equity Stock-Based Compensation Expense By Statement Of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | $ 29,176 | $ 21,462 | $ 16,334 |
Cost of service revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 1,821 | 1,732 | 1,159 |
Cost of product revenue | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 0 | 0 | 0 |
Research and development | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 6,418 | 3,762 | 2,914 |
Sales and marketing | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | 11,654 | 8,832 | 6,133 |
General and administrative | |||
Stock-based employee compensation expense related to employee stock options and employee stock purchases, net of tax | $ 9,283 | $ 7,136 | $ 6,128 |
Stockholders' Equity Option Act
Stockholders' Equity Option Activity (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stockholders Equity Option Activity Details | |||
Balance at beginning of period | 4,462,412 | 4,793,266 | 5,327,907 |
Granted | 609,135 | 407,392 | 723,776 |
Exercised | (773,897) | (603,998) | (1,162,175) |
Cancelled/forfeited | (299,365) | (134,248) | (96,242) |
Balance at end of period | 3,998,285 | 4,462,412 | 4,793,266 |
Options, Vested and expected to vest | 3,998,285 | ||
Options, Exercisable at end of period | 3,025,925 | ||
Weighted-average exercise price of options outstanding, at beginning of period | $ 7.52 | $ 6.29 | $ 5.19 |
Weighted-average exercise price of options granted during period | 14.95 | 14.63 | 8.63 |
Weighted-average exercise price of options exercised during the period | 3.95 | 2.34 | 2.56 |
Weighted-average exercise price of options forfeited, cancelled or expired during the period | 13.05 | 8.41 | 8.06 |
Weighted-average exercise price of options outstanding at end of period | 8.93 | $ 7.52 | $ 6.29 |
Options, Vested and Expected to Vest, Weighted Average Exercise Price | 7.52 | ||
Weighted-Average Exercise Prices, Exercisable at end of period | $ 7.66 |
Stockholders' Equity Stock Purc
Stockholders' Equity Stock Purchase Right Activity (Details) - $ / shares | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2014 | |
Stockholders Equity Stock Purchase Right Activity Details | ||||
Balance at beginning of year | 11,370 | 82,171 | 223,835 | |
Granted | 0 | 0 | 0 | |
Vested | (6,395) | (69,426) | (115,789) | |
Forfeited | 0 | (1,375) | (25,875) | |
Balance at end of year | 4,975 | 11,370 | 82,171 | |
Weighted-average grant date fair value, beginning balance | $ 8.10 | $ 6.30 | $ 5.92 | |
Weighted-average grant date fair value of restricted stock rights granted | 0 | 0 | 0 | |
Weighted-average grant date fair value, released during period | 8.26 | 6 | 5.32 | |
Weighted-average grant date fair value, forfeited during period | 0 | 6.72 | 7.40 | |
Weighted-average grant date fair value, ending balance | $ 7.88 | $ 8.10 | $ 6.30 | |
Weighted-average remaining contractual term, in years, ending balance | 36 days | 1 year 32 days | 274 days | 1 year 180 days |
Stockholders' Equity Restricted
Stockholders' Equity Restricted Stock Unit Activity (Details) | 12 Months Ended | |||
Mar. 31, 2018$ / sharesshares | Mar. 31, 2017$ / sharesshares | Mar. 31, 2016$ / sharesshares | Mar. 31, 2015 | |
Stockholders Equity Restricted Stock Unit Activity Details | ||||
Balance at beginning of period | shares | 4,939,050 | 4,544,799 | 2,698,686 | |
Granted | shares | 3,481,870 | 2,491,877 | 2,681,997 | |
Vested | shares | (1,833,038) | (1,600,831) | (589,788) | |
Forfeited | shares | (652,339) | (496,795) | (246,096) | |
Balance at end of period | shares | 5,935,543 | 4,939,050 | 4,544,799 | |
RSU weighted-average remaining contractual term, in years | 1.60 | 1.55 | 1.67 | 1.88 |
Beginning of period, weighted-average purchase price | $ / shares | $ 11.57 | $ 8.08 | $ 7.33 | |
Granted, weighted-average purchase price | $ / shares | 14.41 | 15.15 | 8.78 | |
Vested, weighted-average purchase price | $ / shares | 10.27 | 7.89 | 7.79 | |
Forfeited, weighted-average purchase price | $ / shares | 12.73 | 9.56 | 8.15 | |
End of period, weighted-average purchase price | $ / shares | $ 13.51 | $ 11.57 | $ 8.08 |
Stockholder's Equity Stock Opti
Stockholder's Equity Stock Options Outstanding And Exercisable (Details) - $ / shares | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2015 |
Options Outstanding, Number of Shares | 3,998,285 | 4,462,412 | 4,793,266 | 5,327,907 |
Options Outstanding, Weighted-Average Exercise Price Per Share | $ 8.93 | $ 7.52 | $ 6.29 | $ 5.19 |
Options Exercisable, Number of Shares | 3,025,925 | |||
Options Exercisable, Weighted-Average Exercise Price Per Share | $ 7.66 |
Stockholder's Equity Assumption
Stockholder's Equity Assumptions Used In Black-Scholes Model (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Option Grants | |||
Expected volatility | 41.00% | 44.00% | 53.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate, minimum | 1.80% | 1.10% | 1.50% |
Risk-free interest rate, maximum | 2.40% | 2.20% | 1.80% |
Weighted average expected option term, in years | 4 years 288 days | 4 years 324 days | 5 years 144 days |
Weighted average fair value of options granted, per share | $ 5.70 | $ 5.74 | $ 4.17 |
Employee Stock Purchase | |||
Expected volatility | 40.00% | 37.00% | 43.00% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 1.33% | 0.65% | 0.39% |
Weighted average expected option term, in years | 288 days | 288 days | 288 days |
Weighted average fair value of options granted, per share | $ 4.10 | $ 4.19 | $ 3.25 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-Based Awards | |||
Total intrinsic value of options exercised | $ 9,000,000 | $ 7,200,000 | $ 9,200,000 |
Unamortized stock-based compensation expense related to unvested stock awards | $ 63,900,000 | ||
Weighted average period of recognition for unrecognized compensation costs (in years) | 2 years 180 days | ||
Employee Stock Purchase Plan | |||
Unamortized stock-based compensation expense related to unvested stock awards | $ 500,000 | ||
Weighted average period of recognition for unrecognized compensation costs (in years) | 180 days | ||
Percentage of market value price of common stock under Employee Stock Purchase Plan | 85.00% | ||
Maximum contribution percentage amount of employee's base compensation | 10.00% |
Stockholders' Equity Repurchase
Stockholders' Equity Repurchases of Common Shares (Narrative) (Detail) - USD ($) | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2016 | |
Stock repurchased and retired during period, value | $ (17,934,000) | $ (11,190,000) |
Total Plan 2017 | ||
Stock repurchase program, authorized amount | 25,000,000 | |
Stock repurchase program, remaining authorized repurchase amount | $ 7,100,000 |
Inome Taxes (Income Tax Provisi
Inome Taxes (Income Tax Provision) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Current: | |||||||||||
Federal | $ (395) | $ (7) | $ 97 | ||||||||
State | 256 | 588 | 551 | ||||||||
Foreign | 185 | 112 | 71 | ||||||||
Total current income tax provision | 46 | 693 | 719 | ||||||||
Deferred: | |||||||||||
Federal | 59,837 | 1,506 | 95 | ||||||||
State | 6,664 | (1,095) | (854) | ||||||||
Foreign | (253) | (1,230) | (807) | ||||||||
Total deferred tax (benefit) provision | 66,248 | (819) | (1,566) | ||||||||
Income tax (benefit) provision | $ 142 | $ 70,842 | $ (3,453) | $ (1,236) | $ (178) | $ 30 | $ (15) | $ 37 | $ 66,294 | $ (126) | $ (847) |
Income taxes (Deferred Tax Asse
Income taxes (Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Mar. 31, 2017 |
Current deferred tax assets | ||
Net operating loss carryforwards | $ 40,465 | $ 36,427 |
Research and development and other credit carryforwards | 11,761 | 8,614 |
Stock-based compensation | 6,389 | 6,942 |
Reserves and allowances | 3,181 | 3,266 |
Fixed assets and intangibles | 378 | (3,688) |
Net non-current deferred tax assets | 62,174 | 51,561 |
Valuation allowance | (62,174) | (2,934) |
Total | $ 0 | $ 48,627 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Taxes Provided to Federal Statutory Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes Reconciliation Of Taxes Provided To Federal Statutory Rate Details | |||||||||||
Tax provision at statutory rate | $ (11,790) | $ (1,652) | $ (2,029) | ||||||||
State income taxes before valuation allowance, net of federal effect | (1,042) | 108 | 9 | ||||||||
Foreign tax rate differential | (1,188) | 885 | (769) | ||||||||
Research and development credits | (2,189) | (1,484) | (1,253) | ||||||||
Change in valuation allowance | 56,663 | (287) | (1,555) | ||||||||
Compensation/option differences | (4,965) | (246) | (471) | ||||||||
Tax Act rate change impact | 1,132 | 0 | 0 | ||||||||
Non-deductible compensation | 22,630 | 1,079 | 944 | ||||||||
Acquisition costs | 0 | 54 | 230 | ||||||||
Expiring California loss carry-forwards | 0 | 0 | 1,626 | ||||||||
Foreign loss not benefited | 6,847 | 780 | 2,342 | ||||||||
Other | 196 | 637 | 79 | ||||||||
Total income tax provision (benefit) | $ 142 | $ 70,842 | $ (3,453) | $ (1,236) | $ (178) | $ 30 | $ (15) | $ 37 | $ 66,294 | $ (126) | $ (847) |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes Unrecognized Tax Benefits Details | |||
Balance at beginning of year | $ 3,331 | $ 2,881 | $ 2,420 |
Gross increases - tax position in prior period | 0 | 0 | 82 |
Gross increases - tax positions related to the current year | 649 | 450 | 379 |
Balance at end of year | $ 3,980 | $ 3,331 | $ 2,881 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Operating loss carryforwards, expiration dates | Mar. 31, 2029 | ||
Accrued penalties and interest | $ 0 | $ 0 | $ 0 |
Federal | |||
Operating Loss Carryforwards | 157.6 | ||
Research Tax Credit Carryforwards | $ 7.2 | ||
Research Tax Credit Carryforwards, Expiration Dates | Mar. 31, 2021 | ||
State | |||
Operating Loss Carryforwards | $ 27.5 | ||
Research Tax Credit Carryforwards | $ 9.1 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | |||||||||||
Net loss available to common stockholders | $ (13,262) | $ (88,520) | $ (546) | $ (2,169) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (104,497) | $ (4,751) | $ (5,120) |
Denominator: | |||||||||||
Denominator for basic calculation | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 89,987 | 89,434 | 92,017 | 90,340 | 88,477 |
Denominator for diluted calculation | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 93,447 | 89,434 | 92,017 | 90,340 | 88,477 |
Net loss per share: | |||||||||||
Basic | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Diluted | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Net Income Per Share Options an
Net Income Per Share Options and Rights Excluded (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Anti-dilutive shares | 9,938 | 9,412 | 9,421 |
Employee stock options | |||
Anti-dilutive shares | 3,998 | 4,462 | 4,793 |
Stock purchase rights | |||
Anti-dilutive shares | 5,940 | 4,950 | 4,628 |
Segment Reporting Revenue and P
Segment Reporting Revenue and Property and Equipment by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Net revenue | $ 296,500 | $ 253,388 | $ 209,336 | ||||||||
Depreciation and amortization expense | 15,717 | 10,437 | 9,007 | ||||||||
Net income (loss) | $ (13,262) | $ (88,520) | $ (546) | $ (2,169) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | (104,497) | (4,751) | (5,120) |
Total assets | 277,209 | 333,855 | 277,209 | 333,855 | |||||||
Property and equipments, net | 35,732 | 24,061 | 35,732 | 24,061 | |||||||
Americas | |||||||||||
Net revenue | 266,034 | 227,914 | 185,241 | ||||||||
Depreciation and amortization expense | 10,619 | 6,842 | 5,776 | ||||||||
Net income (loss) | (84,792) | 2,557 | 940 | ||||||||
Total assets | 240,099 | 284,011 | 240,099 | 284,011 | |||||||
Property and equipments, net | 27,210 | 19,480 | 27,210 | 19,480 | |||||||
Europe | |||||||||||
Net revenue | 30,466 | 25,474 | 24,095 | ||||||||
Depreciation and amortization expense | 5,098 | 3,595 | 3,231 | ||||||||
Net income (loss) | (19,705) | (7,308) | $ (6,060) | ||||||||
Total assets | 37,110 | 49,844 | 37,110 | 49,844 | |||||||
Property and equipments, net | $ 8,462 | $ 4,581 | $ 8,462 | $ 4,581 |
Acquisitions (Purchase Informat
Acquisitions (Purchase Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2017 | Jun. 30, 2015 | May 31, 2015 | |
LeChat | |||
Effective date of purchase agreement | Jan. 6, 2017 | ||
Business Acquisition, Description of Acquired Entity | On January 5, 2017, the Company entered into an Agreement and Plan of Merger (the "Agreement") with the preferred and common shareholders LeChat Inc. (LeChat) for the purchase of all the outstanding preferred and common shares of LeChat. The transaction closed on January 6, 2017. The total aggregate purchase price was $3.1 million, consisting of approximately $2.4 million paid to the preferred shareholders at closing, $0.2 million paid to the common shareholders at closing, and approximately $0.5 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed was recorded as goodwill. The amount of goodwill recognized was primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible asset consisted of developed technology, with an estimated weighted-average useful life of two years. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using a cost approach method. Intangible assets are amortized on a straight-line basis. | ||
Assets acquired: | |||
Cash | $ 231 | ||
Intangible assets | 1,200 | ||
Other non-current assets | 428 | ||
Total assets acquired | 1,859 | ||
Liabilities assumed: | |||
Current and non-current liabilities | (324) | ||
Total liabilities assumed | (324) | ||
Net identifiable assets acquired | 1,535 | ||
Goodwill | 1,580 | ||
Total consideration transferred | $ 3,115 | ||
DXI | |||
Effective date of purchase agreement | May 26, 2015 | ||
Business Acquisition, Description of Acquired Entity | On May 26, 2015, the Company entered into a share purchase agreement with the shareholders of DXI Limited, and its wholly owned subsidiaries, (collectively DXI) for the purchase of the entire share capital of DXI. The transaction closed effective May 29, 2015. The total aggregate purchase price was approximately $22.5 million, consisting of $18.7 million in cash paid to the DXI shareholders at closing, and $3.8 million in cash deposited into escrow to be held for two years as security against indemnity claims made by the Company after the closing date. The cash escrow is to be released in annual installments over two years. The Company recorded the acquired tangible and identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of two and five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. | ||
Assets acquired: | |||
Cash | $ 1,318 | ||
Current assets | 2,016 | ||
Property and equipment | 1,453 | ||
Intangible assets | 13,374 | ||
Total assets acquired | 18,161 | ||
Liabilities assumed: | |||
Current and non-current liabilities | (5,734) | ||
Total liabilities assumed | (5,734) | ||
Net identifiable assets acquired | 12,427 | ||
Goodwill | 10,125 | ||
Total consideration transferred | $ 22,552 | ||
QSC | |||
Effective date of purchase agreement | Jun. 3, 2015 | ||
Business Acquisition, Description of Acquired Entity | On June 3, 2015, the Company entered into an asset purchase agreement with the shareholder of Quality Software Corporation (QSC) and other parties affiliated with the shareholder and QSC for the purchase of certain assets as per the purchase agreement. The total aggregate fair value of the consideration was approximately $2.9 million, which $2.2 million was paid in cash to the QSC shareholder at closing. As part of the aggregate purchases price, there is also $0.5 million in contingent consideration payable subject to attainment of certain revenue and product release milestones for the acquired business, and $0.3 million in cash held by the Company in escrow to be retained for two years as security against indemnity claims made by the Company after the closing date. The preliminary fair value of the contingent consideration and escrow amounts was $0.7 million at the acquisition date. The Company recorded the acquired identifiable intangible assets and liabilities assumed based on their estimated fair values. The excess of the consideration transferred over the aggregate fair values of the assets acquired and liabilities assumed is recorded as goodwill. The amount of goodwill recognized is primarily attributable to the expected contributions of the entity to the overall corporate strategy in addition to synergies and acquired workforce of the acquired business. The finite-lived intangible assets consist of the following: customer relationships, with an estimated weighted-average useful life of five years; and developed technology, with an estimated weighted-average useful life of six years. The indefinite lived intangible asset consisted of in-process research and development and a tradename. The fair value assigned to identifiable intangible assets acquired was based on estimates and assumptions made by management using income approach methods. Intangible assets are amortized on a straight-line basis. | ||
Assets acquired: | |||
Intangible assets | $ 1,100 | ||
Total assets acquired | 1,100 | ||
Liabilities assumed: | |||
Net identifiable assets acquired | 1,100 | ||
Goodwill | 1,789 | ||
Total consideration transferred | $ 2,889 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - DXI Subsequent Event | 1 Months Ended |
Apr. 30, 2018 | |
Subsequent Event, Date | Apr. 30, 2018 |
Subsequent Event, Description | In April 2018, the Company entered into an asset purchase agreement with MarianaIQ, Inc. The total aggregate purchase price was $3.5 million, consisting of approximately $2.6 million paid at closing and $0.9 million in cash deposited into escrow to be held for fifteen months as security against indemnity claims made by the Company after the closing date. |
Consolidated Quarterly Financ68
Consolidated Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | |
Quarterly Financial Data Details | |||||||||||
Service revenue | $ 75,325 | $ 71,891 | $ 68,123 | $ 65,091 | $ 62,654 | $ 60,149 | $ 57,717 | $ 55,296 | $ 280,430 | $ 235,816 | $ 192,241 |
Product revenue | 4,019 | 3,684 | 4,360 | 4,007 | 3,834 | 3,527 | 5,466 | 4,745 | 16,070 | 17,572 | 17,095 |
Total revenue | 79,344 | 75,575 | 72,483 | 69,098 | 66,488 | 63,676 | 63,183 | 60,041 | 296,500 | 253,388 | 209,336 |
Operating expenses: | |||||||||||
Cost of service revenue | 13,952 | 12,318 | 12,757 | 11,662 | 10,803 | 10,525 | 10,837 | 10,235 | 50,689 | 42,400 | 37,078 |
Cost of product revenue | 5,826 | 4,675 | 5,098 | 4,884 | 4,187 | 4,240 | 5,782 | 5,505 | 20,482 | 19,714 | 20,168 |
Research and development | 10,016 | 8,527 | 8,311 | 7,943 | 7,142 | 7,095 | 6,505 | 6,710 | 34,797 | 27,452 | 24,040 |
Sales and marketing | 52,940 | 48,830 | 41,163 | 41,110 | 38,228 | 35,667 | 33,691 | 31,691 | 184,044 | 139,277 | 109,379 |
General and administrative | 10,340 | 10,003 | 9,616 | 8,956 | 9,814 | 7,852 | 6,747 | 6,801 | 38,915 | 31,214 | 25,745 |
Impairment of goodwill, intangible assets and equipment | 0 | 9,469 | 0 | 0 | 0 | 0 | 0 | 0 | 9,469 | 0 | 0 |
Total operating expenses | 93,074 | 93,822 | 76,945 | 74,555 | 70,174 | 65,379 | 63,562 | 60,942 | 338,396 | 260,057 | 216,410 |
Loss from operations | (13,730) | (18,247) | (4,462) | (5,457) | (3,686) | (1,703) | (379) | (901) | (41,896) | (6,669) | (7,074) |
Other income, net | 610 | 569 | 463 | 2,052 | 583 | 408 | 391 | 410 | 3,693 | 1,792 | 1,107 |
Loss before provision (benefit) for income taxes | (13,120) | (17,678) | (3,999) | (3,405) | (3,103) | (1,295) | 12 | (491) | (38,203) | (4,877) | (5,967) |
Provision (benefit) for income taxes | 142 | 70,842 | (3,453) | (1,236) | (178) | 30 | (15) | 37 | 66,294 | (126) | (847) |
Net loss | $ (13,262) | $ (88,520) | $ (546) | $ (2,169) | $ (2,925) | $ (1,325) | $ 27 | $ (528) | $ (104,497) | $ (4,751) | $ (5,120) |
Net income (loss) per share: | |||||||||||
Basic | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Diluted | $ (0.14) | $ (0.96) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.01) | $ 0 | $ (0.01) | $ (1.14) | $ (0.05) | $ (0.06) |
Shares used in per share calculations: | |||||||||||
Basic | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 89,987 | 89,434 | 92,017 | 90,340 | 88,477 |
Diluted | 92,526 | 92,029 | 91,689 | 91,643 | 91,175 | 90,774 | 93,447 | 89,434 | 92,017 | 90,340 | 88,477 |
Schedule II Valuation and Qua69
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Total Allowance for Doubtful Accounts | ||||
Balance at Beginning of Year | $ 954 | $ 586 | $ 416 | |
Additions Charged to Expenses | 250 | 941 | 509 | |
Deductions | [1] | (300) | (573) | (339) |
Balance At End of Year | $ 904 | $ 954 | $ 586 | |
[1] | The deductions related to allowance for doubtful accounts represent accounts receivable which are written off. |