Cover Page
Cover Page - shares | 3 Months Ended | |
Dec. 31, 2022 | Jan. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-26041 | |
Entity Registrant Name | F5, INC. | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 91-1714307 | |
Entity Address, Address Line One | 801 5th Avenue | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98104 | |
City Area Code | 206 | |
Local Phone Number | 272-5555 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | FFIV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001048695 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 60,120,642 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Current assets | ||
Cash and cash equivalents | $ 605,739 | $ 758,012 |
Short-term investments | 54,015 | 126,554 |
Accounts receivable, net of allowances of $6,417 and $6,020 | 485,277 | 469,979 |
Inventories | 59,197 | 68,365 |
Other current assets | 510,279 | 489,314 |
Total current assets | 1,714,507 | 1,912,224 |
Property and equipment, net | 167,709 | 168,182 |
Operating lease right-of-use assets | 223,953 | 227,475 |
Long-term investments | 7,812 | 9,544 |
Deferred tax assets | 208,562 | 183,365 |
Goodwill | 2,259,277 | 2,259,282 |
Other assets, net | 503,748 | 516,122 |
Total assets | 5,085,568 | 5,276,194 |
Current liabilities | ||
Accounts payable | 71,760 | 113,178 |
Accrued liabilities | 330,524 | 309,819 |
Deferred revenue | 1,131,195 | 1,067,182 |
Current portion of long-term debt | 0 | 349,772 |
Total current liabilities | 1,533,479 | 1,839,951 |
Deferred tax liabilities | 2,973 | 2,781 |
Deferred revenue, long-term | 628,924 | 624,398 |
Operating lease liabilities, long-term | 267,700 | 272,376 |
Other long-term liabilities | 70,143 | 67,710 |
Total long-term liabilities | 969,740 | 967,265 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity | ||
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding | 0 | 0 |
Common stock, no par value; 200,000 shares authorized, 60,117 and 59,860 shares issued and outstanding | 129,060 | 91,048 |
Accumulated other comprehensive loss | (23,219) | (26,176) |
Retained earnings | 2,476,508 | 2,404,106 |
Total shareholders' equity | 2,582,349 | 2,468,978 |
Total liabilities and shareholders' equity | $ 5,085,568 | $ 5,276,194 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 6,417 | $ 6,020 |
Preferred stock, par value (dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 60,117,000 | 59,860,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenues | ||
Revenue from contract with customer, excluding assessed tax | $ 700,378 | $ 687,100 |
Cost of net revenues | ||
Cost of net revenues | 155,007 | 135,073 |
Gross profit | 545,371 | 552,027 |
Operating expenses | ||
Sales and marketing | 233,105 | 234,035 |
Research and development | 142,323 | 130,271 |
General and administrative | 69,991 | 65,661 |
Restructuring charges | 8,740 | 7,909 |
Total | 454,159 | 437,876 |
Income from operations | 91,212 | 114,151 |
Other income (expense), net | 4,702 | (2,431) |
Income before income taxes | 95,914 | 111,720 |
Provision for income taxes | 23,512 | 18,161 |
Net income | $ 72,402 | $ 93,559 |
Net income per share — basic (dollars per share) | $ 1.20 | $ 1.54 |
Weighted average shares — basic (shares) | 60,096 | 60,810 |
Net income per share — diluted (dollars per share) | $ 1.20 | $ 1.51 |
Weighted average shares — diluted (shares) | 60,387 | 61,882 |
Product | ||
Net revenues | ||
Revenue from contract with customer, excluding assessed tax | $ 340,558 | $ 343,149 |
Cost of net revenues | ||
Cost of net revenues | 98,855 | 81,662 |
Service | ||
Net revenues | ||
Revenue from contract with customer, excluding assessed tax | 359,820 | 343,951 |
Cost of net revenues | ||
Cost of net revenues | $ 56,152 | $ 53,411 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 72,402 | $ 93,559 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | 2,250 | (517) |
Available-for-sale securities: | ||
Unrealized gains (losses) on securities, net of taxes of $114 and $(74) for the three months ended December 31, 2022 and 2021, respectively | 767 | (621) |
Reclassification adjustment for realized losses included in net income, net of taxes of $20 and $2 for the three months ended December 31, 2022 and 2021, respectively | (60) | (4) |
Net change in unrealized gains (losses) on available-for-sale securities, net of tax | 707 | (625) |
Total other comprehensive income (loss) | 2,957 | (1,142) |
Comprehensive income | $ 75,359 | $ 92,417 |
Consolidated Statements Of Co_2
Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Tax effect of unrealized gain (loss) on securities | $ 114 | $ (74) |
Tax effect of reclassification adjustment for realized (gains) losses | $ 20 | $ 2 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | AOCI Attributable to Parent | Retained Earnings |
Beginning Balance (in shares) at Sep. 30, 2021 | 60,652 | |||
Beginning Balance at Sep. 30, 2021 | $ 2,360,213 | $ 192,458 | $ (20,073) | $ 2,187,828 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of employee stock options (in shares) | 50 | |||
Exercise of employee stock options | 1,255 | $ 1,255 | ||
Issuance of stock under employee stock purchase plan (in shares) | 169 | |||
Issuance of stock under employee stock purchase plan | 26,325 | $ 26,325 | ||
Issuance of restricted stock (in shares) | 442 | |||
Issuance of restricted stock | 0 | |||
Stock Repurchased and Retired During Period, Shares | (539) | |||
Stock Repurchased and Retired During Period, Value | (125,011) | $ (125,011) | ||
Cost of Issuance of Treasury Stock, Shares | (63) | |||
Cost of Issuance of Treasury Stock | (13,595) | $ (13,595) | ||
Stock-based compensation | 63,757 | $ 63,757 | ||
Net income | 93,559 | 93,559 | ||
Other Comprehensive Income (Loss) | (1,142) | (1,142) | ||
Ending Balance ( in shares) at Dec. 31, 2021 | 60,711 | |||
Ending Balance at Dec. 31, 2021 | $ 2,405,361 | $ 145,189 | (21,215) | 2,281,387 |
Beginning Balance (in shares) at Sep. 30, 2022 | 59,860 | 59,860 | ||
Beginning Balance at Sep. 30, 2022 | $ 2,468,978 | $ 91,048 | (26,176) | 2,404,106 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of employee stock options (in shares) | 14 | |||
Exercise of employee stock options | 435 | $ 435 | ||
Issuance of stock under employee stock purchase plan (in shares) | 179 | |||
Issuance of stock under employee stock purchase plan | 21,745 | $ 21,745 | ||
Issuance of restricted stock (in shares) | 376 | |||
Issuance of restricted stock | 0 | |||
Stock Repurchased and Retired During Period, Shares | (263) | |||
Stock Repurchased and Retired During Period, Value | (40,005) | $ (40,005) | ||
Cost of Issuance of Treasury Stock, Shares | (49) | |||
Cost of Issuance of Treasury Stock | (7,037) | $ (7,037) | ||
Stock-based compensation | 62,874 | $ 62,874 | ||
Net income | 72,402 | 72,402 | ||
Other Comprehensive Income (Loss) | $ 2,957 | 2,957 | ||
Ending Balance ( in shares) at Dec. 31, 2022 | 60,117 | 60,117 | ||
Ending Balance at Dec. 31, 2022 | $ 2,582,349 | $ 129,060 | $ (23,219) | $ 2,476,508 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net income | $ 72,402 | $ 93,559 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock-based compensation | 62,874 | 63,757 |
Depreciation and amortization | 27,472 | 30,260 |
Non-cash operating lease costs | 10,167 | 9,663 |
Deferred income taxes | (25,070) | (6,407) |
Impairment of assets | 0 | 6,175 |
Other | 358 | (1,123) |
Changes in operating assets and liabilities (excluding effects of the acquisition of businesses): | ||
Accounts receivable | (15,837) | (77,223) |
Inventories | 9,168 | 1,260 |
Other current assets | (20,602) | (44,286) |
Other assets | (1,252) | (21,774) |
Accounts payable and accrued liabilities | (19,981) | (25,387) |
Deferred revenue | 68,540 | 76,065 |
Lease liabilities | (10,608) | (14,173) |
Net cash provided by operating activities | 157,631 | 90,366 |
Investing activities | ||
Purchases of investments | (680) | (36,205) |
Maturities of investments | 63,519 | 38,138 |
Sales of investments | 12,167 | 34,549 |
Acquisition of businesses, net of cash acquired | 0 | (67,911) |
Purchases of property and equipment | (13,104) | (10,564) |
Net cash provided by (used in) investing activities | 61,902 | (41,993) |
Financing activities | ||
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan | 22,180 | 27,581 |
Payments for Repurchase of Common Stock | (40,005) | (125,011) |
Payments on term debt agreement | (350,000) | (5,000) |
Cost of Issuance of Treasury Stock | (7,037) | (13,595) |
Net cash used in financing activities | (374,862) | (116,025) |
Net decrease in cash, cash equivalents and restricted cash | (155,329) | (67,652) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,079 | (861) |
Cash, cash equivalents and restricted cash, beginning of period | 762,207 | 584,333 |
Cash, cash equivalents and restricted cash, end of period | 609,957 | 515,820 |
Supplemental disclosures of cash flow information | ||
Cash paid for amounts included in the measurement of operating lease liabilities | 13,665 | 16,500 |
Cash paid for interest on long-term debt | 2,970 | 1,252 |
Supplemental disclosures of non-cash activities | ||
Right-of-use assets obtained in exchange for lease obligations | $ 6,193 | $ 818 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business F5, Inc. (the "Company") is a leading provider of multi-cloud application security and delivery solutions which enable its customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud. The Company's cloud, software, and hardware solutions enable its customers to deliver digital experiences to their customers faster, reliably, and at scale. The Company's enterprise-grade application services are available as cloud-based, software-as-a-service, and software-only solutions optimized for multi-cloud environments, with modules that can run independently, or as part of an integrated solution on its high-performance appliances. In connection with its solutions, the Company offers a broad range of professional services, including consulting, training, installation, maintenance, and other technical support services. Basis of Presentation The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for their fair statement in conformity with accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022. There have been no changes to the Company's significant accounting policies as of and for the three months ended December 31, 2022. New Accounting Pronouncements There have been no material changes in recently issued or adopted accounting standards from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Capitalized Contract Acquisition Costs The table below shows significant movements in capitalized contract acquisition costs (current and noncurrent) for the three months ended December 31, 2022 and 2021 (in thousands): Three months ended 2022 2021 Balance, beginning of period $ 77,220 $ 77,836 Additional capitalized contract acquisition costs 6,267 10,512 Amortization of capitalized contract acquisition costs (9,687) (9,414) Balance, end of period $ 73,800 $ 78,934 Amortization of capitalized contract acquisition costs was $9.7 million and $9.4 million for the three months ended December 31, 2022 and 2021, respectively, and is recorded in Sales and Marketing expense in the accompanying consolidated income statements. There was no impairment of any capitalized contract acquisition costs during any period presented. Contract Balances Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to the Company's contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations, or for contracts with customers that contain the Company's unconditional rights to consideration, for which the customer has not been billed. These liabilities are classified as current and non-current deferred revenue. The table below shows significant movements in the deferred revenue balances (current and noncurrent) for the three months ended December 31, 2022 and 2021 (in thousands): Three months ended 2022 2021 Balance, beginning of period $ 1,691,580 $ 1,489,842 Amounts added but not recognized as revenues 460,408 441,591 Deferred revenue acquired through acquisition of businesses — 10,591 Revenues recognized related to the opening balance of deferred revenue (391,869) (365,525) Balance, end of period $ 1,760,119 $ 1,576,499 Remaining Performance Obligations Remaining performance obligations represent the amount of the transaction price under contracts with customers that are attributable to performance obligations that are unsatisfied or partially satisfied at the reporting date. The composition of unsatisfied performance obligations consists mainly of deferred service revenue, and to a lesser extent, deferred product revenue, for which the Company has an obligation to perform, and has not yet recognized as revenue in the consolidated financial statements. As of December 31, 2022, the total non-cancelable remaining performance obligations under the Company's contracts with customers was $1.8 billion and the Company expects to recognize revenues on approximately 64.3% of these remaining performance obligations over the next 12 months, 22.6% in year two, and the remaining balance thereafter. See Note 12, Segment Information, for disaggregated revenue by significant customer and geographic region, as well as disaggregated product revenue by systems and software. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Company determines fair value using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances and expands disclosure about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date, essentially the exit price. The levels of fair value hierarchy are: Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date that the Company has the ability to access. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs for which there is little or no market data available. These inputs reflect management's assumptions of what market participants would use in pricing the asset or liability. Level 1 investments are valued based on quoted market prices in active markets and include the Company's cash equivalent investments. Level 2 investments, which include investments that are valued based on quoted prices in markets that are not active, broker or dealer quotations, actual trade data, benchmark yields or alternative pricing sources with reasonable levels of price transparency, include the Company's certificates of deposit, corporate bonds and notes, municipal bonds and notes, U.S. government securities, U.S. government agency securities and international government securities. Fair values for the Company's level 2 investments are based on similar assets without applying significant judgments. In addition, all of the Company's level 2 investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments. A financial instrument's level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes "observable" requires significant judgment by the Company. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The Company's financial assets measured at fair value on a recurring basis subject to the disclosure requirements at December 31, 2022 and September 30, 2022, were as follows (in thousands): Gross Unrealized Classification on Balance Sheet December 31, 2022 Fair Value Level Cost or Amortized Cost Gains Losses Aggregate Cash and Cash Equivalents Short-Term Investments Long-Term Investments Changes in fair value recorded in other comprehensive income Money Market Funds Level 1 $ 208,279 $ — $ — $ 208,279 $ 208,279 $ — $ — Corporate bonds and notes Level 2 30,908 — (613) 30,295 — 26,595 3,700 Municipal bonds and notes Level 2 2,962 — (81) 2,881 — 2,785 96 U.S. government securities Level 2 23,154 — (246) 22,908 — 22,908 — U.S. government agency securities Level 2 1,784 — (57) 1,727 — 1,727 — Total debt investments $ 267,087 $ — $ (997) $ 266,090 $ 208,279 $ 54,015 $ 3,796 Changes in fair value recorded in other net income (expense) Equity investments * $ 4,016 $ — $ — $ 4,016 Total equity investments 4,016 — — 4,016 Total investments $ 270,106 $ 208,279 $ 54,015 $ 7,812 * The fair value of this equity investment is measured at net asset value (NAV) which approximates fair value and is not classified within the fair value hierarchy . Gross Unrealized Classification on Balance Sheet September 30, 2022 Fair Value Level Cost or Amortized Cost Gains Losses Aggregate Cash and Cash Equivalents Short-Term Investments Long-Term Investments Changes in fair value recorded in other comprehensive income Money Market Funds Level 1 $ 276,294 $ — $ — $ 276,294 $ 276,294 $ — $ — Corporate bonds and notes Level 2 50,828 — (950) 49,878 912 44,356 4,610 Municipal bonds and notes Level 2 5,018 — (102) 4,916 — 3,812 1,104 U.S. government securities Level 2 84,734 — (660) 84,074 10,120 73,954 — U.S. government agency securities Level 2 5,825 — (75) 5,750 606 4,432 712 Total debt investments $ 422,699 $ — $ (1,787) $ 420,912 $ 287,932 $ 126,554 $ 6,426 Changes in fair value recorded in other net income (expense) Equity investments * $ 3,118 $ — $ — $ 3,118 Total equity investments 3,118 — — 3,118 Total investments $ 424,030 $ 287,932 $ 126,554 $ 9,544 * The fair value of this equity investment is measured at NAV which approximates fair value and is not classified within the fair value hierarchy . The Company uses the fair value hierarchy for financial assets and liabilities. The carrying amounts of other current financial assets and other current financial liabilities approximate fair value due to their short-term nature. Interest income from investments was not material for the three months ended December 31, 2022 and 2021. Interest income is included in other income (expense), net on the Company's consolidated income statements. Unrealized losses on investments held for a period greater than 12 months at December 31, 2022 and September 30, 2022 were not material. The Company invests in debt securities that are rated investment grade. The Company reviews the individual debt securities in its portfolio to determine whether a credit loss exists by comparing the extent to which the fair value is less than the amortized cost and considering any changes to ratings of a debt security by a ratings agency. The Company determined that as of December 31, 2022, there were no credit losses on any investments within its portfolio. Assets Measured and Recorded at Fair Value on a Non-Recurring Basis The Company's non-financial assets and liabilities, which include goodwill, intangible assets, and long-lived assets, are not required to be carried at fair value on a recurring basis. These non-financial assets and liabilities are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. The Company reviews goodwill for impairment annually, during the second quarter of each fiscal year, or as circumstances indicate the possibility of impairment. The Company monitors the carrying value of tangible and intangible long-lived assets for impairment whenever events or changes in circumstances indicate its carrying amount may not be recoverable. The Company did not recognize any impairment charges related to its intangible assets in the first quarter of fiscal 2023. In the first quarter of fiscal 2022, as a result of a planned change in the use of the asset, the Company recorded an impairment of $6.2 million against the Shape trade name intangible asset, which was reflected in the Sales and Marketing line item on the Company's consolidated income statement. During the three months ended December 31, 2022 and 2021, the Company did not recognize any impairment charges related to goodwill or long-lived assets. |
Business Combinations
Business Combinations | 3 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Fiscal Year 2022 Acquisition of Threat Stack, Inc. In September 2021, the Company entered into a Merger Agreement (the “Threat Stack Merger Agreement”) with Threat Stack, Inc. ("Threat Stack"), a provider of cloud security and workload protection solutions. The transaction closed on October 1, 2021 with Threat Stack becoming a wholly-owned subsidiary of F5. The addition of Threat Stack’s cloud security capabilities to F5’s application and Application Programming Interface ("API") protection solutions is expected to enhance visibility across application infrastructure and workloads to deliver more actionable security insights for customers. Pursuant to the Threat Stack Merger Agreement, at the effective time of the Merger, the capital stock of Threat Stack and the vested outstanding and unexercised stock options in Threat Stack were cancelled and converted to the right to receive approximately $68.9 million in cash, subject to certain adjustments and conditions set forth in the Threat Stack Merger Agreement. Transaction costs associated with the acquisition were not material. As a result of the acquisition, the Company acquired all the assets and assumed all the liabilities of Threat Stack. The goodwill related to the Threat Stack acquisition is comprised primarily of expected synergies from combining operations and the acquired intangible assets that do not qualify for separate recognition. Goodwill related to the Threat Stack acquisition was not deductible for tax purposes. The results of operations of Threat Stack have been included in the Company's consolidated financial statements from the date of acquisition. The allocated purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values is presented in the following table (in thousands): Estimated Useful Life Assets acquired Deferred tax assets $ 14,041 Other net tangible assets acquired, at fair value 5,481 Cash, cash equivalents, and restricted cash 911 Identifiable intangible assets: Developed technology 11,400 5 years Customer relationships 4,400 5 years Goodwill 43,282 Total assets acquired $ 79,515 Liabilities assumed Deferred revenue $ (10,591) Total liabilities assumed $ (10,591) Net assets acquired $ 68,924 The measurement period for the Threat Stack acquisition lapsed during the first quarter of fiscal 2023. The Company recorded immaterial adjustments to consideration exchanged for the purchase of Threat Stack within the post-close measurement period. The developed technology intangible asset is amortized on a straight-line basis over its estimated useful life of five years and included in cost of net product revenues. The customer relationships intangible asset is amortized on a straight-line basis over its estimated useful life of five years and included in sales and marketing expenses. The weighted-average life of the amortizable intangible assets recognized from the Threat Stack acquisition was five years as of October 1, 2021, the date the transaction closed. The estimated useful lives for the acquired intangible assets were based on the expected future cash flows associated with the respective asset. The pro forma financial information, as well as the revenue and earnings generated by Threat Stack, were not material to the Company's operations for the periods presented. |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Details [Abstract] | |
Balance Sheet Details | Balance Sheet Details Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of the Company's cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows for the periods presented (in thousands): December 31, September 30, Cash and cash equivalents $ 605,739 $ 758,012 Restricted cash included in other assets, net 4,218 4,195 Total cash, cash equivalents and restricted cash $ 609,957 $ 762,207 Inventories Inventories consist of the following (in thousands): December 31, September 30, Finished goods $ 9,947 $ 10,164 Raw materials 49,250 58,201 $ 59,197 $ 68,365 Other Current Assets Other current assets consist of the following (in thousands): December 31, September 30, Unbilled receivables $ 333,816 $ 319,707 Prepaid expenses 74,613 57,340 Capitalized contract acquisition costs 33,828 34,658 Other 1 68,022 77,609 $ 510,279 $ 489,314 (1) As of December 31, 2022 and September 30, 2022, includes a deposit of $47.5 million and $57.0 million, respectively, used to support the working capital needs of the Company’s primary contract manufacturer's procurement of components used in the manufacturing of system hardware. Other Assets Other assets, net consist of the following (in thousands): December 31, September 30, Intangible assets $ 187,367 $ 200,288 Unbilled receivables 226,120 224,780 Capitalized contract acquisition costs 39,972 42,561 Other 50,289 48,493 $ 503,748 $ 516,122 Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, September 30, Payroll and benefits $ 140,995 $ 165,437 Operating lease liabilities, current 43,397 42,523 Income and other tax accruals 79,878 41,217 Other 66,254 60,642 $ 330,524 $ 309,819 Other Long-term Liabilities Other long-term liabilities consist of the following (in thousands): December 31, September 30, Income taxes payable $ 61,865 $ 59,553 Other 8,278 8,157 $ 70,143 $ 67,710 |
Debt Facilities
Debt Facilities | 3 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt Facilities | Debt Facilities Term Credit Agreement In connection with the acquisition of Shape, on January 24, 2020, the Company entered into a Term Credit Agreement ("Term Credit Agreement") with certain institutional lenders that provides for a senior unsecured term loan facility in an aggregate principal amount of $400.0 million (the "Term Loan Facility"). The Term Loan Facility had an original maturity date of January 24, 2023 with quarterly installments equal to 1.25% of the original principal amount. Borrowings under the Term Loan Facility bore interest at a rate equal to LIBOR, plus an applicable margin of 1.125% to 1.75% depending on the Company's leverage ratio. The proceeds from the Term Loan Facility were primarily used to finance the acquisition of Shape and related expenses. In connection with the Term Loan Facility, the Company incurred $2.2 million in debt issuance costs, which are recorded as a reduction to the carrying value of the principal amount of the debt. On December 15, 2022, the Company voluntarily prepaid, in full, all borrowings under the Term Loan Facility, including the outstanding principal balance of $350.0 million, and all accrued, but unpaid interest outstanding of $3.0 million. All remaining debt issuance costs were amortized to interest expense associated with the prepayment. As a result of the payoff of its Term Loan Facility, the Company was released of any and all obligations, maintenance of covenants, and indebtedness under the Term Credit Agreement. As of September 30, 2022, $350.0 million of principal amount under the Term Loan Facility was outstanding, excluding unamortized debt issuance costs of $0.2 million. The weighted average interest rate on the principal amount under the Term Loan Facility outstanding balance was 4.072% and 1.282% for the three months ended December 31, 2022 and 2021, respectively. Revolving Credit Agreement On January 31, 2020, the Company entered into a Revolving Credit Agreement (the "Revolving Credit Agreement") that provides for a senior unsecured revolving credit facility in an aggregate principal amount of $350.0 million (the "Revolving Credit Facility"). The Company has the option to increase commitments under the Revolving Credit Facility from time to time, subject to certain conditions, by up to $150.0 million. Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company's option, (a) LIBOR, adjusted for customary statutory reserves, plus an applicable margin of 1.125% to 1.75% depending on the Company's leverage ratio, or (b) an alternate base rate determined in accordance with the Revolving Credit Agreement, plus an applicable margin of 0.125% to 0.750% depending on the Company's leverage ratio. The Revolving Credit Agreement also requires payment of a commitment fee calculated at a rate per annum of 0.125% to 0.300% depending on the Company's leverage ratio on the undrawn portion of the Revolving Credit Facility. Commitment fees incurred during the three months ended December 31, 2022 were not material. |
Leases
Leases | 3 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The majority of the Company's operating lease payments relate to its corporate headquarters in Seattle, Washington, which includes approximately 515,000 square feet of office space. The lease commenced in April 2019 and expires in 2033 with an option for renewal. The Company also leases additional office and lab space for product development and sales and support personnel in the United States and internationally. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of the Company's operating lease expenses for the three months ended December 31, 2022 and 2021 were as follows (in thousands): Three months ended 2022 2021 Operating lease expense $ 12,516 $ 11,914 Short-term lease expense 655 556 Variable lease expense 5,336 6,244 Total lease expense $ 18,507 $ 18,714 Variable lease expense primarily consists of common area maintenance and parking expenses. Supplemental balance sheet information related to the Company's operating leases was as follows (in thousands, except lease term and discount rate): December 31, 2022 September 30, 2022 Operating lease right-of-use assets, net $ 223,953 $ 227,475 Operating lease liabilities, current 1 43,397 42,523 Operating lease liabilities, long-term 267,700 272,376 Total operating lease liabilities $ 311,097 $ 314,899 Weighted average remaining lease term (in years) 9.0 9.2 Weighted average discount rate 2.70 % 2.66 % (1) Current portion of operating lease liabilities is included in accrued liabilities on the Company's consolidated balance sheets. As of December 31, 2022, the future operating lease payments for each of the next five years and thereafter is as follows (in thousands): Fiscal Years Ending September 30: Operating Lease 2023 (remainder) $ 38,611 2024 48,196 2025 40,683 2026 30,812 2027 29,746 2028 27,885 Thereafter 138,747 Total lease payments 354,680 Less: imputed interest (43,583) Total lease liabilities $ 311,097 Operating lease liabilities above do not include sublease income. As of December 31, 2022, the Company expects to receive sublease income of approximately $19.1 million, which consists of $5.4 million to be received for the remainder of fiscal 2023 and $13.7 million to be received over the three fiscal years thereafter. There were no impairments against right-of-use assets for the three months ended December 31, 2022 and 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Guarantees and Product Warranties In the normal course of business to facilitate sales of its products, the Company indemnifies other parties, including customers, resellers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed to hold the other party harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. The Company has entered into indemnification agreements with its officers and directors and certain other employees, and the Company's bylaws contain similar indemnification obligations to the Company's agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company generally offers warranties of one year for hardware for those customers without service contracts, with the option of purchasing additional warranty coverage in yearly increments. The Company accrues for warranty costs as part of its cost of sales based on associated material product costs and technical support labor costs. Accrued warranty costs as of December 31, 2022 and September 30, 2022 were not material. Commitments In October 2022, the Company entered into an unconditional purchase commitment with one of its suppliers for the delivery of systems components. Under the terms of the agreement, the Company is obligated to purchase $10 million of component inventory annually, with a total committed amount of $40 million over a four The Company leases its facilities under operating leases that expire at various dates through 2033. There have been no material changes in the Company's lease obligations compared to those discussed in Note 7 to its annual consolidated financial statements. Legal Proceedings Lynwood Investment CY Limited v. F5 Networks et al. On June 8, 2020, Lynwood Investment CY Limited (“Lynwood”) filed a lawsuit in the United States District Court for the Northern District of California against the Company and certain affiliates, along with other defendants. In its complaint, Lynwood claims to be the assignee of all rights and interests of Rambler Internet Holding LLC (“Rambler”), and alleges that the intellectual property in the NGINX software originally released by the co-founder of NGINX in 2004 belongs to Rambler (and therefore Lynwood, by assignment) because the software was created and developed while the co-founder was employed by Rambler. Lynwood asserts 26 causes of action against the various defendants, including copyright infringement, violation of trademark law, tortious interference, conspiracy, and fraud. The complaint seeks damages, disgorgement of profits, fees and costs, declarations of copyright and trademark ownership, trademark cancellations, and injunctive relief. Lynwood also initiated several trademark opposition and cancellation proceedings before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office, which have all since been suspended. In August and October 2020, the Company and the other defendants filed motions to dismiss all claims asserted against them in the lawsuit. While these motions were pending, the Court ordered Lynwood to select ten of its twenty-six claims to litigate through trial while the remaining sixteen claims would be stayed pending resolution of the ten selected claims. On March 25 and 30, 2021, the Court dismissed the ten selected claims and granted Lynwood leave to cure the deficiencies in its complaint though it expressed doubt about Lynwood’s ability to do so. The Court further ruled that Lynwood may not add new causes of action or add new parties without stipulation or leave of court, and that unless Lynwood corrects “all the defects” identified in the Court’s orders and the Company’s and other defendants’ motions to dismiss, the Court will dismiss the ten claims with prejudice. On April 6, 2021, the Court referred the parties to private mediation to be completed by June 1, 2021. Pursuant to the Court’s order, the parties held a private mediation on May 27, 2021. The matter did not resolve. On April 29, 2021, Lynwood filed its amended complaint, seeking the same relief against the Company and other defendants. On May 27, 2021, the Company and other defendants filed a consolidated motion to dismiss the claims Lynwood had selected to proceed to litigate through trial, reserving their right to move to dismiss the 16 stayed claims once the Court lifts the stay. The motion to dismiss was set to be heard by the Court on October 14, 2021, but on October 11, 2021, the Court vacated the hearing and gave notice that it will decide the motion on the papers without oral argument. On August 16, 2022, the Court granted the consolidated motion to dismiss the claims Lynwood had selected to proceed to litigate through trial, without leave to amend the claims, thereby dismissing those claims with prejudice. On September 2, 2022, Lynwood informed the Court it changed its name to Hemma Investments CY Limited. On September 9, 2022, the parties stipulated to the dismissal of the remaining 16 stayed claims, with prejudice, and the Court entered a final judgment. On September 14, 2022, Lynwood filed a notice of appeal to the Ninth Circuit Court of Appeals to appeal the Court’s dismissal of the claims Lynwood had selected to proceed to litigate through trial. Lynwood’s opening appeal brief was filed on December 16, 2022 after having been granted a 30-day extension by the Court. The Company was granted a 60-day extension to file its answering brief, which is now due on March 20, 2023. Lynwood’s reply will be due April 10, 2023. Following the Court’s order granting the consolidated motion to dismiss and final judgment in the Company’s favor, the Company filed a motion on September 30, 2022 for an award of attorneys’ fees and costs incurred in defending against Lynwood’s claim of direct copyright infringement and related claims that were dismissed by the Court’s order. On December 19, 2022, the Court granted the Company’s motion, finding that the Company is entitled to an award of attorneys’ fees. The Court asked for supplemental briefing and submissions to determine the exact amount of fees to which the Company is entitled. The supplemental briefing will be complete, and the motion will stand submitted, as of February 21, 2023. In addition to the above matters, the Company is subject to a variety of legal proceedings, claims, investigations, and litigation arising in the ordinary course of business, including intellectual property litigation. Management believes that the Company has meritorious defenses to the allegations made in its pending cases and intends to vigorously defend these lawsuits; however, the Company is unable to currently determine if an unfavorable outcome is probable or estimate any potential amount or range of possible loss of these or similar matters. There are many uncertainties associated with any litigation and these actions or other third-party claims against the Company may cause it to incur costly litigation and/or substantial settlement charges that could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows. The Company records an accrual for loss contingencies for legal proceedings when it believes that an unfavorable outcome is both (a) probable and (b) the amount or range of any possible loss is reasonably estimable. The Company has not recorded any accrual for loss contingencies associated with such legal proceedings or the investigations discussed above. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items in the related period. The effective tax rate was 24.5% and 16.3% for the three months ended December 31, 2022 and 2021, respectively. The increase in the effective tax rate for the three months ended December 31, 2022 as compared to the three months ended December 31, 2021 is primarily due to the tax impact of stock-based compensation and international operations. At December 31, 2022, the Company had $68.7 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. It is anticipated that the Company’s existing liabilities for unrecognized tax benefits will change within the next twelve months due to audit settlements or the expiration of statutes of limitations. The Company does not expect these changes to be material to the consolidated financial statements. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions as a component of income tax expense. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure | Shareholders' Equity Common Stock Repurchase On July 25, 2022, the Company announced that its Board of Directors authorized an additional $1.0 billion for its common stock share repurchase program. This authorization is incremental to the existing $5.4 billion program, initially approved in October 2010 and expanded in subsequent fiscal years. Acquisitions for the share repurchase programs will be made from time to time in private transactions, accelerated share repurchase programs, or open market purchases as permitted by securities laws and other legal requirements. The programs can be terminated at any time. The following table summarizes the Company's repurchases and retirements of its common stock under its Stock Repurchase Program (in thousands, except per share data): Three months ended 2022 2021 Shares repurchased 263 539 Average price per share $ 151.87 $ 232.14 Amount repurchased $ 40,005 $ 125,011 As of December 31, 2022, the Company had $1,232 million remaining authorized to purchase shares under its share repurchase program. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Dec. 31, 2022 | |
Net Income Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. The Company's nonvested restricted stock units do not have nonforfeitable rights to dividends or dividend equivalents and are not considered participating securities that should be included in the computation of earnings per share under the two-class method. The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three months ended 2022 2021 Numerator Net income $ 72,402 $ 93,559 Denominator Weighted average shares outstanding — basic 60,096 60,810 Dilutive effect of common shares from stock options and restricted stock units 291 1,072 Weighted average shares outstanding — diluted 60,387 61,882 Basic net income per share $ 1.20 $ 1.54 Diluted net income per share $ 1.20 $ 1.51 Anti-dilutive stock-based awards excluded from the calculations of diluted earnings per share were not material for the three months ended December 31, 2022 and 2021. |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Management has determined that the Company is organized as, and operates in, one reportable operating segment. Revenues by Geographic Location and Other Information The Company does business in three main geographic regions: the Americas (primarily the United States); Europe, the Middle East, and Africa (EMEA); and the Asia Pacific region (APAC). The Company's chief operating decision-maker reviews financial information presented on a consolidated basis accompanied by information about revenues by geographic region. The Company's foreign offices conduct sales, marketing and support activities. Revenues are attributed by geographic location based on the location of the customer. The following presents revenues by geographic region (in thousands): Three months ended 2022 2021 Americas: United States $ 375,748 $ 381,289 Other 26,410 21,702 Total Americas 402,158 402,991 EMEA 184,115 162,062 Asia Pacific 114,105 122,047 $ 700,378 $ 687,100 The Company generates revenues from the sale of products and services. The Company continues to offer its products through a range of consumption models, from physical systems to software solutions and managed services. The following presents net product revenues by systems and software (in thousands): Three months ended 2022 2021 Net product revenues Systems revenue $ 173,032 $ 180,157 Software revenue 167,526 162,992 Total net product revenue $ 340,558 $ 343,149 The following distributors of the Company's products accounted for more than 10% of total net revenue: Three months ended 2022 2021 Ingram Micro, Inc. 17.6 % 18.7 % Synnex Corporation 13.6 % 12.2 % The Company tracks assets by physical location. Long-lived assets consist of property and equipment, net, and are shown below (in thousands): December 31, September 30, United States $ 129,281 $ 134,699 EMEA 21,416 17,376 Other countries 17,012 16,107 $ 167,709 $ 168,182 |
Restructuring Charges
Restructuring Charges | 3 Months Ended |
Dec. 31, 2022 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Restructuring Charges In the first quarter of fiscal 2023 and 2022, the Company initiated restructuring plans to match strategic and financial objectives and optimize resources for long term growth, including a reduction in force program. In the first quarter of fiscal 2023, the Company recorded a restructuring charge of $8.7 million. The Company does not expect to record any significant future charges related to the first quarter of fiscal 2023 restructuring plan. In the first quarter of fiscal 2022, the Company recorded a restructuring charge of $7.9 million. The Company did not record any significant subsequent charges related to the first quarter of fiscal 2022 restructuring plan. During the three months ended December 31, 2022 and 2021, the following activity was recorded (in thousands): Three months ended 2022 2021 Employee Severance, Benefits and Related Costs Accrued expenses, beginning of period $ — $ — Restructuring charges 8,740 7,909 Cash payments (6,354) (4,027) Accrued expenses, end of period $ 2,386 $ 3,882 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acquisition of Lilac Cloud, Inc. On January 22, 2023, the Company entered into a Merger Agreement (the “Lilac Merger Agreement”) with Lilac Cloud, Inc. ("Lilac"), a provider of innovative application delivery services. The transaction closed on February 1, 2023 with Lilac becoming a wholly-owned subsidiary of F5. The addition of Lilac’s Content Delivery Network ("CDN") technologies will enhance F5’s portfolio of solutions that secure and optimize any application and API anywhere. The acquisition of Lilac is not expected to have a material impact to the Company's operating results. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business F5, Inc. (the "Company") is a leading provider of multi-cloud application security and delivery solutions which enable its customers to develop, deploy, operate, secure, and govern applications in any architecture, from on-premises to the public cloud. The Company's cloud, software, and hardware solutions enable its customers to deliver digital experiences to their customers faster, reliably, and at scale. The Company's enterprise-grade application services are available as cloud-based, software-as-a-service, and software-only solutions optimized for multi-cloud environments, with modules that can run independently, or as part of an integrated solution on its high-performance appliances. In connection with its solutions, the Company offers a broad range of professional services, including consulting, training, installation, maintenance, and other technical support services. |
Basis of Presentation | Basis of Presentation The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for their fair statement in conformity with accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022. |
Recent Accounting Pronouncements | There have been no changes to the Company's significant accounting policies as of and for the three months ended December 31, 2022. New Accounting Pronouncements There have been no material changes in recently issued or adopted accounting standards from those disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Capitalized Contract Cost | The table below shows significant movements in capitalized contract acquisition costs (current and noncurrent) for the three months ended December 31, 2022 and 2021 (in thousands): Three months ended 2022 2021 Balance, beginning of period $ 77,220 $ 77,836 Additional capitalized contract acquisition costs 6,267 10,512 Amortization of capitalized contract acquisition costs (9,687) (9,414) Balance, end of period $ 73,800 $ 78,934 |
Contract with Customer, Asset and Liability | The table below shows significant movements in the deferred revenue balances (current and noncurrent) for the three months ended December 31, 2022 and 2021 (in thousands): Three months ended 2022 2021 Balance, beginning of period $ 1,691,580 $ 1,489,842 Amounts added but not recognized as revenues 460,408 441,591 Deferred revenue acquired through acquisition of businesses — 10,591 Revenues recognized related to the opening balance of deferred revenue (391,869) (365,525) Balance, end of period $ 1,760,119 $ 1,576,499 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The Company's financial assets measured at fair value on a recurring basis subject to the disclosure requirements at December 31, 2022 and September 30, 2022, were as follows (in thousands): Gross Unrealized Classification on Balance Sheet December 31, 2022 Fair Value Level Cost or Amortized Cost Gains Losses Aggregate Cash and Cash Equivalents Short-Term Investments Long-Term Investments Changes in fair value recorded in other comprehensive income Money Market Funds Level 1 $ 208,279 $ — $ — $ 208,279 $ 208,279 $ — $ — Corporate bonds and notes Level 2 30,908 — (613) 30,295 — 26,595 3,700 Municipal bonds and notes Level 2 2,962 — (81) 2,881 — 2,785 96 U.S. government securities Level 2 23,154 — (246) 22,908 — 22,908 — U.S. government agency securities Level 2 1,784 — (57) 1,727 — 1,727 — Total debt investments $ 267,087 $ — $ (997) $ 266,090 $ 208,279 $ 54,015 $ 3,796 Changes in fair value recorded in other net income (expense) Equity investments * $ 4,016 $ — $ — $ 4,016 Total equity investments 4,016 — — 4,016 Total investments $ 270,106 $ 208,279 $ 54,015 $ 7,812 * The fair value of this equity investment is measured at net asset value (NAV) which approximates fair value and is not classified within the fair value hierarchy . Gross Unrealized Classification on Balance Sheet September 30, 2022 Fair Value Level Cost or Amortized Cost Gains Losses Aggregate Cash and Cash Equivalents Short-Term Investments Long-Term Investments Changes in fair value recorded in other comprehensive income Money Market Funds Level 1 $ 276,294 $ — $ — $ 276,294 $ 276,294 $ — $ — Corporate bonds and notes Level 2 50,828 — (950) 49,878 912 44,356 4,610 Municipal bonds and notes Level 2 5,018 — (102) 4,916 — 3,812 1,104 U.S. government securities Level 2 84,734 — (660) 84,074 10,120 73,954 — U.S. government agency securities Level 2 5,825 — (75) 5,750 606 4,432 712 Total debt investments $ 422,699 $ — $ (1,787) $ 420,912 $ 287,932 $ 126,554 $ 6,426 Changes in fair value recorded in other net income (expense) Equity investments * $ 3,118 $ — $ — $ 3,118 Total equity investments 3,118 — — 3,118 Total investments $ 424,030 $ 287,932 $ 126,554 $ 9,544 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The allocated purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values is presented in the following table (in thousands): Estimated Useful Life Assets acquired Deferred tax assets $ 14,041 Other net tangible assets acquired, at fair value 5,481 Cash, cash equivalents, and restricted cash 911 Identifiable intangible assets: Developed technology 11,400 5 years Customer relationships 4,400 5 years Goodwill 43,282 Total assets acquired $ 79,515 Liabilities assumed Deferred revenue $ (10,591) Total liabilities assumed $ (10,591) Net assets acquired $ 68,924 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Details [Abstract] | |
Cash and Cash Equivalents | The following table provides a reconciliation of the Company's cash and cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash shown in the Company's consolidated statements of cash flows for the periods presented (in thousands): December 31, September 30, Cash and cash equivalents $ 605,739 $ 758,012 Restricted cash included in other assets, net 4,218 4,195 Total cash, cash equivalents and restricted cash $ 609,957 $ 762,207 |
Inventories | Inventories consist of the following (in thousands): December 31, September 30, Finished goods $ 9,947 $ 10,164 Raw materials 49,250 58,201 $ 59,197 $ 68,365 |
Other Current Assets | Other current assets consist of the following (in thousands): December 31, September 30, Unbilled receivables $ 333,816 $ 319,707 Prepaid expenses 74,613 57,340 Capitalized contract acquisition costs 33,828 34,658 Other 1 68,022 77,609 $ 510,279 $ 489,314 |
Other Assets, Noncurrent | Other assets, net consist of the following (in thousands): December 31, September 30, Intangible assets $ 187,367 $ 200,288 Unbilled receivables 226,120 224,780 Capitalized contract acquisition costs 39,972 42,561 Other 50,289 48,493 $ 503,748 $ 516,122 |
Accrued Liabilities | Accrued liabilities consist of the following (in thousands): December 31, September 30, Payroll and benefits $ 140,995 $ 165,437 Operating lease liabilities, current 43,397 42,523 Income and other tax accruals 79,878 41,217 Other 66,254 60,642 $ 330,524 $ 309,819 |
Noncurrent Liabilities | Other long-term liabilities consist of the following (in thousands): December 31, September 30, Income taxes payable $ 61,865 $ 59,553 Other 8,278 8,157 $ 70,143 $ 67,710 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The components of the Company's operating lease expenses for the three months ended December 31, 2022 and 2021 were as follows (in thousands): Three months ended 2022 2021 Operating lease expense $ 12,516 $ 11,914 Short-term lease expense 655 556 Variable lease expense 5,336 6,244 Total lease expense $ 18,507 $ 18,714 |
Assets And Liabilities Lessee | Supplemental balance sheet information related to the Company's operating leases was as follows (in thousands, except lease term and discount rate): December 31, 2022 September 30, 2022 Operating lease right-of-use assets, net $ 223,953 $ 227,475 Operating lease liabilities, current 1 43,397 42,523 Operating lease liabilities, long-term 267,700 272,376 Total operating lease liabilities $ 311,097 $ 314,899 Weighted average remaining lease term (in years) 9.0 9.2 Weighted average discount rate 2.70 % 2.66 % (1) Current portion of operating lease liabilities is included in accrued liabilities on the Company's consolidated balance sheets. |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2022, the future operating lease payments for each of the next five years and thereafter is as follows (in thousands): Fiscal Years Ending September 30: Operating Lease 2023 (remainder) $ 38,611 2024 48,196 2025 40,683 2026 30,812 2027 29,746 2028 27,885 Thereafter 138,747 Total lease payments 354,680 Less: imputed interest (43,583) Total lease liabilities $ 311,097 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table summarizes the Company's repurchases and retirements of its common stock under its Stock Repurchase Program (in thousands, except per share data): Three months ended 2022 2021 Shares repurchased 263 539 Average price per share $ 151.87 $ 232.14 Amount repurchased $ 40,005 $ 125,011 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Net Income Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three months ended 2022 2021 Numerator Net income $ 72,402 $ 93,559 Denominator Weighted average shares outstanding — basic 60,096 60,810 Dilutive effect of common shares from stock options and restricted stock units 291 1,072 Weighted average shares outstanding — diluted 60,387 61,882 Basic net income per share $ 1.20 $ 1.54 Diluted net income per share $ 1.20 $ 1.51 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Region | The following presents revenues by geographic region (in thousands): Three months ended 2022 2021 Americas: United States $ 375,748 $ 381,289 Other 26,410 21,702 Total Americas 402,158 402,991 EMEA 184,115 162,062 Asia Pacific 114,105 122,047 $ 700,378 $ 687,100 |
Schedule of Product Revenues by Systems and Software | The following presents net product revenues by systems and software (in thousands): Three months ended 2022 2021 Net product revenues Systems revenue $ 173,032 $ 180,157 Software revenue 167,526 162,992 Total net product revenue $ 340,558 $ 343,149 |
Schedule of Revenue by Major Customers by Reporting Segments | The following distributors of the Company's products accounted for more than 10% of total net revenue: Three months ended 2022 2021 Ingram Micro, Inc. 17.6 % 18.7 % Synnex Corporation 13.6 % 12.2 % |
Long-lived Assets by Geographic Areas | The Company tracks assets by physical location. Long-lived assets consist of property and equipment, net, and are shown below (in thousands): December 31, September 30, United States $ 129,281 $ 134,699 EMEA 21,416 17,376 Other countries 17,012 16,107 $ 167,709 $ 168,182 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Restructuring Charges [Abstract] | |
Restructuring and Related Costs | During the three months ended December 31, 2022 and 2021, the following activity was recorded (in thousands): Three months ended 2022 2021 Employee Severance, Benefits and Related Costs Accrued expenses, beginning of period $ — $ — Restructuring charges 8,740 7,909 Cash payments (6,354) (4,027) Accrued expenses, end of period $ 2,386 $ 3,882 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Capitalized contract acquisition costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Changes In Capitalized Contract Cost [Roll Forward] | ||
Beginning Balance | $ 77,220 | $ 77,836 |
Additional capitalized contract acquisition costs | 6,267 | 10,512 |
Amortization of capitalized contract acquisition costs | (9,687) | (9,414) |
Ending Balance | $ 73,800 | $ 78,934 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Contract with Customer, Liability [Roll Forward] | ||
Beginning Balance | $ 1,691,580 | $ 1,489,842 |
Amounts added but not recognized as revenues | 460,408 | 441,591 |
Deferred revenue acquired through acquisition of businesses | 0 | 10,591 |
Revenues recognized related to the opening balance of deferred revenue | (391,869) | (365,525) |
Ending Balance | $ 1,760,119 | $ 1,576,499 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Narrative (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Amortization of capitalized contract acquisition costs | $ 9,687,000 | $ 9,414,000 |
Capitalized Contract Cost, Impairment Loss | $ 0 | $ 0 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Remaining Performance Obligations (Details) $ in Billions | Dec. 31, 2022 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 1.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, percentage | 64.30% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, percentage | 22.60% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | $ 208,279 | $ 287,932 |
Debt Securities, Available-for-sale, Amortized Cost | 267,087 | 422,699 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax | (997) | (1,787) |
Fair value | 266,090 | 420,912 |
Debt Securities, Available-for-sale, Current | 54,015 | 126,554 |
Debt Securities, Available-for-sale, Noncurrent | 3,796 | 6,426 |
Equity Securities, FV-NI | 4,016 | 3,118 |
Investments, Fair Value Disclosure | 270,106 | 424,030 |
Equity Securities, FV-NI, Current | 0 | 0 |
Short-term Investments | 54,015 | 126,554 |
Equity Securities, FV-NI, Noncurrent | 4,016 | 3,118 |
Long-term investments | 7,812 | 9,544 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 208,279 | 276,294 |
Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt Securities, Available-for-sale, Amortized Cost | 30,908 | 50,828 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax | (613) | (950) |
Municipal Bonds And Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt Securities, Available-for-sale, Amortized Cost | 2,962 | 5,018 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax | (81) | (102) |
U.S. Government Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt Securities, Available-for-sale, Amortized Cost | 23,154 | 84,734 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax | (246) | (660) |
U.S. Government Agency Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Debt Securities, Available-for-sale, Amortized Cost | 1,784 | 5,825 |
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax | 0 | 0 |
Debt Securities, Available-for-Sale, Accumulated Gross Unrealized Loss, before Tax | (57) | (75) |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Equity Securities, FV-NI | 4,016 | 3,118 |
Equity Securities, FV-NI, Current | 0 | 0 |
Equity Securities, FV-NI, Noncurrent | 4,016 | 3,118 |
Fair Value, Recurring | Money Market Funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 208,279 | 276,294 |
Fair Value, Recurring | Corporate Debt Securities [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 912 | |
Fair value | 30,295 | 49,878 |
Debt Securities, Available-for-sale, Current | 26,595 | 44,356 |
Debt Securities, Available-for-sale, Noncurrent | 3,700 | 4,610 |
Fair Value, Recurring | Municipal Bonds And Notes [Member] | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Fair value | 2,881 | 4,916 |
Debt Securities, Available-for-sale, Current | 2,785 | 3,812 |
Debt Securities, Available-for-sale, Noncurrent | 96 | 1,104 |
Fair Value, Recurring | U.S. Government Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 10,120 | |
Fair value | 22,908 | 84,074 |
Debt Securities, Available-for-sale, Current | 22,908 | 73,954 |
Debt Securities, Available-for-sale, Noncurrent | 0 | 0 |
Fair Value, Recurring | U.S. Government Agency Securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 606 | |
Fair value | 1,727 | 5,750 |
Debt Securities, Available-for-sale, Current | 1,727 | 4,432 |
Debt Securities, Available-for-sale, Noncurrent | $ 0 | $ 712 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2021 USD ($) | |
Fair Value, Nonrecurring [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impairment of Intangible Assets (Excluding Goodwill) | $ 6.2 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Dec. 31, 2022 | Sep. 30, 2022 |
Fair Value of intangible Assets [Abstract] | |||
Goodwill | $ 2,259,277 | $ 2,259,282 | |
Threat Stack | |||
Assets Acquired [Abstract] | |||
Deferred tax assets | $ 14,041 | ||
Other net tangible assets acquired, at fair value | 5,481 | ||
Cash, cash equivalents, and restricted cash | $ 911 | ||
Fair Value of intangible Assets [Abstract] | |||
Identifiable intangible assets useful life | 5 years | ||
Goodwill | $ 43,282 | ||
Total assets acquired | 79,515 | ||
Liabilities Assumed Abstract [Abstract] | |||
Deferred revenue | (10,591) | ||
Total liabilities assumed | (10,591) | ||
Net assets acquired | 68,924 | ||
Threat Stack | Developed Technology Rights | |||
Fair Value of intangible Assets [Abstract] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 11,400 | ||
Identifiable intangible assets useful life | 5 years | ||
Threat Stack | Customer Relationships | |||
Fair Value of intangible Assets [Abstract] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 4,400 | ||
Identifiable intangible assets useful life | 5 years |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - Threat Stack $ in Millions | Oct. 01, 2021 USD ($) |
Business Acquisition [Line Items] | |
Total purchase price | $ 68.9 |
Identifiable intangible assets useful life | 5 years |
Developed Technology Rights | |
Business Acquisition [Line Items] | |
Identifiable intangible assets useful life | 5 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Identifiable intangible assets useful life | 5 years |
Balance Sheet Details - Cash an
Balance Sheet Details - Cash and Cash Equivalent (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Balance Sheet Details [Abstract] | ||||
Cash and cash equivalents | $ 605,739 | $ 758,012 | ||
Restricted cash included in other assets, net | 4,218 | 4,195 | ||
Total cash, cash equivalents and restricted cash | $ 609,957 | $ 762,207 | $ 515,820 | $ 584,333 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Balance Sheet Details [Abstract] | ||
Finished goods | $ 9,947 | $ 10,164 |
Raw materials | 49,250 | 58,201 |
Inventories | $ 59,197 | $ 68,365 |
Balance Sheet Details - Other C
Balance Sheet Details - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Balance Sheet Details [Abstract] | ||
Unbilled receivables | $ 333,816 | $ 319,707 |
Prepaid expenses | 74,613 | 57,340 |
Capitalized contract acquisition costs | 33,828 | 34,658 |
Other1 | 68,022 | 77,609 |
Other Assets, Current | 510,279 | 489,314 |
Deposit Assets | $ 47,500 | $ 57,000 |
Balance Sheet Details - Other A
Balance Sheet Details - Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Balance Sheet Details [Abstract] | ||
Intangible assets | $ 187,367 | $ 200,288 |
Unbilled receivables | 226,120 | 224,780 |
Capitalized contract acquisition costs | 39,972 | 42,561 |
Other | 50,289 | 48,493 |
Other Assets, Noncurrent | $ 503,748 | $ 516,122 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Balance Sheet Details [Abstract] | ||
Payroll and benefits | $ 140,995 | $ 165,437 |
Operating lease liabilities, current | 43,397 | 42,523 |
Income and other tax accruals | 79,878 | 41,217 |
Other | 66,254 | 60,642 |
Accrued Liabilities, Current | $ 330,524 | $ 309,819 |
Balance Sheet Details - Other L
Balance Sheet Details - Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Balance Sheet Details [Abstract] | ||
Income taxes payable | $ 61,865 | $ 59,553 |
Other | 8,278 | 8,157 |
Other long-term liabilities | $ 70,143 | $ 67,710 |
Debt Facilities - Narrative (De
Debt Facilities - Narrative (Details) | 3 Months Ended | ||||
Jan. 31, 2020 USD ($) | Jan. 24, 2020 USD ($) | Dec. 31, 2022 USD ($) extension | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Payments on term debt agreement | $ 350,000,000 | $ 5,000,000 | |||
Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 400,000,000 | ||||
Debt issuance costs | $ 2,200,000 | $ 200,000 | |||
Redemption percentage | 1.25% | ||||
Payments on term debt agreement | 350,000,000 | ||||
Interest Expense, Long-Term Debt | $ 3,000,000 | ||||
Long-term Debt | $ 350,000,000 | ||||
Line of Credit Facility, Interest Rate During Period | 4.072% | 1.282% | |||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.125% | ||||
Term Loan Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 350,000,000 | ||||
Conditional increase in borrowing capacity | $ 150,000,000 | ||||
Number of extensions | extension | 2 | ||||
Length of extension period | 1 year | ||||
Long-term line of credit | $ 0 | ||||
Outstanding line of credit balance | $ 350,000,000 | ||||
Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.125% | ||||
Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fee percentage | 0.30% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.125% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility | Alternate Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.125% | ||||
Revolving Credit Facility | Alternate Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.75% |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease expense | $ 12,516 | $ 11,914 |
Short-term lease expense | 655 | 556 |
Variable lease expense | 5,336 | 6,244 |
Total lease expense | $ 18,507 | $ 18,714 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 223,953 | $ 227,475 |
Operating lease liabilities, current | 43,397 | 42,523 |
Operating lease liabilities, long-term | 267,700 | 272,376 |
Total lease liabilities | $ 311,097 | $ 314,899 |
Weighted average remaining lease term (in years) | 9 years | 9 years 2 months 12 days |
Weighted average discount rate | 2.70% | 2.66% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Sep. 30, 2022 |
Leases [Abstract] | ||
2023 (remainder) | $ 38,611 | |
2024 | 48,196 | |
2025 | 40,683 | |
2026 | 30,812 | |
2027 | 29,746 | |
2028 | 27,885 | |
Thereafter | 138,747 | |
Total lease payments | 354,680 | |
Less: imputed interest | (43,583) | |
Total lease liabilities | $ 311,097 | $ 314,899 |
Leases - Narrative (Details)
Leases - Narrative (Details) ft² in Thousands, $ in Millions | 3 Months Ended |
Dec. 31, 2022 USD ($) ft² | |
Lessee, Lease, Description [Line Items] | |
Sublease Income | $ 19.1 |
Sublease income payment remainder of fiscal year | 5.4 |
Payment to be received in year one to three | $ 13.7 |
Office Building | |
Lessee, Lease, Description [Line Items] | |
Operating lease, number of square feet | ft² | 515 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Oct. 27, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Product warranty period | 1 year | |
Unrecorded Unconditional Purchase Obligation, to be Paid, Year One | $ 10 | |
Unrecorded Unconditional Purchase Obligation, to be Paid, Year Two | 10 | |
Unrecorded Unconditional Purchase Obligation, to be Paid, Year Three | 10 | |
Unrecorded Unconditional Purchase Obligation, to be Paid, Year Four | $ 10 | |
Unrecorded Unconditional Purchase Obligation, Term | 4 years | |
Unrecorded Unconditional Purchase Obligation | $ 40 | $ 31.8 |
Unrecorded Unconditional Purchase Obligation, to be Paid, Remainder of Fiscal Year | $ 1.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 24.50% | 16.30% |
Unrecognized tax benefit | $ 68.7 |
Shareholders' Equity - Class of
Shareholders' Equity - Class of Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||
Treasury Stock Acquired, Average Cost Per Share | $ 151.87 | $ 232.14 |
Stock Repurchased and Retired During Period, Value | $ 40,005 | $ 125,011 |
October Twenty Six Two Thousand Ten Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Stock Repurchased and Retired During Period, Shares | 263 | 539 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - October Twenty Six Two Thousand Ten Program - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 25, 2022 | Oct. 31, 2018 |
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 1,000 | $ 5,400 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,232 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator | ||
Net income | $ 72,402 | $ 93,559 |
Denominator | ||
Weighted average shares outstanding — basic (shares) | 60,096 | 60,810 |
Dilutive effect of common shares from stock options and restricted stock units | 291 | 1,072 |
Weighted average shares outstanding — diluted (shares) | 60,387 | 61,882 |
Basic net income per share (dollars per share) | $ 1.20 | $ 1.54 |
Diluted net income per share (dollars per share) | $ 1.20 | $ 1.51 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2022 USD ($) segment geographic_region | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 1 | ||
Number of geographic regions | geographic_region | 3 | ||
Net revenues | $ 700,378 | $ 687,100 | |
Long-lived assets | $ 167,709 | $ 168,182 | |
Net Revenue | Geographic Concentration | Ingram Micro, Inc. | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 17.60% | 18.70% | |
Net Revenue | Geographic Concentration | Synnex Corporation | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 13.60% | 12.20% | |
Product | |||
Segment Reporting Information [Line Items] | |||
Net revenues | $ 340,558 | $ 343,149 | |
Product | Systems [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 173,032 | 180,157 | |
Product | Software [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 167,526 | 162,992 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 375,748 | 381,289 | |
Long-lived assets | 129,281 | 134,699 | |
Other Americas | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 26,410 | 21,702 | |
Total Americas | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 402,158 | 402,991 | |
EMEA | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 184,115 | 162,062 | |
Long-lived assets | 21,416 | 17,376 | |
Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 114,105 | $ 122,047 | |
Other countries | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | $ 17,012 | $ 16,107 |
Restructuring Charges - Restruc
Restructuring Charges - Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Accrued expenses (Beginning balance) | $ 0 | $ 0 |
Restructuring charges | 8,740 | 7,909 |
Cash payments | (6,354) | (4,027) |
Accrued expenses (Ending balance) | $ 2,386 | $ 3,882 |
Restructuring Charges - Narrati
Restructuring Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Charges [Abstract] | ||
Restructuring charges | $ 8,740 | $ 7,909 |