Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2016 | Jan. 27, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSCOUT SYSTEMS INC | |
Entity Central Index Key | 1,078,075 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NTCT | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 91,786,929 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 244,833 | $ 210,711 |
Marketable securities | 114,870 | 128,003 |
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $8,753 and $5,069 at December 31, 2016 and March 31, 2016, respectively | 284,055 | 247,199 |
Inventories and deferred costs | 54,151 | 58,029 |
Prepaid income taxes | 18,913 | 18,137 |
Prepaid expenses and other current assets (related party balances of $3,961 and $44,161 at December 31, 2016 and March 31, 2016, respectively) | 28,808 | 78,399 |
Total current assets | 745,630 | 740,478 |
Fixed assets, net | 61,900 | 62,033 |
Goodwill | 1,720,911 | 1,709,369 |
Intangible assets, net | 959,042 | 1,054,040 |
Deferred income taxes | 2,485 | 6,206 |
Long-term marketable securities | 17,206 | 13,361 |
Other assets | 5,723 | 7,356 |
Total assets | 3,512,897 | 3,592,843 |
Current liabilities: | ||
Accounts payable (related party balances of $2,730 and $5,893 at December 31, 2016 and March 31, 2016, respectively) | 41,660 | 43,969 |
Accrued compensation | 83,459 | 82,303 |
Accrued other | 28,684 | 32,045 |
Income taxes payable | 0 | 2,091 |
Deferred revenue and customer deposits | 299,218 | 296,648 |
Total current liabilities | 453,021 | 457,056 |
Other long-term liabilities | 3,098 | 2,903 |
Deferred tax liability | 246,192 | 285,359 |
Accrued long-term retirement benefits | 29,745 | 31,378 |
Long-term deferred revenue and customer deposits | 78,206 | 68,129 |
Long-term debt | 300,000 | 300,000 |
Contingent liabilities | 4,750 | 4,636 |
Total liabilities | 1,115,012 | 1,149,461 |
Commitments and contingencies (Note 12) | ||
Preferred stock, $0.001 par value: | ||
5,000,000 shares authorized; no shares issued or outstanding at December 31, 2016 and March 31, 2016 | 0 | 0 |
Common stock, $0.001 par value: | ||
300,000,000 and 150,000,000 shares authorized; 115,620,378 and 114,495,614 shares issued and 91,786,929 and 94,088,469 shares outstanding at December 31, 2016 and March 31, 2016, respectively | 116 | 114 |
Additional paid-in capital | 2,676,852 | 2,642,745 |
Accumulated other comprehensive loss | (3,955) | (1,501) |
Treasury stock at cost, 23,833,449 and 20,407,145 shares at December 31, 2016 and March 31, 2016, respectively | (569,499) | (481,366) |
Retained earnings | 294,371 | 283,390 |
Total stockholders’ equity | 2,397,885 | 2,443,382 |
Total liabilities and stockholders’ equity | $ 3,512,897 | $ 3,592,843 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Related Party Transaction [Line Items] | ||
Accounts receivable, allowance for doubtful accounts | $ 8,753 | $ 5,069 |
Related party prepaid expenses and other current assets | 28,808 | 78,399 |
Related party accounts payable | $ 41,660 | $ 43,969 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 115,620,378 | 114,495,614 |
Common stock, shares outstanding (in shares) | 91,786,929 | 94,088,469 |
Treasury stock, shares (in shares) | 23,833,449 | 20,407,145 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Related party prepaid expenses and other current assets | $ 3,961 | $ 44,161 |
Related party accounts payable | $ 2,730 | $ 5,893 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||||
Product | $ 192,010 | $ 209,124 | $ 525,472 | $ 437,616 |
Service | 110,182 | 98,555 | 317,720 | 231,916 |
Total revenue | 302,192 | 307,679 | 843,192 | 669,532 |
Cost of revenue: | ||||
Product (related party balances of $45, $8,736, $7,108 and $16,464, respectively) | 55,296 | 77,147 | 171,770 | 165,066 |
Service (related party balances of $122, $2,225, $594 and $4,717, respectively) | 26,382 | 28,968 | 81,452 | 62,532 |
Total cost of revenue | 81,678 | 106,115 | 253,222 | 227,598 |
Gross profit | 220,514 | 201,564 | 589,970 | 441,934 |
Operating expenses: | ||||
Research and development (related party balances of $43, $4,197, $1,616, and $15,011, respectively) | 58,084 | 65,131 | 179,681 | 149,085 |
Sales and marketing (related party balances of $(49), $3,650, $2,423, and $12,728, respectively) | 83,212 | 91,386 | 241,506 | 208,631 |
General and administrative (related party balances of $307 $6,383, $3,850 and $13,446, respectively) | 28,540 | 30,973 | 90,994 | 82,477 |
Amortization of acquired intangible assets | 17,515 | 11,249 | 52,646 | 21,901 |
Restructuring charges | (199) | 572 | 1,730 | 468 |
Total operating expenses | 187,152 | 199,311 | 566,557 | 462,562 |
Income (loss) from operations | 33,362 | 2,253 | 23,413 | (20,628) |
Interest and other expense, net: | ||||
Interest income | 207 | 189 | 627 | 519 |
Interest expense | (2,260) | (2,070) | (6,783) | (4,047) |
Other expense, (net of related party balances of $0, $0, $0, and $383, respectively) | (695) | (1,022) | (1,926) | (349) |
Total interest and other expense, net | (2,748) | (2,903) | (8,082) | (3,877) |
Income (loss) before income tax expense | 30,614 | (650) | 15,331 | (24,505) |
Income tax expense | 9,369 | 23,857 | 4,350 | 248 |
Net income (loss) | $ 21,245 | $ (24,507) | $ 10,981 | $ (24,753) |
Basic net income (loss) per share (in USD per share) | $ 0.23 | $ (0.25) | $ 0.12 | $ (0.32) |
Diluted net income (loss) per share (in USD per share) | $ 0.23 | $ (0.25) | $ 0.12 | $ (0.32) |
Weighted average common shares outstanding used in computing: | ||||
Net income (loss) per share - basic (in shares) | 91,762 | 98,797 | 92,337 | 77,126 |
Net income (loss) per share - diluted (in shares) | 92,402 | 98,797 | 92,997 | 77,126 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||
Related party product | $ 55,296 | $ 77,147 | $ 171,770 | $ 165,066 |
Related party service | 26,382 | 28,968 | 81,452 | 62,532 |
Related party research and development | 58,084 | 65,131 | 179,681 | 149,085 |
Related party selling and marketing | 83,212 | 91,386 | 241,506 | 208,631 |
Related party general and administrative expense | 28,540 | 30,973 | 90,994 | 82,477 |
Related party other expenses | (695) | (1,022) | (1,926) | (349) |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party product | 45 | 8,736 | 7,108 | 16,464 |
Related party service | 122 | 2,225 | 594 | 4,717 |
Related party research and development | 43 | 4,197 | 1,616 | 15,011 |
Related party selling and marketing | (49) | 3,650 | 2,423 | 12,728 |
Related party general and administrative expense | 307 | 6,383 | 3,850 | 13,446 |
Related party other expenses | $ 0 | $ 0 | $ 0 | $ 383 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 21,245 | $ (24,507) | $ 10,981 | $ (24,753) |
Other comprehensive income (loss): | ||||
Cumulative translation adjustments | (2,022) | (568) | (2,109) | 285 |
Changes in market value of investments: | ||||
Changes in unrealized losses | (49) | (125) | (88) | (67) |
Total net change in market value of investments | (49) | (125) | (88) | (67) |
Changes in market value of derivatives: | ||||
Changes in market value of derivatives, net of tax (benefits) of ($189), ($108), ($242) and ($314), respectively | (299) | (180) | (384) | (492) |
Reclassification adjustment for net gains included in net income (loss), net of taxes of $73, $60, $77, and $718, respectively | 120 | 99 | 127 | 1,231 |
Total net change in market value of derivatives | (179) | (81) | (257) | 739 |
Other comprehensive income (loss) | (2,250) | (774) | (2,454) | 957 |
Total comprehensive income (loss) | $ 18,995 | $ (25,281) | $ 8,527 | $ (23,796) |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Changes in market value of derivatives, taxes (benefits) | $ (189) | $ (108) | $ (242) | $ (314) |
Reclassification adjustment for net gains included in net income (loss), taxes | $ 73 | $ 60 | $ 77 | $ 718 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 10,981 | $ (24,753) |
Adjustments to reconcile net income (loss) to cash provided by operating activities, net of the effects of acquisitions: | ||
Depreciation and amortization | 120,889 | 97,668 |
Loss on disposal of fixed assets | 99 | 131 |
Deal-related compensation expense and accretion charges | 114 | 6,690 |
Share-based compensation expense associated with equity awards | 30,271 | 20,400 |
Deferred income taxes | (38,257) | 6,981 |
Other gains (losses) | (371) | 8 |
Changes in assets and liabilities | ||
Accounts receivable and unbilled costs | (38,602) | (26,534) |
Due from related party | 24,679 | (5,777) |
Inventories | (2,543) | 5,167 |
Prepaid expenses and other assets | 7,587 | (36,343) |
Accounts payable | 2,445 | 13,670 |
Accrued compensation and other expenses | 2,926 | 35,236 |
Due to related party | (506) | (4,329) |
Income taxes payable | (2,071) | (107) |
Deferred revenue | 14,285 | (31,510) |
Net cash provided by operating activities | 131,926 | 56,598 |
Cash flows from investing activities: | ||
Purchase of marketable securities | (135,737) | (74,667) |
Proceeds from maturity of marketable securities | 144,937 | 88,852 |
Purchase of fixed assets | (21,699) | (14,007) |
Purchase of intangible assets | (1,022) | (154) |
Decrease (increase) in deposits | 22 | (25) |
Acquisition of businesses, net of cash acquired | (4,606) | 27,701 |
Contingent purchase consideration | 660 | 0 |
Collection of contingently returnable consideration | 12,864 | 8,750 |
Change in restricted cash | (660) | 0 |
Capitalized software development costs | (1,346) | (1,148) |
Net cash (used in) provided by investing activities | (6,587) | 35,302 |
Cash flows from financing activities: | ||
Issuance of common stock under stock plans | 2 | 1 |
Treasury stock repurchases | (88,133) | (212,426) |
Proceeds from issuance of long-term debt, net of issuance costs | 0 | 244,623 |
Excess tax benefit from share-based compensation awards | (1,091) | 1,786 |
Net cash (used in) provided by financing activities | (89,222) | 33,984 |
Effect of exchange rate changes on cash and cash equivalents | (1,995) | (256) |
Net increase in cash and cash equivalents | 34,122 | 125,628 |
Cash and cash equivalents, beginning of period | 210,711 | 104,893 |
Cash and cash equivalents, end of period | 244,833 | 230,521 |
Non-cash transactions: | ||
Transfers of inventory to fixed assets | 4,928 | 1,855 |
Additions to property, plant and equipment included in accounts payable | 1,057 | 316 |
Debt issuance costs settled through the issuance of additional debt | 0 | 5,377 |
Gross increase in contingently returnable consideration asset relating to fair value adjustment | 0 | 3,676 |
Issuance of common stock under employee stock plans | 6,943 | 3,028 |
Contingent consideration related to acquisition, included in accrued other | 660 | 0 |
Purchase of business | ||
Non-cash transactions: | ||
Noncash acquisition consideration | 0 | 2,276,235 |
Contingently returnable consideration | ||
Non-cash transactions: | ||
Noncash acquisition consideration | $ 0 | $ 29,376 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations and cash flows. The year-end consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. On July 14, 2015, or the Closing Date, the Company completed the acquisition of Danaher Corporation’s (Danaher) Communications Business (Communications Business), which included certain assets, liabilities, technology and employees within Tektronix Communications, VSS Monitoring, Arbor Networks and certain portions of the Fluke Networks Enterprise business, which excluded Danaher’s data communications cable installation business and its communication service provider business (the Comms Transaction). The Comms Transaction is more fully described in Note 7. The Comms Transaction was recorded using the acquisition method of accounting; accordingly, the financial results of the acquisition are included in the accompanying unaudited interim consolidated financial statements for the periods subsequent to the acquisition. During the second quarter of fiscal year 2017, as part of its continued integration of the Communication Business, the Company realigned its organizational structure. As a result, the Company accounts for its operations under one operating segment. For additional information, see Note 17 of the Company's Notes to Consolidated Financial Statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 filed with the SEC on May 31, 2016. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance and does not believe ASU 2016-18 will have a material impact on its consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-16 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning April 1, 2017. The Company is currently assessing the potential impact of the adoption of ASU 2016-09 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-04, 2016-08, ASU 2016-10 and ASU 2016-12, respectively ( ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12 collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company in the first quarter of its fiscal year 2019. Early adoption is not permitted. The Company is currently assessing the potential impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | 9 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS Financial instruments that potentially subject us to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At December 31, 2016 , the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. At March 31, 2016, the Company had one direct customer which accounted for more than 10% of the accounts receivable balance, while no indirect channel partner accounted for more than 10% of the accounts receivable balance. During the three and nine months ended December 31, 2016 , one direct customer accounted for more than 10% of the Company's total revenue, while no indirect channel partner accounted for more than 10% of total revenue. During the three and nine months ended December 31, 2015 , one direct customer accounted for more than 10% of the Company's total revenue, while no indirect channel partner accounted for more than 10% of total revenue. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has a receivable from related parties that represents a concentration of credit risk of $4.0 million and $44.2 million at December 31, 2016 and March 31, 2016, respectively. See Note 19 of the Company's Notes to Consolidated Financial Statements for further information regarding the details of these balances. Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company’s assumptions are incorrect, there could be an adverse impact on its allowance for doubtful accounts. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The following is a summary of share-based compensation expense including restricted stock units and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Cost of product revenue $ 255 $ 196 $ 716 $ 465 Cost of service revenue 1,015 721 3,058 1,848 Research and development 3,456 2,579 9,961 6,641 Sales and marketing 3,367 2,718 9,704 6,361 General and administrative 2,368 2,072 6,832 5,069 $ 10,461 $ 8,286 $ 30,271 $ 20,384 Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2016 . Under the ESPP, shares of the Company’s common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the nine months ended December 31, 2016, employees purchased 234,745 shares under the ESPP and the value per share was $29.58 . |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 9 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents consisted of money market instruments and cash maintained with various financial institutions at December 31, 2016 and March 31, 2016 . Marketable Securities The following is a summary of marketable securities held by NetScout at December 31, 2016 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 89,067 $ (33 ) $ 89,034 Commercial paper 21,153 — 21,153 Corporate bonds 4,685 (2 ) 4,683 Total short-term marketable securities 114,905 (35 ) 114,870 U.S. government and municipal obligations 17,243 (37 ) 17,206 Total long-term marketable securities 17,243 (37 ) 17,206 Total marketable securities $ 132,148 $ (72 ) $ 132,076 The following is a summary of marketable securities held by NetScout at March 31, 2016 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 109,963 $ 4 $ 109,967 Commercial paper 16,172 — 16,172 Corporate bonds 1,864 — 1,864 Total short-term marketable securities 127,999 4 128,003 U.S. government and municipal obligations 13,349 12 13,361 Total long-term marketable securities 13,349 12 13,361 Total marketable securities $ 141,348 $ 16 $ 141,364 Contractual maturities of the Company’s marketable securities held at December 31, 2016 and March 31, 2016 were as follows (in thousands): December 31, March 31, Available-for-sale securities: Due in 1 year or less $ 114,870 $ 128,003 Due after 1 year through 5 years 17,206 13,361 $ 132,076 $ 141,364 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company’s financial assets and liabilities measured on a recurring basis using the fair value hierarchy at December 31, 2016 and March 31, 2016 (in thousands): Fair Value Measurements at December 31, 2016 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 244,833 $ — $ — $ 244,833 U.S. government and municipal obligations 35,384 70,856 — 106,240 Commercial paper — 21,153 — 21,153 Corporate bonds 4,683 — — 4,683 Derivative financial instruments — 9 — 9 $ 284,900 $ 92,018 $ — $ 376,918 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,410 ) $ (5,410 ) Derivative financial instruments — (391 ) — (391 ) $ — $ (391 ) $ (5,410 ) $ (5,801 ) Fair Value Measurements at March 31, 2016 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 210,711 $ — $ — $ 210,711 U.S. government and municipal obligations 41,116 82,212 — 123,328 Commercial paper — 16,172 — 16,172 Corporate bonds 1,864 — — 1,864 Derivative financial instruments — 191 — 191 Contingently returnable consideration — — 16,131 16,131 $ 253,691 $ 98,575 $ 16,131 $ 368,397 LIABILITIES: Contingent purchase consideration $ — $ — $ (7,293 ) $ (7,293 ) Derivative financial instruments — (158 ) — (158 ) $ — $ (158 ) $ (7,293 ) $ (7,451 ) This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments. The Company’s Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. The Company’s Level 2 investments are classified as such because fair value is calculated using market observable data for similar but not identical instruments, or a discounted cash flow model using the contractual interest rate as compared to the underlying interest yield curve. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level 2 because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. The Company classifies municipal obligations as level 2 because the fair values are determined using quoted prices from markets the Company considers to be inactive. Commercial paper is classified as Level 2 because the Company uses market information from similar but not identical instruments and discounted cash flow models based on interest rate yield curves to determine fair value. The Company's Level 3 asset and liabilities consist of contingently returnable consideration and contingent purchase consideration, respectively. The Company's contingently returnable consideration at March 31, 2016 represents a contingent right of return from Danaher to reimburse NetScout for cash awards to be paid by NetScout to employees of the Communications Business transferred to Newco (as defined below) for post-combination services on various dates through August 4, 2016 as part of the Comms Transaction. The contingently returnable consideration is classified as Level 3 because the fair value of the asset was determined using assumptions developed by management in determining the estimated cash awards paid on August 4, 2016 after applying an assumed forfeiture rate. There was no contingently returnable consideration or contingent purchase consideration related to the Comms Transaction at December 31, 2016 as Danaher reimbursed NetScout for these cash awards during fiscal year 2017. The Company's contingent purchase consideration at December 31, 2016 includes $660 thousand related to the acquisition of certain assets and liabilities of Avvasi Inc. (Avvasi) in the second quarter of fiscal year 2017. The contingent purchase consideration represents amounts deposited into an escrow account, which was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the asset purchase agreement. The contingent purchase consideration is included as accrued other in the Company's consolidated balance sheet as of December 31, 2016 . The fair value of contingent purchase consideration related to the acquisition of Simena LLC (Simena) in November 2011 for future consideration to be paid to the former seller is $4.8 million at December 31, 2016. The contingent purchase consideration is included as contingent liabilities in the Company's consolidated balance sheet at December 31, 2016 and March 31, 2016. The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial assets and liabilities for the nine months ended December 31, 2016 (in thousands): Contingent Purchase Consideration Contingently Returnable Consideration Balance at March 31, 2016 $ (7,293 ) $ 16,131 Additions to Level 3 (660 ) — Increase in fair value and accretion expense (included within research and development expense) (114 ) — Decrease in fair value — (610 ) Gross presentation of contingently returnable consideration to contingent purchase consideration (3,910 ) 3,910 Payment received — (19,431 ) Payments made 6,567 — Balance at December 31, 2016 $ (5,410 ) $ — Deal-related compensation expense and accretion charges related to the contingent consideration for the nine months ended December 31, 2016 was $114 thousand and was included as part of earnings. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands): December 31, March 31, Raw materials $ 24,629 $ 18,617 Work in process 1,628 651 Finished goods 27,894 38,761 $ 54,151 $ 58,029 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Avvasi On August 19, 2016, the Company acquired certain assets and liabilities of Avvasi for $4.6 million . Avvasi’s technology allows service providers to measure, improve and monetize video in their networks. This acquisition builds on the Company's ongoing investment to enhance its service assurance capabilities for video traffic over 4G/LTE networks. The Company completed the purchase accounting related to the Avvasi acquisition in the second quarter of fiscal year 2017. The following table summarizes the allocation of the purchase price (in thousands): Initial cash payment $ 3,946 Estimated fair value of contingent purchase consideration 660 Estimated Purchase Price $ 4,606 Estimated fair value of assets acquired and liabilities assumed: Accounts receivable $ 103 Inventories 85 Prepaid and other current assets 32 Property, plant and equipment 43 Intangible assets 2,760 Accounts payable (1 ) Accrued compensation (49 ) Deferred revenue (317 ) Goodwill $ 1,950 Of the total consideration, $660 thousand was deposited into an escrow account. The escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the asset purchase agreement. Generally, indemnification claims that Avvasi would be liable for are limited to the total amount of the escrow account and shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Avvasi's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $660 thousand will be paid to the seller on August 21, 2017. In connection with the Avvasi acquisition, certain former employees of Avvasi will receive cash retention payments subject to such employee's continued employment with the Company through two specified dates: August 21, 2017 and August 20, 2018. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment is automatically forfeited upon termination of employment. The Company will record the liability over the period it is earned as compensation expense for post-combination services. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $2.0 million from the acquisition was included within the Service Assurance reporting unit. Goodwill and intangible assets recorded as part of the acquisition are deductible for tax purposes. The fair values of intangible assets were based on valuations using an income approach. These assumptions include estimates of future revenues associated with the technology purchased as part of the acquisition and the migration of the current technology to a more advanced version of the software. This fair value measurement was based on significant inputs not observable in the market and thus represents Level 3 fair value measurements. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 1,730 9 Customer relationships 1,030 14 $ 2,760 The weighted average useful life of identifiable intangible assets acquired from Avvasi is 10.9 years. Communications Business On July 14, 2015 (Closing Date), the Company completed the Comms Transaction, which was structured as a Reverse Morris Trust transaction whereby Danaher contributed its Communications Business to a new subsidiary, Potomac Holding LLC (Newco). The total equity consideration was approximately $2.3 billion based on issuing approximately 62.5 million new shares of NetScout common stock to the existing common unit holders of Newco, based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. On the Closing Date, the Company did not gain control over certain foreign entities due to regulatory and other compliance requirements (Delayed Close Entities). The Company closed on the acquisition of these Delayed Close Entities on October 7, 2015. The Comms Transaction was accounted for under the acquisition method of accounting with the operations of the Communications Business included in the Company’s operating results from the relevant date of acquisition. The acquisition method of accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The determination of the fair value of assets acquired and liabilities assumed has been recognized based on management's estimates and assumptions using the information about facts and circumstances that existed at the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed on the acquisition date, its estimates and assumptions are subject to refinement. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company's results of operations. The finalization of the purchase accounting assessment may result in a change in the valuation of assets acquired and liabilities assumed. As a result, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill to reflect additional information received about facts and circumstances which existed at the date of acquisition. The Company records adjustments to the assets acquired and liabilities assumed subsequent to the purchase price allocation period in the Company’s operating results in the period in which the adjustments were determined. During the six months ended September 30, 2016, the Company identified measurement period adjustments that impacted the estimated fair value of the assets and liabilities assumed on July 14, 2015 as a result of new information obtained about the facts and circumstances that existed as of the Closing Date. The table below, which summarizes the allocation of the purchase price for the entities acquired on July 14, 2015, has been updated to reflect these measurement period adjustments. The total measurement period adjustments resulted in a decrease in prepaid expenses and other current assets of $0.2 million , an increase in deferred income taxes of $0.7 million , an increase in deferred tax liabilities of $3.3 million and an overall increase in goodwill of $2.8 million . This change to the provisional amounts of fair value of the assets and liabilities assumed had no impact on the Statement of Operations for the year ended March 31, 2016 or the quarters ended June 30, 2016 and September 30, 2016. The Company completed the purchase accounting related to the Comms Transaction during the second quarter of fiscal year 2017. In connection with the Comms Transaction, under the Employee Matters Agreement dated July 14, 2015 by and among the Company, Danaher and Newco, Danaher funded certain contracts under which employees provided post-combination services to the Company. 1) For any outstanding Danaher restricted stock units or stock options held by employees of the Communications Business transferred to Newco (Newco Employees) that vested from July 14, 2015 through August 4, 2015, the awards continued to vest in Danaher shares. These awards met the definition of a derivative under ASC 815 and as such, the Company determined the fair value of these awards on July 14, 2015 and recorded them separately from the business combination as prepaid compensation. The derivative was amortized into compensation expense through August 4, 2015, the post-combination requisite settlement date. The total amount of compensation expense for post-combination services recorded for the three and nine months ended December 31, 2015 was $0.0 and $6.5 million , respectively. 2) All outstanding Danaher restricted stock units or stock options held by Newco Employees that were due to vest after August 4, 2015 were cancelled and replaced by NetScout with a cash retention award equal to one half of the value of the employee’s cancelled Danaher equity award and up to an aggregate of $15 million of restricted stock units relating to shares of NetScout common stock equal to the remaining one half of the value of the employee’s cancelled Danaher equity award. The restricted stock units issued are considered new share-based payment awards granted by NetScout to the former employees of Danaher. NetScout accounted for these new awards separately from the business combination. The Company recognized share-based compensation net of an estimated forfeiture rate and only recognized compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. The cash retention award was paid on August 4, 2016, to those employees that continued their employment with NetScout through the applicable vesting date of August 4, 2016. Danaher reimbursed NetScout for the amount of the cash retention payments (net of any applicable employment taxes and tax deductions). The cash retention award liability was accounted for separately from the business combination as the cash retention award was automatically forfeited upon termination of employment. NetScout recorded the cash retention award liability over the period it was earned as compensation expense for post-combination services. The reimbursement by Danaher to NetScout of the cash retention award payment was accounted for separately from the business combination on the date of the acquisition. For the three and nine months ended December 31, 2016 , $0.0 and $4.3 million , respectively, was recorded as compensation expense for post-combination services. For the three and nine months ended December 31, 2015, $2.8 million and $5.4 million , respectively, was recorded as compensation expense for post-combination services. 3) Newco Employees that were entitled to receive an incentive bonus under the Danaher annual bonus plan and who continued to be employed by NetScout through December 31, 2015 received a cash incentive bonus payment. The cash incentive bonus liability was accounted for separately from the business combination as the cash incentive bonus is automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. For the three and nine months ended December 31, 2015, $5.2 million and $9.3 million , respectively, was recorded as compensation for post-combination services. 4) Certain Newco Employees received cash retention payments that were subject to the employee’s continued employment with NetScout through October 16, 2015, ninety ( 90 ) days after the close of the acquisition. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment was automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. For the three and nine months ended December 31, 2015, $1.1 million and $7.8 million , respectively, was recorded as compensation for post-combination services. The following table summarizes the allocation of the purchase price for the entities acquired on July 14, 2015 (in thousands): Purchase Price Allocation: Total equity consideration $ 2,299,911 (1) Less: Equity consideration for replacement awards (29,355 ) (2) Estimated Purchase Price $ 2,270,556 Estimated fair value of assets acquired and liabilities assumed: Cash 27,701 Accounts receivable 140,586 Inventories 80,719 Prepaid expenses and other assets 6,519 Property, plant and equipment 36,825 Deferred income taxes 13,803 Intangible assets 1,080,700 Other assets 999 Accounts payable (21,311 ) Accrued compensation (24,316 ) Accrued other (12,916 ) Deferred revenue (187,882 ) Other long-term liabilities (3,615 ) Accrued retirement benefits (29,917 ) Deferred tax liabilities (348,004 ) Goodwill $ 1,510,665 (1) Represents approximately 62.5 million new shares (plus cash in lieu of fractional shares) of NetScout common stock issued to the existing common unit holders of Newco based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share, less the fair value attributable to the foreign entities that the Company did not obtain control over on July 14, 2015 due to regulatory and other compliance requirements. (2) Represents the value of certain outstanding Danaher equity awards held by Newco Employees for which continuing employees received, or will receive value after the Closing Date. A portion of this amount relates to awards that continued to vest in Danaher shares after the Closing Date. These future compensation amounts were settled in shares other than shares of the acquired business. The balance of this amount also represents future compensation expense and relates to cash awards which were paid by NetScout to acquired Newco employees on August 4, 2016. The cash payments by NetScout were reimbursed by Danaher. These items are further described in the Employee Matters Agreement dated July 14, 2015 by and among NetScout Systems, Inc., Danaher Corporation and Potomac Holding LLC and have been accounted for separately from the Comms Transaction. The following table summarizes the allocation of the purchase price for the Delayed Close Entities acquired on October 7, 2015 (in thousands): Purchase Price Allocation: Total equity consideration $ 5,700 (1) Estimated Purchase Price $ 5,700 Estimated fair value of assets acquired and liabilities assumed: Accounts receivable $ 110 Inventories 78 Prepaid expenses and other assets 35 Property, plant and equipment 1,254 Other assets 281 Accounts payable (8 ) Accrued compensation (824 ) Accrued other (176 ) Deferred revenue (65 ) Other long-term liabilities (126 ) Goodwill $ 5,141 (1 ) Represents the fair value attributable to the Delayed Close Entities that the Company obtained control over on October 7, 2015. The Comms Transaction was aimed at extending the Company's reach into growth-oriented adjacent markets, including cyber security, with a broader range of market-leading products and capabilities; strengthening the Company's go-to-market resources to better support a larger, more diverse and more global customer base; and increasing scale and elevating the Company's strategic position within key accounts. Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill of $1.5 billion from the acquisition was included within the following reporting units: $534.8 million in the Security reporting unit and $976.5 million in the Service Assurance reporting unit. All reporting units resulting from the Comms Transaction will be included in the Company's annual goodwill impairment review. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. The fair values of intangible assets were based on valuations using an income approach. These assumptions include estimates of future revenues associated with the technology purchased as part of the acquisition and the migration of the current technology to a more advanced version of the software. This fair value measurement was based on significant inputs not observable in the market and thus represents Level 3 fair value measurements. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 221,900 9 - 13 Customer relationships 794,100 13 - 18 Backlog 18,200 1 - 3 Definite lived trademark and trade names 43,900 3 - 9 Leasehold interest 2,600 4 - 6 $ 1,080,700 The weighted average useful life of identifiable intangible assets acquired in the Comms Transaction is 14.7 years . Developed technology is amortized using an accelerated amortization method and has a weighted average useful life of 11.7 years . Customer relationships are amortized using an accelerated amortization method and have a weighted average useful life of 16.3 years . Backlog is amortized using an accelerated amortization method and has a weighted average useful life of 2.0 years . Trademarks and trade names are amortized using an accelerated amortization method and have a weighted average useful life of 8.5 years . Leasehold interests are amortized on a straight-line basis and have a weighted average useful life of 5.6 years . The Company incurred approximately $0 and $23.7 million of acquisition-related costs related to the Comms Transaction during the nine months ended December 31, 2016 and 2015, respectively. During the nine months ended December 31, 2016 , the Company has recorded $523.3 million of revenue and a net loss of $9.4 million directly attributable to the entities acquired as part of the Comms Transaction within its consolidated financial statements. The following table presents unaudited pro forma results of the historical Consolidated Statements of Operations of the Company and the Communications Business of Danaher for the three and nine months ended December 31, 2015, giving effect to the Comms Transaction as if they occurred on April 1, 2014 (in thousands, except per share data): Three Months Ended Nine Months Ended December 31, 2015 December 31, 2015 Pro forma revenue $ 307,679 $ 845,739 Pro forma net loss $ (24,507 ) $ (55,190 ) Pro forma net loss per share: Basic $ (0.25 ) $ (0.55 ) Diluted $ (0.25 ) $ (0.55 ) Pro forma shares outstanding Basic 98,797 100,762 Diluted 98,797 100,762 The pro forma results for the three and nine months ended December 31, 2015 primarily include adjustments for amortization of intangibles. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisitions been completed on the assumed date, or which may be realized in the future. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill We assess goodwill for impairment at the reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. Through the first quarter of fiscal year 2017, the Company had five reporting units: (1) legacy NetScout, (2) cybersecurity (Arbor Networks), (3) service assurance product lines focused on the service provider market (formerly known as Tektronix Communications), (4) network visibility product lines (formerly known as VSS Monitoring) and (5) service assurance product lines primarily focused on the enterprise market (formerly known as FNET). As part of its continued integration efforts of the Communication Business acquisition, effective July 1, 2016, the Company reorganized its business units. As a result of this change, the Company reduced the number of reporting units from five reporting units to two reporting units. The two reporting units are: (1) Service Assurance and (2) Security. The former cybersecurity reporting unit was aggregated within the Security reporting unit along with portions of the legacy NetScout business while all other former reporting units were aggregated into the Service Assurance reporting unit. Our reporting units are determined based on the components of our operating segments that constitute a business for which financial information is available and for which operating results are regularly reviewed by segment management. As a result of the reduction in reporting units, the Company completed a quantitative impairment analysis for goodwill as of July 1, 2016. To conduct the impairment test, the Company performed a quantitative step 1 analysis, on a before and after basis, and concluded the estimated fair values of each of the Company’s current and former reporting units exceeded their respective carrying values both immediately prior to and subsequent to the change. The Company determined the fair values of its reporting units by preparing a discounted cash flow analysis using forward looking projections of the reporting units’ future operating results and by comparing the value of the reporting units to the implied market value of selected peers. The significant assumptions used in the discounted cash flow analysis include: revenue and revenue growth, selling margins, other operating expenditures, the discounted rate used to present value future cash flows and terminal growth rates. The discount rate used is a cost of equity method, which is essentially equal to the “market participant” weighted-average cost of capital (WACC). The Service Assurance reporting unit's goodwill fair value substantially exceeded its carrying value. The Security reporting unit's goodwill fair value did not substantially exceed its carrying value. The Company performed a sensitivity analysis on the significant assumptions used to determine the fair value of the Security reporting unit and has determined that a reasonable, negative change in its assumptions, as follows, would not impact our conclusion: decrease projected revenue growth by 2% , decrease selling margin by 4% , decrease the operating margin by 5% or increase the WACC by 200 basis points . At December 31, 2016 , goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $548.1 million , respectively. At March 31, 2016, goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $547.4 million , respectively. Goodwill is tested for impairment at a reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. The change in the carrying amount of goodwill for the nine months ended December 31, 2016 is due to the acquisition of Avvasi, purchase accounting adjustments, and the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. The changes in the carrying amount of goodwill for the nine months ended December 31, 2016 are as follows (in thousands): Balance at March 31, 2016 $ 1,709,369 Goodwill attributable to the Avvasi acquisition 1,950 Purchase accounting adjustments 2,817 Foreign currency translation impact and other adjustments 6,775 Balance at December 31, 2016 $ 1,720,911 Intangible Assets The net carrying amounts of intangible assets were $959.0 million and $ 1.1 billion at December 31, 2016 and March 31, 2016 , respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General Central Corporation (Network General) acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite-lived trade name is evaluated for potential impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at December 31, 2016 (in thousands): Cost Accumulated Amortization Net Developed technology $ 253,105 $ (99,665 ) $ 153,440 Customer relationships 828,592 (89,384 ) 739,208 Distributor relationships 7,237 (2,366 ) 4,871 Definite-lived trademark and trade name 43,681 (10,394 ) 33,287 Core technology 7,052 (5,785 ) 1,267 Net beneficial leases 336 (336 ) — Non-compete agreements 269 (269 ) — Leasehold interest 2,600 (852 ) 1,748 Backlog 18,045 (15,205 ) 2,840 Capitalized software 2,971 (368 ) 2,603 Technical licenses 1,000 (167 ) 833 Other 1,206 (861 ) 345 $ 1,166,094 $ (225,652 ) $ 940,442 Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2016 (in thousands): Cost Accumulated Amortization Net Developed technology $ 253,249 $ (69,810 ) $ 183,439 Customer relationships 834,091 (42,526 ) 791,565 Distributor relationships 5,348 (1,633 ) 3,715 Definite-lived trademark and trade name 43,964 (5,511 ) 38,453 Core technology 7,169 (4,659 ) 2,510 Net beneficial leases 336 (336 ) — Non-compete agreements 288 (288 ) — Leasehold interest 2,600 (416 ) 2,184 Backlog 18,245 (6,750 ) 11,495 Capitalized software 1,625 — 1,625 Other 1,191 (737 ) 454 $ 1,168,106 $ (132,666 ) $ 1,035,440 Amortization included as product revenue consists of amortization of backlog. Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and nine months ended December 31, 2016 and 2015, respectively. Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Amortization of intangible assets included as: Product revenue $ 2,850 $ 2,357 $ 8,596 $ 4,385 Cost of product revenue 11,773 14,765 33,202 30,330 Operating expense 17,548 11,291 52,811 22,027 $ 32,171 $ 28,413 $ 94,609 $ 56,742 The following is the expected future amortization expense at December 31, 2016 for the fiscal years ending March 31 (in thousands): 2017 (remaining three months) $ 31,597 2018 111,239 2019 105,790 2020 97,535 2021 85,111 Thereafter 509,170 $ 940,442 The weighted average amortization period of developed technology and core technology is 11.5 years . The weighted average amortization period for customer and distributor relationships is 16.1 years . The weighted average amortization period for trademarks and trade names is 8.5 years . The weighted average amortization period for leasehold interests is 5.6 years . The weighted average amortization period for backlog is 2.0 years . The weighted average amortization period for capitalized software is 4.0 years . The weighted average amortization period for amortizing all intangible assets is 14.6 years . |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception. All of the Company’s derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity. The notional amounts and fair values of derivative instruments in the consolidated balance sheets at December 31, 2016 and March 31, 2016 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other December 31, March 31, December 31, March 31, December 31, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 8,621 $ 17,490 $ 9 $ 191 $ 391 $ 158 (a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Loss Recognized in Gain Reclassified from Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Forward contracts $ (488 ) $ (288 ) Research and development $ 12 $ 46 Research and development $ 39 $ 39 Sales and marketing 181 113 Sales and marketing (21 ) — $ (488 ) $ (288 ) $ 193 $ 159 $ 18 $ 39 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the nine months ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Effective Portion Ineffective Portion Loss Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Forward contracts $ (626 ) $ (806 ) Research and $ (6 ) $ 132 Research and $ 70 $ 102 Sales and 210 1,817 Sales and (113 ) (21 ) $ (626 ) $ (806 ) $ 204 $ 1,949 $ (43 ) $ 81 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On July 14, 2015, the Company entered into a certain credit facility with a syndicate of lenders pursuant to a Credit Agreement (Credit Agreement), dated as of July 14, 2015, by and among: the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Credit Agreement provides for a five -year, $800 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $50 million . The Company may elect to use the new credit facility for working capital purposes or repurchase of up to 20 million shares of common stock under the Company's common stock repurchase plan. The commitments under the Credit Agreement will expire on July 14, 2020, and any outstanding loans will be due on that date. At December 31, 2016 , $300 million was outstanding under this credit facility. At the Company’s election, revolving loans under the Credit Agreement bear interest at either (a) an Alternate Base Rate per annum equal to the greatest of (1) JPMorgan’s prime rate, (2) 0.50% in excess of the Federal Funds effective rate, or (3) an adjusted one month LIBOR rate plus 1% ; or (b) such adjusted LIBOR rate (for the interest period selected by the Company), in each case plus an applicable margin. For the period from the delivery of the Company's financial statements for the quarter ended September 30, 2016 until the Company has delivered financial statements for the quarter ended December 31, 2016, the applicable margin will be 1.50% per annum for LIBOR loans and 0.50% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company’s leverage ratio, ranging from 1.00% per annum for Base Rate loans and 2.00% per annum for LIBOR loans if the Company’s consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.25% per annum for Alternate Base Rate loans and 1.25% per annum for LIBOR loans if the Company’s consolidated leverage ratio is equal to or less than 1.00 to 1.00. The Company’s consolidated leverage ratio is the ratio of its total funded debt compared to its consolidated adjusted EBITDA. Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the definition of Consolidated EBITDA in the Credit Agreement. Commitment fees will accrue on the daily unused amount of the credit facility. For the period from the delivery of the Company's financial statements for the quarter ended September 30, 2016 until the Company has delivered financial statements for the quarter ended December 31, 2016, the commitment fee will be 0.25% per annum, and thereafter the commitment fee will vary depending on the Company’s consolidated leverage ratio, ranging from 0.35% per annum if the Company’s consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.20% per annum if the Company’s consolidated leverage ratio is equal to or less than 1.00 to 1.00. Letter of credit participation fees are payable to each lender on the amount of such lender’s letter of credit exposure, during the period from the closing date of the Credit Agreement to but excluding the date which is the later of (i) the date on which such lender’s commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for LIBOR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank. Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on LIBOR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. The Company may also prepay loans under the Credit Agreement at any time, without penalty, subject to certain notice requirements. Debt is recorded at the amount drawn on the revolving credit facility plus interest based on floating rates reflective of changes in the market which approximates fair value. The loans and other obligations under the credit facility are (a) guaranteed by each of the Company’s wholly owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) are secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Credit Agreement. The Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. In addition, the Company is required to maintain certain consolidated leverage and interest coverage ratios. These covenants and limitations are more fully described in the Credit Agreement. At December 31, 2016 , the Company was in compliance with all of these covenants. The Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amount of the loans and commitments may terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Credit Agreement and the other loan documents. In connection with the Company’s new revolving credit facility described above, effective as of the Closing Date, the Company terminated its existing term loan and revolving credit facility pursuant to the Credit and Security Agreement, dated as of November 22, 2011, by and among the Company, KeyBank National Association, as joint lead arranger, sole book runner and administrative agent, Wells Fargo Bank, National Association, as joint lead arranger and co-syndication agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger, Bank of America, N.A., as co-syndication agent, and Silicon Valley Bank and Comerica Bank, as co-documentation agents, and the Lenders party thereto. The Company capitalized $6.6 million of debt issuance costs associated with the origination of the Credit Agreement, which are being amortized over the life of the revolving credit facility. The unamortized balance was $4.7 million as of December 31, 2016 . A balance of $1.3 million is included as prepaid expenses and other current assets and a balance of $3.4 million is included as other assets in Company’s consolidated balance sheet. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES During the fiscal year ended March 31, 2016, the Company recorded a restructuring charge of $500 thousand related to one-time termination benefits to be paid to one employee, which was the completion of a plan that was required as a closing condition for the Comms Transaction. During the quarter ended June 30, 2016, the Company restructured certain departments to better align functions subsequent to the Comms Transaction. As a result of the restructuring program, the Company recorded $2.0 million of restructuring charges related to one-time termination benefits to be paid to nineteen employees which was recorded in the nine months ended December 31, 2016. The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): Q3 FY2016 Plan Q1 FY2017 Plan Employee-Related Employee-Related Total Balance at March 31, 2016 $ 272 $ — $ 272 Restructuring charges to operations — 2,034 2,034 Cash payments (272 ) (1,524 ) (1,796 ) Other adjustments — (305 ) (305 ) Balance at December 31, 2016 $ — $ 205 $ 205 The accrual for employee-related severance is included as accrued compensation in the Company's consolidated balance sheet. The balance is expected to be paid in full in the next twelve months. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition related – The Company has a contingent liability related to the acquisition of Simena in November 2011 for future consideration to be paid to the former seller which had an initial fair value of $8.0 million at the time of acquisition. At December 31, 2016 , the present value of the future consideration was $4.8 million . In addition, the Company has a contingent liability for $660 thousand related to the acquisition of Avvasi in August 2016 for which an escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the sellers as described in the asset purchase agreement. Generally, indemnification claims that Avvasi would be liable for are limited to the total amount of the escrow account, which shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Avvasi's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $660 thousand will be paid to the seller on August 21, 2017. Legal – From time to time, NetScout is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, the amount of ultimate expense with respect to any current legal proceedings and claims, if determined adversely, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
PENSION BENEFIT PLANS
PENSION BENEFIT PLANS | 9 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the Comms Transaction. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan’s funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors. The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and nine months ended December 31, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Service cost $ 103 $ 49 $ 268 $ 98 Interest cost 199 75 520 150 Amortization of net loss — 80 — 160 Net periodic pension cost $ 302 $ 204 $ 788 $ 408 Expected Contributions During the nine months ended December 31, 2016 , the Company made contributions of $169 thousand to its defined benefit pension plans. During the fiscal year ending March 31, 2017, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million . As a majority of the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future. Other Matters Substantially all employees not covered by defined benefit plans are covered by defined contribution plans, which generally provide for company funding based on a percentage of compensation. Expense for all defined contribution plans amounted to $1.9 million and $7.2 million for the three and nine months ended December 31, 2016 , respectively and $2.3 million and $5.1 million for the three and nine months ended December 31, 2015 , respectively. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 9 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY | STOCKHOLDERS EQUITY On September 20, 2016, the stockholders of the Company approved an amendment to the Third Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock, par value $0.001 per share, from 150,000,000 to 300,000,000 shares. The increase in authorized shares of common stock has been reflected in the Company's financial statements. |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On April 22, 2014, the Company's board of directors approved a stock repurchase program. This program authorized management to make repurchases of NetScout outstanding common stock of up to $100 million . The Company repurchased 67,752 shares for $2.8 million under this program during the nine months ended December 31, 2015. Through July 14, 2015, the Company had repurchased 824,452 shares totaling $34.3 million in the open market under this stock repurchase plan. At March 31, 2016, there were no shares of common stock that remained available to be purchased under this plan due to the approval of a new share repurchase program approved on May 19, 2015. On May 19, 2015, the Company’s board of directors approved a new share repurchase program, conditional upon the completion of the Comms Transaction. This program enables the Company to repurchase up to 20 million shares of its common stock. This plan became effective on July 14, 2015 upon the completion of the Comms Transaction and replaced the Company's previously existing open market stock repurchase program described above. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe under this program. Through December 31, 2016 , the Company has repurchased 13,205,532 shares totaling $379.3 million in the open market under this stock repurchase plan. At December 31, 2016 , 6,794,468 shares of common stock remained available to be purchased under the plan. The Company repurchased 3,127,396 shares for $79.3 million under the program during the nine months ended December 31, 2016 . In connection with the delivery of common shares upon vesting of restricted stock units, the Company withheld 298,908 shares at a cost of $8.8 million related to minimum statutory tax withholding requirements on these restricted stock units during the nine months ended December 31, 2016 . These withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the amount that is available for repurchase under that program. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 9 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Calculations of the basic and diluted net income (loss) per share and potential common shares are as follows (in thousands, except for per share data): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Numerator: Net income (loss) $ 21,245 $ (24,507 ) $ 10,981 $ (24,753 ) Denominator: Denominator for basic net income (loss) per share - weighted average common shares outstanding 91,762 98,797 92,337 77,126 Dilutive common equivalent shares: Weighted average restricted stock units 640 — 660 — Denominator for diluted net income (loss) per share - weighted average shares outstanding 92,402 98,797 92,997 77,126 Net income (loss) per share: Basic net income (loss) per share $ 0.23 $ (0.25 ) $ 0.12 $ (0.32 ) Diluted net income (loss) per share $ 0.23 $ (0.25 ) $ 0.12 $ (0.32 ) The following table sets forth restricted stock units excluded from the calculation of diluted net income (loss) per share, since their inclusion would be anti-dilutive (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Restricted stock units 1,207 358 1,718 503 Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options, unrecognized compensation expense and any tax benefits as additional proceeds. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were 30.6% and 3,670.3% for the three months ended December 31, 2016 and 2015 , respectively. Generally, the effective tax rate differs from the statutory tax rate due to the impact of the domestic production activities deduction, research and development credit, the impact of state taxes and income generated in jurisdictions that have a different tax rate than the U.S. statutory rate. The effective tax rate for the three months ended December 31, 2016 is lower than the effective rate for the three months ended December 31, 2015 , primarily related to a decrease in profit before taxes and the associated volatility related to the low profit before tax coupled with significant timing differences due to transaction related expenses recorded in the three months ended December 31, 2015 and a change in the jurisdictional mix of earnings. The Company's effective income tax rates were 28.4% and 1.0% for the nine months ended December 31, 2016 and 2015 , respectively. The effective tax rate for the nine months ended December 31, 2016 is higher than the effective rate for the nine months ended December 31, 2015 , primarily due to a change in the jurisdictional mix of earnings and losses for the nine months ended December 31, 2015 due to acquisition related costs. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION As part of its continued integration efforts of the Comms Transaction, effective July 1, 2016, the Company reorganized its business units, which resulted in a change in operating segment composition. As a result of this change, the Company reorganized the number of operating segments from five operating segments to one operating segment. The financial information that is regularly reviewed by the Company's Chief Operating Decision Maker (CODM) to allocate resources and assess performance was changed during the second quarter of fiscal year 2017. Our operating segments are determined based on the units that constitute a business for which financial information is available and for which operating results are regularly reviewed by segment management. The Company reports revenue and income in one reportable segment. The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. In accordance with United States export control regulations, the Company does not sell or do business with countries subject to economic sanctions and export controls. Total revenue by geography is as follows (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 United States $ 181,934 $ 206,899 $ 537,404 $ 480,341 Europe 57,345 50,765 139,874 99,003 Asia 27,578 21,625 76,747 39,337 Rest of the world 35,335 28,390 89,167 50,851 $ 302,192 $ 307,679 $ 843,192 $ 669,532 The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company’s products to international locations. The Company reports these shipments as United States revenue because the Company ships the products to a United States location. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company’s identifiable assets are located in the United States. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During our fiscal year ended March 31, 2016 and the three months ended June 30, 2016, a member of the Company’s Board of Directors served as an executive officer of Danaher. As part of the split off of Danaher’s Communications Business and the Company’s subsequent acquisition of that business from Newco's shareholders, NetScout has entered into multiple transactions with Danaher which include: transition services agreements, lease agreements, closing agreements, and compensation for post-combination services provisions within the separation and distribution agreement. This board member is now the founding President and CEO of Fortive Corporation (Fortive), which spun off of Danaher in July 2016. As part of the spin off of Fortive, the transition services agreement was amended to, among other things, assign Danaher's rights, duties, obligations and liabilities under the transition services agreement to Fluke Corporation, a subsidiary of Fortive. The Company has disclosed the transactions with Danaher and Fortive parenthetically within the financial statements. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands): December 31, 2016 March 31, 2016 Danaher $ 759 $ 44,161 Fortive 3,202 — $ 3,961 $ 44,161 As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands): December 31, 2016 March 31, 2016 Danaher $ 2,242 $ 5,893 Fortive 488 — $ 2,730 $ 5,893 As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Danaher: Cost of product revenue $ — $ 8,736 $ 4,690 $ 16,464 Cost of service revenue 27 2,225 485 4,717 Research and development expenses 43 4,197 1,720 15,011 Sales and marketing (49 ) 3,650 2,273 12,728 General and administrative expenses 46 6,383 2,548 13,446 Other expense, net — — — 383 $ 67 $ 25,191 $ 11,716 $ 62,749 Fortive: Cost of product revenue $ 45 $ — $ 2,418 $ — Cost of service revenue 95 — 109 — Research and development expenses — — (104 ) — Sales and marketing — — 150 — General and administrative expenses 261 — 1,302 — $ 401 $ — $ 3,875 $ — As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands): Nine Months Ended December 31, 2016 December 31, 2015 Due from related party: Danaher $ 16,955 $ (5,777 ) Fortive 7,724 — Total $ 24,679 $ (5,777 ) Due to related party: Danaher $ (712 ) $ (4,329 ) Fortive 206 — Total $ (506 ) $ (4,329 ) The Company recognized $143 thousand and $102 thousand in revenue from Danaher during the nine months ended December 31, 2016 and 2015, respectively, in the ordinary course of business. A member of the Company’s Board of Directors served as a member of the board of directors for EMC Corporation (EMC) during the three and nine months ended December 31, 2016 , and therefore, the Company considers sales to EMC to be a related party transaction. During the quarter ended September 30, 2016, EMC was acquired by Dell Technologies and EMC's board members resigned. The Company will continue to report the wind down of preexisting transactions as related party transactions through the Company's fiscal year 2017. The Company recognized $152 thousand and $409 thousand in revenue from EMC during the nine months ended December 31, 2016 and 2015 in the ordinary course of business. A member of the Company’s Board of Directors also serves as a consultant for The MITRE Corporation (MITRE) and therefore, the Company considers sales to MITRE to be a related party transaction. The Company generated $24 thousand and $107 thousand in revenue from MITRE during the nine months ended December 31, 2016 and 2015, respectively, in the ordinary course of business. During our fiscal year ended March 31, 2016, the Company had a member of the Board of Directors who served as a Section 16 officer of State Street Corporation (State Street) and therefore, the Company considered sales to State Street to be a related party transaction. The Company recognized $254 thousand in revenue from State Street during the nine months ended December 31, 2015 in the ordinary course of business. This board member is no longer a Section 16 officer of State Street, and as a result, State Street is no longer considered a related party in the Company's fiscal year ended March 31, 2017. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations and cash flows. The year-end consolidated balance sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. On July 14, 2015, or the Closing Date, the Company completed the acquisition of Danaher Corporation’s (Danaher) Communications Business (Communications Business), which included certain assets, liabilities, technology and employees within Tektronix Communications, VSS Monitoring, Arbor Networks and certain portions of the Fluke Networks Enterprise business, which excluded Danaher’s data communications cable installation business and its communication service provider business (the Comms Transaction). The Comms Transaction is more fully described in Note 7. The Comms Transaction was recorded using the acquisition method of accounting; accordingly, the financial results of the acquisition are included in the accompanying unaudited interim consolidated financial statements for the periods subsequent to the acquisition. During the second quarter of fiscal year 2017, as part of its continued integration of the Communication Business, the Company realigned its organizational structure. As a result, the Company accounts for its operations under one operating segment. For additional information, see Note 17 of the Company's Notes to Consolidated Financial Statements. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2016 filed with the SEC on May 31, 2016. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the new guidance and does not believe ASU 2016-18 will have a material impact on its consolidated statement of cash flows. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-16 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 on its consolidated statement of cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning April 1, 2017. The Company is currently assessing the potential impact of the adoption of ASU 2016-09 on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016 and May 2016 within ASU 2015-04, 2016-08, ASU 2016-10 and ASU 2016-12, respectively ( ASU 2014-09, ASU 2015-04, ASU 2016-08, ASU 2016-10 and ASU 2016-12 collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company in the first quarter of its fiscal year 2019. Early adoption is not permitted. The Company is currently assessing the potential impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-Based Compensation Expense | The following is a summary of share-based compensation expense including restricted stock units and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Cost of product revenue $ 255 $ 196 $ 716 $ 465 Cost of service revenue 1,015 721 3,058 1,848 Research and development 3,456 2,579 9,961 6,641 Sales and marketing 3,367 2,718 9,704 6,361 General and administrative 2,368 2,072 6,832 5,069 $ 10,461 $ 8,286 $ 30,271 $ 20,384 |
CASH, CASH EQUIVALENTS AND MA30
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Marketable Securities | The following is a summary of marketable securities held by NetScout at December 31, 2016 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 89,067 $ (33 ) $ 89,034 Commercial paper 21,153 — 21,153 Corporate bonds 4,685 (2 ) 4,683 Total short-term marketable securities 114,905 (35 ) 114,870 U.S. government and municipal obligations 17,243 (37 ) 17,206 Total long-term marketable securities 17,243 (37 ) 17,206 Total marketable securities $ 132,148 $ (72 ) $ 132,076 The following is a summary of marketable securities held by NetScout at March 31, 2016 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 109,963 $ 4 $ 109,967 Commercial paper 16,172 — 16,172 Corporate bonds 1,864 — 1,864 Total short-term marketable securities 127,999 4 128,003 U.S. government and municipal obligations 13,349 12 13,361 Total long-term marketable securities 13,349 12 13,361 Total marketable securities $ 141,348 $ 16 $ 141,364 |
Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company’s marketable securities held at December 31, 2016 and March 31, 2016 were as follows (in thousands): December 31, March 31, Available-for-sale securities: Due in 1 year or less $ 114,870 $ 128,003 Due after 1 year through 5 years 17,206 13,361 $ 132,076 $ 141,364 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following tables present the Company’s financial assets and liabilities measured on a recurring basis using the fair value hierarchy at December 31, 2016 and March 31, 2016 (in thousands): Fair Value Measurements at December 31, 2016 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 244,833 $ — $ — $ 244,833 U.S. government and municipal obligations 35,384 70,856 — 106,240 Commercial paper — 21,153 — 21,153 Corporate bonds 4,683 — — 4,683 Derivative financial instruments — 9 — 9 $ 284,900 $ 92,018 $ — $ 376,918 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,410 ) $ (5,410 ) Derivative financial instruments — (391 ) — (391 ) $ — $ (391 ) $ (5,410 ) $ (5,801 ) Fair Value Measurements at March 31, 2016 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 210,711 $ — $ — $ 210,711 U.S. government and municipal obligations 41,116 82,212 — 123,328 Commercial paper — 16,172 — 16,172 Corporate bonds 1,864 — — 1,864 Derivative financial instruments — 191 — 191 Contingently returnable consideration — — 16,131 16,131 $ 253,691 $ 98,575 $ 16,131 $ 368,397 LIABILITIES: Contingent purchase consideration $ — $ — $ (7,293 ) $ (7,293 ) Derivative financial instruments — (158 ) — (158 ) $ — $ (158 ) $ (7,293 ) $ (7,451 ) |
Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets | The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial assets and liabilities for the nine months ended December 31, 2016 (in thousands): Contingent Purchase Consideration Contingently Returnable Consideration Balance at March 31, 2016 $ (7,293 ) $ 16,131 Additions to Level 3 (660 ) — Increase in fair value and accretion expense (included within research and development expense) (114 ) — Decrease in fair value — (610 ) Gross presentation of contingently returnable consideration to contingent purchase consideration (3,910 ) 3,910 Payment received — (19,431 ) Payments made 6,567 — Balance at December 31, 2016 $ (5,410 ) $ — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): December 31, March 31, Raw materials $ 24,629 $ 18,617 Work in process 1,628 651 Finished goods 27,894 38,761 $ 54,151 $ 58,029 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Business Acquisition [Line Items] | |
Schedule of Pro Forma Results of Consolidated Statement of Operations | The following table presents unaudited pro forma results of the historical Consolidated Statements of Operations of the Company and the Communications Business of Danaher for the three and nine months ended December 31, 2015, giving effect to the Comms Transaction as if they occurred on April 1, 2014 (in thousands, except per share data): Three Months Ended Nine Months Ended December 31, 2015 December 31, 2015 Pro forma revenue $ 307,679 $ 845,739 Pro forma net loss $ (24,507 ) $ (55,190 ) Pro forma net loss per share: Basic $ (0.25 ) $ (0.55 ) Diluted $ (0.25 ) $ (0.55 ) Pro forma shares outstanding Basic 98,797 100,762 Diluted 98,797 100,762 |
Communications Business | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation | The following table summarizes the allocation of the purchase price for the entities acquired on July 14, 2015 (in thousands): Purchase Price Allocation: Total equity consideration $ 2,299,911 (1) Less: Equity consideration for replacement awards (29,355 ) (2) Estimated Purchase Price $ 2,270,556 Estimated fair value of assets acquired and liabilities assumed: Cash 27,701 Accounts receivable 140,586 Inventories 80,719 Prepaid expenses and other assets 6,519 Property, plant and equipment 36,825 Deferred income taxes 13,803 Intangible assets 1,080,700 Other assets 999 Accounts payable (21,311 ) Accrued compensation (24,316 ) Accrued other (12,916 ) Deferred revenue (187,882 ) Other long-term liabilities (3,615 ) Accrued retirement benefits (29,917 ) Deferred tax liabilities (348,004 ) Goodwill $ 1,510,665 (1) Represents approximately 62.5 million new shares (plus cash in lieu of fractional shares) of NetScout common stock issued to the existing common unit holders of Newco based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share, less the fair value attributable to the foreign entities that the Company did not obtain control over on July 14, 2015 due to regulatory and other compliance requirements. (2) Represents the value of certain outstanding Danaher equity awards held by Newco Employees for which continuing employees received, or will receive value after the Closing Date. A portion of this amount relates to awards that continued to vest in Danaher shares after the Closing Date. These future compensation amounts were settled in shares other than shares of the acquired business. The balance of this amount also represents future compensation expense and relates to cash awards which were paid by NetScout to acquired Newco employees on August 4, 2016. The cash payments by NetScout were reimbursed by Danaher. These items are further described in the Employee Matters Agreement dated July 14, 2015 by and among NetScout Systems, Inc., Danaher Corporation and Potomac Holding LLC and have been accounted for separately from the Comms Transaction. The following table summarizes the allocation of the purchase price for the Delayed Close Entities acquired on October 7, 2015 (in thousands): Purchase Price Allocation: Total equity consideration $ 5,700 (1) Estimated Purchase Price $ 5,700 Estimated fair value of assets acquired and liabilities assumed: Accounts receivable $ 110 Inventories 78 Prepaid expenses and other assets 35 Property, plant and equipment 1,254 Other assets 281 Accounts payable (8 ) Accrued compensation (824 ) Accrued other (176 ) Deferred revenue (65 ) Other long-term liabilities (126 ) Goodwill $ 5,141 (1 ) Represents the fair value attributable to the Delayed Close Entities that the Company obtained control over on October 7, 2015. |
Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 221,900 9 - 13 Customer relationships 794,100 13 - 18 Backlog 18,200 1 - 3 Definite lived trademark and trade names 43,900 3 - 9 Leasehold interest 2,600 4 - 6 $ 1,080,700 |
Avvasi | |
Business Acquisition [Line Items] | |
Summary of Purchase Price Allocation | The following table summarizes the allocation of the purchase price (in thousands): Initial cash payment $ 3,946 Estimated fair value of contingent purchase consideration 660 Estimated Purchase Price $ 4,606 Estimated fair value of assets acquired and liabilities assumed: Accounts receivable $ 103 Inventories 85 Prepaid and other current assets 32 Property, plant and equipment 43 Intangible assets 2,760 Accounts payable (1 ) Accrued compensation (49 ) Deferred revenue (317 ) Goodwill $ 1,950 |
Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 1,730 9 Customer relationships 1,030 14 $ 2,760 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine months ended December 31, 2016 are as follows (in thousands): Balance at March 31, 2016 $ 1,709,369 Goodwill attributable to the Avvasi acquisition 1,950 Purchase accounting adjustments 2,817 Foreign currency translation impact and other adjustments 6,775 Balance at December 31, 2016 $ 1,720,911 |
Schedule of Intangible Assets | Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at December 31, 2016 (in thousands): Cost Accumulated Amortization Net Developed technology $ 253,105 $ (99,665 ) $ 153,440 Customer relationships 828,592 (89,384 ) 739,208 Distributor relationships 7,237 (2,366 ) 4,871 Definite-lived trademark and trade name 43,681 (10,394 ) 33,287 Core technology 7,052 (5,785 ) 1,267 Net beneficial leases 336 (336 ) — Non-compete agreements 269 (269 ) — Leasehold interest 2,600 (852 ) 1,748 Backlog 18,045 (15,205 ) 2,840 Capitalized software 2,971 (368 ) 2,603 Technical licenses 1,000 (167 ) 833 Other 1,206 (861 ) 345 $ 1,166,094 $ (225,652 ) $ 940,442 Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2016 (in thousands): Cost Accumulated Amortization Net Developed technology $ 253,249 $ (69,810 ) $ 183,439 Customer relationships 834,091 (42,526 ) 791,565 Distributor relationships 5,348 (1,633 ) 3,715 Definite-lived trademark and trade name 43,964 (5,511 ) 38,453 Core technology 7,169 (4,659 ) 2,510 Net beneficial leases 336 (336 ) — Non-compete agreements 288 (288 ) — Leasehold interest 2,600 (416 ) 2,184 Backlog 18,245 (6,750 ) 11,495 Capitalized software 1,625 — 1,625 Other 1,191 (737 ) 454 $ 1,168,106 $ (132,666 ) $ 1,035,440 |
Finite-lived Intangible Assets Amortization Expense | The following table provides a summary of amortization expense for the three and nine months ended December 31, 2016 and 2015, respectively. Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Amortization of intangible assets included as: Product revenue $ 2,850 $ 2,357 $ 8,596 $ 4,385 Cost of product revenue 11,773 14,765 33,202 30,330 Operating expense 17,548 11,291 52,811 22,027 $ 32,171 $ 28,413 $ 94,609 $ 56,742 |
Schedule of Expected Future Amortization Expense | The following is the expected future amortization expense at December 31, 2016 for the fiscal years ending March 31 (in thousands): 2017 (remaining three months) $ 31,597 2018 111,239 2019 105,790 2020 97,535 2021 85,111 Thereafter 509,170 $ 940,442 |
DERIVATIVE INSTRUMENTS AND HE35
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet | The notional amounts and fair values of derivative instruments in the consolidated balance sheets at December 31, 2016 and March 31, 2016 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other December 31, March 31, December 31, March 31, December 31, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 8,621 $ 17,490 $ 9 $ 191 $ 391 $ 158 (a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
Summary of Effect of Foreign Exchange Forward Contracts on OCI and Results of Operations | The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Loss Recognized in Gain Reclassified from Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Forward contracts $ (488 ) $ (288 ) Research and development $ 12 $ 46 Research and development $ 39 $ 39 Sales and marketing 181 113 Sales and marketing (21 ) — $ (488 ) $ (288 ) $ 193 $ 159 $ 18 $ 39 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the nine months ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Effective Portion Ineffective Portion Loss Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Location December 31, 2016 December 31, 2015 Forward contracts $ (626 ) $ (806 ) Research and $ (6 ) $ 132 Research and $ 70 $ 102 Sales and 210 1,817 Sales and (113 ) (21 ) $ (626 ) $ (806 ) $ 204 $ 1,949 $ (43 ) $ 81 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liability | The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): Q3 FY2016 Plan Q1 FY2017 Plan Employee-Related Employee-Related Total Balance at March 31, 2016 $ 272 $ — $ 272 Restructuring charges to operations — 2,034 2,034 Cash payments (272 ) (1,524 ) (1,796 ) Other adjustments — (305 ) (305 ) Balance at December 31, 2016 $ — $ 205 $ 205 |
PENSION BENEFIT PLANS (Tables)
PENSION BENEFIT PLANS (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and nine months ended December 31, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Service cost $ 103 $ 49 $ 268 $ 98 Interest cost 199 75 520 150 Amortization of net loss — 80 — 160 Net periodic pension cost $ 302 $ 204 $ 788 $ 408 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of the Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares | Calculations of the basic and diluted net income (loss) per share and potential common shares are as follows (in thousands, except for per share data): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Numerator: Net income (loss) $ 21,245 $ (24,507 ) $ 10,981 $ (24,753 ) Denominator: Denominator for basic net income (loss) per share - weighted average common shares outstanding 91,762 98,797 92,337 77,126 Dilutive common equivalent shares: Weighted average restricted stock units 640 — 660 — Denominator for diluted net income (loss) per share - weighted average shares outstanding 92,402 98,797 92,997 77,126 Net income (loss) per share: Basic net income (loss) per share $ 0.23 $ (0.25 ) $ 0.12 $ (0.32 ) Diluted net income (loss) per share $ 0.23 $ (0.25 ) $ 0.12 $ (0.32 ) |
Summary of Antidilutive Securities Excluded from Computation of Diluted EPS | The following table sets forth restricted stock units excluded from the calculation of diluted net income (loss) per share, since their inclusion would be anti-dilutive (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Restricted stock units 1,207 358 1,718 503 |
SEGMENT AND GEOGRAPHIC INFORM39
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 United States $ 181,934 $ 206,899 $ 537,404 $ 480,341 Europe 57,345 50,765 139,874 99,003 Asia 27,578 21,625 76,747 39,337 Rest of the world 35,335 28,390 89,167 50,851 $ 302,192 $ 307,679 $ 843,192 $ 669,532 |
RELATED PARTY TRANSACTIONS RELA
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands): December 31, 2016 March 31, 2016 Danaher $ 759 $ 44,161 Fortive 3,202 — $ 3,961 $ 44,161 As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands): December 31, 2016 March 31, 2016 Danaher $ 2,242 $ 5,893 Fortive 488 — $ 2,730 $ 5,893 As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2016 2015 2016 2015 Danaher: Cost of product revenue $ — $ 8,736 $ 4,690 $ 16,464 Cost of service revenue 27 2,225 485 4,717 Research and development expenses 43 4,197 1,720 15,011 Sales and marketing (49 ) 3,650 2,273 12,728 General and administrative expenses 46 6,383 2,548 13,446 Other expense, net — — — 383 $ 67 $ 25,191 $ 11,716 $ 62,749 Fortive: Cost of product revenue $ 45 $ — $ 2,418 $ — Cost of service revenue 95 — 109 — Research and development expenses — — (104 ) — Sales and marketing — — 150 — General and administrative expenses 261 — 1,302 — $ 401 $ — $ 3,875 $ — As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands): Nine Months Ended December 31, 2016 December 31, 2015 Due from related party: Danaher $ 16,955 $ (5,777 ) Fortive 7,724 — Total $ 24,679 $ (5,777 ) Due to related party: Danaher $ (712 ) $ (4,329 ) Fortive 206 — Total $ (506 ) $ (4,329 ) |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - Segment | 3 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating segments | 5 | 1 |
CONCENTRATION OF CREDIT RISK 42
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 28,808 | $ 78,399 |
Affiliated Entity | ||
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 3,961 | $ 44,161 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 10,461 | $ 8,286 | $ 30,271 | $ 20,384 |
Cost of product revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 255 | 196 | 716 | 465 |
Cost of service revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,015 | 721 | 3,058 | 1,848 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,456 | 2,579 | 9,961 | 6,641 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,367 | 2,718 | 9,704 | 6,361 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,368 | $ 2,072 | $ 6,832 | $ 5,069 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - ESPP | 9 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of common stock price for employees | 85.00% |
Shares purchased by employees | shares | 234,745 |
Per share price of shares purchased by employees | $ / shares | $ 29.58 |
CASH, CASH EQUIVALENTS AND MA45
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 132,148 | $ 141,348 |
Unrealized Gains (Losses) | (72) | 16 |
Fair Value | 132,076 | 141,364 |
U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 106,240 | 123,328 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 21,153 | 16,172 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 4,683 | 1,864 |
Short-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 114,905 | 127,999 |
Unrealized Gains (Losses) | (35) | 4 |
Fair Value | 114,870 | 128,003 |
Short-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 89,067 | 109,963 |
Unrealized Gains (Losses) | (33) | 4 |
Fair Value | 89,034 | 109,967 |
Short-term marketable securities | Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 21,153 | 16,172 |
Unrealized Gains (Losses) | 0 | 0 |
Fair Value | 21,153 | 16,172 |
Short-term marketable securities | Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 4,685 | 1,864 |
Unrealized Gains (Losses) | (2) | 0 |
Fair Value | 4,683 | 1,864 |
Long-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 17,243 | 13,349 |
Unrealized Gains (Losses) | (37) | 12 |
Fair Value | 17,206 | 13,361 |
Long-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 17,243 | 13,349 |
Unrealized Gains (Losses) | (37) | 12 |
Fair Value | $ 17,206 | $ 13,361 |
CASH, CASH EQUIVALENTS AND MA46
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Available-for-sale securities: | ||
Due in 1 year or less | $ 114,870 | $ 128,003 |
Due after 1 year through 5 years | 17,206 | 13,361 |
Fair Value | $ 132,076 | $ 141,364 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
ASSETS: | ||
Cash and cash equivalents | $ 244,833 | $ 210,711 |
Marketable securities | 132,076 | 141,364 |
Derivative financial instruments | 9 | 191 |
Contingently returnable consideration | 16,131 | |
Total assets | 376,918 | 368,397 |
LIABILITIES: | ||
Contingent purchase consideration | (5,410) | (7,293) |
Derivative financial instruments | (391) | (158) |
Total liabilities | (5,801) | (7,451) |
U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 106,240 | 123,328 |
Commercial paper | ||
ASSETS: | ||
Marketable securities | 21,153 | 16,172 |
Corporate bonds | ||
ASSETS: | ||
Marketable securities | 4,683 | 1,864 |
Level 1 | ||
ASSETS: | ||
Cash and cash equivalents | 244,833 | 210,711 |
Derivative financial instruments | 0 | 0 |
Contingently returnable consideration | 0 | |
Total assets | 284,900 | 253,691 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 35,384 | 41,116 |
Level 1 | Commercial paper | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 1 | Corporate bonds | ||
ASSETS: | ||
Marketable securities | 4,683 | 1,864 |
Level 2 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 9 | 191 |
Contingently returnable consideration | 0 | |
Total assets | 92,018 | 98,575 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | (391) | (158) |
Total liabilities | (391) | (158) |
Level 2 | U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 70,856 | 82,212 |
Level 2 | Commercial paper | ||
ASSETS: | ||
Marketable securities | 21,153 | 16,172 |
Level 2 | Corporate bonds | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 3 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Contingently returnable consideration | 16,131 | |
Total assets | 0 | 16,131 |
LIABILITIES: | ||
Contingent purchase consideration | (5,410) | (7,293) |
Derivative financial instruments | 0 | 0 |
Total liabilities | (5,410) | (7,293) |
Level 3 | U.S. government and municipal obligations | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 3 | Commercial paper | ||
ASSETS: | ||
Marketable securities | 0 | 0 |
Level 3 | Corporate bonds | ||
ASSETS: | ||
Marketable securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Dec. 31, 2016 | Aug. 19, 2016 | Mar. 31, 2016 | Nov. 30, 2011 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingently returnable consideration | $ 16,131 | |||
Contingent purchase consideration | $ 5,410 | 7,293 | ||
Fair value, measurements, recurring | Contingent Purchase Consideration | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Deal related compensation expense, accretion charges and changes related to settlements of contractual non-compliance liabilities | 114 | |||
Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingently returnable consideration | 16,131 | |||
Contingent purchase consideration | 5,410 | $ 7,293 | ||
Simena | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent purchase consideration | $ 8,000 | |||
Simena | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent purchase consideration | 4,800 | |||
Avvasi | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent purchase consideration | $ 660 | |||
Avvasi | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Contingent purchase consideration | $ 660 |
FAIR VALUE MEASUREMENTS - Sch49
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Gross presentation of contingently returnable consideration to contingent purchase consideration | $ 0 | $ 3,676 |
Collection of contingently returnable consideration | 12,864 | $ 8,750 |
Fair value, measurements, recurring | Contingent Purchase Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at March 31, 2016 | (7,293) | |
Additions to Level 3 | (660) | |
Increase in fair value and accretion expense (included within research and development expense) | (114) | |
Gross presentation of contingently returnable consideration to contingent purchase consideration | (3,910) | |
Payments made | 6,567 | |
Balance at December 31, 2016 | (5,410) | |
Fair value, measurements, recurring | Contingently Returnable Consideration | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at March 31, 2016 | 16,131 | |
Decrease in fair value | (610) | |
Gross presentation of contingently returnable consideration to contingent purchase consideration | 3,910 | |
Collection of contingently returnable consideration | (19,431) | |
Balance at December 31, 2016 | $ 0 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 24,629 | $ 18,617 |
Work in process | 1,628 | 651 |
Finished goods | 27,894 | 38,761 |
Total inventories | $ 54,151 | $ 58,029 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | Aug. 19, 2016 | Oct. 07, 2015 | Jul. 14, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 07, 2015 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 21, 2017 | Aug. 20, 2017 | Mar. 31, 2016 | Jul. 13, 2015 |
Business Acquisition [Line Items] | |||||||||||||
Contingent purchase consideration | $ 5,410,000 | $ 5,410,000 | $ 7,293,000 | ||||||||||
Goodwill | 1,720,911,000 | $ 1,720,911,000 | 1,709,369,000 | ||||||||||
Weighted average useful life of acquired intangible assets | 14 years 7 months | ||||||||||||
Increase in goodwill | $ 2,817,000 | ||||||||||||
Backlog | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 2 years | ||||||||||||
Trademarks and trade names | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||||||||||||
Leasehold interest | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | ||||||||||||
Service Assurance | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | 1,200,000,000 | $ 1,200,000,000 | 1,200,000,000 | ||||||||||
Security | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | $ 548,100,000 | $ 548,100,000 | $ 547,400,000 | ||||||||||
Cash retention award | Vesting after August 4, 2015 | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percent of cancelled Danaher equity awards replaced | 50.00% | 50.00% | |||||||||||
Restricted stock units | Vesting after August 4, 2015 | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Percent of cancelled Danaher equity awards replaced | 50.00% | 50.00% | |||||||||||
Business acquisition, equity interest issued, value | $ 15,000,000 | $ 15,000,000 | |||||||||||
Post combination compensation expense, Danaher equity awards | Vesting July 14, 2015 through August 4, 2015 | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Post combination compensation expense | $ 0 | $ 6,500,000 | |||||||||||
Post combination compensation expense, Danaher equity awards | Vesting after August 4, 2015 | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Post combination compensation expense | $ 0 | 2,800,000 | 4,300,000 | 5,400,000 | |||||||||
Post combination compensation expense, Danaher bonus | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Post combination compensation expense | 5,200,000 | 9,300,000 | |||||||||||
Post combination compensation expense, Danaher retention | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Post combination compensation expense | $ 1,100,000 | 7,800,000 | |||||||||||
Common stock | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Share price (in dollars per share) | $ 36.89 | ||||||||||||
Avvasi | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Estimated Purchase Price | $ 4,606,000 | ||||||||||||
Contingent purchase consideration | 660,000 | ||||||||||||
Goodwill | $ 1,950,000 | ||||||||||||
Weighted average useful life of acquired intangible assets | 10 years 10 months 24 days | ||||||||||||
Avvasi | Service Assurance | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | $ 2,000,000 | ||||||||||||
Communications Business | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Estimated Purchase Price | $ 5,700,000 | $ 2,270,556,000 | |||||||||||
Goodwill | 5,141,000 | $ 1,510,665,000 | $ 5,141,000 | ||||||||||
Weighted average useful life of acquired intangible assets | 14 years 8 months | ||||||||||||
Total equity consideration | $ 5,700,000 | $ 2,299,911,000 | $ 2,300,000,000 | ||||||||||
Decrease in prepaid expenses and other current assets | $ 200,000 | ||||||||||||
Increase in deferred income taxes | 700,000 | ||||||||||||
Increase in deferred tax liabilities | 3,300,000 | ||||||||||||
Increase in goodwill | $ 2,800,000 | ||||||||||||
Revenues | 523,300,000 | ||||||||||||
Net loss | 9,400,000 | ||||||||||||
Communications Business | General and administrative | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Acquisition related costs | $ 0 | $ 23,700,000 | |||||||||||
Communications Business | Developed technology | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 11 years 8 months 12 days | ||||||||||||
Communications Business | Customer relationships | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 16 years 3 months 18 days | ||||||||||||
Communications Business | Backlog | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 2 years | ||||||||||||
Communications Business | Trademarks and trade names | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||||||||||||
Communications Business | Leasehold interest | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | ||||||||||||
Communications Business | Service Assurance | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | $ 976,500,000 | ||||||||||||
Communications Business | Security | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Goodwill | $ 534,800,000 | ||||||||||||
Communications Business | Common stock | Newco | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Shares issued in business acquisition (in shares) | 62.5 | ||||||||||||
Forecast | Avvasi | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Contingent purchase consideration | $ 660,000 | $ 660,000 |
ACQUISITIONS - Summary of Purch
ACQUISITIONS - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Aug. 19, 2016 | Oct. 07, 2015 | Jul. 14, 2015 | Oct. 07, 2015 | Dec. 31, 2016 | Mar. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Estimated fair value of contingent purchase consideration | $ 5,410 | $ 7,293 | ||||
Estimated fair value of assets acquired and liabilities assumed: | ||||||
Goodwill | $ 1,720,911 | $ 1,709,369 | ||||
Avvasi | ||||||
Business Acquisition [Line Items] | ||||||
Initial cash payment | $ 3,946 | |||||
Estimated fair value of contingent purchase consideration | 660 | |||||
Estimated Purchase Price | 4,606 | |||||
Estimated fair value of assets acquired and liabilities assumed: | ||||||
Accounts receivable | 103 | |||||
Inventories | 85 | |||||
Prepaid expenses and other assets | 32 | |||||
Property, plant and equipment | 43 | |||||
Intangible assets | 2,760 | |||||
Accounts payable | (1) | |||||
Accrued compensation | (49) | |||||
Deferred revenue | (317) | |||||
Goodwill | $ 1,950 | |||||
Communications Business | ||||||
Business Acquisition [Line Items] | ||||||
Total equity consideration | $ (5,700) | $ (2,299,911) | $ (2,300,000) | |||
Estimated Purchase Price | 5,700 | 2,270,556 | ||||
Estimated fair value of assets acquired and liabilities assumed: | ||||||
Cash | 27,701 | |||||
Accounts receivable | 110 | 140,586 | 110 | |||
Inventories | 78 | 80,719 | 78 | |||
Prepaid expenses and other assets | 35 | 6,519 | 35 | |||
Property, plant and equipment | 1,254 | 36,825 | 1,254 | |||
Deferred income taxes | 13,803 | |||||
Intangible assets | 1,080,700 | |||||
Other assets | 281 | 999 | 281 | |||
Accounts payable | (8) | (21,311) | (8) | |||
Accrued compensation | (824) | (24,316) | (824) | |||
Accrued other | (176) | (12,916) | (176) | |||
Deferred revenue | (65) | (187,882) | (65) | |||
Other long-term liabilities | (126) | (3,615) | (126) | |||
Accrued retirement benefits | (29,917) | |||||
Deferred tax liabilities | (348,004) | |||||
Goodwill | $ 5,141 | 1,510,665 | $ 5,141 | |||
Communications Business | Replacement Awards | ||||||
Business Acquisition [Line Items] | ||||||
Total equity consideration | $ (29,355) |
ACQUISITIONS - Schedule of Fair
ACQUISITIONS - Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives (Details) - USD ($) $ in Thousands | Aug. 19, 2016 | Jul. 14, 2015 |
Avvasi | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 2,760 | |
Avvasi | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 1,730 | |
Useful life of identifiable finite-lived intangible assets | 9 years | |
Avvasi | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 1,030 | |
Useful life of identifiable finite-lived intangible assets | 14 years | |
Communications Business | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 1,080,700 | |
Communications Business | Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 221,900 | |
Communications Business | Developed technology | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 9 years | |
Communications Business | Developed technology | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 13 years | |
Communications Business | Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 794,100 | |
Communications Business | Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 13 years | |
Communications Business | Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 18 years | |
Communications Business | Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 18,200 | |
Communications Business | Backlog | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 1 year | |
Communications Business | Backlog | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 3 years | |
Communications Business | Definite lived trademark and trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 43,900 | |
Communications Business | Definite lived trademark and trade names | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 3 years | |
Communications Business | Definite lived trademark and trade names | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 9 years | |
Communications Business | Leasehold interest | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Fair value of finite-lived intangible assets | $ 2,600 | |
Communications Business | Leasehold interest | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 4 years | |
Communications Business | Leasehold interest | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life of identifiable finite-lived intangible assets | 6 years |
ACQUISITIONS - Schedule of Pro
ACQUISITIONS - Schedule of Pro Forma Results of Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Pro forma revenue | $ 307,679 | $ 845,739 |
Pro forma net loss | $ (24,507) | $ (55,190) |
Pro forma net loss per share: | ||
Basic (in dollars per share) | $ (0.25) | $ (0.55) |
Diluted (in dollars per share) | $ (0.25) | $ (0.55) |
Pro forma shares outstanding | ||
Basic (in shares) | 98,797 | 100,762 |
Diluted (in shares) | 98,797 | 100,762 |
GOODWILL AND INTANGIBLE ASSET55
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2016Segment | Dec. 31, 2016USD ($)Segment | Mar. 31, 2016USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Number of reporting units | Segment | 5 | 2 | |
Goodwill impairment test, sensitivity analysis, decrease of projected revenue growth | 2.00% | ||
Goodwill impairment test, sensitivity analysis, decrease of selling margin | 4.00% | ||
Goodwill impairment test, sensitivity analysis, decrease of operating margin | 5.00% | ||
Goodwill impairment test, sensitivity analysis, increase of WACC | 2.00% | ||
Goodwill | $ 1,720,911 | $ 1,709,369 | |
Carrying value of intangible assets | $ 959,042 | 1,054,040 | |
Weighted average useful life of acquired intangible assets | 14 years 7 months | ||
Developed and core technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 11 years 6 months | ||
Customer and distributor relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 16 years 1 month | ||
Trademarks and trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 8 years 6 months | ||
Leasehold interest | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | ||
Backlog | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 2 years | ||
Capitalized software | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life of acquired intangible assets | 4 years | ||
Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 18,600 | 18,600 | |
Service Assurance | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 1,200,000 | 1,200,000 | |
Security | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 548,100 | $ 547,400 |
GOODWILL AND INTANGIBLE ASSET56
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at March 31, 2016 | $ 1,709,369 |
Goodwill attributable to the Avvasi acquisition | 1,950 |
Purchase accounting adjustments | 2,817 |
Foreign currency translation impact and other adjustments | 6,775 |
Balance at December 31, 2016 | $ 1,720,911 |
GOODWILL AND INTANGIBLE ASSET57
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,166,094 | $ 1,168,106 |
Accumulated Amortization | (225,652) | (132,666) |
Net | 940,442 | 1,035,440 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 253,105 | 253,249 |
Accumulated Amortization | (99,665) | (69,810) |
Net | 153,440 | 183,439 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 828,592 | 834,091 |
Accumulated Amortization | (89,384) | (42,526) |
Net | 739,208 | 791,565 |
Distributor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,237 | 5,348 |
Accumulated Amortization | (2,366) | (1,633) |
Net | 4,871 | 3,715 |
Definite-lived trademark and trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 43,681 | 43,964 |
Accumulated Amortization | (10,394) | (5,511) |
Net | 33,287 | 38,453 |
Core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,052 | 7,169 |
Accumulated Amortization | (5,785) | (4,659) |
Net | 1,267 | 2,510 |
Net beneficial leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 336 | 336 |
Accumulated Amortization | (336) | (336) |
Net | 0 | 0 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 269 | 288 |
Accumulated Amortization | (269) | (288) |
Net | 0 | 0 |
Leasehold interest | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,600 | 2,600 |
Accumulated Amortization | (852) | (416) |
Net | 1,748 | 2,184 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 18,045 | 18,245 |
Accumulated Amortization | (15,205) | (6,750) |
Net | 2,840 | 11,495 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,971 | 1,625 |
Accumulated Amortization | (368) | 0 |
Net | 2,603 | 1,625 |
Technical licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,000 | |
Accumulated Amortization | (167) | |
Net | 833 | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,206 | 1,191 |
Accumulated Amortization | (861) | (737) |
Net | $ 345 | $ 454 |
GOODWILL AND INTANGIBLE ASSET58
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2017 (remaining three months) | $ 31,597 | |
2,018 | 111,239 | |
2,019 | 105,790 | |
2,020 | 97,535 | |
2,021 | 85,111 | |
Thereafter | 509,170 | |
Net | $ 940,442 | $ 1,035,440 |
GOODWILL AND INTANGIBLE ASSET59
GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 32,171 | $ 28,413 | $ 94,609 | $ 56,742 |
Product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 2,850 | 2,357 | 8,596 | 4,385 |
Cost of product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 11,773 | 14,765 | 33,202 | 30,330 |
Operating expense | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 17,548 | $ 11,291 | $ 52,811 | $ 22,027 |
DERIVATIVE INSTRUMENTS AND HE60
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) | 9 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Managing period of hedging forecasted cash flows for operating expenses denominated in foreign currencies | 12 months |
Contract maturity period | 12 months |
DERIVATIVE INSTRUMENTS AND HE61
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 8,621 | $ 17,490 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Prepaid Expenses and Other Current Assets | 9 | 191 |
Accrued Other | ||
Derivatives, Fair Value [Line Items] | ||
Accrued Other | $ 391 | $ 158 |
DERIVATIVE INSTRUMENTS AND HE62
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income and Results of Operations (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss Recognized in OCI on Derivative | $ (488) | $ (288) | $ (626) | $ (806) |
Gain Reclassified from Accumulated OCI into Income | 193 | 159 | 204 | 1,949 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 18 | 39 | (43) | 81 |
Research and development | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain Reclassified from Accumulated OCI into Income | 12 | 46 | (6) | 132 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 39 | 39 | 70 | 102 |
Sales and marketing | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain Reclassified from Accumulated OCI into Income | 181 | 113 | 210 | 1,817 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | $ (21) | $ 0 | $ (113) | $ (21) |
DERIVATIVE INSTRUMENTS AND HE63
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income and Results of Operations (Footnote) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Reclassified gain (loss) as a result of discontinuance of cash flow hedges | $ 0 | $ 0 | $ 0 | $ 0 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Jul. 14, 2015USD ($)shares | Dec. 31, 2016USD ($) |
Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 2.50 | 2.50 |
Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1 | 1 |
Common Stock Repurchase Plan | ||
Debt Instrument [Line Items] | ||
Stock authorized to repurchase under stock repurchase program (in shares) | shares | 20,000,000 | |
Senior secured revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Debt term | 5 years | |
Credit facility | $ 800,000,000 | |
Amount outstanding under credit facility | $ 300,000,000 | |
Commitment fee percentage | 0.25% | |
Debt default, acceleration clause, required consent percentage | 50.00% | |
Unamortized debt issuance costs | $ 6,600,000 | $ 4,700,000 |
Senior secured revolving credit facility | Line of credit | Prepaid expenses and other current assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | 1,300,000 | |
Senior secured revolving credit facility | Line of credit | Other assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 3,400,000 | |
Senior secured revolving credit facility | Line of credit | Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.35% | |
Senior secured revolving credit facility | Line of credit | Maximum | Foreign Subsidiaries | ||
Debt Instrument [Line Items] | ||
Voting stock pledge limit for any foreign subsidiary | 65.00% | |
Senior secured revolving credit facility | Line of credit | Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee percentage | 0.20% | |
Senior secured revolving credit facility | Line of credit | Federal funds effective rate | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.50% | |
Senior secured revolving credit facility | Line of credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.00% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.50% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 2.00% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.25% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.50% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.00% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.25% | |
Letter of credit sub-facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 50,000,000 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)Employee | Dec. 31, 2015USD ($) | Mar. 31, 2016USD ($)Employee | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ (199) | $ 572 | $ 1,730 | $ 468 | |
Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 2,034 | $ 500 | |||
Restructuring and Related Cost, Number of Employees Terminated | Employee | 19 | 1 |
RESTRUCTURING CHARGES - Schedul
RESTRUCTURING CHARGES - Schedule of Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges to operations | $ (199) | $ 572 | $ 1,730 | $ 468 | |
Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at March 31, 2016 | 272 | ||||
Restructuring charges to operations | 2,034 | $ 500 | |||
Cash payments | (1,796) | ||||
Other adjustments | (305) | ||||
Balance at December 31, 2016 | 205 | 205 | 272 | ||
Q3 FY2016 Plan | Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at March 31, 2016 | 272 | ||||
Restructuring charges to operations | 0 | ||||
Cash payments | (272) | ||||
Other adjustments | 0 | ||||
Balance at December 31, 2016 | 0 | 0 | 272 | ||
Q1 FY2017 Plan | Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Balance at March 31, 2016 | 0 | ||||
Restructuring charges to operations | 2,034 | ||||
Cash payments | (1,524) | ||||
Other adjustments | (305) | ||||
Balance at December 31, 2016 | $ 205 | $ 205 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands | Aug. 21, 2017 | Aug. 20, 2017 | Dec. 31, 2016 | Aug. 19, 2016 | Mar. 31, 2016 | Nov. 30, 2011 |
Commitments and Contingencies Disclosure [Line Items] | ||||||
Contingent purchase consideration | $ 5,410 | $ 7,293 | ||||
Simena | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Contingent purchase consideration | $ 8,000 | |||||
Present value of future consideration | $ 4,800 | |||||
Avvasi | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Contingent purchase consideration | $ 660 | |||||
Forecast | Avvasi | ||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||
Contingent purchase consideration | $ 660 | $ 660 |
PENSION BENEFIT PLANS - Narrati
PENSION BENEFIT PLANS - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2016USD ($)Employee | Dec. 31, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions to defined benefit pension plans | $ 169 | |||
Expense for all defined benefit pension and defined contribution plans | $ 1,900 | $ 2,300 | $ 7,200 | $ 5,100 |
Danaher | United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of employees participating in noncontributory defined benefit pension plans | Employee | 0 | |||
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected cash contribution requirements for defined benefit pension plans, less than | $ 1,000 |
PENSION BENEFIT PLANS - Schedul
PENSION BENEFIT PLANS - Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans (Details) - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 103 | $ 49 | $ 268 | $ 98 |
Interest cost | 199 | 75 | 520 | 150 |
Amortization of net loss | (80) | 0 | (160) | |
Net periodic pension cost | $ 302 | $ 204 | $ 788 | $ 408 |
STOCKHOLDERS EQUITY - Narrative
STOCKHOLDERS EQUITY - Narrative (Details) - $ / shares | Dec. 31, 2016 | Sep. 20, 2016 | Sep. 19, 2016 | Mar. 31, 2016 |
Equity [Abstract] | ||||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 150,000,000 | 150,000,000 |
TREASURY STOCK - Narrative (Det
TREASURY STOCK - Narrative (Details) - USD ($) | 9 Months Ended | 15 Months Ended | 19 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Jul. 13, 2015 | Dec. 31, 2016 | Mar. 31, 2016 | May 19, 2015 | Apr. 22, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Shares repurchased during the period, value | $ 88,133,000 | $ 212,426,000 | |||||
Share Repurchase Program, April 2014 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, authorized amount up to | $ 100,000,000 | ||||||
Shares repurchased during the period (in shares) | 67,752 | 824,452 | |||||
Shares repurchased during the period, value | $ 2,800,000 | $ 34,300,000 | |||||
Stock remaining to be purchased (in shares) | 0 | ||||||
Share Repurchase Program, May 2015 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Shares repurchased during the period (in shares) | 3,127,396 | 13,205,532 | |||||
Shares repurchased during the period, value | $ 79,300,000 | $ 379,300,000 | |||||
Stock remaining to be purchased (in shares) | 6,794,468 | 6,794,468 | |||||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 | ||||||
Restricted stock units | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Shares repurchased during the period (in shares) | 298,908 | ||||||
Shares repurchased during the period, value | $ 8,800,000 |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | ||||
Net income (loss) | $ 21,245 | $ (24,507) | $ 10,981 | $ (24,753) |
Denominator: | ||||
Denominator for basic net income (loss) per share - weighted average common shares outstanding (in shares) | 91,762 | 98,797 | 92,337 | 77,126 |
Dilutive common equivalent shares: | ||||
Weighted average restricted stock units (in shares) | 640 | 0 | 660 | 0 |
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 92,402 | 98,797 | 92,997 | 77,126 |
Net income (loss) per share: | ||||
Basic net income (loss) per share (in USD per share) | $ 0.23 | $ (0.25) | $ 0.12 | $ (0.32) |
Diluted net income (loss) per share (in USD per share) | $ 0.23 | $ (0.25) | $ 0.12 | $ (0.32) |
NET INCOME (LOSS) PER SHARE -73
NET INCOME (LOSS) PER SHARE - Summary of Antidilutive Securities Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Restricted stock units (in shares) | 1,207 | 358 | 1,718 | 503 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 30.60% | 28.40% | 3670.30% | 1.00% |
SEGMENT AND GEOGRAPHIC INFORM75
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) - Segment | 3 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 5 | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM76
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Total Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 302,192 | $ 307,679 | $ 843,192 | $ 669,532 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 181,934 | 206,899 | 537,404 | 480,341 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 57,345 | 50,765 | 139,874 | 99,003 |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 27,578 | 21,625 | 76,747 | 39,337 |
Rest of the world | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 35,335 | $ 28,390 | $ 89,167 | $ 50,851 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | $ 28,808 | $ 28,808 | $ 78,399 | ||
Related party accounts payable | 41,660 | 41,660 | 43,969 | ||
Cost of product revenue | 55,296 | $ 77,147 | 171,770 | $ 165,066 | |
Cost of service revenue | 26,382 | 28,968 | 81,452 | 62,532 | |
Research and development expenses | 58,084 | 65,131 | 179,681 | 149,085 | |
Sales and marketing | 83,212 | 91,386 | 241,506 | 208,631 | |
Other expense, net | 28,540 | 30,973 | 90,994 | 82,477 | |
Other expense, net | 695 | 1,022 | 1,926 | 349 | |
Cash flows, due from related party | (24,679) | 5,777 | |||
Cash flows, due to related party | (506) | (4,329) | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 3,961 | 3,961 | 44,161 | ||
Related party accounts payable | 2,730 | 2,730 | 5,893 | ||
Cost of product revenue | 45 | 8,736 | 7,108 | 16,464 | |
Cost of service revenue | 122 | 2,225 | 594 | 4,717 | |
Research and development expenses | 43 | 4,197 | 1,616 | 15,011 | |
Sales and marketing | (49) | 3,650 | 2,423 | 12,728 | |
Other expense, net | 307 | 6,383 | 3,850 | 13,446 | |
Other expense, net | 0 | 0 | 0 | (383) | |
Cash flows, due from related party | 24,679 | (5,777) | |||
Cash flows, due to related party | (506) | (4,329) | |||
Fortive | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 3,202 | 3,202 | 0 | ||
Related party accounts payable | 488 | 488 | 0 | ||
Cost of product revenue | 45 | 0 | 2,418 | 0 | |
Cost of service revenue | 95 | 0 | 109 | 0 | |
Research and development expenses | 0 | 0 | (104) | 0 | |
Sales and marketing | 0 | 0 | 150 | 0 | |
Other expense, net | 261 | 0 | 1,302 | 0 | |
Related party transaction, Total | 401 | 0 | 3,875 | 0 | |
Cash flows, due from related party | 7,724 | 0 | |||
Cash flows, due to related party | 206 | 0 | |||
Danaher | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 759 | 759 | 44,161 | ||
Related party accounts payable | 2,242 | 2,242 | $ 5,893 | ||
Cost of product revenue | 0 | 8,736 | 4,690 | 16,464 | |
Cost of service revenue | 27 | 2,225 | 485 | 4,717 | |
Research and development expenses | 43 | 4,197 | 1,720 | 15,011 | |
Sales and marketing | (49) | 3,650 | 2,273 | 12,728 | |
Other expense, net | 46 | 6,383 | 2,548 | 13,446 | |
Other expense, net | 0 | 0 | 0 | 383 | |
Related party transaction, Total | $ 67 | $ 25,191 | 11,716 | 62,749 | |
Cash flows, due from related party | 16,955 | (5,777) | |||
Cash flows, due to related party | $ (712) | $ (4,329) |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Danaher | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 143 | $ 102 |
EMC, Corp. | Member of board of directors | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 152 | 409 |
Mitre Corp. | Member of board of directors | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 24 | 107 |
State Street | Member of board of directors | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 254 |