Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | May 13, 2019 | Sep. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NETSCOUT SYSTEMS INC | ||
Trading Symbol | NTCT | ||
Entity Central Index Key | 0001078075 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Common Stock, Shares Outstanding | 77,462,629 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,886,903,665 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 409,632 | $ 369,821 |
Marketable securities | 76,344 | 77,941 |
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $1,583 and $1,991 at March 31, 2019 and 2018, respectively | 235,318 | 213,438 |
Inventories and deferred costs | 26,270 | 34,774 |
Prepaid income taxes | 18,000 | 22,932 |
Prepaid expenses and other current assets (related party balances of $335 and $3,187 at March 31, 2019 and 2018, respectively) | 35,658 | 33,502 |
Total current assets | 801,222 | 752,408 |
Fixed assets, net | 58,951 | 52,511 |
Goodwill | 1,715,485 | 1,712,764 |
Intangible assets, net | 669,118 | 831,374 |
Deferred income taxes | 7,218 | 6,685 |
Long-term marketable securities | 1,012 | 0 |
Other assets | 16,988 | 12,866 |
Total assets | 3,269,994 | 3,368,608 |
Current liabilities: | ||
Accounts payable (related party balances of $244 and $369 at March 31, 2019 and 2018, respectively) | 24,582 | 30,133 |
Accrued compensation | 58,501 | 46,552 |
Accrued other | 23,027 | 33,164 |
Income taxes payable | 1,318 | 1,526 |
Deferred revenue and customer deposits | 272,508 | 301,925 |
Total current liabilities | 379,936 | 413,300 |
Other long-term liabilities | 19,493 | 8,308 |
Deferred tax liability | 124,229 | 151,563 |
Accrued long-term retirement benefits | 36,284 | 35,246 |
Long-term deferred revenue and customer deposits | 94,619 | 91,409 |
Long-term debt | 550,000 | 600,000 |
Total liabilities | 1,204,561 | 1,299,826 |
Commitments and contingencies (Note 18) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value: 5,000,000 shares authorized; no shares issued or outstanding at March 31, 2019 and 2018 | 0 | 0 |
Common stock, $0.001 par value: 300,000,000 shares authorized; 119,760,132 and 117,744,913 shares issued and 77,610,361 and 80,270,023 shares outstanding at March 31, 2019 and 2018, respectively | 120 | 117 |
Additional paid-in capital | 2,828,922 | 2,665,120 |
Accumulated other comprehensive income (loss) | (2,639) | 2,895 |
Treasury stock at cost, 42,149,771 and 37,474,890 shares at March 31, 2019 and 2018, respectively | (1,119,063) | (995,843) |
Retained earnings | 358,093 | 396,493 |
Total stockholders’ equity | 2,065,433 | 2,068,782 |
Total liabilities and stockholders’ equity | $ 3,269,994 | $ 3,368,608 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Related Party Transaction [Line Items] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,583 | $ 1,991 |
Related party prepaid expenses and other current assets | 35,658 | 33,502 |
Related party accounts payable | $ 24,582 | $ 30,133 |
Preferred stock, par value (in dollars 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 dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 119,760,132 | 117,744,913 |
Common stock, shares outstanding (in shares) | 77,610,361 | 80,270,023 |
Treasury stock (in shares) | 42,149,771 | 37,474,890 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Related party prepaid expenses and other current assets | $ 335 | $ 3,187 |
Related party accounts payable | $ 244 | $ 369 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | |||
Total revenue | $ 909,918 | $ 986,787 | $ 1,162,112 |
Cost of revenue: | |||
Total cost of revenue | 254,127 | 271,905 | 346,139 |
Gross profit | 655,791 | 714,882 | 815,973 |
Operating expenses: | |||
Research and development (related party balances of $20, $3, and $1,624, respectively) | 203,588 | 215,076 | 232,701 |
Sales and marketing (related party balances of $0, $2, and $2,423, respectively) | 291,870 | 312,536 | 328,628 |
General and administrative (related party balances of $20, $1,703, and $4,099, respectively) | 93,572 | 109,479 | 118,438 |
Amortization of acquired intangible assets | 74,305 | 76,640 | 70,141 |
Restructuring charges | 18,693 | 5,209 | 4,001 |
Impairment of intangible assets | 35,871 | 0 | 0 |
Loss on divestiture of business | 9,472 | 0 | 0 |
Total operating expenses | 727,371 | 718,940 | 753,909 |
Income (loss) from operations | (71,580) | (4,058) | 62,064 |
Interest and other income (expense), net: | |||
Interest income | 5,245 | 1,808 | 1,021 |
Interest expense | (26,143) | (12,633) | (9,184) |
Other expense, net (related party balances of $0, $56, and $426, respectively) | (434) | (3,776) | (1,716) |
Total interest and other expense, net | (21,332) | (14,601) | (9,879) |
Income (loss) before income tax expense (benefit) | (92,912) | (18,659) | 52,185 |
Income tax expense (benefit) | (19,588) | (98,471) | 18,894 |
Net income (loss) | $ (73,324) | $ 79,812 | $ 33,291 |
Basic net income (loss) per share (in dollars per share) | $ (0.93) | $ 0.91 | $ 0.36 |
Diluted net income (loss) per share (in dollars per share) | $ (0.93) | $ 0.90 | $ 0.36 |
Weighted average common shares outstanding used in computing: | |||
Net income (loss) per share-basic (in shares) | 78,617 | 87,425 | 92,226 |
Net income (loss) per share-diluted (in shares) | 78,617 | 88,261 | 92,920 |
Product | |||
Revenue: | |||
Total revenue | $ 467,289 | $ 520,418 | $ 715,404 |
Cost of revenue: | |||
Total cost of revenue | 140,938 | 158,628 | 233,275 |
Service | |||
Revenue: | |||
Total revenue | 442,629 | 466,369 | 446,708 |
Cost of revenue: | |||
Total cost of revenue | $ 113,189 | $ 113,277 | $ 112,864 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Related party | $ 254,127 | $ 271,905 | $ 346,139 |
Related party research and development | 203,588 | 215,076 | 232,701 |
Related party selling and marketing | 291,870 | 312,536 | 328,628 |
Related party general and administrative expense | 93,572 | 109,479 | 118,438 |
Related party other income (expense), net | (434) | (3,776) | (1,716) |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Related party research and development | 20 | 3 | 1,624 |
Related party selling and marketing | 0 | 2 | 2,423 |
Related party general and administrative expense | 20 | 1,703 | 4,099 |
Related party other income (expense), net | 0 | 56 | 426 |
Product | |||
Related Party Transaction [Line Items] | |||
Related party | 140,938 | 158,628 | 233,275 |
Product | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Related party | 0 | 245 | 7,229 |
Service | |||
Related Party Transaction [Line Items] | |||
Related party | 113,189 | 113,277 | 112,864 |
Service | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Related party | $ 529 | $ 665 | $ 745 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (73,324) | $ 79,812 | $ 33,291 |
Other comprehensive income (loss): | |||
Cumulative translation adjustments | (3,229) | 4,889 | (1,000) |
Recognition of actuarial net (loss) gain from pension and other post-retirement plans, net of (benefit) taxes of ($976), $435, and ($368) | (2,278) | 1,353 | (858) |
Changes in market value of investments: | |||
Changes in unrealized gains (losses), net of taxes (benefit) of $19, $15, and $0 | 60 | (6) | (59) |
Total net change in market value of investments | 60 | (6) | (59) |
Changes in market value of derivatives: | |||
Changes in market value of derivatives, net of tax (benefits) of ($172), $267, and ($167) | (524) | 812 | (277) |
Reclassification adjustment for net (losses) gains included in net income (loss), net of (benefit) taxes of $138, ($219), and $135 | 437 | (681) | 223 |
Total net change in market value of derivatives | (87) | 131 | (54) |
Other comprehensive income (loss) | (5,534) | 6,367 | (1,971) |
Total comprehensive income (loss) | $ (78,858) | $ 86,179 | $ 31,320 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Recognition of actuarial net gain from pension and other post-retirement plans, tax expense (benefit) | $ (976) | $ 435 | $ (368) |
Changes in unrealized (losses) gains, taxes | 19 | 15 | 0 |
Changes in market value of derivatives, taxes (benefit) | (172) | 267 | (167) |
Reclassification adjustment for net gains included in net income, taxes | $ 138 | $ (219) | $ 135 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock Voting | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Treasury stock | Retained Earnings |
Beginning Balance at Mar. 31, 2016 | $ 2,443,382 | $ 114 | $ 2,642,745 | $ (1,501) | $ (481,366) | $ 283,390 |
Beginning Balance (in shares) at Mar. 31, 2016 | 114,495,614 | 20,407,145 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 33,291 | 33,291 | ||||
Unrealized net investment gains | (59) | (59) | ||||
Unrealized net losses on derivative financial instruments | (54) | (54) | ||||
Cumulative translation adjustments | (1,000) | (1,000) | ||||
Recognition of actuarial net losses from pension and other post-retirement plan | (858) | (858) | ||||
Issuance of common stock pursuant to vesting of restricted stock units | 2 | $ 2 | ||||
Issuance of common stock pursuant to vesting of restricted stock units (in shares) | 950,159 | |||||
Stock-based compensation expense for restricted stock units granted to employees | 36,449 | 36,449 | ||||
Issuance of common stock under employee stock purchase plan | 15,697 | 15,697 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 471,658 | |||||
Repurchase of treasury stock | (89,555) | $ (89,555) | ||||
Repurchase of treasury stock (in shares) | 3,468,998 | |||||
Shortfall from tax benefit from share-based compensation awards | (1,045) | (1,045) | ||||
Ending Balance at Mar. 31, 2017 | 2,436,250 | $ 116 | 2,693,846 | (3,472) | $ (570,921) | 316,681 |
Ending Balance (in shares) at Mar. 31, 2017 | 115,917,431 | 23,876,143 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 79,812 | 79,812 | ||||
Unrealized net investment gains | (6) | (6) | ||||
Unrealized net losses on derivative financial instruments | 131 | 131 | ||||
Cumulative translation adjustments | 4,889 | 4,889 | ||||
Recognition of actuarial net losses from pension and other post-retirement plan | 1,353 | 1,353 | ||||
Issuance of common stock pursuant to vesting of restricted stock units | 1 | $ 1 | ||||
Issuance of common stock pursuant to vesting of restricted stock units (in shares) | 1,216,535 | |||||
Stock-based compensation expense for restricted stock units granted to employees | 43,425 | 43,425 | ||||
Issuance of common stock under employee stock purchase plan | 17,849 | 17,849 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 610,947 | |||||
Repurchase of treasury stock | (514,922) | (90,000) | $ (424,922) | |||
Repurchase of treasury stock (in shares) | 13,598,747 | |||||
Ending Balance at Mar. 31, 2018 | 2,068,782 | $ 117 | 2,665,120 | 2,895 | $ (995,843) | 396,493 |
Ending Balance (in shares) at Mar. 31, 2018 | 117,744,913 | 37,474,890 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (73,324) | (73,324) | ||||
Unrealized net investment gains | 60 | 60 | ||||
Unrealized net losses on derivative financial instruments | (87) | (87) | ||||
Cumulative translation adjustments | (3,229) | (3,229) | ||||
Recognition of actuarial net losses from pension and other post-retirement plan | (2,278) | (2,278) | ||||
Issuance of common stock pursuant to vesting of restricted stock units | 3 | $ 3 | ||||
Issuance of common stock pursuant to vesting of restricted stock units (in shares) | 1,438,219 | |||||
Stock-based compensation expense for restricted stock units granted to employees | 51,945 | 51,945 | ||||
Issuance of common stock under employee stock purchase plan | 15,074 | 15,074 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 577,000 | |||||
Repurchase of treasury stock | (26,437) | 96,783 | $ (123,220) | |||
Repurchase of treasury stock (in shares) | 4,674,881 | |||||
Ending Balance at Mar. 31, 2019 | $ 2,065,433 | $ 120 | $ 2,828,922 | $ (2,639) | $ (1,119,063) | $ 358,093 |
Ending Balance (in shares) at Mar. 31, 2019 | 119,760,132 | 42,149,771 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (73,324) | $ 79,812 | $ 33,291 |
Adjustments to reconcile net income (loss) to cash provided by operating activities, net of the effects of acquisitions: | |||
Depreciation and amortization | 137,878 | 153,503 | 160,863 |
Loss on divestiture of business | 7,660 | 0 | 0 |
Loss on disposal of fixed assets | 260 | 481 | 271 |
Deal related compensation expense and accretion charges | 102 | 153 | 153 |
Share-based compensation expense associated with equity awards | 56,328 | 47,317 | 39,189 |
Net change in fair value of contingent and contractual liabilities | 1,614 | 0 | 0 |
Accretion of contingent consideration | (119) | 0 | 0 |
Impairment charge | 35,871 | 0 | 0 |
Deferred income taxes | (33,442) | (127,784) | (11,008) |
Other (gains) losses | (152) | 18 | (111) |
Changes in assets and liabilities | |||
Accounts receivable and unbilled costs | (22,180) | 84,952 | (48,080) |
Due from related party | 172 | 443 | 25,055 |
Inventories | 5,321 | 1,006 | 12,456 |
Prepaid expenses and other assets | 3,034 | 20,147 | (24,751) |
Accounts payable | (3,876) | (8,929) | 405 |
Accrued compensation and other expenses | 19,964 | (17,718) | 6,785 |
Due to related party | 234 | (75) | (2,792) |
Income taxes payable | (639) | (2,734) | 1,963 |
Deferred revenue | 15,132 | (8,138) | 33,075 |
Net cash provided by operating activities | 149,838 | 222,454 | 226,764 |
Cash flows from investing activities: | |||
Purchase of marketable securities | (229,769) | (114,178) | (199,841) |
Proceeds from maturity of marketable securities | 230,433 | 196,041 | 181,321 |
Purchase of fixed assets | (23,392) | (15,913) | (29,696) |
Purchase of intangible assets | 0 | (544) | (1,031) |
Payments related to the divestiture of business | (3,293) | 0 | 0 |
Acquisition of businesses, net of cash acquired | 0 | (8,334) | (4,606) |
(Increase) decrease in deposits | (97) | (330) | 129 |
Contingent purchase consideration | 0 | 523 | 660 |
Collection of contingently returnable consideration | 0 | 0 | 12,864 |
Capitalized software development costs | (134) | (137) | (1,421) |
Net cash (used in) provided by investing activities | (26,252) | 57,128 | (41,621) |
Cash flows from financing activities: | |||
Issuance of common stock under stock plans | 3 | 1 | 2 |
Payment of contingent consideration | (2,851) | (660) | 0 |
Treasury stock repurchases, including accelerated share repurchases | (14,468) | (501,324) | (79,996) |
Tax withholding on restricted stock units | (11,969) | (13,598) | (9,559) |
Proceeds from issuance of long-term debt, net of issuance costs | 0 | 294,619 | 0 |
Repayment of long-term debt | (50,000) | 0 | 0 |
Net cash used in financing activities | (79,285) | (220,962) | (89,553) |
Effect of exchange rate changes on cash and cash equivalents | (5,212) | 6,385 | (761) |
Net increase in cash and cash equivalents | 39,089 | 65,005 | 94,829 |
Cash and cash equivalents, beginning of year | 370,731 | 305,726 | 210,897 |
Cash and cash equivalents, end of year | 409,820 | 370,731 | 305,726 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 23,281 | 9,604 | 6,442 |
Cash paid for income taxes | 13,381 | 18,216 | 49,290 |
Non-cash transactions: | |||
Transfers of inventory to fixed assets | 2,152 | 5,556 | 4,928 |
Additions to property, plant and equipment included in accounts payable | 455 | 1,379 | 1,241 |
Issuance of common stock under employee stock purchase plans | 15,074 | 17,849 | 15,697 |
Contingent consideration related to acquisition, included in accrued other | 0 | 523 | 660 |
Tenant improvement allowance | 10,171 | 2,104 | 0 |
Initial fair value of contingent consideration received as partial consideration for divestiture of business | $ 2,257 | $ 0 | $ 0 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS NetScout Systems, Inc., or NetScout or the Company, has been a technology innovator for three-plus decades since its founding in 1984. The Company's solutions, based on patented Adaptive Service Intelligence (ASI) technology, help customers identify network and application performance issues, defend their networks from denial of service (DDoS) attacks, and rapidly find and isolate advanced network threats. As a result, customers can quickly resolve issues that cause business disruptions, downtime, poor service quality or compromised security, thereby driving compelling returns on their investments in their network and broader information technology (IT) initiatives. The Company reports revenue and income in one reportable segment. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of NetScout and its wholly owned subsidiaries. Inter-company transactions and balances have been eliminated in consolidation. Certain amounts for the twelve months ended March 31, 2018 and March 31, 2017 , respectively, have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. Segment Reporting The Company's 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 the Chief Operating Decision Maker (CODM). The Company reports revenue and income in one reportable segment. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include those involving revenue recognition, valuation of goodwill and acquired assets and liabilities, valuation of the pension obligation, valuation of contingent consideration and share-based compensation. These items are continuously monitored and analyzed by management for changes in facts and circumstances and material changes in these estimates could occur in the future. Cash and Cash Equivalents and Marketable Securities Under current authoritative guidance, NetScout has classified its investments as "available-for-sale" which are carried at fair value based on quoted market prices and associated unrealized gains or losses are recorded as a separate component of stockholders’ equity until realized. NetScout 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. At March 31, 2019 and periodically throughout the year, NetScout has maintained cash balances in various operating accounts in excess of federally insured limits. NetScout limits the amount of credit exposure by investing only with credit worthy institutions which the Company believes are those institutions with an investment grade rating for deposits. Revenue Recognition The Company accounts for revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was adopted on April 1, 2018 using the modified retrospective transition method. For further discussion of the Company's accounting policies related to revenue see Note 3, "Revenue Recognition." Commission Expense Sales commissions are recorded as an asset when the initial contract's duration is longer than 12 months and amortized to expense ratably over the remaining performance periods of the related contracts. Uncollected Deferred Revenue Because of NetScout's revenue recognition policies, there are circumstances for which the Company does not recognize revenue relating to sales transactions that have been billed, but the related account receivable has not been collected. While the receivable represents an enforceable obligation, for balance sheet presentation purposes, the Company has not recognized the deferred revenue or the related account receivable and no amounts appear in the consolidated balance sheets for such transactions because control of the underlying deliverable has not transferred. The aggregate amount of unrecognized accounts receivable and deferred revenue was $23.3 million and $20.0 million at March 31, 2019 and 2018 , respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. NetScout's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At March 31, 2019 and 2018 respectively, the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. During the fiscal years ended March 31, 2019 and 2018 respectively, no direct customers or indirect channel partners accounted for more than 10% of total revenue. During the fiscal year ended March 31, 2017 , one direct customer, Verizon Communications Inc. (Verizon), accounted for more than 10% of total revenue, while no indirect channel partner accounted for more than 10% of total revenue. Historically, the Company has not experienced any significant failure of its customers 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. Trade Receivable Valuations Accounts receivable are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. 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. Fixed Assets Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or anticipated useful life of the improvement. Gains and losses upon asset disposal are recognized in the year of disposition. Expenditures for replacements and building improvements are capitalized, while expenditures for maintenance and repairs are charged against earnings as incurred. Valuation of Goodwill, Intangible Assets and Other Acquisition and Divestiture Accounting Items The Company amortizes acquired definite-lived intangible assets over their estimated useful lives. Goodwill and other indefinite-lived intangible assets are not amortized but subject to annual impairment tests; more frequently if events or circumstances occur that would indicate a potential decline in their fair value. The Company performs the assessment annually during the fourth quarter and on an interim basis if potential impairment indicators arise. The Company has identified two reporting units: (1) Service Assurance and (2) Security. To test impairment, the Company first assesses qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the intangible asset is impaired. If based on the Company's qualitative assessment it is more likely than not that the fair value of the intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if the Company concludes otherwise, quantitative impairment testing is not required. During fiscal year 2019, the Company performed a quantitative analysis for goodwill. The Company determined the fair value of the reporting unit's goodwill using established income and market valuation approaches. Goodwill was estimated to be recoverable as of January 31, 2019. Indefinite-lived intangible assets are tested for impairment 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 indefinite-lived intangible assets below its carrying value. To test impairment, the Company first assesses qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible is impaired. If based on the Company's qualitative assessment, the Company concludes that it is more likely than not that the fair value of the indefinite-lived asset is greater than its carrying amount, quantitative impairment testing is not required. The Company completed its annual impairment test of the indefinite-lived intangible asset at January 31, 2019 using the qualitative Step 0 assessment. No impairment indicators were observed as of January 31, 2019. The Company completed two acquisitions and one divestiture during the three-year period ended March 31, 2019 . The acquisition method of accounting requires an estimate of the fair value of the assets and liabilities acquired as part of these transactions. In order to estimate the fair value of acquired intangible assets, the Company uses a relief from royalty model which requires management to estimate: future revenues expected to be generated by the acquired intangible assets, a royalty rate which a market participant would pay related to the projected revenue stream, a present value factor which approximates a risk adjusted rate of return for a market participant purchasing the assets, and a technology migration curve representing a period of time over which the technology assets or some portion thereof are still being used. The Company is also required to develop the fair value for customer relationships acquired as part of these transactions which requires that it create estimates for the following items: a projection of future revenues associated with the acquired company's existing customers, a turnover rate for those customers, a margin related to those sales, and a risk adjusted rate of return for a market participant purchasing those relationships. The Company has a contingent consideration asset related to the divestiture of its handheld network test (HNT) tools business in September 2018. The contingent consideration asset represents potential future earnout payments to the Company of up to $4.0 million over two years that are contingent on the HNT tools business achieving certain milestones. The fair value of the contingent consideration of $2.3 million was recognized on the acquisition date and was measured using unobservable (Level 3) inputs. The value of the contingent consideration asset at March 31, 2019 was $0.8 million . The Company had a contingent liability at March 31, 2018 for $523 thousand related to the acquisition of Efflux in July 2017 for which an escrow account was established to cover damages NetScout may have suffered 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 merger agreement. The $523 thousand was paid to the seller in July 2018. The Company had a contingent liability at March 31, 2018 for $4.9 million related to the acquisition of Simena LLC in November 2011, which was based on the ultimate settlement of assets and liabilities acquired as part of the transaction, and the former owners' future period of employment with NetScout. The contingent purchase consideration of $5.0 million was paid to the seller in November 2018. The Company had $660 thousand of contingent purchase consideration related to the acquisition of Avvasi Incorporated (Avvasi) in August 2016 for which an escrow account was established to cover damages NetScout may have suffered 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 $660 thousand was paid to the seller in August 2017. Capitalized Software Development Costs Costs incurred in the research and development of the Company’s products are expensed as incurred, except for certain software development costs. Costs associated with the development of computer software are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software products are available for first customer shipment. Such costs are amortized using the straight-line method over the estimated economic life of the product, which generally does not exceed three years . Capitalized software development costs are periodically assessed for recoverability in the event of changes to the anticipated future revenue for the software products or changes in product technologies. Unamortized capitalized software development costs that are determined to be in excess of the net realizable value of the software products would be expensed in the period in which such a determination is made. Typically for accounting purposes, these R&D investments have not been capitalized because of the development methodology employed. The developments are added individually to the core code over a shorter period of time but marketed as a release once all portions are complete. Amortization included as cost of product revenue was $1.1 million , $1.0 million and $ 594 thousand for the fiscal years ended March 31, 2019 , 2018 , and 2017 , respectively. The Company capitalized $0.1 million and $0.1 million in software development costs in the fiscal years ended March 31, 2019 and 2018 . Derivative Financial Instruments Under authoritative guidance for derivative instruments and hedging activities, all hedging activities must be documented at the inception of the hedge and must meet the definition of highly effective in offsetting changes to future cash flows in order for the derivative to qualify for hedge accounting. Under the guidance, if an instrument qualifies for hedge accounting, the changes in the fair value each period for open contracts, measured at the end of the period, are recorded to other comprehensive income. Otherwise, changes in the fair value are recorded in earnings each period. Management must perform initial and ongoing tests in order to qualify for hedge accounting. In accordance with the guidance, the Company accounts for its instruments under hedge accounting. The effectiveness and a measurement of ineffectiveness of qualifying hedge contracts are assessed by the Company quarterly. The Company records the fair value of its derivatives in prepaid expenses and other current assets and accrued other in the Company's consolidated balance sheet. The effective portion of gains or losses resulting from changes in the fair value of qualifying hedges are recorded in other comprehensive income (loss) until the forecasted transaction occurs, with any ineffective portion classified directly to the Company’s consolidated statement of operations based on the expense categories of the items being hedged. When forecasted transactions occur, unrealized gains or losses associated with the effective portion of the hedge are reclassified to the respective expense categories in the Company’s consolidated statement of operations. Gains or losses related to hedging activity are included as operating activities in the Company’s consolidated statement of cash flows. If the underlying forecasted transactions do not occur, or it becomes probable that they will not occur, the gain or loss on the related cash flow hedge is recognized immediately in earnings. Contingencies NetScout accounts for claims and contingencies in accordance with authoritative guidance that requires an estimated loss to be recorded from a claim or loss contingency when information available prior to issuance of its consolidated financial statements indicates that it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. If NetScout determines that it is reasonably possible but not probable that an asset has been impaired or a liability has been incurred or if the amount of a probable loss cannot be reasonably estimated, then in accordance with the authoritative guidance, Netscout discloses the amount or range of estimated loss if the amount or range of estimated loss is material. Accounting for claims and contingencies requires NetScout to use its judgment. NetScout consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to matters in the ordinary course of business. Contingent assets and liabilities include contingent consideration in connection with the Company’s acquisitions and divestitures. Contingent consideration represents earnout payments in connection with the Company’s acquisitions and divestitures and is recognized at fair value on the acquisition date and remeasured each reporting period with subsequent adjustments recognized in the consolidated statements of income. The Company discounts the contingent purchase consideration to present value using a risk adjusted interest rate at each reporting period. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. Changes in the fair value of contingent assets and liabilities may result from changes in discount periods. The Company reflects changes in fair value due to probability changes in earnings in the consolidated statements of income. Earnout payments are reflected in both cash flows from operating and financing activities and the changes in fair value are reflected in cash flows from operating activities in the consolidated statements of cash flows. Share-Based Compensation NetScout recognizes compensation expense for all share-based payments granted. Under the fair value recognition provisions, share-based compensation is calculated net of an estimated forfeiture rate and compensation cost is only recognized for those shares expected to vest on a straight-line basis over the expected requisite service period of the award. Foreign Currency NetScout accounts for its reporting of foreign operations in accordance with guidance which establishes guidelines for the determination of the functional currency of foreign subsidiaries. In accordance with the guidance, NetScout has determined its functional currency for those foreign subsidiaries that are an extension of NetScout's U.S. operations to be the U.S. Dollar. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into United States dollars using the period-end exchange rate, and income and expense items are translated using the average exchange rate during the period. Cumulative translation adjustments are reflected as a separate component of stockholders’ equity. NetScout will experience currency exchange risk with respect to foreign currency denominated expenses. In order to partially offset the risks associated with the effects of certain foreign currency exposures, NetScout has established a program that utilizes foreign currency forward contracts. Under this program, increases or decreases in foreign currency exposures are partially offset by gains or losses on forward contracts, to mitigate the impact of foreign currency transaction gains or losses. The Company does not use forward contracts to engage in currency speculation. All outstanding foreign currency forward contracts are recorded at fair value at the end of each fiscal period. The Company had foreign currency losses of $2.0 million , $4.1 million and $2.5 million for the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. These amounts are included in other expense, net. Advertising Expense NetScout recognizes advertising expense as incurred. Advertising expense was $9.4 million , $6.5 million and $8.1 million for the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) typically consists of unrealized gains and losses on marketable securities, unrealized gain (loss) on hedge contracts, actuarial gains and losses, and foreign currency translation adjustments. Income Taxes NetScout accounts for its income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis, as well as the effect of any net operating loss and tax credit carryforwards. Income tax expense is comprised of the current tax liability or benefit and the change in deferred tax assets and liabilities. NetScout evaluates the recoverability of deferred tax assets by considering all positive and negative evidence relating to future profitability. NetScout weighs objective and verifiable evidence more heavily in this analysis. In situations where NetScout concludes that it does not have sufficient objective and verifiable evidence to support the realizability of the deferred tax asset, NetScout creates a valuation allowance against it. Recent Accounting Standards In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company adopted ASU 2018-15 effective July 1, 2018. The adoption has had an immaterial impact to the consolidated financial statements for the twelve months ended March 31, 2019. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years ending after December 15, 2020. ASU 2018-14 is effective for NetScout beginning April 1, 2021. Early adoption is permitted. The Company is currently assessing the effect that ASU 2018-14 will have on its financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. ASU 2018-13 is effective for NetScout beginning April 1, 2020. Early adoption is permitted. The Company is currently assessing the effect that ASU 2018-13 will have on its financial position, results of operations, and disclosures. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. ASU 2018-02 amends ASC 220, Income Statement - Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. In addition, under the ASU 2018-02, the Company may be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2018-02 is effective for the Company beginning April 1, 2019. Early adoption is permitted. The Company does not believe the adoption of ASU 2018-02 will have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company does not believe the adoption of ASU 2017-12 will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and issued subsequent amendments to initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, Topic 842). ASC 842 aims to increase transparency and comparability among organizations with respect to accounting for leases. Lessees will recognize a right-of-use (ROU) asset and a lease liability measured at the present value of lease payments for virtually all of their leases. Short term leases with a term of 12 months or less are not required to be recognized. ASC 842 also requires disclosure of key information about leasing arrangements. ASC 842 will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted. The Company adopted the new standard on April 1, 2019 using the effective date as the date of initial application. Consequently, financial information will not be updated and disclosures required under the new standard will not be provided for dates and periods before April 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which among other things, allows the carryforward of the historical lease classification. Further, the Company elected the practical expedients to combine lease and non-lease components, and to not recognize ROU assets and lease liabilities for short-term leases. The Company currently anticipates that the adoption of this new standard will materially impact the consolidated balance sheets by recognizing new ROU assets and lease liabilities for operating leases with the most significant impact from the recognition of ROU assets and lease liabilities related to the Company's office space operating leases. The impact on the Company's results of operations and cash flows is not expected to be material. The Company has implemented a new lease accounting system and is updating processes and controls in preparation for the adoption of the new standard, including the requirement to provide significant new disclosures about the Company's leasing activities. Please refer to Note 18, "Commitments and Contingencies" for additional information about the Company's leases, including the future minimum lease payments for operating leases at March 31, 2019. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted Topic 606 as of April 1, 2018 using the modified retrospective transition method. Please refer to Note 3, "Revenue Recognition" for further details. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Revenue from Contracts with Customers In May 2014, the FASB issued Topic 606, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Topic 606 replaced most existing revenue recognition guidance under GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers and establishes disclosure requirements which are more extensive than those required under prior GAAP. Topic 606 became effective for the Company on April 1, 2018. The Company elected to use the modified retrospective transition approach. Therefore, the comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. Revenue Recognition Policy The Company exercises judgment and uses estimates in connection with determining the amounts of product and services revenues to be recognized in each accounting period. The Company derives revenues primarily from the sale of network management tools and security solutions for service provider and enterprise customers, which include hardware, software and service offerings. The majority of the Company’s product sales consist of hardware products with embedded software that are essential to providing customers the intended functionality of the solutions. The Company also sells software offerings decoupled from the underlying hardware and software solutions to provide customers with enhanced functionality. The Company accounts for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by the Company as an arrangement with commercial substance identifying payment terms, each party’s rights and obligations regarding the products or services to be transferred and the amount the Company deems probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services. Product revenue is typically recognized upon shipment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software, and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. The Company's service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, stand-ready software-as-a-service (SAAS) and other professional services including consulting and training. The Company generally provides software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training. Generally, the Company's contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. Bundled arrangements are concurrent customer purchases of a combination of the Company's product and service offerings that may be delivered at various points in time. The Company allocates the transaction price among the performance obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately based on the element’s historical pricing. The Company also considers its overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, the Company has established SSP for a majority of its service elements based on historical standalone sales. In certain instances, the Company has established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. Further, for certain service engagements, the Company considers quoted prices as part of multi-element arrangements of those engagements as a basis for establishing SSP. SSP has been established for product elements as the average or median selling price the element was recently sold for, whether sold alone or sold as part of a multiple element transaction. The Company reviews sales of the product elements on a quarterly basis and updates, when appropriate, its SSP for such elements to ensure that it reflects recent pricing experience. The Company's products are distributed through its direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. The Company records consideration given to a reseller or distributor as a reduction of revenue to the extent they have recorded revenue from the reseller or distributor. With limited exceptions, the Company's return policy does not allow product returns for a refund. Returns have been insignificant to date. In addition, the Company has a history of successfully collecting receivables from its resellers and distributors. Financial Statement Impact of Adoption The cumulative impact of applying Topic 606 to all contracts with outstanding performance obligations as of April 1, 2018 was recorded as an adjustment to retained earnings as of the adoption date. As a result of applying the modified retrospective approach to adopt the new standard, the following adjustments were made to accounts on the consolidated balance sheet at April 1, 2018 (in thousands): Balance at March 31, 2018 Adjustments from Adopting Topic 606 Balance at April 1, 2018 ASSETS: Accounts receivable and unbilled costs $ 213,438 $ 1,195 $ 214,633 Prepaid expenses and other current assets 33,502 4,626 38,128 Other assets 12,866 4,748 17,614 LIABILITIES: Deferred revenue and customer deposits 301,925 (30,227 ) 271,698 Deferred tax liability 151,563 7,124 158,687 Long-term deferred revenue and customer deposits 91,409 (1,252 ) 90,157 STOCKHOLDERS' EQUITY: Retained earnings 396,493 34,924 431,417 In connection with the adoption of Topic 606, the Company increased its retained earnings by $34.9 million , due to uncompleted contracts at April 1, 2018, of which $34.9 million of revenue will not be recognized in future periods under the new standard. The Company capitalized $7.1 million of incremental sales commission costs on the adoption date directly related to obtaining customer contracts and is amortizing these costs as it satisfies the underlying performance obligations, which for certain contracts can include anticipated renewal periods. As of April 1, 2018, the acceleration of revenue that was deferred under prior guidance was primarily attributable to no longer requiring the separation of promised goods or services, such as software licenses, technical support, specified and unspecified upgrade rights on the basis of vendor specific objective evidence, and the impact of allocating the transaction price to the software performance obligations in the contract on a relative basis using standalone selling price rather than allocating under the residual method, which allocates the entire arrangement discount to the delivered performance obligations. In addition, revenue from perpetual licenses and associated hardware with extended payment terms and term licenses are now recognized when control is transferred to the customer, the point in time when the customer can use and benefit from the license. Previously the Company recognized revenue over the term of the agreements as payments became due or earlier if prepaid. The net change in deferred income taxes of $7.1 million is primarily due to the deferred tax effects resulting from the adjustment to retained earnings for the cumulative effect of applying Topic 606 to active contracts as of the adoption date. Impact of Topic 606 on Financial Statement Line Items The impact of adoption of Topic 606 on the Company's consolidated balance sheet at March 31, 2019 and on the Company's consolidated statement of operations for the twelve months ended March 31, 2019 was as follows (in thousands): March 31, 2019 As Reported Balance without Adoption of Topic 606 Effect of Change Higher (Lower) ASSETS: Accounts receivable and unbilled costs 235,318 229,708 5,610 Inventories and deferred costs 26,270 26,418 (148 ) Prepaid expenses and other current assets 35,658 31,810 3,848 Other assets 16,988 12,074 4,914 LIABILITIES: Deferred revenue and customer deposits 272,508 306,799 (34,291 ) Deferred tax liability 124,229 121,535 2,694 Long-term deferred revenue and customer deposits 94,619 106,025 (11,406 ) STOCKHOLDERS' EQUITY: — Retained earnings 358,093 339,765 18,328 Twelve Months Ended March 31, 2019 As Reported Balance without Adoption of Topic 606 Effect of Change Higher (Lower) Total revenues $ 909,918 $ 888,950 $ 20,968 Total cost of revenue 254,127 253,979 148 Sales and marketing expense 291,870 292,080 (210 ) Income tax benefit (19,588 ) (24,022 ) 4,434 Net loss (73,324 ) (89,920 ) 16,596 Basic net loss per share $ (0.93 ) $ (1.14 ) $ 0.21 Diluted net loss per share $ (0.93 ) $ (1.14 ) $ 0.21 During the twelve months ended March 31, 2019 , the Company recognized revenue of $260.1 million related to the Company's deferred revenue balance reported as of April 1, 2018. The adoption of Topic 606 had no impact to net cash provided by or used in operating, investing and financing activities on the Company’s consolidated statements of cash flows during the twelve months ended March 31, 2019 . Performance Obligations Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. The transaction price is allocated among performance obligations in bundled contracts in an amount that depicts the relative standalone selling prices of each obligation. For contracts involving distinct hardware and software licenses, the performance obligations are satisfied at a point in time when control is transferred to the customer. For standalone maintenance and post-contract support (PCS) the performance obligation is satisfied ratably over the contract term as a stand-ready obligation. For consulting and training services, the performance obligation may be satisfied over the contract term as a stand-ready obligation, satisfied over a period of time as those services are delivered, or satisfied at the completion of the service when control has transferred, or the services have expired unused. Payments for hardware, software licenses, one-year maintenance, PCS and consulting services, are typically due up front with payment terms of 30 to 90 days. However, the Company does have contracts pursuant to which billings occur ratably over a period of years following the transfer of control for the contracted performance obligations. Payments on multi-year maintenance, PCS and consulting services are typically due in annual installments over the contract term. The Company did not have any material variable consideration such as obligations for returns, refunds or warranties at March 31, 2019 . At March 31, 2019 , the Company had total deferred revenue of $367.1 million , which represents the aggregate total contract price allocated to undelivered performance obligations. The Company expects to recognize $272.5 million , or 74% , of this revenue during the next 12 months, and expects to recognize the remaining $94.6 million , or 26% , of this revenue thereafter. NetScout expects that the amount of billed and unbilled deferred revenue will change from quarter to quarter for several reasons, including the specific timing, duration and size of large customer support and service agreements, varying billing cycles of such agreements, the specific timing of customer renewals, and foreign currency fluctuations. The Company did not have any significant financing components, or variable consideration or performance obligations satisfied in a prior period recognized during the twelve months ended March 31, 2019 . Contract Balances The Company receives payments from customers based on a billing schedule as established by the Company’s contracts. Contract assets relate to performance obligations where control has transferred to the customer in advance of scheduled billings. Upon adoption, the Company recorded unbilled accounts receivable representing the right to consideration in exchange for goods or services that have been transferred to a customer conditional on the passage of time. The Company did not record any contract assets upon adoption. Deferred revenue relates to payments received in advance of performance under the contract. The following table provides information about contract assets and liabilities (in thousands): April 1, 2018 March 31, 2019 Increase/ (Decrease) ASSETS: Customer accounts receivable $ 205,299 $ 240,482 35,183 Unbilled receivables 4,338 3,354 (984 ) Other receivables 4,996 3,577 (1,419 ) Long-term unbilled receivables 2,254 2,754 500 $ 216,887 $ 250,167 33,280 LIABILITIES: Deferred revenue $ 271,698 $ 272,508 $ 810 Deferred revenue, long-term 90,157 94,619 4,462 $ 361,855 $ 367,127 $ 5,272 Costs to Obtain Contracts The Company has determined that the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are sales commissions paid to its employees. Sales commissions are recorded as an asset and amortized to expense ratably over the remaining performance periods of the related contracts with remaining performance obligations. The Company applies the practical expedient in Topic 606 and expenses costs as incurred for sales commissions when the amortization period would have been one year or less. At March 31, 2019 , the consolidated balance sheet included $6.4 million in assets related to sales commissions to be expensed in future periods. A balance of $3.8 million was included in prepaid expenses and other current assets, and a balance of $2.6 million was included as other assets in the Company's consolidated balance sheet at March 31, 2019 . During the twelve months ended March 31, 2019 , the Company recognized $6.5 million of amortization related to this sales commission asset, which is included in the sales and marketing expense line in the Company's consolidated statements of operations. |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 12 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Cash and cash equivalents consisted of money market instruments and cash maintained with various financial institutions at March 31, 2019 and 2018 . Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): March 31, 2019 March 31, 2018 March 31, 2017 March 31, 2016 Cash and cash equivalents $ 409,632 $ 369,821 $ 304,880 $ 210,711 Restricted cash 188 910 846 186 Total cash, cash equivalents and restricted cash $ 409,820 $ 370,731 $ 305,726 $ 210,897 The Company's restricted cash includes cash balances which are legally or contractually restricted. The Company's restricted cash is included within prepaid and other current assets and consists of amounts related to holdbacks associated with prior acquisitions. Marketable Securities The following is a summary of marketable securities held by NetScout at March 31, 2019 classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 27,610 $ 12 $ 27,622 Commercial paper 48,722 — 48,722 Total short-term marketable securities 76,332 12 76,344 Corporate bonds 1,007 5 1,012 Total long-term marketable securities 1,007 5 1,012 Total marketable securities $ 77,339 $ 17 $ 77,356 The following is a summary of marketable securities held by NetScout at March 31, 2018 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 42,246 $ (60 ) $ 42,186 Commercial paper 33,003 — 33,003 Corporate bonds 2,754 (2 ) 2,752 Total short-term marketable securities 78,003 (62 ) 77,941 Total long-term marketable securities — — — Total marketable securities $ 78,003 $ (62 ) $ 77,941 Contractual maturities of the Company’s marketable securities held at March 31, 2019 and March 31, 2018 were as follows (in thousands): March 31, March 31, Available-for-sale securities: Due in 1 year or less $ 76,344 $ 77,941 Due after 1 year through 5 years 1,012 — $ 77,356 $ 77,941 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Mar. 31, 2019 | |
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 unobservable inputs. The following tables present the Company’s financial assets and liabilities measured on a recurring basis using the fair value hierarchy at March 31, 2019 and 2018 (in thousands): Fair Value Measurements at March 31, 2019 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 409,632 $ — $ — $ 409,632 U.S. government and municipal obligations 10,732 16,890 — 27,622 Commercial paper — 48,722 — 48,722 Corporate bonds 1,012 — — 1,012 Derivative financial instruments — 58 — 58 Contingent consideration — — 762 762 $ 421,376 $ 65,670 $ 762 $ 487,808 LIABILITIES: Derivative financial instruments $ — $ (68 ) $ — $ (68 ) $ — $ (68 ) $ — $ (68 ) Fair Value Measurements at March 31, 2018 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 369,821 $ — $ — $ 369,821 U.S. government and municipal obligations 14,513 27,673 — 42,186 Commercial paper — 33,003 — 33,003 Corporate bonds 2,752 — — 2,752 Derivative financial instruments — 122 — 122 $ 387,086 $ 60,798 $ — $ 447,884 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,464 ) $ (5,464 ) Derivative financial instruments — (40 ) — (40 ) $ — $ (40 ) $ (5,464 ) $ (5,504 ) 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 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 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's Level 3 assets consist of contingent consideration related to the divestiture of the Company's handheld network test (HNT) tools business in September 2018. The contingent consideration represents potential future earnout payments to the Company of up to $4.0 million over two years that are contingent on the HNT tools business achieving certain milestones. The fair value of the contingent consideration of $2.3 million was recognized on the acquisition date and was measured using unobservable (Level 3) inputs. The Company recorded a $1.6 million change in the fair value of the contingent consideration, which is included in other expense, net within the Company's consolidated statement of operations for the year ended March 31, 2019. The $0.8 million of contingent consideration is included in other assets within the Company’s consolidated balance sheet at March 31, 2019 . The Company's Level 3 liabilities at March 31, 2018 consist of contingent purchase consideration. The Company's contingent purchase consideration at March 31, 2018 included $523 thousand related to the acquisition of certain assets and liabilities of Efflux Systems, Inc. (Efflux) in the second quarter of fiscal year 2018. The contingent purchase consideration was released from escrow to the sellers in July 2018. The fair value of contingent purchase consideration at March 31, 2018 included $4.9 million related to the acquisition of Simena LLC (Simena) in November 2011 for future consideration to be paid to the seller. The contingent purchase consideration was included as a contingent liability within accrued other in the Company's consolidated balance sheet at March 31, 2018 . The contingent purchase consideration was paid to the seller in November 2018. The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended March 31, 2019 (in thousands): Contingent Contingent Consideration Balance at March 31, 2018 $ (5,464 ) $ — Contingent consideration pursuant to divestiture of the HNT tools business — 2,257 Change in fair value of contingent consideration (102 ) (1,495 ) Payments made 5,566 — Balance at March 31, 2019 $ — $ 762 Deal-related compensation expense and accretion charges related to the contingent purchase consideration for the fiscal year ended March 31, 2019 were $102 thousand and were included within research and development expense. Accretion income related to the contingent consideration received as partial consideration for the divestiture of the HNT tools business for the fiscal year ended March 31, 2019 was $119 thousand and was included within interest income. The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended March 31, 2018 (in thousands): Contingent Purchase Consideration Balance at March 31, 2017 $ (5,449 ) Additions to Level 3 (523 ) Change in fair value of contingent consideration (152 ) Payments made 660 Balance at March 31, 2018 $ (5,464 ) Deal related compensation expense and accretion charges related to the contingent purchase consideration for the fiscal year ended March 31, 2018 were $152 thousand and were included within research and development expense. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the FIFO method. Inventories consist of the following (in thousands): March 31, 2019 2018 Raw materials $ 14,432 $ 20,860 Work in process 1,181 2,589 Finished goods 7,738 8,500 Deferred costs 2,919 2,825 $ 26,270 $ 34,774 |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | FIXED ASSETS Fixed assets consist of the following (in thousands): Estimated Useful Life in Years March 31, 2019 2018 Furniture and fixtures 3-7 $ 9,373 $ 6,596 Computer equipment and internal use software 3-5 158,797 147,237 Demonstration and spare part units 2-5 17,928 31,338 Leasehold improvements (1) up to 12 46,662 19,340 232,760 204,511 Less – accumulated depreciation (173,809 ) (152,000 ) $ 58,951 $ 52,511 (1) Leasehold improvements are depreciated over the shorter of the lease term or anticipated useful life of the improvement. Depreciation expense was $27.4 million , $34.7 million and $33.0 million for the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. |
ACQUISITIONS & DIVESTITURES
ACQUISITIONS & DIVESTITURES | 12 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS & DIVESTITURES | ACQUISITIONS & DIVESTITURES HNT Tools Business Divestiture On September 14, 2018 (the HNT Divestiture Date), the Company divested its HNT tools business for cash proceeds of $1.3 million and potential future earnout payments of up to $4.0 million over two years that are contingent on the HNT tools business achieving certain milestones. The fair value of the contingent consideration in the amount of $2.3 million was recognized on the HNT Divestiture Date and was measured using unobservable (Level 3) inputs. The contingent consideration is presented as a non-cash investing activity on the consolidated statement of cash flows. The Company transferred $4.6 million of consideration along with net liabilities of the HNT tools business related to a working capital adjustment during the year ended March 31, 2019. The Company recorded a loss on the divestiture for the year ended March 31, 2019 totaling $9.5 million , which included $1.3 million of transaction costs and $0.5 million of incentive compensation payable to the HNT tools business employees negotiated as part of the sale. In connection with the divestiture, the Company has entered into a transitional services agreement with the buyer to provide certain services for a period of up to eighteen months . Income associated with the transitional services agreement for the fiscal year ended March 31, 2019 was $2.2 million and is included within other expense, net in the Company's consolidated statement of operations. The Company recorded a $1.6 million change in the fair value of the contingent consideration, which is included in other expense, net within the Company’s consolidated statements of operations for the year ended March 31, 2019. The $0.8 million of contingent consideration is included in other assets within the Company’s consolidated balance sheet at March 31, 2019 The Company determined that the sale of the HNT tools business did not represent a strategic shift and will not have a major effect on its consolidated results of operations, financial position or cash flows. Accordingly, the Company has not presented the sale as a discontinued operation in the consolidated financial statements. Efflux On July 12, 2017 (the Efflux Closing Date), the Company completed the acquisition of Efflux for $8.6 million . Efflux's technology detects, analyzes and correlates threat activity within enterprise networks. The Efflux technology and engineering talent have been integrated into our security products in order to support the ongoing enhancement of that products portfolio. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $6.1 million from the acquisition was included within the Security reporting unit. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. |
GOODWILL & INTANGIBLE ASSETS
GOODWILL & INTANGIBLE ASSETS | 12 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL & INTANGIBLE ASSETS | GOODWILL & INTANGIBLE ASSETS Goodwill The Company has two reporting units: (1) Service Assurance and (2) Security. At March 31, 2019 , goodwill attributable to the Company's Service Assurance and Security reporting units was $1.2 billion and $555.1 million , respectively. At March 31, 2018 , goodwill attributable to the Company's Service Assurance and Security reporting units was $1.2 billion and $555.9 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 Company completed its annual impairment test on January 31, 2019 . In fiscal years 2019 and 2018 , the Company's quantitative impairment tests indicated that goodwill was not impaired. 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 and Security reporting units' goodwill fair value substantially exceeded their respective carrying value. The change in the carrying amount of goodwill for the fiscal year ended March 31, 2019 is due to the divestiture of the HNT tools business and 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 fiscal years ended March 31, 2019 and 2018 are as follows (in thousands): Balance at March 31, 2017 $ 1,718,162 Goodwill attributable to the Efflux acquisition 6,077 Foreign currency translation impact (11,475 ) Balance as of March 31, 2018 $ 1,712,764 Divestiture of the HNT tools business (4,414 ) Foreign currency translation impact 7,135 Balance as of March 31, 2019 $ 1,715,485 Intangible Assets The net carrying amounts of intangible assets were $669.1 million and $831.4 million at March 31, 2019 and 2018 , 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 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. During fiscal year 2019, the Company performed a quantitative analysis on certain intangible assets related to the HNT tools business, which has since been divested. The fair value for the intangible assets related to the HNT tools business was calculated considering a range of potential transaction prices which the Company considers to be a Level 3 measurement. The fair value of these intangible assets was determined to be less than the carrying value, and as a result, the Company recognized an impairment charge of $35.9 million in the twelve months ended March 31, 2019 . The impairment charge was recorded within a separate operating expense line item in the Company's consolidated statements of operations during the twelve months ended March 31, 2019 . In September 2018, the Company completed the divestiture of the HNT tools business. As a result, the net carrying value of the Company's intangible assets was reduced by $10.2 million . In fiscal year 2019 and 2018 , the Company's annual impairment tests indicated that the acquired trade name was not impaired. In the fourth quarter of fiscal year 2019, the Company completed its annual impairment test of the indefinite lived intangible at January 31, 2019, using the qualitative Step 0 assessment. No impairment indicators were observed at January 31, 2019. The Company did not acquire any technology licenses during the fiscal year ended March 31, 2019. During the fiscal year ended March 31, 2018 , the Company acquired technology licenses for $0.5 million . This amount is included within distributor relationships and is being amortized using the economic benefit method over a useful life of 3 years. 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, 2019 (in thousands): Cost Accumulated Amortization Net Developed technology $ 242,259 $ (168,289 ) $ 73,970 Customer relationships 772,969 (218,043 ) 554,926 Distributor relationships and technology licenses 6,882 (5,237 ) 1,645 Definite-lived trademark and trade name 39,304 (20,586 ) 18,718 Core technology 7,192 (6,845 ) 347 Net beneficial leases 336 (336 ) — Non-compete agreements 292 (292 ) — Leasehold interest 500 (500 ) — Backlog 16,397 (16,397 ) — Capitalized software 3,317 (2,690 ) 627 Other 1,208 (923 ) 285 $ 1,090,656 $ (440,138 ) $ 650,518 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, 2018 (in thousands): Cost Accumulated Amortization Net Developed technology $ 259,758 $ (148,937 ) $ 110,821 Customer relationships 845,490 (176,425 ) 669,065 Distributor relationships and technology licenses 9,019 (5,389 ) 3,630 Definite-lived trademark and trade name 44,387 (18,138 ) 26,249 Core technology 7,345 (6,712 ) 633 Net beneficial leases 336 (336 ) — Non-compete agreements 317 (317 ) — Leasehold interest 2,600 (2,130 ) 470 Backlog 18,544 (18,544 ) — Capitalized software 3,183 (1,621 ) 1,562 Other 1,247 (903 ) 344 $ 1,192,226 $ (379,452 ) $ 812,774 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 and technology licenses, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense during the fiscal years ended March 31, 2019 , 2018 , and 2017 (in thousands). Years Ended March 31, 2019 2018 2017 Amortization of intangible assets included as: Product revenue $ — $ 9 $ 11,438 Cost of product revenue 34,039 40,286 44,326 Operating expense 74,325 76,661 70,325 $ 108,364 $ 116,956 $ 126,089 The following is the expected future amortization expense at March 31, 2019 for the fiscal years ended March 31 (in thousands): 2020 $ 90,924 2021 79,643 2022 69,232 2023 61,511 2024 53,403 Thereafter 295,805 Total $ 650,518 The weighted average amortization period of developed technology and core technology is 11.3 years. The weighted average amortization period for customer and distributor relationships is 15.9 years. The weighted average amortization period for trademarks and trade names is 8.6 years . The weighted average amortization period for capitalized software is 3.0 years . The weighted average amortization period for all amortizing intangible assets is 14.6 years. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and 2018 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Derivatives Designated as Hedging Instruments: Forward contracts $ 4,550 $ 11,225 $ 58 $ 122 $ 68 $ 40 (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 at March 31, 2019 and 2018 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in OCI on Derivative (a) Gain (Loss) Reclassified from Accumulated OCI into Income (b) Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) March 31, March 31, March 31, March 31, March 31, March 31, 2019 2018 Location 2019 2018 Location 2019 2018 Forward contracts $ (696 ) $ 1,079 Research and development $ 164 $ (121 ) Research and development $ 69 $ 60 Sales and marketing 411 (779 ) Sales and marketing (196 ) (153 ) $ (696 ) $ 1,079 $ 575 $ (900 ) $ (127 ) $ (93 ) (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
RESTRUCTURING CHARGES | 12 Months Ended |
Mar. 31, 2019 | |
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 related to the acquisition of Danaher Corporation's (Danaher) Communications Business in July 2015 (Comms Transaction). During the fiscal year ended March 31, 2017, the Company approved two restructuring plans. During the first quarter of fiscal year 2017, 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 during the fiscal year ended March 31, 2017. The one-time termination benefits related to this plan were paid in full during the fiscal year ended March 31, 2017. In addition, during the fourth quarter of fiscal year 2017, the Company restructured certain departments to better align functions subsequent to the Comms Transaction, resulting in the termination of forty-one employees. Communication of the plan to the impacted employees was substantially completed on March 31, 2017. As a result of the workforce reduction, during the fiscal year ended March 31, 2017, the Company recorded a restructuring change totaling $1.9 million related to one-time termination benefits and $0.4 million in facility related charges. All of the workforce reduction was completed during the quarter ended September 30, 2017. During the fiscal year ended March 31, 2018, the Company recorded an additional charge for one-time termination benefits and facility-related costs of $0.9 million . The one-time termination benefits and facilities-related costs related to this plan were paid in full during the fiscal year ended March 31, 2018. During the fiscal year ended March 31, 2018, the Company restructured certain departments to better align functions resulting in the termination of sixty-one employees. As a result of the workforce reduction, during the fiscal year ended March 31, 2018, the Company recorded a restructuring charge totaling $5.1 million related to one-time termination benefits for the employees that were notified during the period. Additional one-time termination benefit charges and facility-related costs of approximately $1.7 million were recorded during the fiscal year ended March 31, 2019 . The one-time termination benefits and facility-related costs related to this plan were paid in full during the fiscal year ended March 31, 2019 . During the fiscal year ended March 31, 2019 , the Company implemented a voluntary separation program (VSP) for employees who met certain requirements to reduce overall headcount. As a result of the related workforce reduction, the Company recorded restructuring charges totaling $17.2 million related to one-time termination benefits for one hundred fifty-five employees who voluntarily terminated their employment with the Company during the period. Additional one-time termination benefit charges of approximately $0.1 million for one employee are anticipated to be recorded in the next three months. The one-time termination benefits are expected to be paid in full by the end of the first quarter of the fiscal year ending March 31, 2020. The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): FY2016 Plan Q1 FY2017 Plan Q4 FY2017 Plan FY2018 Plan VSP Employee-Related Employee-Related Employee-Related Facilities Related Employee-Related Facilities Related Employee-Related Total Balance at March 31, 2016 $ 272 $ — $ — $ — $ — $ — $ — $ 272 Restructuring charges to operations — 2,034 1,867 405 — — — 4,306 Cash payments (272 ) (1,739 ) (317 ) — — — — (2,328 ) Other adjustments — (295 ) — — — — — (295 ) Balance at March 31, 2017 $ — $ — $ 1,550 $ 405 $ — $ — $ — $ 1,955 Restructuring charges to operations — — 729 208 5,085 — — 6,022 Cash payments — — (1,867 ) (374 ) (1,331 ) — — (3,572 ) Other adjustments — — (412 ) (239 ) (58 ) — — (709 ) Balance at March 31, 2018 $ — $ — $ — $ — $ 3,696 $ — $ — $ 3,696 Restructuring charges to operations — — — — 1,017 643 17,248 18,908 Cash payments — — — — (4,240 ) (458 ) (17,329 ) (22,027 ) Other adjustments — — — — (473 ) (185 ) 81 (577 ) Balance at March 31, 2019 $ — $ — $ — $ — $ — $ — $ — $ — |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On January 16, 2018, the Company amended and expanded its existing credit agreement (Amended Credit Agreement) with a syndicate of lenders 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; Fifth Third Bank, Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Amended Credit Agreement provides for a five -year $1.0 billion senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. The Company may elect to use the new credit facility for general corporate purposes or to finance the repurchase of up to twenty-five million shares of the Company's common stock under the Company's common stock repurchase plan. The commitments under the Amended Credit Agreement will expire on January 16, 2023, and any outstanding loans will be due on that date. During the fiscal year ended March 31, 2019, the Company repaid $50.0 million of borrowings under the Amended Credit Agreement. At March 31, 2019 , $550 million was outstanding under the Amended Credit Agreement. At the Company's election, revolving loans under the Amended 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 New York Federal Reserve Bank (NYFRB) 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 December 31, 2018, until the Company has delivered financial statements for the quarter ended March 31, 2019 , the applicable margin will be 1.75% per annum for LIBOR loans and 0.75% 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 3.50 to 1.00, down to 0.00% per annum for Alternate Base Rate loans and 1.00% per annum for LIBOR loans if the Company's consolidated leverage ratio is equal to or less than 1.50 to 1.00. On July 27, 2017, the U.K. Financial Conduct Authority (FCA) announced that it will no longer require banks to submit rates for the calculation of LIBOR after 2021. The Company's Amended Credit Agreement provides for the Administrative Agent to determine if (i) adequate and reasonable means do not exist for ascertaining the LIBOR rate or (ii) the FCA or Government Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBOR rate shall no longer be used for determining interest rates for loans and the Administrative Agent determines that (i) and (ii) above are unlikely to be temporary then the Administrative Agent and the Company would agree to transition to an Alternate Base Rate Borrowing or amend the Credit Agreement to establish an alternate rate of interest to LIBOR that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time. 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 adjusted EBITDA in the Amended 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 December 31, 2018 until the Company has delivered financial statements for the quarter ended March 31, 2019 , the commitment fee will be 0.30% per annum, and thereafter the commitment fee will vary depending on the Company's consolidated leverage ratio, ranging from 0.30% per annum if the Company's consolidated leverage ratio is greater than 2.75 to 1.00, down to 0.15% per annum if the Company's consolidated leverage ratio is equal to or less than 1.50 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 Amended 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 Amended 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 Amended 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 Amended Credit Agreement. The Amended 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 Amended Credit Agreement. At March 31, 2019 , the Company was in compliance with all of these covenants. The Amended 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 Amended 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 Amended Credit Agreement and the other loan documents. In connection with the Company's Amended Credit Agreement described above, the Company terminated its previous term loan 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 Company has capitalized debt issuance costs totaling $12.2 million at March 31, 2019 , which are being amortized over the life of the revolving credit facility. The unamortized balance was $6.6 million as of March 31, 2019 . The balance of $1.7 million was included as prepaid expenses and other current assets and a balance of $4.9 million was included as other assets in the Company's consolidated balance sheet. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 12 Months Ended |
Mar. 31, 2019 | |
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): Year Ended March 31, 2019 2018 2017 Numerator: Net income (loss) $ (73,324 ) $ 79,812 $ 33,291 Denominator: Denominator for basic net income (loss) per share - weighted average common shares outstanding 78,617 87,425 92,226 Dilutive common equivalent shares: Weighted average restricted stock units — 836 694 Denominator for diluted net income (loss) per share - weighted average shares outstanding 78,617 88,261 92,920 Net income (loss) per share: Basic net income (loss) per share $ (0.93 ) $ 0.91 $ 0.36 Diluted net income (loss) per share $ (0.93 ) $ 0.90 $ 0.36 The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be antidilutive (in thousands): Year Ended March 31, 2019 2018 2017 Restricted stock units 706 1,450 1,320 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 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 unrecognized compensation expense. As the Company incurred a net loss in the fiscal year ended March 31, 2019, all outstanding restricted stock units have an anti-dilutive effect and are therefore excluded from the computation of diluted weighted average share outstanding. For the fiscal year ended March 31, 2018, the delivery of 7.4 million shares under the Company's accelerated share repurchase (ASR) agreements reduced its outstanding shares used to determine its weighted average common shares outstanding for purposes of calculating basic and diluted earnings per share. See Note 14 for additional information. The Company evaluated the ASR agreements for potential dilutive effects of any shares remaining to be received or owed upon settlement and determined the additional shares to be received would be anti-dilutive, and therefore they were not included in the Company's calculation of diluted earnings per share for the fiscal year ended March 31, 2018. |
TREASURY STOCK
TREASURY STOCK | 12 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On May 19, 2015, the Company’s Board of Directors approved a share repurchase program, conditional upon the completion of the Comms Transaction. This program enabled 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. The Company was not obligated to acquire any specific amount of common stock within any particular timeframe under this program. The Company repurchased 6,773,438 shares for $227.6 million , and 3,148,426 shares for $80.0 million in the open market under this stock repurchase plan during the fiscal years ended March 31, 2018, and 2017, respectively. At March 31, 2018, there were no shares of common stock that remained available to be purchased under this plan. On October 24, 2017, the Company’s Board of Directors approved a new share repurchase program that enables the Company to repurchase up to twenty-five million shares of its common stock. This new program became effective once the Company’s previously disclosed twenty million share repurchase program was completed. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of its new share repurchase program. On February 1, 2018, the Company entered into ASR agreements with two third-party financial institutions (the Dealers) to repurchase an aggregate of $300 million of the Company's common stock via accelerated stock repurchase transactions under the Company’s twenty million share repurchase program and the twenty-five million share repurchase program. The Company borrowed $300 million against its Amended Credit Facility in order to finance the payment of the initial purchase price to each of the Dealers. Under the terms of the ASR, the Company made a $150 million payment to each of the Dealers on February 2, 2018, and received an initial delivery of 3,693,931 shares from each of the Dealers, or 7,387,862 shares in the aggregate, which is approximately 70 percent of the total number of shares of the Company's common stock expected to be repurchased under the ASR. As part of this purchase, 970,650 shares for $27.6 million were deducted under the twenty million share repurchase program and 6,417,212 shares for $182.4 million were deducted from the twenty-five million share repurchase program during the fiscal year ended March 31, 2018. Final settlement of the ASR agreements was completed in August 2018. As a result, the Company received an additional 3,679,947 shares of its common stock for $96.8 million , which reduced the number of shares available to be purchased from the twenty-five million share repurchase program during the fiscal year ended March 31, 2019. In total, 11,067,809 shares of the Company's common stock were repurchased under the ASR at an average cost per share of $27.11 . The Company repurchased an additional 543,251 shares for $14.5 million under the twenty-five million share repurchase program during the fiscal year ended March 31, 2019. At March 31, 2019 , 14,359,590 shares of common stock remained available to be purchased under the current repurchase program. In connection with the vesting and release of the restriction on previously vested shares of restricted stock, the Company repurchased 451,683 shares for $11.9 million , 408,097 shares for $13.6 million and 320,572 shares for $9.6 million related to minimum statutory tax withholding requirements on these restricted stock units during the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. These repurchase transactions do not fall under the repurchase program described above, and therefore do not reduce the amount that is available for repurchase under those programs. |
STOCK PLANS
STOCK PLANS | 12 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK PLANS | STOCK PLANS 2011 Employee Stock Purchase Plan On September 7, 2011, the Company’s stockholders approved the 2011 Employee Stock Purchase Plan (the ESPP), under which 2,500,000 shares of the Company’s common stock have been reserved for issuance. On November 8, 2018, the Company increased the number of shares available under the ESPP by an additional 3,000,000 shares. The Company implemented the ESPP on March 1, 2012. Eligible employees may purchase shares of the Company’s common stock through regular payroll deductions of up to 20% of their eligible compensation. Under the terms of the offering under the ESPP, the number of shares of the Company’s common stock which a participant could purchase during any purchase period is limited to 2,000 . In addition, the fair market value of shares purchased by an individual participant in the plan may not exceed $25,000 if the contribution period is within any calendar year. However, if contribution periods overlap calendar years, an individual participant is eligible to utilize the unused portion of the $25,000 limit from the subsequent purchase in the current purchase up to $50,000 . 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 market value on the last day of such offering period. The offering periods run from March 1 through August 31 and from September 1 through the last day of February of each year. During the fiscal year ended March 31, 2019 , employees purchased 577,000 shares under the ESPP with a weighted average purchase price per share of $26.13 . At March 31, 2019 , 2,908,143 shares were available for future issuance under the ESPP. 2007 Equity Incentive Plan Enacted in September 2007, the 2007 Equity Incentive Plan (2007 Plan) permits the granting of stock options, restricted stock and restricted stock units, collectively referred to as “share-based awards.” Periodically, the Company grants share-based awards to employees and officers of the Company and its subsidiaries. The Company accounts for these share-based awards in accordance with GAAP, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to its employees and directors. Share-based award grants are generally measured at fair value on the date of grant based on the number of shares granted and the quoted price of the Company’s common stock. Such value is recognized as a cost of revenue or an operating expense over the corresponding vesting period. On September 7, 2011, the Company’s stockholders approved an amendment and restatement of the 2007 Equity Incentive Plan to increase the shares of common stock reserved for issuance by 8,000,000 shares. On September 22, 2015, the Company's stockholders approved an amendment and restatement of the 2007 Equity Incentive Plan (the Amended 2007 Plan) to increase the shares of common stock reserved for issuance by 8,500,000 . A total of 21,500,000 shares are reserved for issuance under the Amended 2007 Plan. In addition, any shares not delivered to a participant because an award is exercised through a reduction of shares subject to the award (cashless exercise) will not be available for issuance under the Amended 2007 Plan and any shares reacquired by the Company to cover withholding taxes upon exercise of a stock option or stock appreciation right or as consideration for the exercise of a stock option or stock appreciation right will not become available for issuance under the Amended 2007 Plan. Shares withheld to cover tax liabilities of restricted stock unit grants will be restored to the available reserve on the 2 for 1 amount. Furthermore, the share reserve under the Amended 2007 Plan is reduced one share for each share of common stock issued pursuant to a stock option or stock appreciation right and two shares for each share of common stock issued pursuant to restricted stock, restricted stock units, performance stock awards, or other stock awards granted under the Amended 2007 Plan on or after March 31, 2011. At March 31, 2019 , an aggregate of 4,210,655 unvested equity awards were outstanding under the Amended 2007 Plan. The Amended 2007 Plan is administered by the Compensation Committee of the Board of Directors. The Compensation Committee operates under guidelines established by the Board of Directors. The Compensation Committee has the authority to select the employees and consultants to whom awards are granted (except for directors and executive officers) and determine the terms of each award, including the number of shares of common stock subject to the award. Share-based awards generally vest over four years. The exercise price of incentive stock options shall not be less than 100% of the fair market value of the common stock at the date of grant ( 110% for incentive stock options granted to holders of more than 10% of the voting stock of NetScout). The term of options granted cannot exceed ten years ( five years for incentive stock options granted to holders of more than 10% of the voting stock of NetScout). Based on historical experience, the Company assumed an annualized forfeiture rate of 0% for awards granted to its independent directors, approximately 2% for awards granted to its senior executives, and approximately 5% granted to all remaining employees during the fiscal years ended March 31, 2019 , 2018 and 2017 . The following is a summary of share-based compensation expense including restricted stock units and employee stock purchases made under the Company's employee stock purchase plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Year Ended March 31, 2019 2018 2017 Cost of product revenue $ 1,463 $ 1,159 $ 934 Cost of service revenue 5,959 4,824 3,956 Research and development 17,321 14,711 12,362 Sales and marketing 18,923 15,213 12,823 General and administrative 12,662 11,410 9,114 $ 56,328 $ 47,317 $ 39,189 Transactions under the Amended 2007 Plan during the fiscal years ended March 31, 2019 , 2018 and 2017 are summarized in the table below. Restricted Stock Units Number of Awards Weighted Average Fair Value Outstanding – March 31, 2016 2,873,306 $ 35.32 Granted 2,020,536 24.92 Vested (950,159 ) 33.16 Canceled (333,382 ) 33.40 Outstanding – March 31, 2017 3,610,301 $ 30.24 Granted 1,962,590 34.01 Vested (1,216,585 ) 31.09 Canceled (277,526 ) 31.70 Outstanding – March 31, 2018 4,078,780 $ 31.77 Granted 2,178,339 30.10 Vested (1,438,219 ) 32.49 Canceled (608,245 ) 30.52 Outstanding – March 31, 2019 4,210,655 $ 30.84 At March 31, 2019 , there were 3,811,505 shares of common stock available for grant under the Amended 2007 Plan. The Company does not currently expect to repurchase shares from any source to satisfy its obligations under the Amended 2007 Plan. The aggregate intrinsic value of stock options exercised and the fair value of restricted stock units vested at March 31, 2019 , 2018 and 2017 were as follows (in thousands): Year Ended March 31, 2019 2018 2017 Total fair value of restricted stock unit awards vested $ 38,070 $ 40,539 $ 28,293 At March 31, 2019 , the total unrecognized compensation cost related to restricted stock unit awards was $98.1 million , which is expected to be amortized over a weighted-average period of 1.3 years. |
PENSION BENEFIT PLANS
PENSION BENEFIT PLANS | 12 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS 401(k) Plan The Company has a defined contribution program for certain employees that is qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The Company matches 50% of the employee’s contribution up to 6% of the employee’s salary. NetScout contributions vest at a rate of 25% per year of service. NetScout made matching contributions of $6.6 million , $8.0 million and $9.4 million to the plan for the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. Defined Benefit Pension Plan Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the Comms Transaction on July 14, 2015. 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 components of the change in benefit obligation of the pension plan is as follows (in thousands): March 31, March 31, 2019 2018 Benefit obligation, at beginning of year $ 33,464 $ 30,141 Service cost 304 407 Interest cost 704 718 Benefits paid and other (302 ) (288 ) Actuarial loss (gain) 3,254 (1,788 ) Foreign exchange rate impact (2,529 ) 4,274 Benefit obligation, at end of year $ 34,895 $ 33,464 The reconciliation of the beginning and ending balances of the fair value of the assets of the pension plan is as follows (in thousands): March 31, March 31, 2019 2018 Fair value of plan assets, at beginning of year $ — $ — Employer direct benefit payments 302 288 Benefits paid and other (302 ) (288 ) Fair value of plan assets, at end of year $ — $ — The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the fiscal years ended March 31, 2019 , 2018 , and 2017 (in thousands): Year Ended March 31, 2019 2018 2017 Service cost $ 304 $ 407 $ 329 Interest cost 704 718 638 Net periodic pension cost $ 1,008 $ 1,125 $ 967 Weighted average assumptions used to determine net periodic pension cost at date of measurement: March 31, March 31, March 31, 2019 2018 2017 Discount rate 1.80 % 2.30 % 2.10 % Rate of compensation increase 3.00 % 2.25 % 2.25 % As of March 31, 2019 , unrecognized actuarial loss of $3.3 million ( $2.3 million , net of tax) which have not yet been recognized in net periodic pension cost are included in accumulated other comprehensive income (loss). The unrecognized actuarial gains and losses are calculated as the difference between the actuarially determined projected benefit obligation and the value of the plan assets less accrued pension costs. None of this amount is expected to be recognized in net periodic pension costs during the fiscal year ending March 31, 2020. No plan assets are expected to be returned to the Company during the fiscal year ending March 31, 2020. Expected Contributions During the fiscal year ended March 31, 2019 , the Company contributed $ 302 thousand to its defined benefit pension plan. The following sets forth benefit payments, which reflect expected future service, as appropriate, expected to be paid by the plan in the periods indicated (in thousands): 2020 $ 382 2021 $ 436 2022 $ 484 2023 $ 549 2024 $ 599 2025 - 2030 $ 4,561 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income (loss) before income tax expense (benefit) consisted of the following (in thousands): Year Ended March 31, 2019 2018 2017 Domestic $ (107,088 ) $ (35,032 ) $ 32,475 Foreign 14,176 16,373 19,710 $ (92,912 ) $ (18,659 ) $ 52,185 The components of the income tax expense (benefit) are as follows (in thousands): Year Ended March 31, 2019 2018 2017 Current income tax expense (benefit): Federal $ 3,902 $ 14,191 $ 15,912 State (136 ) 1,925 3,152 Foreign 10,618 12,249 11,175 14,384 28,365 30,239 Deferred income tax expense (benefit): Federal (25,347 ) (113,122 ) (8,278 ) State (3,845 ) (10,037 ) 3,578 Foreign (4,780 ) (3,677 ) (6,645 ) (33,972 ) (126,836 ) (11,345 ) $ (19,588 ) $ (98,471 ) $ 18,894 The income tax expense (benefit) computed using the federal statutory income tax rate differs from NetScout's effective tax rate primarily due to the following: Year Ended March 31, 2019 2018 2017 Statutory U.S. federal tax rate 21.0 % 31.6 % 35.0 % State taxes, net of federal tax effect 3.4 6.9 9.7 Research and development tax credits 7.1 39.5 (8.2 ) Effect of foreign operations (0.6 ) 15.5 (6.7 ) Meals and entertainment (1.0 ) (6.7 ) 2.5 Domestic production activities deduction — 13.8 (4.0 ) Change in valuation allowance 2.2 (0.2 ) (0.1 ) Stock Compensation (2.6 ) (2.5 ) 3.1 Divestiture (1.0 ) — — GILTI/FDII 2.9 — — BEAT (7.0 ) — — 2017 Tax Act (transition tax and re-measurement of deferreds) 0.4 454.1 — Foreign withholding (3.0 ) (21.0 ) 3.8 Other permanent differences (0.7 ) (3.3 ) 1.1 21.1 % 527.7 % 36.2 % The components of net deferred tax assets and liabilities are as follows (in thousands): Year Ended March 31, 2019 2018 Deferred tax assets: Accrued expenses $ 4,359 $ 4,068 Deferred revenue 11,278 12,168 Reserves 5,463 3,375 Pension and other retiree benefits 5,960 5,307 Net operating loss carryforwards 14,992 21,251 Tax credit carryforwards 9,043 6,625 Share-based compensation 5,505 5,164 Other 166 418 Total gross deferred tax assets 56,766 58,376 Valuation allowance (835 ) (3,108 ) Net deferred tax assets 55,931 55,268 Deferred tax liabilities: Intangible assets (164,199 ) (195,959 ) Other Deferred Liabilities (1,609 ) — Depreciation (7,134 ) (4,187 ) Total deferred tax asset (liability) $ (117,011 ) $ (144,878 ) Deferred tax assets and liabilities are recognized based on the anticipated future tax consequences, attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets by considering all positive and negative evidence relating to future profitability. The Company weighs objective and verifiable evidence more heavily in this analysis. In situations where the Company concludes that it does not have sufficient objective and verifiable evidence to support the realizability of the asset it creates a valuation allowance against it. As a result, the Company established a valuation allowance of $3.1 million as of March 31, 2018 and $0.8 million as of March 31, 2019, representing a decrease of $2.3 million . The decrease in the valuation allowance as of March 31, 2019, as compared to March 31, 2018, is primarily related to deferred tax assets related to Psytechnics Ltd that the Company believes are more likely than not to be realized. If it is later determined the Company is able to use all or a portion of the deferred tax assets for which a valuation allowance has been established, then the Company may be required to recognize these deferred tax assets through a tax benefit recorded in the period such determination is made. At March 31, 2019 , the Company had U.S. federal net operating loss carry forwards of approximately $26 million , state net operating loss carryforwards of approximately $21 million and tax credit carryforwards of approximately $11 million . The net operating loss and credit carryforwards will expire at various dates beginning in 2021. The Company also had foreign net operating loss carryforwards of approximately $59 million at March 31, 2019. The majority of foreign net operating losses have no expiration dates. Utilization of the U.S. net operating losses and credits are subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state tax provisions. The Company files U.S. federal tax returns and files returns in various state, local and foreign jurisdictions. With respect to the U.S. federal and primary state jurisdictions, the Company is no longer subject to examinations by tax authorities for tax years before 2015, although carryforward attributes that were generated prior to 2015 may still be adjusted upon examination if they either have been or will be used in a future period. The Company also receives inquiries from various tax jurisdictions during the year, and some of those inquiries may include an audit of the tax return previously filed. In the normal course of business, NetScout and its subsidiaries are examined by various taxing authorities, including the IRS in the United States. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years ended March 31, 2019 , 2018 and 2017 is as follows (in thousands): Year Ended March 31, 2019 2018 2017 Balance at April 1, $ 2,215 $ 2,926 $ 1,588 Additions based on tax positions related to the current year 28 126 46 Release of tax positions of prior years (194 ) (481 ) (154 ) Increase in unrecognized tax benefits as a result of a tax position taken during a prior period — — 1,446 Decrease relating to settlements with taxing authorities (735 ) (356 ) — Balance at March 31, $ 1,314 $ 2,215 $ 2,926 The Company is unable to make a reliable estimate when cash settlement, if any, will occur with a tax authority as the timing of examinations and ultimate resolution of those examinations is uncertain. All of the unrecognized tax benefits would affect the effective tax rate if recognized. The Company includes interest and penalties accrued in the consolidated financial statements as a component of the tax provision. Several key provisions under the Tax Cuts and Jobs Act of 2017 (TCJA), enacted on December 22, 2017, impact the Company. The final impact of the TCJA, as described below, did not differ from the estimates reported at December 31, 2017. The key changes from the TCJA that were reported as of March 31, 2019 are the impact due to the reduced U.S. Federal corporate tax rate from 35.0% to 21.0%, a one-time transition tax on certain foreign earnings on which U.S. income tax was deferred, the Base Erosion Anti-Abuse Tax (BEAT), the deduction for Foreign Derived Intangible Income (FDII) and the Global Intangible Low Tax Income (GILTI). The Company is required to record deferred tax assets and liabilities based on the enacted tax rate which they are expected to reverse in the future. Therefore, any U.S. related deferred taxes were re-measured from 35.0% down to 21.0% based on the recorded balances. As of December 31, 2017, the Company recorded an estimate related to the re-measurement of its deferred tax balances, which was a benefit of approximately $87.0 million . During the third quarter of the current fiscal year the Company finalized its calculation and did not adjust its estimate recorded. Additionally, the Company is required to calculate a one-time transition tax based on its total post-1986 foreign subsidiaries’ earnings and profits that were previously deferred from U.S. income taxes. As of December 31, 2017, the Company recorded an estimate related to this one-time transition charge of approximately $2.0 million . During the third quarter of the current fiscal year the Company finalized its calculation and did not adjust its estimate recorded. The Company is subject to the tax on the Global Intangible Low-Taxed Income (GILTI). The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the "period cost method") or (2) factoring such amounts into the Company's measurement of its deferred taxes (the "deferred method"). The Company has elected to treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the "period cost method"). The Company expects that current and future foreign earnings may be repatriated tax efficiently as a result of the TCJA. After fully assessing the impact of the TCJA, the Company has determined that its current and future foreign earnings will not be indefinitely reinvested where the Company can repatriate those earnings in a tax efficient manner acceptable to management and which comply with local statutory and operational requirements. Additionally, the Company intends a one-time repatriation of certain previously taxed historical earnings because of TCJA which can be repatriated in a tax efficient manner. The Company continues to assert that any remainder of its historical book basis in excess of tax basis will be permanently reinvested. It is not practicable to estimate the amount of unrecognized deferred U.S. taxes on these differences. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition and Divestiture Related The Company has a contingent consideration asset related to the divestiture of its HNT tools business in September 2018. The contingent consideration asset represents potential future earnout payments to the Company of up to $4.0 million over two years that are contingent on the HNT tools business achieving certain milestones. The fair value of the contingent consideration of $2.3 million was recognized on the acquisition date and was measured using unobservable (Level 3) inputs. The contingent consideration asset at March 31, 2019 was $0.8 million . The Company had a contingent liability at March 31, 2018 for $523 thousand related to the acquisition of Efflux in July 2017 for which an escrow account was established to cover damages NetScout may have suffered 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 merger agreement. The $523 thousand was paid to the sellers in July 2018. The Company had a contingent liability at March 31, 2018 for $4.9 million related to the acquisition of Simena LLC in November 2011, which was based on the ultimate settlement of assets and liabilities acquired as part of the transaction, and the former owners' future period of employment with NetScout. The contingent purchase consideration of $5.0 million was paid to the seller in November 2018. The Company had $660 thousand of contingent purchase consideration related to the acquisition of Avvasi Incorporated (Avvasi) in August 2016 for which an escrow account was established to cover damages NetScout may have suffered 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 $660 thousand was paid to the seller in August 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. As previously disclosed, in March 2016, Packet Intelligence LLC (Packet Intelligence or Plaintiff) filed a Complaint against NetScout and two subsidiary entities in the United States District Court for the Eastern District of Texas asserting infringement of five United States patents. Plaintiff’s Complaint alleged that legacy Tektronix GeoProbe products, including the G10 and GeoBlade products, infringed these patents. NetScout filed an Answer denying Plaintiff’s allegations and asserting that Plaintiff’s patents were, among other things, invalid, not infringed, and unenforceable due to inequitable conduct. In October 2017, a jury trial was held to address the parties’ claims and counterclaims regarding infringement of three patents by the G10 and GeoBlade products, invalidity of these patents, and damages. On October 13, 2017, the jury rendered a verdict finding in favor of the Plaintiff and that Plaintiff was entitled to $3,500,000 for pre-suit damages and $2,250,000 for post-suit damages. The jury indicated that the awarded damages amounts were intended to reflect a running royalty. The Court also conducted a bench trial on whether these patents were unenforceable due to, among other things, inequitable conduct. In September 2018, the Court entered judgment and "enhanced" the jury verdict in the amount of $2.8 million as a result of a jury finding. The judgment also awards pre- and post judgement interest, and a running royalty on the G10 and GeoBlade products until the expiration of the patents at issue, the last date being June 2022. The Court denied the Plaintiff's motion for fees. Following the entry of judgment, NetScout filed motions for judgment as a matter of law, seeking to both overturn the verdict and to reduce damages. NetScout has concluded that the risk of loss from this matter is currently neither remote nor probable, and therefore, under GAAP definitions, the risk of loss is termed "reasonably possible". Therefore, accounting rules require NetScout to provide an estimate for the range of potential liability. NetScout currently estimates that the estimated range of liability is between $0 and the aggregate amount awarded by the jury and the Court's award of enhanced damages, plus potential additional pre- and post-judgment interest amounts and costs and any royalties owed on post-trial sales of the accused G10 and GeoBlade products. NetScout intends to continue to vigorously dispute Packet Intelligence’s claims including through appeal, if necessary. Unconditional purchase obligations At March 31, 2019 , the Company had unconditional purchase obligations of $49.2 million , which represent estimated open purchase orders to purchase inventory as well as commitments for products and services used in the normal course of business. Leases NetScout leases office space under non-cancelable operating leases. Total rent expense under the leases was $16.3 million , $16.6 million and $13.8 million for the fiscal years ended March 31, 2019 , 2018 and 2017 , respectively. At March 31, 2019 , future non-cancelable minimum lease commitments (including office space, copiers and automobiles) are as follows (in thousands): Year Ending March 31, 2020 $ 16,102 2021 11,059 2022 9,804 2023 8,807 2024 8,500 Remaining years 43,997 Total minimum lease payments $ 98,269 |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION 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): Year Ended March 31, 2019 2018 2017 United States $ 553,267 $ 581,853 $ 722,440 Europe 148,036 174,445 193,441 Asia 72,355 88,917 95,735 Rest of the world 136,260 141,572 150,496 $ 909,918 $ 986,787 $ 1,162,112 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. Further, the Company determines the geography of its sales after considering where the contract originated. 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 | 12 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During the Company's 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 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 of September 12, 2018, this person is no longer serving on the Company's Board of Directors. 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): March 31, 2019 March 31, 2018 Danaher $ — $ 252 Fortive 335 2,935 $ 335 $ 3,187 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): March 31, 2019 March 31, 2018 Fortive $ 244 $ 369 $ 244 $ 369 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): Year Ended March 31, 2019 2018 2017 Danaher: Cost of product revenue $ — $ — $ 4,690 Cost of service revenue — — 485 Research and development expenses — — 1,720 Sales and marketing — 2 2,273 General and administrative expenses — 7 2,551 $ — $ 9 $ 11,719 Fortive: Cost of product revenue $ — $ 245 $ 2,539 Cost of service revenue 529 665 260 Research and development expenses 20 3 (96 ) Sales and marketing — — 150 General and administrative expenses 20 1,696 1,548 Other income — (56 ) (426 ) $ 569 $ 2,553 $ 3,975 As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows from operating activities resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows from operating activities (in thousands): Year Ended March 31, 2019 2018 2017 Due from related party: Danaher $ 58 $ 96 $ 17,310 Fortive 114 347 7,745 Total $ 172 $ 443 $ 25,055 Due to related party: Danaher $ 243 $ — $ (2,954 ) Fortive (9 ) (75 ) 162 Total $ 234 $ (75 ) $ (2,792 ) As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows from investing activities resulting from amounts due from related parties. The following table summarizes those cash flows from investing activities (in thousands): Year Ended March 31, 2019 2018 2017 Due from related party: Danaher $ — $ — $ 12,864 Total $ — $ — $ 12,864 The Company recognized $0 , $45 thousand , and $177 thousand in revenue from Danaher during the fiscal years ended March 31, 2019 , 2018 , and 2017 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 fiscal years ended March 31, 2017 and 2016, and therefore, the Company considered 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 member resigned. The Company continued to report the wind down of preexisting transactions as related party transactions through the Company's fiscal year 2017. The Company recognized $167 thousand in revenue from EMC during the fiscal year ended March 31, 2017 in the ordinary course of business. A member of the Company’s Board of Directors served as a trustee for Boston College during the fiscal years ended March 31, 2017 and 2016 and a portion of the fiscal year ended March 31, 2018 and therefore, the Company considers sales to Boston College to be a related party transaction. The Company recognized $150 thousand and $0 in revenue from Boston College during the fiscal years ended March 31, 2018 and 2017, respectively, in the ordinary course of business. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED | 12 Months Ended |
Mar. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED | QUARTERLY RESULTS OF OPERATIONS – UNAUDITED The following table sets forth certain unaudited quarterly results of operations of NetScout for the fiscal years ended March 31, 2019 and 2018 . In the opinion of management, this information has been prepared on the same basis as the audited consolidated financial statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the quarterly information when read in conjunction with the audited consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The quarterly operating results are not necessarily indicative of future results of operations. Three Months Ended (in thousands, except per share data) March 31, 2019 Dec. 31, Sept. 30, June 30, March 31, 2018 Dec. 31, Sept. 30, June 30, Revenue $ 235,002 $ 246,008 $ 223,797 $ 205,111 $ 235,224 $ 268,944 $ 256,863 $ 225,756 Gross profit $ 176,466 $ 176,424 $ 159,817 $ 143,084 $ 168,633 $ 204,435 $ 182,620 $ 159,194 Net income (loss) $ 19,211 $ (3,603 ) $ (26,428 ) $ (62,504 ) $ 16,817 $ 89,685 $ (2,468 ) $ (24,222 ) Diluted net income (loss) per share $ 0.24 $ (0.05 ) $ (0.34 ) $ (0.78 ) $ 0.20 $ 1.02 $ (0.03 ) $ (0.27 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 7, 2019, the Company repaid $50.0 million of borrowings under the Amended Credit Agreement. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | NetScout Systems, Inc. Schedule II—Valuation and Qualifying Accounts (in thousands) Balance at Beginning of Year Additions Resulting in Charges to Operations Charges to Other Accounts Deductions Due to Write-Offs Balance at End of Year Year ended March 31, 2017 Allowance for doubtful accounts $ 5,069 $ 6,961 $ (7,580 ) $ (2,384 ) $ 2,066 Deferred tax asset valuation allowance $ 3,777 $ (338 ) $ (65 ) $ — $ 3,374 Year ended March 31, 2018 Allowance for doubtful accounts $ 2,066 $ 695 $ (346 ) $ (424 ) $ 1,991 Deferred tax asset valuation allowance $ 3,374 $ — $ — $ (266 ) $ 3,108 Year ended March 31, 2019 Allowance for doubtful accounts $ 1,991 $ 826 $ (464 ) $ (770 ) $ 1,583 Deferred tax asset valuation allowance $ 3,108 $ 905 $ — $ (3,178 ) $ 835 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of NetScout and its wholly owned subsidiaries. Inter-company transactions and balances have been eliminated in consolidation. Certain amounts for the twelve months ended March 31, 2018 and March 31, 2017 , respectively, have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. |
Segment Reporting | Segment Reporting The Company's 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 the Chief Operating Decision Maker (CODM). The Company reports revenue and income in one reportable segment. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates in these financial statements include those involving revenue recognition, valuation of goodwill and acquired assets and liabilities, valuation of the pension obligation, valuation of contingent consideration and share-based compensation. These items are continuously monitored and analyzed by management for changes in facts and circumstances and material changes in these estimates could occur in the future. |
Cash and Cash Equivalents and Marketable Securities | Cash and Cash Equivalents and Marketable Securities Under current authoritative guidance, NetScout has classified its investments as "available-for-sale" which are carried at fair value based on quoted market prices and associated unrealized gains or losses are recorded as a separate component of stockholders’ equity until realized. NetScout 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. At March 31, 2019 and periodically throughout the year, NetScout has maintained cash balances in various operating accounts in excess of federally insured limits. NetScout limits the amount of credit exposure by investing only with credit worthy institutions which the Company believes are those institutions with an investment grade rating for deposits. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was adopted on April 1, 2018 using the modified retrospective transition method. Revenue from Contracts with Customers In May 2014, the FASB issued Topic 606, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. Topic 606 replaced most existing revenue recognition guidance under GAAP. The new standard introduces a five-step process to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred to obtain or fulfill contracts with customers and establishes disclosure requirements which are more extensive than those required under prior GAAP. Topic 606 became effective for the Company on April 1, 2018. The Company elected to use the modified retrospective transition approach. Therefore, the comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. Revenue Recognition Policy The Company exercises judgment and uses estimates in connection with determining the amounts of product and services revenues to be recognized in each accounting period. The Company derives revenues primarily from the sale of network management tools and security solutions for service provider and enterprise customers, which include hardware, software and service offerings. The majority of the Company’s product sales consist of hardware products with embedded software that are essential to providing customers the intended functionality of the solutions. The Company also sells software offerings decoupled from the underlying hardware and software solutions to provide customers with enhanced functionality. The Company accounts for revenue once a legally enforceable contract with a customer has been approved by the parties and the related promises to transfer products or services have been identified. A contract is defined by the Company as an arrangement with commercial substance identifying payment terms, each party’s rights and obligations regarding the products or services to be transferred and the amount the Company deems probable of collection. Customer contracts may include promises to transfer multiple products and services to a customer. Determining whether the products and services are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation may require significant judgment. Revenue is recognized when control of the products or services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for products and services. Product revenue is typically recognized upon shipment, provided a legally enforceable contract exists, control has passed to the customer, and in the case of software products, when the customer has the rights and ability to access the software, and collection of the related receivable is probable. If any significant obligations to the customer remain post-delivery, typically involving obligations relating to installation and acceptance by the customer, revenue recognition is deferred until such obligations have been fulfilled. The Company's service offerings include installation, integration, extended warranty and maintenance services, post-contract customer support, stand-ready software-as-a-service (SAAS) and other professional services including consulting and training. The Company generally provides software and/or hardware support as part of product sales. Revenue related to the initial bundled software and hardware support is recognized ratably over the support period. In addition, customers can elect to purchase extended support agreements for periods after the initial software/hardware warranty expiration. Support services generally include rights to unspecified upgrades (when and if available), telephone and internet-based support, updates, bug fixes and hardware repair and replacement. Consulting services are recognized upon delivery or completion of performance depending on the terms of the underlying contract. Reimbursements of out-of-pocket expenditures incurred in connection with providing consulting services are included in services revenue, with the offsetting expense recorded in cost of service revenue. Training services include on-site and classroom training. Training revenues are recognized upon delivery of the training. Generally, the Company's contracts are accounted for individually. However, when contracts are closely interrelated and dependent on each other, it may be necessary to account for two or more contracts as one to reflect the substance of the group of contracts. Bundled arrangements are concurrent customer purchases of a combination of the Company's product and service offerings that may be delivered at various points in time. The Company allocates the transaction price among the performance obligations in an amount that depicts the relative standalone selling prices (SSP) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when it sells each of the products and services separately based on the element’s historical pricing. The Company also considers its overall pricing objectives and practices across different sales channels and geographies, and market conditions. Generally, the Company has established SSP for a majority of its service elements based on historical standalone sales. In certain instances, the Company has established SSP for services based upon an estimate of profitability and the underlying cost to fulfill those services. Further, for certain service engagements, the Company considers quoted prices as part of multi-element arrangements of those engagements as a basis for establishing SSP. SSP has been established for product elements as the average or median selling price the element was recently sold for, whether sold alone or sold as part of a multiple element transaction. The Company reviews sales of the product elements on a quarterly basis and updates, when appropriate, its SSP for such elements to ensure that it reflects recent pricing experience. The Company's products are distributed through its direct sales force and indirect distribution channels through alliances with resellers and distributors. Revenue arrangements with resellers and distributors are recognized on a sell-in basis; that is, when control of the product transfers to the reseller or distributor. The Company records consideration given to a reseller or distributor as a reduction of revenue to the extent they have recorded revenue from the reseller or distributor. With limited exceptions, the Company's return policy does not allow product returns for a refund. Returns have been insignificant to date. In addition, the Company has a history of successfully collecting receivables from its resellers and distributors. |
Commission Expense | Commission Expense Sales commissions are recorded as an asset when the initial contract's duration is longer than 12 months and amortized to expense ratably over the remaining performance periods of the related contracts. |
Uncollected Deferred Revenue | Uncollected Deferred Revenue Because of NetScout's revenue recognition policies, there are circumstances for which the Company does not recognize revenue relating to sales transactions that have been billed, but the related account receivable has not been collected. While the receivable represents an enforceable obligation, for balance sheet presentation purposes, the Company has not recognized the deferred revenue or the related account receivable and no amounts appear in the consolidated balance sheets for such transactions because control of the underlying deliverable has not transferred. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. NetScout's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At March 31, 2019 and 2018 respectively, the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. During the fiscal years ended March 31, 2019 and 2018 respectively, no direct customers or indirect channel partners accounted for more than 10% of total revenue. During the fiscal year ended March 31, 2017 , one direct customer, Verizon Communications Inc. (Verizon), accounted for more than 10% of total revenue, while no indirect channel partner accounted for more than 10% of total revenue. Historically, the Company has not experienced any significant failure of its customers 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. |
Trade Receivable Valuations | Trade Receivable Valuations Accounts receivable are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. |
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. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or anticipated useful life of the improvement. Gains and losses upon asset disposal are recognized in the year of disposition. Expenditures for replacements and building improvements are capitalized, while expenditures for maintenance and repairs are charged against earnings as incurred. |
Valuation of Goodwill, Intangible Assets and Other Acquisition and Divestiture Accounting Items | Valuation of Goodwill, Intangible Assets and Other Acquisition and Divestiture Accounting Items The Company amortizes acquired definite-lived intangible assets over their estimated useful lives. Goodwill and other indefinite-lived intangible assets are not amortized but subject to annual impairment tests; more frequently if events or circumstances occur that would indicate a potential decline in their fair value. The Company performs the assessment annually during the fourth quarter and on an interim basis if potential impairment indicators arise. The Company has identified two reporting units: (1) Service Assurance and (2) Security. To test impairment, the Company first assesses qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the intangible asset is impaired. If based on the Company's qualitative assessment it is more likely than not that the fair value of the intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if the Company concludes otherwise, quantitative impairment testing is not required. During fiscal year 2019, the Company performed a quantitative analysis for goodwill. The Company determined the fair value of the reporting unit's goodwill using established income and market valuation approaches. Goodwill was estimated to be recoverable as of January 31, 2019. Indefinite-lived intangible assets are tested for impairment 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 indefinite-lived intangible assets below its carrying value. To test impairment, the Company first assesses qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible is impaired. If based on the Company's qualitative assessment, the Company concludes that it is more likely than not that the fair value of the indefinite-lived asset is greater than its carrying amount, quantitative impairment testing is not required. The Company completed its annual impairment test of the indefinite-lived intangible asset at January 31, 2019 using the qualitative Step 0 assessment. No impairment indicators were observed as of January 31, 2019. The Company completed two acquisitions and one divestiture during the three-year period ended March 31, 2019 . The acquisition method of accounting requires an estimate of the fair value of the assets and liabilities acquired as part of these transactions. In order to estimate the fair value of acquired intangible assets, the Company uses a relief from royalty model which requires management to estimate: future revenues expected to be generated by the acquired intangible assets, a royalty rate which a market participant would pay related to the projected revenue stream, a present value factor which approximates a risk adjusted rate of return for a market participant purchasing the assets, and a technology migration curve representing a period of time over which the technology assets or some portion thereof are still being used. The Company is also required to develop the fair value for customer relationships acquired as part of these transactions which requires that it create estimates for the following items: a projection of future revenues associated with the acquired company's existing customers, a turnover rate for those customers, a margin related to those sales, and a risk adjusted rate of return for a market participant purchasing those relationships. The Company has a contingent consideration asset related to the divestiture of its handheld network test (HNT) tools business in September 2018. The contingent consideration asset represents potential future earnout payments to the Company of up to $4.0 million over two years that are contingent on the HNT tools business achieving certain milestones. The fair value of the contingent consideration of $2.3 million was recognized on the acquisition date and was measured using unobservable (Level 3) inputs. The value of the contingent consideration asset at March 31, 2019 was $0.8 million . The Company had a contingent liability at March 31, 2018 for $523 thousand related to the acquisition of Efflux in July 2017 for which an escrow account was established to cover damages NetScout may have suffered 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 merger agreement. The $523 thousand was paid to the seller in July 2018. The Company had a contingent liability at March 31, 2018 for $4.9 million related to the acquisition of Simena LLC in November 2011, which was based on the ultimate settlement of assets and liabilities acquired as part of the transaction, and the former owners' future period of employment with NetScout. The contingent purchase consideration of $5.0 million was paid to the seller in November 2018. The Company had $660 thousand of contingent purchase consideration related to the acquisition of Avvasi Incorporated (Avvasi) in August 2016 for which an escrow account was established to cover damages NetScout may have suffered 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 $660 thousand was paid to the seller in August 2017. |
Capitalized Software Development Costs | Capitalized Software Development Costs Costs incurred in the research and development of the Company’s products are expensed as incurred, except for certain software development costs. Costs associated with the development of computer software are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software products are available for first customer shipment. Such costs are amortized using the straight-line method over the estimated economic life of the product, which generally does not exceed three years . Capitalized software development costs are periodically assessed for recoverability in the event of changes to the anticipated future revenue for the software products or changes in product technologies. Unamortized capitalized software development costs that are determined to be in excess of the net realizable value of the software products would be expensed in the period in which such a determination is made. Typically for accounting purposes, these R&D investments have not been capitalized because of the development methodology employed. The developments are added individually to the core code over a shorter period of time but marketed as a release once all portions are complete. |
Derivative Financial Instruments | Derivative Financial Instruments Under authoritative guidance for derivative instruments and hedging activities, all hedging activities must be documented at the inception of the hedge and must meet the definition of highly effective in offsetting changes to future cash flows in order for the derivative to qualify for hedge accounting. Under the guidance, if an instrument qualifies for hedge accounting, the changes in the fair value each period for open contracts, measured at the end of the period, are recorded to other comprehensive income. Otherwise, changes in the fair value are recorded in earnings each period. Management must perform initial and ongoing tests in order to qualify for hedge accounting. In accordance with the guidance, the Company accounts for its instruments under hedge accounting. The effectiveness and a measurement of ineffectiveness of qualifying hedge contracts are assessed by the Company quarterly. The Company records the fair value of its derivatives in prepaid expenses and other current assets and accrued other in the Company's consolidated balance sheet. The effective portion of gains or losses resulting from changes in the fair value of qualifying hedges are recorded in other comprehensive income (loss) until the forecasted transaction occurs, with any ineffective portion classified directly to the Company’s consolidated statement of operations based on the expense categories of the items being hedged. When forecasted transactions occur, unrealized gains or losses associated with the effective portion of the hedge are reclassified to the respective expense categories in the Company’s consolidated statement of operations. Gains or losses related to hedging activity are included as operating activities in the Company’s consolidated statement of cash flows. If the underlying forecasted transactions do not occur, or it becomes probable that they will not occur, the gain or loss on the related cash flow hedge is recognized immediately in earnings. |
Contingencies | Contingencies NetScout accounts for claims and contingencies in accordance with authoritative guidance that requires an estimated loss to be recorded from a claim or loss contingency when information available prior to issuance of its consolidated financial statements indicates that it is probable that a liability has been incurred at the date of the consolidated financial statements and the amount of the loss can be reasonably estimated. If NetScout determines that it is reasonably possible but not probable that an asset has been impaired or a liability has been incurred or if the amount of a probable loss cannot be reasonably estimated, then in accordance with the authoritative guidance, Netscout discloses the amount or range of estimated loss if the amount or range of estimated loss is material. Accounting for claims and contingencies requires NetScout to use its judgment. NetScout consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to matters in the ordinary course of business. Contingent assets and liabilities include contingent consideration in connection with the Company’s acquisitions and divestitures. Contingent consideration represents earnout payments in connection with the Company’s acquisitions and divestitures and is recognized at fair value on the acquisition date and remeasured each reporting period with subsequent adjustments recognized in the consolidated statements of income. The Company discounts the contingent purchase consideration to present value using a risk adjusted interest rate at each reporting period. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. Changes in the fair value of contingent assets and liabilities may result from changes in discount periods. The Company reflects changes in fair value due to probability changes in earnings in the consolidated statements of income. Earnout payments are reflected in both cash flows from operating and financing activities and the changes in fair value are reflected in cash flows from operating activities in the consolidated statements of cash flows. |
Share-Based Compensation | Share-Based Compensation NetScout recognizes compensation expense for all share-based payments granted. Under the fair value recognition provisions, share-based compensation is calculated net of an estimated forfeiture rate and compensation cost is only recognized for those shares expected to vest on a straight-line basis over the expected requisite service period of the award. |
Foreign Currency | Foreign Currency NetScout accounts for its reporting of foreign operations in accordance with guidance which establishes guidelines for the determination of the functional currency of foreign subsidiaries. In accordance with the guidance, NetScout has determined its functional currency for those foreign subsidiaries that are an extension of NetScout's U.S. operations to be the U.S. Dollar. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into United States dollars using the period-end exchange rate, and income and expense items are translated using the average exchange rate during the period. Cumulative translation adjustments are reflected as a separate component of stockholders’ equity. NetScout will experience currency exchange risk with respect to foreign currency denominated expenses. In order to partially offset the risks associated with the effects of certain foreign currency exposures, NetScout has established a program that utilizes foreign currency forward contracts. Under this program, increases or decreases in foreign currency exposures are partially offset by gains or losses on forward contracts, to mitigate the impact of foreign currency transaction gains or losses. The Company does not use forward contracts to engage in currency speculation. All outstanding foreign currency forward contracts are recorded at fair value at the end of each fiscal period. |
Advertising Expense | Advertising Expense NetScout recognizes advertising expense as incurred. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) typically consists of unrealized gains and losses on marketable securities, unrealized gain (loss) on hedge contracts, actuarial gains and losses, and foreign currency translation adjustments. |
Income Taxes | Income Taxes NetScout accounts for its income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis, as well as the effect of any net operating loss and tax credit carryforwards. Income tax expense is comprised of the current tax liability or benefit and the change in deferred tax assets and liabilities. NetScout evaluates the recoverability of deferred tax assets by considering all positive and negative evidence relating to future profitability. NetScout weighs objective and verifiable evidence more heavily in this analysis. In situations where NetScout concludes that it does not have sufficient objective and verifiable evidence to support the realizability of the deferred tax asset, NetScout creates a valuation allowance against it. |
Recent Accounting Standards | Recent Accounting Standards In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The Company adopted ASU 2018-15 effective July 1, 2018. The adoption has had an immaterial impact to the consolidated financial statements for the twelve months ended March 31, 2019. In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU adds, modifies and clarifies several disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This guidance is effective for fiscal years ending after December 15, 2020. ASU 2018-14 is effective for NetScout beginning April 1, 2021. Early adoption is permitted. The Company is currently assessing the effect that ASU 2018-14 will have on its financial position, results of operations, and disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 adds, modifies and removes several disclosure requirements relative to the three levels of inputs used to measure fair value in accordance with Topic 820, Fair Value Measurement. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. ASU 2018-13 is effective for NetScout beginning April 1, 2020. Early adoption is permitted. The Company is currently assessing the effect that ASU 2018-13 will have on its financial position, results of operations, and disclosures. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. ASU 2018-02 amends ASC 220, Income Statement - Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. In addition, under the ASU 2018-02, the Company may be required to provide certain disclosures regarding stranded tax effects. ASU 2018-02 is effective for years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2018-02 is effective for the Company beginning April 1, 2019. Early adoption is permitted. The Company does not believe the adoption of ASU 2018-02 will have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company does not believe the adoption of ASU 2017-12 will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and issued subsequent amendments to initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, Topic 842). ASC 842 aims to increase transparency and comparability among organizations with respect to accounting for leases. Lessees will recognize a right-of-use (ROU) asset and a lease liability measured at the present value of lease payments for virtually all of their leases. Short term leases with a term of 12 months or less are not required to be recognized. ASC 842 also requires disclosure of key information about leasing arrangements. ASC 842 will be effective for fiscal years beginning after December 15, 2018, including interim periods within such fiscal years. Early adoption is permitted. The Company adopted the new standard on April 1, 2019 using the effective date as the date of initial application. Consequently, financial information will not be updated and disclosures required under the new standard will not be provided for dates and periods before April 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients, which among other things, allows the carryforward of the historical lease classification. Further, the Company elected the practical expedients to combine lease and non-lease components, and to not recognize ROU assets and lease liabilities for short-term leases. The Company currently anticipates that the adoption of this new standard will materially impact the consolidated balance sheets by recognizing new ROU assets and lease liabilities for operating leases with the most significant impact from the recognition of ROU assets and lease liabilities related to the Company's office space operating leases. The impact on the Company's results of operations and cash flows is not expected to be material. The Company has implemented a new lease accounting system and is updating processes and controls in preparation for the adoption of the new standard, including the requirement to provide significant new disclosures about the Company's leasing activities. Please refer to Note 18, "Commitments and Contingencies" for additional information about the Company's leases, including the future minimum lease payments for operating leases at March 31, 2019. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted Topic 606 as of April 1, 2018 using the modified retrospective transition method. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Financial Statement Impact of Adoption | The impact of adoption of Topic 606 on the Company's consolidated balance sheet at March 31, 2019 and on the Company's consolidated statement of operations for the twelve months ended March 31, 2019 was as follows (in thousands): March 31, 2019 As Reported Balance without Adoption of Topic 606 Effect of Change Higher (Lower) ASSETS: Accounts receivable and unbilled costs 235,318 229,708 5,610 Inventories and deferred costs 26,270 26,418 (148 ) Prepaid expenses and other current assets 35,658 31,810 3,848 Other assets 16,988 12,074 4,914 LIABILITIES: Deferred revenue and customer deposits 272,508 306,799 (34,291 ) Deferred tax liability 124,229 121,535 2,694 Long-term deferred revenue and customer deposits 94,619 106,025 (11,406 ) STOCKHOLDERS' EQUITY: — Retained earnings 358,093 339,765 18,328 Twelve Months Ended March 31, 2019 As Reported Balance without Adoption of Topic 606 Effect of Change Higher (Lower) Total revenues $ 909,918 $ 888,950 $ 20,968 Total cost of revenue 254,127 253,979 148 Sales and marketing expense 291,870 292,080 (210 ) Income tax benefit (19,588 ) (24,022 ) 4,434 Net loss (73,324 ) (89,920 ) 16,596 Basic net loss per share $ (0.93 ) $ (1.14 ) $ 0.21 Diluted net loss per share $ (0.93 ) $ (1.14 ) $ 0.21 As a result of applying the modified retrospective approach to adopt the new standard, the following adjustments were made to accounts on the consolidated balance sheet at April 1, 2018 (in thousands): Balance at March 31, 2018 Adjustments from Adopting Topic 606 Balance at April 1, 2018 ASSETS: Accounts receivable and unbilled costs $ 213,438 $ 1,195 $ 214,633 Prepaid expenses and other current assets 33,502 4,626 38,128 Other assets 12,866 4,748 17,614 LIABILITIES: Deferred revenue and customer deposits 301,925 (30,227 ) 271,698 Deferred tax liability 151,563 7,124 158,687 Long-term deferred revenue and customer deposits 91,409 (1,252 ) 90,157 STOCKHOLDERS' EQUITY: Retained earnings 396,493 34,924 431,417 |
Contract with Customer, Asset and Liability | The following table provides information about contract assets and liabilities (in thousands): April 1, 2018 March 31, 2019 Increase/ (Decrease) ASSETS: Customer accounts receivable $ 205,299 $ 240,482 35,183 Unbilled receivables 4,338 3,354 (984 ) Other receivables 4,996 3,577 (1,419 ) Long-term unbilled receivables 2,254 2,754 500 $ 216,887 $ 250,167 33,280 LIABILITIES: Deferred revenue $ 271,698 $ 272,508 $ 810 Deferred revenue, long-term 90,157 94,619 4,462 $ 361,855 $ 367,127 $ 5,272 |
CASH, CASH EQUIVALENTS AND MA_2
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): March 31, 2019 March 31, 2018 March 31, 2017 March 31, 2016 Cash and cash equivalents $ 409,632 $ 369,821 $ 304,880 $ 210,711 Restricted cash 188 910 846 186 Total cash, cash equivalents and restricted cash $ 409,820 $ 370,731 $ 305,726 $ 210,897 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): March 31, 2019 March 31, 2018 March 31, 2017 March 31, 2016 Cash and cash equivalents $ 409,632 $ 369,821 $ 304,880 $ 210,711 Restricted cash 188 910 846 186 Total cash, cash equivalents and restricted cash $ 409,820 $ 370,731 $ 305,726 $ 210,897 |
Summary of Marketable Securities Classified as Short-term and Long-term | The following is a summary of marketable securities held by NetScout at March 31, 2019 classified as short-term and long-term (in thousands): Amortized Cost Unrealized Gains Fair Value Type of security: U.S. government and municipal obligations $ 27,610 $ 12 $ 27,622 Commercial paper 48,722 — 48,722 Total short-term marketable securities 76,332 12 76,344 Corporate bonds 1,007 5 1,012 Total long-term marketable securities 1,007 5 1,012 Total marketable securities $ 77,339 $ 17 $ 77,356 The following is a summary of marketable securities held by NetScout at March 31, 2018 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 42,246 $ (60 ) $ 42,186 Commercial paper 33,003 — 33,003 Corporate bonds 2,754 (2 ) 2,752 Total short-term marketable securities 78,003 (62 ) 77,941 Total long-term marketable securities — — — Total marketable securities $ 78,003 $ (62 ) $ 77,941 |
Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company’s marketable securities held at March 31, 2019 and March 31, 2018 were as follows (in thousands): March 31, March 31, Available-for-sale securities: Due in 1 year or less $ 76,344 $ 77,941 Due after 1 year through 5 years 1,012 — $ 77,356 $ 77,941 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and 2018 (in thousands): Fair Value Measurements at March 31, 2019 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 409,632 $ — $ — $ 409,632 U.S. government and municipal obligations 10,732 16,890 — 27,622 Commercial paper — 48,722 — 48,722 Corporate bonds 1,012 — — 1,012 Derivative financial instruments — 58 — 58 Contingent consideration — — 762 762 $ 421,376 $ 65,670 $ 762 $ 487,808 LIABILITIES: Derivative financial instruments $ — $ (68 ) $ — $ (68 ) $ — $ (68 ) $ — $ (68 ) Fair Value Measurements at March 31, 2018 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 369,821 $ — $ — $ 369,821 U.S. government and municipal obligations 14,513 27,673 — 42,186 Commercial paper — 33,003 — 33,003 Corporate bonds 2,752 — — 2,752 Derivative financial instruments — 122 — 122 $ 387,086 $ 60,798 $ — $ 447,884 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,464 ) $ (5,464 ) Derivative financial instruments — (40 ) — (40 ) $ — $ (40 ) $ (5,464 ) $ (5,504 ) |
Schedule of Reconciliation of Changes in Fair Value of Level Three Financial Liabilities | The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended March 31, 2018 (in thousands): Contingent Purchase Consideration Balance at March 31, 2017 $ (5,449 ) Additions to Level 3 (523 ) Change in fair value of contingent consideration (152 ) Payments made 660 Balance at March 31, 2018 $ (5,464 ) The following table sets forth a reconciliation of changes in the fair value of the Company’s Level 3 financial liabilities for the year ended March 31, 2019 (in thousands): Contingent Contingent Consideration Balance at March 31, 2018 $ (5,464 ) $ — Contingent consideration pursuant to divestiture of the HNT tools business — 2,257 Change in fair value of contingent consideration (102 ) (1,495 ) Payments made 5,566 — Balance at March 31, 2019 $ — $ 762 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the FIFO method. Inventories consist of the following (in thousands): March 31, 2019 2018 Raw materials $ 14,432 $ 20,860 Work in process 1,181 2,589 Finished goods 7,738 8,500 Deferred costs 2,919 2,825 $ 26,270 $ 34,774 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following (in thousands): Estimated Useful Life in Years March 31, 2019 2018 Furniture and fixtures 3-7 $ 9,373 $ 6,596 Computer equipment and internal use software 3-5 158,797 147,237 Demonstration and spare part units 2-5 17,928 31,338 Leasehold improvements (1) up to 12 46,662 19,340 232,760 204,511 Less – accumulated depreciation (173,809 ) (152,000 ) $ 58,951 $ 52,511 (1) Leasehold improvements are depreciated over the shorter of the lease term or anticipated useful life of the improvement. |
GOODWILL & INTANGIBLE ASSETS (T
GOODWILL & INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the fiscal years ended March 31, 2019 and 2018 are as follows (in thousands): Balance at March 31, 2017 $ 1,718,162 Goodwill attributable to the Efflux acquisition 6,077 Foreign currency translation impact (11,475 ) Balance as of March 31, 2018 $ 1,712,764 Divestiture of the HNT tools business (4,414 ) Foreign currency translation impact 7,135 Balance as of March 31, 2019 $ 1,715,485 |
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 March 31, 2019 (in thousands): Cost Accumulated Amortization Net Developed technology $ 242,259 $ (168,289 ) $ 73,970 Customer relationships 772,969 (218,043 ) 554,926 Distributor relationships and technology licenses 6,882 (5,237 ) 1,645 Definite-lived trademark and trade name 39,304 (20,586 ) 18,718 Core technology 7,192 (6,845 ) 347 Net beneficial leases 336 (336 ) — Non-compete agreements 292 (292 ) — Leasehold interest 500 (500 ) — Backlog 16,397 (16,397 ) — Capitalized software 3,317 (2,690 ) 627 Other 1,208 (923 ) 285 $ 1,090,656 $ (440,138 ) $ 650,518 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, 2018 (in thousands): Cost Accumulated Amortization Net Developed technology $ 259,758 $ (148,937 ) $ 110,821 Customer relationships 845,490 (176,425 ) 669,065 Distributor relationships and technology licenses 9,019 (5,389 ) 3,630 Definite-lived trademark and trade name 44,387 (18,138 ) 26,249 Core technology 7,345 (6,712 ) 633 Net beneficial leases 336 (336 ) — Non-compete agreements 317 (317 ) — Leasehold interest 2,600 (2,130 ) 470 Backlog 18,544 (18,544 ) — Capitalized software 3,183 (1,621 ) 1,562 Other 1,247 (903 ) 344 $ 1,192,226 $ (379,452 ) $ 812,774 |
Summary of Amortization Expense | The following table provides a summary of amortization expense during the fiscal years ended March 31, 2019 , 2018 , and 2017 (in thousands). Years Ended March 31, 2019 2018 2017 Amortization of intangible assets included as: Product revenue $ — $ 9 $ 11,438 Cost of product revenue 34,039 40,286 44,326 Operating expense 74,325 76,661 70,325 $ 108,364 $ 116,956 $ 126,089 |
Schedule of Expected Future Amortization Expense | The following is the expected future amortization expense at March 31, 2019 for the fiscal years ended March 31 (in thousands): 2020 $ 90,924 2021 79,643 2022 69,232 2023 61,511 2024 53,403 Thereafter 295,805 Total $ 650,518 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and 2018 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018 Derivatives Designated as Hedging Instruments: Forward contracts $ 4,550 $ 11,225 $ 58 $ 122 $ 68 $ 40 (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 at March 31, 2019 and 2018 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in OCI on Derivative (a) Gain (Loss) Reclassified from Accumulated OCI into Income (b) Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) March 31, March 31, March 31, March 31, March 31, March 31, 2019 2018 Location 2019 2018 Location 2019 2018 Forward contracts $ (696 ) $ 1,079 Research and development $ 164 $ (121 ) Research and development $ 69 $ 60 Sales and marketing 411 (779 ) Sales and marketing (196 ) (153 ) $ (696 ) $ 1,079 $ 575 $ (900 ) $ (127 ) $ (93 ) (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) | 12 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Activities | The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): FY2016 Plan Q1 FY2017 Plan Q4 FY2017 Plan FY2018 Plan VSP Employee-Related Employee-Related Employee-Related Facilities Related Employee-Related Facilities Related Employee-Related Total Balance at March 31, 2016 $ 272 $ — $ — $ — $ — $ — $ — $ 272 Restructuring charges to operations — 2,034 1,867 405 — — — 4,306 Cash payments (272 ) (1,739 ) (317 ) — — — — (2,328 ) Other adjustments — (295 ) — — — — — (295 ) Balance at March 31, 2017 $ — $ — $ 1,550 $ 405 $ — $ — $ — $ 1,955 Restructuring charges to operations — — 729 208 5,085 — — 6,022 Cash payments — — (1,867 ) (374 ) (1,331 ) — — (3,572 ) Other adjustments — — (412 ) (239 ) (58 ) — — (709 ) Balance at March 31, 2018 $ — $ — $ — $ — $ 3,696 $ — $ — $ 3,696 Restructuring charges to operations — — — — 1,017 643 17,248 18,908 Cash payments — — — — (4,240 ) (458 ) (17,329 ) (22,027 ) Other adjustments — — — — (473 ) (185 ) 81 (577 ) Balance at March 31, 2019 $ — $ — $ — $ — $ — $ — $ — $ — |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of Basic and Diluted Net Income 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): Year Ended March 31, 2019 2018 2017 Numerator: Net income (loss) $ (73,324 ) $ 79,812 $ 33,291 Denominator: Denominator for basic net income (loss) per share - weighted average common shares outstanding 78,617 87,425 92,226 Dilutive common equivalent shares: Weighted average restricted stock units — 836 694 Denominator for diluted net income (loss) per share - weighted average shares outstanding 78,617 88,261 92,920 Net income (loss) per share: Basic net income (loss) per share $ (0.93 ) $ 0.91 $ 0.36 Diluted net income (loss) per share $ (0.93 ) $ 0.90 $ 0.36 |
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 per share, since their inclusion would be antidilutive (in thousands): Year Ended March 31, 2019 2018 2017 Restricted stock units 706 1,450 1,320 |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
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 employee stock purchase plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Year Ended March 31, 2019 2018 2017 Cost of product revenue $ 1,463 $ 1,159 $ 934 Cost of service revenue 5,959 4,824 3,956 Research and development 17,321 14,711 12,362 Sales and marketing 18,923 15,213 12,823 General and administrative 12,662 11,410 9,114 $ 56,328 $ 47,317 $ 39,189 |
Summary of Transactions under Amended 2007 Equity Incentive Plan | Transactions under the Amended 2007 Plan during the fiscal years ended March 31, 2019 , 2018 and 2017 are summarized in the table below. Restricted Stock Units Number of Awards Weighted Average Fair Value Outstanding – March 31, 2016 2,873,306 $ 35.32 Granted 2,020,536 24.92 Vested (950,159 ) 33.16 Canceled (333,382 ) 33.40 Outstanding – March 31, 2017 3,610,301 $ 30.24 Granted 1,962,590 34.01 Vested (1,216,585 ) 31.09 Canceled (277,526 ) 31.70 Outstanding – March 31, 2018 4,078,780 $ 31.77 Granted 2,178,339 30.10 Vested (1,438,219 ) 32.49 Canceled (608,245 ) 30.52 Outstanding – March 31, 2019 4,210,655 $ 30.84 |
Schedule of Aggregate Intrinsic Values of Stock Options and Restricted Stock Units | The aggregate intrinsic value of stock options exercised and the fair value of restricted stock units vested at March 31, 2019 , 2018 and 2017 were as follows (in thousands): Year Ended March 31, 2019 2018 2017 Total fair value of restricted stock unit awards vested $ 38,070 $ 40,539 $ 28,293 |
PENSION BENEFIT PLANS (Tables)
PENSION BENEFIT PLANS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Changes in Benefit Obligation | The components of the change in benefit obligation of the pension plan is as follows (in thousands): March 31, March 31, 2019 2018 Benefit obligation, at beginning of year $ 33,464 $ 30,141 Service cost 304 407 Interest cost 704 718 Benefits paid and other (302 ) (288 ) Actuarial loss (gain) 3,254 (1,788 ) Foreign exchange rate impact (2,529 ) 4,274 Benefit obligation, at end of year $ 34,895 $ 33,464 |
Schedule of Changes in Fair Value of Plan Assets | The reconciliation of the beginning and ending balances of the fair value of the assets of the pension plan is as follows (in thousands): March 31, March 31, 2019 2018 Fair value of plan assets, at beginning of year $ — $ — Employer direct benefit payments 302 288 Benefits paid and other (302 ) (288 ) Fair value of plan assets, at end of year $ — $ — |
Schedule of Net Benefit Costs | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the fiscal years ended March 31, 2019 , 2018 , and 2017 (in thousands): Year Ended March 31, 2019 2018 2017 Service cost $ 304 $ 407 $ 329 Interest cost 704 718 638 Net periodic pension cost $ 1,008 $ 1,125 $ 967 |
Schedule of Assumptions Used | Weighted average assumptions used to determine net periodic pension cost at date of measurement: March 31, March 31, March 31, 2019 2018 2017 Discount rate 1.80 % 2.30 % 2.10 % Rate of compensation increase 3.00 % 2.25 % 2.25 % |
Schedule of Expected Benefit Payments | The following sets forth benefit payments, which reflect expected future service, as appropriate, expected to be paid by the plan in the periods indicated (in thousands): 2020 $ 382 2021 $ 436 2022 $ 484 2023 $ 549 2024 $ 599 2025 - 2030 $ 4,561 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax Expense | Income (loss) before income tax expense (benefit) consisted of the following (in thousands): Year Ended March 31, 2019 2018 2017 Domestic $ (107,088 ) $ (35,032 ) $ 32,475 Foreign 14,176 16,373 19,710 $ (92,912 ) $ (18,659 ) $ 52,185 |
Summary of Components of Income Tax Expense | The components of the income tax expense (benefit) are as follows (in thousands): Year Ended March 31, 2019 2018 2017 Current income tax expense (benefit): Federal $ 3,902 $ 14,191 $ 15,912 State (136 ) 1,925 3,152 Foreign 10,618 12,249 11,175 14,384 28,365 30,239 Deferred income tax expense (benefit): Federal (25,347 ) (113,122 ) (8,278 ) State (3,845 ) (10,037 ) 3,578 Foreign (4,780 ) (3,677 ) (6,645 ) (33,972 ) (126,836 ) (11,345 ) $ (19,588 ) $ (98,471 ) $ 18,894 |
Schedule of Federal Statutory Income Tax Rate to Effective Tax Rate | The income tax expense (benefit) computed using the federal statutory income tax rate differs from NetScout's effective tax rate primarily due to the following: Year Ended March 31, 2019 2018 2017 Statutory U.S. federal tax rate 21.0 % 31.6 % 35.0 % State taxes, net of federal tax effect 3.4 6.9 9.7 Research and development tax credits 7.1 39.5 (8.2 ) Effect of foreign operations (0.6 ) 15.5 (6.7 ) Meals and entertainment (1.0 ) (6.7 ) 2.5 Domestic production activities deduction — 13.8 (4.0 ) Change in valuation allowance 2.2 (0.2 ) (0.1 ) Stock Compensation (2.6 ) (2.5 ) 3.1 Divestiture (1.0 ) — — GILTI/FDII 2.9 — — BEAT (7.0 ) — — 2017 Tax Act (transition tax and re-measurement of deferreds) 0.4 454.1 — Foreign withholding (3.0 ) (21.0 ) 3.8 Other permanent differences (0.7 ) (3.3 ) 1.1 21.1 % 527.7 % 36.2 % |
Summary of Components of Net Deferred Tax Assets | The components of net deferred tax assets and liabilities are as follows (in thousands): Year Ended March 31, 2019 2018 Deferred tax assets: Accrued expenses $ 4,359 $ 4,068 Deferred revenue 11,278 12,168 Reserves 5,463 3,375 Pension and other retiree benefits 5,960 5,307 Net operating loss carryforwards 14,992 21,251 Tax credit carryforwards 9,043 6,625 Share-based compensation 5,505 5,164 Other 166 418 Total gross deferred tax assets 56,766 58,376 Valuation allowance (835 ) (3,108 ) Net deferred tax assets 55,931 55,268 Deferred tax liabilities: Intangible assets (164,199 ) (195,959 ) Other Deferred Liabilities (1,609 ) — Depreciation (7,134 ) (4,187 ) Total deferred tax asset (liability) $ (117,011 ) $ (144,878 ) |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years ended March 31, 2019 , 2018 and 2017 is as follows (in thousands): Year Ended March 31, 2019 2018 2017 Balance at April 1, $ 2,215 $ 2,926 $ 1,588 Additions based on tax positions related to the current year 28 126 46 Release of tax positions of prior years (194 ) (481 ) (154 ) Increase in unrecognized tax benefits as a result of a tax position taken during a prior period — — 1,446 Decrease relating to settlements with taxing authorities (735 ) (356 ) — Balance at March 31, $ 1,314 $ 2,215 $ 2,926 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Non-Cancelable Minimum Lease Commitments | At March 31, 2019 , future non-cancelable minimum lease commitments (including office space, copiers and automobiles) are as follows (in thousands): Year Ending March 31, 2020 $ 16,102 2021 11,059 2022 9,804 2023 8,807 2024 8,500 Remaining years 43,997 Total minimum lease payments $ 98,269 |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands): Year Ended March 31, 2019 2018 2017 United States $ 553,267 $ 581,853 $ 722,440 Europe 148,036 174,445 193,441 Asia 72,355 88,917 95,735 Rest of the world 136,260 141,572 150,496 $ 909,918 $ 986,787 $ 1,162,112 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
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): March 31, 2019 March 31, 2018 Danaher $ — $ 252 Fortive 335 2,935 $ 335 $ 3,187 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): March 31, 2019 March 31, 2018 Fortive $ 244 $ 369 $ 244 $ 369 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): Year Ended March 31, 2019 2018 2017 Danaher: Cost of product revenue $ — $ — $ 4,690 Cost of service revenue — — 485 Research and development expenses — — 1,720 Sales and marketing — 2 2,273 General and administrative expenses — 7 2,551 $ — $ 9 $ 11,719 Fortive: Cost of product revenue $ — $ 245 $ 2,539 Cost of service revenue 529 665 260 Research and development expenses 20 3 (96 ) Sales and marketing — — 150 General and administrative expenses 20 1,696 1,548 Other income — (56 ) (426 ) $ 569 $ 2,553 $ 3,975 As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows from operating activities resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows from operating activities (in thousands): Year Ended March 31, 2019 2018 2017 Due from related party: Danaher $ 58 $ 96 $ 17,310 Fortive 114 347 7,745 Total $ 172 $ 443 $ 25,055 Due to related party: Danaher $ 243 $ — $ (2,954 ) Fortive (9 ) (75 ) 162 Total $ 234 $ (75 ) $ (2,792 ) As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows from investing activities resulting from amounts due from related parties. The following table summarizes those cash flows from investing activities (in thousands): Year Ended March 31, 2019 2018 2017 Due from related party: Danaher $ — $ — $ 12,864 Total $ — $ — $ 12,864 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Results of Operations | The following table sets forth certain unaudited quarterly results of operations of NetScout for the fiscal years ended March 31, 2019 and 2018 . In the opinion of management, this information has been prepared on the same basis as the audited consolidated financial statements and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the quarterly information when read in conjunction with the audited consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The quarterly operating results are not necessarily indicative of future results of operations. Three Months Ended (in thousands, except per share data) March 31, 2019 Dec. 31, Sept. 30, June 30, March 31, 2018 Dec. 31, Sept. 30, June 30, Revenue $ 235,002 $ 246,008 $ 223,797 $ 205,111 $ 235,224 $ 268,944 $ 256,863 $ 225,756 Gross profit $ 176,466 $ 176,424 $ 159,817 $ 143,084 $ 168,633 $ 204,435 $ 182,620 $ 159,194 Net income (loss) $ 19,211 $ (3,603 ) $ (26,428 ) $ (62,504 ) $ 16,817 $ 89,685 $ (2,468 ) $ (24,222 ) Diluted net income (loss) per share $ 0.24 $ (0.05 ) $ (0.34 ) $ (0.78 ) $ 0.20 $ 1.02 $ (0.03 ) $ (0.27 ) |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | 12 Months Ended |
Mar. 31, 2019segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Sep. 14, 2018USD ($) | Nov. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($) | Mar. 31, 2019USD ($)segmentreporting_unit | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2019USD ($)company | Aug. 31, 2016USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Number of reportable segments | segment | 1 | ||||||||
Unrecognized accounts receivable and deferred revenue | $ 23,300,000 | $ 20,000,000 | $ 23,300,000 | ||||||
Number of reporting units | reporting_unit | 2 | ||||||||
Number of companies acquired | company | 2 | ||||||||
Number of businesses divested | company | 1 | ||||||||
Fair value of contingent consideration | $ 762,000 | $ 762,000 | |||||||
Fair value of contingent liability | 5,464,000 | ||||||||
Amortization included as cost of product | 1,100,000 | 1,000,000 | $ 594,000 | ||||||
Capitalized software development costs | 100,000 | 100,000 | 100,000 | ||||||
Foreign currency losses | 2,000,000 | 4,100,000 | 2,500,000 | ||||||
Advertising expense | $ 9,400,000 | 6,500,000 | $ 8,100,000 | ||||||
Computer equipment and internal use software | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Estimated useful life | 3 years | ||||||||
Level 3 | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent consideration | $ 762,000 | 762,000 | |||||||
Fair value of contingent liability | 5,464,000 | ||||||||
Efflux Systems, Inc. | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent liability | 523,000 | ||||||||
Payments of contingent consideration | $ 523,000 | ||||||||
Efflux Systems, Inc. | Level 3 | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent liability | 523,000 | ||||||||
Simena LLC | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent liability | 4,900,000 | ||||||||
Payments of contingent consideration | $ 5,000,000 | ||||||||
Simena LLC | Level 3 | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent liability | $ 4,900,000 | ||||||||
Avvasi | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Fair value of contingent liability | $ 660,000 | ||||||||
Maximum | Computer equipment and internal use software | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Estimated useful life | 5 years | ||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Handheld Network Test Tools Business | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Contingent consideration related to the divestiture | $ 2,300,000 | $ 800,000 | 800,000 | ||||||
Contingent consideration measurement period | 2 years | 2 years | |||||||
Fair value of contingent consideration | $ 800,000 | $ 800,000 | |||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Maximum | Handheld Network Test Tools Business | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Contingent consideration related to the divestiture | $ 4,000,000 | $ 4,000,000 |
REVENUE RECOGNITION - Financial
REVENUE RECOGNITION - Financial Statement Impact of Adoption (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Apr. 01, 2018 | |
ASSETS: | ||||||||||||
Accounts receivable and unbilled costs | $ 235,318 | $ 213,438 | $ 235,318 | $ 213,438 | $ 214,633 | |||||||
Inventories and deferred costs | 26,270 | 34,774 | 26,270 | 34,774 | ||||||||
Prepaid expenses and other current assets | 35,658 | 33,502 | 35,658 | 33,502 | 38,128 | |||||||
Other assets | 16,988 | 12,866 | 16,988 | 12,866 | 17,614 | |||||||
LIABILITIES: | ||||||||||||
Deferred revenue and customer deposits | 272,508 | 301,925 | 272,508 | 301,925 | 271,698 | |||||||
Deferred tax liability | 124,229 | 151,563 | 124,229 | 151,563 | 158,687 | |||||||
Long-term deferred revenue and customer deposits | 94,619 | 91,409 | 94,619 | 91,409 | 90,157 | |||||||
STOCKHOLDERS' EQUITY: | ||||||||||||
Retained earnings | 358,093 | 396,493 | 358,093 | 396,493 | 431,417 | |||||||
Income Statement [Abstract] | ||||||||||||
Total revenue | 235,002 | $ 246,008 | $ 223,797 | $ 205,111 | 235,224 | $ 268,944 | $ 256,863 | $ 225,756 | 909,918 | 986,787 | $ 1,162,112 | |
Total cost of revenue | 254,127 | 271,905 | 346,139 | |||||||||
Sales and marketing expense | 291,870 | 312,536 | 328,628 | |||||||||
Income tax benefit | (19,588) | (98,471) | 18,894 | |||||||||
Net income (loss) | $ 19,211 | $ (3,603) | $ (26,428) | $ (62,504) | $ 16,817 | $ 89,685 | $ (2,468) | $ (24,222) | $ (73,324) | $ 79,812 | $ 33,291 | |
Basic net loss per share (in dollars per share) | $ (0.93) | $ 0.91 | $ 0.36 | |||||||||
Diluted net loss per share (in dollars per share) | $ 0.24 | $ (0.05) | $ (0.34) | $ (0.78) | $ 0.20 | $ 1.02 | $ (0.03) | $ (0.27) | $ (0.93) | $ 0.90 | $ 0.36 | |
Balance without Adoption of Topic 606 | ||||||||||||
ASSETS: | ||||||||||||
Accounts receivable and unbilled costs | $ 229,708 | $ 229,708 | ||||||||||
Inventories and deferred costs | 26,418 | 26,418 | ||||||||||
Prepaid expenses and other current assets | 31,810 | 31,810 | ||||||||||
Other assets | 12,074 | 12,074 | ||||||||||
LIABILITIES: | ||||||||||||
Deferred revenue and customer deposits | 306,799 | 306,799 | ||||||||||
Deferred tax liability | 121,535 | 121,535 | ||||||||||
Long-term deferred revenue and customer deposits | 106,025 | 106,025 | ||||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||
Retained earnings | 339,765 | 339,765 | ||||||||||
Income Statement [Abstract] | ||||||||||||
Total revenue | 888,950 | |||||||||||
Total cost of revenue | 253,979 | |||||||||||
Sales and marketing expense | 292,080 | |||||||||||
Income tax benefit | (24,022) | |||||||||||
Net income (loss) | $ (89,920) | |||||||||||
Basic net loss per share (in dollars per share) | $ (1.14) | |||||||||||
Diluted net loss per share (in dollars per share) | $ (1.14) | |||||||||||
ASU 2014-09 | Effect of Change Higher (Lower) | ||||||||||||
ASSETS: | ||||||||||||
Accounts receivable and unbilled costs | 5,610 | $ 5,610 | 1,195 | |||||||||
Inventories and deferred costs | (148) | (148) | ||||||||||
Prepaid expenses and other current assets | 3,848 | 3,848 | 4,626 | |||||||||
Other assets | 4,914 | 4,914 | 4,748 | |||||||||
LIABILITIES: | ||||||||||||
Deferred revenue and customer deposits | (34,291) | (34,291) | (30,227) | |||||||||
Deferred tax liability | 2,694 | 2,694 | 7,124 | |||||||||
Long-term deferred revenue and customer deposits | (11,406) | (11,406) | (1,252) | |||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||
Retained earnings | $ 18,328 | 18,328 | $ 34,924 | |||||||||
Income Statement [Abstract] | ||||||||||||
Total revenue | 20,968 | |||||||||||
Total cost of revenue | 148 | |||||||||||
Sales and marketing expense | (210) | |||||||||||
Income tax benefit | 4,434 | |||||||||||
Net income (loss) | $ 16,596 | |||||||||||
Basic net loss per share (in dollars per share) | $ 0.21 | |||||||||||
Diluted net loss per share (in dollars per share) | $ 0.21 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands | Apr. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Disaggregation of Revenue [Line Items] | |||
Retained earnings | $ 431,417 | $ 358,093 | $ 396,493 |
Capitalized contract cost | 7,100 | 6,400 | |
Deferred tax liability | 158,687 | 124,229 | $ 151,563 |
Revenue recognized | 260,100 | ||
Deferred revenue | 361,855 | 367,127 | |
Capitalized contract cost, amortization | 6,500 | ||
Prepaid expenses and other current assets | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost | 3,800 | ||
Other assets | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost | $ 2,600 | ||
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 30 days | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 90 days | ||
ASU 2014-09 | |||
Disaggregation of Revenue [Line Items] | |||
Revenue will not be recognized in future periods | 34,900 | ||
ASU 2014-09 | Effect of Change Higher (Lower) | |||
Disaggregation of Revenue [Line Items] | |||
Retained earnings | 34,924 | $ 18,328 | |
Deferred tax liability | $ 7,124 | $ 2,694 |
REVENUE RECOGNITION - Performan
REVENUE RECOGNITION - Performance Obligations (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 272.5 |
Revenue, remaining performance obligation, percentage | 74.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 94.6 |
Revenue, remaining performance obligation, percentage | 26.00% |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Apr. 01, 2018 | Mar. 31, 2018 | |
ASSETS: | |||
Customer accounts receivable | $ 240,482 | $ 205,299 | |
Increase (decrease) in customer accounts receivable | 35,183 | ||
Unbilled receivables | 3,354 | 4,338 | |
Increase (decrease) of unbilled receivables | (984) | ||
Other receivables | 3,577 | 4,996 | |
Increase (decrease) in other receivables | (1,419) | ||
Long-term unbilled receivables | 2,754 | 2,254 | |
Increase (decrease) of long-term unbilled receivables | 500 | ||
Contract assets | 250,167 | 216,887 | |
Increase (decrease) in contract assets | 33,280 | ||
LIABILITIES: | |||
Deferred revenue | 272,508 | 271,698 | $ 301,925 |
Increase (decrease) in deferred revenue | 810 | ||
Deferred revenue, long-term | 94,619 | 90,157 | $ 91,409 |
Increase (decrease) in deferred revenue, long-term | 4,462 | ||
Contract liabilities | 367,127 | $ 361,855 | |
Increase (decrease) in contract liabilities | $ 5,272 |
CASH, CASH EQUIVALENTS AND MA_3
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Cash, Cash Equivalent and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 409,632 | $ 369,821 | $ 304,880 | $ 210,711 |
Restricted cash | 188 | 910 | 846 | 186 |
Total cash, cash equivalents and restricted cash | $ 409,820 | $ 370,731 | $ 305,726 | $ 210,897 |
CASH, CASH EQUIVALENTS AND MA_4
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Marketable Securities Classified as Short-term and Long-term (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | $ 77,339 | $ 78,003 |
Unrealized Gains | 17 | (62) |
Fair Value | 77,356 | 77,941 |
U.S. government and municipal obligations | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Fair Value | 27,622 | 42,186 |
Commercial paper | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Fair Value | 48,722 | 33,003 |
Corporate bonds | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Fair Value | 1,012 | 2,752 |
Short-term marketable securities | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 76,332 | 78,003 |
Unrealized Gains | 12 | (62) |
Fair Value | 76,344 | 77,941 |
Short-term marketable securities | U.S. government and municipal obligations | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 27,610 | 42,246 |
Unrealized Gains | 12 | (60) |
Fair Value | 27,622 | 42,186 |
Short-term marketable securities | Commercial paper | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 48,722 | 33,003 |
Unrealized Gains | 0 | 0 |
Fair Value | 48,722 | 33,003 |
Short-term marketable securities | Corporate bonds | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 2,754 | |
Unrealized Gains | (2) | |
Fair Value | 2,752 | |
Long-term marketable securities | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 1,007 | 0 |
Unrealized Gains | 5 | 0 |
Fair Value | 1,012 | $ 0 |
Long-term marketable securities | Corporate bonds | ||
Cash, Cash Equivalents and Marketable Securities [Line Items] | ||
Amortized Cost | 1,007 | |
Unrealized Gains | 5 | |
Fair Value | $ 1,012 |
CASH, CASH EQUIVALENTS AND MA_5
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Available-for-sale securities: | ||
Due in 1 year or less | $ 76,344 | $ 77,941 |
Due after 1 year through 5 years | 1,012 | 0 |
Fair Value | $ 77,356 | $ 77,941 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
ASSETS: | ||
Cash and cash equivalents | $ 409,632 | $ 369,821 |
Available for sale securities | 77,356 | 77,941 |
Derivative financial instruments | 58 | 122 |
Contingent consideration | 762 | |
Total assets | 487,808 | 447,884 |
LIABILITIES: | ||
Contingent purchase consideration | (5,464) | |
Derivative financial instruments | (68) | (40) |
Total liabilities | (68) | (5,504) |
U.S. government and municipal obligations | ||
ASSETS: | ||
Available for sale securities | 27,622 | 42,186 |
Commercial paper | ||
ASSETS: | ||
Available for sale securities | 48,722 | 33,003 |
Corporate bonds | ||
ASSETS: | ||
Available for sale securities | 1,012 | 2,752 |
Level 1 | ||
ASSETS: | ||
Cash and cash equivalents | 409,632 | 369,821 |
Derivative financial instruments | 0 | 0 |
Contingent consideration | 0 | |
Total assets | 421,376 | 387,086 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available for sale securities | 10,732 | 14,513 |
Level 1 | Commercial paper | ||
ASSETS: | ||
Available for sale securities | 0 | 0 |
Level 1 | Corporate bonds | ||
ASSETS: | ||
Available for sale securities | 1,012 | 2,752 |
Level 2 | ||
ASSETS: | ||
Derivative financial instruments | 58 | 122 |
Contingent consideration | 0 | |
Total assets | 65,670 | 60,798 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | |
Derivative financial instruments | (68) | (40) |
Total liabilities | (68) | (40) |
Level 2 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available for sale securities | 16,890 | 27,673 |
Level 2 | Commercial paper | ||
ASSETS: | ||
Available for sale securities | 48,722 | 33,003 |
Level 2 | Corporate bonds | ||
ASSETS: | ||
Available for sale securities | 0 | 0 |
Level 3 | ||
ASSETS: | ||
Derivative financial instruments | 0 | 0 |
Contingent consideration | 762 | |
Total assets | 762 | 0 |
LIABILITIES: | ||
Contingent purchase consideration | (5,464) | |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | (5,464) |
Level 3 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available for sale securities | 0 | 0 |
Level 3 | Commercial paper | ||
ASSETS: | ||
Available for sale securities | 0 | 0 |
Level 3 | Corporate bonds | ||
ASSETS: | ||
Available for sale securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Sep. 14, 2018 | Sep. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | $ 5,464,000 | |||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | 5,464,000 | |||
Efflux Systems, Inc. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | 523,000 | |||
Efflux Systems, Inc. | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | 523,000 | |||
Simena LLC | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | 4,900,000 | |||
Simena LLC | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent liability | 4,900,000 | |||
Fair value, measurements, recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liability adjustment included in earnings | $ 102,000 | 152,000 | ||
Change in fair value of contingent consideration | (1,495,000) | |||
Fair value, measurements, recurring | Contingent consideration | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liability adjustment included in earnings | $ 152,000 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Handheld Network Test Tools Business | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration related to the divestiture | $ 2,300,000 | 800,000 | ||
Contingent consideration measurement period | 2 years | 2 years | ||
Change in fair value of contingent consideration | 1,600,000 | |||
Change in fair value of contingent consideration | $ 119,000 | |||
Maximum | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Handheld Network Test Tools Business | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration related to the divestiture | $ 4,000,000 | $ 4,000,000 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Changes in Fair Value of Level 3 Financial Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Contingent Consideration | |||
Initial fair value of contingent consideration received as partial consideration for divestiture of business | $ 2,257 | $ 0 | $ 0 |
Fair value, measurements, recurring | |||
Contingent Purchase Consideration | |||
Balance at March 31, 2018 | (5,464) | (5,449) | |
Additions to Level 3 | (523) | ||
Change in fair value of contingent consideration | (102) | (152) | |
Payments made | 5,566 | 660 | |
Balance at March 31, 2019 | 0 | (5,464) | $ (5,449) |
Contingent Consideration | |||
Balance at March 31, 2018 | 0 | ||
Initial fair value of contingent consideration received as partial consideration for divestiture of business | 2,257 | ||
Change in fair value of contingent consideration | (1,495) | ||
Payments made | 0 | ||
Balance at March 31, 2018 | $ 762 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,432 | $ 20,860 |
Work in process | 1,181 | 2,589 |
Finished goods | 7,738 | 8,500 |
Deferred costs | 2,919 | 2,825 |
Total inventories | $ 26,270 | $ 34,774 |
FIXED ASSETS - Schedule of Fixe
FIXED ASSETS - Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 232,760 | $ 204,511 |
Less – accumulated depreciation | (173,809) | (152,000) |
Fixed assets, net | 58,951 | 52,511 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 9,373 | 6,596 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 7 years | |
Computer equipment and internal use software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Fixed assets, gross | $ 158,797 | 147,237 |
Computer equipment and internal use software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Computer equipment and internal use software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Demonstration and spare part units | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 17,928 | 31,338 |
Demonstration and spare part units | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years | |
Demonstration and spare part units | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 46,662 | $ 19,340 |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 12 years |
FIXED ASSETS - Narrative (Detai
FIXED ASSETS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 27.4 | $ 34.7 | $ 33 |
ACQUISITIONS & DIVESTITURES - N
ACQUISITIONS & DIVESTITURES - Narrative (Details) - USD ($) | Sep. 14, 2018 | Jul. 12, 2017 | Sep. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Loss on divestiture of business | $ 9,472,000 | $ 0 | $ 0 | |||
Goodwill | 1,715,485,000 | $ 1,712,764,000 | $ 1,718,162,000 | |||
Efflux Systems, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Estimated purchase price | $ 8,600,000 | |||||
Goodwill | $ 6,100,000 | |||||
Handheld Network Test Tools Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||||
Business Acquisition [Line Items] | ||||||
Cash proceeds from divestiture | $ 1,300,000 | |||||
Contingent consideration related to the divestiture | $ 2,300,000 | 800,000 | ||||
Contingent consideration measurement period | 2 years | 2 years | ||||
Net liabilities transferred | 4,600,000 | |||||
Loss on divestiture of business | 9,500,000 | |||||
Transaction costs | 1,300,000 | |||||
Incentive compensation payable | 500,000 | |||||
Transitional services agreement | 18 months | |||||
Transitional services within other expense | 2,200,000 | |||||
Change in fair value contingent consideration in other expense | 1,600,000 | |||||
Change in fair value contingent consideration in other assets | $ 800,000 | |||||
Handheld Network Test Tools Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration related to the divestiture | $ 4,000,000 | $ 4,000,000 |
GOODWILL & INTANGIBLE ASSETS -
GOODWILL & INTANGIBLE ASSETS - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($)reporting_unit | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Number of reporting units | reporting_unit | 2 | |||
Goodwill | $ 1,715,485 | $ 1,712,764 | $ 1,718,162 | |
Carrying value of intangible assets | 669,118 | 831,374 | ||
Impairment of intangible assets | $ 35,871 | 0 | $ 0 | |
Weighted average useful life of acquired intangible assets | 14 years 7 months 2 days | |||
Trade name | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets | $ 18,600 | 18,600 | ||
Technology license | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | $ 500 | |||
Weighted average useful life of acquired intangible assets | 3 years | |||
Developed and core technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life of acquired intangible assets | 11 years 3 months | |||
Customer and distributor relationships | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life of acquired intangible assets | 15 years 10 months 18 days | |||
Trademarks and trade names | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life of acquired intangible assets | 8 years 7 months 6 days | |||
Capitalized software | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average useful life of acquired intangible assets | 3 years | |||
Handheld Network Test Tools Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Increase (decrease) in intangible assets | $ (10,200) | |||
Service Assurance reporting unit | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 1,200,000 | $ 1,200,000 | ||
Security reporting unit | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 555,100 | $ 555,900 |
GOODWILL & INTANGIBLE ASSETS _2
GOODWILL & INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 1,712,764 | $ 1,718,162 |
Goodwill attributable to the Efflux acquisition | 6,077 | |
Divestiture of the HNT tools business | (4,414) | |
Foreign currency translation impact | 7,135 | (11,475) |
Ending balance | $ 1,715,485 | $ 1,712,764 |
GOODWILL & INTANGIBLE ASSETS _3
GOODWILL & INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,090,656 | $ 1,192,226 |
Accumulated Amortization | (440,138) | (379,452) |
Net | 650,518 | 812,774 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 242,259 | 259,758 |
Accumulated Amortization | (168,289) | (148,937) |
Net | 73,970 | 110,821 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 772,969 | 845,490 |
Accumulated Amortization | (218,043) | (176,425) |
Net | 554,926 | 669,065 |
Distributor relationships and technology licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 6,882 | 9,019 |
Accumulated Amortization | (5,237) | (5,389) |
Net | 1,645 | 3,630 |
Definite-lived trademark and trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 39,304 | 44,387 |
Accumulated Amortization | (20,586) | (18,138) |
Net | 18,718 | 26,249 |
Core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,192 | 7,345 |
Accumulated Amortization | (6,845) | (6,712) |
Net | 347 | 633 |
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 | 292 | 317 |
Accumulated Amortization | (292) | (317) |
Net | 0 | 0 |
Leasehold interest | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 500 | 2,600 |
Accumulated Amortization | (500) | (2,130) |
Net | 0 | 470 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 16,397 | 18,544 |
Accumulated Amortization | (16,397) | (18,544) |
Net | 0 | 0 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 3,317 | 3,183 |
Accumulated Amortization | (2,690) | (1,621) |
Net | 627 | 1,562 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,208 | 1,247 |
Accumulated Amortization | (923) | (903) |
Net | $ 285 | $ 344 |
GOODWILL & INTANGIBLE ASSETS _4
GOODWILL & INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | $ 108,364 | $ 116,956 | $ 126,089 |
Product revenue | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | 0 | 9 | 11,438 |
Cost of product revenue | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | 34,039 | 40,286 | 44,326 |
Operating expense | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | $ 74,325 | $ 76,661 | $ 70,325 |
GOODWILL & INTANGIBLE ASSETS _5
GOODWILL & INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 | $ 90,924 | |
2021 | 79,643 | |
2022 | 69,232 | |
2023 | 61,511 | |
2024 | 53,403 | |
Thereafter | 295,805 | |
Net | $ 650,518 | $ 812,774 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) | 12 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging forecasted cash flows for operating expenses denominated in foreign currencies managed in months (up to) | 12 months |
Contract maturing over next months | 12 months |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Details) - Designated as Hedging Instrument - Cash Flow Hedging - Forward contracts - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 4,550 | $ 11,225 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Prepaid Expenses and Other Current Assets | 58 | 122 |
Accrued Other | ||
Derivatives, Fair Value [Line Items] | ||
Accrued Other | $ 68 | $ 40 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income And Results Of Operations (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified as a result of discontinuance of cash flow hedges | $ 0 | $ 0 |
Designated as Hedging Instrument | Cash Flow Hedging | Forward contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in OCI on Derivative | (696,000) | 1,079,000 |
Gain (Loss) Reclassified from Accumulated OCI into Income | 575,000 | (900,000) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | (127,000) | (93,000) |
Designated as Hedging Instrument | Cash Flow Hedging | Forward contracts | Research and development | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Recognized in OCI on Derivative | (696,000) | 1,079,000 |
Gain (Loss) Reclassified from Accumulated OCI into Income | 164,000 | (121,000) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 69,000 | 60,000 |
Designated as Hedging Instrument | Cash Flow Hedging | Forward contracts | Sales and marketing | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (Loss) Reclassified from Accumulated OCI into Income | 411,000 | (779,000) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | $ (196,000) | $ (153,000) |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2019USD ($)employee | Mar. 31, 2019USD ($)employee | Mar. 31, 2018USD ($)employee | Mar. 31, 2017USD ($)planemployee | Mar. 31, 2016USD ($)employee | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 18,693 | $ 5,209 | $ 4,001 | ||
Number of restructuring plans | plan | 2 | ||||
FY2017 Plans | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 900 | ||||
FY2018 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 1,700 | ||||
Number of employees terminated | employee | 61 | ||||
VSP | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 17,200 | ||||
Number of employees terminated | employee | 155 | ||||
VSP | Scenario, Forecast | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 100 | ||||
Number of employees terminated | employee | 1 | ||||
Employee-Related | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 500 | ||||
Number of employees terminated | employee | 1 | ||||
Employee-Related | Q1 FY2017 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 2,000 | ||||
Number of employees terminated | employee | 19 | ||||
Employee-Related | Q4 FY2017 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 1,900 | ||||
Number of employees terminated | employee | 41 | ||||
Employee-Related | FY2018 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 5,100 | ||||
Facilities Related | Q4 FY2017 Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 400 |
RESTRUCTURING CHARGES - Schedul
RESTRUCTURING CHARGES - Schedule of Restructuring Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | $ 3,696 | $ 1,955 | $ 272 |
Restructuring charges to operations | 18,908 | 6,022 | 4,306 |
Cash payments | (22,027) | (3,572) | (2,328) |
Other adjustments | (577) | (709) | (295) |
Ending Balance | 0 | 3,696 | 1,955 |
Employee-Related | FY2016 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 0 | 272 |
Restructuring charges to operations | 0 | 0 | 0 |
Cash payments | 0 | 0 | (272) |
Other adjustments | 0 | 0 | 0 |
Ending Balance | 0 | 0 | 0 |
Employee-Related | Q1 FY2017 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 0 | 0 |
Restructuring charges to operations | 0 | 0 | 2,034 |
Cash payments | 0 | 0 | (1,739) |
Other adjustments | 0 | 0 | (295) |
Ending Balance | 0 | 0 | 0 |
Employee-Related | Q4 FY2017 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 1,550 | 0 |
Restructuring charges to operations | 0 | 729 | 1,867 |
Cash payments | 0 | (1,867) | (317) |
Other adjustments | 0 | (412) | 0 |
Ending Balance | 0 | 0 | 1,550 |
Employee-Related | FY2018 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 3,696 | 0 | 0 |
Restructuring charges to operations | 1,017 | 5,085 | 0 |
Cash payments | (4,240) | (1,331) | 0 |
Other adjustments | (473) | (58) | 0 |
Ending Balance | 0 | 3,696 | 0 |
Employee-Related | VSP | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 0 | 0 |
Restructuring charges to operations | 17,248 | 0 | 0 |
Cash payments | (17,329) | 0 | 0 |
Other adjustments | 81 | 0 | 0 |
Ending Balance | 0 | 0 | 0 |
Facilities Related | Q4 FY2017 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 405 | 0 |
Restructuring charges to operations | 0 | 208 | 405 |
Cash payments | 0 | (374) | 0 |
Other adjustments | 0 | (239) | 0 |
Ending Balance | 0 | 0 | 405 |
Facilities Related | FY2018 Plan | |||
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 0 | 0 | 0 |
Restructuring charges to operations | 643 | 0 | 0 |
Cash payments | (458) | 0 | 0 |
Other adjustments | (185) | 0 | 0 |
Ending Balance | $ 0 | $ 0 | $ 0 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Apr. 01, 2018 | Jan. 16, 2018USD ($)shares | Mar. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Feb. 01, 2018USD ($) | Jul. 14, 2015 |
Debt Instrument [Line Items] | ||||||
Stock authorized to repurchase under stock repurchase program (in shares) | shares | 25,000,000 | |||||
Repaid borrowings | $ 50,000,000 | |||||
Line of credit | Senior secured revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt term | 5 years | |||||
Credit facility | $ 1,000,000,000 | |||||
Amount outstanding under credit facility | $ 550,000,000 | $ 550,000,000 | $ 300,000,000 | |||
Commitment fee percentage | 0.30% | |||||
Debt default, acceleration clause, required consent percentage | 50.00% | 50.00% | ||||
Debt issuance costs | $ 12,200,000 | $ 12,200,000 | ||||
Unamortized debt issuance costs | 6,600,000 | 6,600,000 | ||||
Line of credit | Senior secured revolving credit facility | Prepaid expenses and other current assets | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized debt issuance costs | 1,700,000 | 1,700,000 | ||||
Line of credit | Senior secured revolving credit facility | Other assets | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized debt issuance costs | $ 4,900,000 | $ 4,900,000 | ||||
Line of credit | Senior secured revolving credit facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Leverage Ratio | 2.75 | 2.75 | 3.5 | |||
Commitment fee percentage | 0.30% | |||||
Line of credit | Senior secured revolving credit facility | Maximum | Foreign Subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Voting stock pledge limit for any foreign subsidiary | 65.00% | 65.00% | ||||
Line of credit | Senior secured revolving credit facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Leverage Ratio | 1.50 | 1.50 | 1.5 | |||
Commitment fee percentage | 0.15% | |||||
Line of credit | Senior secured revolving credit facility | Federal funds effective rate | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 0.50% | |||||
Line of credit | Senior secured revolving credit facility | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 1.00% | |||||
Line of credit | Senior secured revolving credit facility | LIBOR | LIBOR loans | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 1.75% | |||||
Line of credit | Senior secured revolving credit facility | LIBOR | LIBOR loans | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 2.00% | |||||
Line of credit | Senior secured revolving credit facility | LIBOR | LIBOR loans | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 1.00% | |||||
Line of credit | Senior secured revolving credit facility | Base rate | Base rate loans | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 0.75% | |||||
Line of credit | Senior secured revolving credit facility | Base rate | Base rate loans | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 1.00% | |||||
Line of credit | Senior secured revolving credit facility | Base rate | Base rate loans | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of effective rate | 0.00% | |||||
Line of credit | Letter of credit sub-facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility | $ 75,000,000 |
NET INCOME (LOSS) PER SHARE - S
NET INCOME (LOSS) PER SHARE - Schedule of Calculations of Basic and Diluted Net Income per Share and Potential Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | |||||||||||
Net income (loss) | $ 19,211 | $ (3,603) | $ (26,428) | $ (62,504) | $ 16,817 | $ 89,685 | $ (2,468) | $ (24,222) | $ (73,324) | $ 79,812 | $ 33,291 |
Denominator: | |||||||||||
Denominator for basic net income per share - weighted average common shares outstanding (in shares) | 78,617 | 87,425 | 92,226 | ||||||||
Dilutive common equivalent shares: | |||||||||||
Weighted average restricted stock units (in shares) | 0 | 836 | 694 | ||||||||
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 78,617 | 88,261 | 92,920 | ||||||||
Net income (loss) per share: | |||||||||||
Basic net income (loss) per share (in dollars per share) | $ (0.93) | $ 0.91 | $ 0.36 | ||||||||
Diluted net income (loss) per share (in dollars per share) | $ 0.24 | $ (0.05) | $ (0.34) | $ (0.78) | $ 0.20 | $ 1.02 | $ (0.03) | $ (0.27) | $ (0.93) | $ 0.90 | $ 0.36 |
NET INCOME (LOSS) PER SHARE -_2
NET INCOME (LOSS) PER SHARE - Summary of Antidilutive Securities Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluding from calculation of diluted net income per share (in shares) | 706 | 1,450 | 1,320 |
NET INCOME (LOSS) PER SHARE - N
NET INCOME (LOSS) PER SHARE - Narrative (Details) - shares | 7 Months Ended | 12 Months Ended | |
Aug. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
ASR Agreements | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Repurchase of treasury stock (in shares) | 11,067,809 | 3,679,947 | 7,387,862 |
TREASURY STOCK (Details)
TREASURY STOCK (Details) $ / shares in Units, $ in Thousands | Feb. 02, 2018USD ($)shares | Feb. 01, 2018USD ($)dealershares | Aug. 31, 2018$ / sharesshares | Mar. 31, 2019USD ($)shares | Mar. 31, 2018USD ($)shares | Mar. 31, 2017USD ($)shares | Jan. 16, 2018shares | Oct. 24, 2017shares | May 19, 2015shares |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | ||||||||
Shares repurchased during the period, value | $ | $ 14,468 | $ 501,324 | $ 79,996 | ||||||
Restricted stock units | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Shares repurchased during the period (in shares) | 451,683 | 408,097 | 320,572 | ||||||
Shares repurchased during the period, value | $ | $ 11,900 | $ 13,600 | $ 9,600 | ||||||
Dealer one | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Shares repurchased during the period, value | $ | $ 150,000 | ||||||||
Dealer two | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Shares repurchased during the period, value | $ | $ 150,000 | ||||||||
Line of credit | Senior secured revolving credit facility | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Amount outstanding under credit facility | $ | $ 300,000 | $ 550,000 | |||||||
Share repurchase program, May 2015 | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 | ||||||||
Shares repurchased during the period (in shares) | 970,650 | 6,773,438 | 3,148,426 | ||||||
Shares repurchased during the period, value | $ | $ 27,600 | $ 227,600 | $ 80,000 | ||||||
Common stock available to be purchased (in shares) | 0 | ||||||||
ASR Agreements | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Shares repurchased during the period (in shares) | 11,067,809 | 3,679,947 | 7,387,862 | ||||||
Shares repurchased during the period, value | $ | $ 300,000 | $ 96,800 | |||||||
Number of third-party financial institutions (the Dealers) | dealer | 2 | ||||||||
Shares repurchased during the period from each of the dealers (in shares) | 3,693,931 | ||||||||
Shares repurchased as percentage of total expected to be repurchased | 70.00% | ||||||||
Average cost per share (in dollars per share) | $ / shares | $ 27.11 | ||||||||
Share repurchase program, October 2017 | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | ||||||||
Shares repurchased during the period (in shares) | 6,417,212 | 543,251 | |||||||
Shares repurchased during the period, value | $ | $ 182,400 | $ 14,500 | |||||||
Common stock available to be purchased (in shares) | 14,359,590 |
STOCK PLANS - Narrative (Detail
STOCK PLANS - Narrative (Details) | Nov. 08, 2018shares | Sep. 07, 2011USD ($)shares | Sep. 30, 2007 | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 22, 2015shares |
Restricted stock units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost | $ | $ 98,100,000 | ||||||
Unrecognized cost, period for recognition, years | 1 year 4 months 6 days | ||||||
Employee stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares purchased by employees (in shares) | 577,000 | ||||||
Shares issued under ESPP plan, weighted average purchase price per share (in dollars per share) | $ / shares | $ 26.13 | ||||||
Shares available for future issuance under the ESPP (in shares) | 2,908,143 | ||||||
Maximum | Incentive options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of options granted, years | 5 years | ||||||
2011 Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, equity awards reserved for issuance (in shares) | 2,500,000 | ||||||
Number of additional shares available (in shares) | 3,000,000 | ||||||
Maximum payroll deductions for purchase of shares by participants | 20.00% | ||||||
Maximum number of shares available for purchased by participants (in shares) | 2,000 | ||||||
Cap on fair value of shares available for purchase by participants | $ | $ 25,000 | ||||||
Percentage of common stock price for employees | 85.00% | ||||||
2011 Employee Stock Purchase Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Cap on fair value of shares available for purchase by participants | $ | $ 50,000 | ||||||
2007 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, equity awards reserved for issuance (in shares) | 21,500,000 | ||||||
Restoration ratio of restricted stock unit grants withheld | 2 | ||||||
Reduction for each share of common stock pursuant to option | 1 | ||||||
Reduction for each share of common stock pursuant to other than option | 2 | ||||||
Equity awards outstanding (in shares) | 4,210,655 | ||||||
Share-based awards generally vest, years | 4 years | ||||||
Percentage of incentive stock option granted | 110.00% | ||||||
Shares available for grant (in shares) | 3,811,505 | ||||||
2007 Equity Incentive Plan | Independent Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive stock option granted | 0.00% | 0.00% | |||||
Percentage of annualized forfeiture rate for awards granted | 0.00% | ||||||
2007 Equity Incentive Plan | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive stock option granted | 5.00% | 5.00% | |||||
Percentage of annualized forfeiture rate for awards granted | 5.00% | ||||||
2007 Equity Incentive Plan | Senior Executives | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of incentive stock option granted | 2.00% | 2.00% | |||||
Percentage of annualized forfeiture rate for awards granted | 2.00% | ||||||
2007 Equity Incentive Plan | Common stock voting | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, equity awards reserved for issuance (in shares) | 8,000,000 | 8,500,000 | |||||
2007 Equity Incentive Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of options granted, years | 10 years | ||||||
2007 Equity Incentive Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage of fair market value of common stock | 100.00% | ||||||
Percentage of voting stock | 10.00% |
STOCK PLANS - Summary of Share-
STOCK PLANS - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 56,328 | $ 47,317 | $ 39,189 |
Cost of product revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 1,463 | 1,159 | 934 |
Cost of service revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 5,959 | 4,824 | 3,956 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 17,321 | 14,711 | 12,362 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 18,923 | 15,213 | 12,823 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 12,662 | $ 11,410 | $ 9,114 |
STOCK PLANS - Summary of Transa
STOCK PLANS - Summary of Transactions under Amended 2007 Plan (Details) - $ / shares | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted Stock Units, Number of Awards | |||
Beginning outstanding balance (in shares) | 4,078,780 | 3,610,301 | 2,873,306 |
Granted (in shares) | 2,178,339 | 1,962,590 | 2,020,536 |
Exercised (Options)/Issued (RSU’s) (in shares) | (1,438,219) | (1,216,585) | (950,159) |
Canceled (in shares) | (608,245) | (277,526) | (333,382) |
Ending outstanding balance (in shares) | 4,210,655 | 4,078,780 | 3,610,301 |
Restricted Stock Units, Weighted Average Fair Value | |||
Beginning outstanding balance (in dollars per share) | $ 31.77 | $ 30.24 | $ 35.32 |
Granted (in dollars per share) | 30.10 | 34.01 | 24.92 |
Exercised (Options)/Issued (RSU’s) (in dollars per share) | 32.49 | 31.09 | 33.16 |
Canceled (in dollars per share) | 30.52 | 31.70 | 33.40 |
Ending outstanding balance (in dollars per share) | $ 30.84 | $ 31.77 | $ 30.24 |
STOCK PLANS - Schedule of Aggre
STOCK PLANS - Schedule of Aggregate Intrinsic Values of Stock Options and Restricted Stock Units (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of restricted stock unit awards vested | $ 38,070 | $ 40,539 | $ 28,293 |
PENSION BENEFIT PLANS - Narrati
PENSION BENEFIT PLANS - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019USD ($)employee | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Retirement plan employee's contribution, percentage matched | 50.00% | ||
Retirement plan employee's contribution, percentage of match | 6.00% | ||
Retirement plan employer contributions vest at rate per year of service, percentage | 25.00% | ||
Retirement plan employer contributions | $ 6,600 | $ 8,000 | $ 9,400 |
Unrecognized actuarial gains, before tax | 3,300 | ||
Unrecognized actuarial gains, net of tax | 2,300 | ||
Employer direct benefit payments | $ 302 | $ 288 | |
United States | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Number of employees in the U.S. participating in noncontributory defined benefit pension plants | employee | 0 |
PENSION BENEFIT PLANS - Defined
PENSION BENEFIT PLANS - Defined Benefit Pension Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation, at beginning of year | $ 33,464 | $ 30,141 | |
Service cost | 304 | 407 | $ 329 |
Interest cost | 704 | 718 | 638 |
Benefits paid and other | (302) | (288) | |
Actuarial loss (gain) | 3,254 | (1,788) | |
Foreign exchange rate impact | (2,529) | 4,274 | |
Benefit obligation, at end of year | 34,895 | 33,464 | 30,141 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets, at beginning of year | 0 | 0 | |
Employer direct benefit payments | 302 | 288 | |
Benefits paid and other | (302) | (288) | |
Fair value of plan assets, at end of year | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 304 | 407 | 329 |
Interest cost | 704 | 718 | 638 |
Net periodic pension cost | $ 1,008 | $ 1,125 | $ 967 |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 1.80% | 2.30% | 2.10% |
Rate of compensation increase | 3.00% | 2.25% | 2.25% |
PENSION BENEFIT PLANS - Expecte
PENSION BENEFIT PLANS - Expected Contributions (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2020 | $ 382 |
2021 | 436 |
2022 | 484 |
2023 | 549 |
2024 | 599 |
2025-2030 | $ 4,561 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Before Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (107,088) | $ (35,032) | $ 32,475 |
Foreign | 14,176 | 16,373 | 19,710 |
Income before income tax expense | $ (92,912) | $ (18,659) | $ 52,185 |
INCOME TAXES - Summary of Compo
INCOME TAXES - Summary of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Current income tax expense (benefit): | |||
Federal | $ 3,902 | $ 14,191 | $ 15,912 |
State | (136) | 1,925 | 3,152 |
Foreign | 10,618 | 12,249 | 11,175 |
Current income tax expense, Total | 14,384 | 28,365 | 30,239 |
Deferred income tax expense (benefit): | |||
Federal | (25,347) | (113,122) | (8,278) |
State | (3,845) | (10,037) | 3,578 |
Foreign | (4,780) | (3,677) | (6,645) |
Deferred income tax expense (benefit), Total | (33,972) | (126,836) | (11,345) |
Income tax expense (benefit), Total | $ (19,588) | $ (98,471) | $ 18,894 |
INCOME TAXES - Schedule of Fede
INCOME TAXES - Schedule of Federal Statutory Income Tax Rate to Effective Tax Rate (Details) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal tax rate | 21.00% | 31.55% | 35.00% |
State taxes, net of federal tax effect | 3.40% | 6.90% | 9.70% |
Research and development tax credits | 7.10% | 39.50% | (8.20%) |
Effect of foreign operations | (0.60%) | 15.50% | (6.70%) |
Meals and entertainment | (1.00%) | (6.70%) | 2.50% |
Domestic production activities deduction | (0.00%) | 13.80% | (4.00%) |
Change in valuation allowance | 2.20% | (0.20%) | (0.10%) |
Stock Compensation | (2.60%) | (2.50%) | 3.10% |
Divestiture | (1.00%) | 0.00% | 0.00% |
GILTI/FDII | 2.90% | 0.00% | 0.00% |
BEAT | (7.00%) | 0.00% | 0.00% |
2017 Tax Act (transition tax and re-measurement of deferreds) | 0.40% | 454.10% | 0.00% |
Foreign withholding | (3.00%) | (21.00%) | 3.80% |
Other permanent differences | (0.70%) | (3.30%) | 1.10% |
Total effective income tax rate | 21.10% | 527.70% | 36.20% |
INCOME TAXES - Summary of Com_2
INCOME TAXES - Summary of Components of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Deferred tax assets: | ||
Accrued expenses | $ 4,359 | $ 4,068 |
Deferred revenue | 11,278 | 12,168 |
Reserves | 5,463 | 3,375 |
Pension and other retiree benefits | 5,960 | 5,307 |
Net operating loss carryforwards | 14,992 | 21,251 |
Tax credit carryforwards | 9,043 | 6,625 |
Share-based compensation | 5,505 | 5,164 |
Other | 166 | 418 |
Total gross deferred tax assets | 56,766 | 58,376 |
Valuation allowance | (835) | (3,108) |
Net deferred tax assets | 55,931 | 55,268 |
Deferred tax liabilities: | ||
Intangible assets | (164,199) | (195,959) |
Other Deferred Liabilities | (1,609) | 0 |
Depreciation | (7,134) | (4,187) |
Total deferred tax asset (liability) | $ (117,011) | $ (144,878) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Provisional income tax expense related to transition tax associated with deemed repatriation of foreign earnings | $ 0.8 | $ 3.1 | |
Provisional income tax benefit related to re-measurement of deferred tax assets and liabilities | $ 87 | 2.3 | |
State net operating loss carryforwards | 26 | ||
Federal net operating loss carryforwards | 21 | ||
Tax credit carryforwards | 11 | ||
Foreign net operating loss carryforwards | $ 59 | ||
One-time transition charge | $ 2 |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Balance at April 1, | $ 2,215 | $ 2,926 | $ 1,588 |
Additions based on tax positions related to the current year | 28 | 126 | 46 |
Release of tax positions of prior years | (194) | (481) | (154) |
Increase in unrecognized tax benefits as a result of a tax position taken during a prior period | 0 | 0 | 1,446 |
Decrease relating to settlements with taxing authorities | (735) | (356) | 0 |
Balance at March 31, | $ 1,314 | $ 2,215 | $ 2,926 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Sep. 14, 2018USD ($) | Oct. 13, 2017USD ($) | Nov. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 31, 2018USD ($) | Oct. 31, 2017patent | Mar. 31, 2016subsidiarypatent | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Aug. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Contingent consideration | $ 762,000 | ||||||||||
Fair value of contingent liability | $ 5,464,000 | ||||||||||
Number of subsidiary entities | subsidiary | 2 | ||||||||||
Number of patents allegedly infringed | patent | 3 | 5 | |||||||||
Loss contingency, damages awarded, value | $ 2,800,000 | ||||||||||
Unconditional purchase obligation | 49,200,000 | ||||||||||
Total rent expense under non-cancelable operating leases | 16,300,000 | 16,600,000 | $ 13,800,000 | ||||||||
Pre-Suit Damages | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Loss contingency, damages awarded, value | $ 3,500,000 | ||||||||||
Post-Suit Damages | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Loss contingency, damages awarded, value | $ 2,250,000 | ||||||||||
Efflux Systems, Inc. | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Fair value of contingent liability | 523,000 | ||||||||||
Payments of contingent consideration | $ 523,000 | ||||||||||
Simena LLC | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Fair value of contingent liability | $ 4,900,000 | ||||||||||
Payments of contingent consideration | $ 5,000,000 | ||||||||||
Avvasi | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Fair value of contingent liability | $ 660,000 | ||||||||||
Minimum | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Estimated litigation liability | 0 | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Handheld Network Test Tools Business | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Contingent consideration related to the divestiture | $ 2,300,000 | 800,000 | |||||||||
Contingent consideration measurement period | 2 years | 2 years | |||||||||
Contingent consideration | $ 800,000 | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Maximum | Handheld Network Test Tools Business | |||||||||||
Commitments and Contingencies Disclosure [Line Items] | |||||||||||
Contingent consideration related to the divestiture | $ 4,000,000 | $ 4,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Future Non Cancelable Minimum Lease Commitments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 16,102 |
2021 | 11,059 |
2022 | 9,804 |
2023 | 8,807 |
2024 | 8,500 |
Remaining years | 43,997 |
Total minimum lease payments | $ 98,269 |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 235,002 | $ 246,008 | $ 223,797 | $ 205,111 | $ 235,224 | $ 268,944 | $ 256,863 | $ 225,756 | $ 909,918 | $ 986,787 | $ 1,162,112 |
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 553,267 | 581,853 | 722,440 | ||||||||
Europe | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 148,036 | 174,445 | 193,441 | ||||||||
Asia | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | 72,355 | 88,917 | 95,735 | ||||||||
Rest of the world | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenue | $ 136,260 | $ 141,572 | $ 150,496 |
RELATED PARTY TRANSACTIONS - Sc
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Apr. 01, 2018 | |
Related Party Transaction [Line Items] | ||||
Related party prepaid expenses and other current assets | $ 35,658 | $ 33,502 | $ 38,128 | |
Related party accounts payable | 24,582 | 30,133 | ||
Total cost of revenue | 254,127 | 271,905 | $ 346,139 | |
Related party research and development | 203,588 | 215,076 | 232,701 | |
Related party selling and marketing | 291,870 | 312,536 | 328,628 | |
Related party general and administrative expense | 93,572 | 109,479 | 118,438 | |
Related party other expense (income) | 434 | 3,776 | 1,716 | |
Due from related party, operating activities | (172) | (443) | (25,055) | |
Due to related party | 234 | (75) | (2,792) | |
Service | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 113,189 | 113,277 | 112,864 | |
Product | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 140,938 | 158,628 | 233,275 | |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party prepaid expenses and other current assets | 335 | 3,187 | ||
Related party accounts payable | 244 | 369 | ||
Related party research and development | 20 | 3 | 1,624 | |
Related party selling and marketing | 0 | 2 | 2,423 | |
Related party general and administrative expense | 20 | 1,703 | 4,099 | |
Related party other expense (income) | 0 | (56) | (426) | |
Due from related party, operating activities | 172 | 443 | 25,055 | |
Due to related party | 234 | (75) | (2,792) | |
Due from related party, investing activities | 0 | 0 | 12,864 | |
Affiliated Entity | Service | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 529 | 665 | 745 | |
Affiliated Entity | Product | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 0 | 245 | 7,229 | |
Danaher | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party prepaid expenses and other current assets | 0 | 252 | ||
Related party research and development | 0 | 0 | 1,720 | |
Related party selling and marketing | 0 | 2 | 2,273 | |
Related party general and administrative expense | 0 | 7 | 2,551 | |
Related party transaction amount | 0 | 9 | 11,719 | |
Due from related party, operating activities | 58 | 96 | 17,310 | |
Due to related party | 243 | 0 | (2,954) | |
Due from related party, investing activities | 0 | 0 | 12,864 | |
Danaher | Affiliated Entity | Service | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 0 | 0 | 485 | |
Danaher | Affiliated Entity | Product | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 0 | 0 | 4,690 | |
Fortive | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party prepaid expenses and other current assets | 335 | 2,935 | ||
Related party accounts payable | 244 | 369 | ||
Related party research and development | 20 | 3 | (96) | |
Related party selling and marketing | 0 | 0 | 150 | |
Related party general and administrative expense | 20 | 1,696 | 1,548 | |
Related party other expense (income) | 0 | (56) | (426) | |
Related party transaction amount | 569 | 2,553 | 3,975 | |
Due from related party, operating activities | 114 | 347 | 7,745 | |
Due to related party | (9) | (75) | 162 | |
Fortive | Affiliated Entity | Service | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | 529 | 665 | 260 | |
Fortive | Affiliated Entity | Product | ||||
Related Party Transaction [Line Items] | ||||
Total cost of revenue | $ 0 | $ 245 | $ 2,539 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Danaher | Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Revenue | $ 0 | $ 45 | $ 177 |
EMC, Corp. | Member of board of directors | |||
Related Party Transaction [Line Items] | |||
Revenue | 167 | ||
Boston College | Member of board of directors | |||
Related Party Transaction [Line Items] | |||
Revenue | $ 150 | $ 0 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS - UNAUDITED (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 235,002 | $ 246,008 | $ 223,797 | $ 205,111 | $ 235,224 | $ 268,944 | $ 256,863 | $ 225,756 | $ 909,918 | $ 986,787 | $ 1,162,112 |
Gross profit | 176,466 | 176,424 | 159,817 | 143,084 | 168,633 | 204,435 | 182,620 | 159,194 | 655,791 | 714,882 | 815,973 |
Net income (loss) | $ 19,211 | $ (3,603) | $ (26,428) | $ (62,504) | $ 16,817 | $ 89,685 | $ (2,468) | $ (24,222) | $ (73,324) | $ 79,812 | $ 33,291 |
Diluted net income (loss) per share (in dollars per share) | $ 0.24 | $ (0.05) | $ (0.34) | $ (0.78) | $ 0.20 | $ 1.02 | $ (0.03) | $ (0.27) | $ (0.93) | $ 0.90 | $ 0.36 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | May 07, 2019 | Mar. 31, 2019 |
Subsequent Event [Line Items] | ||
Repaid borrowings | $ 50 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Repaid borrowings | $ 50 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 1,991 | $ 2,066 | $ 5,069 |
Additions Resulting in Charges to Operations | 826 | 695 | 6,961 |
Charges to Other Accounts | (464) | (346) | (7,580) |
Deductions Due to Write-Offs | (770) | (424) | (2,384) |
Balance at End of Year | 1,583 | 1,991 | 2,066 |
Deferred tax asset valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 3,108 | 3,374 | 3,777 |
Additions Resulting in Charges to Operations | 905 | 0 | (338) |
Charges to Other Accounts | 0 | 0 | (65) |
Deductions Due to Write-Offs | (3,178) | (266) | 0 |
Balance at End of Year | $ 835 | $ 3,108 | $ 3,374 |
Uncategorized Items - ntct-2019
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 34,924,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 34,924,000 |