Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2020 | May 05, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | EXTREME NETWORKS, INC. | |
Entity Central Index Key | 0001078271 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | EXTR | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 120,209,507 | |
Entity File Number | 000-25711 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0430270 | |
Entity Address, Address Line One | 6480 Via Del Oro | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95119 | |
City Area Code | 408 | |
Local Phone Number | 579-2800 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash | $ 196,350 | $ 169,607 |
Accounts receivable, net of allowance for doubtful accounts of $1,686 and $1,054, respectively | 96,212 | 174,414 |
Inventories | 66,214 | 63,589 |
Prepaid expenses and other current assets | 36,737 | 34,379 |
Total current assets | 395,513 | 441,989 |
Property and equipment, net | 62,961 | 73,554 |
Operating lease right-of-use assets, net | 53,015 | |
Intangible assets, net | 77,152 | 51,112 |
Goodwill | 331,084 | 138,577 |
Other assets | 53,727 | 51,642 |
Total assets | 973,452 | 756,874 |
Current liabilities: | ||
Current portion of long-term debt, net of unamortized debt issuance costs of $2,181 and $489, respectively | 16,819 | 9,011 |
Accounts payable | 52,981 | 65,704 |
Accrued compensation and benefits | 34,745 | 51,625 |
Accrued warranty | 15,222 | 14,779 |
Current portion of operating lease liabilities | 18,197 | |
Current portion of deferred revenue | 174,900 | 144,230 |
Other accrued liabilities | 61,665 | 70,680 |
Total current liabilities | 374,529 | 356,029 |
Deferred revenue, less current portion | 96,799 | 59,012 |
Long-term debt, less current portion, net of unamortized debt issuance costs of $6,796 and $1,261, respectively | 399,704 | 169,739 |
Operating lease liabilities, less current portion | 53,855 | |
Deferred income taxes | 2,233 | 1,957 |
Other long-term liabilities | 29,932 | 54,150 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock, $.001 par value, 750,000 shares authorized; 126,736 and 121,538 shares issued, respectively; 120,139 and 119,172 shares outstanding, respectively | 127 | 122 |
Additional paid-in-capital | 1,024,836 | 986,772 |
Accumulated other comprehensive loss | (6,388) | (2,473) |
Accumulated deficit | (959,062) | (853,434) |
Treasury stock at cost: 6,597 and 2,366 shares, respectively | (43,113) | (15,000) |
Total stockholders’ equity | 16,400 | 115,987 |
Total liabilities and stockholders’ equity | $ 973,452 | $ 756,874 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Current assets: | ||
Allowance for doubtful accounts | $ 1,686 | $ 1,054 |
Current liabilities: | ||
Net of unamortized debt issuance costs | 2,181 | 489 |
Noncurrent liabilities: | ||
Net of unamortized debt issuance costs | $ 6,796 | $ 1,261 |
Stockholders’ equity: | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 126,736,000 | 121,538,000 |
Common stock, shares outstanding | 120,139,000 | 119,172,000 |
Treasury stock, shares | 6,597,000 | 2,366,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Net revenues: | ||||
Total net revenues | $ 209,519 | $ 250,864 | $ 732,497 | $ 743,430 |
Cost of revenues: | ||||
Total cost of revenues | 98,184 | 111,945 | 335,248 | 331,141 |
Gross profit: | ||||
Total gross profit | 111,335 | 138,919 | 397,249 | 412,289 |
Operating expenses: | ||||
Research and development | 50,577 | 52,081 | 165,073 | 155,526 |
Sales and marketing | 70,132 | 72,321 | 216,925 | 208,245 |
General and administrative | 15,119 | 15,479 | 45,199 | 42,136 |
Acquisition and integration costs | 5,156 | 30,075 | 2,613 | |
Restructuring charges, net of reversals and impairment | 6,648 | 19,407 | 1,282 | |
Amortization of intangibles | 2,059 | 1,292 | 6,366 | 5,008 |
Total operating expenses | 149,691 | 141,173 | 483,045 | 414,810 |
Operating loss | (38,356) | (2,254) | (85,796) | (2,521) |
Interest income | 222 | 628 | 1,366 | 1,665 |
Interest expense | (5,979) | (2,996) | (17,377) | (9,588) |
Other income (expense), net | 1,318 | (433) | 1,128 | (345) |
Loss before income taxes | (42,795) | (5,055) | (100,679) | (10,789) |
Provision (benefit) for income taxes | 1,557 | 1,877 | 4,949 | (1,991) |
Net loss | $ (44,352) | $ (6,932) | $ (105,628) | $ (8,798) |
Basic and diluted net loss per share: | ||||
Net loss per share - basic and diluted | $ (0.37) | $ (0.06) | $ (0.88) | $ (0.07) |
Shares used in per share calculation - basic and diluted | 119,162 | 117,944 | 119,648 | 117,619 |
Product | ||||
Net revenues: | ||||
Total net revenues | $ 136,547 | $ 190,740 | $ 512,173 | $ 558,027 |
Cost of revenues: | ||||
Total cost of revenues | 71,927 | 86,876 | 254,705 | 256,906 |
Gross profit: | ||||
Total gross profit | 64,620 | 103,864 | 257,468 | 301,121 |
Service | ||||
Net revenues: | ||||
Total net revenues | 72,972 | 60,124 | 220,324 | 185,403 |
Cost of revenues: | ||||
Total cost of revenues | 26,257 | 25,069 | 80,543 | 74,235 |
Gross profit: | ||||
Total gross profit | $ 46,715 | $ 35,055 | $ 139,781 | $ 111,168 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (44,352) | $ (6,932) | $ (105,628) | $ (8,798) |
Other comprehensive (loss) income, net of tax: | ||||
Unrealized losses on derivative instruments - interest rate swaps | (958) | (958) | ||
Net change in foreign currency translation adjustments | (2,945) | 176 | (2,957) | (349) |
Other comprehensive income (loss), net of tax: | (3,903) | 176 | (3,915) | (349) |
Total comprehensive loss | $ (48,255) | $ (6,756) | $ (109,543) | $ (9,147) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In-Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Accumulated Deficit |
Balance at Jun. 30, 2018 | $ 112,732 | $ 116 | $ 942,397 | $ (1,703) | $ (828,078) | |
Balance, common stock, shares at Jun. 30, 2018 | 116,124 | |||||
Treasury stock, shares at Jun. 30, 2018 | 0 | |||||
Treasury stock, value at Jun. 30, 2018 | $ 0 | |||||
Cumulative effect of adopting ASU 2016-01 at Jun. 30, 2018 | (497) | 497 | ||||
Net income (loss) | (8,798) | $ 0 | 0 | 0 | 0 | (8,798) |
Other comprehensive loss | (349) | 0 | 0 | (349) | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax | 13,044 | $ 5 | 13,039 | 0 | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax, shares | 4,911 | |||||
Repurchase of stock | (15,000) | $ 0 | 0 | 0 | $ (15,000) | 0 |
Repurchase of stock, shares | (2,366) | |||||
Share-based compensation | 24,339 | 0 | 24,339 | 0 | $ 0 | 0 |
Balance at Mar. 31, 2019 | 125,968 | $ 121 | 979,775 | (2,549) | (836,379) | |
Balance, common stock, shares at Mar. 31, 2019 | 121,035 | |||||
Treasury stock, shares at Mar. 31, 2019 | (2,366) | |||||
Treasury stock, value at Mar. 31, 2019 | $ (15,000) | |||||
Balance at Dec. 31, 2018 | 115,871 | $ 119 | 962,924 | (2,725) | (829,447) | |
Balance, common stock, shares at Dec. 31, 2018 | 119,089 | |||||
Treasury stock, shares at Dec. 31, 2018 | (2,366) | |||||
Treasury stock, value at Dec. 31, 2018 | $ (15,000) | |||||
Net income (loss) | (6,932) | $ 0 | 0 | 0 | 0 | (6,932) |
Other comprehensive loss | 176 | 0 | 0 | 176 | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax | 8,039 | $ 2 | 8,037 | 0 | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax, shares | 1,946 | |||||
Share-based compensation | 8,814 | $ 0 | 8,814 | 0 | $ 0 | 0 |
Balance at Mar. 31, 2019 | 125,968 | $ 121 | 979,775 | (2,549) | (836,379) | |
Balance, common stock, shares at Mar. 31, 2019 | 121,035 | |||||
Treasury stock, shares at Mar. 31, 2019 | (2,366) | |||||
Treasury stock, value at Mar. 31, 2019 | $ (15,000) | |||||
Balance at Jun. 30, 2019 | $ 115,987 | $ 122 | 986,772 | (2,473) | (853,434) | |
Balance, common stock, shares at Jun. 30, 2019 | 121,538 | 121,538 | ||||
Treasury stock, shares at Jun. 30, 2019 | (2,366) | (2,366) | ||||
Treasury stock, value at Jun. 30, 2019 | $ (15,000) | $ (15,000) | ||||
Net income (loss) | (105,628) | $ 0 | 0 | 0 | 0 | (105,628) |
Other comprehensive loss | (3,915) | 0 | 0 | (3,915) | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax | 9,491 | $ 5 | 9,486 | 0 | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax, shares | 5,198 | |||||
Stock awards granted in connection with acquisition | 3,530 | $ 0 | 3,530 | 0 | 0 | 0 |
Repurchase of stock | (30,000) | 0 | (1,887) | 0 | $ (28,113) | 0 |
Repurchase of stock, shares | (4,231) | |||||
Share-based compensation | 26,935 | 0 | 26,935 | 0 | $ 0 | 0 |
Balance at Mar. 31, 2020 | $ 16,400 | $ 127 | 1,024,836 | (6,388) | (959,062) | |
Balance, common stock, shares at Mar. 31, 2020 | 126,736 | 126,736 | ||||
Treasury stock, shares at Mar. 31, 2020 | (6,597) | (6,597) | ||||
Treasury stock, value at Mar. 31, 2020 | $ (43,113) | $ (43,113) | ||||
Balance at Dec. 31, 2019 | 50,927 | $ 125 | 1,008,176 | (2,485) | (914,710) | |
Balance, common stock, shares at Dec. 31, 2019 | 124,616 | |||||
Treasury stock, shares at Dec. 31, 2019 | (6,216) | |||||
Treasury stock, value at Dec. 31, 2019 | $ (40,179) | |||||
Net income (loss) | (44,352) | $ 0 | 0 | 0 | 0 | (44,352) |
Other comprehensive loss | (3,903) | 0 | 0 | (3,903) | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax | 6,585 | $ 2 | 6,583 | 0 | 0 | 0 |
Issuance of common stock from equity incentive plans, net of tax, shares | 2,120 | |||||
Equity forward contract | 4,821 | $ 0 | 4,821 | 0 | 0 | 0 |
Repurchase of stock | (4,821) | 0 | (1,887) | 0 | $ (2,934) | 0 |
Repurchase of stock, shares | (381) | |||||
Share-based compensation | 7,143 | 0 | 7,143 | 0 | $ 0 | 0 |
Balance at Mar. 31, 2020 | $ 16,400 | $ 127 | $ 1,024,836 | $ (6,388) | $ (959,062) | |
Balance, common stock, shares at Mar. 31, 2020 | 126,736 | 126,736 | ||||
Treasury stock, shares at Mar. 31, 2020 | (6,597) | (6,597) | ||||
Treasury stock, value at Mar. 31, 2020 | $ (43,113) | $ (43,113) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (105,628) | $ (8,798) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 21,719 | 20,026 |
Amortization of intangible assets | 26,460 | 19,734 |
Reduction in carrying amount of right-of-use asset | 12,469 | |
Provision for doubtful accounts | 1,267 | 1,369 |
Share-based compensation | 26,935 | 24,339 |
Deferred income taxes | 1,293 | (6,030) |
Non-cash restructuring and impairment charges | 7,622 | |
Non-cash interest expense | 3,070 | 2,308 |
Other | (395) | 15 |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable | 88,688 | 69,328 |
Inventories | 16,373 | 6,222 |
Prepaid expenses and other assets | 438 | (6,993) |
Accounts payable | (21,530) | (26,348) |
Accrued compensation and benefits | (24,009) | (17,502) |
Operating lease liabilities | (13,222) | |
Deferred revenue | 43 | 13,197 |
Other current and long-term liabilities | (14,532) | (11,365) |
Net cash provided by operating activities | 27,061 | 79,502 |
Cash flows from investing activities: | ||
Capital expenditures | (12,630) | (16,181) |
Business acquisitions, net of cash acquired | (219,458) | |
Maturities and sales of investments | 45,249 | 727 |
Net cash used in investing activities | (186,839) | (15,454) |
Cash flows from financing activities: | ||
Borrowings under Revolving Facility | 55,000 | |
Borrowings under Term Loan | 199,500 | |
Repayments of debt | (29,767) | (17,403) |
Loan fees on borrowings | (10,514) | (545) |
Repurchase of common stock | (30,000) | (15,000) |
Proceeds from issuance of common stock, net of tax withholding | 9,491 | 13,044 |
Payment of contingent consideration obligations | (3,448) | (5,274) |
Deferred payments on an acquisition | (3,000) | (3,000) |
Net cash provided by (used in) financing activities | 187,262 | (28,178) |
Foreign currency effect on cash | (741) | (196) |
Net increase in cash | 26,743 | 35,674 |
Cash at beginning of period | 169,607 | 121,139 |
Cash at end of period | $ 196,350 | $ 156,813 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 1. Description of Business and Basis of Presentation Extreme Networks, Inc., together with its subsidiaries (collectively referred to as “Extreme” or the “Company”), is a leader in providing software-driven networking solutions for enterprise customers. The Company conducts its sales and marketing activities on a worldwide basis through distributors, resellers and the Company’s field sales organization. Extreme was incorporated in California in 1996 and reincorporated in Delaware in 1999. The unaudited condensed consolidated financial statements of Extreme included herein have been prepared under the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted under such rules and regulations. The condensed consolidated balance sheet at June 30, 2019 was derived from audited financial statements as of that date but does not include all disclosures required by generally accepted accounting principles for complete financial statements. These interim financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019. The unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition of Extreme at March 31, 2020. The results of operations for the three and nine months ended March 31, 2020 are not necessarily indicative of the results that may be expected for fiscal 2020 or any future periods. Fiscal Year The Company uses a fiscal calendar year ending on June 30. All references herein to “fiscal 2020” or “2020” represent the fiscal year ending June 30, 2020. All references herein to “fiscal 2019” or “2019” represent the fiscal year ended June 30, 2019. Principles of Consolidation The consolidated financial statements include the accounts of Extreme and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company predominantly uses the United States Dollar as its functional currency. The functional currency for certain of its foreign subsidiaries is the local currency. For those subsidiaries that operate in a local functional currency environment, all assets and liabilities are translated to United States Dollars at current month end rates of exchange and revenue and expenses are translated using the monthly average rate. Accounting Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies For a description of significant accounting policies, see Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019. There have been no material changes to the Company’s significant accounting policies since the filing of the Annual Report on Form 10-K, except for the adoption of the new lease guidance, new derivatives and hedging guidance and related policies as discussed within these financial statements. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) Leases (Topic 842) (“ROU”) In addition, Topic 842 was subsequently amended by ASU No 2018-10, Codification Improvements; ASU 2018-11, Targeted Improvements; ASU 2018-20 Narrow Scope Improvements; and ASU 2019-01 Codification Improvements. The Company adopted the new standards beginning with its fiscal year 2020. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The new standard also provided practical expedients for ongoing accounting. The Company also elected the short-term lease recognition exemption for all leases that qualified. For those leases that qualified, existing short-term leases at the transition date and those entered into subsequent to the transition date, the Company did not recognize right-of-use assets or lease liabilities. In addition, the Company elected the practical expedient not to separate lease and non-lease components for leases except for the logistic services asset class and certain revenue subscription contracts where the Company leases its hardware products and provides maintenance and support over a service period which is recognized under ASC Topic 606. See Note 9, Leases, for additional information regarding the Company’s leases. On July 1, 2019, the Company recognized ROU assets of $64.6 million and corresponding lease liabilities of $79.5 million on the condensed consolidated balance sheets, which was based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which is intended to allow companies to better align 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 by expanding and refining hedge accounting for both nonfinancial and financial risk components and aligning the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In addition, in October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging ( Topic 815 ), which amends Topic 815 to add the overnight index swap (OIS) rate based on the secured overnight financing rate as a fifth U.S. benchmark interest rate. In addition, Topic 815 was subsequently amended by ASU 2019-04, Codification Improvements. These standards are effective for interim and annual reporting periods beginning after December 15, 2018. The standard was adopted on July 1, 2019 and did not have a material impact on the Company’s financial statements upon adoption. During the third quarter of fiscal 2020, the Company entered into interest rate swap agreements to manage its exposure to fluctuations of interest rates associated with its debt. See Note 14, Derivatives and Hedging, for additional information. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) In March 2020 ASU 2020 - 04 “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. This guidance is effective upon issuance and can be applied to applicable contract modifications through December 31, 2022. The Company elected to apply the amendments in this update to eligible hedging relationships existing as of January 1, 2020 or entered into during the three months ended March 31, 2020 in accordance with the transition options available. This guidance did not have any impact upon adoption. The Company will apply this guidance to transactions or modifications of these arrangements as appropriate through transition period. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses with its fiscal year 2021, beginning on July 1, 2020. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), and related disclosures In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40 and related disclosures In December 2019, the FASB issued ASU 2019-12, Income taxes – Simplifying the Accounting for Income Taxes (Topic 740 Income Taxes and related disclosures |
Revenues
Revenues | 9 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | 3. Revenues The Company accounts for revenue in accordance with ASU 2014-09, Revenue from Contracts from Customers Revenue Recognition Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. The Company’s performance obligations are satisfied at a point in time or over time as the customer receives and consumes the benefits provided . Substantially all of the Company’s product sales revenues are recognized at a point in time. Substantially all of the Company’s service and SaaS revenu e is recognized over time. For revenue recognized over time, the Company uses an input measure, days elapsed, to measure progress. On March 31, 2020, the Company had $271.7 million of remaining performance obligations, which are primarily comprised of deferred maintenance and SaaS revenue. The Company expects to recognize approximately 24 percent of its deferred revenue as revenue in fiscal 2020, an additional 46 percent in fiscal 2021 and 30 percent of the balance thereafter. Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the condensed consolidated balance sheets. Services provided under renewable support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are either billed fully at the inception of contract or at periodic intervals (e.g., quarterly or annually). The Company sometimes receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the three months ended March 31, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each period was $64.3 million and $54.8 million, respectively. Revenue recognized for the nine months ended March 31, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each period was $116.7 million and $110.8 million, respectively. Contract Costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representatives as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company’s condensed consolidated balance sheets included capitalized balances in the amount of $7.4 million and $6.5 million at March 31, 2020 and June 30, 2019, respectively. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended March 31, 2020 and 2019, was $1.1 million and $0.8 million, respectively. Amortization recognized during the nine months ended March 31, 2020 and 2019 was $4.1 million and $2.2 million, respectively. Estimated Variable Consideration. There were no material changes in the current period to the estimated variable consideration for performance obligations which were satisfied or partially satisfied during previous periods. Revenue by Category The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands): Three Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 38,666 $ 56,391 $ 95,057 $ 72,071 $ 56,096 $ 128,167 Other 3,277 5,781 9,058 4,930 5,589 10,519 Total Americas 41,943 62,172 104,115 77,001 61,685 138,686 EMEA 49,979 33,630 83,609 48,834 35,076 83,910 APAC 3,242 18,553 21,795 4,850 23,418 28,268 Total net revenues $ 95,164 $ 114,355 $ 209,519 $ 130,685 $ 120,179 $ 250,864 Nine Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 168,755 $ 180,358 $ 349,113 $ 172,752 $ 171,359 $ 344,111 Other 15,496 16,343 31,839 17,893 16,494 34,387 Total Americas 184,251 196,701 380,952 190,645 187,853 378,498 EMEA 173,825 107,521 281,346 190,041 98,687 288,728 APAC 18,362 51,837 70,199 11,967 64,237 76,204 Total net revenues $ 376,438 $ 356,059 $ 732,497 $ 392,653 $ 350,777 $ 743,430 Included in the above amounts are $2.2 million and $6.9 million of leasing revenue for the three and nine months ended March 31, 2020, respectively. Included in the above amounts are $2.7 million and $8.6 million of leasing revenue for the three and nine months ended March 31, 2019, respectively. Customer Concentrations The Company performs ongoing credit evaluations of its customers and generally does not require collateral in exchange for credit. The following table sets forth major customers accounting for 10% or more of the Company’s net revenues: Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Tech Data Corporation 19% 14% 16% 17% Jenne Corporation * 21% 13% 15% Westcon Group Inc. 19% 12% 14% 13% * Less than 10% of net revenue. The following table sets forth major customers accounting for 10% or more of the Company’s accounts receivable balance: March 31, 2020 June 30, 2019 Tech Data Corporation 11 % 12 % Jenne Corporation 10 % 35 % Westcon Group Inc. 14 % * * Less than 10% of accounts receivable. |
Business Combination
Business Combination | 9 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combination | 4. Business Combination Aerohive Acquisition On August 9, 2019 (the “Acquisition Date”) the Company consummated its acquisition (the “Acquisition”) of all of the outstanding common stock of Aerohive Networks, Inc. (“Aerohive”) pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”) entered into as of June 26, 2019. Under the terms of the Acquisition, the preliminary net consideration paid by Extreme to Aerohive stockholders was $267.1 million. The Acquisition was accounted for using the acquisition method of accounting whereby the acquired assets and liabilities of Aerohive have been recorded at their respective fair values and added to those of the Company including an amount for goodwill calculated as the difference between the acquisition consideration and the fair value of the identifiable net assets. The purchase price was preliminarily allocated to tangible and identifiable intangible assets acquired and liabilities assumed. The estimated fair values were determined through established and generally accepted valuation techniques, including work performed by third-party valuation specialists. The fair value of working capital related items, such as other current assets and accrued liabilities, approximated their book values at the Acquisition Date. Inventories were valued at fair value using the net realizable value approach. The fair value of the acquired deferred revenue was estimated using the cost build-up approach. The cost build-up approach determines fair value using estimates of the costs required to provide the contracted deliverables plus an assumed profit. The total costs including the assumed profit were adjusted to present value using a discount rate that was considered appropriate. The resulting fair value approximates the amount the Company would be required to pay to a third party to assume the obligation. I ntangible assets were valued using income approaches based on management projections, which the Company considers to be Level 3 inputs. The Company also continues to analyze the tax implications of the A cquisition and the intangible assets which may ultimately impact the overall level of goodwill associated with the acquisition. Results of operations of Aerohive have been included in the operations of the Co mpany beginning with the Acquisition Date. The components of aggregate purchase consideration are as follows (in thousands): Estimated purchase consideration August 9, 2019 Cash paid to acquire outstanding shares $ 263,616 Replacement of stock-based awards 3,530 Aggregate estimated purchase consideration $ 267,146 The preliminary purchase price allocation is set forth in the table below and reflects estimated fair values (in thousands). Preliminary Allocation as of August 9, 2019 Adjustments Allocation as of March 31, 2020 Cash and cash equivalents $ 44,158 $ — $ 44,158 Short-term investments 45,148 — 45,148 Accounts receivable, net 11,753 — 11,753 Inventories 16,698 2,534 a 19,232 Prepaid expenses and other current assets 3,980 (56 ) b 3,924 Property and equipment 2,185 179 c 2,364 Operating lease right-of-use assets 6,336 — 6,336 Other assets 2,195 — 2,195 Debt (20,000 ) — (20,000 ) Accounts payable (9,737 ) — (9,737 ) Accrued compensation and benefits (7,129 ) — (7,129 ) Accrued warranty (570 ) — (570 ) Other accrued liabilities (1,960 ) — (1,960 ) Operating lease liabilities (4,752 ) — (4,752 ) Deferred revenue (68,415 ) — (68,415 ) Other liabilities (408 ) — (408 ) Net tangible assets 19,482 2,657 22,139 Identifiable intangible assets 53,400 (900 ) d 52,500 Goodwill 194,264 (1,757 ) a,b,c,d 192,507 Total intangible assets acquired 247,664 (2,657 ) 245,007 Total net assets acquired $ 267,146 — $ 267,146 The changes during the period in the table above include: a) adjustment of the fair value of inventories acquired, b) write-off of an asset with no future economic value as of the Acquisition Date, c) adjustment to the value of property and equipment as of the Acquisition Date at an international location, and d) adjustment to the fair value of intangibles The following table presents details of the identifiable intangible assets acquired as part of the Acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 4 $ 39,100 Backlog 1 400 Customer relationships 7 11,400 Trade names 1 1,600 Total identifiable intangible assets $ 52,500 The amortization for the developed technology and backlog is recorded in “Cost of revenues” for product and service and the amortization for the remaining intangibles is recorded in “Amortization of intangibles” in the accompanying condensed consolidated statements of operations. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Aerohive . The Company will not be entitled to amortization of the goodwill and intangible assets for tax purposes as the A cquisition is a nontaxable stock acquisition . The results of operations of Aerohive are included in the accompanying condensed consolidated statements of operations beginning August 9, 2019. The Aerohive revenue for the three and nine months ended March 31, 2020 was $27.0 million and $94.3 million, respectively, and was incorporated into the revenue of the Company. Certain associated expenses of Aerohive were incorporated with the results of operations of the Company and, therefore, stand-alone operating results are not available. In the three and nine months ended March 31, 2020, the Company incurred acquisition and integration related expenses of $5.2 million and $30.1 million, respectively, associated with the Acquisition. In the quarter ended September 30, 2019, this included a $6.8 million compensation charge for certain Aerohive Executive stock awards which were accelerated due to change-in-control and termination provisions included in the Executives’ employment contracts. Such acquisition-related costs were and are included in “Acquisition and integration costs” in the accompanying condensed consolidated statements of operations. Pro Forma Financial Information The following unaudited pro forma results of operations are presented as though the Acquisition had occurred as of July 1, 2018, the beginning of fiscal 2019, after giving effect to purchase accounting adjustments relating to inventories, deferred revenue, depreciation and amortization of intangibles, acquisition and integration costs, interest income and expense and related tax effects. The pro forma results of operations are not necessarily indicative of the combined results that would have occurred had the acquisition been consummated as of the beginning of fiscal 2019, nor are they necessarily indicative of future operating results. The unaudited pro forma results do not include the impact of synergies, nor any potential impacts on current or future market conditions which could alter the unaudited pro forma results. The unaudited pro forma financial information for the three and nine months ended March 31, 2020 combines the historical results for Extreme for such periods, which include the results of Aerohive subsequent to the Acquisition Date, and Aerohive’s historical results up to the Acquisition Date. Pro forma results of operations for the three and nine months ended March 31, 2019 combines the historical results of operations for Extreme and for Aerohive. The following table summarizes the unaudited pro forma financial information (in thousands, except per share amounts): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Net revenues $ 210,255 $ 282,229 $ 746,301 $ 850,337 Net loss $ (37,873 ) $ (23,272 ) $ (66,720 ) $ (83,051 ) Net loss per share - basic and diluted $ (0.32 ) $ (0.20 ) $ (0.56 ) $ (0.71 ) Shares used in per share calculation - basic and diluted 119,162 117,944 119,648 117,619 |
Balance Sheet Accounts
Balance Sheet Accounts | 9 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Accounts | 5. Balance Sheet Accounts Inventories The Company values its inventory at lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company adjusts the carrying value of its inventory when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any written down or obsolete inventory subsequently sold has not had a material impact on gross margin for any of the periods presented. Inventories consist of the following (in thousands): March 31, 2020 June 30, 2019 Finished goods $ 55,790 $ 49,492 Raw materials 10,424 14,097 Total Inventories $ 66,214 $ 63,589 Property and Equipment, Net Property and equipment consist of the following (in thousands): March 31, 2020 June 30, 2019 Computers and equipment $ 75,134 $ 72,309 Purchased software 33,467 29,126 Office equipment, furniture and fixtures 11,405 10,815 Leasehold improvements 52,167 51,245 Total property and equipment 172,173 163,495 Less: accumulated depreciation and amortization (109,212 ) (89,941 ) Property and equipment, net $ 62,961 $ 73,554 Deferred Revenue Deferred revenue represents amounts for (i) deferred maintenance and support revenue, (ii) deferred SaaS revenue, and (iii) other deferred revenue including professional services and training when the revenue recognition criteria have not been met. Guarantees and Product Warranties The majority of the Company’s hardware products are shipped with either a one-year The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2020 and 2019 (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Balance beginning of period $ 16,209 $ 12,808 $ 14,779 $ 12,807 Warranties assumed due to acquisitions — — 570 — New warranties issued 4,810 4,510 16,271 12,377 Warranty expenditures (5,797 ) (4,112 ) (16,398 ) (11,978 ) Balance end of period $ 15,222 $ 13,206 $ 15,222 $ 13,206 To facilitate sales of its products in the normal course of business, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position. Other Long-term Liabilities The following is a summary of long-term liabilities (in thousands): March 31, 2020 June 30, 2019 Acquisition-related deferred payments, less current portion $ 6,797 $ 9,604 Contingent consideration obligations, less current portion 626 2,688 Other contractual obligations, less current portion 18,707 26,261 Other 3,802 15,597 Total other long-term liabilities $ 29,932 $ 54,150 Concentrations The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting of accounts receivable and short-term investments. The Company does not invest an amount exceeding 10% of its combined cash or cash equivalents in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. Fair Value Measurements A three-tier fair value hierarchy is utilized to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows: • Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2 Inputs - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and • Level 3 Inputs - unobservable inputs reflecting the Company’s own assumptions in measuring the asset or liability at fair value. The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 (in thousands). The Company had one fair value item at June 30, 2019, a level 3 acquisition-related contingent consideration obligation of $6.3 million. March 31, 2020 Level 1 Level 2 Level 3 Total Assets Foreign currency derivatives $ — $ 231 $ — $ 231 Total assets measured at fair value $ — $ 231 $ — $ 231 Liabilities Foreign currency derivatives $ — $ 97 $ — $ 97 Interest rate swaps $ — $ 958 $ — $ 958 Acquisition-related contingent consideration obligations $ — $ — $ 2,940 $ 2,940 Total liabilities measured at fair value $ — $ 1,055 $ 2,940 $ 3,995 Level 1 Assets and L iabilities : The Company has no Level 1 assets or liabilities at March 31, 2020 or June 30, 2019. Level 2 Assets and Liabilities : The fair value of derivative instruments under our foreign currency contracts is estimated based on valuations provided by alternative pricing sources supported by observable inputs which is considered Level 2. As of March 31, 2020, forward foreign currency contracts had a notional principal amount of $13.3 million and for the three and nine months ended March 31, 2020, there were gains of $0.1 million. These contracts have maturities of less than 30 days The fair values of the interest rate swaps are based upon inputs corroborated by observable market data which is considered Level 2. As of March 31, 2020, the Company had entered into multiple interest rate swap contracts with the total notional amount of $200 million. Changes in fair value of these contracts are recorded as a component of accumulated other comprehensive income (loss). As of March 31, 2020, these contracts had an unrealized loss of $1.0 million. See Note 14, Derivatives and Hedging, for additional information. The fair value of the borrowings under the 2019 Credit Agreement (as defined below) is estimated based on valuations provided by alternative pricing sources supported by observable inputs which is considered Level 2. Due to the recent establishment of the 2019 Credit Agreement, the fair value approximates the face amount of the Company’s indebtedness of $425.5 million and $180.5 million as of March 31, 2020, and June 30, 2019, respectively. Level 3 Assets and Liabilities: At March 31, 2020 and June 30, 2019, the Company reflected one liability measured at fair value of $2.9 million and $6.3 million, respectively, for contingent consideration related to a certain acquisition completed in fiscal 2018. The fair value measurement of the contingent consideration obligation is determined using Level 3 inputs. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. Changes in the value of the contingent consideration obligations is recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. The change in the acquisition-related contingent consideration obligations is as follows (in thousands): Nine Months Ended March 31, 2020 Beginning balance 6,298 Payments (3,448 ) Accretion on discount 90 Ending balance $ 2,940 There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the three and nine months ended March 31, 2020, or 2019. There were no impairments recorded for the three and nine months ended March 31, 2020, or 2019. The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income into earnings using the specific identification method. Realized gains or losses recognized on the sale of investment securities were not significant for the three and nine months ended March 31, 2020,or 2019. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The following table reflects the changes in the carrying amount of goodwill (in thousands): March 31, 2020 Balance as of June 30, 2019 $ 138,577 Additions due to acquisition (see Note 4) 192,507 Balance at end of period $ 331,084 The following tables summarize the components of gross and net intangible asset balances (dollars in thousands): Weighted Average Remaining Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount March 31, 2020 Developed technology 2.6 years $ 156,100 $ 97,193 $ 58,907 Customer relationships 4.8 years 63,039 48,281 14,758 Backlog — years 400 400 — Trade names 1.5 years 10,700 7,794 2,906 License agreements 5.6 years 2,445 1,864 581 Other intangibles — years 1,382 1,382 — Total intangibles, net $ 234,066 $ 156,914 $ 77,152 Weighted Average Remaining Amortization Gross Accumulated Net Carrying Period Amount Amortization Amount June 30, 2019 Developed technology 2.4 years $ 117,000 $ 77,449 $ 39,551 Customer relationships 2.0 years 51,639 44,410 7,229 Trade names 2.4 years 9,100 5,647 3,453 License agreements 5.4 years 2,445 1,661 784 Other intangibles 0.6 years 1,382 1,287 95 Total intangibles, net $ 181,566 $ 130,454 $ 51,112 The amortization expense of intangibles for the periods presented is summarized below (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Amortization in “Cost of revenues: Product and Service” $ 6,629 $ 4,890 $ 20,094 $ 14,726 Amortization of intangibles in "Operations" 2,059 1,292 6,366 5,008 Total amortization $ 8,688 $ 6,182 $ 26,460 $ 19,734 The amortization expense that is recognized in “Cost of revenues: Product and Service” is comprised of amortization for developed technology, license agreements and other intangibles. |
Debt
Debt | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt The Company’s debt is comprised of the following (in thousands): March 31, 2020 June 30, 2019 Current portion of long-term debt: Term Loan $ 19,000 $ 9,500 Less: unamortized debt issuance costs (2,181 ) (489 ) Current portion of long-term debt $ 16,819 $ 9,011 Long-term debt, less current portion: Term Loan $ 351,500 $ 171,000 Revolving Facility 55,000 — Less: unamortized debt issuance costs (6,796 ) (1,261 ) Total long-term debt, less current portion 399,704 169,739 Total debt $ 416,523 $ 178,750 In connection with the Acquisition as discussed in Note 4, on August 9, 2019, the Company entered into an Amended and Restated Credit Agreement (the “2019 Credit Agreement”), by and among the Company, as borrower, several banks and other financial institutions as Lenders, BMO Harris Bank N.A., as an issuing lender and swingline lender, Silicon Valley Bank, as an Issuing Lender, and Bank of Montreal, as administrative agent and collateral agent for the Lenders. The 2019 Credit Agreement provides for a 5-year first lien term loan facility in an aggregate principal amount of $380 million and a 5-year revolving loan facility in an aggregate principal amount of $75 million (the “2019 Revolving Facility”). In addition, the Company may request incremental term loans and/or incremental revolving loan commitments in an aggregate amount not to exceed the sum of $100 million plus an unlimited amount that is subject to pro forma compliance with certain financial tests. On August 9, 2019, the Company used the proceeds to partially fund the Acquisition and for working capital and general corporate purposes At the Company’s election, the initial term loan under the 2019 Credit Agreement may be made as either base rate loans or Eurodollar loans. The applicable margin for base rate loans ranges from 0.25% to 2.50% per annum and the applicable margin for Eurodollar loans ranges from 1.25% to 3.50%, in each case based on Extreme’s consolidated leverage ratio. All Eurodollar loans are subject to a Base Rate of 0.00%. In addition, the Company is required to pay a commitment fee of between 0.25% and 0.40% quarterly (currently 0.35%) on the unused portion of the 2019 Revolving Facility, also based on the Company’s consolidated leverage ratio. Principal installments are payable on the new term loan in varying percentages quarterly starting December 31, 2019 and to the extent not previously paid, all outstanding balances are to be paid at maturity. The 2019 Credit Agreement is secured by substantially all of the Company’s assets. The 2019 Credit Agreement requires the Company to maintain certain minimum financial ratios at the end of each fiscal quarter. The 2019 Credit Agreement also includes covenants and restrictions that limit, among other things, the Company’s ability to incur additional indebtedness, create liens upon any of its property, merge, consolidate or sell all or substantially all of its assets. The 2019 Credit Agreement also includes customary events of default which may result in acceleration of the outstanding balance. Financing costs incurred in connection with obtaining long-term financing are deferred and amortized over the term of the related indebtedness or credit agreement. The Company incurred $10.5 million of deferred financing costs in conjunction with this modification of the debt and continues to amortize $1.6 million of debt issuance costs as of August 9, 2019 that were associated with the previous facility Amortization of deferred financing costs included in “Interest expense” in the accompanying condensed consolidated statements of operati ons totaled $0.6 million and $0.2 million for the months ended March 31, 2020 and 2019 for the nine months ended March 31, 2020 and 2019, respectively. The Company had $7.7 million of outstanding letters of credit as of March 31, 2020. On April 8, 2020, the Company entered into the first amendment to the 2019 Credit Agreement (the “First Amendment”) to waive certain terms and financial covenants of the 2019 Credit Agreement through July 31, 2020. On May 8, 2020, the Company entered into the second amendment to the 2019 Credit Agreement (the “Second Amendment”) which supersedes the First Amendment and provides certain revised terms and financial covenants through March 31, 2021. Subsequent to March 31, 2021, the original terms and financial covenants under the 2019 Credit Agreement will resume in effect. The Second Amendment requires |
Leases
Leases | 9 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 9. Leases Lessee Considerations The Company leases certain facilities, equipment, and vehicles under operating leases that expire on various dates through fiscal 2028. Its leases generally have terms that range from one year to eight years for its facilities, one year to five years for equipment, and one year to five years for vehicles. Some of its leases contain renewal options, escalation clauses, rent concessions, and leasehold improvement incentives. The Company determines if an arrangement is a lease at inception. The Company has elected not to recognize a lease liability or right-of-use (“ROU”) asset for short-term leases (leases with a term of twelve months or less). Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The interest rate used to determine the present value of future payments is the Company’s incremental borrowing rate because the rate implicit in the leases are not readily determinable. The Company’s incremental borrowing rate is a hypothetical rate for collateralized borrowings based on the current economic environment, credit history, credit rating, value of leases, currency in which the lease obligation is satisfied, rate sensitivity, lease term and materiality. Operating lease assets also included a reclassification for previous asset impairments and associated restructuring liabilities, deferred rent, lease incentives and initial direct costs which reduced the operating lease ROU assets as of July 1, 2019. Some operating leases contain lease and non-lease components. Certain lease contracts include fixed payments for services, such as operations, maintenance, or other services. The Company has elected to account for fixed lease and non-lease components as a single lease component except for the logistic service asset class. Cash payments made for non-lease costs and variable lease costs are not included in the measurement of operating lease assets and liabilities and are recognized in the Company’s condensed consolidated statements of operations as incurred. Some lease terms include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless it is reasonably certain that it will exercise that option. The Company’s lease agreements do not contain any residual value guarantees. Activity and other information relating to operating leases is as follows (in thousands except for lease term and discount rate): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2020 Operating lease costs $ 4,871 $ 14,874 Variable lease costs 1,613 4,548 Cash paid for amounts included in the measurement of operating liabilities 5,328 16,159 ROU assets obtained for new lease obligations 1,103 2,525 ROU assets obtained from Aerohive business combination — 6,336 March 31, 2020 Weighted average remaining lease term (in years) 4.5 Weighted Average Discount Rate 4.5 % Short-term lease expense which represents expense for leases that have terms of one year or less was not material for the three and nine months ended March 31, 2020. The maturities of the Company’s operating lease liabilities as of March 31, 2020 by fiscal year are as follows: Operating Leases (in thousands) 2020 (remaining three months) $ 5,356 2021 20,509 2022 19,351 2023 15,666 2024 6,333 Thereafter 12,396 Total future minimum lease payments 79,611 Less amount representing interest 7,559 Total operating lease liabilities $ 72,052 Operating lease liabilities, current $ 18,197 Operating lease liabilities, non-current $ 53,855 As of June 30, 2019, the minimum future rentals on non-cancellable operating leases by fiscal year, based on the previous accounting standard, were as follows: Operating Leases (in thousands) 2020 $ 22,733 2021 21,174 2022 20,680 2023 17,828 2024 5,976 Thereafter 16,287 Total lease payments $ 104,678 Sublease Considerations The Company currently is a sublessor on several operating facility subleases that expire on various dates through fiscal 2023. The subleases have terms from 5 to 6 years and extend through the term of the underlying leases. The subleases do not include renewal options, purchase options, or termination rights. These operating subleases include only lease components. Included in lease expense, the Company had $0.6 million and $1.9 million of sublease income for the three and nine months ended March 31, 2020, respectively. Lessor Considerations Although most of the Company’s revenue from its hardware business comes from sales of hardware, the Company also sells subscription contracts which contain both operating lease and non-lease components. These leases range in duration generally up to three years with payments generally collected in equal quarterly installments, do not include purchase options, and include 60-day termination rights by either party. For the three months ended March 31, 2020 and 2019, $2.2 million and $2.7 million are included in product revenue in the Company’s condensed consolidated financial statements, respectively. For the nine months ended March 31, 2020 and 2019, $6.9 million and $8.6 million are included in product revenue in the Company’s condensed consolidated financial statements, respectively. There were no changes to the accounting treatment of these transactions from the adoption of ASC 842. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10 . Commitments and Contingencies Purchase Commitments The Company currently has arrangements with contract manufacturers and suppliers for the manufacture of its products. Those arrangements allow the contract manufactures to procure long lead-time component inventory based upon a rolling production forecast provided by the Company. The Company is obligated to purchase long lead-time component inventory that its contract manufacturer procures in accordance with the forecast, unless the Company gives notice of order cancellation outside of applicable component lead-times Legal Proceedings The Company may from time to time be party to litigation arising in the course of its business, including, without limitation, allegations relating to commercial transactions, business relationships or intellectual property rights. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. Litigation in general, and intellectual property in particular, can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict. In accordance with applicable accounting guidance, the Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, at least on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not record a loss accrual. However, if the loss (or an additional loss in excess of any prior accrual) is at least a reasonable possibility and material, then the Company would disclose an estimate of the possible loss or range of loss, if such estimate can be made, or disclose that an estimate cannot be made. The assessment whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, involves a series of complex judgments about future events. Even if a loss is reasonably possible, the Company may not be able to estimate a range of possible loss, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the ultimate resolution of such matters, including the amount of any possible loss, fine or penalty. Accordingly, for current proceedings, except as noted below, the Company is currently unable to estimate any reasonably possible loss or range of possible loss. However, an adverse resolution of one or more of such matters could have a material adverse effect on the Company's results of operations in a particular quarter or fiscal year. All currency conversions in this Legal Proceedings section are as of March 31, 2020. XR Communications, LLC d/b/a Vivato Technologies v. Extreme Networks, Inc. Patent Infringement Suit On April 19, 2017, XR Communications, LLC (“XR”) (d/b/a Vivato Technologies) filed a patent infringement lawsuit against the Company in the Central District of California. The operative Second Amended Complaint asserts infringement of U.S. Patent Nos. 7,062,296, 7,729,728, and 6,611,231 based on the Company’s manufacture, use, sale, offer for sale, and/or importation into the United States of certain access points and routers supporting multi-user, multiple-input, multiple-output technology. XR seeks unspecified damages, on-going royalties, pre- and post-judgment interest, and attorneys’ fees. In 2018, the Court stayed the case pending a resolution by the Patent Trial and Appeal Board (“PTAB”) of inter partes invalidated all asserted claims of the ’296 patent and ’728 patent and has found the challenged claims of the ’231 patent not invalid in view of the prior art asserted in the IPR instituted against that pat ent. The matter has been stayed and a status conference is set for June 8 , 2020 . T he Company believes the claims are without merit and intends to defend them vigorously . Orckit IP, LLC v. Extreme Networks, Inc., Extreme Networks Ireland Ltd., and Extreme Networks GmbH On February 1, 2018, Orckit IP, LLC (“Orckit”) filed a patent infringement lawsuit against the Company and its Irish and German subsidiaries in the District Court in Dusseldorf, Germany. The lawsuit alleges direct and indirect infringement of the German portion of European Patent EP 1 958 364 B1 (“EP ’364”) based on the offer, distribution, use, possession and/or importation into Germany of certain network switches equipped with the ExtremeXOS operating system. Orckit is seeking injunctive relief, accounting, and an unspecified declaration of liability for damages and costs of the lawsuit. After a hearing on January 28, 2020, the Court rendered a decision in favor of the Company fully dismissing Orckit’s complaint. Orckit filed a notice of appeal on March 13, 2020. On April 23, 2019, Orckit filed and extension of the patent infringement complaint against the Company and its Irish and German subsidiaries in the District Court in Dusseldorf, Germany. With this extension, Orckit alleges infringement of the German portion of European Patent EP 3 068 077 B1 (“EP ‘077”) based on the offer, distribution, use, possession and/or importation into Germany of certain network switches. Orckit is seeking injunctive relief, accounting and sales information, and a declaration of liability for damages as well as costs of the lawsuit. The Company filed a nullity action with the German Federal Patent Court, seeking to invalidate the asserted patent. Orckit has filed its formal opposition to the Company’s nullity action on March 11, 2020. No hearing has been scheduled yet in this case, which was split from the original. The Company believes that all claims in both cases are without merit and intends to defend them vigorously. Global Innovation Aggregators, LLC v. Extreme Networks, Inc.; Extreme Networks China Limited; Extreme Networks Technology (Beijing) Co., Ltd.; and Shenzhen Yingzhixiang Technology Co. In January 2019, Global Innovation Aggregators, LLC (“GIA”) filed six patent infringement lawsuits against the Company and its Chinese and Hong Kong subsidiaries and Shenzhen Yingzhixiang Technology Co., Ltd. in Shenzhen Intermediate People’s Court in China. In each lawsuit, GIA has accused a number of Summit switching products of infringing one of six patents (the “Asserted Patents”). One trial has been postponed, and the trials for the rest of the cases have not yet been scheduled. Additionally, the Company has filed invalidity challenges with the Chinese patent office to challenge the validity of each asserted patent. Oral invalidity hearings were held in July and August 2019. The Chinese patent office has issued decisions maintaining the validity of five of the Asserted Patents. The Company has appealed three of these rulings. All the claims in one case have been fully invalidated. The Company disputes GIA’s claims and intends to defend the matter vigorously. Given the uncertainty of litigation and the preliminary stage of the case, the Company cannot estimate at this time the possible loss or range of loss that may result from this action. Shenzhen Dunjun Technology Ltd. v. Aerohive Networks (Hangzhou) Ltd.; Aerohive Networks, Inc.; and Yunqing Information Technology (Shenzhen) Ltd. On June 20, 2019, Shenzhen Dunjun Technology Ltd. (“Shenzhen Dunjun”) filed a patent infringement lawsuit against Aerohive Networks, Inc. (“Aerohive”), its Chinese subsidiary, and Yunqing Information Technology (Shenzhen) Ltd. in the Shenzhen Intermediate People’s Court in China. The lawsuit alleges infringement of a Chinese patent and seeks damages of RMB 10.0 million (USD $1.4 million). The trial originally scheduled for November 15, 2019 has been postponed by the Court, pending the jurisdictional objections filed by Aerohive, and has not yet been rescheduled. The Court rejected the jurisdictional challenge, which Aerohive is appealing. The Company cannot estimate at this time the possible loss or range of loss that may result from this action. Proven Networks, LLC v. Extreme Networks, Inc. On March 24, 2020, Proven Networks, LLC (“Proven”) filed a patent infringement lawsuit against the Company in the Northern District of California. The lawsuit alleges direct and indirect infringement of three U.S. patents based on the Company’s manufacture, use, sale, offer for sale, and/or importation into the United States of Extreme Analytics Extreme XOS, and certain network devices equipped with the Extreme XOS operating system. Proven seeks injunctive relief, unspecified damages, pre- and post-judgment interest, and attorneys’ fees. Given the uncertainty of litigation and the preliminary stage of the case, the Company cannot estimate at this time the possible loss or range of loss that may result from this action. Indemnification Obligations Subject to certain limitations, the Company may be obligated to indemnify its current and former directors, officers and employees. These obligations arise under the terms of its certificate of incorporation, its bylaws, applicable contracts, and applicable law. The obligation to indemnify, where applicable, generally means that the Company is required to pay or reimburse, and in certain circumstances the Company has paid or reimbursed, the individuals' reasonable legal expenses and possibly damages and other liabilities incurred in connection with certain legal matters. The Company also procures Directors and Officers liability insurance to help cover its defense and/or indemnification costs, although its ability to recover such costs through insurance is uncertain. While it is not possible to estimate the maximum potential amount that could be owed under these governing documents and agreements due to the Company’s limited history with prior indemnification claims, indemnification (including defense) costs could, in the future, have a material adverse effect on the Company’s consolidated financial position, results of operations and cash flows. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 11 . Stockholders’ Equity Stockholders’ Rights Agreement On April 26, 2012, the Company entered into an Amended and Restated Rights Agreement between the Company and Computershare Shareholder Services LLC as the rights agent (as amended, the “Restated Rights Plan”). The Restated Rights Plan governs the terms of each right (“Right”) that has been issued with respect to each share of common stock of Extreme Networks. Each Right initially represents the right to purchase one one-thousandth of a share of the Company’s Preferred Stock. The Company’s Board of Directors (the “Board”) adopted the Restated Rights Plan to preserve the value of deferred tax assets, including net operating loss carry forwards of the Company, with respect to its ability to fully use its tax benefits to offset future income which may be limited if the Company experiences an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986 as a result of ordinary buying and selling of its common stock. Following its review of the terms of the plan, the Board decided it was necessary and in the best interests of the Company and its stockholders to enter into the Restated Rights Plan. Each year since 2013 the Board and stockholders have approved an amendment providing for a one-year extension of the term of the Restated Rights Plan. The Board unanimously approved an amendment to the Restated Rights Plan on May 8, 2020, to extend the Restated Rights Plan through May 31, 2021, subject to ratification by a majority of the stockholders of the Company at the next annual shareholders meeting. Equity Incentive Plan The Board unanimously approved an amendment to the Extreme Networks, Inc. Amended and Restated 2013 Equity Incentive Plan to increase the maximum number of available shares by 7,000,000 shares. The amendment was ratified by a majority of the stockholders at the Company’s annual meeting of stockholders held on November 7, 2019. Employee Stock Purchase Plan The Board unanimously approved an amendment to the 2014 Employee Stock Purchase Plan to increase the maximum number of shares that will be available for sale thereunder by 7,500,000 shares. The amendment was ratified by a majority of the stockholders of the Company at the annual meeting of stockholders held on November 8, 2018. Common Stock Repurchases On November 2, 2018, the Company announced the Board had authorized management to repurchase up to $60.0 million of the Company’s common stock over a two-year period from the date of authorization. Purchases may be made from time to time through any means including, but not limited to, open market purchases and privately negotiated transactions. A maximum of $35.0 million of the Company’s common stock may be repurchased in any calendar year. In February 2020, the Board increased the authorization to repurchase by $40.0 million to $100.0 million and extended the period for repurchase for three years from February 5, 2020. The maximum repurchase in any year was decreased to $30.0 million. In November 2019, the Company entered into an accelerated share repurchase agreement (the “November 2019 ASR”) to repurchase shares of the Company’s common stock. Pursuant to the November 2019 ASR, the Company paid $30.0 million for an initial delivery of 3,850,000 shares valued at $25.2 million. The remaining balance of $4.8 million was recorded in additional paid-in-capital as a forward contract in the Company’s common stock. The forward contract was settled on January 24, 2020 and the Company received an additional 381,505 shares of its common stock. Total shares repurchased under the November 2019 ASR were 4,231,505 shares at an average cash purchase price paid of $7.09. The following table summarizes stock award activity representing the cost recorded for the three and nine months ended March 31, 2020 and 2019 (in thousands, except per share amounts). Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Total number of shares repurchased 381 — 4,232 2,366 Average price paid per share $ 12.64 $ — $ 7.09 $ 6.34 Total cost of shares repurchased $ 4,821 $ — $ 30,000 $ 15,000 Dollar value of shares that may yet be repurchased under program $ 55,000 $ 45,000 $ 55,000 $ 45,000 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Mar. 31, 2020 | |
Share Based Compensation [Abstract] | |
Employee Benefit Plans | 12 . Shares Reserved for Issuance The Company had reserved for issuance as of the dates noted (in thousands): March 31, 2020 June 30, 2019 2013 Equity Incentive Plan shares available for grant 11,368 8,462 Employee stock options and awards outstanding 12,086 10,455 2014 Employee Stock Purchase Plan 7,364 10,085 Total shares reserved for issuance 30,818 29,002 Aerohive 2014 Equity Incentive Plan Pursuant to the acquisition of Aerohive on August 9, 2019, the Company assumed the Aerohive 2014 Equity Incentive Plan (the "Aerohive Plan"). Stock awards outstanding under the Aerohive Plan were converted into awards for Extreme shares as of the Acquisition Date at a predetermined rate pursuant to the Merger Agreement. As of March 31, 2020, total awards to acquire 736,796 shares of Extreme common stock were outstanding under the Aerohive Plan. If a participant terminates employment prior to the vesting dates, the non-vested shares will be forfeited and retired. No future grants may be made from the Aerohive Plan. Share-based Compensation Expense Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Cost of product revenue $ 280 $ 223 $ 932 $ 618 Cost of service revenue 368 648 1,220 1,670 Research and development 2,518 2,814 8,213 7,953 Sales and marketing 1,338 3,187 8,568 8,529 General and administrative 2,639 1,942 7,523 5,569 Integration costs — — 479 — Total share-based compensation expense $ 7,143 $ 8,814 $ 26,935 $ 24,339 During the three and nine months ended March 31, 2020, and 2019, the Company did not capitalize any share-based compensation expense in inventory, as the amounts were immaterial. Stock Awards Stock awards may be granted under the 2013 Equity Incentive Plan (the “2013 Plan”) on terms approved by the Compensation Committee of the Board. Stock awards generally provide for the issuance of restricted stock units (“RSUs”) including performance or market-based RSUs which vest over a fixed period of time or based upon the satisfaction of certain performance criteria. The Company uses the straight-line method for expense attribution. The Company does not estimate forfeitures, but accounts for them as incurred. The following table summarizes stock award activity for the nine months ended March 31, 2020 (in thousands, except grant date fair value): Number of Shares Weighted- Average Grant Date Fair Value Aggregate Fair Market Value Non-vested stock awards outstanding at June 30, 2019 7,736 $ 7.67 Granted 6,299 6.83 Released (3,365 ) 7.11 Cancelled (1,598 ) 7.28 Non-vested stock awards outstanding at March 31, 2020 9,072 $ 7.40 $ 28,033 Vested and expected to vest at March 31, 2020 6,397 $ 7.26 $ 25,947 The following table summarizes stock option activity for the nine months ended March 31, 2020 (in thousands, except per share and contractual term): Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Options outstanding at June 30, 2019 2,719 $ 4.61 3.26 $ 5,070 Granted 637 6.70 Exercised (217 ) 4.58 Cancelled (125 ) 6.02 Options outstanding at March 31, 2020 3,014 $ 4.99 3.39 $ 524 Vested and expected to vest at March 31, 2020 3,014 $ 4.99 3.39 $ 524 Exercisable at March 31, 2020 1,693 $ 3.78 1.43 $ 524 The fair value of each stock option grant under the 2013 Plan and 2005 Equity Incentive Plan is estimated on the date of grant using the Black-Scholes-Merton option valuation model. The Company uses the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate is based upon the estimated life of the option and the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on the historical volatility on the Company’s stock. The average fair value per share of the options granted during the nine months ended March 31, 2020 was $6.70. The fair value of each RSU grant with performance-based vesting criteria (“PSUs”) under the 2013 Plan is estimated on the date of grant using the Monte-Carlo simulation model to determine the fair value and the derived service period of stock awards with market conditions, on the date of the grant. The RSUs granted during the nine months ended March 31, 2020 vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, Company. These RSUs included 566,038 RSUs to named executive officers and directors. During fiscal 2019 and 2018, the Company approved the grant of 0.6 million shares underlying stock awards each year in the form of PSU’s to named executive officers and other vice president level employees. These PSUs would be considered earned once the Company’s U.S. GAAP earnings aggregates at least $0.20 per share over two consecutive quarters (the “Performance Thresholds”). During the second quarter of fiscal 2020, the compensation committee of the Board modified the Performance Thresholds of $0.20 earnings per share over two consecutive quarters for PSUs issued in fiscal 2019 and 2018, to $0.09 earnings per share over two consecutive quarters. Upon satisfying the Performance Thresholds, the PSUs will vest with respect to the same number of RSUs that have vested which were granted on the same date and thereafter will vest on the same schedule as the RSUs, subject to continued service to the Company. If the Performance Thresholds is not met by the third anniversary of the grant date for each award, that award is canceled. During the nine months ended March 31, 2020, the 2019 and 2018 Performance Thresholds for outstanding performance awards were not achieved. 2014 Employee Stock Purchase Plan The fair value of each share purchase option under the Company ’ There were 1,498,155 and 1,499,042 shares issued under the ESPP during the three months ended March 31, 2020 and 2019, respectively. There were 2,721,699 and 2,779,750 shares issued under the ESPP during the nine months ended March 31, 2020 and 2019, respectively. The following assumptions were used to calculate the fair value of shares issued under the ESPP during the following periods: Employee Stock Purchase Plan Employee Stock Purchase Plan Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Expected life 0.5 years 0.5 years 0.5 years 0.5 years Risk-free interest rate 1.56 % 2.46 % 1.71 % 2.35 % Volatility 43 % 75 % 43 % 70 % Dividend yield — % — % — % — % The weighted-average fair value of shares issued under the ESPP during the nine months ended March 31, 2020 and 2019 was $1.90 and $2.71, respectively. The weighted-average fair value of shares issued under the ESPP during the three months ended March 31, 2020 and 2019 was $1.76 and $2.69, respectively. |
Information about Segments and
Information about Segments and Geographic Areas | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Information about Segments and Geographic Areas | 13 . Information about Segments and Geographic Areas The Company operates in one segment, the development and marketing of network infrastructure equipment and related software. The Company conducts business globally and is managed geographically. Revenue is attributed to a geographical area based on the location of its customers. The Company operates in three geographical areas: Americas, which includes the United States, Canada, Mexico, Central America and South America; EMEA, which includes Europe, Russia, Middle East and Africa; and APAC which includes Asia Pacific, South Asia, India, Australia and Japan. The Company’s chief operating decision maker, who is its CEO, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. See Note 3 Revenues for the Company’s revenues by geographic regions and channel based on the customer’s ship-to location. The Company’s long-lived assets are attributed to the geographic regions as follows (in thousands): Long-lived Assets March 31, 2020 June 30, 2019 Americas $ 203,865 $ 136,035 EMEA 25,417 28,744 APAC 17,573 11,529 Total long-lived assets $ 246,855 $ 176,308 |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | 14. Derivativesand Hedging Foreign Exchange Forward Contracts The Company uses derivative financial instruments to manage exposures to foreign currency. The Company’s objective for holding derivatives is to use the most effective methods to minimize the impact of these exposures. The Company does not enter into derivatives for speculative or trading purposes. The fair value of the Company’s derivatives in a gain position are recorded in “Prepaid expenses and other current assets” and derivatives in a loss position are recorded in “Other accrued liabilities” in the accompanying condensed consolidated balance sheets. Changes in the fair value of derivatives are recorded in “Other income (expense), net” in the accompanying condensed consolidated statements of operations. The Company enters into foreign exchange forward contracts to mitigate the effect of gains and losses generated by foreign currency transactions related to certain operating expenses and re-measurement of certain assets and liabilities denominated in foreign currencies. These derivatives do not qualify as hedges. As of March 31, 2020, foreign exchange forward contracts had a notional principal amount of $13.3 million and as of the three and nine months ended March 31, 2020 there were gains of $0.1 million. These contracts have maturities of less than 30 days. Changes in the fair value of these foreign exchange forward contracts are offset largely by re-measurement of the underlying assets and liabilities. As of March 31, 2019, the Company did not have any foreign exchange forward contracts outstanding. Foreign currency transactions gains and losses from operations was a gain of $0.9 million and a loss of less than $0.1 million for the three months ended March 31, 2020 and 2019, respectively. Foreign currency transactions gains and losses from operations was a loss of $1.1 million and a gain of $0.1 million for the nine months ended March 31, 2020 and 2019, respectively. Interest Rate Swaps The Company is exposed to interest rate risk on its debt. The Company enters into interest rate swap contracts to effectively manage the impact of fluctuations of interest rate changes on its outstanding debt which has floating interest rate. The Company does not enter into derivative contracts for trading or speculative purposes. At the inception date of the derivative contract, the Company performs an assessment of these contracts and has designated these contracts as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, by performing qualitative and quantitative assessment, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in other comprehensive income (loss). When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively. In accordance with ASC 815 “Derivatives and Hedging,” the Company may prospectively discontinue the hedge accounting for an existing hedge if the applicable criteria are no longer met, the derivative instrument expires, is sold, terminated or exercised or if the Company removes the designation of the respective cash flow hedge. In those circumstances, the net gain or loss remains in accumulated other comprehensive income (loss) and is reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings, unless the forecasted transaction is no longer probable in which case the net gain or loss is reclassified into earnings immediately. During the three months ended March 31, 2020, the Company entered into multiple interest rate swap contracts, designated as cash flow hedges, to hedge the variability of cash flows in interest payments associated with the Company’s various tranches of floating-rate debt. As of March 31, 2020, the total notional amount of these interest rate swaps was $200 million and had maturity dates through April 2023 |
Restructuring Charges, Net of R
Restructuring Charges, Net of Reversals and Impairment, and Related Charges | 9 Months Ended |
Mar. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Charges, net of reversals, impairment, and related charges | 15 . Restructuring Charges, Net of Reversals, Impairment, and Related Charges. The Company recorded $6.6 million and $19.4 million of restructuring charges, net of reversals and impairments during the three and nine months ended March 31, 2020, respectively. Total restructuring charges included facility related charges of $0.3 million and $8.2 million as well as charges for severance and benefits of $6.3 million and $11.2 million for the three and nine months ended March 31, 2020, respectively. During the first quarter of fiscal 2020, the Company moved to reduce its operat ing expenses by exiting a floor of its San Ignacio building in San Jose , California and consolidating its workforce. Also, the Company exited additional space in its Salem , New Hampshire facility , which includes general office and lab space. The Company has the intent and ability to sub-lease these facilities which it has ceased using and as such , has considered estimated future sub-lease income based on its existing le ase agreement s , as well as the local real estate market conditions , in measuring the amount of asset impairment. The Company also factored into its estimate the time for a sub-lease tenant to enter into an agreement and complete any improvements. F or the three months ended September 30, 2019, the Company recorded restructuring charges o f $ 3.9 million related to impairment of ROU assets from exited facilities. In addition, the Company recorded severance and benefits charges of $ 2.2 million related to its reduction-in-force action which had begun in the fourth quarter of fiscal 2019. During the second quarter of fiscal 2020, the Company continued its initiative to realign its operations resulting from the acquisition of Aerohive and consolidating its workforce. The Company exited its facility in Milpitas, California which includes general office and lab space. The Company has the intent and ability to sub-lease this facility which it has ceased using and as such has considered estimated future sub-lease income based on its existing lease agreement, as well as the local real estate market conditions in measuring the amount of asset impairment. The Company also factored into its estimate the time for a sub-lease tenant to enter into an agreement and complete any improvements. For the three months ended December 31, 2019, the Company recorded charges for the impairment of ROU assets of $2.8 million, long-lived assets of $0.9 million, and other charges of $0.2 million related to the exited facility. In addition, the Company recorded severance and benefits charges of $2.7 million related to its reduction-in-force action which began in the fourth quarter of fiscal 2019. During the third quarter of fiscal 2020, the Company continued its initiative to reduce cost by realigning its workforce. In addition, with the global disruptions and slow-down in the demand of its products caused by the global pandemic outbreak, COVID-19, and the uncertainty around the timing of the recovery of the market, the Company initiated a reduction-in-force plan (the 2020 Plan) to reduce its operating costs and enhance financial flexibility. The plan affected approximately 300 employees primarily from the research and development and sales organizations who were located mainly in US and India. The Company recorded restructuring charges of $5.8 million during the three months ended March 31, 2020 related to the 2020 Plan. We expect to incur additional charges related to this 2020 Plan through the first quarter of fiscal 2021. The costs associated with this restructuring plan primarily included employee severance and benefit expenses. The Company recorded additional severance and benefits charges of $0.5 million for the three months ended March 31, 2020 related to the prior period restructuring plans. In addition, the Company recorded facility related charges of $0.3 million related to its previously impaired facilities for the three months ended March 31, 2020. Certain amounts have been reclassified from restructuring liabilities and have been recorded as a reduction to operating lease ROU assets as of July 1, 2019. Restructuring liabilities related to severance and benefits obligations are recorded in “Other accrued liabilities” in the accompanying condensed consolidated balance sheets. Total restructuring and related liabilities as of March 31, 2020 consist of (in thousands): Excess Facilities Severance Benefits Total Balance as of June 30, 2019 $ 1,764 $ 3,559 $ 5,323 Period charges — 12,257 12,257 Period reversals — (1,044 ) (1,044 ) Reclassification to reduce operating lease assets (1,764 ) — (1,764 ) Period payments — (8,568 ) (8,568 ) Balance as of March 31, 2020 $ — $ 6,204 $ 6,204 |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16 . Income Taxes For the three months ended March 31, 2020 and 2019, the Company recorded an income tax provision of $1.6 million and $1.9 million, respectively. For the nine months ended March 31, 2020 and 2019, the Company recorded an income tax provision of $4.9 million and an income tax benefit of $2.0 million, respectively. The income tax provisions for the three and nine months ended March 31, 2020 and 2019, consisted of (1) taxes on the income of the Company’s foreign subsidiaries, (2) foreign withholding taxes (3) tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the wireless local area network (“WLAN”) business from Zebra Technologies Corporation, the Campus Fabric Business from Avaya and the Data Center Business from Brocade, and (4) state taxes in jurisdictions where the Company has no remaining state Net Operating Losses. In addition, the nine months ended March 31, 2019 included tax benefits associated with the release of valuation allowance resulting from changes introduced by US tax reform as well as the release of a valuation allowance recorded against deferred tax assets in Australia. The income tax provisions for both fiscal years were calculated based on the actual results of operations for the three and nine months ended March 31, 2020 and 2019 , respectively and therefore may not reflect the annual effective tax rate. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law in the United States. The CARES Act, among other things, includes modifications to net operating loss carryforward provisions and the net interest expense deduction, and deferment of employer social security tax payments. The Company has evaluated the provisions of the CARES Act and how certain elections may impact our financial position and results of operations, and have determined the enactment of the CARES Act did not have a material impact to our income tax provision for the three months ended March 31, 2020, or to our net deferred tax assets as of March 31, 2020. In the first quarter of the Company’s fiscal year ended June 30, 2019, the Company adopted ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory The Company has provided a full valuation allowance against all of its U.S. federal and state deferred tax assets as well as a portion of the deferred tax assets in Ireland. A valuation allowance is determined by assessing both negative and positive evidence to determine whether it is “more likely than not” that deferred tax assets are recoverable; such assessment is required on a jurisdiction by jurisdiction basis. The Company's inconsistent earnings in recent periods, including a cumulative loss over the last three years, coupled with its difficulty in forecasting future revenue trends and the cyclical nature of its business represent sufficient negative evidence to require a full valuation allowance against its U.S. federal and state net deferred tax assets as well as a portion of the deferred tax assets in Ireland. These valuation allowance will be evaluated periodically and can be reversed partially or in whole if business results and the economic environment have sufficiently improved to support realization of some or all of the Company's deferred tax assets. On August 9, 2019, the Company completed its acquisition of Aerohive. This acquisition was treated as a non-taxable stock acquisition and therefore Extreme Networks will have carryover tax basis in the assets and liabilities acquired. The Company had $24.6 million of unrecognized tax benefits as of March 31, 2020. The future impact of the unrecognized tax benefit of $24.6 million, if recognized, would result in adjustments to deferred tax assets and corresponding adjustments to the valuation allowance with no impact to the effective tax rate. The Company does not anticipate any events to occur during the next twelve months that would reduce the unrealized tax benefit as currently stated in the Company’s balance sheet. The Company’s policy is to accrue interest and penalties related to the underpayment of income taxes as a component of tax expense in the accompanying condensed consolidated statements of operations. In general, the Company’s U.S. federal income tax returns are subject to examination by tax authorities for fiscal years 2001 forward due to net operating losses and the Company's state income tax returns are subject to examination for fiscal years 2000 forward due to net operating losses. The Company is not currently under audit in any material jurisdictions. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 17 . Net Loss Per Share Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options and unvested restricted stock units. The following table presents the calculation of net loss per share of basic and diluted (in thousands, except per share data): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Net loss $ (44,352 ) $ (6,932 ) $ (105,628 ) $ (8,798 ) Weighted-average shares used in per share calculation - basic and diluted 119,162 117,944 119,648 117,619 Net loss per share - basic and diluted $ (0.37 ) $ (0.06 ) $ (0.88 ) $ (0.07 ) The following securities were excluded from the computation of net loss per diluted share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Options to purchase common stock 3,090 780 3,055 621 Restricted stock units 9,204 1,907 9,676 888 Employee Stock Purchase Plan shares 742 965 742 965 Total shares excluded 13,036 3,652 13,473 2,474 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal Year The Company uses a fiscal calendar year ending on June 30. All references herein to “fiscal 2020” or “2020” represent the fiscal year ending June 30, 2020. All references herein to “fiscal 2019” or “2019” represent the fiscal year ended June 30, 2019. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Extreme and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company predominantly uses the United States Dollar as its functional currency. The functional currency for certain of its foreign subsidiaries is the local currency. For those subsidiaries that operate in a local functional currency environment, all assets and liabilities are translated to United States Dollars at current month end rates of exchange and revenue and expenses are translated using the monthly average rate. |
Accounting Estimates | Accounting Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) Leases (Topic 842) (“ROU”) In addition, Topic 842 was subsequently amended by ASU No 2018-10, Codification Improvements; ASU 2018-11, Targeted Improvements; ASU 2018-20 Narrow Scope Improvements; and ASU 2019-01 Codification Improvements. The Company adopted the new standards beginning with its fiscal year 2020. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permitted the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The new standard also provided practical expedients for ongoing accounting. The Company also elected the short-term lease recognition exemption for all leases that qualified. For those leases that qualified, existing short-term leases at the transition date and those entered into subsequent to the transition date, the Company did not recognize right-of-use assets or lease liabilities. In addition, the Company elected the practical expedient not to separate lease and non-lease components for leases except for the logistic services asset class and certain revenue subscription contracts where the Company leases its hardware products and provides maintenance and support over a service period which is recognized under ASC Topic 606. See Note 9, Leases, for additional information regarding the Company’s leases. On July 1, 2019, the Company recognized ROU assets of $64.6 million and corresponding lease liabilities of $79.5 million on the condensed consolidated balance sheets, which was based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which is intended to allow companies to better align 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 by expanding and refining hedge accounting for both nonfinancial and financial risk components and aligning the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. In addition, in October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging ( Topic 815 ), which amends Topic 815 to add the overnight index swap (OIS) rate based on the secured overnight financing rate as a fifth U.S. benchmark interest rate. In addition, Topic 815 was subsequently amended by ASU 2019-04, Codification Improvements. These standards are effective for interim and annual reporting periods beginning after December 15, 2018. The standard was adopted on July 1, 2019 and did not have a material impact on the Company’s financial statements upon adoption. During the third quarter of fiscal 2020, the Company entered into interest rate swap agreements to manage its exposure to fluctuations of interest rates associated with its debt. See Note 14, Derivatives and Hedging, for additional information. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) In March 2020 ASU 2020 - 04 “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” of the London Interbank Offered Rate (LIBOR) and other interbank offered rates. This guidance is effective upon issuance and can be applied to applicable contract modifications through December 31, 2022. The Company elected to apply the amendments in this update to eligible hedging relationships existing as of January 1, 2020 or entered into during the three months ended March 31, 2020 in accordance with the transition options available. This guidance did not have any impact upon adoption. The Company will apply this guidance to transactions or modifications of these arrangements as appropriate through transition period. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses with its fiscal year 2021, beginning on July 1, 2020. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), and related disclosures In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40 and related disclosures In December 2019, the FASB issued ASU 2019-12, Income taxes – Simplifying the Accounting for Income Taxes (Topic 740 Income Taxes and related disclosures |
Revenue Recognition | Revenue Recognition Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. The Company’s performance obligations are satisfied at a point in time or over time as the customer receives and consumes the benefits provided . Substantially all of the Company’s product sales revenues are recognized at a point in time. Substantially all of the Company’s service and SaaS revenu e is recognized over time. For revenue recognized over time, the Company uses an input measure, days elapsed, to measure progress. On March 31, 2020, the Company had $271.7 million of remaining performance obligations, which are primarily comprised of deferred maintenance and SaaS revenue. The Company expects to recognize approximately 24 percent of its deferred revenue as revenue in fiscal 2020, an additional 46 percent in fiscal 2021 and 30 percent of the balance thereafter. Contract Balances. The timing of revenue recognition, billings and cash collections results in billed accounts receivable and deferred revenue in the condensed consolidated balance sheets. Services provided under renewable support arrangements of the Company are billed in accordance with agreed-upon contractual terms, which are either billed fully at the inception of contract or at periodic intervals (e.g., quarterly or annually). The Company sometimes receives payments from its customers in advance of services being provided, resulting in deferred revenues. These liabilities are reported on the condensed consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Revenue recognized for the three months ended March 31, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each period was $64.3 million and $54.8 million, respectively. Revenue recognized for the nine months ended March 31, 2020 and 2019 that was included in the deferred revenue balance at the beginning of each period was $116.7 million and $110.8 million, respectively. Contract Costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. Management expects that commission fees paid to sales representatives as a result of obtaining service contracts and contract renewals are recoverable and therefore the Company’s condensed consolidated balance sheets included capitalized balances in the amount of $7.4 million and $6.5 million at March 31, 2020 and June 30, 2019, respectively. Capitalized commission fees are amortized on a straight-line basis over the average period of service contracts of approximately three years, and are included in “Sales and marketing” in the accompanying condensed consolidated statements of operations. Amortization recognized during the three months ended March 31, 2020 and 2019, was $1.1 million and $0.8 million, respectively. Amortization recognized during the nine months ended March 31, 2020 and 2019 was $4.1 million and $2.2 million, respectively. Estimated Variable Consideration. There were no material changes in the current period to the estimated variable consideration for performance obligations which were satisfied or partially satisfied during previous periods. Revenue by Category The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands): Three Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 38,666 $ 56,391 $ 95,057 $ 72,071 $ 56,096 $ 128,167 Other 3,277 5,781 9,058 4,930 5,589 10,519 Total Americas 41,943 62,172 104,115 77,001 61,685 138,686 EMEA 49,979 33,630 83,609 48,834 35,076 83,910 APAC 3,242 18,553 21,795 4,850 23,418 28,268 Total net revenues $ 95,164 $ 114,355 $ 209,519 $ 130,685 $ 120,179 $ 250,864 Nine Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 168,755 $ 180,358 $ 349,113 $ 172,752 $ 171,359 $ 344,111 Other 15,496 16,343 31,839 17,893 16,494 34,387 Total Americas 184,251 196,701 380,952 190,645 187,853 378,498 EMEA 173,825 107,521 281,346 190,041 98,687 288,728 APAC 18,362 51,837 70,199 11,967 64,237 76,204 Total net revenues $ 376,438 $ 356,059 $ 732,497 $ 392,653 $ 350,777 $ 743,430 |
Inventories | Inventories The Company values its inventory at lower of cost or net realizable value. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company adjusts the carrying value of its inventory when conditions exist that suggest that inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Any written down or obsolete inventory subsequently sold has not had a material impact on gross margin for any of the periods presented. Inventories consist of the following (in thousands): March 31, 2020 June 30, 2019 Finished goods $ 55,790 $ 49,492 Raw materials 10,424 14,097 Total Inventories $ 66,214 $ 63,589 |
Property and Equipment, Net | Property and Equipment, Net Property and equipment consist of the following (in thousands): March 31, 2020 June 30, 2019 Computers and equipment $ 75,134 $ 72,309 Purchased software 33,467 29,126 Office equipment, furniture and fixtures 11,405 10,815 Leasehold improvements 52,167 51,245 Total property and equipment 172,173 163,495 Less: accumulated depreciation and amortization (109,212 ) (89,941 ) Property and equipment, net $ 62,961 $ 73,554 |
Deferred Revenue | Deferred Revenue Deferred revenue represents amounts for (i) deferred maintenance and support revenue, (ii) deferred SaaS revenue, and (iii) other deferred revenue including professional services and training when the revenue recognition criteria have not been met. |
Guarantees and Product Warranties | Guarantees and Product Warranties The majority of the Company’s hardware products are shipped with either a one-year The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2020 and 2019 (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Balance beginning of period $ 16,209 $ 12,808 $ 14,779 $ 12,807 Warranties assumed due to acquisitions — — 570 — New warranties issued 4,810 4,510 16,271 12,377 Warranty expenditures (5,797 ) (4,112 ) (16,398 ) (11,978 ) Balance end of period $ 15,222 $ 13,206 $ 15,222 $ 13,206 To facilitate sales of its products in the normal course of business, the Company indemnifies its resellers and end-user customers with respect to certain matters. The Company has agreed to hold the customer harmless against losses arising from a breach of intellectual property infringement or other. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to estimate the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results or financial position. |
Other Long-term Liabilities | Other Long-term Liabilities The following is a summary of long-term liabilities (in thousands): March 31, 2020 June 30, 2019 Acquisition-related deferred payments, less current portion $ 6,797 $ 9,604 Contingent consideration obligations, less current portion 626 2,688 Other contractual obligations, less current portion 18,707 26,261 Other 3,802 15,597 Total other long-term liabilities $ 29,932 $ 54,150 |
Concentrations | Concentrations The Company may be subject to concentration of credit risk as a result of certain financial instruments consisting of accounts receivable and short-term investments. The Company does not invest an amount exceeding 10% of its combined cash or cash equivalents in the securities of any one obligor or maker, except for obligations of the United States government, obligations of United States government agencies and money market accounts. |
Earnings Per Share | Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Dilutive earnings per share is calculated by dividing net earnings by the weighted average number of common shares used in the basic earnings per share calculation plus the dilutive effect of shares subject to repurchase, options and unvested restricted stock units. |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Revenue Disaggregated by Sales Channel and Geographic Region | The following table sets forth the Company’s revenue disaggregated by sales channel and geographic region based on the customer’s ship-to locations (in thousands): Three Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 38,666 $ 56,391 $ 95,057 $ 72,071 $ 56,096 $ 128,167 Other 3,277 5,781 9,058 4,930 5,589 10,519 Total Americas 41,943 62,172 104,115 77,001 61,685 138,686 EMEA 49,979 33,630 83,609 48,834 35,076 83,910 APAC 3,242 18,553 21,795 4,850 23,418 28,268 Total net revenues $ 95,164 $ 114,355 $ 209,519 $ 130,685 $ 120,179 $ 250,864 Nine Months Ended March 31, 2020 March 31, 2019 Distributor Direct Total Distributor Direct Total Americas: United States $ 168,755 $ 180,358 $ 349,113 $ 172,752 $ 171,359 $ 344,111 Other 15,496 16,343 31,839 17,893 16,494 34,387 Total Americas 184,251 196,701 380,952 190,645 187,853 378,498 EMEA 173,825 107,521 281,346 190,041 98,687 288,728 APAC 18,362 51,837 70,199 11,967 64,237 76,204 Total net revenues $ 376,438 $ 356,059 $ 732,497 $ 392,653 $ 350,777 $ 743,430 |
Schedule of Major Customers Accounting for 10% or More of Net Revenues and Accounts Receivable Balance | The following table sets forth major customers accounting for 10% or more of the Company’s net revenues: Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Tech Data Corporation 19% 14% 16% 17% Jenne Corporation * 21% 13% 15% Westcon Group Inc. 19% 12% 14% 13% * Less than 10% of net revenue. The following table sets forth major customers accounting for 10% or more of the Company’s accounts receivable balance: March 31, 2020 June 30, 2019 Tech Data Corporation 11 % 12 % Jenne Corporation 10 % 35 % Westcon Group Inc. 14 % * * Less than 10% of accounts receivable. |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Summary of Unaudited Pro Forma Financial Information | Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Net revenues $ 210,255 $ 282,229 $ 746,301 $ 850,337 Net loss $ (37,873 ) $ (23,272 ) $ (66,720 ) $ (83,051 ) Net loss per share - basic and diluted $ (0.32 ) $ (0.20 ) $ (0.56 ) $ (0.71 ) Shares used in per share calculation - basic and diluted 119,162 117,944 119,648 117,619 |
Aerohive Networks, Inc. | |
Components of Aggregate Purchase Consideration | The components of aggregate purchase consideration are as follows (in thousands): Estimated purchase consideration August 9, 2019 Cash paid to acquire outstanding shares $ 263,616 Replacement of stock-based awards 3,530 Aggregate estimated purchase consideration $ 267,146 |
Summary of Preliminary Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation is set forth in the table below and reflects estimated fair values (in thousands). Preliminary Allocation as of August 9, 2019 Adjustments Allocation as of March 31, 2020 Cash and cash equivalents $ 44,158 $ — $ 44,158 Short-term investments 45,148 — 45,148 Accounts receivable, net 11,753 — 11,753 Inventories 16,698 2,534 a 19,232 Prepaid expenses and other current assets 3,980 (56 ) b 3,924 Property and equipment 2,185 179 c 2,364 Operating lease right-of-use assets 6,336 — 6,336 Other assets 2,195 — 2,195 Debt (20,000 ) — (20,000 ) Accounts payable (9,737 ) — (9,737 ) Accrued compensation and benefits (7,129 ) — (7,129 ) Accrued warranty (570 ) — (570 ) Other accrued liabilities (1,960 ) — (1,960 ) Operating lease liabilities (4,752 ) — (4,752 ) Deferred revenue (68,415 ) — (68,415 ) Other liabilities (408 ) — (408 ) Net tangible assets 19,482 2,657 22,139 Identifiable intangible assets 53,400 (900 ) d 52,500 Goodwill 194,264 (1,757 ) a,b,c,d 192,507 Total intangible assets acquired 247,664 (2,657 ) 245,007 Total net assets acquired $ 267,146 — $ 267,146 adjustment to the value of property and equipment as of the Acquisition Date at an international location, and d) adjustment to the fair value of intangibles |
Schedule of Identifiable Intangible Assets Acquired as Part of Acquisition | The following table presents details of the identifiable intangible assets acquired as part of the Acquisition (dollars in thousands): Intangible Assets Estimated Useful Life (in years) Amount Developed technology 4 $ 39,100 Backlog 1 400 Customer relationships 7 11,400 Trade names 1 1,600 Total identifiable intangible assets $ 52,500 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Components of Inventories | Inventories consist of the following (in thousands): March 31, 2020 June 30, 2019 Finished goods $ 55,790 $ 49,492 Raw materials 10,424 14,097 Total Inventories $ 66,214 $ 63,589 |
Components of Property and Equipment | Property and equipment consist of the following (in thousands): March 31, 2020 June 30, 2019 Computers and equipment $ 75,134 $ 72,309 Purchased software 33,467 29,126 Office equipment, furniture and fixtures 11,405 10,815 Leasehold improvements 52,167 51,245 Total property and equipment 172,173 163,495 Less: accumulated depreciation and amortization (109,212 ) (89,941 ) Property and equipment, net $ 62,961 $ 73,554 |
Summary of Product Warranty Liability Activity | The following table summarizes the activity related to the Company’s product warranty liability during the three and nine months ended March 31, 2020 and 2019 (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Balance beginning of period $ 16,209 $ 12,808 $ 14,779 $ 12,807 Warranties assumed due to acquisitions — — 570 — New warranties issued 4,810 4,510 16,271 12,377 Warranty expenditures (5,797 ) (4,112 ) (16,398 ) (11,978 ) Balance end of period $ 15,222 $ 13,206 $ 15,222 $ 13,206 |
Summary of Long-term Liabilities | The following is a summary of long-term liabilities (in thousands): March 31, 2020 June 30, 2019 Acquisition-related deferred payments, less current portion $ 6,797 $ 9,604 Contingent consideration obligations, less current portion 626 2,688 Other contractual obligations, less current portion 18,707 26,261 Other 3,802 15,597 Total other long-term liabilities $ 29,932 $ 54,150 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value for Financial Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 (in thousands). March 31, 2020 Level 1 Level 2 Level 3 Total Assets Foreign currency derivatives $ — $ 231 $ — $ 231 Total assets measured at fair value $ — $ 231 $ — $ 231 Liabilities Foreign currency derivatives $ — $ 97 $ — $ 97 Interest rate swaps $ — $ 958 $ — $ 958 Acquisition-related contingent consideration obligations $ — $ — $ 2,940 $ 2,940 Total liabilities measured at fair value $ — $ 1,055 $ 2,940 $ 3,995 |
Schedule of Change in Acquisition-related Contingent Consideration Obligations | The change in the acquisition-related contingent consideration obligations is as follows (in thousands): Nine Months Ended March 31, 2020 Beginning balance 6,298 Payments (3,448 ) Accretion on discount 90 Ending balance $ 2,940 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table reflects the changes in the carrying amount of goodwill (in thousands): March 31, 2020 Balance as of June 30, 2019 $ 138,577 Additions due to acquisition (see Note 4) 192,507 Balance at end of period $ 331,084 |
Components of Gross and Net Intangible Asset Balances | The following tables summarize the components of gross and net intangible asset balances (dollars in thousands): Weighted Average Remaining Amortization Gross Carrying Accumulated Net Carrying Period Amount Amortization Amount March 31, 2020 Developed technology 2.6 years $ 156,100 $ 97,193 $ 58,907 Customer relationships 4.8 years 63,039 48,281 14,758 Backlog — years 400 400 — Trade names 1.5 years 10,700 7,794 2,906 License agreements 5.6 years 2,445 1,864 581 Other intangibles — years 1,382 1,382 — Total intangibles, net $ 234,066 $ 156,914 $ 77,152 Weighted Average Remaining Amortization Gross Accumulated Net Carrying Period Amount Amortization Amount June 30, 2019 Developed technology 2.4 years $ 117,000 $ 77,449 $ 39,551 Customer relationships 2.0 years 51,639 44,410 7,229 Trade names 2.4 years 9,100 5,647 3,453 License agreements 5.4 years 2,445 1,661 784 Other intangibles 0.6 years 1,382 1,287 95 Total intangibles, net $ 181,566 $ 130,454 $ 51,112 |
Summary of Amortization Expense of Intangibles | The amortization expense of intangibles for the periods presented is summarized below (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Amortization in “Cost of revenues: Product and Service” $ 6,629 $ 4,890 $ 20,094 $ 14,726 Amortization of intangibles in "Operations" 2,059 1,292 6,366 5,008 Total amortization $ 8,688 $ 6,182 $ 26,460 $ 19,734 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Components of Debt | The Company’s debt is comprised of the following (in thousands): March 31, 2020 June 30, 2019 Current portion of long-term debt: Term Loan $ 19,000 $ 9,500 Less: unamortized debt issuance costs (2,181 ) (489 ) Current portion of long-term debt $ 16,819 $ 9,011 Long-term debt, less current portion: Term Loan $ 351,500 $ 171,000 Revolving Facility 55,000 — Less: unamortized debt issuance costs (6,796 ) (1,261 ) Total long-term debt, less current portion 399,704 169,739 Total debt $ 416,523 $ 178,750 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Activity and Other Information Relating to Operating Leases | Activity and other information relating to operating leases is as follows (in thousands except for lease term and discount rate): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2020 Operating lease costs $ 4,871 $ 14,874 Variable lease costs 1,613 4,548 Cash paid for amounts included in the measurement of operating liabilities 5,328 16,159 ROU assets obtained for new lease obligations 1,103 2,525 ROU assets obtained from Aerohive business combination — 6,336 March 31, 2020 Weighted average remaining lease term (in years) 4.5 Weighted Average Discount Rate 4.5 % |
Schedule of Maturities of Operating Lease Liabilities | The maturities of the Company’s operating lease liabilities as of March 31, 2020 by fiscal year are as follows: Operating Leases (in thousands) 2020 (remaining three months) $ 5,356 2021 20,509 2022 19,351 2023 15,666 2024 6,333 Thereafter 12,396 Total future minimum lease payments 79,611 Less amount representing interest 7,559 Total operating lease liabilities $ 72,052 Operating lease liabilities, current $ 18,197 Operating lease liabilities, non-current $ 53,855 |
Schedule of Minimum Future Rentals on Non-Cancellable Operating Leases | As of June 30, 2019, the minimum future rentals on non-cancellable operating leases by fiscal year, based on the previous accounting standard, were as follows: Operating Leases (in thousands) 2020 $ 22,733 2021 21,174 2022 20,680 2023 17,828 2024 5,976 Thereafter 16,287 Total lease payments $ 104,678 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Share Repurchases Under Stock Award Activity | The following table summarizes stock award activity representing the cost recorded for the three and nine months ended March 31, 2020 and 2019 (in thousands, except per share amounts). Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Total number of shares repurchased 381 — 4,232 2,366 Average price paid per share $ 12.64 $ — $ 7.09 $ 6.34 Total cost of shares repurchased $ 4,821 $ — $ 30,000 $ 15,000 Dollar value of shares that may yet be repurchased under program $ 55,000 $ 45,000 $ 55,000 $ 45,000 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Share Based Compensation [Abstract] | |
Shares Reserved for Issuance | The Company had reserved for issuance as of the dates noted (in thousands): March 31, 2020 June 30, 2019 2013 Equity Incentive Plan shares available for grant 11,368 8,462 Employee stock options and awards outstanding 12,086 10,455 2014 Employee Stock Purchase Plan 7,364 10,085 Total shares reserved for issuance 30,818 29,002 |
Schedule of Recognized Share-based Compensation Expense | Share-based Compensation Expense Share-based compensation expense recognized in the condensed consolidated financial statements by line item caption is as follows (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Cost of product revenue $ 280 $ 223 $ 932 $ 618 Cost of service revenue 368 648 1,220 1,670 Research and development 2,518 2,814 8,213 7,953 Sales and marketing 1,338 3,187 8,568 8,529 General and administrative 2,639 1,942 7,523 5,569 Integration costs — — 479 — Total share-based compensation expense $ 7,143 $ 8,814 $ 26,935 $ 24,339 |
Summary of Stock Award Activity | The following table summarizes stock award activity for the nine months ended March 31, 2020 (in thousands, except grant date fair value): Number of Shares Weighted- Average Grant Date Fair Value Aggregate Fair Market Value Non-vested stock awards outstanding at June 30, 2019 7,736 $ 7.67 Granted 6,299 6.83 Released (3,365 ) 7.11 Cancelled (1,598 ) 7.28 Non-vested stock awards outstanding at March 31, 2020 9,072 $ 7.40 $ 28,033 Vested and expected to vest at March 31, 2020 6,397 $ 7.26 $ 25,947 |
Summary of Stock Option Activity | The following table summarizes stock option activity for the nine months ended March 31, 2020 (in thousands, except per share and contractual term): Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value Options outstanding at June 30, 2019 2,719 $ 4.61 3.26 $ 5,070 Granted 637 6.70 Exercised (217 ) 4.58 Cancelled (125 ) 6.02 Options outstanding at March 31, 2020 3,014 $ 4.99 3.39 $ 524 Vested and expected to vest at March 31, 2020 3,014 $ 4.99 3.39 $ 524 Exercisable at March 31, 2020 1,693 $ 3.78 1.43 $ 524 |
Schedule of Fair Value Assumptions for Stock Options and Employee Stock Purchase Plan Awards | The following assumptions were used to calculate the fair value of shares issued under the ESPP during the following periods: Employee Stock Purchase Plan Employee Stock Purchase Plan Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Expected life 0.5 years 0.5 years 0.5 years 0.5 years Risk-free interest rate 1.56 % 2.46 % 1.71 % 2.35 % Volatility 43 % 75 % 43 % 70 % Dividend yield — % — % — % — % |
Information about Segments an_2
Information about Segments and Geographic Areas (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Long Lived Assets by Segment | The Company’s long-lived assets are attributed to the geographic regions as follows (in thousands): Long-lived Assets March 31, 2020 June 30, 2019 Americas $ 203,865 $ 136,035 EMEA 25,417 28,744 APAC 17,573 11,529 Total long-lived assets $ 246,855 $ 176,308 |
Restructuring Charges, Net of_2
Restructuring Charges, Net of Reversals and Impairment, and Related Charges (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Liabilities | Restructuring liabilities related to severance and benefits obligations are recorded in “Other accrued liabilities” in the accompanying condensed consolidated balance sheets. Total restructuring and related liabilities as of March 31, 2020 consist of (in thousands): Excess Facilities Severance Benefits Total Balance as of June 30, 2019 $ 1,764 $ 3,559 $ 5,323 Period charges — 12,257 12,257 Period reversals — (1,044 ) (1,044 ) Reclassification to reduce operating lease assets (1,764 ) — (1,764 ) Period payments — (8,568 ) (8,568 ) Balance as of March 31, 2020 $ — $ 6,204 $ 6,204 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of net loss per share of basic and diluted (in thousands, except per share data): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Net loss $ (44,352 ) $ (6,932 ) $ (105,628 ) $ (8,798 ) Weighted-average shares used in per share calculation - basic and diluted 119,162 117,944 119,648 117,619 Net loss per share - basic and diluted $ (0.37 ) $ (0.06 ) $ (0.88 ) $ (0.07 ) |
Schedule of Antidilutive Securities Excluded from Earnings Per Share Calculation | The following securities were excluded from the computation of net loss per diluted share of common stock for the periods presented as their effect would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019 Options to purchase common stock 3,090 780 3,055 621 Restricted stock units 9,204 1,907 9,676 888 Employee Stock Purchase Plan shares 742 965 742 965 Total shares excluded 13,036 3,652 13,473 2,474 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narratives) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jul. 01, 2019 |
Significant Accounting Policies [Line Items] | ||
Operating lease, right-of-use asset | $ 53,015 | |
Operating lease, liability | $ 72,052 | |
ASU 2016-02 | ||
Significant Accounting Policies [Line Items] | ||
Operating lease, right-of-use asset | $ 64,600 | |
Operating lease, liability | $ 79,500 |
Revenues (Narratives) (Details)
Revenues (Narratives) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)Distribution_Channels | Mar. 31, 2019USD ($) | Jun. 30, 2019USD ($) | |
Disaggregation Of Revenue [Line Items] | |||||
Number of distribution channels | Distribution_Channels | 2 | ||||
Estimated selling price determination approach | Certain of the Company’s contracts have multiple performance obligations, as the promise to transfer individual goods or services is separately identifiable from other promises in the contracts and, therefore, is distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using the best estimated selling price approach. | ||||
Remaining revenue performance obligations | $ 271.7 | $ 271.7 | |||
Revenue recognized for deferred revenue balance | 64.3 | $ 54.8 | 116.7 | $ 110.8 | |
Lease revenue | 2.2 | 2.7 | $ 6.9 | 8.6 | |
Commission Fees | |||||
Disaggregation Of Revenue [Line Items] | |||||
Revenue, practical expedient, incremental cost of obtaining contract [true false] | true | ||||
Contract costs capitalized, balances amount | $ 7.4 | $ 7.4 | $ 6.5 | ||
Contract costs capitalized, amortization period | 3 years | 3 years | |||
Contract costs capitalized, amortization method | straight-line basis | ||||
Contract costs capitalized, amortization expense | $ 1.1 | $ 0.8 | $ 4.1 | $ 2.2 |
Revenues (Narratives) (Details
Revenues (Narratives) (Details 1) | 9 Months Ended |
Mar. 31, 2020 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Percentage of remaining performance obligations expected to recognize, period | 1 year |
Percentage of remaining performance obligations expected to recognize | 24.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-07-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Percentage of remaining performance obligations expected to recognize, period | 1 year |
Percentage of remaining performance obligations expected to recognize | 46.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-07-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Percentage of remaining performance obligations expected to recognize, period | 1 year |
Percentage of remaining performance obligations expected to recognize, description | thereafter |
Percentage of remaining performance obligations expected to recognize | 30.00% |
Revenues (Schedule of Revenue D
Revenues (Schedule of Revenue Disaggregated by Sales Channel and Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | $ 209,519 | $ 250,864 | $ 732,497 | $ 743,430 |
Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 95,164 | 130,685 | 376,438 | 392,653 |
Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 114,355 | 120,179 | 356,059 | 350,777 |
United States | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 95,057 | 128,167 | 349,113 | 344,111 |
United States | Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 38,666 | 72,071 | 168,755 | 172,752 |
United States | Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 56,391 | 56,096 | 180,358 | 171,359 |
Other Americas | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 9,058 | 10,519 | 31,839 | 34,387 |
Other Americas | Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 3,277 | 4,930 | 15,496 | 17,893 |
Other Americas | Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 5,781 | 5,589 | 16,343 | 16,494 |
Total Americas | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 104,115 | 138,686 | 380,952 | 378,498 |
Total Americas | Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 41,943 | 77,001 | 184,251 | 190,645 |
Total Americas | Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 62,172 | 61,685 | 196,701 | 187,853 |
EMEA | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 83,609 | 83,910 | 281,346 | 288,728 |
EMEA | Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 49,979 | 48,834 | 173,825 | 190,041 |
EMEA | Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 33,630 | 35,076 | 107,521 | 98,687 |
APAC | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 21,795 | 28,268 | 70,199 | 76,204 |
APAC | Distributor | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | 3,242 | 4,850 | 18,362 | 11,967 |
APAC | Direct | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net Revenues | $ 18,553 | $ 23,418 | $ 51,837 | $ 64,237 |
Revenues (Schedule of Major Cus
Revenues (Schedule of Major Customers Accounting for 10% or More of Net Revenues and Accounts Receivable Balance) (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | ||
Westcon Group Inc. | Net Revenue | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | 19.00% | 12.00% | 14.00% | 13.00% | ||
Westcon Group Inc. | Accounts Receivable | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | [1] | 14.00% | ||||
Jenne Corporation | Net Revenue | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | [2] | 21.00% | 13.00% | 15.00% | ||
Jenne Corporation | Accounts Receivable | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | 10.00% | 35.00% | ||||
Tech Data Corporation | Net Revenue | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | 19.00% | 14.00% | 16.00% | 17.00% | ||
Tech Data Corporation | Accounts Receivable | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (percent) | 11.00% | 12.00% | ||||
[1] | * Less than 10% of accounts receivable. | |||||
[2] | * Less than 10% of net revenue. |
Business Combination (Narrative
Business Combination (Narratives) (Details) - USD ($) $ in Thousands | Aug. 09, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Line Items] | |||||
Acquisition and integration related expenses | $ 5,156 | $ 30,075 | $ 2,613 | ||
Aerohive Networks, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, cash consideration | $ 267,146 | ||||
Business acquisition, date of acquisition | Aug. 9, 2019 | ||||
Revenue | 27,000 | 94,300 | |||
Acquisition and integration related expenses | $ 5,200 | $ 30,100 | |||
Compensation charge associated with acquisition | $ 6,800 |
Business Combination (Component
Business Combination (Components of Aggregate Purchase Consideration) (Details) - Aerohive Networks, Inc. $ in Thousands | Aug. 09, 2019USD ($) |
Business Acquisition [Line Items] | |
Cash paid to acquire outstanding shares | $ 263,616 |
Replacement of stock-based awards | 3,530 |
Aggregate estimated purchase consideration | $ 267,146 |
Business Combination (Summary o
Business Combination (Summary of Preliminary Allocation of Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Aug. 09, 2019 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 331,084 | $ 138,577 | ||
Aerohive Networks, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 44,158 | $ 44,158 | ||
Short-term investments | 45,148 | 45,148 | ||
Accounts receivable, net | 11,753 | 11,753 | ||
Inventories | 19,232 | 16,698 | ||
Prepaid expenses and other current assets | 3,924 | 3,980 | ||
Property and equipment | 2,364 | 2,185 | ||
Operating lease right-of-use assets | 6,336 | 6,336 | ||
Other assets | 2,195 | 2,195 | ||
Debt | (20,000) | (20,000) | ||
Accounts payable | (9,737) | (9,737) | ||
Accrued compensation and benefits | (7,129) | (7,129) | ||
Accrued warranty | (570) | (570) | ||
Other accrued liabilities | (1,960) | (1,960) | ||
Operating lease liabilities | (4,752) | (4,752) | ||
Deferred revenue | (68,415) | (68,415) | ||
Other liabilities | (408) | (408) | ||
Net tangible assets | 22,139 | 19,482 | ||
Identifiable intangible assets | 52,500 | 53,400 | ||
Goodwill | 192,507 | 194,264 | ||
Total intangible assets acquired | 245,007 | 247,664 | ||
Total net assets acquired | 267,146 | $ 267,146 | ||
Aerohive Networks, Inc. | Adjustments | ||||
Business Acquisition [Line Items] | ||||
Inventories | [1] | 2,534 | ||
Prepaid expenses and other current assets | [2] | (56) | ||
Property and equipment | [3] | 179 | ||
Net tangible assets | 2,657 | |||
Identifiable intangible assets | (900) | |||
Goodwill | [1],[2],[3] | (1,757) | ||
Total intangible assets acquired | $ (2,657) | |||
[1] | adjustment of the fair value of inventories acquired | |||
[2] | write-off of an asset with no future economic value as of the Acquisition Date | |||
[3] | adjustment to the value of property and equipment as of the Acquisition Date at an international location, and d) adjustment to the fair value of intangibles |
Business Combination (Schedule
Business Combination (Schedule of Identifiable Intangible Assets Acquired as Part of Acquisition) (Details) - Aerohive Networks, Inc. $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Amount | $ 52,500 |
Developed technology | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Amount | $ 39,100 |
Estimated Useful Life (in years) | 4 years |
Backlog | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Amount | $ 400 |
Estimated Useful Life (in years) | 1 year |
Customer relationships | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Amount | $ 11,400 |
Estimated Useful Life (in years) | 7 years |
Trade names | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Amount | $ 1,600 |
Estimated Useful Life (in years) | 1 year |
Business Combinations (Summary
Business Combinations (Summary of Unaudited Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition Pro Forma Information [Abstract] | ||||
Net revenues | $ 210,255 | $ 282,229 | $ 746,301 | $ 850,337 |
Net loss | $ (37,873) | $ (23,272) | $ (66,720) | $ (83,051) |
Net loss per share - basic and diluted | $ (0.32) | $ (0.20) | $ (0.56) | $ (0.71) |
Shares used in per share calculation - basic and diluted | 119,162 | 117,944 | 119,648 | 117,619 |
Balance Sheet Accounts (Compone
Balance Sheet Accounts (Components of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Finished goods | $ 55,790 | $ 49,492 |
Raw materials | 10,424 | 14,097 |
Total Inventories | $ 66,214 | $ 63,589 |
Balance Sheet Accounts (Compo_2
Balance Sheet Accounts (Components of Property and Equipment) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 172,173 | $ 163,495 |
Less: accumulated depreciation and amortization | (109,212) | (89,941) |
Property and equipment, net | 62,961 | 73,554 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 75,134 | 72,309 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,467 | 29,126 |
Office equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,405 | 10,815 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 52,167 | $ 51,245 |
Balance Sheet Accounts (Narrati
Balance Sheet Accounts (Narratives) (Details) | 9 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Standard hardware warranty period (in months) | 1 year |
Standard software warranty period (in days) | 90 days |
Maximum investment in one obligor or maker (percent) | 10.00% |
Balance Sheet Accounts (Summary
Balance Sheet Accounts (Summary of Product Warranty Liability Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance beginning of period | $ 16,209 | $ 12,808 | $ 14,779 | $ 12,807 |
Warranties assumed due to acquisitions | 570 | |||
New warranties issued | 4,810 | 4,510 | 16,271 | 12,377 |
Warranty expenditures | (5,797) | (4,112) | (16,398) | (11,978) |
Balance end of period | $ 15,222 | $ 13,206 | $ 15,222 | $ 13,206 |
Balance Sheet Accounts (Summa_2
Balance Sheet Accounts (Summary of Long-term Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Acquisition-related deferred payments, less current portion | $ 6,797 | $ 9,604 |
Contingent consideration obligations, less current portion | 626 | 2,688 |
Other contractual obligations, less current portion | 18,707 | 26,261 |
Other | 3,802 | 15,597 |
Total other long-term liabilities | $ 29,932 | $ 54,150 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Interest rate swap contracts | |||||
Assets/Liabilities | |||||
Notional principal amount of forward foreign currency contracts | $ 200,000,000 | $ 200,000,000 | |||
Other Comprehensive Income (Loss) | Interest rate swap contracts | |||||
Assets/Liabilities | |||||
Unrealized loss on interest rate cash flow hedges | (1,000,000) | ||||
Not Designated as Hedging Instrument | Forward Foreign Currency Contracts | |||||
Assets/Liabilities | |||||
Notional principal amount of forward foreign currency contracts | $ 13,300,000 | $ 13,300,000 | |||
Maximum maturities for contracts | 30 days | 30 days | |||
Gain (loss) on foreign currency derivative instruments | $ 100,000 | $ 100,000 | |||
Level 1 Assets and Liabilities | |||||
Assets/Liabilities | |||||
Assets, fair value | 0 | 0 | $ 0 | ||
Liabilities, fair value | 0 | 0 | 0 | ||
Level 2 Assets and Liabilities | |||||
Assets/Liabilities | |||||
Long-term debt, fair value | 425,500,000 | 425,500,000 | 180,500,000 | ||
Transfers of assets between Level 1 and Level 2 | 0 | $ 0 | 0 | $ 0 | |
Transfers of liabilities between Level 1 and Level 2 | 0 | 0 | 0 | 0 | |
Level 3 Assets and Liabilities | |||||
Assets/Liabilities | |||||
Acquisition-related contingent consideration obligations | 6,300,000 | ||||
Acquisition-related contingent consideration obligations | 2,940,000 | 2,940,000 | $ 6,298,000 | ||
Transfers of assets between Level 2 and Level 3 | 0 | 0 | 0 | 0 | |
Transfers of liabilities between Level 2 and Level 3 | 0 | 0 | 0 | 0 | |
Intangible asset and goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value for Financial Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Level 1 | ||
Assets | ||
Total assets measured at fair value | $ 0 | $ 0 |
Liabilities | ||
Total liabilities measured at fair value | 0 | 0 |
Level 3 | ||
Liabilities | ||
Acquisition-related contingent consideration obligations | $ 6,300,000 | |
Recurring | ||
Assets | ||
Foreign currency derivatives | 231,000 | |
Total assets measured at fair value | 231,000 | |
Liabilities | ||
Foreign currency derivatives | 97,000 | |
Interest rate swaps | 958,000 | |
Acquisition-related contingent consideration obligations | 2,940,000 | |
Total liabilities measured at fair value | 3,995,000 | |
Recurring | Level 2 | ||
Assets | ||
Foreign currency derivatives | 231,000 | |
Total assets measured at fair value | 231,000 | |
Liabilities | ||
Foreign currency derivatives | 97,000 | |
Interest rate swaps | 958,000 | |
Total liabilities measured at fair value | 1,055,000 | |
Recurring | Level 3 | ||
Liabilities | ||
Acquisition-related contingent consideration obligations | 2,940,000 | |
Total liabilities measured at fair value | $ 2,940,000 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Change in Acquisition-related Contingent Consideration Obligations) (Details) - Level 3 Assets and Liabilities $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Business Acquisition Contingent Consideration [Line Items] | |
Beginning balance | $ 6,298 |
Payments | (3,448) |
Accretion on discount | 90 |
Ending balance | $ 2,940 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Summary of Goodwill) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance as of June 30, 2019 | $ 138,577 |
Additions due to acquisition | 192,507 |
Balance at end of period | $ 331,084 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Components of Gross and Net Intangible Asset Balances) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Jun. 30, 2019 | |
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 234,066 | $ 181,566 |
Accumulated Amortization | 156,914 | 130,454 |
Net Carrying Amount | $ 77,152 | $ 51,112 |
Developed technology | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 2 years 7 months 6 days | 2 years 4 months 24 days |
Gross Carrying Amount | $ 156,100 | $ 117,000 |
Accumulated Amortization | 97,193 | 77,449 |
Net Carrying Amount | $ 58,907 | $ 39,551 |
Customer relationships | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 4 years 9 months 18 days | 2 years |
Gross Carrying Amount | $ 63,039 | $ 51,639 |
Accumulated Amortization | 48,281 | 44,410 |
Net Carrying Amount | $ 14,758 | $ 7,229 |
Backlogs | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 0 years | |
Gross Carrying Amount | $ 400 | |
Accumulated Amortization | $ 400 | |
Trade names | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 1 year 6 months | 2 years 4 months 24 days |
Gross Carrying Amount | $ 10,700 | $ 9,100 |
Accumulated Amortization | 7,794 | 5,647 |
Net Carrying Amount | $ 2,906 | $ 3,453 |
License agreements | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 5 years 7 months 6 days | 5 years 4 months 24 days |
Gross Carrying Amount | $ 2,445 | $ 2,445 |
Accumulated Amortization | 1,864 | 1,661 |
Net Carrying Amount | $ 581 | $ 784 |
Other intangibles | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Amortization Period | 0 years | 7 months 6 days |
Gross Carrying Amount | $ 1,382 | $ 1,382 |
Accumulated Amortization | $ 1,382 | 1,287 |
Net Carrying Amount | $ 95 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Summary of Amortization Expense of Intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Amortization in “Cost of revenues: Product and Service” | $ 6,629 | $ 4,890 | $ 20,094 | $ 14,726 |
Type Of Cost Good Or Service Extensible List | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Amortization of intangibles in "Operations" | $ 2,059 | $ 1,292 | $ 6,366 | $ 5,008 |
Total amortization | $ 8,688 | $ 6,182 | $ 26,460 | $ 19,734 |
Debt (Components of Debt) (Deta
Debt (Components of Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Line Of Credit Facility [Line Items] | ||
Less: unamortized debt issuance costs | $ (2,181) | $ (489) |
Current portion of long-term debt | 16,819 | 9,011 |
Less: unamortized debt issuance costs | (6,796) | (1,261) |
Long-term debt, less current portion | 399,704 | 169,739 |
Total debt | 416,523 | 178,750 |
Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Current portion of long-term debt | 19,000 | 9,500 |
Long-term debt, less current portion | 351,500 | $ 171,000 |
Revolving Facility | ||
Line Of Credit Facility [Line Items] | ||
Long-term debt, less current portion | $ 55,000 |
Debt (Narratives) (Details)
Debt (Narratives) (Details) - USD ($) | Aug. 09, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | May 08, 2020 | Apr. 30, 2020 |
Line Of Credit Facility [Line Items] | |||||||
Outstanding letters of credit | $ 7,700,000 | $ 7,700,000 | |||||
Subsequent Event | |||||||
Line Of Credit Facility [Line Items] | |||||||
Euro dollar rate | 4.50% | ||||||
Interest Expense | |||||||
Line Of Credit Facility [Line Items] | |||||||
Amortization of deferred financing costs | 600,000 | $ 200,000 | 1,800,000 | $ 500,000 | |||
2019 Credit Agreement | |||||||
Line Of Credit Facility [Line Items] | |||||||
Amortization of deferred financing costs | $ 1,600,000 | ||||||
Deferred financing cost | $ 10,500,000 | $ 10,500,000 | |||||
Debt instrument interest rate | 5.10% | ||||||
2019 Credit Agreement | First Amendment | |||||||
Line Of Credit Facility [Line Items] | |||||||
Amendment start date | Apr. 8, 2020 | ||||||
2019 Credit Agreement | Second Amendment | |||||||
Line Of Credit Facility [Line Items] | |||||||
Amendment start date | May 8, 2020 | ||||||
2019 Credit Agreement | Term Loan | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit Facility, term | 5 years | ||||||
Borrowing capacity from Credit Agreement | $ 380,000,000 | ||||||
2019 Credit Agreement | Revolving Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Credit Facility, term | 5 years | ||||||
Borrowing capacity from Credit Agreement | $ 75,000,000 | ||||||
2019 Credit Agreement | Revolving Facility | Subsequent Event | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings available under facility | $ 55,000,000 | ||||||
Initial Term Loan | Applicable Margin for Eurodollar | |||||||
Line Of Credit Facility [Line Items] | |||||||
Base rate | 0.00% | ||||||
Initial Term Loan | Revolving Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Commitment fee | 0.35% | ||||||
Maximum | 2019 Credit Agreement | |||||||
Line Of Credit Facility [Line Items] | |||||||
Additional incremental loan facility that may be requested | $ 100,000,000 | ||||||
Maximum | Initial Term Loan | Applicable Margin for Eurodollar | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings, interest rate | 3.50% | ||||||
Maximum | Initial Term Loan | Applicable Margin for Base Rate | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings, interest rate | 2.50% | ||||||
Maximum | Initial Term Loan | Revolving Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Commitment fee | 0.40% | ||||||
Minimum | Initial Term Loan | Applicable Margin for Eurodollar | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings, interest rate | 1.25% | ||||||
Minimum | Initial Term Loan | Applicable Margin for Base Rate | |||||||
Line Of Credit Facility [Line Items] | |||||||
Borrowings, interest rate | 0.25% | ||||||
Minimum | Initial Term Loan | Revolving Facility | |||||||
Line Of Credit Facility [Line Items] | |||||||
Commitment fee | 0.25% |
Leases (Narratives) (Details)
Leases (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee Lease Description [Line Items] | ||||
Lease option to extend, description | Some lease terms include one or more options to renew. | |||
Lease, existence of option to extend | true | |||
Sublease income | $ 0.6 | $ 1.9 | ||
Product Revenues | $ 2.2 | $ 2.7 | $ 6.9 | $ 8.6 |
Minimum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Sublease term | 5 years | |||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Sublease term | 6 years | |||
Facilities | Minimum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 1 year | 1 year | ||
Facilities | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 8 years | 8 years | ||
Equipment | Minimum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 1 year | 1 year | ||
Equipment | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 5 years | 5 years | ||
Vehicles | Minimum [Member] | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 1 year | 1 year | ||
Vehicles | Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Lease term | 5 years | 5 years | ||
Hardware | ||||
Lessee Lease Description [Line Items] | ||||
Lease termination rights period | 60 days | |||
Lease term | 3 years | 3 years | ||
Hardware | Product | ||||
Lessee Lease Description [Line Items] | ||||
Product Revenues | $ 2.2 | $ 2.7 | $ 6.9 | $ 8.6 |
Leases (Summary of Activity and
Leases (Summary of Activity and Other Information Relating to Operating Leases) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Leases [Abstract] | ||
Operating lease costs | $ 4,871 | $ 14,874 |
Variable lease costs | 1,613 | 4,548 |
Cash paid for amounts included in the measurement of operating liabilities | 5,328 | 16,159 |
ROU assets obtained for new lease obligations | $ 1,103 | 2,525 |
ROU assets obtained from Aerohive business combination | $ 6,336 | |
Weighted average remaining lease term (in years) | 4 years 6 months | 4 years 6 months |
Weighted Average Discount Rate | 4.50% | 4.50% |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Operating Lease Liabilities) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating Leases | |
2020 (remaining three months) | $ 5,356 |
2021 | 20,509 |
2022 | 19,351 |
2023 | 15,666 |
2024 | 6,333 |
Thereafter | 12,396 |
Total future minimum lease payments | 79,611 |
Less amount representing interest | 7,559 |
Total operating lease liabilities | 72,052 |
Operating lease liabilities, current | 18,197 |
Operating lease liabilities, non-current | $ 53,855 |
Leases (Schedule of Minimum Fut
Leases (Schedule of Minimum Future Rentals on Non-Cancellable Operating Leases) (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2020 | $ 22,733 |
2021 | 21,174 |
2022 | 20,680 |
2023 | 17,828 |
2024 | 5,976 |
Thereafter | 16,287 |
Total lease payments | $ 104,678 |
Commitments and Contingencies (
Commitments and Contingencies (Narratives) (Details) ¥ in Millions | Mar. 24, 2020USD ($) | Jun. 20, 2019USD ($) | Jun. 20, 2019CNY (¥) | Mar. 31, 2020USD ($) |
Shenzhen Dunjun Technology Ltd. v. Aerohive Networks (Hangzhou) Ltd | ||||
Commitments And Contingencies [Line Items] | ||||
Damages claims amount | $ 1,400,000 | ¥ 10 | ||
Proven Networks L L C V Extreme Networks Inc | ||||
Commitments And Contingencies [Line Items] | ||||
Number of patents allegedly infringed | 3 | |||
Non-cancelable Inventory and Other Services Purchase Commitments | ||||
Commitments And Contingencies [Line Items] | ||||
Purchase commitments | $ 37,100,000 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narratives) (Details) - USD ($) | Jan. 24, 2020 | Nov. 07, 2019 | Nov. 08, 2018 | Feb. 29, 2020 | Nov. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Nov. 02, 2018 |
Class Of Stock [Line Items] | |||||||||
Stock repurchase, authorized amount | $ 100,000,000 | $ 60,000,000 | |||||||
Maximum amount of common stock may be repurchased in calendar year | $ 35,000,000 | $ 35,000,000 | |||||||
Stock repurchase, increase in authorized amount | 40,000,000 | ||||||||
Stock repurchase decrease in authorized amount | $ 30,000,000 | ||||||||
Stock repurchase, extended period | 3 years | ||||||||
Stock repurchase, extended period, effective date | Feb. 5, 2020 | ||||||||
Payment for intial delivery of shares | $ 30,000,000 | $ 15,000,000 | |||||||
Equity forward contract | $ 4,821,000 | ||||||||
Total number of shares repurchased | 381,000 | 4,232,000 | 2,366,000 | ||||||
Accelerated Share Repurchase Agreement "November 2019" | |||||||||
Class Of Stock [Line Items] | |||||||||
Payment for intial delivery of shares | $ 30,000,000 | ||||||||
Initial delivery of shares repurchased | 3,850,000 | ||||||||
Value of initial share delivery repurchased | $ 25,200,000 | ||||||||
Equity forward contract | $ 4,800,000 | ||||||||
Forward contract settlement date | Jan. 24, 2020 | ||||||||
Additional shares of common stock received | 381,505 | ||||||||
Total number of shares repurchased | 4,231,505 | ||||||||
Average cash purchase price paid | $ 7.09 | ||||||||
2013 Equity Incentive Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Increase in authorized shares for issuance | 7,000,000 | ||||||||
2014 Employee Stock Purchase Plan | |||||||||
Class Of Stock [Line Items] | |||||||||
Increase in authorized shares for issuance | 7,500,000 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Share Repurchases Under Stock Award Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||||
Total number of shares repurchased | 381,000 | 4,232,000 | 2,366,000 | |
Average price paid per share | $ 12.64 | $ 7.09 | $ 6.34 | |
Total cost of shares repurchased | $ 4,821 | $ 30,000 | $ 15,000 | |
Dollar value of shares that may yet be repurchased under program | $ 55,000 | $ 45,000 | $ 55,000 | $ 45,000 |
Employee Benefit Plans (Shares
Employee Benefit Plans (Shares Reserved for Issuance) (Details) - shares shares in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 30,818 | 29,002 |
2014 Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 7,364 | 10,085 |
Employee Stock Options and Awards Outstanding | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 12,086 | 10,455 |
2013 Equity Incentive Plan Shares Available for Grant | ||
Class Of Stock [Line Items] | ||
Shares reserved for issuance | 11,368 | 8,462 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narratives) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019Quarter$ / shares | Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2019USD ($)$ / sharesshares | Jun. 30, 2019Quarter$ / sharesshares | Jun. 30, 2018Quarter$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares outstanding for options and awards | 3,014,000 | 3,014,000 | 2,719,000 | ||||
Share-based compensation expense | $ | $ 0 | $ 0 | $ 0 | $ 0 | |||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ / shares | $ 6.70 | ||||||
Awards granted | 6,299,000 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, award vesting percentage | The RSUs granted during the nine months ended March 31, 2020 vest from the original grant date as to one-third (1/3) on the one-year anniversary and one-twelfth (1/12) each quarter thereafter, subject to continued service to the Company. | ||||||
Performance Shares | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Performance stock unit vesting, consecutive quarters | Quarter | 2 | 2 | 2 | ||||
Performance stock unit vesting, earnings per share threshold one | $ / shares | $ 0.20 | $ 0.20 | |||||
Performance stock unit vesting, earnings per share threshold two | $ / shares | $ 0.09 | ||||||
Performance Shares | Minimum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Performance stock unit vesting, earnings per share | $ / shares | $ 0.20 | ||||||
Executive Officers and Directors | Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Awards granted | 566,038 | ||||||
Executive Officers And Other Vice President Level Employee | Performance Shares | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Awards granted | 600,000 | 600,000 | |||||
Aerohive 2014 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Shares outstanding for options and awards | 736,796 | 736,796 | |||||
2014 Employee Stock Purchase Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ / shares | $ 1.76 | $ 2.69 | $ 1.90 | $ 2.71 | |||
Shares issued under stock purchase plan | 1,498,155 | 1,499,042 | 2,721,699 | 2,779,750 |
Employee Benefit Plans (Schedul
Employee Benefit Plans (Schedule of Recognized Share-based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 7,143 | $ 8,814 | $ 26,935 | $ 24,339 |
Cost of Product Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 280 | 223 | 932 | 618 |
Cost of Service Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 368 | 648 | 1,220 | 1,670 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 2,518 | 2,814 | 8,213 | 7,953 |
Sales and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,338 | 3,187 | 8,568 | 8,529 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,639 | $ 1,942 | 7,523 | $ 5,569 |
Integration Costs | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 479 |
Employee Benefit Plans (Summary
Employee Benefit Plans (Summary of Stock Award Activity) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Number of Shares | |
Non-vested stock awards outstanding at June 30, 2019 | shares | 7,736 |
Granted | shares | 6,299 |
Released | shares | (3,365) |
Cancelled | shares | (1,598) |
Non-vested stock awards outstanding at March 31, 2020 | shares | 9,072 |
Vested and expected to vest at March 31, 2020 | shares | 6,397 |
Weighted-Average Grant Date Fair Value | |
Non-vested stock awards outstanding at June 30, 2019 | $ / shares | $ 7.67 |
Granted | $ / shares | 6.83 |
Released | $ / shares | 7.11 |
Cancelled | $ / shares | 7.28 |
Non-vested stock awards outstanding at March 31, 2020 | $ / shares | 7.40 |
Vested and expected to vest at March 31, 2020 | $ / shares | $ 7.26 |
Aggregate Fair Market Value | |
Non-vested stock awards outstanding at March 31, 2020 | $ | $ 28,033 |
Vested and expected to vest at March 31, 2020 | $ | $ 25,947 |
Employee Benefit Plans (Summa_2
Employee Benefit Plans (Summary of Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Jun. 30, 2019 | |
Number of Shares | ||
Options outstanding at June 30, 2019 | 2,719 | |
Granted | 637 | |
Exercised | (217) | |
Cancelled | (125) | |
Options outstanding at March 31, 2020 | 3,014 | 2,719 |
Vested and expected to vest at March 31, 2020 | 3,014 | |
Exercisable at March 31, 2020 | 1,693 | |
Weighted-Average Exercise Price Per Share | ||
Options outstanding at June 30, 2019 | $ 4.61 | |
Granted | 6.70 | |
Exercised | 4.58 | |
Cancelled | 6.02 | |
Options outstanding at March 31, 2020 | 4.99 | $ 4.61 |
Vested and expected to vest at March 31, 2020 | 4.99 | |
Exercisable at March 31, 2020 | $ 3.78 | |
Weighted-Average Remaining Contractual Term | ||
Options outstanding | 3 years 4 months 20 days | 3 years 3 months 3 days |
Vested and expected to vest at March 31, 2020 | 3 years 4 months 20 days | |
Exercisable at March 31, 2020 | 1 year 5 months 4 days | |
Aggregate Intrinsic Value | ||
Options outstanding | $ 524 | $ 5,070 |
Vested and expected to vest at March 31, 2020 | 524 | |
Exercisable at March 31, 2020 | $ 524 |
Employee Benefit Plans (Sched_2
Employee Benefit Plans (Schedule of Fair Value Assumptions for Stock Options and Employee Stock Purchase Plan Awards) (Details) - Employee Stock Purchase Plan | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life | 6 months | 6 months | 6 months | 6 months |
Risk-free interest rate | 1.56% | 2.46% | 1.71% | 2.35% |
Volatility | 43.00% | 75.00% | 43.00% | 70.00% |
Information about Segments an_3
Information about Segments and Geographic Areas (Narratives) (Details) | 9 Months Ended |
Mar. 31, 2020SegmentGeographic_Area | |
Segment Reporting [Abstract] | |
Number of operating segments | Segment | 1 |
Number of geographic regions | Geographic_Area | 3 |
Information about Segments an_4
Information about Segments and Geographic Areas (Schedule of Long Lived Assets by Segment) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 246,855 | $ 176,308 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 203,865 | 136,035 |
EMEA | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | 25,417 | 28,744 |
APAC | ||
Segment Reporting Information [Line Items] | ||
Total long-lived assets | $ 17,573 | $ 11,529 |
Derivatives and Hedging (Narrat
Derivatives and Hedging (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||||
Foreign currency transactions realized gain (loss) | $ 0.9 | $ 0.1 | $ 1.1 | $ 0.1 |
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Notional principal amount of forward foreign currency contracts | 200 | $ 200 | ||
Maturity date | Apr. 30, 2023 | |||
Unrealized loss on interest rate cash flow hedges | $ 1 | |||
Estimated interest expense over next twelve months | 0.1 | |||
Not Designated as Hedging Instrument | Forward Foreign Currency Contracts | ||||
Derivative [Line Items] | ||||
Notional principal amount of forward foreign currency contracts | 13.3 | 13.3 | ||
Foreign currency transactions realized gain (loss) | $ 0.1 | $ 0.1 | ||
Maximum maturities for contracts | 30 days |
Restructuring Charges, Net of_3
Restructuring Charges, Net of Reversals and Impairment, and Related Charges (Narratives) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020USD ($)EMP | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Restructuring And Related Activities [Abstract] | |||||
Restructuring charges, net of reversals and impairment | $ 6,648 | $ 19,407 | $ 1,282 | ||
Facility related charges | 300 | 8,200 | |||
Severance and benefits charges | 6,300 | $ 2,700 | $ 2,200 | $ 11,200 | |
Restructuring charges related to exited facilities | $ 5,800 | $ 3,900 | |||
Charges for impairment of right-of-use assets | 2,800 | ||||
Impairment of long-lived assets | 900 | ||||
Exited facility related charges | $ 200 | ||||
Number of employee affected | EMP | 300 | ||||
Additional severance and benefits charges | $ 500 |
Restructuring Charges, Net of_4
Restructuring Charges, Net of Reversals and Impairment, and Related Charges (Restructuring Liabilities) (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | $ 5,323 |
Period charges | 12,257 |
Period reversals | (1,044) |
Reclassification to reduce operating lease assets | (1,764) |
Period payments | (8,568) |
Ending balance | 6,204 |
Excess Facilities | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | 1,764 |
Period charges | 0 |
Period reversals | 0 |
Reclassification to reduce operating lease assets | (1,764) |
Period payments | 0 |
Ending balance | 0 |
Severance Benefits | |
Restructuring Cost And Reserve [Line Items] | |
Beginning balance | 3,559 |
Period charges | 12,257 |
Period reversals | (1,044) |
Reclassification to reduce operating lease assets | 0 |
Period payments | (8,568) |
Ending balance | $ 6,204 |
Income Taxes (Narratives) (Deta
Income Taxes (Narratives) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Income tax provision (benefit) | $ 1,557,000 | $ 1,877,000 | $ 4,949,000 | $ (1,991,000) | |
Remaining state net operating loss | 0 | $ 0 | 0 | $ 0 | |
Unrecognized tax benefits | 24,600,000 | 24,600,000 | |||
Unrecognized tax benefit future impact if recognized | $ 24,600,000 | $ 24,600,000 | |||
ASU 2016-16 | Ireland | Subsidiary | |||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred tax asset relating to a transfer of certain assets to subsidiary | $ 3,700,000 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Earnings Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (44,352) | $ (6,932) | $ (105,628) | $ (8,798) |
Shares used in per share calculation - basic and diluted | 119,162 | 117,944 | 119,648 | 117,619 |
Net loss per share - basic and diluted | $ (0.37) | $ (0.06) | $ (0.88) | $ (0.07) |
Net Loss Per Share (Schedule _2
Net Loss Per Share (Schedule of Anti-Dilutive Shares Excluded from Earnings Per Share Calculation) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 13,036 | 3,652 | 13,473 | 2,474 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 3,090 | 780 | 3,055 | 621 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 9,204 | 1,907 | 9,676 | 888 |
Employee Stock Purchase Plan shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS | 742 | 965 | 742 | 965 |