Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2015 | Jan. 25, 2016 | |
Document And Entity Information [Abstract] | ||
Trading Symbol | CVLT | |
Entity Registrant Name | COMMVAULT SYSTEMS INC | |
Entity Central Index Key | 1,169,561 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 45,166,564 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 316,396 | $ 337,673 |
Short-term investments | 84,710 | 49,936 |
Trade accounts receivable, less allowance for doubtful accounts of $309 at December 31, 2015 and $104 at March 31, 2015 | 114,591 | 117,716 |
Prepaid expenses and other current assets | 17,052 | 20,084 |
Total current assets | 532,749 | 525,409 |
Deferred tax assets, net | 49,115 | 41,045 |
Property and equipment, net | 137,210 | 140,208 |
Equity method investment | 4,576 | 0 |
Other assets | 6,913 | 6,804 |
Total assets | 730,563 | 713,466 |
Current liabilities: | ||
Accounts payable | 762 | 860 |
Accrued liabilities | 69,980 | 72,757 |
Deferred revenue | 184,439 | 184,312 |
Total current liabilities | 255,181 | 257,929 |
Deferred revenue, less current portion | 45,924 | 45,423 |
Other liabilities | $ 3,891 | $ 3,104 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding at December 31, 2015 and March 31, 2015 | $ 0 | $ 0 |
Common stock, $0.01 par value: 250,000 shares authorized, 45,405 shares and 45,122 shares issued and outstanding at December 31, 2015 and March 31, 2015, respectively | 453 | 451 |
Additional paid-in capital | 593,472 | 539,565 |
Accumulated deficit | (158,678) | (125,502) |
Accumulated other comprehensive loss | (9,680) | (7,504) |
Total stockholders’ equity | 425,567 | 407,010 |
Total liabilities and stockholders’ equity | $ 730,563 | $ 713,466 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade accounts receivable | $ 309 | $ 104 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 45,405,000 | 45,122,000 |
Common stock, shares outstanding (in shares) | 45,405,000 | 45,122,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | ||||
Software | $ 71,389 | $ 71,729 | $ 185,449 | $ 213,202 |
Services | 84,307 | 81,292 | 250,112 | 243,606 |
Total revenues | 155,696 | 153,021 | 435,561 | 456,808 |
Cost of revenues: | ||||
Software | 530 | 587 | 1,595 | 1,834 |
Services | 19,899 | 19,354 | 60,320 | 59,320 |
Total cost of revenues | 20,429 | 19,941 | 61,915 | 61,154 |
Gross margin | 135,267 | 133,080 | 373,646 | 395,654 |
Operating expenses: | ||||
Sales and marketing | 91,393 | 85,925 | 263,017 | 249,933 |
Research and development | 17,963 | 16,468 | 50,876 | 47,343 |
General and administrative | 20,002 | 23,103 | 59,717 | 58,350 |
Depreciation and amortization | 2,400 | 2,687 | 7,336 | 6,013 |
Total operating expenses | 131,758 | 128,183 | 380,946 | 361,639 |
Income (loss) from operations | 3,509 | 4,897 | (7,300) | 34,015 |
Interest expense | (234) | (228) | (692) | (446) |
Interest income | 207 | 202 | 587 | 592 |
Income (loss) before income taxes | 3,482 | 4,871 | (7,405) | 34,161 |
Income tax expense (benefit) | (1,396) | 1,798 | (1,747) | 11,863 |
Net income (loss) | $ 4,878 | $ 3,073 | $ (5,658) | $ 22,298 |
Net income (loss) per common share: | ||||
Basic (in dollars per share) | $ 0.11 | $ 0.07 | $ (0.12) | $ 0.49 |
Diluted (in dollars per share) | $ 0.10 | $ 0.07 | $ (0.12) | $ 0.47 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 45,315 | 45,331 | 45,339 | 45,610 |
Diluted (in shares) | 46,577 | 46,976 | 45,339 | 47,385 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 4,878 | $ 3,073 | $ (5,658) | $ 22,298 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (496) | (2,509) | (2,176) | (3,930) |
Comprehensive income (loss) | $ 4,382 | $ 564 | $ (7,834) | $ 18,368 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - 9 months ended Dec. 31, 2015 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid – In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2015 | 45,122 | ||||
Beginning balance at Mar. 31, 2015 | $ 407,010 | $ 451 | $ 539,565 | $ (125,502) | $ (7,504) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 47,516 | 47,516 | |||
Tax benefits relating to stock-based payments | 3,677 | 3,677 | |||
Share issuances related to stock-based compensation (in shares) | 1,248 | ||||
Share issuances related to stock-based compensation | 9,778 | $ 12 | 9,766 | ||
Repurchase of common stock (in shares) | (965) | ||||
Repurchase of common stock | (34,580) | $ (10) | (7,052) | (27,518) | |
Net loss | (5,658) | (5,658) | |||
Other comprehensive loss | (2,176) | (2,176) | |||
Ending balance (in shares) at Dec. 31, 2015 | 45,405 | ||||
Ending balance at Dec. 31, 2015 | $ 425,567 | $ 453 | $ 593,472 | $ (158,678) | $ (9,680) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | ||
Net income (loss) | $ (5,658) | $ 22,298 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 8,509 | 6,232 |
Noncash stock-based compensation | 47,516 | 45,501 |
Excess tax benefits from stock-based compensation | (6,263) | (4,221) |
Deferred income taxes | (7,880) | 1,803 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | 2,186 | 45 |
Prepaid expenses and other current assets | 2,845 | (10,683) |
Other assets | (397) | 578 |
Accounts payable | (625) | 46 |
Accrued liabilities | 4,020 | 6,093 |
Deferred revenue | 2,984 | 21,442 |
Other liabilities | (3) | (1,269) |
Net cash provided by operating activities | 47,234 | 87,865 |
Cash flows from investing activities | ||
Purchase of short-term investments | (72,235) | (56,458) |
Proceeds from maturity of short-term investments | 37,461 | 31,478 |
Purchases of equity method investment | (4,576) | 0 |
Purchases for corporate campus headquarters | (2,111) | (50,308) |
Purchase of property and equipment | (5,007) | (3,742) |
Net cash used in investing activities | (46,468) | (79,030) |
Cash flows from financing activities | ||
Repurchase of common stock | (34,580) | (155,125) |
Debt issuance costs | 0 | (1,262) |
Proceeds from the exercise of stock options and the Employee Stock Purchase Plan | 9,778 | 12,057 |
Excess tax benefits from stock-based compensation | 6,263 | 4,221 |
Net cash used in financing activities | (18,539) | (140,109) |
Effects of exchange rate — changes in cash | (3,504) | (11,513) |
Net decrease in cash and cash equivalents | (21,277) | (142,787) |
Cash and cash equivalents at beginning of period | 337,673 | 457,733 |
Cash and cash equivalents at end of period | 316,396 | 314,946 |
Supplemental disclosures of cash flow information | ||
Purchases for corporate campus headquarters in accounts payable and accrued expenses | $ 0 | $ 4,832 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Commvault Systems, Inc. and its subsidiaries (“Commvault” or the “Company”) is a leading provider of data and information management software applications and related services. The Company develops, markets and sells a suite of software applications and services, primarily in North America, Europe, Australia and Asia, that provides its customers with high-performance data protection, including backup and recovery; data migration and archiving; snapshot management and replication of data; integrated source, and target data deduplication; eDiscovery and compliance solutions; self-service access; a secure virtual repository using Commvault ContentStore; enterprise-wide search capabilities; protection, recovery and discovery of data in virtual server and cloud environments; and robust built-in analytics and troubleshooting tools. The Company’s unified suite of data and information management software applications shares an underlying architecture that has been developed to minimize the cost and complexity of managing data on globally distributed and networked storage infrastructures. The Company also provides its customers with a broad range of professional and customer support services. The consolidated financial statements as of December 31, 2015 and for the three and nine months ended December 31, 2015 and 2014 are unaudited, and in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for fiscal 2015 . The results reported in these financial statements should not necessarily be taken as indicative of results that may be expected for the entire fiscal year. The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments and estimates that affect the amounts reported in the Company’s consolidated financial statements and the accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of revenues and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, allowance for doubtful accounts, income taxes and related reserves, stock-based compensation and accounting for research and development costs. Actual results could differ from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no other significant changes in the Company’s accounting policies during the nine months ended December 31, 2015 as compared to the significant accounting policies described in its Annual Report on Form 10-K for the year ended March 31, 2015 . Recently Issued Accounting Standards In November 2015, the Financial Accounting Standards Board ("FASB") issued new accounting guidance regarding balance sheet classification of deferred taxes. The guidance requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent. The Company has elected to early adopt the guidance on a retrospective basis. The adoption had an effect on the Consolidated Balance sheet as of March 31, 2015 and no effect on the Consolidated Statement of Income (Loss), Comprehensive Income (Loss), Cash Flow, or Statement of Stockholder’s Equity. The following table summarizes the Company's As Reported and As Adjusted changes to the Consolidated Balance Sheet at March 31, 2015. March 31, As Reported As Adjusted Current assets: Deferred tax assets, net $ 16,142 $ — Total Current Assets $ 541,551 $ 525,409 Deferred tax assets, net $ 24,903 $ 41,045 In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." This amendment provides principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will apply to the Company in fiscal 2019 with early adoption allowable in fiscal 2018. The Company is currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption. There have been no other accounting pronouncements issued but not yet adopted by the Company which are expected to have a material impact on the Company’s financial position, results of operations or cash flows. Revenue Recognition The Company derives revenues from two primary sources: software licenses and services. Services include customer support, consulting, assessment and design services, installation services and training. A typical sales arrangement includes both licenses and services. For sales arrangements involving multiple elements, the Company recognizes revenue using the residual method. Under the residual method, the Company allocates and defers revenue for the undelivered elements based on fair value and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of the undelivered elements in multiple-element arrangements is based on the price charged when such elements are sold separately, which is commonly referred to as vendor-specific objective-evidence, or VSOE. The Company’s software licenses typically provide for a perpetual right to use the Company’s software and are sold on a per terabyte basis, on a per-copy basis, as site licenses or as a solution set. Software licenses sold on a capacity basis provide the customer with unlimited licenses of specified software products based on a defined level of terabytes of data under management. Site licenses give the customer the additional right to deploy the software on a limited basis during a specified term. Solution sets are generally sold on a per unit basis such as per virtual machine for our virtual machine backup, recovery and cloud management solution set; per mailbox for our email archive solution set and per user for our endpoint data protection solution set. The Company recognizes software revenue through direct sales channels upon receipt of a purchase order or other persuasive evidence and when all other basic revenue recognition criteria are met as described below. The Company recognizes software revenue through all indirect sales channels on a sell-through model. A sell-through model requires that the Company recognize revenue when the basic revenue recognition criteria are met as described below and these channels complete the sale of the Company’s software products to the end-user. Revenue from software licenses sold through an original equipment manufacturer partner is recognized upon the receipt of a royalty report or purchase order from that original equipment manufacturer partner. Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year. To determine the price for the customer support element when sold separately, the Company primarily uses historical renewal rates. Historical renewal rates are supported by performing an analysis in which the Company segregates its customer support renewal contracts into different classes based on specific criteria including, but not limited to, the dollar amount of the software purchased, the level of customer support being provided and the distribution channel. As a result of this analysis, the Company has concluded that it has established VSOE for the different classes of customer support when the support is sold as part of a multiple-element sales arrangement. The Company’s determination of fair value for customer support has not changed for the periods presented. The Company’s other professional services include consulting services, implementation and post-deployment services and education services. Other professional services provided by the Company are not mandatory and can also be performed by the customer or a third-party. In addition to a signed purchase order, the Company’s consulting services and implementation and post-deployment services are, in some cases, evidenced by a Statement of Work, which defines the specific scope of such services to be performed when sold and performed on a stand-alone basis or included in multiple-element sales arrangements. Revenues from consulting services and implementation and post-deployment services are based upon a daily or weekly rate and are recognized when the services are completed. Education services include courses taught by the Company’s instructors or third-party contractors either at one of the Company’s facilities or at the customer’s site. Education services fees are recognized as revenue after the course has been provided. Based on the Company’s analysis of such other professional services transactions sold on a stand-alone basis, the Company has concluded it has established VSOE for such other professional services when sold in connection with a multiple-element sales arrangement. The Company generally performs its other professional services within 90 days of entering into an agreement. The Company’s determination of fair value for other professional services has not changed for the periods presented. The Company has analyzed all of the undelivered elements included in its multiple-element sales arrangements and determined that VSOE of fair value exists to allocate revenues to services. Accordingly, assuming all basic revenue recognition criteria are met, software revenue is recognized upon delivery of the software license using the residual method. The Company considers the four basic revenue recognition criteria for each of the elements as follows: • Persuasive evidence of an arrangement with the customer exists. The Company’s customary practice is to require a purchase order and, in some cases, a written contract signed by both the customer and the Company, or other persuasive evidence that an arrangement exists prior to recognizing revenue related to an arrangement. • Delivery or performance has occurred. The Company’s software applications are either physically or electronically delivered to customers with standard transfer terms such as FOB shipping point. Software and/or software license keys for add-on orders or software updates are typically delivered in an electronic format. If products that are essential to the functionality of the delivered software in an arrangement have not been delivered, the Company does not consider delivery to have occurred. Services revenue is recognized when the services are completed, except for customer support, which is recognized ratably over the term of the customer support agreement, which is typically one year. • Vendor’s fee is fixed or determinable. The fee customers pay for software applications, customer support and other professional services is negotiated at the outset of a sales arrangement. The fees are therefore considered to be fixed or determinable at the inception of the arrangement. The Company evaluates instances when extended payment terms are granted to determine if revenue should be deferred until payment becomes due. • Collection is probable. Probability of collection is assessed on a customer-by-customer basis. Each new customer undergoes a credit review process to evaluate its financial position and ability to pay. If the Company determines from the outset of an arrangement that collection is not probable based upon the review process, revenue is recognized at the earlier of when cash is collected or when sufficient credit becomes available, assuming all of the other basic revenue recognition criteria are met. The Company’s sales arrangements generally do not include acceptance clauses. However, if an arrangement does include an acceptance clause, revenue for such an arrangement is deferred and recognized upon acceptance. Acceptance occurs upon the earliest of receipt of a written customer acceptance, waiver of customer acceptance or expiration of the acceptance period. Concentration of Credit Risk The Company grants credit to customers in a wide variety of industries worldwide and generally does not require collateral. Credit losses relating to these customers have been minimal. Sales through the Company’s distribution agreement with Arrow Enterprise Computing Solutions, Inc. (“Arrow”) totaled 38% and 35% of total revenues for the nine months ended December 31, 2015 and 2014 , respectively. Arrow accounted for approximately 47% of total accounts receivable as of December 31, 2015 and 41% of total accounts receivable as of March 31, 2015 . The Company has an original equipment manufacturer agreement with Hitachi Data Systems ("HDS") for them to market, sell and support our software applications and services on a stand-alone basis and/or incorporate our software applications into their own hardware products. HDS accounted for 11% and 10% of total revenues for the nine months ended December 31, 2015 and 2014, respectively. HDS accounted for 12% of the total accounts receivable as of December 31, 2015 . Deferred Revenue Deferred revenues represent amounts collected from, or invoiced to, customers in excess of revenues recognized. This results primarily from the billing of annual customer support agreements and billings for other professional services fees that have not yet been performed by the Company, and receipt of license fees that are deferred due to one or more of the revenue recognition criteria not being met. The value of deferred revenues will increase or decrease based on the timing of invoices and recognition of revenue. The Company expenses internal direct and incremental costs related to contract acquisition and origination as incurred. Deferred revenue consists of the following: December 31, March 31, Current: Deferred software revenue $ 1,479 $ 1,305 Deferred services revenue 182,960 183,007 $ 184,439 $ 184,312 Non-current: Deferred services revenue $ 45,924 $ 45,423 Total Deferred Revenue $ 230,363 $ 229,735 Fair Value of Financial Instruments The carrying amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments. The Company’s cash equivalents balance consists primarily of money market funds. The Company’s short-term investments balance consists of U.S. Treasury Bills with maturities of one year or less. The Company accounts for its short-term investments as held to maturity. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table summarizes the composition of the Company’s financial assets measured at fair value at December 31, 2015 and March 31, 2015 : December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents $ 173,057 — — $ 173,057 Short-term investments $ — 84,762 — $ 84,762 March 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents $ 204,939 — — $ 204,939 Short-term investments $ — 49,955 — $ 49,955 Equity Method Investment In December of 2015, the Company acquired a minority ownership in Laitek, Inc. ("Laitek"). The Company also has an option to acquire the remaining ownership of Laitek at a fixed price for the next two years. Laitek develops solutions for acquiring, processing and presenting scientific and medical image information. The Company uses the equity method to account for its investment. In the event that management identifies an other than temporary decline in the estimated fair value of an equity method investment to an amount below its carrying value, such investment is written down to its estimated fair value. The Company also has development and original equipment manufacturing agreements with Laitek to jointly develop healthcare related software products. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following: December 31, March 31, 2015 2015 Land $ 9,445 $ 9,445 Buildings 103,186 102,880 Computers, servers and other equipment 33,878 33,914 Furniture and fixtures 14,730 14,399 Leasehold improvements 6,888 4,621 Purchased software 2,008 2,463 Construction in process 248 619 170,383 168,341 Less: Accumulated depreciation and amortization (33,173 ) (28,133 ) $ 137,210 $ 140,208 The Company recorded depreciation and amortization expense of $8,320 and $6,106 for the nine months ended December 31, 2015 and 2014 , respectively. |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 9 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | Net Income (Loss) per Common Share Basic net income per common share is computed by dividing net income by the weighted average number of common shares during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, vesting of restricted stock units and shares to be purchased under the Employee Stock Purchase Plan. The dilutive effect of such potential common shares is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net income (loss) per common share: Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Net income (loss) $ 4,878 $ 3,073 $ (5,658 ) $ 22,298 Basic net income (loss) per common share: Basic weighted average shares outstanding 45,315 45,331 45,339 45,610 Basic net income (loss) per common share $ 0.11 $ 0.07 $ (0.12 ) $ 0.49 Diluted net income (loss) per common share: Basic weighted average shares outstanding 45,315 45,331 45,339 45,610 Dilutive effect of stock options, restricted stock units, performance stock options, performance restricted stock units and employee stock purchase plan 1,262 1,645 — 1,775 Diluted weighted average shares outstanding 46,577 46,976 45,339 47,385 Diluted net income (loss) per common share $ 0.10 $ 0.07 $ (0.12 ) $ 0.47 The diluted weighted average shares outstanding in the table above exclude outstanding stock options, restricted stock units, performance stock options, performance restricted stock units and shares to be purchased under the employee stock purchase plan totaling approximately 4,273 and 3,594 for the three months ended December 31, 2015 and 2014 , respectively, and 8,202 and 3,044 for the nine months ended December 31, 2015 and 2014 , respectively, because the effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the normal course of its business, the Company may be involved in various claims, negotiations and legal actions. As of December 31, 2015 , the Company is not aware of any asserted or unasserted claims, negotiations and legal actions for which a loss is considered reasonably possible of occurring and would require disclosure under the guidance. On September 10, 2014, a purported class action complaint was filed in the United States District Court for the District of New Jersey against the Company, its Chief Executive Officer and its Chief Financial Officer. The case is captioned In re Commvault Systems, Inc. Securities Litigation (Master File No. 3:14-cv-05628-MAS-LHG). The suit alleges that the defendants made materially false and misleading statements, or failed to disclose material facts, regarding our financial results, business, operations and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit asserts claims covering an alleged class period from May 7, 2013 through April 24, 2014. It is purportedly brought on behalf of purchasers of our common stock during that period, and seeks compensatory damages, costs and expenses, as well as equitable or other relief. Lead plaintiff, the Arkansas Teachers Retirement System, was appointed on January 12, 2015, and on March 18, 2015, an amended complaint was filed by the plaintiffs. Defendants filed their motion to dismiss the complaint on May 26, 2015, and the plaintiff’s filed their opposition brief on July 1, 2015. The Company's reply was filed on August 24, 2015 and a hearing on the motion to dismiss was held on October 13, 2015. On December 17, 2015, the court issued an order (i) granting our motion to dismiss in its entirety without prejudice, and (ii) allowing the plaintiffs the opportunity to amend their complaint to “demonstrate the GAAP violation.” The Company continues to believe that the suit is without merit and we intend to defend ourselves and our officers vigorously. At this time, the Company is unable to predict the outcome of this matter and cannot currently estimate a range of any possible losses that it may experience. Accordingly, the Company is unable at this time to estimate the effects of this lawsuit on its financial condition, results of operations, or cash flows. As of December 31, 2015 the Company has not recorded a reserve for this matter. |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On June 30, 2014, the Company entered into a five -year $250,000 revolving credit facility (the “Credit Facility”). The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio. The Credit Facility also contains certain customary events of default which would permit the lenders to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods. The Credit Facility also limits the Company's ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to London Interbank Offered Rate plus 1.50% subject to increases based on the Company's actual leverage. The unused balance on the Credit Facility is also subject to a 0.25% annual interest charge subject to increases based on the Company's actual leverage. As of December 31, 2015 , there were no borrowings under the Credit Facility and the Company was in compliance with all covenants. The Company has deferred the expense related to debt issuance costs, which are classified as Other Assets, and will amortize the costs into interest expense over the term of the Credit Facility. Unamortized amounts at December 31, 2015 were $883 . The amortization of debt issuance costs was $63 and $189 in the three and nine months ended December 31, 2015 and is included in Interest expense. |
Capitalization
Capitalization | 9 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Capitalization | Capitalization During the three months ended December 31, 2015 , the Company repurchased $1,776 of common stock ( 53 shares). During the nine months ended December 31, 2015 , the Company repurchased $34,580 of common stock ( 965 shares). As of December 31, 2015 , $150,000 remained in the stock repurchase authorization that expires on March 31, 2017. |
Stock Plans
Stock Plans | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Plans | Stock Plans The following table presents the stock-based compensation expense included in Cost of services revenue, Sales and marketing, Research and development and General and administrative expenses for the three and nine months ended December 31, 2015 and 2014 . Stock-based compensation is attributable to stock options, restricted stock units, performance based awards and the employee stock purchase plan. Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Cost of services revenue $ 870 $ 785 $ 2,258 $ 2,186 Sales and marketing 7,971 7,396 21,011 20,140 Research and development 1,813 1,567 4,888 4,284 General and administrative 6,573 6,266 19,359 18,891 Stock-based compensation expense $ 17,227 $ 16,014 $ 47,516 $ 45,501 As of December 31, 2015 , there was approximately $124,163 of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested stock option and restricted stock unit awards that is expected to be recognized over a weighted average period of 2.14 years. To the extent the actual forfeiture rate is different from what the Company has estimated, stock-based compensation related to these awards will be different from the Company’s current estimate. Stock Options Stock Option activity for the nine months ended December 31, 2015 is as follows: Options Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of March 31, 2015 6,853 $ 40.91 Options granted 148 41.84 Options exercised (683 ) 8.25 Options forfeited (85 ) 57.01 Options expired (85 ) 63.26 Outstanding as of December 31, 2015 6,148 $ 44.03 5.93 $ 45,679 Vested or expected to vest as of December 31, 2015 6,062 $ 44.20 5.89 $ 45,670 Exercisable as of December 31, 2015 4,366 $ 37.42 5.04 $ 45,576 The weighted average fair value of stock options granted was $14.46 and $15.20 per option during the three and nine months ended December 31, 2015 , and $20.09 per option and $20.23 per option during the three and nine months ended December 31, 2014 , respectively. The total intrinsic value of options exercised was $1,794 and $21,768 for the three and nine months ended December 31, 2015 , respectively, and $1,286 and $12,231 for the three and nine months ended December 31, 2014 , respectively. The Company’s policy is to issue new shares upon exercise of options as the Company does not hold shares in treasury. The assumptions used in the Black-Scholes option-pricing model are as follows: Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Dividend yield None None None None Expected volatility 39-42% 43-47% 39-43% 43-47% Weighted average expected volatility 41% 46% 41% 46% Risk-free interest rates 1.29-1.67% 1.45%-1.95% 1.29%-1.75% 1.45%-2.18% Weighted average expected life (in years) 4.7 5.8 4.6 5.7 Restricted Stock Units Restricted stock unit activity for the nine months ended December 31, 2015 is as follows: Non-vested Restricted Stock Units Number of Weighted Non-vested as of March 31, 2015 1,412 $ 56.82 Awarded 1,495 37.31 Vested (435 ) 39.27 Forfeited (114 ) 52.34 Non-vested as of December 31, 2015 2,358 $ 43.93 The weighted average fair value of restricted stock units awarded was $36.69 and $37.31 per unit during the three and nine months ended December 31, 2015 , and $45.80 per unit and $46.75 per unit during the three and nine months ended December 31, 2014 , respectively. Performance Based Awards On March 31, 2015, the Company’s CEO was granted 48 performance stock options (“PSO”) and 24 performance restricted stock units (“PSU”). This performance grant is subject to the Company's performance in fiscal year 2016. Vesting is contingent upon the Company meeting certain company-wide revenue and non-GAAP operating margin performance goals (performance-based) in fiscal 2016. The related stock-based compensation expense is determined based on the value of the underlying shares on the date of grant and is recognized over the vesting term using the accelerated method. During the interim financial periods, management estimates the probable number of PSO’s and PSU’s that will be vested until the achievement of the performance goals is known. The awards are included in the tables above. Awards with a Market Condition In October 2015, the Company granted 133 market performance stock units to select executives. The vesting of these awards is contingent upon the Company meeting certain total shareholder return (TSR) levels as compared to a market index over the next three years. The awards vest in three annual tranches and have a maximum potential to vest at 200% ( 266 shares) based on TSR performance. The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted in October was $42.69 . The awards are included in the restricted stock unit table above. Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “Purchase Plan”) is a shareholder approved plan under which substantially all employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six -month offering periods. An employee’s payroll deductions under the Purchase Plan are limited to 10% of the employee’s salary and employees may not purchase more than $25 of stock during any calendar year. As of December 31, 2015 , 2,776 shares were reserved for future issuance under the Purchase Plan. The Purchase Plan is considered compensatory and the fair value of the discount and look back provision are estimated using the Black-Scholes formula and recognized over the six month withholding period prior to purchase. The total expense associated with the Purchase Plan was $588 and $1,784 for the three and nine months ended December 31, 2015 and $850 and $2,226 for the three and nine months ended December 31, 2014 . |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Expense (Benefit) Income tax benefit was $(1,396) and $(1,747) in the three and nine months ended December 31, 2015 , respectively. The effective rate of the income tax benefit in the nine month period is lower than the federal statutory rate due to the impact of unfavorable permanent differences, partially offset by the permanently extended research credit. Income tax expense was $1,798 and $11,863 in the three and nine months ended December 31, 2014, respectively with an effective tax rate of 37% and 35% in the three and nine months ended December 31, 2014, respectively. The effective rate in the three and nine months ended December 31, 2014 approximates the federal statutory rate but is impacted by state income taxes and permanent differences in both the United States and foreign jurisdictions. These items were partially offset by tax benefits from research and development tax credits, foreign tax credits and domestic production activities deductions. Unrecognized Tax Benefits The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations in each of its tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. A number of years may lapse before a particular matter is audited and finally resolved. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Balance as of March 31, 2015 $ 2,005 Additions for tax positions related to fiscal 2016 173 Additions for tax positions related to prior years — Settlements and effective settlements with tax authorities and remeasurements (327 ) Reductions related to the expiration of statutes of limitations — Foreign currency translation adjustment 14 Balance as of December 31, 2015 $ 1,865 All of the Company’s unrecognized tax benefits would favorably impact the effective tax rate if they were recognized. Components of the reserve are classified as either current or long-term in the Consolidated Balance Sheet based on when the Company expects each of the items to be settled. Unrecognized tax benefits and the related accrued interest and penalties totaling $2,097 are recorded as Other Liabilities on the Consolidated Balance Sheet, of which $408 represents interest and penalties. The Company also has unrecognized tax benefits and related accrued interest and penalties totaling $197 as a reduction of Deferred Tax Assets on the Consolidated Balance Sheet, of which $21 represents interest and penalties. Other Tax Items Excess tax benefits related to share-based payments are credited to equity. When determining this excess tax benefit, the Company elected to follow the tax law approach. As a result, the Company’s excess tax benefit which was recorded to equity was approximately $3,677 and $1,943 for the nine months ended December 31, 2015 and 2014 , respectively. The Company conducts business globally and as a result, files income tax returns in the United States and in various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United States, Australia, Canada, Germany, Netherlands and United Kingdom. The years subject to income tax examination in the Company’s foreign jurisdictions cover the maximum time period with respect to these jurisdictions. Due to net operating loss ("NOL") carryforwards, in some cases the tax years continue to remain subject to examination with respect to such NOLs. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The consolidated financial statements as of December 31, 2015 and for the three and nine months ended December 31, 2015 and 2014 are unaudited, and in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for fiscal 2015 . The results reported in these financial statements should not necessarily be taken as indicative of results that may be expected for the entire fiscal year. |
Use of Estimates | The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments and estimates that affect the amounts reported in the Company’s consolidated financial statements and the accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of revenues and expenses reported for each of its periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, allowance for doubtful accounts, income taxes and related reserves, stock-based compensation and accounting for research and development costs. Actual results could differ from those estimates. |
Revenue Recognition | The Company derives revenues from two primary sources: software licenses and services. Services include customer support, consulting, assessment and design services, installation services and training. A typical sales arrangement includes both licenses and services. For sales arrangements involving multiple elements, the Company recognizes revenue using the residual method. Under the residual method, the Company allocates and defers revenue for the undelivered elements based on fair value and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of the undelivered elements in multiple-element arrangements is based on the price charged when such elements are sold separately, which is commonly referred to as vendor-specific objective-evidence, or VSOE. The Company’s software licenses typically provide for a perpetual right to use the Company’s software and are sold on a per terabyte basis, on a per-copy basis, as site licenses or as a solution set. Software licenses sold on a capacity basis provide the customer with unlimited licenses of specified software products based on a defined level of terabytes of data under management. Site licenses give the customer the additional right to deploy the software on a limited basis during a specified term. Solution sets are generally sold on a per unit basis such as per virtual machine for our virtual machine backup, recovery and cloud management solution set; per mailbox for our email archive solution set and per user for our endpoint data protection solution set. The Company recognizes software revenue through direct sales channels upon receipt of a purchase order or other persuasive evidence and when all other basic revenue recognition criteria are met as described below. The Company recognizes software revenue through all indirect sales channels on a sell-through model. A sell-through model requires that the Company recognize revenue when the basic revenue recognition criteria are met as described below and these channels complete the sale of the Company’s software products to the end-user. Revenue from software licenses sold through an original equipment manufacturer partner is recognized upon the receipt of a royalty report or purchase order from that original equipment manufacturer partner. Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year. To determine the price for the customer support element when sold separately, the Company primarily uses historical renewal rates. Historical renewal rates are supported by performing an analysis in which the Company segregates its customer support renewal contracts into different classes based on specific criteria including, but not limited to, the dollar amount of the software purchased, the level of customer support being provided and the distribution channel. As a result of this analysis, the Company has concluded that it has established VSOE for the different classes of customer support when the support is sold as part of a multiple-element sales arrangement. The Company’s determination of fair value for customer support has not changed for the periods presented. The Company’s other professional services include consulting services, implementation and post-deployment services and education services. Other professional services provided by the Company are not mandatory and can also be performed by the customer or a third-party. In addition to a signed purchase order, the Company’s consulting services and implementation and post-deployment services are, in some cases, evidenced by a Statement of Work, which defines the specific scope of such services to be performed when sold and performed on a stand-alone basis or included in multiple-element sales arrangements. Revenues from consulting services and implementation and post-deployment services are based upon a daily or weekly rate and are recognized when the services are completed. Education services include courses taught by the Company’s instructors or third-party contractors either at one of the Company’s facilities or at the customer’s site. Education services fees are recognized as revenue after the course has been provided. Based on the Company’s analysis of such other professional services transactions sold on a stand-alone basis, the Company has concluded it has established VSOE for such other professional services when sold in connection with a multiple-element sales arrangement. The Company generally performs its other professional services within 90 days of entering into an agreement. The Company’s determination of fair value for other professional services has not changed for the periods presented. The Company has analyzed all of the undelivered elements included in its multiple-element sales arrangements and determined that VSOE of fair value exists to allocate revenues to services. Accordingly, assuming all basic revenue recognition criteria are met, software revenue is recognized upon delivery of the software license using the residual method. The Company considers the four basic revenue recognition criteria for each of the elements as follows: • Persuasive evidence of an arrangement with the customer exists. The Company’s customary practice is to require a purchase order and, in some cases, a written contract signed by both the customer and the Company, or other persuasive evidence that an arrangement exists prior to recognizing revenue related to an arrangement. • Delivery or performance has occurred. The Company’s software applications are either physically or electronically delivered to customers with standard transfer terms such as FOB shipping point. Software and/or software license keys for add-on orders or software updates are typically delivered in an electronic format. If products that are essential to the functionality of the delivered software in an arrangement have not been delivered, the Company does not consider delivery to have occurred. Services revenue is recognized when the services are completed, except for customer support, which is recognized ratably over the term of the customer support agreement, which is typically one year. • Vendor’s fee is fixed or determinable. The fee customers pay for software applications, customer support and other professional services is negotiated at the outset of a sales arrangement. The fees are therefore considered to be fixed or determinable at the inception of the arrangement. The Company evaluates instances when extended payment terms are granted to determine if revenue should be deferred until payment becomes due. • Collection is probable. Probability of collection is assessed on a customer-by-customer basis. Each new customer undergoes a credit review process to evaluate its financial position and ability to pay. If the Company determines from the outset of an arrangement that collection is not probable based upon the review process, revenue is recognized at the earlier of when cash is collected or when sufficient credit becomes available, assuming all of the other basic revenue recognition criteria are met. The Company’s sales arrangements generally do not include acceptance clauses. However, if an arrangement does include an acceptance clause, revenue for such an arrangement is deferred and recognized upon acceptance. Acceptance occurs upon the earliest of receipt of a written customer acceptance, waiver of customer acceptance or expiration of the acceptance period. |
Concentration of Credit Risk | The Company grants credit to customers in a wide variety of industries worldwide and generally does not require collateral. Credit losses relating to these customers have been minimal. |
Deferred Revenue | Deferred revenues represent amounts collected from, or invoiced to, customers in excess of revenues recognized. This results primarily from the billing of annual customer support agreements and billings for other professional services fees that have not yet been performed by the Company, and receipt of license fees that are deferred due to one or more of the revenue recognition criteria not being met. The value of deferred revenues will increase or decrease based on the timing of invoices and recognition of revenue. The Company expenses internal direct and incremental costs related to contract acquisition and origination as incurred. |
Fair Value of Financial Instruments | The carrying amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments. The Company’s cash equivalents balance consists primarily of money market funds. The Company’s short-term investments balance consists of U.S. Treasury Bills with maturities of one year or less. The Company accounts for its short-term investments as held to maturity. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncement, Early Adoption | The following table summarizes the Company's As Reported and As Adjusted changes to the Consolidated Balance Sheet at March 31, 2015. March 31, As Reported As Adjusted Current assets: Deferred tax assets, net $ 16,142 $ — Total Current Assets $ 541,551 $ 525,409 Deferred tax assets, net $ 24,903 $ 41,045 |
Deferred Revenue | Deferred revenue consists of the following: December 31, March 31, Current: Deferred software revenue $ 1,479 $ 1,305 Deferred services revenue 182,960 183,007 $ 184,439 $ 184,312 Non-current: Deferred services revenue $ 45,924 $ 45,423 Total Deferred Revenue $ 230,363 $ 229,735 |
Financial Assets Measured at Fair Value | The following table summarizes the composition of the Company’s financial assets measured at fair value at December 31, 2015 and March 31, 2015 : December 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents $ 173,057 — — $ 173,057 Short-term investments $ — 84,762 — $ 84,762 March 31, 2015 Level 1 Level 2 Level 3 Total Cash equivalents $ 204,939 — — $ 204,939 Short-term investments $ — 49,955 — $ 49,955 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: December 31, March 31, 2015 2015 Land $ 9,445 $ 9,445 Buildings 103,186 102,880 Computers, servers and other equipment 33,878 33,914 Furniture and fixtures 14,730 14,399 Leasehold improvements 6,888 4,621 Purchased software 2,008 2,463 Construction in process 248 619 170,383 168,341 Less: Accumulated depreciation and amortization (33,173 ) (28,133 ) $ 137,210 $ 140,208 |
Net Income (Loss) per Common 20
Net Income (Loss) per Common Share (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Common Share | The following table sets forth the computation of basic and diluted net income (loss) per common share: Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Net income (loss) $ 4,878 $ 3,073 $ (5,658 ) $ 22,298 Basic net income (loss) per common share: Basic weighted average shares outstanding 45,315 45,331 45,339 45,610 Basic net income (loss) per common share $ 0.11 $ 0.07 $ (0.12 ) $ 0.49 Diluted net income (loss) per common share: Basic weighted average shares outstanding 45,315 45,331 45,339 45,610 Dilutive effect of stock options, restricted stock units, performance stock options, performance restricted stock units and employee stock purchase plan 1,262 1,645 — 1,775 Diluted weighted average shares outstanding 46,577 46,976 45,339 47,385 Diluted net income (loss) per common share $ 0.10 $ 0.07 $ (0.12 ) $ 0.47 |
Stock Plans (Tables)
Stock Plans (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | The following table presents the stock-based compensation expense included in Cost of services revenue, Sales and marketing, Research and development and General and administrative expenses for the three and nine months ended December 31, 2015 and 2014 . Stock-based compensation is attributable to stock options, restricted stock units, performance based awards and the employee stock purchase plan. Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Cost of services revenue $ 870 $ 785 $ 2,258 $ 2,186 Sales and marketing 7,971 7,396 21,011 20,140 Research and development 1,813 1,567 4,888 4,284 General and administrative 6,573 6,266 19,359 18,891 Stock-based compensation expense $ 17,227 $ 16,014 $ 47,516 $ 45,501 |
Schedule of Stock Option Activity | Stock Option activity for the nine months ended December 31, 2015 is as follows: Options Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of March 31, 2015 6,853 $ 40.91 Options granted 148 41.84 Options exercised (683 ) 8.25 Options forfeited (85 ) 57.01 Options expired (85 ) 63.26 Outstanding as of December 31, 2015 6,148 $ 44.03 5.93 $ 45,679 Vested or expected to vest as of December 31, 2015 6,062 $ 44.20 5.89 $ 45,670 Exercisable as of December 31, 2015 4,366 $ 37.42 5.04 $ 45,576 |
Schedule of Stock Option Valuation Assumptions | The assumptions used in the Black-Scholes option-pricing model are as follows: Three Months Ended December 31, Nine Months Ended December 31, 2015 2014 2015 2014 Dividend yield None None None None Expected volatility 39-42% 43-47% 39-43% 43-47% Weighted average expected volatility 41% 46% 41% 46% Risk-free interest rates 1.29-1.67% 1.45%-1.95% 1.29%-1.75% 1.45%-2.18% Weighted average expected life (in years) 4.7 5.8 4.6 5.7 |
Schedule of Restricted Stock Unit Activity | Restricted stock unit activity for the nine months ended December 31, 2015 is as follows: Non-vested Restricted Stock Units Number of Weighted Non-vested as of March 31, 2015 1,412 $ 56.82 Awarded 1,495 37.31 Vested (435 ) 39.27 Forfeited (114 ) 52.34 Non-vested as of December 31, 2015 2,358 $ 43.93 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Amounts of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Balance as of March 31, 2015 $ 2,005 Additions for tax positions related to fiscal 2016 173 Additions for tax positions related to prior years — Settlements and effective settlements with tax authorities and remeasurements (327 ) Reductions related to the expiration of statutes of limitations — Foreign currency translation adjustment 14 Balance as of December 31, 2015 $ 1,865 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Early Adoption of New Accounting Pronouncement (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, net, current | $ 0 | |
Total Current Assets | $ 532,749 | 525,409 |
Deferred tax assets, net | $ 49,115 | 41,045 |
Previously reported | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, net, current | 16,142 | |
Total Current Assets | 541,551 | |
Deferred tax assets, net | $ 24,903 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Additional Information (Detail) - revenue_source | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | |
Accounting Policies [Abstract] | |||
Sources of primary revenue | 2 | ||
Length of customer support agreement - in years | 1 year | ||
Number of days for other professional services | 90 days | ||
Customer Concentration Risk | Revenue | Arrow | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 38.00% | 35.00% | |
Customer Concentration Risk | Revenue | Hitachi | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 11.00% | 10.00% | |
Customer Concentration Risk | Accounts receivable | Arrow | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 47.00% | 41.00% | |
Customer Concentration Risk | Accounts receivable | Hitachi | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 12.00% |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Deferred Revenue (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | $ 184,439 | $ 184,312 |
Deferred revenue, non-current | 45,924 | 45,423 |
Total deferred revenue | 230,363 | 229,735 |
Deferred software revenue | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 1,479 | 1,305 |
Deferred services revenue | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue, current | 182,960 | 183,007 |
Deferred revenue, non-current | $ 45,924 | $ 45,423 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Summary of Fair Value of Financial Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 173,057 | $ 204,939 |
Short-term investments | 84,762 | 49,955 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 173,057 | 204,939 |
Short-term investments | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments | 84,762 | 49,955 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term investments | $ 0 | $ 0 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Equity Method Investment (Details) | 9 Months Ended |
Dec. 31, 2015 | |
Laitek, Inc. | |
Business Acquisition [Line Items] | |
Period to acquire remaining ownership | 2 years |
Property and Equipment - Sched
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 170,383 | $ 168,341 |
Less: Accumulated depreciation and amortization | (33,173) | (28,133) |
Property and equipment, net | 137,210 | 140,208 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,445 | 9,445 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 103,186 | 102,880 |
Computers, servers and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 33,878 | 33,914 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,730 | 14,399 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,888 | 4,621 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,008 | 2,463 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 248 | $ 619 |
Property and Equipment - Addit
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 8,320 | $ 6,106 |
Net Income (Loss) per Common 30
Net Income (Loss) per Common Share - Computation of Basic and Diluted Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 4,878 | $ 3,073 | $ (5,658) | $ 22,298 |
Basic net income (loss) per common share: | ||||
Basic weighted average shares outstanding (in shares) | 45,315 | 45,331 | 45,339 | 45,610 |
Basic net income (loss) per common share (in dollars per share) | $ 0.11 | $ 0.07 | $ (0.12) | $ 0.49 |
Diluted net income (loss) per common share: | ||||
Basic weighted average shares outstanding (in shares) | 45,315 | 45,331 | 45,339 | 45,610 |
Dilutive effect of stock options, restricted stock units, performance stock options, performance restricted stock units and employee stock purchase plan (in shares) | 1,262 | 1,645 | 0 | 1,775 |
Diluted weighted average shares outstanding (in shares) | 46,577 | 46,976 | 45,339 | 47,385 |
Diluted net income (loss) per common share (in dollars per share) | $ 0.10 | $ 0.07 | $ (0.12) | $ 0.47 |
Net Income (Loss) per Common 31
Net Income (Loss) per Common Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation (in shares) | 4,273 | 3,594 | 8,202 | 3,044 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Revolving credit facility - USD ($) | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | |||
Debt term (in years) | 5 years | ||
Borrowing capacity | $ 250,000,000 | ||
Unused capacity fee (as a percentage) | 0.25% | ||
Unamortized debt issuance costs | $ 883,000 | $ 883,000 | |
Amortization of debt issuance costs | $ 63,000 | $ 189,000 | |
LIBOR rate | |||
Line of Credit Facility [Line Items] | |||
Variable rate (as a percentage) | 1.50% |
Capitalization (Detail)
Capitalization (Detail) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2015USD ($)shares | Dec. 31, 2015USD ($)shares | |
Class of Stock [Line Items] | ||
Repurchase of common stock | $ 34,580 | |
Common stock repurchase program | ||
Class of Stock [Line Items] | ||
Repurchase of common stock | $ 1,776 | $ 34,580 |
Repurchase of common stock (in shares) | shares | 53 | 965 |
Remaining value of common stock to be repurchased under share repurchase program | $ 150,000 | $ 150,000 |
Stock Plans - Stock-Based Comp
Stock Plans - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 17,227 | $ 16,014 | $ 47,516 | $ 45,501 |
Cost of services revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 870 | 785 | 2,258 | 2,186 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 7,971 | 7,396 | 21,011 | 20,140 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,813 | 1,567 | 4,888 | 4,284 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 6,573 | $ 6,266 | $ 19,359 | $ 18,891 |
Stock Plans - Activity for Com
Stock Plans - Activity for Company's Two Stock Incentive Plans (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Number of Options | |
Outstanding (in shares) as of March 31, 2015 | shares | 6,853 |
Options granted (in shares) | shares | 148 |
Options exercised (in shares) | shares | (683) |
Options forfeited (in shares) | shares | (85) |
Options expired (in shares) | shares | (85) |
Outstanding (in shares) as of December 31, 2015 | shares | 6,148 |
Vested or expected to vest (in shares) as of December 31, 2015 | shares | 6,062 |
Exercisable (in shares) as of December 31, 2015 | shares | 4,366 |
Weighted- Average Exercise Price | |
Outstanding (in dollars per share) as of March 31, 2015 | $ / shares | $ 40.91 |
Options granted (in dollars per share) | $ / shares | 41.84 |
Options exercised (in dollars per share) | $ / shares | 8.25 |
Options forfeited (in dollars per share) | $ / shares | 57.01 |
Options expired (in dollars per share) | $ / shares | 63.26 |
Outstanding (in dollars per share) as of December 31, 2015 | $ / shares | 44.03 |
Vested or expected to vest (in dollars per share) as of December 31, 2015 | $ / shares | 44.20 |
Exercisable (in dollars per share) as of December 31, 2015 | $ / shares | $ 37.42 |
Weighted- Average Remaining Contractual Term (Years) | |
Outstanding (in years) as of December 31, 2015 | 5 years 11 months 4 days |
Vested or expected to vest (in years) as of December 31, 2015 | 5 years 10 months 20 days |
Exercisable (in years) as of December 31, 2015 | 5 years 14 days |
Aggregate Intrinsic Value | |
Outstanding as of December 31, 2015 | $ | $ 45,679 |
Vested or expected to vest as of December 31, 2015 | $ | 45,670 |
Exercisable as of December 31, 2015 | $ | $ 45,576 |
Stock Plans - Additional Infor
Stock Plans - Additional Information (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | Mar. 31, 2015shares | Oct. 31, 2015tranche$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average fair value of stock options granted per share (in dollars per share) | $ / shares | $ 14.46 | $ 20.09 | $ 15.20 | $ 20.23 | ||
Total intrinsic value of options exercised | $ | $ 1,794 | $ 1,286 | $ 21,768 | $ 12,231 | ||
Stock options and restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense, net of estimated forfeitures | $ | $ 124,163 | $ 124,163 | ||||
Weighted average period awards expected to be recognized over | 2 years 1 month 20 days | |||||
Restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average fair value, units awarded (in dollars per unit) | $ / shares | $ 36.69 | $ 45.80 | $ 37.31 | $ 46.75 | ||
Awarded (in shares) | 1,495 | |||||
Performance stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awarded (in shares) | 48 | |||||
Performance restricted stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted average fair value, units awarded (in dollars per unit) | $ / shares | $ 42.69 | |||||
Awarded (in shares) | 24 | 133 | ||||
Service period (in years) | 3 years | |||||
Number of annual tranches | tranche | 3 | |||||
Maximum potential to vest (percent) | 200.00% | |||||
Maximum potential to vest (in shares) | 266 |
Stock Plans - Assumptions Used
Stock Plans - Assumptions Used in Black-Scholes Option-Pricing Model (Detail) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Black-Scholes Option-Pricing Model Assumptions | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility, minimum | 39.00% | 43.00% | 39.00% | 43.00% |
Expected volatility, maximum | 42.00% | 47.00% | 43.00% | 47.00% |
Weighted average expected volatility | 41.00% | 46.00% | 41.00% | 46.00% |
Risk-free interest rates, minimum | 1.29% | 1.45% | 1.29% | 1.45% |
Risk-free interest rates, maximum | 1.67% | 1.95% | 1.75% | 2.18% |
Weighted average expected life (in years) | 4 years 8 months 12 days | 5 years 9 months 18 days | 4 years 7 months 6 days | 5 years 8 months 12 days |
Stock Plans - Restricted Stock
Stock Plans - Restricted Stock Unit Activity (Detail) - Restricted stock units - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Awards | ||||
Non-vested (in shares) as of March 31, 2015 | 1,412 | |||
Awarded (in shares) | 1,495 | |||
Vested (in shares) | (435) | |||
Forfeited (in shares) | (114) | |||
Non-vested (in shares) as of December 31, 2015 | 2,358 | 2,358 | ||
Weighted Average Grant Date Fair Value | ||||
Non-vested (in dollars per share) as of March 31, 2015 | $ 56.82 | |||
Awarded (in dollars per share) | $ 36.69 | $ 45.80 | 37.31 | $ 46.75 |
Vested (in dollars per share) | 39.27 | |||
Forfeited (in dollars per share) | 52.34 | |||
Non-vested (in dollars per share) as of December 31, 2015 | $ 43.93 | $ 43.93 |
Stock Plans - Employee Stock P
Stock Plans - Employee Stock Purchase Plan (Details) - Purchase plan - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock purchase price (as a percentage) | 85.00% | |||
Offering period (in months) | 6 months | |||
Maximum employee subscription rate (as a percentage) | 10.00% | 10.00% | ||
Maximum annual purchases per employee | $ 25 | |||
Shares reserved for future issuance | 2,776 | 2,776 | ||
Compensation expense | $ 588 | $ 850 | $ 1,784 | $ 2,226 |
Income Taxes - Additional Info
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ (1,396) | $ 1,798 | $ (1,747) | $ 11,863 | |
Effective income tax rate (as a percentage) | 37.00% | 35.00% | |||
Reconciliation Of Unrecognized Tax Benefits [Line Items] | |||||
Unrecognized tax benefits | 1,865 | 1,865 | $ 2,005 | ||
Tax benefits relating to stock-based payments | 3,677 | $ 1,943 | |||
Other liabilities | |||||
Reconciliation Of Unrecognized Tax Benefits [Line Items] | |||||
Unrecognized tax benefits | 2,097 | 2,097 | |||
Unrecognized tax benefits accrued interest and penalties | 408 | 408 | |||
Deferred tax assets | |||||
Reconciliation Of Unrecognized Tax Benefits [Line Items] | |||||
Unrecognized tax benefits | 197 | 197 | |||
Unrecognized tax benefits accrued interest and penalties | $ 21 | $ 21 |
Income Taxes - Reconciliation
Income Taxes - Reconciliation of Amounts of Unrecognized Tax Benefits (Detail) $ in Thousands | 9 Months Ended |
Dec. 31, 2015USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance as of March 31, 2015 | $ 2,005 |
Additions for tax positions related to fiscal 2016 | 173 |
Additions for tax positions related to prior years | 0 |
Settlements and effective settlements with tax authorities and remeasurements | (327) |
Reductions related to the expiration of statutes of limitations | 0 |
Foreign currency translation adjustment | 14 |
Balance as of December 31, 2015 | $ 1,865 |