Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | May 25, 2021 | Sep. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Mar. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-39010 | ||
Entity Registrant Name | Dynatrace, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-2386428 | ||
Entity Address, Address Line One | 1601 Trapelo Road, Suite 116 | ||
Entity Address, City or Town | Waltham | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02451 | ||
City Area Code | 781 | ||
Local Phone Number | 530-1000 | ||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Trading Symbol | DT | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,550 | ||
Entity Common Stock, Shares Outstanding | 283,654,155 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001773383 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --03-31 | ||
Documents Incorporated by Reference | Portions of the Registrant’s Proxy Statement for the 2021 Annual Meeting of Shareholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ending March 31, 2021. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement is not deemed to be filed as part of this Annual Report on Form 10-K. | ||
Entity Filer Category | Large Accelerated Filer | ||
ICFR Auditor Attestation Flag | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 324,962 | $ 213,170 |
Accounts receivable, net | 242,079 | 157,058 |
Deferred commissions, current | 48,986 | 38,509 |
Prepaid expenses and other current assets | 64,255 | 79,040 |
Total current assets | 680,282 | 487,777 |
Property and equipment, net | 36,916 | 31,508 |
Operating lease right-of-use asset, net | 42,959 | |
Goodwill | 1,271,195 | 1,270,733 |
Other intangible assets, net | 149,484 | 201,592 |
Deferred tax assets, net | 16,811 | 7,405 |
Deferred commissions, non-current | 48,638 | 39,736 |
Other assets | 9,933 | 8,126 |
Total assets | 2,256,218 | 2,046,877 |
Current liabilities: | ||
Accounts payable | 9,621 | 11,112 |
Accrued expenses, current | 119,527 | 95,011 |
Deferred revenue, current | 509,272 | 384,060 |
Operating lease liabilities, current | 9,491 | |
Total current liabilities | 647,911 | 490,183 |
Deferred revenue, non-current | 47,504 | 60,711 |
Accrued expenses, non-current | 16,072 | 20,294 |
Operating lease liabilities, non-current | 38,203 | |
Deferred tax liabilities | 1,014 | 0 |
Long-term debt | 391,913 | 509,985 |
Total liabilities | 1,142,617 | 1,081,173 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Common shares, $0.001 par value, 600,000,000 shares authorized, 283,130,238 and 280,853,040 shares issued and outstanding at March 31, 2021 and March 31, 2020, respectively | 283 | 281 |
Additional paid-in capital | 1,653,328 | 1,573,347 |
Accumulated deficit | (513,799) | (589,819) |
Accumulated other comprehensive loss | (26,211) | (18,105) |
Total shareholders' equity | 1,113,601 | 965,704 |
Total liabilities and shareholders' equity | $ 2,256,218 | $ 2,046,877 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, authorized (in shares) | 600,000,000,000 | 600,000,000,000 |
Common shares, issued (in shares) | 283,130,238 | 280,853,040 |
Common shares, outstanding (in shares) | 283,130,238 | 280,853,040 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | |||
Total revenue | $ 703,509 | $ 545,803 | $ 430,966 |
Cost of revenue: | |||
Amortization of acquired technology | 15,317 | 16,449 | 18,338 |
Total cost of revenue | 127,708 | 128,931 | 106,801 |
Gross profit | 575,801 | 416,872 | 324,165 |
Operating expenses: | |||
Research and development | 111,415 | 119,281 | 76,759 |
Sales and marketing | 245,487 | 266,175 | 178,886 |
General and administrative | 92,219 | 161,983 | 91,778 |
Amortization of other intangibles | 34,744 | 40,280 | 47,686 |
Restructuring and other | 40 | 1,092 | 1,763 |
Total operating expenses | 483,905 | 588,811 | 396,872 |
Income (loss) from operations | 91,896 | (171,939) | (72,707) |
Interest expense, net | (14,205) | (45,397) | (69,845) |
Other income (expense), net | 162 | (1,197) | 2,641 |
Income (loss) before income taxes | 77,853 | (218,533) | (139,911) |
Income tax (expense) benefit | (2,139) | (195,284) | 23,717 |
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Net income (loss) per share: | |||
Net income (loss) per share, basic (in dollars per share) | $ 0.27 | $ (1.56) | $ (0.49) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.26 | $ (1.56) | $ (0.49) |
Weighted average shares outstanding: | |||
Weighted average shares outstanding, basic (in shares) | 280,469,000 | 264,933,000 | 235,939,000 |
Weighted average shares outstanding, diluted (in shares) | 286,509,000 | 264,933,000 | 235,939,000 |
Subscription | |||
Revenue: | |||
Total revenue | $ 655,180 | $ 487,817 | $ 349,830 |
Cost of revenue: | |||
Cost of revenues | 77,488 | 73,193 | 56,934 |
License | |||
Revenue: | |||
Total revenue | 1,446 | 12,686 | 40,354 |
Service | |||
Revenue: | |||
Total revenue | 46,883 | 45,300 | 40,782 |
Cost of revenue: | |||
Cost of revenues | $ 34,903 | $ 39,289 | $ 31,529 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | (8,106) | 4,982 | (3,912) |
Effect of reorganization | 0 | 6,623 | 0 |
Total other comprehensive (loss) income | (8,106) | 11,605 | (3,912) |
Comprehensive income (loss) | $ 67,608 | $ (402,212) | $ (120,106) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity / Members' Deficit - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2018 | 0 | ||||||
Beginning balance at Mar. 31, 2018 | $ (268,690) | $ 0 | $ (183,084) | $ (59,808) | $ (25,798) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Foreign currency translation | (3,912) | (3,912) | |||||
Transfers to related parties | (813) | (813) | |||||
Equity repurchases | (649) | (649) | |||||
Net income (loss) | (116,194) | (116,194) | |||||
Ending balance (in shares) at Mar. 31, 2019 | 0 | ||||||
Ending balance at Mar. 31, 2019 | (390,258) | $ 0 | (184,546) | (176,002) | (29,710) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Foreign currency translation | 4,982 | 4,982 | |||||
Reclassification of related party payable upon reorganization | 600,622 | 600,622 | |||||
Issuance of common stock in connection with initial public offering, net of underwriters' discounts and commissions and issuance costs (in shares) | 38,873,000 | ||||||
Issuance of common stock in connection with initial public offering, net of underwriters' discounts and commissions and issuance costs | 585,297 | $ 39 | 585,258 | ||||
Effect of reorganization (in shares) | 241,547,000 | ||||||
Effect of reorganization | 278,248 | $ 242 | 271,383 | 6,623 | |||
Contribution for taxes associated with reorganization | 265,000 | 265,000 | |||||
Restricted stock units vested (in shares) | 503,000 | ||||||
Restricted stock awards forfeited (in shares) | (70,000) | ||||||
Share-based compensation | 35,786 | 35,786 | |||||
Equity repurchases | (156) | (156) | |||||
Net income (loss) | $ (413,817) | (413,817) | |||||
Ending balance (in shares) at Mar. 31, 2020 | 280,853,040 | 280,853,000 | |||||
Ending balance at Mar. 31, 2020 | $ 965,704 | $ 306 | $ 281 | 1,573,347 | (589,819) | $ 306 | (18,105) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Foreign currency translation | (8,106) | (8,106) | |||||
Restricted stock units vested (in shares) | 1,256,000 | ||||||
Restricted stock units vested | 1 | $ 1 | |||||
Restricted stock awards forfeited (in shares) | (110,000) | ||||||
Issuance of common stock related to employee stock purchase plan (in shares) | 331,000 | ||||||
Issuance of common stock related to employee stock purchase plan | $ 9,195 | 9,195 | |||||
Exercise of stock options (in shares) | 800,000 | 800,000 | |||||
Exercise of stock options | $ 13,052 | $ 1 | 13,051 | ||||
Share-based compensation | 57,784 | 57,784 | |||||
Equity repurchases | $ (49) | (49) | |||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-02 | ||||||
Net income (loss) | $ 75,714 | 75,714 | |||||
Ending balance (in shares) at Mar. 31, 2021 | 283,130,238 | 283,130,000 | |||||
Ending balance at Mar. 31, 2021 | $ 1,113,601 | $ 283 | $ 1,653,328 | $ (513,799) | $ (26,211) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operations: | |||
Depreciation | 9,022 | 7,864 | 7,319 |
Amortization | 51,942 | 58,457 | 72,792 |
Share-based compensation | 57,784 | 222,478 | 71,151 |
Deferred income taxes | (7,036) | (46,221) | (34,214) |
Other | 1,845 | 6,129 | (1,140) |
Net change in operating assets and liabilities: | |||
Accounts receivable | (81,992) | (44,021) | 17,979 |
Deferred commissions | (16,323) | (20,107) | (19,968) |
Prepaid expenses and other assets | 5,669 | (57,588) | (12,401) |
Accounts payable and accrued expenses | 26,592 | 53,004 | 34,787 |
Operating leases, net | 731 | ||
Deferred revenue | 96,488 | 91,367 | 127,030 |
Net cash provided by (used in) operating activities | 220,436 | (142,455) | 147,141 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (14,076) | (19,721) | (7,377) |
Capitalized software costs | 197 | (892) | (1,873) |
Net cash used in investing activities | (13,879) | (20,613) | (9,250) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of underwriters' discounts and commissions | 0 | 590,297 | 0 |
Settlement of deferred offering costs | 0 | (5,000) | 0 |
Proceeds from term loans | 0 | 0 | 1,120,000 |
Debt issuance costs | 0 | (866) | (16,288) |
Repayment of term loans | (120,000) | (515,189) | (83,871) |
Payments to related parties | 0 | 0 | (1,177,021) |
Contribution for tax associated with reorganization | 0 | 265,000 | 0 |
Proceeds from employee stock purchase plan | 9,195 | 0 | 0 |
Proceeds from exercise of stock options | 13,052 | 0 | 0 |
Equity repurchases | (49) | (156) | (649) |
Installments related to acquisitions | 0 | (4,694) | (3,653) |
Net cash (used in) provided by financing activities | (97,802) | 329,392 | (161,482) |
Effect of exchange rates on cash and cash equivalents | 3,037 | (4,468) | (2,676) |
Net increase (decrease) in cash and cash equivalents | 111,792 | 161,856 | (26,267) |
Cash and cash equivalents, beginning of year | 213,170 | 51,314 | 77,581 |
Cash and cash equivalents, end of year | 324,962 | 213,170 | 51,314 |
Supplemental cash flow data: | |||
Cash paid for interest | 12,475 | 39,568 | 40,969 |
Cash (received from) paid for tax, net | (7,337) | 266,708 | 5,928 |
Noncash investing and financing activities: | |||
Reclassification of related party payable upon reorganization | 0 | 600,622 | 0 |
Transactions with related parties | 0 | 0 | 14,263 |
Modification of MIU Plan awards | $ 0 | $ 278,248 | $ 0 |
Description of the Business
Description of the Business | 12 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business Business Dynatrace, Inc. (“Dynatrace”, or the “Company”) offers an observability platform, purpose-built for modern multicloud environments. The Company designed its all-in-one Dynatrace ® Software Intelligence Platform to address the growing complexity faced by technology and digital business teams as these enterprises further embrace the cloud to effect their digital transformation. The Company’s platform does so by utilizing artificial intelligence at its core and continuous automation to deliver precise answers about the performance and security of applications, the underlying infrastructure, and the experience of its customers’ users to enable organizations to innovate faster, operate more efficiently, and improve user experiences for consistently better business outcomes. Thoma Bravo (“TB”), a private equity investment firm, completed its acquisition of Compuware Corporation on December 15, 2014. Following the acquisition, Compuware Corporation was restructured following which Compuware Parent, LLC became the owner of Dynatrace Holding Corporation (“DHC”), under which the Compuware and Dynatrace businesses were separated, establishing Dynatrace as a standalone business. Following the corporate reorganization described below, Dynatrace became wholly owned by Dynatrace, Inc. (formerly Dynatrace Holdings LLC). Fiscal year The Company’s fiscal year ends on March 31. References to fiscal 2021, for example, refer to the fiscal year ended March 31, 2021. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of presentation and consolidation Prior to July 30, 2019, Dynatrace Holdings LLC, a Delaware limited liability company, was an indirect equity holder of DHC that indirectly and wholly owned Dynatrace, LLC. On July 31, 2019, Dynatrace Holdings LLC (i) converted into a Delaware corporation with the name Dynatrace, Inc. and (ii) through a series of corporate reorganization steps, became the parent company of DHC. Additionally, as part of the reorganization, two wholly owned subsidiaries of DHC, Compuware Corporation (“Compuware”) and SIGOS LLC (“SIGOS”), were spun out from the corporate structure to the DHC shareholders. As a result of these transactions, DHC is a wholly owned indirect subsidiary of Dynatrace, Inc. These reorganization steps are collectively referred to as the “reorganization.” In connection with the reorganization, the equity holders of Compuware Parent, LLC received 222,021,708 units of Dynatrace Holdings LLC in exchange for their equity interests in Compuware Parent, LLC based on the fair value of a unit of Dynatrace Holdings LLC on July 30, 2019, which was determined to be $16.00 per unit by a committee of the board of managers of Dynatrace Holdings LLC, and all of the outstanding units of Dynatrace Holdings LLC then converted into shares of Dynatrace, Inc. Additionally, 19,525,510 units of Dynatrace Holdings LLC were issued upon exchange of Dynatrace, LLC Management Incentive Units (“MIUs”) and Appreciation Units (“AUs”) for a total of 241,547,218 outstanding units in Dynatrace Holdings LLC immediately prior to the closing of the Company’s initial public offering (“IPO”). The reorganization was completed between entities that were under common control since December 15, 2014. Therefore, these consolidated financial statements retroactively reflect DHC and Dynatrace, Inc. on a consolidated basis for the periods presented. The spin-offs of Compuware Corporation and SIGOS LLC from DHC have been accounted for retroactively as a change in reporting entity and accordingly, these consolidated financial statements exclude their accounts and results. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements. The income tax amounts in the accompanying consolidated financial statements have been calculated based on a separate return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. As described in Note 16, prior to the reorganization the consolidated financial statements reflected the debt and debt service associated with subordinated demand promissory notes payable to a related party. The consolidated financial statements also reflect certain expenses incurred by the Company for certain functions including shared services for the periods prior to the reorganization, which are immaterial to these consolidated financial statements. These expenses were allocated to Dynatrace on the basis of direct usage when identifiable, and for resources indirectly used by Dynatrace. Allocations were based on a proportional cost allocation methodology to reflect estimated usage by Dynatrace. Management considers the allocation methodology and results to be reasonable for all periods presented. However, the financial information presented in these consolidated financial statements may not reflect the consolidated financial position, operating results and cash flows of Dynatrace had the Dynatrace business been a separate stand-alone entity during all of the periods presented. Actual costs that would have been incurred if Dynatrace had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas. Initial Public Offering On August 1, 2019, the Company completed its initial public offering, in which it sold and issued 38,873,174 shares of common stock, inclusive of the underwriters’ option to purchase additional shares that was exercised in full, at an issue price of $16.00 per share. The Company received a total of $622.0 million in gross proceeds from the offering, or approximately $585.3 million in net proceeds after deducting approximately $36.7 million for underwriting discounts, commissions and offering-related expenses. The IPO also included the sale of 2.1 million shares of common stock, by selling stockholders, inclusive of the underwriters’ option to purchase additional shares that was exercised in full. The Company did not receive any proceeds from the sale of common stock by the selling stockholders. Prior to the closing of the IPO, the 241,547,218 outstanding units of Dynatrace Holdings LLC were converted on a one-for-one basis into shares of common stock in accordance with the terms of the certificate of incorporation. Foreign currency translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the Company’s principal foreign subsidiaries is the currency of the country in which each entity operates. Accordingly, assets and liabilities in the consolidated balance sheet have been translated at the rate of exchange at the balance sheet date, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations and are reported as accumulated other comprehensive loss within the consolidated statements of shareholders’ equity / member’s deficit. Transaction gains and losses generated by the effect of changes in foreign currency exchange rates on recorded assets and liabilities denominated in a currency different than the functional currency of the applicable entity are recorded in “Other income (expense), net” in the consolidated statements of operations. Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, the Company makes estimates with respect to the stand-alone selling price for each distinct performance obligation in customer contracts with multiple performance obligations, the uncollectible accounts receivable, the fair value of tangible and intangible assets acquired, valuation of long-lived assets, the period of benefit for deferred commissions and material rights, income taxes, equity-based compensation expense, and the determination of the incremental borrowing rate used for operating lease liabilities, among other things. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. In March 2020, the World Health Organization declared the recent outbreak of the novel coronavirus disease, or COVID-19, a global pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on the Company’s customers and its sales cycles, which are uncertain and cannot be predicted. As of the date of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments or a revision of the carrying value the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the consolidated financial statements. Segment information The Company operates as one operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. Business combinations When the Company acquires a business, management allocates the purchase price to the net tangible and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted average cost of capital and the cost savings expected to be derived from acquiring an asset. Revenue recognition The Company sells software licenses, subscriptions, maintenance and support, and professional services together in contracts with its customers, which include end-customers and channel partners. The Company’s software license agreements provide customers with a right to use software perpetually or for a defined term. As required under applicable accounting principles, the goods and services that the Company promises to transfer to a customer are accounted for separately if they are distinct from one another. Promised items that are not distinct are bundled as a combined performance obligation. The transaction price is allocated to the performance obligations based on the relative estimated standalone selling prices of those performance obligations. The Company recognizes revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer The Company considers the terms and conditions of the contract in identifying the contracts. The Company determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, it has been determined the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company will evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit, and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. In identifying performance obligations, the Company reviews contractual terms, considers whether any implied rights exist, and evaluates published product and marketing information. The Company’s performance obligations consist of (i) software licenses, (ii) subscription services, (ii) maintenance and support for software licenses, and (iv) professional services. 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s contracts do not contain a significant financing component. 4. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) for arrangements not including software licenses or subscription services. The Company has determined that its pricing for software licenses and subscription services is highly variable and therefore allocates the transaction price to those performance obligations using the residual approach. 5. Recognition of revenue when, or as a performance obligation is satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Subscription Subscription revenue relates to performance obligations for which the Company recognizes revenue over time as control of the product or service is transferred to the customer. Subscription revenue includes arrangements that permit customers to access and utilize the Company’s hosted software delivered on a software-as-a-service (“SaaS”) basis, term-based and perpetual licenses of the Company’s Dynatrace Software, as well as maintenance. The when-and-if available updates of the Dynatrace Software, which are part of the maintenance agreement, are critical to the continued utility of the Dynatrace Software; therefore, the Company has determined the Dynatrace Software and the related when-and-if available updates to be a combined performance obligation. Accordingly, when Dynatrace Software is sold under a term-based license, the revenue associated with this combined performance obligation is recognized ratably over the license term as maintenance is included for the duration of the license term. The Company has determined that perpetual licenses of Dynatrace Software provide customers with a material right to acquire additional goods or services that they would not receive without entering into the initial contract as the renewal option for maintenance services allows the customer to extend the utility of the Dynatrace Software without having to again make the initial payment of the perpetual software license fee. The associated material right is deferred and recognized ratably over the term of the expected optional maintenance renewals. Subscription revenue also includes maintenance services relating to the Company’s Classic offerings as that revenue is recognized over time given that the obligation is a stand-ready obligation to provide customer support and when-and-if available updates to the Classic software as well as certain other stand-ready obligations. License License revenue relates to performance obligations for which the Company recognizes revenue at the point that the license is transferred to the customer. License revenue includes these perpetual and term-based licenses that relate to the Company’s Classic offerings (“Classic Software Licenses”), which are focused on traditional customer approaches to building, operating and monitoring software in less dynamic environments. The Company requires customers purchasing perpetual licenses of Classic Software and Dynatrace Software, as defined below, to also purchase maintenance services covering at least one year from the beginning of the perpetual license. The Company has determined that the Classic Software Licenses and the related maintenance services are separate performance obligations with different patterns of recognition. Revenue from Classic Software Licenses is recognized upon delivery of the license. Revenue from maintenance is recognized over the period of time of the maintenance agreement and is included in “Subscription”. Service The Company offers implementation, consulting and training services for the Company’s software solutions and SaaS offerings. Services fees are generally based on hourly rates. Revenues from services are recognized in the period the services are performed, provided that collection of the related receivable is reasonably assured. Deferred commissions Deferred sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit which the Company has estimated to be three years. The period of benefit has been determined by taking into consideration the duration of customer contracts, the life of the technology, renewals of maintenance and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in “Sales and marketing” expenses on the consolidated statements of operations. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred commissions. There were no impairment losses recorded during the periods presented. Deferred revenue Deferred revenue consists primarily of billed subscription and maintenance fees related to the future service period of subscription and maintenance agreements in effect at the reporting date. Deferred licenses are also included in deferred revenue for those billed arrangements that are being recognized over time. Short-term deferred revenue represents the unearned revenue that will be earned within twelve months of the balance sheet date; whereas, long-term deferred revenue represents the unearned revenue that will be earned after twelve months from the balance sheet date. Payment terms Payment terms and conditions vary by contract type, although the Company’s terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers or to provide customers with financing. Contract modification Contract modifications are assessed to determine (i) if the additional goods and services are distinct from the goods and services in the original arrangement; and (ii) if the amount of the consideration expected for the added goods and services reflects the stand-alone selling price of those goods and services, as adjusted for contract-specific circumstances. The Company’s additional goods and services offered have historically been distinct. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract, which the Company accounts for on a prospective basis as the termination of the existing contract and the creation of a new contract. Cost of revenue Cost of subscription Cost of subscription revenue includes all direct costs to deliver the Company’s subscription products including salaries, benefits, share-based compensation and related expenses such as employer taxes, allocated overhead for facilities, IT, third-party hosting fees related to the Company’s cloud services, and amortization of internally developed capitalized software technology. The Company recognizes these expenses as they are incurred. Cost of service Cost of service revenue includes salaries, benefits, share-based compensation and related expenses such as employer taxes for our services organization, allocated overhead for depreciation of equipment, facilities and IT, and amortization of acquired intangible assets. The Company recognizes expense related to its services organization as they are incurred. Amortization of acquired technology Amortization of acquired technology includes amortization expense for technology acquired in business combinations. Research and development Research and development (“R&D”) costs, which primarily include the cost of programming personnel, including share-based compensation, amounted to $111.4 million, $119.3 million, and $76.8 million during the years ended March 31, 2021, 2020 and 2019, respectively. R&D costs related to the Company’s software solutions are reported as “Research and development” in the consolidated statements of operations. Advertising Advertising costs are expensed as incurred and are included in “Sales and marketing” expense in the consolidated statements of operations. Advertising expense was $26.4 million, $5.7 million, and $2.1 million during the years ended March 31, 2021, 2020 and 2019, respectively. Leases Leases arise from contractual obligations that convey the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At the inception of the contract, the Company determines if an arrangement contains a lease based on whether there is an identified asset and whether the Company controls the use of the identified asset. The Company also determines the classification of that lease, between financing and operating, at the lease commencement date. The Company accounts for and allocates consideration to the lease and non-lease components as a single lease component. A right-of-use asset represents the Company’s right to use an underlying asset and a lease liability represents the Company’s obligation to make payments during the lease term. Right-of-use assets are recorded and recognized at commencement for the lease liability amount, adjusted for initial direct costs incurred and lease incentives received. Lease liabilities are recorded at the present value of the future lease payments over the lease term at commencement. The discount rate used to determine the present value is the incremental borrowing rate unless the interest rate implicit in the lease is readily determinable. As the implicit rate for the operating leases is generally not determinable, the Company uses an incremental borrowing rate as the discount rate at the lease commencement date to determine the present value of lease payments. The Company determines the discount rate of the leases by considering various factors, such as the credit rating, interest rates of similar debt instruments of entities with comparable credit ratings, jurisdictions, and the lease term. The Company’s operating leases typically include non-lease components such as common-area maintenance costs, utilities, and other maintenance costs. The Company has elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments. The Company’s lease terms may include options to extend or terminate the lease. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that the Company will exercise those options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s right-of-use assets are included in “Operating lease right-of-use asset, net” and the current and non-current portions of the lease liabilities are included in “Operating lease liabilities, current” and “Operating lease liabilities, non-current,” respectively, on the consolidated balance sheets. The Company does not record leases with terms of 12 months or less on the consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. Restructuring expense The Company defines restructuring expense as costs directly associated with exit or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs are probable and estimable. For one-time termination benefits (i.e., no substantive plan) and employee retention costs, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. There is presently no concentration of credit risk for customers as no individual entity represented more than 10% of the balance in accounts receivable as of March 31, 2021, 2020 and 2019 or 10% of revenue for the years ended March 31, 2021, 2020 and 2019. Cash and cash equivalents All highly-liquid investments with a maturity of three months or less when purchased are considered cash and cash equivalents. Accounts receivable, net Trade accounts receivable are recorded at the invoiced amount. Prior to the Company’s adoption of Topic 326, the accounts receivable balance was reduced by an allowance for doubtful accounts that was determined based on the Company’s assessment of the collectability of customer accounts. Under Topic 326, accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors. In establishing any required allowance, management considers historical losses adjusted for current market conditions, the Company’s customers’ financial condition, the amount of any receivables in dispute, the current receivables aging, current payment terms and expectations of forward-looking loss estimates. Allowance for credit losses was $1.3 million as of March 31, 2021 and allowance for doubtful accounts was $3.1 million as of March 31, 2020, and is classified as “Accounts receivable, net” in the consolidated balance sheets. See “Recently adopted accounting pronouncements" section below for information pertaining to the adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. Property and equipment, net The Company states property and equipment, net, at the acquisition cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the useful lives of the assets or the related lease. The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term Property and equipment are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if an impairment exists. If the asset is determined to be impaired, the impairment loss is measured based on the excess of its carrying value over its fair value. Assets to be disposed of are reported at the lower of carrying value or net realizable value. There was no impairment of property and equipment during the years ended March 31, 2021, 2020 and 2019. Goodwill and other intangible assets The Company’s goodwill and intangible assets primarily relate to the push-down of such assets relating to Thoma Bravo’s December 15, 2014 acquisition of Compuware Corporation based on their relative fair values at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter of the Company’s fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. Since the Company’s acquisition by Thoma Bravo through March 31, 2021, the Company has not had any goodwill impairment. Intangible assets consist primarily of customer relationships, developed technology, trade names and trademarks, all of which have a finite useful life, as well as goodwill. Intangible assets are amortized based on either the pattern in which the economic benefits of the intangible assets are estimated to be realized or on a straight-line basis, which approximates the manner in which the economic benefits of the intangible asset will be consumed. Capitalized software The Company’s capitalized software includes the costs of internally developed software technology and software technology purchased through acquisition. Internally developed software technology consists of development costs associated with software products to be sold (“software products”) and internal use software associated with hosted software. Costs associated with the development of software technology are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software technology is available for general release to customers. Technological feasibility is established when management has authorized and committed to funding a project and it is probable that the project will be completed, and the software will be used to perform the function intended. For internal use software, capitalization begins during the application development stage. The Company capitalized $0.3 million for internally developed software technology during the year ended March 31, 2021, offset by $0.5 million of derecognized software costs. The Company capitalized $0.9 million, and $1.9 million for internally developed software technology during the years ended March 31, 2020 and 2019, respectively, and is recorded within “Other intangible assets, net” in the consolidated balance sheets. The amortization of capitalized software technology is computed on a project-by-project basis. The annual amortization is the greater of the amount computed using (a) the ratio of current gross revenues compared with the total of current and anticipated future revenues for the software technology or (b) the straight-line method over the remaining estimated economic life of the software technology, including the period being reported on. Amortization begins when the software technology is available for general release to customers. The amortization period for capitalized software is generally three Impairment of long-lived assets Long-lived assets, including amortized intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying va |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of revenue The following table is a summary of the Company’s total revenue by geographic region (in thousands, except percentages): Fiscal Year Ended March 31, 2021 2020 2019 Amount % Amount % Amount % North America $ 388,188 55 % $ 318,299 58 % $ 248,012 57 % Europe, Middle East and Africa 216,647 31 % 150,418 28 % 125,615 29 % Asia Pacific 78,295 11 % 60,418 11 % 45,563 11 % Latin America 20,379 3 % 16,668 3 % 11,776 3 % Total revenue $ 703,509 $ 545,803 $ 430,966 For the years ended March 31, 2021, 2020 and 2019, the United States was the only country that represented more than 10% of the Company’s revenues in any period, constituting $362.1 million and 51%, $299.5 million and 55% and $233.3 million and 54% of total revenue, respectively. Deferred commissions The following table represents a rollforward of the Company’s deferred commissions (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Beginning balance $ 78,245 $ 59,250 $ 39,282 Additions to deferred commissions 63,627 54,969 43,212 Amortization of deferred commissions (44,248) (35,974) (23,244) Ending Balance $ 97,624 $ 78,245 $ 59,250 Deferred commissions, current 48,986 38,509 27,705 Deferred commissions, non-current 48,638 39,736 31,545 Total deferred commissions $ 97,624 $ 78,245 $ 59,250 Deferred revenue Revenue recognized during the years ended March 31, 2021, 2020, and 2019 which was included in the deferred revenue balances at the beginning of each respective period, was $504.7 million, $274.7 million, and $211.4 million. Remaining performance obligations As of March 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,190.1 million, which consists of both billed consideration in the amount of $556.8 million and unbilled consideration in the amount of $633.3 million that the Company expects to recognize as subscription and service revenue. The Company expects to recognize 57% of this amount as revenue in the year ended March 31, 2022 and the remainder thereafter. |
Business Combinations
Business Combinations | 12 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Business CombinationsIn November 2017, the Company completed the acquisition of Qumram AG (Qumram), a Swiss company whose technology allows organizations to gain insight into user behavior and enhance customer experience by recording, analyzing and visually replaying user sessions, for an aggregate purchase price of $20.8 million. Total cash consideration net of cash acquired was $11.3 million. The Company recorded a payment obligation of $8.5 million, of which $0.0 million was classified as “Accrued expenses, current” in its consolidated balance sheet for the year ended March 31, 2020 and no purchase obligations are outstanding as of March 31, 2021. Of the total purchase price, $1.7 million was allocated to acquired technology and an immaterial amount to net tangible assets acquired, with the excess $18.7 million of the purchase price over the fair value of net tangible and intangible assets acquired recorded as goodwill. The Company also recognized transaction costs of approximately $0.2 million, which are included in “General and administrative” expense in its consolidated statement of operations for the year ended March 31, 2018. The acquired technology has an estimated useful life of 6 years and is recorded within “Other intangible assets, net” in the consolidated balance sheets. The acquisition has been accounted for as a business combination under the acquisition method. Goodwill generated from the acquisition is attributable to expected synergies from future growth and potential future monetization opportunities, and is not deductible for tax purposes. Pro forma revenue and results of operations have not been presented because the historical results of Qumram were not material to the Company’s consolidated financial statements in any period presented. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consists of the following (in thousands): March 31, 2021 2020 Prepaid expenses $ 20,308 $ 13,189 Income taxes refundable 41,875 65,341 Other 2,072 510 Prepaid expenses and other current assets $ 64,255 $ 79,040 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2021 2020 Computer equipment and software $ 23,134 $ 19,550 Furniture and fixtures 9,804 7,679 Leasehold improvements 27,961 21,562 Other 864 3,111 Total property and equipment 61,763 51,902 Less: accumulated depreciation and amortization (24,847) (20,394) Property and equipment, net $ 36,916 $ 31,508 Depreciation and amortization of property and equipment totaled $9.0 million, $7.9 million, and $7.3 million for the years ended March 31, 2021, 2020, and 2019, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 12 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net Changes in the carrying amount of goodwill on a consolidated basis for fiscal 2021 consists of the following (in thousands): March 31, 2021 Balance, beginning of year $ 1,270,733 Foreign currency impact 462 Balance, end of year $ 1,271,195 Other intangible assets, net excluding goodwill consists of the following (in thousands): Weighted Average Useful Life (in months) March 31, 2021 2020 Capitalized software 107 $ 189,398 $ 189,554 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 595,956 596,112 Less: accumulated amortization (446,472) (394,520) Total other intangible assets, net $ 149,484 $ 201,592 Amortization of other intangible assets totaled $51.9 million, $58.5 million, and $72.8 million for the years ended March 31, 2021, 2020, and 2019, respectively. As of March 31, 2021, the estimated future amortization expense of the Company’s other intangible assets in the table above is as follows (in thousands): Fiscal Year Ended March 31, 2022 2023 2024 2025 Capitalized software $ 15,876 $ 15,522 $ 15,221 $ 10,632 Customer relationships 24,660 20,794 17,534 10,473 Trademarks and tradenames 5,501 5,501 4,753 3,017 Total amortization $ 46,037 $ 41,817 $ 37,508 $ 24,122 |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax provision Income (loss) before income taxes and the income tax (expense) benefit includes the following (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Domestic $ 37,368 $ (245,177) $ (163,385) Foreign 40,485 26,644 23,474 Total $ 77,853 $ (218,533) $ (139,911) The income tax provision includes the following (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Income tax expense (benefit) Federal $ (3,835) $ 180,402 $ 3,213 State (2,071) 48,045 575 Foreign 15,110 13,058 5,920 Total current tax position 9,204 241,505 9,708 Federal (3,027) (37,731) (29,021) State (615) (5,689) (5,464) Foreign (3,423) (2,801) 1,060 Total deferred tax provision (7,065) (46,221) (33,425) Total income tax expense (benefit) $ 2,139 $ 195,284 $ (23,717) The Company’s income tax expense of $2.1 million for the year ended March 31, 2021 differed from the amount computed on pre-tax income at the U.S. federal income tax rate of 21%, primarily due to the impact of tax return to provision true-ups resulting from changes in estimates to the reorganization transaction tax and the corresponding impact to the uncertain tax positions. In addition, the difference was due to the vesting of share-based compensation that generated excess tax benefits, the foreign-derived intangible income deduction, and the utilization of U.S. foreign tax credits generated in the current year as well as the carryforward from previous years. The Company’s income tax expense of $195.3 million for the year ended March 31, 2020 differed from the amount computed on pre-tax loss at the U.S. federal income tax rate of 21% because of the effects of the reorganization transaction, non-deductible share-based compensation, and the foreign-derived intangible income deduction. The transaction produced a gain on the difference between the fair market value of the Compuware assets distributed and the adjusted tax basis in such assets, generating a tax liability that was only partially offset by U.S. foreign tax credits that previously were subject to a valuation allowance. The Company’s income tax benefit of $23.7 million for the year ended March 31, 2019 differed from the amount computed on pre-tax loss at the U.S. federal income tax rate of 21% primarily because of non-deductible share-based compensation, the effects of which were partially offset by U.S. tax credits generated during this year as well as the foreign-derived intangible income deduction. The tax rate reconciliation is as follows (in thousands, certain prior year amounts have been reclassified to conform to the current year’s presentation): Fiscal Year Ended March 31, 2021 2020 2019 Income tax expense (benefit) at U.S. federal statutory income tax rate $ 16,349 $ (45,892) $ (29,381) State and local tax expense (580) (2,897) (4,890) Foreign tax rate differential 1,939 3,521 2,051 Branch income 4,830 1,601 1,824 Non-deductible expenses 3,459 5,976 840 Tax credits (9,316) (57,277) (13,233) Foreign derived intangibles deduction (4,775) (3,901) (1,790) Tax associated with reorganization — 239,990 — Share-based compensation (6,424) 48,129 10,967 Prior year tax return to provision true-ups (11,464) — — Changes in uncertain tax positions (1,102) 13,204 234 Changes in valuation allowance 2,091 (9,472) 6,087 Foreign withholding tax 6,992 4,231 3,086 Other adjustments 140 (1,929) 488 Total income tax expense (benefit) $ 2,139 $ 195,284 $ (23,717) Deferred tax assets and liabilities Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the jurisdictional cumulative loss incurred over the three-year period ended March 31, 2021. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. Based on this evaluation, a valuation allowance of $24.3 million and $22.2 million has been recorded as of March 31, 2021 and 2020, respectively. Only the portion of the deferred tax asset that is more likely than not to be realized has been recorded. Given the Company’s current earnings and anticipated future earnings, it is reasonably possible that within the next twelve months sufficient positive evidence may become available to allow the Company to conclude that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets. However, the exact timing and amount of the valuation allowance release are subject to change based on the Company’s growth and profitability. Temporary differences and carryforwards that give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands, certain prior year amounts have been reclassified to conform to the current year’s presentation): March 31, 2021 2020 Deferred revenue $ 17,050 $ 23,185 Capitalized research and development costs 10,834 11,140 Accrued expenses 8,882 6,217 Share-based compensation 8,367 5,251 Lease liabilities 8,321 — Net operating loss carryforwards 4,637 4,468 Other tax carryforwards, primarily foreign tax credits 20,479 18,215 Other 2,272 2,590 Total deferred tax assets before valuation allowance 80,842 71,066 Less: valuation allowance (24,297) (22,206) Net deferred tax assets 56,545 48,860 Intangible assets 30,525 40,270 Right-of-use assets 7,388 — Other 2,835 1,185 Total deferred tax liabilities 40,748 41,455 Net deferred tax assets $ 15,797 $ 7,405 At March 31, 2021, the Company had non-U.S. net operating loss carryforwards of $22.8 million of which $1.8 million expires in periods through 2033 if not utilized, and the remaining balance of $21.0 million may be carried forward indefinitely. The Company had U.S. net operating loss carryforwards and tax credit carryforwards of $21.5 million which expire in periods through 2040 if not utilized. The Company has not provided for taxes on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested. Generally, these earnings will be treated as previously taxed income from either the one-time transition tax or GILTI (“Global Intangible Low Taxed Income”), or they will be offset with a 100% dividend received deduction. The income taxes applicable to repatriating such earnings are not readily determinable. As of March 31, 2021, the Company had no plans which would subject these basis differences to income taxes in the United States or elsewhere. Uncertain tax positions The amount of gross unrecognized tax benefits was $15.1 million and $16.6 million as of March 31, 2021 and 2020, respectively, all of which would favorably affect the Company’s effective tax rate if recognized in future periods. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended March 31, 2021, 2020, and 2019 (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Gross unrecognized tax benefit, beginning of year $ 16,648 $ 9,653 $ 9,143 Gross increases to tax positions for prior periods 1,223 438 20 Gross decreases to tax positions for prior periods (2,654) (6,986) (70) Gross increases to tax positions for current period — 13,543 560 Settlements (10) — — Lapse of statutes of limitations (132) — — Gross unrecognized tax benefit, end of year $ 15,075 $ 16,648 $ 9,653 As of March 31, 2021 and 2020, the net interest and penalties payable associated with its uncertain tax positions was $0.9 million and $0.3 million, respectively. During the years ended March 31, 2021 and 2020, the Company recognized expense related to interest and penalties of $0.6 million and $0.2 million, respectively. During the year ended March 31, 2019, the Company recognized an immaterial amount of net interest expense. The Company files tax returns in the U.S. federal, state, and foreign jurisdictions and the tax returns are subject to examination by various domestic and international tax authorities. As of March 31, 2021, the Internal Revenue Services has completed the examinations of the Company’s fiscal 2018 federal income tax return. The settlement from this examination was not material to the Company’s financial statements, including cash flow and effective tax rate. The Company has open years in all significant federal, state, and foreign jurisdictions back to 2011 in certain locations. These open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations due to the amount, timing or inclusion of revenue and expenses. The Company does not anticipate a significant impact to the gross unrecognized tax benefits within the next twelve months related to these open years. Tax legislation On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The Company is required to recognize the effects of tax law changes in the period of enactment. The CARES Act did not materially impact the Company’s tax provision as of March 31, 2021 and 2020. Immaterial revision of previously issued consolidated financial statements During the fourth quarter of fiscal 2021, in conjunction with the Company’s completion of the tax return to provision process, the Company identified an immaterial error in the calculation of its income tax provision for the year ended March 31, 2020. The error was primarily related to adjustments to tax attributes related to the reorganization and stock-based compensation. The Company evaluated the materiality of the error, considering both quantitative and qualitative factors, and determined that the related impact was not material to its consolidated financial statements for the year ended March 31, 2020, the three months ended June 30, 2020, the three and six months ended September 30, 2020, and the three and nine months ended December 31, 2020. The Company has decided to correct the prior year presentation to provide comparability to the fiscal 2021 consolidated financial statements. Accordingly, the results for the year ended March 31, 2020 have been adjusted to incorporate the revised amounts, where applicable. The adjustments below related to the consolidated balance sheet as of March 31, 2020 are also required for June 30, 2020, September 30, 2020, and December 31, 2020. The following tables summarize the effect of this revision (in thousands, except per share data): March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Balance Sheets Items: Prepaid expenses and other current assets $ 61,188 $ 17,852 $ 79,040 Total current assets 469,925 17,852 487,777 Deferred tax assets, net 20,460 (13,055) 7,405 Total assets 2,042,080 4,797 2,046,877 Accrued expenses, current 93,728 1,283 95,011 Total current liabilities 488,900 1,283 490,183 Accrued expenses, non-current 20,987 (693) 20,294 Total liabilities 1,080,583 590 1,081,173 Accumulated deficit (594,026) 4,207 (589,819) Total shareholders’ equity 961,497 4,207 965,704 Total liabilities and shareholders’ equity $ 2,042,080 $ 4,797 $ 2,046,877 Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Operations Items: Income tax expense $ (199,491) $ 4,207 $ (195,284) Net loss (418,024) 4,207 (413,817) Net loss per share: Basic and diluted $ (1.58) $ 0.02 $ (1.56) Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Comprehensive Income (Loss) Items: Net loss $ (418,024) $ 4,207 $ (413,817) Comprehensive loss $ (406,419) $ 4,207 $ (402,212) March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Shareholders’ Equity / Member’s Deficit Items: Net loss $ (418,024) $ 4,207 $ (413,817) Total shareholders’ equity, balance at March 31, 2020 $ 961,497 $ 4,207 $ 965,704 Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Cash Flow Items: Net loss $ (418,024) $ 4,207 $ (413,817) Deferred income taxes (59,276) 13,055 (46,221) Prepaid expenses and other assets (39,737) (17,851) (57,588) Accounts payable and accrued expenses 52,415 589 53,004 Net cash used in operating activities $ (142,455) $ — $ (142,455) The following table represents revisions to the Company’s current and deferred tax expense (in thousands): |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses, current consists of the following (in thousands): March 31, 2021 2020 Accrued employee - related expenses $ 63,890 $ 40,687 Accrued tax liabilities 23,001 13,350 Accrued restructuring — 1,065 Accrued professional fees 3,275 2,103 Income taxes payable 9,117 22,040 Other 20,244 15,766 Total accrued expenses, current $ 119,527 $ 95,011 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consists of the following (in thousands, except percentages): March 31, 2021 March 31, 2020 Amount Effective Rate Amount Effective Rate First Lien Term Loan $ 401,125 2.4 % $ 521,125 3.2 % Revolving credit facility — — Total principal 401,125 521,125 Unamortized discount and debt issuance costs (9,212) (11,140) Total debt 391,913 509,985 Less: Current portion of long-term debt — — Long-term debt $ 391,913 $ 509,985 First lien credit facilities The Company’s First Lien Credit Agreement, as amended, provides for a term loan facility, or the First Lien Term Loan, in an aggregate principal amount of $950.0 million and a senior secured revolving credit facility, or the Revolving facility, in an aggregate amount of $60.0 million. The Revolving Facility includes a $25.0 million letter of credit sub-facility. The First Lien Term Loan and Revolving Facility mature on August 23, 2025 and August 23, 2023, respectively. As of March 31, 2021 and 2020, there were $15.6 million and $15.3 million of letters of credit issued, respectively. The Company had $44.4 million and $44.7 million of availability under the Revolving Facility as of March 31, 2021 and 2020, respectively. Debt issuance costs and original issuance discount were incurred in connection with the First Lien Credit Agreement. These debt issuance costs and original issuance discount are included as a reduction of the debt balance in the consolidated balance sheets and will be amortized into interest expense over the contractual term of the loans. The Company recognized $1.9 million, $1.7 million, and $1.0 million of amortization of debt issuance costs and original issuance discount for the years ended March 31, 2021, 2020 and 2019, respectively, which is included in the accompanying consolidated statements of operations. Borrowings under the First Lien Term Loan and Revolving Facility currently bear interest, at the Company’s election, at either (i) the Alternative Base Rate, as defined per the credit agreement, plus 1.25% per annum, or (ii) LIBOR plus 2.25% per annum. Interest payments are due quarterly, or more frequently, based on the terms of the credit agreement. The Company has satisfied all required principal payments under the First Lien Term Loan and the remainder is due at maturity. The Company incurs fees with respect to the Revolving Facility, including (i) a commitment fee of 0.25% per annum of unused commitments under the Revolving Facility, (ii) facility fees equal to the applicable margin in effect for Eurodollar Rate Loans, as defined per the credit agreement, times the average daily stated amount of letters of credit, (iii) a fronting fee equal to either (a) 0.125% per annum on the stated amount of each letter of credit or (b) such other rate per annum as agreed to by the parties subject to the letters of credit, and (iv) customary administrative fees. The First Lien Term Loan requires prepayments in the case of certain events including: property or asset sale in excess of $5.0 million, proceeds in excess of $5.0 million from an insurance settlement, or proceeds from a new debt agreement. An additional prepayment may be required under the First Lien Term Loan related to excess cash flow for the respective measurement periods. All of the indebtedness under the First Lien Credit Agreement is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors. The First Lien Credit Agreement contains customary negative covenants. At March 31, 2021, the Company was in compliance with all applicable covenants. Second lien credit facility On August 23, 2018, the Company entered into the Second Lien Credit Agreement (the “Second Lien Term Loan”) in which the Company borrowed an aggregate principal amount of $170.0 million. Borrowings under the Second Lien Term Loan bore interest, at the Company’s election, at either (i) the Alternative Base Rate, as defined per the credit agreement, plus 6.00% per annum, or (ii) LIBOR plus 7.00% per annum. The maturity date on the Second Lien Term Loan was August 23, 2026, with principal payment due in full on the maturity date. Interest payments were due quarterly, or more frequently, based on the terms of the credit agreement. The Company recognized $0.1 million and $0.2 million of amortization of debt issuance costs and original issuance discount for the years ended March 31, 2020 and 2019, respectively, which is included in the accompanying consolidated statements of operations. During the second quarter of fiscal 2020, the Company repaid all outstanding borrowings, including accrued interest, under the Second Lien Term Loan and the remaining unamortized debt issuance costs and original issuance discount, aggregating to $2.7 million, was recognized as a loss on debt extinguishment within “Interest expense, net” in the consolidated statements of operations during the year ended March 31, 2020. Debt maturities The maturities of outstanding debt are as follows (in thousands): Fiscal year Amount 2022 $ — 2023 — 2024 — 2025 — 2026 401,125 Thereafter — Total future payments $ 401,125 |
Leases
Leases | 12 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2022 to 2032. As of March 31, 2021, the weighted average remaining lease term was 5.5 years and the weighted average discount rate was 7.6%. The Company does not have any finance leases as of March 31, 2021. The Company also has subleases of former offices which expire at various dates from fiscal 2022 to fiscal 2025. Sublease income from operating leases, which is recorded as a reduction of rental expense, was $3.9 million, $4.5 million and $4.3 million for the years ended March 31, 2021, 2020 and 2019, respectively. The following table presents information about leases on the consolidated statements of operations (in thousands): Fiscal Year Ended March 31, 2021 Operating lease expense (1) $ 10,436 Short-term lease expense $ 752 Variable lease expense $ 674 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Fiscal Year Ended March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 13,478 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 5,260 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. As of March 31, 2021, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2022 $ 12,290 2023 11,871 2024 10,886 2025 7,620 2026 5,017 Thereafter 10,206 Total operating lease payments (1) 57,890 Less: imputed interest (10,196) Total operating lease liabilities $ 47,694 _________________ (1) Presented gross of sublease income. As of March 31, 2021, the Company had commitments of $1.2 million for operating leases that have not yet commenced, and therefore are not included in the right-of-use assets or operating lease liabilities. These operating leases are expected to commence during the fiscal year ended March 31, 2022, with lease terms ranging from 1 to 10 years. Under previous lease accounting standard ASC 840, the aggregate future non-cancelable minimum rental payments on its operating leases, as of March 31, 2020, were as follows (in thousands): Fiscal Years Ending March 31, Amount 2021 $ 14,210 2022 11,663 2023 11,235 2024 10,864 2025 8,020 Thereafter 16,331 Total future contractual payments (1) $ 72,323 _________________ (1) Presented gross of sublease income. Under ASC 840, total rent expense under operating leases during the years ended March 31, 2020 and 2019 were $14.0 million and $11.3 million, respectively. |
Leases | Leases The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2022 to 2032. As of March 31, 2021, the weighted average remaining lease term was 5.5 years and the weighted average discount rate was 7.6%. The Company does not have any finance leases as of March 31, 2021. The Company also has subleases of former offices which expire at various dates from fiscal 2022 to fiscal 2025. Sublease income from operating leases, which is recorded as a reduction of rental expense, was $3.9 million, $4.5 million and $4.3 million for the years ended March 31, 2021, 2020 and 2019, respectively. The following table presents information about leases on the consolidated statements of operations (in thousands): Fiscal Year Ended March 31, 2021 Operating lease expense (1) $ 10,436 Short-term lease expense $ 752 Variable lease expense $ 674 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Fiscal Year Ended March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 13,478 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 5,260 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. As of March 31, 2021, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2022 $ 12,290 2023 11,871 2024 10,886 2025 7,620 2026 5,017 Thereafter 10,206 Total operating lease payments (1) 57,890 Less: imputed interest (10,196) Total operating lease liabilities $ 47,694 _________________ (1) Presented gross of sublease income. As of March 31, 2021, the Company had commitments of $1.2 million for operating leases that have not yet commenced, and therefore are not included in the right-of-use assets or operating lease liabilities. These operating leases are expected to commence during the fiscal year ended March 31, 2022, with lease terms ranging from 1 to 10 years. Under previous lease accounting standard ASC 840, the aggregate future non-cancelable minimum rental payments on its operating leases, as of March 31, 2020, were as follows (in thousands): Fiscal Years Ending March 31, Amount 2021 $ 14,210 2022 11,663 2023 11,235 2024 10,864 2025 8,020 Thereafter 16,331 Total future contractual payments (1) $ 72,323 _________________ (1) Presented gross of sublease income. Under ASC 840, total rent expense under operating leases during the years ended March 31, 2020 and 2019 were $14.0 million and $11.3 million, respectively. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities The Company has undertaken various restructuring activities to achieve its strategic and financial objectives. Restructuring activities include, but are not limited to product offering cancellation and termination of related employees, office relocation, administrative cost structure realignment and consolidation of resources. The Company expects to finance restructuring programs through cash on hand and cash generated from operations. Restructuring costs are estimated based on information available at the time such charges are recorded. In general, management anticipates that restructuring activities will be completed within a time frame such that significant changes to the plan are not likely. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated. The Company recorded no restructuring expenses during the year ended March 31, 2021. The Company recorded restructuring expenses of $0.9 million and $1.7 million during the years ended March 31, 2020 and 2019, respectively, within “Restructuring and other” on the consolidated statements of operations. Transformation activities During the year ended March 31, 2020, the Company announced a restructuring program designed to better align employee resources with its product offerings and future plans. Accordingly, the Company calculated and recorded a liability of the estimated termination benefits of $0.9 million. Restructuring reserves A restructuring reserve balance of $1.1 million as of March 31, 2020 is classified as “Accrued expenses, current” on the consolidated balance sheets. The activities associated with the restructuring reserve as of March 31, 2020 were complete by the end of fiscal 2021 and there was not a restructuring reserve as of March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal matters From time to time, the Company may be a party to lawsuits and legal proceedings arising in the ordinary course of business. In the opinion of the Company’s management, these matters, individually and in the aggregate, will not have a material adverse effect on the financial condition and results of the future operations of the Company. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Management Incentive Unit Plan Under the Management Incentive Unit Plan (the “MIU Plan”), Compuware Parent LLC’s board of managers had authorized the issuance of MIUs and AUs to certain executive officers and key employees. The MIUs and AUs consisted of two types of units which were classified as performance-vested units and time-vested units. In connection with the reorganization transactions described in Note 2, outstanding awards granted under the MIU Plan were converted into shares of common stock, restricted stock, and restricted stock units which were granted under the 2019 Plan (as defined below). Upon conversion, the MIUs and AUs were modified and ceased to be classified as liability awards. This modification impacted 306 participants and resulted in the recognition of incremental share-based compensation expense of $145.3 million to record the liability awards at fair value immediately prior to the modification during the year ended March 31, 2020. Upon modification, the liability balance of $278.2 million related to these MIUs and AUs was reclassified into additional paid-in capital. The fair value of the equity units underlying the MIUs and AUs had historically been determined by the board of directors as there was no public market for the equity units. The board of directors determined the fair value of the Company’s equity units by considering a number of objective and subjective factors including: the valuation of comparable companies, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. The participation threshold was determined by the board of directors, based on the fair market value on the grant issuance date upon vesting or settlement, the value associated with the MIUs and AUs was the difference between the fair value of the unit and the associated participation threshold. Prior to the modification, the awards were marked to market at the balance sheet date. Upon modification, the awards were marked to market immediately prior to the modification. The weighted average grant date fair value of units granted during the years ended March 31, 2020 and 2019 was $7.71 and $3.62, respectively. The total fair value of vested units during the years ended March 31, 2020 and 2019 was $278.2 million and $92.0 million, respectively. The following key assumptions were used to determine the fair value of the MIUs and AUs for fiscal 2020 and 2019: March 31, 2020 2019 Expected dividend yield — — Expected volatility 35% - 55% 50% - 60% Expected term (years) 0.5 - 1.25 1.0 - 1.5 Risk-free interest rate 1.86% - 2.09% 2.33% - 2.40% Amended and Restated 2019 Equity Incentive Plan In July 2019, the Company’s board of directors (the “Board”), upon the recommendation of the compensation committee of the board of directors, adopted the 2019 Equity Incentive Plan, as amended and restated, or the 2019 Plan, which was subsequently approved by the Company’s shareholders. In January 2021, the Board amended and restated the 2019 Plan to permit tolling vesting during leaves of absence for certain employees. The Company initially reserved 52,000,000 shares of common stock, or the Initial Limit, for the issuance of awards under the 2019 Plan. The 2019 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each April 1, beginning on April 1, 2020, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of March 31, 2021, 29,898,274 shares of common stock were available for future issuance under the 2019 Plan. The awards granted under the 2019 Plan have varying terms but generally vest over a four four upon the board of director’s confirmation that the performance target was met for such fiscal year. These shares have a requisite service period that varies based on the grant date, but the service period begins on the grant date and ends on achievement of the final fiscal year performance target. The performance criterion for vesting of performance shares has been based on certain company financial performance targets established and approved by the Company’s board of directors for each fiscal year. Shares that are vested based upon performance for any given year for which the target was not met shall not vest; provided, that if the target is not met for a given year, but the target for the subsequent year is met, the unvested performance-based shares for the previous year shall become vested when the target for the subsequent year was met. Stock options The following table summarizes activity for stock options during the period ended March 31, 2021: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balance, March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Granted 2,396 34.26 Exercised (800) 16.32 Forfeited (350) 18.29 Balance, March 31, 2021 8,393 $ 21.31 8.6 $ 226,438 Options vested and expected to vest at March 31, 2021 8,393 $ 21.31 8.6 $ 226,438 Options vested and exercisable at March 31, 2021 1,783 $ 16.16 8.3 $ 57,193 As of March 31, 2021, the total unrecognized compensation expense related to non-vested stock options is $50.8 million and is expected to be recognized over a weighted average period of 2.7 years. The Company recognized $16.8 million and $7.2 million of share-based compensation expense related to stock options for the years ended March 31, 2021 and 2020, respectively. The fair value for the Company’s stock options granted during the years ended March 31, 2021 and 2020 were estimated at the date of grant using a Black-Scholes option-pricing model using the following assumptions: March 31, 2021 2020 Expected dividend yield — — Expected volatility 39.3% - 39.8% 37.1% - 38.9% Expected term (years) 6.1 6.1 Risk-free interest rate 0.4% - 1.1% 0.8% - 1.9% The weighted average grant-date fair value of options granted during 2021 and 2020 were $13.08 and $6.43, respectively. The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. The computation of expected volatility is based on a calculation using the historical volatility of a group of publicly traded peer companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of the Company’s traded stock price. The computation of expected term was based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options’ remaining vesting term and contractual expiration period, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the award. Restricted shares and units During the year ended March 31, 2021, the Company granted an aggregate of 1,358,169 restricted stock units to certain key employees and non-employee directors. The total grants consisted of: (i) 1,323,169 time-based restricted stock units that vest 25% one year after the grant date and the remaining 75% vest ratably on a quarterly basis over 3 years and (ii) 35,000 time-based restricted stock units that vest on August 15, 2021 or at the annual shareholder meeting, if earlier. The restricted shares are generally subject to forfeiture if employment terminates prior to the vesting date. The Company expenses the cost of the restricted shares, which is determined to be the fair market value of the shares of common stock underlying the restricted shares on the date of grant, ratably over the period during which the vesting restrictions lapse. The following table provides a summary of the changes in the number of restricted shares for the year ended March 31, 2021: Number of Shares of Restricted Stock Awards Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2020 1,984 $ 16.00 3,123 $ 16.39 Granted — — 1,358 34.69 Vested (1,146) 16.00 (1,256) 16.26 Forfeited (110) 16.00 (184) 19.46 Balance, March 31, 2021 728 $ 16.00 3,041 $ 24.44 As of March 31, 2021, the total unrecognized compensation expense related to unvested restricted stock is $8.8 million and is expected to be recognized over a weighted average period of 1.3 years. As of March 31, 2021, the total unrecognized compensation expense related to unvested restricted stock units is $62.9 million and is expected to be recognized over a weighted average period of 2.6 years. The Company recognized $37.3 million and $27.9 million of share-based compensation expense related to restricted shares and units for the years ended March 31, 2021 and 2020, respectively. Employee Stock Purchase Plan In July 2019, the board of directors adopted, and the Company’s shareholders approved, the 2019 Employee Stock Purchase Plan. The Company expects to offer, sell and issue shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The ESPP provides for six six As of March 31, 2021, there was approximately $0.7 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period. The Company recognized $3.7 million and $0.8 million of share-based compensation expense related to the ESPP for the years ended March 31, 2021 and 2020, respectively. The Company estimated the fair value of the ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: March 31, 2021 2020 Expected dividend yield — — Expected volatility 35.9% - 55.5% 35.9 % Expected term (years) 0.5 0.5 Risk-free interest rate 0.1% - 1.6% 1.6 % The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. The computation of expected volatility is based on a calculation using the historical volatility of a group of publicly traded peer companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of the Company’s traded stock price. The computation of expected term was based on the offering period, which is six months. The risk-free interest rate is based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Share-based compensation The following table summarizes the components of total share-based compensation expense included in the consolidated financial statements for each period presented (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Cost of revenue $ 7,307 $ 18,685 $ 5,777 Research and development 11,684 38,670 12,566 Sales and marketing 24,153 84,698 24,673 General and administrative 14,640 80,425 28,135 Total share-based compensation expense $ 57,784 $ 222,478 $ 71,151 |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 12 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net (Loss) Income Per Share | Net Income (Loss) Per Share On August 1, 2019, the Company completed its IPO in which the Company issued and sold 38,873,174 shares of common stock at a price to the public of $16.00 per share. These shares are included in the common stock outstanding as of that date. For the years ended March 31, 2020 and 2019, basic and diluted net income (loss) per share has been retrospectively adjusted to reflect the conversion of equity in connection with the reorganization transactions described in Note 2. Basic and diluted net income (loss) per share was derived from a unit conversion factor of $16.00 per share as determined by the board of managers of Dynatrace Holdings LLC on July 30, 2019. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Fiscal Year Ended March 31, 2021 2020 2019 Numerator: Net income (loss) $ 75,714 $ (413,817) $ (116,194) Denominator: Weighted average shares outstanding, basic 280,469 264,933 235,939 Dilutive effect of stock-based awards 6,040 — — Weighted average shares outstanding, diluted 286,509 264,933 235,939 Net income (loss) per share, basic $ 0.27 $ (1.56) $ (0.49) Net income (loss) per share, diluted $ 0.26 $ (1.56) $ (0.49) The effect of certain common share equivalents were excluded from the computation of weighted average diluted shares outstanding for the years ended March 31, 2021, 2020, and 2019 as inclusion would have resulted in anti-dilution. A summary of these weighted-average anti-dilutive common share equivalents is provided in the table below (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Stock options 1,901 4,763 — Unvested restricted stock and RSUs 11 3,819 — Shares committed under ESPP — 64 — Unvested equity awards — — 6,399 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company had agreements with Thoma Bravo, LLC for financial and management advisory services that terminated on August 1, 2019. During the years ended March 31, 2021, 2020, and 2019, the Company incurred zero, $1.6 million, and $4.9 million, respectively, related to these services. The related expense is reflected in “General and administrative” expense in the consolidated statements of operations. During the year ended March 31, 2020, Compuware distributed $265.0 million to the Company to fund a tax liability incurred in connection with the reorganization transactions described in Note 2. During the year ended March 31, 2019, the Company has transfers to related parties of $0.8 million which are included in “Additional paid-in capital” in the consolidated balance sheets. |
Related Party Debt
Related Party Debt | 12 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Debt | Related Party Transactions The Company had agreements with Thoma Bravo, LLC for financial and management advisory services that terminated on August 1, 2019. During the years ended March 31, 2021, 2020, and 2019, the Company incurred zero, $1.6 million, and $4.9 million, respectively, related to these services. The related expense is reflected in “General and administrative” expense in the consolidated statements of operations. During the year ended March 31, 2020, Compuware distributed $265.0 million to the Company to fund a tax liability incurred in connection with the reorganization transactions described in Note 2. During the year ended March 31, 2019, the Company has transfers to related parties of $0.8 million which are included in “Additional paid-in capital” in the consolidated balance sheets. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit PlanThe Company has established a 401(k) tax-deferred savings plan (the “401(k) Plan”), which permits participants to make contributions by salary deduction pursuant to Section 401(k) of the Code. The Company is responsible for administrative costs of the 401(k) Plan and may, at its discretion, make matching contributions to the 401(k) Plan. For the years ended March 31, 2021, 2020, and 2019, the Company made contributions of $3.6 million, $3.1 million and $1.9 million to the 401(k) Plan, respectively. |
Geographic Information
Geographic Information | 12 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Revenue Revenues by geography are based on legal jurisdiction. Refer to Note 3, Revenue Recognition, for a disaggregation of revenue by geographic region. Property and equipment, net The following tables present property and equipment by geographic region for the periods presented (in thousands): March 31, 2021 2020 North America $ 12,129 $ 11,296 Europe, Middle East and Africa 23,124 18,590 Asia Pacific 1,619 1,564 Latin America 44 58 Total property and equipment, net $ 36,916 $ 31,508 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Fiscal year | Fiscal year The Company’s fiscal year ends on March 31. References to fiscal 2021, for example, refer to the fiscal year ended March 31, 2021. |
Consolidation | Prior to July 30, 2019, Dynatrace Holdings LLC, a Delaware limited liability company, was an indirect equity holder of DHC that indirectly and wholly owned Dynatrace, LLC. On July 31, 2019, Dynatrace Holdings LLC (i) converted into a Delaware corporation with the name Dynatrace, Inc. and (ii) through a series of corporate reorganization steps, became the parent company of DHC. Additionally, as part of the reorganization, two wholly owned subsidiaries of DHC, Compuware Corporation (“Compuware”) and SIGOS LLC (“SIGOS”), were spun out from the corporate structure to the DHC shareholders. As a result of these transactions, DHC is a wholly owned indirect subsidiary of Dynatrace, Inc. These reorganization steps are collectively referred to as the “reorganization.” In connection with the reorganization, the equity holders of Compuware Parent, LLC received 222,021,708 units of Dynatrace Holdings LLC in exchange for their equity interests in Compuware Parent, LLC based on the fair value of a unit of Dynatrace Holdings LLC on July 30, 2019, which was determined to be $16.00 per unit by a committee of the board of managers of Dynatrace Holdings LLC, and all of the outstanding units of Dynatrace Holdings LLC then converted into shares of Dynatrace, Inc. Additionally, 19,525,510 units of Dynatrace Holdings LLC were issued upon exchange of Dynatrace, LLC Management Incentive Units (“MIUs”) and Appreciation Units (“AUs”) for a total of 241,547,218 outstanding units in Dynatrace Holdings LLC immediately prior to the closing of the Company’s initial public offering (“IPO”). The reorganization was completed between entities that were under common control since December 15, 2014. Therefore, these consolidated financial statements retroactively reflect DHC and Dynatrace, Inc. on a consolidated basis for the periods presented. The spin-offs of Compuware Corporation and SIGOS LLC from DHC have been accounted for retroactively as a change in reporting entity and accordingly, these consolidated financial statements exclude their accounts and results. |
Basis of presentation | The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in the accompanying consolidated financial statements. The income tax amounts in the accompanying consolidated financial statements have been calculated based on a separate return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. |
Foreign currency translation | Foreign currency translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the Company’s principal foreign subsidiaries is the currency of the country in which each entity operates. Accordingly, assets and liabilities in the consolidated balance sheet have been translated at the rate of exchange at the balance sheet date, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations and are reported as accumulated other comprehensive loss within the consolidated statements of shareholders’ equity / member’s deficit. Transaction gains and losses generated by the effect of changes in foreign currency exchange rates on recorded assets and liabilities denominated in a currency different than the functional currency of the applicable entity are recorded in “Other income (expense), net” in the consolidated statements of operations. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, the Company makes estimates with respect to the stand-alone selling price for each distinct performance obligation in customer contracts with multiple performance obligations, the uncollectible accounts receivable, the fair value of tangible and intangible assets acquired, valuation of long-lived assets, the period of benefit for deferred commissions and material rights, income taxes, equity-based compensation expense, and the determination of the incremental borrowing rate used for operating lease liabilities, among other things. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. In March 2020, the World Health Organization declared the recent outbreak of the novel coronavirus disease, or COVID-19, a global pandemic. The extent of the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on the Company’s customers and its sales cycles, which are uncertain and cannot be predicted. As of the date of the consolidated financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments or a revision of the carrying value the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the consolidated financial statements. |
Segment information | Segment information The Company operates as one operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. |
Business combinations | Business combinations When the Company acquires a business, management allocates the purchase price to the net tangible and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make |
Revenue recognition | Revenue recognition The Company sells software licenses, subscriptions, maintenance and support, and professional services together in contracts with its customers, which include end-customers and channel partners. The Company’s software license agreements provide customers with a right to use software perpetually or for a defined term. As required under applicable accounting principles, the goods and services that the Company promises to transfer to a customer are accounted for separately if they are distinct from one another. Promised items that are not distinct are bundled as a combined performance obligation. The transaction price is allocated to the performance obligations based on the relative estimated standalone selling prices of those performance obligations. The Company recognizes revenue from contracts with customers under Accounting Standards Codification (“ASC”) Topic 606 (“Topic 606”). The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer The Company considers the terms and conditions of the contract in identifying the contracts. The Company determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, it has been determined the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company will evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit, and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. In identifying performance obligations, the Company reviews contractual terms, considers whether any implied rights exist, and evaluates published product and marketing information. The Company’s performance obligations consist of (i) software licenses, (ii) subscription services, (ii) maintenance and support for software licenses, and (iv) professional services. 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s contracts do not contain a significant financing component. 4. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) for arrangements not including software licenses or subscription services. The Company has determined that its pricing for software licenses and subscription services is highly variable and therefore allocates the transaction price to those performance obligations using the residual approach. 5. Recognition of revenue when, or as a performance obligation is satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Subscription Subscription revenue relates to performance obligations for which the Company recognizes revenue over time as control of the product or service is transferred to the customer. Subscription revenue includes arrangements that permit customers to access and utilize the Company’s hosted software delivered on a software-as-a-service (“SaaS”) basis, term-based and perpetual licenses of the Company’s Dynatrace Software, as well as maintenance. The when-and-if available updates of the Dynatrace Software, which are part of the maintenance agreement, are critical to the continued utility of the Dynatrace Software; therefore, the Company has determined the Dynatrace Software and the related when-and-if available updates to be a combined performance obligation. Accordingly, when Dynatrace Software is sold under a term-based license, the revenue associated with this combined performance obligation is recognized ratably over the license term as maintenance is included for the duration of the license term. The Company has determined that perpetual licenses of Dynatrace Software provide customers with a material right to acquire additional goods or services that they would not receive without entering into the initial contract as the renewal option for maintenance services allows the customer to extend the utility of the Dynatrace Software without having to again make the initial payment of the perpetual software license fee. The associated material right is deferred and recognized ratably over the term of the expected optional maintenance renewals. Subscription revenue also includes maintenance services relating to the Company’s Classic offerings as that revenue is recognized over time given that the obligation is a stand-ready obligation to provide customer support and when-and-if available updates to the Classic software as well as certain other stand-ready obligations. License License revenue relates to performance obligations for which the Company recognizes revenue at the point that the license is transferred to the customer. License revenue includes these perpetual and term-based licenses that relate to the Company’s Classic offerings (“Classic Software Licenses”), which are focused on traditional customer approaches to building, operating and monitoring software in less dynamic environments. The Company requires customers purchasing perpetual licenses of Classic Software and Dynatrace Software, as defined below, to also purchase maintenance services covering at least one year from the beginning of the perpetual license. The Company has determined that the Classic Software Licenses and the related maintenance services are separate performance obligations with different patterns of recognition. Revenue from Classic Software Licenses is recognized upon delivery of the license. Revenue from maintenance is recognized over the period of time of the maintenance agreement and is included in “Subscription”. Service The Company offers implementation, consulting and training services for the Company’s software solutions and SaaS offerings. Services fees are generally based on hourly rates. Revenues from services are recognized in the period the services are performed, provided that collection of the related receivable is reasonably assured. Deferred commissions Deferred sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit which the Company has estimated to be three years. The period of benefit has been determined by taking into consideration the duration of customer contracts, the life of the technology, renewals of maintenance and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in “Sales and marketing” expenses on the consolidated statements of operations. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred commissions. There were no impairment losses recorded during the periods presented. Deferred revenue Deferred revenue consists primarily of billed subscription and maintenance fees related to the future service period of subscription and maintenance agreements in effect at the reporting date. Deferred licenses are also included in deferred revenue for those billed arrangements that are being recognized over time. Short-term deferred revenue represents the unearned revenue that will be earned within twelve months of the balance sheet date; whereas, long-term deferred revenue represents the unearned revenue that will be earned after twelve months from the balance sheet date. Payment terms Payment terms and conditions vary by contract type, although the Company’s terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers or to provide customers with financing. Contract modification Contract modifications are assessed to determine (i) if the additional goods and services are distinct from the goods and services in the original arrangement; and (ii) if the amount of the consideration expected for the added goods and services reflects the stand-alone selling price of those goods and services, as adjusted for contract-specific circumstances. The Company’s additional goods and services offered have historically been distinct. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract, which the Company accounts for on a prospective basis as the termination of the existing contract and the creation of a new contract. Cost of revenue Cost of subscription Cost of subscription revenue includes all direct costs to deliver the Company’s subscription products including salaries, benefits, share-based compensation and related expenses such as employer taxes, allocated overhead for facilities, IT, third-party hosting fees related to the Company’s cloud services, and amortization of internally developed capitalized software technology. The Company recognizes these expenses as they are incurred. Cost of service Cost of service revenue includes salaries, benefits, share-based compensation and related expenses such as employer taxes for our services organization, allocated overhead for depreciation of equipment, facilities and IT, and amortization of acquired intangible assets. The Company recognizes expense related to its services organization as they are incurred. |
Amortization of acquired technology | Amortization of acquired technology Amortization of acquired technology includes amortization expense for technology acquired in business combinations. |
Research and development | Research and development Research and development (“R&D”) costs, which primarily include the cost of programming personnel, including share-based compensation, amounted to $111.4 million, $119.3 million, and $76.8 million during the years ended March 31, 2021, 2020 and 2019, respectively. R&D costs related to the Company’s software solutions are reported as “Research and development” in the consolidated statements of operations. |
Advertising | AdvertisingAdvertising costs are expensed as incurred and are included in “Sales and marketing” expense in the consolidated statements of operations. |
Leases | Leases Leases arise from contractual obligations that convey the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At the inception of the contract, the Company determines if an arrangement contains a lease based on whether there is an identified asset and whether the Company controls the use of the identified asset. The Company also determines the classification of that lease, between financing and operating, at the lease commencement date. The Company accounts for and allocates consideration to the lease and non-lease components as a single lease component. A right-of-use asset represents the Company’s right to use an underlying asset and a lease liability represents the Company’s obligation to make payments during the lease term. Right-of-use assets are recorded and recognized at commencement for the lease liability amount, adjusted for initial direct costs incurred and lease incentives received. Lease liabilities are recorded at the present value of the future lease payments over the lease term at commencement. The discount rate used to determine the present value is the incremental borrowing rate unless the interest rate implicit in the lease is readily determinable. As the implicit rate for the operating leases is generally not determinable, the Company uses an incremental borrowing rate as the discount rate at the lease commencement date to determine the present value of lease payments. The Company determines the discount rate of the leases by considering various factors, such as the credit rating, interest rates of similar debt instruments of entities with comparable credit ratings, jurisdictions, and the lease term. The Company’s operating leases typically include non-lease components such as common-area maintenance costs, utilities, and other maintenance costs. The Company has elected to include non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable lease payments. The Company’s lease terms may include options to extend or terminate the lease. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that the Company will exercise those options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s right-of-use assets are included in “Operating lease right-of-use asset, net” and the current and non-current portions of the lease liabilities are included in “Operating lease liabilities, current” and “Operating lease liabilities, non-current,” respectively, on the consolidated balance sheets. The Company does not record leases with terms of 12 months or less on the consolidated balance sheets. Lease expense is recognized on a straight-line basis over the expected lease term. |
Restructuring expense | Restructuring expense The Company defines restructuring expense as costs directly associated with exit or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs are probable and estimable. For one-time termination benefits (i.e., no substantive plan) and employee retention costs, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. |
Concentration of credit risk | Concentration of credit riskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. |
Cash and cash equivalents | Cash and cash equivalents All highly-liquid investments with a maturity of three months or less when purchased are considered cash and cash equivalents. |
Accounts receivable, net | Accounts receivable, netTrade accounts receivable are recorded at the invoiced amount. Prior to the Company’s adoption of Topic 326, the accounts receivable balance was reduced by an allowance for doubtful accounts that was determined based on the Company’s assessment of the collectability of customer accounts. Under Topic 326, accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors. In establishing any required allowance, management considers historical losses adjusted for current market conditions, the Company’s customers’ financial condition, the amount of any receivables in dispute, the current receivables aging, current payment terms and expectations of forward-looking loss estimates. |
Property and equipment, net | Property and equipment, net The Company states property and equipment, net, at the acquisition cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the useful lives of the assets or the related lease. The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term Property and equipment are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if an impairment exists. If the asset is |
Goodwill and other intangible assets | Goodwill and other intangible assets The Company’s goodwill and intangible assets primarily relate to the push-down of such assets relating to Thoma Bravo’s December 15, 2014 acquisition of Compuware Corporation based on their relative fair values at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter of the Company’s fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. Since the Company’s acquisition by Thoma Bravo through March 31, 2021, the Company has not had any goodwill impairment. Intangible assets consist primarily of customer relationships, developed technology, trade names and trademarks, all of which have a finite useful life, as well as goodwill. Intangible assets are amortized based on either the pattern in which the economic benefits of the intangible assets are estimated to be realized or on a straight-line basis, which approximates the manner in which the economic benefits of the intangible asset will be consumed. |
Capitalized software | Capitalized software The Company’s capitalized software includes the costs of internally developed software technology and software technology purchased through acquisition. Internally developed software technology consists of development costs associated with software products to be sold (“software products”) and internal use software associated with hosted software. Costs associated with the development of software technology are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software technology is available for general release to customers. Technological feasibility is established when management has authorized and committed to funding a project and it is probable that the project will be completed, and the software will be used to perform the function intended. For internal use software, capitalization begins during the application development stage. The Company capitalized $0.3 million for internally developed software technology during the year ended March 31, 2021, offset by $0.5 million of derecognized software costs. The Company capitalized $0.9 million, and $1.9 million for internally developed software technology during the years ended March 31, 2020 and 2019, respectively, and is recorded within “Other intangible assets, net” in the consolidated balance sheets. three |
Impairment of long-lived assets | Impairment of long-lived assetsLong-lived assets, including amortized intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is estimated by the Company using discounted cash flows and other market-related valuation models, including earnings multiples and comparable asset market values. If circumstances change or events occur to indicate that the Company’s fair market value has fallen below book value, the Company will compare the estimated fair value of long-lived assets (including goodwill) to its book value. If the book value exceeds the estimated fair value, the Company will recognize the difference as an impairment loss in the consolidated statements of operations. |
Income taxes | Income taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company has the ability to permanently reinvest any earnings in its foreign subsidiaries and therefore does not recognize any deferred tax liabilities that arise from outside basis differences in its investment in subsidiaries. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would reduce deferred tax assets. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Interest and penalties related to uncertain income tax positions are included in the income tax provision. |
Fair value of assets and liabilities | Fair value of assets and liabilities Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: • Level 1: Observable inputs that reflect quoted prices for identical assets or liabilities in active markets; • Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The Company’s carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities approximate their fair values due to their short maturities. |
Share-based compensation | Share-based compensation Prior to the IPO, certain employees were granted management incentive units and appreciation units which made a holder eligible to participate in distributions of cash, property, or securities of Compuware Parent LLC made in respect of the Company (whether by way of dividend, repurchase, recapitalization, or otherwise). In the event the employee was no longer employed by the Company, including due to a change in control, as defined, all the MIUs and AUs were subject to a repurchase arrangement, at the discretion of the Company, Compuware Parent LLC, or Thoma Bravo and certain Thoma Bravo affiliated funds that held equity in Compuware Parent LLC (collectively, “TB”). There were no distributions during the years ended March 31, 2020 and 2019. The MIUs and AUs were settled in cash and were accounted for as liability-based awards. Liabilities for awards under these plans were required to be measured at fair value at each reporting date until the date of settlement. The fair value of the equity units underlying the MIUs and AUs was determined by the board of managers as there was no public market for the equity units. The board of managers determined the fair value of the Company’s equity units by considering a number of objective and subjective factors including: the valuation of comparable companies, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. In connection with the reorganization during the second quarter of fiscal 2020, the Company converted all outstanding MIUs and AUs into common stock, restricted stock, or restricted stock units (“RSUs”) of Dynatrace, Inc. After the IPO, the Company uses the publicly quoted price as reported on the New York Stock Exchange as the fair value of its common stock. The Company measures the cost of employee services received in exchange for an award of equity instruments, including stock options, restricted stock, RSUs, and the purchase rights under the employee stock purchase plan (the “ESPP”), based on the estimated grant-date fair value of the award. The fair value is recognized as an expense following the straight-line attribution method over the requisite service period of the entire award for stock options, restricted stock, and RSUs; and over the offering period for the purchase rights issued under the ESPP. The Company calculates the fair value of stock options and the purchase rights under the ESPP using the Black-Scholes option-pricing model. This requires the input of assumptions, including the fair value of the Company’s underlying common stock, the expected term of stock options and purchase rights, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock. The assumptions used in the Company’s option-pricing model represent its best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s share-based compensation expense could be materially different in the future. The |
Net income (loss) per share | Net income (loss) per shareBasic net income (loss) per share is calculated by dividing the net income (loss) for the period by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net income (loss) per share includes the dilutive effect of common share equivalents and is calculated using the weighted-average number of common shares and the common share equivalents outstanding during the reporting period. An anti-dilutive impact is an increase in net income per share or a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities. |
Recently adopted accounting pronouncements and recently issued accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). The amendments supersede current lease requirements in Topic 840 which require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. This new guidance is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those periods, except for certain emerging growth companies and smaller reporting companies who may elect to adopt the standard for annual reporting periods beginning after December 15, 2020. The Company early adopted the new standard as of April 1, 2020 and recognized a cumulative-effect adjustment to the opening balance of accumulated deficit as of the adoption date. The Company elected the optional transition approach to not apply Topic 842 in the comparative periods presented. The Company elected the package of practical expedients to not 1) reassess whether any expired or existing contracts are considered or contain leases; (2) reassess the lease classification for any expired or existing leases; and (3) reassess the initial direct costs for any existing leases. The adoption of Topic 842 resulted in the recognition of total right-of-use assets of $50.6 million, total lease liabilities of $50.7 million, and a cumulative effect adjustment to accumulated deficit of $0.3 million as of the adoption date, with the most significant impact related to the office space leases. Additionally, the Company derecognized $3.3 million in deferred rent upon adoption of this standard which was offset against the right-of-use asset. The adoption of Topic 842 did not have a material impact to the consolidated statements of operations or consolidated statements of cash flows. The Company has updated the accounting policies, systems, processes and internal controls, and have allocated internal and external resources to assist during the implementation efforts. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. ASU 2016-13 is effective for annual periods, and interim periods within those years, beginning after December 15, 2019, except for emerging growth companies who may elect to adopt the standard for annual reporting periods beginning after December 15, 2022. The Company adopted the new standard on a modified retrospective basis as of April 1, 2020. The adoption did not have a material impact and did not result in any cumulative effect adjustment on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract; Disclosures for Implementation Costs Incurred for Internal-Use Software and Cloud Computing Arrangements, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. ASU 2018-15 is effective for annual periods, and interim periods within those years, beginning after December 15, 2019, except for emerging growth companies who may elect to adopt the standard for annual reporting periods beginning after December 15, 2020, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company adopted the new standard on a prospective basis as of April 1, 2020. The adoption did not have a material impact on the consolidated financial statements. Recently issued accounting pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual periods, and interim periods within those years, beginning after December 15, 2020. The Company expects to adopt the standard during the first quarter of fiscal 2022 and does not expect the standard to have a material effect on its consolidated financial statements. |
Comparability of Prior Year Financial Data, Policy | Immaterial revision of previously issued consolidated financial statements During the fourth quarter of fiscal 2021, the Company identified an immaterial error in the calculation of its income tax provision for the year ended March 31, 2020. Accordingly, the results for the year ended March 31, 2020 have been adjusted to incorporate the revised amounts, where applicable, as further described in Note 7. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of the Company's Property and Equipment | The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2021 2020 Computer equipment and software $ 23,134 $ 19,550 Furniture and fixtures 9,804 7,679 Leasehold improvements 27,961 21,562 Other 864 3,111 Total property and equipment 61,763 51,902 Less: accumulated depreciation and amortization (24,847) (20,394) Property and equipment, net $ 36,916 $ 31,508 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table is a summary of the Company’s total revenue by geographic region (in thousands, except percentages): Fiscal Year Ended March 31, 2021 2020 2019 Amount % Amount % Amount % North America $ 388,188 55 % $ 318,299 58 % $ 248,012 57 % Europe, Middle East and Africa 216,647 31 % 150,418 28 % 125,615 29 % Asia Pacific 78,295 11 % 60,418 11 % 45,563 11 % Latin America 20,379 3 % 16,668 3 % 11,776 3 % Total revenue $ 703,509 $ 545,803 $ 430,966 |
Schedule of Capitalized Contract Cost | The following table represents a rollforward of the Company’s deferred commissions (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Beginning balance $ 78,245 $ 59,250 $ 39,282 Additions to deferred commissions 63,627 54,969 43,212 Amortization of deferred commissions (44,248) (35,974) (23,244) Ending Balance $ 97,624 $ 78,245 $ 59,250 Deferred commissions, current 48,986 38,509 27,705 Deferred commissions, non-current 48,638 39,736 31,545 Total deferred commissions $ 97,624 $ 78,245 $ 59,250 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consists of the following (in thousands): March 31, 2021 2020 Prepaid expenses $ 20,308 $ 13,189 Income taxes refundable 41,875 65,341 Other 2,072 510 Prepaid expenses and other current assets $ 64,255 $ 79,040 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment by Major Class | The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2021 2020 Computer equipment and software $ 23,134 $ 19,550 Furniture and fixtures 9,804 7,679 Leasehold improvements 27,961 21,562 Other 864 3,111 Total property and equipment 61,763 51,902 Less: accumulated depreciation and amortization (24,847) (20,394) Property and equipment, net $ 36,916 $ 31,508 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill on a consolidated basis for fiscal 2021 consists of the following (in thousands): March 31, 2021 Balance, beginning of year $ 1,270,733 Foreign currency impact 462 Balance, end of year $ 1,271,195 |
Schedule of Intangible Assets | Other intangible assets, net excluding goodwill consists of the following (in thousands): Weighted Average Useful Life (in months) March 31, 2021 2020 Capitalized software 107 $ 189,398 $ 189,554 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 595,956 596,112 Less: accumulated amortization (446,472) (394,520) Total other intangible assets, net $ 149,484 $ 201,592 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of March 31, 2021, the estimated future amortization expense of the Company’s other intangible assets in the table above is as follows (in thousands): Fiscal Year Ended March 31, 2022 2023 2024 2025 Capitalized software $ 15,876 $ 15,522 $ 15,221 $ 10,632 Customer relationships 24,660 20,794 17,534 10,473 Trademarks and tradenames 5,501 5,501 4,753 3,017 Total amortization $ 46,037 $ 41,817 $ 37,508 $ 24,122 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | Income (loss) before income taxes and the income tax (expense) benefit includes the following (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Domestic $ 37,368 $ (245,177) $ (163,385) Foreign 40,485 26,644 23,474 Total $ 77,853 $ (218,533) $ (139,911) |
Schedule of Income Tax Provision | The income tax provision includes the following (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Income tax expense (benefit) Federal $ (3,835) $ 180,402 $ 3,213 State (2,071) 48,045 575 Foreign 15,110 13,058 5,920 Total current tax position 9,204 241,505 9,708 Federal (3,027) (37,731) (29,021) State (615) (5,689) (5,464) Foreign (3,423) (2,801) 1,060 Total deferred tax provision (7,065) (46,221) (33,425) Total income tax expense (benefit) $ 2,139 $ 195,284 $ (23,717) |
Schedule of Tax Rate Reconciliation | The tax rate reconciliation is as follows (in thousands, certain prior year amounts have been reclassified to conform to the current year’s presentation): Fiscal Year Ended March 31, 2021 2020 2019 Income tax expense (benefit) at U.S. federal statutory income tax rate $ 16,349 $ (45,892) $ (29,381) State and local tax expense (580) (2,897) (4,890) Foreign tax rate differential 1,939 3,521 2,051 Branch income 4,830 1,601 1,824 Non-deductible expenses 3,459 5,976 840 Tax credits (9,316) (57,277) (13,233) Foreign derived intangibles deduction (4,775) (3,901) (1,790) Tax associated with reorganization — 239,990 — Share-based compensation (6,424) 48,129 10,967 Prior year tax return to provision true-ups (11,464) — — Changes in uncertain tax positions (1,102) 13,204 234 Changes in valuation allowance 2,091 (9,472) 6,087 Foreign withholding tax 6,992 4,231 3,086 Other adjustments 140 (1,929) 488 Total income tax expense (benefit) $ 2,139 $ 195,284 $ (23,717) |
Schedule of Deferred Tax Assets and Liabilities | Temporary differences and carryforwards that give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands, certain prior year amounts have been reclassified to conform to the current year’s presentation): March 31, 2021 2020 Deferred revenue $ 17,050 $ 23,185 Capitalized research and development costs 10,834 11,140 Accrued expenses 8,882 6,217 Share-based compensation 8,367 5,251 Lease liabilities 8,321 — Net operating loss carryforwards 4,637 4,468 Other tax carryforwards, primarily foreign tax credits 20,479 18,215 Other 2,272 2,590 Total deferred tax assets before valuation allowance 80,842 71,066 Less: valuation allowance (24,297) (22,206) Net deferred tax assets 56,545 48,860 Intangible assets 30,525 40,270 Right-of-use assets 7,388 — Other 2,835 1,185 Total deferred tax liabilities 40,748 41,455 Net deferred tax assets $ 15,797 $ 7,405 |
Schedule of Reconciliation of Unrecognized Tax Benefits | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended March 31, 2021, 2020, and 2019 (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Gross unrecognized tax benefit, beginning of year $ 16,648 $ 9,653 $ 9,143 Gross increases to tax positions for prior periods 1,223 438 20 Gross decreases to tax positions for prior periods (2,654) (6,986) (70) Gross increases to tax positions for current period — 13,543 560 Settlements (10) — — Lapse of statutes of limitations (132) — — Gross unrecognized tax benefit, end of year $ 15,075 $ 16,648 $ 9,653 |
Summary of Revision of Previously Issued Financial Statements | The following tables summarize the effect of this revision (in thousands, except per share data): March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Balance Sheets Items: Prepaid expenses and other current assets $ 61,188 $ 17,852 $ 79,040 Total current assets 469,925 17,852 487,777 Deferred tax assets, net 20,460 (13,055) 7,405 Total assets 2,042,080 4,797 2,046,877 Accrued expenses, current 93,728 1,283 95,011 Total current liabilities 488,900 1,283 490,183 Accrued expenses, non-current 20,987 (693) 20,294 Total liabilities 1,080,583 590 1,081,173 Accumulated deficit (594,026) 4,207 (589,819) Total shareholders’ equity 961,497 4,207 965,704 Total liabilities and shareholders’ equity $ 2,042,080 $ 4,797 $ 2,046,877 Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Operations Items: Income tax expense $ (199,491) $ 4,207 $ (195,284) Net loss (418,024) 4,207 (413,817) Net loss per share: Basic and diluted $ (1.58) $ 0.02 $ (1.56) Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Comprehensive Income (Loss) Items: Net loss $ (418,024) $ 4,207 $ (413,817) Comprehensive loss $ (406,419) $ 4,207 $ (402,212) March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Shareholders’ Equity / Member’s Deficit Items: Net loss $ (418,024) $ 4,207 $ (413,817) Total shareholders’ equity, balance at March 31, 2020 $ 961,497 $ 4,207 $ 965,704 Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Consolidated Statements of Cash Flow Items: Net loss $ (418,024) $ 4,207 $ (413,817) Deferred income taxes (59,276) 13,055 (46,221) Prepaid expenses and other assets (39,737) (17,851) (57,588) Accounts payable and accrued expenses 52,415 589 53,004 Net cash used in operating activities $ (142,455) $ — $ (142,455) The following table represents revisions to the Company’s current and deferred tax expense (in thousands): Fiscal Year Ended March 31, 2020 As Previously Reported Adjustment As Revised Income tax provision: Income tax expense Federal $ 198,307 $ (17,905) $ 180,402 State 47,992 53 48,045 Foreign 12,468 590 13,058 Total current tax position 258,767 (17,262) 241,505 Federal (50,086) 12,355 (37,731) State (5,839) 150 (5,689) Foreign (3,351) 550 (2,801) Total deferred tax provision (59,276) 13,055 (46,221) Total income tax expense $ 199,491 $ (4,207) $ 195,284 The following table represents revisions to the Company’s deferred tax balances, which were largely offset by revisions to the income taxes refundable on the consolidated balance sheet (in thousands): March 31, 2020 As Previously Reported Adjustment As Revised Temporary differences and carryforwards: Deferred revenue $ 27,681 $ (4,496) $ 23,185 Capitalized research and development costs 11,140 — 11,140 Accrued expenses 6,625 (408) 6,217 Share-based compensation 16,660 (11,409) 5,251 Fixed assets 279 (279) — Net operating loss carryforwards 4,046 422 4,468 Other tax carryforwards, primarily foreign tax credits 14,603 3,612 18,215 Other 2,823 (233) 2,590 Total deferred tax assets before valuation allowance 83,857 (12,791) 71,066 Less: valuation allowance (21,996) (210) (22,206) Net deferred tax assets 61,861 (13,001) 48,860 Intangible assets 40,270 — 40,270 State taxes 251 (251) — Other 880 305 1,185 Total deferred tax liabilities 41,401 54 41,455 Net deferred tax assets $ 20,460 $ (13,055) $ 7,405 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses, current consists of the following (in thousands): March 31, 2021 2020 Accrued employee - related expenses $ 63,890 $ 40,687 Accrued tax liabilities 23,001 13,350 Accrued restructuring — 1,065 Accrued professional fees 3,275 2,103 Income taxes payable 9,117 22,040 Other 20,244 15,766 Total accrued expenses, current $ 119,527 $ 95,011 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following (in thousands, except percentages): March 31, 2021 March 31, 2020 Amount Effective Rate Amount Effective Rate First Lien Term Loan $ 401,125 2.4 % $ 521,125 3.2 % Revolving credit facility — — Total principal 401,125 521,125 Unamortized discount and debt issuance costs (9,212) (11,140) Total debt 391,913 509,985 Less: Current portion of long-term debt — — Long-term debt $ 391,913 $ 509,985 |
Schedule of Maturities of Outstanding Debt | The maturities of outstanding debt are as follows (in thousands): Fiscal year Amount 2022 $ — 2023 — 2024 — 2025 — 2026 401,125 Thereafter — Total future payments $ 401,125 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Lease Expense and Supplemental Cash Flow Information | The following table presents information about leases on the consolidated statements of operations (in thousands): Fiscal Year Ended March 31, 2021 Operating lease expense (1) $ 10,436 Short-term lease expense $ 752 Variable lease expense $ 674 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Fiscal Year Ended March 31, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 13,478 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 5,260 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. |
Schedule of Maturities of Lease Liabilities | As of March 31, 2021, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2022 $ 12,290 2023 11,871 2024 10,886 2025 7,620 2026 5,017 Thereafter 10,206 Total operating lease payments (1) 57,890 Less: imputed interest (10,196) Total operating lease liabilities $ 47,694 _________________ (1) Presented gross of sublease income. |
Schedule of Payments Under Company's Operating Lease Commitments | Under previous lease accounting standard ASC 840, the aggregate future non-cancelable minimum rental payments on its operating leases, as of March 31, 2020, were as follows (in thousands): Fiscal Years Ending March 31, Amount 2021 $ 14,210 2022 11,663 2023 11,235 2024 10,864 2025 8,020 Thereafter 16,331 Total future contractual payments (1) $ 72,323 _________________ (1) Presented gross of sublease income. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value Assumptions | The following key assumptions were used to determine the fair value of the MIUs and AUs for fiscal 2020 and 2019: March 31, 2020 2019 Expected dividend yield — — Expected volatility 35% - 55% 50% - 60% Expected term (years) 0.5 - 1.25 1.0 - 1.5 Risk-free interest rate 1.86% - 2.09% 2.33% - 2.40% The Company estimated the fair value of the ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: March 31, 2021 2020 Expected dividend yield — — Expected volatility 35.9% - 55.5% 35.9 % Expected term (years) 0.5 0.5 Risk-free interest rate 0.1% - 1.6% 1.6 % |
Schedule of Activity for Stock Options | The following table summarizes activity for stock options during the period ended March 31, 2021: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balance, March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Granted 2,396 34.26 Exercised (800) 16.32 Forfeited (350) 18.29 Balance, March 31, 2021 8,393 $ 21.31 8.6 $ 226,438 Options vested and expected to vest at March 31, 2021 8,393 $ 21.31 8.6 $ 226,438 Options vested and exercisable at March 31, 2021 1,783 $ 16.16 8.3 $ 57,193 |
Schedule of Fair value Assumptions for Stock Options | The fair value for the Company’s stock options granted during the years ended March 31, 2021 and 2020 were estimated at the date of grant using a Black-Scholes option-pricing model using the following assumptions: March 31, 2021 2020 Expected dividend yield — — Expected volatility 39.3% - 39.8% 37.1% - 38.9% Expected term (years) 6.1 6.1 Risk-free interest rate 0.4% - 1.1% 0.8% - 1.9% |
Schedule of Restricted Stock Activity | The following table provides a summary of the changes in the number of restricted shares for the year ended March 31, 2021: Number of Shares of Restricted Stock Awards Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2020 1,984 $ 16.00 3,123 $ 16.39 Granted — — 1,358 34.69 Vested (1,146) 16.00 (1,256) 16.26 Forfeited (110) 16.00 (184) 19.46 Balance, March 31, 2021 728 $ 16.00 3,041 $ 24.44 |
Schedule of Share-based Compensation Expense | The following table summarizes the components of total share-based compensation expense included in the consolidated financial statements for each period presented (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Cost of revenue $ 7,307 $ 18,685 $ 5,777 Research and development 11,684 38,670 12,566 Sales and marketing 24,153 84,698 24,673 General and administrative 14,640 80,425 28,135 Total share-based compensation expense $ 57,784 $ 222,478 $ 71,151 |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Fiscal Year Ended March 31, 2021 2020 2019 Numerator: Net income (loss) $ 75,714 $ (413,817) $ (116,194) Denominator: Weighted average shares outstanding, basic 280,469 264,933 235,939 Dilutive effect of stock-based awards 6,040 — — Weighted average shares outstanding, diluted 286,509 264,933 235,939 Net income (loss) per share, basic $ 0.27 $ (1.56) $ (0.49) Net income (loss) per share, diluted $ 0.26 $ (1.56) $ (0.49) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | A summary of these weighted-average anti-dilutive common share equivalents is provided in the table below (in thousands): Fiscal Year Ended March 31, 2021 2020 2019 Stock options 1,901 4,763 — Unvested restricted stock and RSUs 11 3,819 — Shares committed under ESPP — 64 — Unvested equity awards — — 6,399 |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Property and Equipment by Geographical Region | The following tables present property and equipment by geographic region for the periods presented (in thousands): March 31, 2021 2020 North America $ 12,129 $ 11,296 Europe, Middle East and Africa 23,124 18,590 Asia Pacific 1,619 1,564 Latin America 44 58 Total property and equipment, net $ 36,916 $ 31,508 |
Significant Accounting Polici_4
Significant Accounting Policies - Basis of Presentation and Consolidation (Details) | Jul. 31, 2019subsidiary | Jul. 30, 2019$ / sharesshares |
Class of Stock [Line Items] | ||
Number of wholly owned subsidiaries | subsidiary | 2 | |
Share of equity interest (in dollars per unit) | $ / shares | $ 16 | |
Dynatrace Holdings LLC | ||
Class of Stock [Line Items] | ||
Common units, issued (in shares) | 19,525,510 | |
Common units, outstanding (in units) | 241,547,218 | |
Compuware Parent, LLC, Equity Holders | Dynatrace Holdings LLC | ||
Class of Stock [Line Items] | ||
Common units, issued (in shares) | 222,021,708 |
Significant Accounting Polici_5
Significant Accounting Policies - Initial Public Offering (Details) $ / shares in Units, $ in Thousands | Aug. 01, 2019USD ($)$ / sharesshares | Jul. 31, 2019shares | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | $ 0 | $ 590,297 | $ 0 | ||
Payment of underwriting discounts, commissions and estimated offering related expense | $ 0 | $ 5,000 | $ 0 | ||
Common Class A | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Conversion of stock, conversion ratio | 1 | ||||
Dynatrace Holdings LLC | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Common units, issued during the exchange (in shares) | shares | 241,547,218 | ||||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares sold and issued (in shares) | shares | 38,873,174 | ||||
Sale of stock price per share (in dollars per share) | $ / shares | $ 16 | ||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | $ 622,000 | ||||
Consideration received on sale of stock | 585,300 | ||||
Payment of underwriting discounts, commissions and estimated offering related expense | $ 36,700 | ||||
IPO, Sale of Stockholders | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares sold and issued (in shares) | shares | 2,100,000 |
Significant Accounting Polici_6
Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Mar. 31, 2020segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Significant Accounting Polici_7
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Minimum period covered by maintenance service contracts from the beginning of the perpetual license | 1 year | |
Estimated term to defer sales commissions | 3 years | |
Impairment losses recorded on deferred commissions | $ 0 | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 30 days | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Payment terms | 60 days |
Significant Accounting Polici_8
Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | |||
Research and development | $ 111,415 | $ 119,281 | $ 76,759 |
Significant Accounting Polici_9
Significant Accounting Policies Significant Accounting Policies - Advertising (Details) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 26.4 | $ 5.7 | $ 2.1 |
Significant Accounting Polic_10
Significant Accounting Policies - Accounts Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Mar. 31, 2020 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 1.3 | $ 3.1 |
Significant Accounting Polic_11
Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Property, Plant and Equipment [Line Items] | |
Impairment of property and equipment | $ 0 |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Significant Accounting Polic_12
Significant Accounting Policies - Capitalized Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized software | $ 0.3 | $ 0.9 | $ 1.9 |
Derecognized software costs | 0.5 | ||
Capitalized software, amortization | $ 1.9 | $ 1.7 | $ 6.8 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period for capitalized software | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period for capitalized software | 5 years |
Significant Accounting Polic_13
Significant Accounting Policies - Impairment of Long-lived Assets (Details) | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Accounting Policies [Abstract] | |
Impairment of long-lived assets | $ 0 |
Significant Accounting Polic_14
Significant Accounting Policies - Share-based Compensation (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 57,784,000 | $ 222,478,000 | $ 71,151,000 |
Income tax benefit recognized on shares-based compensation arrangements | $ 21,300,000 | $ 3,900,000 | $ 4,800,000 |
Management Incentive Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Distributions during the period (in shares) | 0 | 0 |
Significant Accounting Polic_15
Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use asset, net | $ 42,959 | ||||
Total operating lease liabilities | 47,694 | ||||
Total shareholders' equity | 1,113,601 | $ 965,704 | $ (390,258) | $ (268,690) | |
Accumulated Deficit | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders' equity | $ (513,799) | (589,819) | $ (176,002) | $ (59,808) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders' equity | 306 | ||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders' equity | $ 306 | ||||
Accounting Standards Update 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use asset, net | $ 50,600 | ||||
Total operating lease liabilities | 50,700 | ||||
Derecognized deferred rent | 3,300 | ||||
Accounting Standards Update 2016-02 | Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders' equity | $ 300 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 703,509 | $ 545,803 | $ 430,966 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 388,188 | 318,299 | 248,012 |
Europe, Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 216,647 | 150,418 | 125,615 |
Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 78,295 | 60,418 | 45,563 |
Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 20,379 | 16,668 | 11,776 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 362,100 | $ 299,500 | $ 233,300 |
Geographic Concentration Risk | Revenue Benchmark | North America | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 55.00% | 58.00% | 57.00% |
Geographic Concentration Risk | Revenue Benchmark | Europe, Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 31.00% | 28.00% | 29.00% |
Geographic Concentration Risk | Revenue Benchmark | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 11.00% | 11.00% | 11.00% |
Geographic Concentration Risk | Revenue Benchmark | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 3.00% | 3.00% | 3.00% |
Geographic Concentration Risk | Revenue Benchmark | United States | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 51.00% | 55.00% | 54.00% |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Deferred Commissions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Capitalized Contract Cost [Roll Forward] | ||||||
Beginning balance | $ 78,245 | $ 59,250 | $ 39,282 | |||
Additions to deferred commissions | 63,627 | 54,969 | 43,212 | |||
Amortization of deferred commissions | (44,248) | (35,974) | (23,244) | |||
Ending Balance | 97,624 | 78,245 | 59,250 | |||
Deferred commissions, current | $ 48,986 | $ 38,509 | $ 27,705 | |||
Deferred commissions, non-current | 48,638 | 39,736 | 31,545 | |||
Total deferred commissions | $ 78,245 | $ 59,250 | $ 59,250 | $ 97,624 | $ 78,245 | $ 59,250 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized | $ 504.7 | $ 274.7 | $ 211.4 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Narrative) (Details) $ in Millions | Mar. 31, 2021USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 1,190.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 57.00% |
Remaining performance obligation, expected timing of satisfaction, period | |
Extended Recognition Period | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected timing of satisfaction, period | 3 years |
Billed consideration | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 556.8 |
Unbilled consideration | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 633.3 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,271,195,000 | $ 1,270,733,000 | ||
Qumram | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 20,800,000 | |||
Cash consideration paid | 11,300,000 | |||
Payment obligation | 8,500,000 | |||
Current accrued expenses | $ 0 | $ 0 | ||
Goodwill | 18,700,000 | |||
Acquisition transaction costs | $ 200,000 | |||
Qumram | Acquired Technology | ||||
Business Acquisition [Line Items] | ||||
Purchase price allocated to intangibles | $ 1,700,000 | |||
Estimated useful live of acquired intangibles | 6 years |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 20,308 | $ 13,189 |
Income taxes refundable | 41,875 | 65,341 |
Other | 2,072 | 510 |
Prepaid expenses and other current assets | $ 64,255 | $ 79,040 |
Property and Equipment, Net - T
Property and Equipment, Net - Table (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 61,763 | $ 51,902 |
Less: accumulated depreciation and amortization | (24,847) | (20,394) |
Property and equipment, net | 36,916 | 31,508 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 23,134 | 19,550 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 9,804 | 7,679 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 27,961 | 21,562 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 864 | $ 3,111 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 9 | $ 7.9 | $ 7.3 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of year | $ 1,270,733 |
Foreign currency impact | 462 |
Balance, end of year | $ 1,271,195 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 595,956 | $ 596,112 |
Less: accumulated amortization | (446,472) | (394,520) |
Total other intangible assets, net | $ 149,484 | 201,592 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 107 months | |
Total intangible assets | $ 189,398 | 189,554 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 120 months | |
Total intangible assets | $ 351,555 | 351,555 |
Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 120 months | |
Total intangible assets | $ 55,003 | $ 55,003 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of other intangibles | $ 51,942 | $ 58,457 | $ 72,792 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, Net Goodwill and Other Intangible Assets, Net - Schedule of Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2022 | $ 46,037 |
2023 | 41,817 |
2024 | 37,508 |
2025 | 24,122 |
Capitalized software | |
Finite-Lived Intangible Assets [Line Items] | |
2022 | 15,876 |
2023 | 15,522 |
2024 | 15,221 |
2025 | 10,632 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
2022 | 24,660 |
2023 | 20,794 |
2024 | 17,534 |
2025 | 10,473 |
Trademarks and tradenames | |
Finite-Lived Intangible Assets [Line Items] | |
2022 | 5,501 |
2023 | 5,501 |
2024 | 4,753 |
2025 | $ 3,017 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 37,368 | $ (245,177) | $ (163,385) |
Foreign | 40,485 | 26,644 | 23,474 |
Income (loss) before income taxes | $ 77,853 | $ (218,533) | $ (139,911) |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ (3,835) | $ 180,402 | $ 3,213 |
State | (2,071) | 48,045 | 575 |
Foreign | 15,110 | 13,058 | 5,920 |
Total current tax position | 9,204 | 241,505 | 9,708 |
Federal | (3,027) | (37,731) | (29,021) |
State | (615) | (5,689) | (5,464) |
Foreign | (3,423) | (2,801) | 1,060 |
Total deferred tax provision | (7,065) | (46,221) | (33,425) |
Total income tax expense (benefit) | $ 2,139 | $ 195,284 | $ (23,717) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Total income tax expense (benefit) | $ 2,139 | $ 195,284 | $ (23,717) | |
Effective income tax rate | 21.00% | 21.00% | 21.00% | |
Less: valuation allowance | $ 24,297 | $ 22,206 | ||
Gross unrecognized tax benefits | 15,075 | 16,648 | $ 9,653 | $ 9,143 |
Net interest and penalties payable associated with uncertain tax positions | 900 | 300 | ||
Interest and penalties recognized | 600 | $ 200 | ||
Non-U.S. | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 22,800 | |||
Net tax carryforwards | 1,800 | |||
Indefinite net operating losses | 21,000 | |||
U.S. | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 21,500 |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) at U.S. federal statutory income tax rate | $ 16,349 | $ (45,892) | $ (29,381) |
State and local tax expense | (580) | (2,897) | (4,890) |
Foreign tax rate differential | 1,939 | 3,521 | 2,051 |
Branch income | 4,830 | 1,601 | 1,824 |
Non-deductible expenses | 3,459 | 5,976 | 840 |
Tax credits | (9,316) | (57,277) | (13,233) |
Foreign derived intangibles deduction | (4,775) | (3,901) | (1,790) |
Tax associated with reorganization | 0 | 239,990 | 0 |
Share-based compensation | (6,424) | 48,129 | 10,967 |
Prior year tax return to provision true-ups | (11,464) | 0 | 0 |
Changes in uncertain tax positions | (1,102) | 13,204 | 234 |
Changes in valuation allowance | 2,091 | (9,472) | 6,087 |
Foreign withholding tax | 6,992 | 4,231 | 3,086 |
Other adjustments | 140 | (1,929) | 488 |
Total income tax expense (benefit) | $ 2,139 | $ 195,284 | $ (23,717) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Deferred revenue | $ 17,050 | $ 23,185 |
Capitalized research and development costs | 10,834 | 11,140 |
Accrued expenses | 8,882 | 6,217 |
Share-based compensation | 8,367 | 5,251 |
Lease liabilities | 8,321 | 0 |
Net operating loss carryforwards | 4,637 | 4,468 |
Other tax carryforwards, primarily foreign tax credits | 20,479 | 18,215 |
Other | 2,272 | 2,590 |
Total deferred tax assets before valuation allowance | 80,842 | 71,066 |
Less: valuation allowance | (24,297) | (22,206) |
Net deferred tax assets | 56,545 | 48,860 |
Intangible assets | 30,525 | 40,270 |
Right-of-use assets | 7,388 | 0 |
Other | 2,835 | 1,185 |
Total deferred tax liabilities | 40,748 | 41,455 |
Net deferred tax assets | $ 15,797 | $ 7,405 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefit, beginning of year | $ 15,075 | $ 16,648 | $ 9,653 |
Gross increases to tax positions for prior periods | 1,223 | 438 | 20 |
Gross decreases to tax positions for prior periods | (2,654) | (6,986) | (70) |
Gross increases to tax positions for current period | 0 | 13,543 | 560 |
Settlements | (10) | 0 | 0 |
Lapse of statutes of limitations | (132) | 0 | 0 |
Gross unrecognized tax benefit, end of year | $ 16,648 | $ 9,653 | $ 9,143 |
Income Taxes - Summary of Revis
Income Taxes - Summary of Revision of the Consolidated Balance Sheet Items (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Prepaid expenses and other current assets | $ 64,255 | $ 79,040 | ||
Total current assets | 680,282 | 487,777 | ||
Deferred tax assets, net | 16,811 | 7,405 | ||
Total assets | 2,256,218 | 2,046,877 | ||
Accrued expenses, current | 119,527 | 95,011 | ||
Total current liabilities | 647,911 | 490,183 | ||
Accrued expenses, non-current | 16,072 | 20,294 | ||
Total liabilities | 1,142,617 | 1,081,173 | ||
Accumulated deficit | (513,799) | (589,819) | ||
Total shareholders' equity | 1,113,601 | 965,704 | $ (390,258) | $ (268,690) |
Total liabilities and shareholders' equity | $ 2,256,218 | 2,046,877 | ||
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Prepaid expenses and other current assets | 61,188 | |||
Total current assets | 469,925 | |||
Deferred tax assets, net | 20,460 | |||
Total assets | 2,042,080 | |||
Accrued expenses, current | 93,728 | |||
Total current liabilities | 488,900 | |||
Accrued expenses, non-current | 20,987 | |||
Total liabilities | 1,080,583 | |||
Accumulated deficit | (594,026) | |||
Total shareholders' equity | 961,497 | |||
Total liabilities and shareholders' equity | 2,042,080 | |||
Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Prepaid expenses and other current assets | 17,852 | |||
Total current assets | 17,852 | |||
Deferred tax assets, net | (13,055) | |||
Total assets | 4,797 | |||
Accrued expenses, current | 1,283 | |||
Total current liabilities | 1,283 | |||
Accrued expenses, non-current | (693) | |||
Total liabilities | 590 | |||
Accumulated deficit | 4,207 | |||
Total shareholders' equity | 4,207 | |||
Total liabilities and shareholders' equity | $ 4,797 |
Income Taxes - Summary of Rev_2
Income Taxes - Summary of Revision of the Consolidated Statements of Operations Items (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income tax expense | $ (2,139) | $ (195,284) | $ 23,717 |
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.26 | $ (1.56) | $ (0.49) |
Net loss per share, basic (in dollars per share) | $ 0.27 | $ (1.56) | $ (0.49) |
As Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income tax expense | $ (199,491) | ||
Net income (loss) | $ (418,024) | ||
Net income (loss) per share, diluted (in dollars per share) | $ (1.58) | ||
Net loss per share, basic (in dollars per share) | $ (1.58) | ||
Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Income tax expense | $ 4,207 | ||
Net income (loss) | $ 4,207 | ||
Net income (loss) per share, diluted (in dollars per share) | $ 0.02 | ||
Net loss per share, basic (in dollars per share) | $ 0.02 |
Income Taxes - Summary of Rev_3
Income Taxes - Summary of Revision of the Consolidated Statements of Comprehensive Income (Loss) Items (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Comprehensive loss | $ 67,608 | (402,212) | $ (120,106) |
As Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | (418,024) | ||
Comprehensive loss | (406,419) | ||
Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | 4,207 | ||
Comprehensive loss | $ 4,207 |
Income Taxes - Summary of Rev_4
Income Taxes - Summary of Revision of the Consolidated Statements of Shareholders' Equity/Member's Deficit Items (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) | |
Total shareholders' equity | $ 1,113,601 | 965,704 | $ (390,258) | $ (268,690) |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | (418,024) | |||
Total shareholders' equity | 961,497 | |||
Adjustment | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | 4,207 | |||
Total shareholders' equity | $ 4,207 |
Income Taxes - Summary of Rev_5
Income Taxes - Summary of Revision of the Consolidated Statements of Cash Flow Items (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Deferred income taxes | (7,036) | (46,221) | (34,214) |
Prepaid expenses and other assets | 5,669 | (57,588) | (12,401) |
Accounts payable and accrued expenses | 26,592 | 53,004 | 34,787 |
Net cash used in operating activities | $ 220,436 | (142,455) | $ 147,141 |
As Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | (418,024) | ||
Deferred income taxes | (59,276) | ||
Prepaid expenses and other assets | (39,737) | ||
Accounts payable and accrued expenses | 52,415 | ||
Net cash used in operating activities | (142,455) | ||
Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Net income (loss) | 4,207 | ||
Deferred income taxes | 13,055 | ||
Prepaid expenses and other assets | (17,851) | ||
Accounts payable and accrued expenses | 589 | ||
Net cash used in operating activities | $ 0 |
Income Taxes - Summary of Rev_6
Income Taxes - Summary of Revision of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Federal | $ (3,835) | $ 180,402 | $ 3,213 |
State | (2,071) | 48,045 | 575 |
Foreign | 15,110 | 13,058 | 5,920 |
Total current tax position | 9,204 | 241,505 | 9,708 |
Federal | (3,027) | (37,731) | (29,021) |
State | (615) | (5,689) | (5,464) |
Foreign | (3,423) | (2,801) | 1,060 |
Total deferred tax provision | (7,065) | (46,221) | (33,425) |
Total income tax expense | $ 2,139 | 195,284 | $ (23,717) |
As Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Federal | 198,307 | ||
State | 47,992 | ||
Foreign | 12,468 | ||
Total current tax position | 258,767 | ||
Federal | (50,086) | ||
State | (5,839) | ||
Foreign | (3,351) | ||
Total deferred tax provision | (59,276) | ||
Total income tax expense | 199,491 | ||
Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Federal | (17,905) | ||
State | 53 | ||
Foreign | 590 | ||
Total current tax position | (17,262) | ||
Federal | 12,355 | ||
State | 150 | ||
Foreign | 550 | ||
Total deferred tax provision | 13,055 | ||
Total income tax expense | $ (4,207) |
Income Taxes - Summary of Rev_7
Income Taxes - Summary of Revision of Temporary Differences and Carryforwards (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred revenue | $ 17,050 | $ 23,185 |
Capitalized research and development costs | 10,834 | 11,140 |
Accrued expenses | 8,882 | 6,217 |
Share-based compensation | 8,367 | 5,251 |
Fixed assets | 0 | |
Net operating loss carryforwards | 4,637 | 4,468 |
Other tax carryforwards, primarily foreign tax credits | 20,479 | 18,215 |
Other | 2,272 | 2,590 |
Total deferred tax assets before valuation allowance | 80,842 | 71,066 |
Less: valuation allowance | (24,297) | (22,206) |
Net deferred tax assets | 56,545 | 48,860 |
Intangible assets | 30,525 | 40,270 |
State taxes | 0 | |
Other | 2,835 | 1,185 |
Total deferred tax liabilities | 40,748 | 41,455 |
Net deferred tax assets | $ 15,797 | 7,405 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred revenue | 27,681 | |
Capitalized research and development costs | 11,140 | |
Accrued expenses | 6,625 | |
Share-based compensation | 16,660 | |
Fixed assets | 279 | |
Net operating loss carryforwards | 4,046 | |
Other tax carryforwards, primarily foreign tax credits | 14,603 | |
Other | 2,823 | |
Total deferred tax assets before valuation allowance | 83,857 | |
Less: valuation allowance | (21,996) | |
Net deferred tax assets | 61,861 | |
Intangible assets | 40,270 | |
State taxes | 251 | |
Other | 880 | |
Total deferred tax liabilities | 41,401 | |
Net deferred tax assets | 20,460 | |
Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Deferred revenue | (4,496) | |
Capitalized research and development costs | 0 | |
Accrued expenses | (408) | |
Share-based compensation | (11,409) | |
Fixed assets | (279) | |
Net operating loss carryforwards | 422 | |
Other tax carryforwards, primarily foreign tax credits | 3,612 | |
Other | (233) | |
Total deferred tax assets before valuation allowance | (12,791) | |
Less: valuation allowance | (210) | |
Net deferred tax assets | (13,001) | |
Intangible assets | 0 | |
State taxes | (251) | |
Other | 305 | |
Total deferred tax liabilities | 54 | |
Net deferred tax assets | $ (13,055) |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Accrued Expenses, Current | ||
Accrued employee - related expenses | $ 63,890 | $ 40,687 |
Accrued tax liabilities | 23,001 | 13,350 |
Accrued restructuring | 0 | 1,065 |
Accrued professional fees | 3,275 | 2,103 |
Income taxes payable | 9,117 | 22,040 |
Other | 20,244 | 15,766 |
Total accrued expenses, current | $ 119,527 | $ 95,011 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Debt Instrument [Line Items] | ||
Total principal | $ 401,125 | $ 521,125 |
Unamortized discount and debt issuance costs | (9,212) | (11,140) |
Total debt | 391,913 | 509,985 |
Current portion of long-term debt | 0 | 0 |
Long-term debt | $ 391,913 | $ 509,985 |
Secured Debt | First Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Effective Rate | 2.40% | 3.20% |
Total principal | $ 401,125 | $ 521,125 |
Revolving Credit Facility | Line of Credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total principal | $ 0 | $ 0 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - USD ($) | Aug. 23, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs and original issuance discount | $ 100,000 | $ 200,000 | ||
Secured Debt | First Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 950,000,000 | |||
Secured Debt | First Lien Term Loan | Alternative Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 1.25% | |||
Secured Debt | First Lien Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 2.25% | |||
Secured Debt | First And Second Lien Term Loans | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs and original issuance discount | 1,900,000 | 1,700,000 | $ 1,000,000 | |
Threshold of sale of property or assets that requires loan prepayments | $ 5,000,000 | |||
Threshold of proceeds received from insurance settlement or new debt agreements that require loan prepayments | 5,000,000 | |||
Secured Debt | Second Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 170,000,000 | |||
Loss on debt extinguishment | 2,700,000 | |||
Secured Debt | Second Lien Term Loan | Alternative Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 6.00% | |||
Secured Debt | Second Lien Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 7.00% | |||
Revolving Credit Facility | Line of Credit | Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 60,000,000 | |||
Available borrowing capacity | $ 44,400,000 | 44,700,000 | ||
Commitment fee percentage | 0.25% | |||
Fronting fee percentage | 0.125% | |||
Letter of Credit | Line of Credit | Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 25,000,000 | |||
Letters of credit issued | $ 15,600,000 | $ 15,300,000 |
Long-term Debt - Maturities of
Long-term Debt - Maturities of Outstanding Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 401,125 | |
Thereafter | 0 | |
Total principal | 401,125 | $ 521,125 |
Total future payments | $ 401,125 | $ 521,125 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 5 years 6 months | ||
Weighted average discount rate | 7.60% | ||
Sublease Income | $ 3.9 | $ 4.5 | $ 4.3 |
Operating lease that has not yet commenced | $ 1.2 | ||
Operating lease agreement, rent payment | $ 14 | $ 11.3 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease that has not yet commenced, term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease that has not yet commenced, term | 10 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 10,436 |
Short-term lease expense | 752 |
Variable lease expense | $ 674 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 13,478 |
Operating lease assets obtained in exchange for new operating lease liabilities | $ 5,260 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Operating Leases, After Adoption of 842: | ||
2022 | $ 12,290 | |
2023 | 11,871 | |
2024 | 10,886 | |
2025 | 7,620 | |
2026 | 5,017 | |
Thereafter | 10,206 | |
Total operating lease payments | 57,890 | |
Less: imputed interest | (10,196) | |
Total operating lease liabilities | $ 47,694 | |
Capital Leases, Before Adoption of 842: | ||
2021 | $ 14,210 | |
2022 | 11,663 | |
2023 | 11,235 | |
2024 | 10,864 | |
2025 | 8,020 | |
Thereafter | 16,331 | |
Total future contractual payments | $ 72,323 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 0 | $ 0.9 | $ 1.7 |
Restructuring reserve | $ 0 | 1.1 | |
Employee Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 0.9 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | Jul. 31, 2019shares | Jul. 31, 2019shares | Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($)awardTypeparticipant$ / shares | Mar. 31, 2019USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of award types | awardType | 2 | ||||
Effect of reorganization | $ 278,248 | ||||
Weighted average grant date fair value of units granted (in dollars per share) | $ / shares | $ 7.71 | $ 3.62 | |||
Total fair value of units vested | $ 278,200 | $ 92,000 | |||
Share-based compensation expense | $ 57,784 | 222,478 | $ 71,151 | ||
Granted (in dollars per share) | $ / shares | $ 34.26 | ||||
2019 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance (in shares) | shares | 52,000,000 | 52,000,000 | |||
Annual increase in shares reserved for future issuance based off of shares outstanding | 4.00% | ||||
Award vesting period | 4 years | ||||
Vesting percentage | 25.00% | ||||
Equity Incentive Plan 2019 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance (in shares) | shares | 29,898,274 | ||||
2019 Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 3,700 | $ 800 | |||
Total unrecognized compensation cost | $ 700 | ||||
2019 Employee Stock Purchase Plan | Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance (in shares) | shares | 8,727,792 | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | shares | 330,738 | ||||
Management Incentive Units and Appreciation Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of participants impacted by the plan modification | participant | 306 | ||||
Incremental stock compensation expense recognized from the plan modification | $ 145,300 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation cost not yet recognized | $ 50,800 | ||||
Weighted average period of recognition | 2 years 8 months 12 days | ||||
Share-based compensation expense | $ 16,800 | $ 7,200 | |||
Granted (in dollars per share) | $ / shares | $ 13.08 | $ 6.43 | |||
Unvested restricted stock and RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 37,300 | $ 27,900 | |||
Number of awards granted (in shares) | shares | 1,358,169 | ||||
Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards granted (in shares) | shares | 1,323,169 | ||||
Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards granted (in shares) | shares | 35,000 | ||||
Restricted Stock And Restricted Stock Units, Time-Based | Award Period One | Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
Restricted Stock And Restricted Stock Units, Time-Based | Award Period One | Share-based Payment Arrangement, Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Vesting percentage | 75.00% | ||||
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average period of recognition | 1 year 3 months 18 days | ||||
Number of awards granted (in shares) | shares | 0 | ||||
Total unrecognized compensation cost | $ 8,800 | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average period of recognition | 2 years 7 months 6 days | ||||
Number of awards granted (in shares) | shares | 1,358,000 | ||||
Total unrecognized compensation cost | $ 62,900 | ||||
Shares committed under ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
ESPP offering period | 6 months | ||||
Purchase period | 6 months | ||||
Shares committed under ESPP | Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
ESPP, maximum percentage of the common stock available for purchase | 85.00% |
Share-based Compensation - Opti
Share-based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Beginning balance (in shares) | 7,147 | |
Granted (in shares) | 2,396 | |
Exercised (in shares) | (800) | |
Forfeited (in shares) | (350) | |
Ending balance (in shares) | 8,393 | 7,147 |
Options vested and expected to vest (in shares) | 8,393 | |
Options vested and exercisable (in shares) | 1,783 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted average exercise price, beginning of period (in dollars per share) | $ 16.26 | |
Granted (in dollars per share) | 34.26 | |
Exercised (in dollars per share) | 16.32 | |
Forfeited (in dollars per share) | 18.29 | |
Weighted average exercise price, end of period (in dollars per share) | 21.31 | $ 16.26 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | 21.31 | |
Vested and exercisable, weighted average exercise price (in dollars per share) | $ 16.16 | |
Weighted average remaining contractual term, options outstanding | 8 years 7 months 6 days | 9 years 3 months 18 days |
Weighted average remaining contractual term, options vested and expected to vest | 8 years 7 months 6 days | |
Weighted average remaining contractual term, options vested and exercisable | 8 years 3 months 18 days | |
Aggregate intrinsic value, options outstanding | $ 226,438 | $ 54,423 |
Aggregate intrinsic value, options vested and expected to vest | 226,438 | |
Aggregate intrinsic value, options vested and exercisable | $ 57,193 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Restricted Activity (Details) shares in Thousands | 12 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of awards, beginning balance (in shares) | shares | 1,984 |
Number of awards granted (in shares) | shares | 0 |
Number of units vested (in shares) | shares | 1,146 |
Number of units forfeited/repurchased (in shares) | shares | (110) |
Number of awards, ending balance (in shares) | shares | 728 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 16 |
Weighted average participation threshold, granted (in dollars per share) | $ / shares | 0 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 16 |
Weighted average participation threshold, forfeited/repurchased (in dollars per share) | $ / shares | 16 |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 16 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of awards, beginning balance (in shares) | shares | 3,123 |
Number of awards granted (in shares) | shares | 1,358 |
Number of units vested (in shares) | shares | 1,256 |
Number of units forfeited/repurchased (in shares) | shares | (184) |
Number of awards, ending balance (in shares) | shares | 3,041 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 16.39 |
Weighted average participation threshold, granted (in dollars per share) | $ / shares | 34.69 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 16.26 |
Weighted average participation threshold, forfeited/repurchased (in dollars per share) | $ / shares | 19.46 |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 24.44 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of Fair Value Assumptions (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.60% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 35.90% | ||
Risk-free interest rate | 0.10% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 55.50% | ||
Risk-free interest rate | 1.60% | ||
2019 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | $ 0 | |
Expected volatility | 35.90% | ||
Expected term (years) | 6 months | 6 months | |
Management Incentive Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | $ 0 | |
Management Incentive Unit | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 35.00% | 50.00% | |
Expected term (years) | 6 months | 1 year | |
Risk-free interest rate | 1.86% | 2.33% | |
Management Incentive Unit | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 55.00% | 60.00% | |
Expected term (years) | 1 year 3 months | 1 year 6 months | |
Risk-free interest rate | 2.09% | 2.40% | |
Appreciation Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | $ 0 | |
Appreciation Unit | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 35.00% | 50.00% | |
Expected term (years) | 6 months | 1 year | |
Risk-free interest rate | 1.86% | 2.33% | |
Appreciation Unit | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 55.00% | 60.00% | |
Expected term (years) | 1 year 3 months | 1 year 6 months | |
Risk-free interest rate | 2.09% | 2.40% | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | $ 0 | |
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 39.30% | 37.10% | |
Risk-free interest rate | 0.40% | 0.80% | |
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 39.80% | 38.90% | |
Risk-free interest rate | 1.10% | 1.90% |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 57,784 | $ 222,478 | $ 71,151 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 7,307 | 18,685 | 5,777 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 11,684 | 38,670 | 12,566 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 24,153 | 84,698 | 24,673 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 14,640 | $ 80,425 | $ 28,135 |
Net (Loss) Income Per Share - N
Net (Loss) Income Per Share - Narrative (Details) - $ / shares | Aug. 01, 2019 | Jul. 30, 2019 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, conversion price (in dollars per share) | $ 16 | |
IPO | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares sold and issued (in shares) | 38,873,174 | |
Sale of stock price per share (in dollars per share) | $ 16 |
Net (Loss) Income Per Share - S
Net (Loss) Income Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | |||
Net income (loss) | $ 75,714 | $ (413,817) | $ (116,194) |
Denominator: | |||
Weighted average shares outstanding, basic (in shares) | 280,469,000 | 264,933,000 | 235,939,000 |
Dilutive effect of stock-based awards (in shares) | 6,040,000 | 0 | 0 |
Weighted average shares outstanding, diluted (in shares) | 286,509,000 | 264,933,000 | 235,939,000 |
Net income (loss) per share, basic (in dollars per share) | $ 0.27 | $ (1.56) | $ (0.49) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.26 | $ (1.56) | $ (0.49) |
Net (Loss) Income Per Share - A
Net (Loss) Income Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 1,901 | 4,763 | 0 |
Unvested restricted stock and RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 11 | 3,819 | 0 |
Shares committed under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 0 | 64 | 0 |
Unvested equity awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 0 | 0 | 6,399 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Contribution for taxes associated with reorganization | $ 265,000 | ||
Cash payments to related parties | $ 0 | 0 | $ 1,177,021 |
Affiliated Entity | Financial And Management Advisory Services | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | $ 0 | (1,600) | (4,900) |
Affiliated Entity | Debt Service And Shared Costs | |||
Related Party Transaction [Line Items] | |||
Cash payments to related parties | 1,177,000 | ||
Affiliated Entity | Other Related Party Settlements | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | 14,300 | ||
Additional Paid-In Capital | |||
Related Party Transaction [Line Items] | |||
Contribution for taxes associated with reorganization | $ 265,000 | ||
Additional Paid-In Capital | Affiliated Entity | Transfers To Related Parties | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | $ 800 |
Related Party Debt (Details)
Related Party Debt (Details) - Subordinated Debt - Subordinated Demand Promissory Notes - Affiliated Entity - USD ($) $ in Millions | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 01, 2015 | |
Related Party Transaction [Line Items] | ||||
Debt instrument, face amount | $ 1,800 | |||
Interest expense | $ 0 | $ 4.1 | $ 27.4 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 3.6 | $ 3.1 | $ 1.9 |
Geographic Information - Summar
Geographic Information - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 36,916 | $ 31,508 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 12,129 | 11,296 |
Europe, Middle East and Africa | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 23,124 | 18,590 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 1,619 | 1,564 |
Latin America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 44 | $ 58 |