Nextgen Healthcare (NXGN) 10-Q 29 Jul 16 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2016	Jul. 26, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	QUALITY SYSTEMS, INC
Entity Central Index Key	708,818
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		61,506,483

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Current assets:
Cash and cash equivalents	$ 26,349	$ 27,176
Restricted cash and cash equivalents	4,842	5,320
Marketable securities	0	9,297
Accounts receivable, net	81,795	94,024
Inventories	430	555
Income taxes receivable	33,020	32,709
Prepaid expenses and other current assets	16,631	14,910
Total current assets	163,067	183,991
Equipment and improvements, net	26,683	25,790
Capitalized software costs, net	13,827	13,250
Deferred income taxes, net	8,158	8,198
Intangibles, net	85,943	91,675
Goodwill	188,837	188,837
Other assets	18,559	19,049
Total assets	505,074	530,790
Current liabilities:
Accounts payable	4,122	11,126
Deferred revenue	54,361	57,935
Accrued compensation and related benefits	14,257	18,670
Income taxes payable	90	91
Other current liabilities	52,660	50,238
Total current liabilities	125,490	138,060
Deferred revenue, net of current	1,476	1,335
Deferred compensation	6,617	6,357
Line of credit	88,000	105,000
Other noncurrent liabilities	13,365	10,661
Total liabilities	234,948	261,413
Commitments and contingencies (Note 13)
Shareholders’ equity:
$0.01 par value; authorized 100,000 shares; issued and outstanding 61,510 and 60,978 shares at June 30, 2016 and March 31, 2016, respectively	615	610
Additional paid-in capital	212,765	211,262
Accumulated other comprehensive loss	(593)	(481)
Retained earnings	57,339	57,986
Total shareholders’ equity	270,126	269,377
Total liabilities and shareholders’ equity	$ 505,074	$ 530,790

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2016	Mar. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	61,510	60,978
Common stock, shares outstanding	61,510	60,978

Consolidated Statements of Inco

Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Software license and hardware	$ 14,789	$ 16,189
Software related subscription services	19,875	12,246
Total software, hardware and related	34,664	28,435
Support and maintenance	38,007	43,713
Revenue cycle management and related services	21,053	20,243
Electronic data interchange and data services	22,124	20,189
Professional services	6,357	9,584
Total revenues	122,205	122,164
Cost of revenue:
Software license and hardware	7,120	7,041
Software related subscription services	9,087	5,958
Total software, hardware and related	16,207	12,999
Support and maintenance	6,568	7,943
Revenue cycle management and related services	14,231	14,512
Electronic data interchange and data services	12,763	12,326
Professional services	7,046	8,197
Total cost of revenue	56,815	55,977
Gross profit	65,390	66,187
Operating expenses:
Selling, general and administrative	40,581	39,171
Research and development costs, net	18,224	17,085
Amortization of acquired intangible assets	2,704	897
Restructuring costs	3,753	0
Total operating expenses	65,262	57,153
Income from operations	128	9,034
Interest income	8	302
Interest expense	(1,013)	0
Other expense, net	(87)	(50)
Income (loss) before provision for (benefit of) income taxes	(964)	9,286
Provision for (benefit of) income taxes	(317)	2,924
Net income (loss)	(647)	6,362
Foreign currency translation, net of tax	(122)	(72)
Unrealized gain (loss) on marketable securities, net of tax	10	(4)
Comprehensive income (loss)	$ (759)	$ 6,286
Net income (loss) per share:
Basic (in usd per share)	$ (0.01)	$ 0.11
Diluted (in usd per share)	$ (0.01)	$ 0.10
Weighted-average shares outstanding:
Basic (in usd per share)	61,179	60,312
Diluted (in usd per share)	61,179	61,064
Dividends declared per common share	$ 0	$ 0.175

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ (647)	$ 6,362
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,554	2,279
Amortization of capitalized software costs	2,371	2,439
Amortization of other intangibles	5,732	1,800
Amortization of debt issuance costs	269	0
Loss on disposal of equipment and improvements	40	0
Provision for bad debts	762	575
Provision for inventory obsolescence	130	57
Share-based compensation	1,259	684
Deferred income taxes	40	81
Change in fair value of contingent consideration	2,574	403
Restructuring costs, net of amounts paid	1,308	0
Changes in assets and liabilities, net of amounts acquired:
Accounts receivable	11,467	7,120
Inventories	(5)	(82)
Accounts payable	(7,029)	887
Deferred revenue	(3,433)	(4,557)
Accrued compensation and related benefits	(5,721)	(8,406)
Income taxes	(423)	(7,140)
Deferred compensation	260	635
Other assets and liabilities	1,425	570
Net cash provided by operating activities	12,933	3,707
Cash flows from investing activities:
Additions to capitalized software costs	(2,948)	(3,635)
Proceeds from sales and maturities of marketable securities	9,291	1,120
Additions to equipment and improvements	(3,462)	(3,337)
Purchases of marketable securities	0	(1,514)
Net cash provided by (used in) investing activities	2,881	(7,366)
Cash flows from financing activities:
Principal repayments on line of credit	(17,000)	0
Proceeds from issuance of shares under employee plans	359	225
Dividends paid	0	(10,700)
Net cash used in financing activities	(16,641)	(10,475)
Net increase (decrease) in cash and cash equivalents	(827)	(14,134)
Cash and cash equivalents at beginning of period	27,176	118,993
Cash and cash equivalents at end of period	26,349	104,859
Cash paid during the period for income taxes, net of refunds	65	9,661
Cash paid for interest	736	0
Tenant improvement allowance from landlord	3,094	0
Dividends declared but not paid	0	10,703
Unpaid additions to equipment and improvements	$ 25	$ 190

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include the accounts of Quality Systems, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Each of the terms “we,” “us,” or “our” as used herein refers collectively to the Company, unless otherwise stated. All intercompany accounts and transactions have been eliminated. Basis of Presentation. The accompanying unaudited consolidated financial statements as of June 30, 2016 and for the three months ended June 30, 2016 have been prepared in accordance with the requirements of Quarterly Report on Form 10-Q and Article 10 of the Securities and Exchange Commission Regulation S-X and therefore do not include all information and notes which would be presented were such consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 . In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair statement of the results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year. References to amounts in the consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified. Significant Accounting Policies . There have been no material changes to the significant accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 . Share-Based Compensation. The following table shows total share-based compensation expense included in the consolidated statements of comprehensive income for the three months ended June 30, 2016 and 2015 : Three Months Ended June 30, 2016 2015 Costs and expenses: Cost of revenue $ 149 $ 97 Research and development costs, net 83 110 Selling, general and administrative 1,027 477 Total share-based compensation 1,259 684 Income tax benefit (412 ) (200 ) Decrease in net income $ 847 $ 484 Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The amendments in this update are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to improve financial reporting about leasing transactions. The new guidance will require entities that lease assets to recognize on their balance sheets the assets and liabilities for the rights and obligations created by those leases and to disclose key information about the leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 is effective for us in the first quarter of fiscal 2019. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"), which replaces the concept of subsequently measuring inventory at 'lower of cost or market' with that of 'lower of cost and net realizable value'. The guidance only applies to inventories for which cost is determined by methods other than last-in first-out (LIFO) and the retail inventory method (RIM). ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. This guidance is effective for us for fiscal year ending March 31, 2018. We do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Arrangement ("ASU 2015-05"), which requires a customer to determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The adoption of this new standard did not have material impact on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"), which incorporates and expands upon certain principles that currently exist in U.S. auditing standards. ASU 2014-15 provides guidance regarding management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The new standard requires management to perform interim and annual evaluations and sets forth principles for considering the mitigating effect of management's plans. The standard mandates certain disclosures when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016, and all annual and interim periods thereafter. Early adoption is permitted. ASU 2014-15 is effective for us for fiscal year ending March 31, 2017. We do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards and GAAP. The core principle of this updated guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosure about revenue and provides improved guidance for multiple element arrangements. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, based on the July 2015 decision and issuance of ASU 2015-14, Deferral of Effective Date ("ASU 2015-14") by the FASB to delay the effective date by one year. Companies are permitted to adopt this new guidance following either a full retrospective or modified retrospective approach. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration ("ASU 2016-08"). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing ("ASU 2016-10”). In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16 ("ASU 2016-11") and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). The new ASUs do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather help to provide further interpretive clarifications on the new guidance in ASU 2014-09. ASU 2014-09, as amended by ASU 2015-14, is effective for us in the first quarter of fiscal 2019. We are currently in the process of evaluating the potential impact of implementation of the updated authoritative guidance on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2016 and March 31, 2016 : Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) June 30, ASSETS Cash and cash equivalents (1) $ 26,349 $ 26,349 $ — $ — Restricted cash and cash equivalents 4,842 4,842 — — $ 31,191 $ 31,191 $ — $ — LIABILITIES Contingent consideration related to acquisitions $ 26,417 $ — $ — $ 26,417 $ 26,417 $ — $ — $ 26,417 Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) March 31, ASSETS Cash and cash equivalents (1) $ 27,176 $ 27,176 $ — $ — Restricted cash and cash equivalents 5,320 5,320 — — Marketable securities (2) 9,297 9,297 — — $ 41,793 $ 41,793 $ — $ — LIABILITIES Contingent consideration related to acquisitions $ 23,843 $ — $ — $ 23,843 $ 23,843 $ — $ — $ 23,843 ___________________________________ (1) Cash equivalents consist of money market funds. (2) Marketable securities consist of available-for-sale money market instruments and fixed-income securities, including certificates of deposit, corporate bonds and notes, and municipal securities. Our contingent consideration liabilities relates primarily to the acquisitions of Mirth and HealthFusion. We assess the fair value of contingent consideration liabilities on a recurring basis and any adjustments to fair value subsequent to the measurement period are reflected in the consolidated statements of comprehensive income. Key assumptions include discount rates and probability-adjusted achievement estimates of certain revenue and strategic targets that are not observable in the market. The categorization of the framework used to measure fair value of the contingent consideration liability is considered Level 3 due to the subjective nature of the unobservable inputs used. The following table presents activity in our financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3), as of and for the three months ended June 30, 2016 : Total Liabilities Balance as of March 31, 2016 $ 23,843 Fair value adjustments 2,574 Balance as of June 30, 2016 $ 26,417 Non-Recurring Fair Value Measurements We have certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered Level 3 due to the subjective nature of the unobservable inputs used. There were no adjustments to fair value of such assets.

Business Combinations and Dispo

Business Combinations and Dispositions	3 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
Business Combinations and Disposals	Business Combinations HealthFusion Acquisition On January 4, 2016, we completed our acquisition of HealthFusion Holdings, Inc. ("HealthFusion") pursuant to the Agreement and Plan of Merger (the “Merger Agreement"), dated October 30, 2015. HealthFusion provides Web-based, cloud computing software for physicians, medical billing service providers, and hospitals. Its flagship product, MediTouch®, is a fully-integrated, cloud-based software suite consisting of clearinghouse, practice management, electronic health records, and patient portals with rich functionality to enable mobility, workflow automation, and advanced reporting and analytics aimed primarily at small-to-mid-size physician practices. The acquisition of HealthFusion is part of our strategy to expand its client base and cloud-based solution capabilities in the ambulatory market. Over time, we plan to expand the HealthFusion platform to satisfy the needs of practices of increasing size and complexity. The preliminary purchase price totaled $183,049 , which includes preliminary working capital and other customary adjustments and the fair value of contingent consideration related to an additional $25,000 of cash in the form of an earnout, subject to HealthFusion achieving certain revenue targets through December 31, 2016. The initial estimated fair value of contingent consideration of $16,700 was estimated using a Monte Carlo-based valuation model that considered, among other assumptions and inputs, our estimate of projected HealthFusion revenues. The acquisition was initially funded by a draw against the revolving credit agreement (see Note 7), a portion of which was subsequently repaid from existing cash on hand. We accounted for the HealthFusion acquisition as a purchase business combination using the acquisition method of accounting. The preliminary purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as changes to deferred taxes and/or working capital, becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The preliminary estimated fair value of the acquired tangible and intangible assets and liabilities assumed were determined using multiple valuation approaches depending on the type of tangible or intangible asset acquired, including but not limited to the income approach, the excess earnings method and the relief from royalty method approach. The preliminary amount of goodwill represents the excess of the preliminary purchase price over the preliminary net identifiable assets acquired and liabilities assumed. Goodwill primarily represents, among other factors, the value of synergies expected to be realized and the assemblage of all assets that enable us to create new client relationships, neither of which qualify as separate amortizable intangible assets. Goodwill arising from the acquisition of HealthFusion was determined as the excess of the preliminary purchase price over the net acquisition date fair values of the acquired assets and the liabilities assumed, and is not deductible for tax purposes. HealthFusion operates under the NextGen Division. The total preliminary purchase price for the HealthFusion acquisition is summarized as follows: Initial purchase price $ 165,000 Contingent consideration 16,700 Preliminary working capital and other adjustments 1,349 Total preliminary purchase price $ 183,049 January 4, 2016 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 2,225 Accounts receivable, net 1,514 Prepaid expenses and other current assets 4,645 Equipment and improvements, net 767 Capitalized software costs, net 307 Other assets 700 Accounts payable (1,085 ) Accrued compensation and related benefits (533 ) Deferred revenue (1,067 ) Deferred income taxes, net (12,027 ) Other liabilities (2,721 ) Total preliminary net tangible assets acquired and liabilities assumed (7,275 ) Preliminary fair value of identifiable intangible assets acquired: Software technology 42,500 Customer relationships 28,500 Trade name 4,000 Goodwill 115,324 Total preliminary identifiable intangible assets acquired 190,324 Total preliminary purchase price $ 183,049

Goodwill

Goodwill	3 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill We test goodwill for impairment annually during our first fiscal quarter, referred to as the annual test date. We will also test for impairment between annual test dates if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is performed at a reporting-unit level, which is defined as an operating segment or one level below an operating segment (referred to as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. During the quarter ended June 30, 2016 , we elected to bypass the optional qualitative step of the goodwill impairment assessment, as permitted by the authoritative guidance, and proceed directly with the quantitative step, under which we compared the estimated fair value of each reporting unit with goodwill to its net carrying amount. An impairment loss, if any, is recognized when the carrying amount of the reporting unit's net assets exceeds the estimated fair value of the reporting unit. We determined the fair value of our reporting units by considering two valuation methods, consisting of the income approach (based upon estimates of future discounted cash flows for each reporting unit) and a market comparable approach (based upon valuation multiples of companies that operate in similar industries with similar operating characteristics). The net cash flows used to determine fair value under the income approach represent our best estimate of projected operating results and assumed terminal growth rates, which are dependent on a number of significant assumptions, including historical experience, expectations of future performance, and expected changes to the macroeconomic variables and industry in which the Company operates, and are subject to changes given the inherent uncertainty in predicting future results. We also considered the Company's stock price and market capitalization as a corroborative step in assessing the reasonableness of the fair values estimated for the reporting units as part of the goodwill impairment assessment. The results of the goodwill impairment assessment established that the fair value for each reporting unit with goodwill significantly exceeded its respective net carrying amount, indicating that no goodwill impairment existed as of the annual test date. We do not amortize goodwill as it has been determined to have an indefinite useful life. Goodwill by reporting unit consists of the following: June 30, March 31, NextGen Division $ 149,258 $ 149,258 RCM Services Division 32,290 32,290 QSI Dental Division (1) 7,289 7,289 Total goodwill $ 188,837 $ 188,837 ___________________________________ (1) QSI Dental Division goodwill is presented on a basis consistent with that of our management reporting structures. However, for the purposes of our annual assessment of goodwill for impairment and as otherwise may be required, the QSI Dental Division goodwill is allocated to the reporting units that derive cash flows from the products associated with the acquired goodwill. For all periods presented in this report, the allocation resulted in substantially all of the QSI Dental Division goodwill being ascribed to the NextGen Division.

Intangible Assets

Intangible Assets	3 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible Assets Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows: June 30, 2016 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 50,550 $ 7,368 $ 67,810 $ 125,728 Accumulated amortization (22,043 ) (3,174 ) (14,568 ) (39,785 ) Net intangible assets $ 28,507 $ 4,194 $ 53,242 $ 85,943 March 31, 2016 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 50,550 $ 7,370 $ 67,810 $ 125,730 Accumulated amortization (19,618 ) (2,895 ) (11,542 ) (34,055 ) Net intangible assets $ 30,932 $ 4,475 $ 56,268 $ 91,675 Amortization expense related to customer relationships and trade name and contracts recorded as operating expenses in the consolidated statements of comprehensive income was $2,704 and $897 for the three months ended June 30, 2016 and 2015 , respectively. Amortization expense related to software technology recorded as cost of revenue was $3,027 and $903 for the three months ended June 30, 2016 and 2015 , respectively. The following table represents the remaining estimated amortization of definite-lived intangible assets as of June 30, 2016 : For the year ended March 31, 2017 (remaining nine months) $ 16,729 2018 19,115 2019 16,703 2020 15,706 2021 10,974 2022 and beyond 6,716 Total $ 85,943

Capitalized Software Costs

Capitalized Software Costs	3 Months Ended
	Jun. 30, 2016
Research and Development [Abstract]
Capitalized Software Costs	Capitalized Software Costs Our capitalized software costs are summarized as follows: June 30, March 31, Gross carrying amount $ 99,648 $ 96,699 Accumulated amortization (85,821 ) (83,449 ) Net capitalized software costs $ 13,827 $ 13,250 Amortization expense related to capitalized software costs was $2,371 and $2,439 for the three months ended June 30, 2016 and 2015 , respectively. The following table presents the remaining estimated amortization of capitalized software costs as of June 30, 2016 . The estimated amortization is comprised of (i) amortization of released products and (ii) the expected amortization for products that are not yet available for sale based on their estimated economic lives and projected general release dates. For the year ended March 31, 2017 (remaining nine months) $ 5,300 2018 3,900 2019 3,100 2020 1,527 2021 — 2022 and beyond — Total $ 13,827

Line of Credit (Notes)

Line of Credit (Notes)	3 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
LIne of Credit	Line of Credit On January 4, 2016, we entered into a $250,000 revolving credit agreement (“Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as syndication agent, and certain other lenders. The credit agreement is secured by substantially all of our existing and future property and material domestic subsidiaries. The Credit Agreement provides a subfacility of up to $10,000 for letters of credit and a subfacility of up to $10,000 for swing-line loans. The Credit Agreement matures on January 4, 2021 and the full balance of the revolving loans and all other obligations under the agreement must be paid at that time. The revolving loans under the Credit Agreement will be available for letters of credit, working capital and general corporate purposes. We were in compliance with all covenants under the Credit Agreement as of June 30, 2016 . As of June 30, 2016 , we had $88,000 in outstanding loans and $162,000 of unused credit under the Credit Agreement. During the three months ended June 30, 2016 , we recorded $740 of interest expense and $269 in amortization of deferred debt issuance costs related to the Credit Agreement.

Composition of Certain Financia

Composition of Certain Financial Statement Captions	3 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Composition of Certain Financial Statement Captions	Composition of Certain Financial Statement Captions Accounts receivable include amounts invoiced but not yet rendered at each period end. Undelivered products and services are included as a component of the deferred revenue balance on the accompanying consolidated balance sheets. June 30, March 31, Accounts receivable, gross $ 93,266 $ 104,467 Sales return reserve (8,434 ) (7,541 ) Allowance for doubtful accounts (3,037 ) (2,902 ) Accounts receivable, net $ 81,795 $ 94,024 Inventories are summarized as follows: June 30, March 31, Computer systems and components $ 430 $ 555 Prepaid expenses and other current assets are summarized as follows: June 30, March 31, Prepaid expenses $ 11,530 $ 11,804 Other current assets 5,101 3,106 Prepaid expenses and other current assets $ 16,631 $ 14,910 Equipment and improvements are summarized as follows: June 30, March 31, Computer equipment $ 32,514 $ 32,213 Internal-use software 10,201 10,201 Furniture and fixtures 11,304 9,799 Leasehold improvements 12,995 13,408 67,014 65,621 Accumulated depreciation and amortization (40,331 ) (39,831 ) Equipment and improvements, net $ 26,683 $ 25,790 The current portion of deferred revenue are summarized as follows: June 30, March 31, Professional services $ 22,013 $ 23,128 Software license, hardware and other 15,095 14,913 Support and maintenance 11,052 11,902 Software related subscription services 6,201 7,992 Deferred revenue, current $ 54,361 $ 57,935 Accrued compensation and related benefits are summarized as follows: June 30, March 31, Vacation $ 8,585 $ 8,987 Payroll, bonus and commission 5,672 9,683 Accrued compensation and related benefits $ 14,257 $ 18,670 Other current and non-current liabilities are summarized as follows: June 30, March 31, Contingent consideration and other liabilities related to acquisitions $ 26,417 $ 24,153 Care services liabilities 4,842 5,339 Customer credit balances and deposits 4,801 4,123 Accrued EDI expense 2,405 2,382 Accrued royalties 2,390 2,341 Self insurance reserve 1,742 1,862 Accrued outsourcing costs 1,609 1,604 Deferred rent 1,308 828 Accrued consulting and outside services 1,197 3,650 Accrued legal expense 819 864 Other accrued expenses 5,130 3,092 Other current liabilities $ 52,660 $ 50,238 Deferred rent $ 9,281 $ 6,577 Uncertain tax position and related liabilities 4,084 4,084 Other noncurrent liabilities $ 13,365 $ 10,661

Income Taxes

Income Taxes	3 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The benefit of income taxes for the three months ended June 30 , 2016 was $317 and the provision for income taxes for the three months ended June 30 , 2015 was $2,924 . The effective tax rates were 32.9% and 31.5% for the three months ended June 30 , 2016 and 2015 , respectively. The effective rate for the three months ended June 30 , 2016 increased compared to the prior year period primarily due to lower qualifying production activity deductions, offset by a favorable impact of the research and development credit. The deferred tax assets and liabilities have been shown net in the accompanying consolidated balance sheets as noncurrent. We expect to receive the full benefit of the deferred tax assets recorded with the exception of certain state credits and state net operating loss carryforwards for which we have recorded a valuation allowance. Uncertain tax positions We had a liability of $3,955 and $3,955 for unrecognized tax benefits related to various federal, state and local income tax matters as of June 30, 2016 and March 31, 2016 , respectively. If recognized, this amount would reduce our effective tax rate. We are no longer subject to U.S. federal income tax examinations for tax years before 2012. With few exceptions, we are no longer subject to state income tax examinations for tax years before 2011. We do not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months .

Earnings Per Share

Earnings Per Share	3 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Earnings (Loss) per Share The dual presentation of “basic” and “diluted” earnings (loss) per share (“EPS”) is provided below. Share amounts below are in thousands. Three Months Ended June 30, 2016 2015 Earnings (loss) per share — Basic: Net income (loss) $ (647 ) $ 6,362 Weighted-average shares outstanding — Basic 61,179 60,312 Net income (loss) per common share — Basic $ (0.01 ) $ 0.11 Earnings (loss) per share — Diluted: Net income (loss) $ (647 ) $ 6,362 Weighted-average shares outstanding 61,179 60,312 Effect of potentially dilutive securities — 752 Weighted-average shares outstanding — Diluted 61,179 61,064 Net income (loss) per common share — Diluted $ (0.01 ) $ 0.10 The computation of diluted net income (loss) per share does not include 2,767 and 1,768 options to acquire shares of common stock for the three months ended June 30, 2016 and 2015 , respectively, because their inclusion would have an anti-dilutive effect on net income per share.

Share-Based Awards

Share-Based Awards	3 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Awards	Share-Based Awards Employee Stock Option and Incentive Plans In October 2005, our shareholders approved a stock option and incentive plan (the “2005 Plan”) under which 4,800,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares, performance units (including performance options) and other share-based awards. The 2005 Plan provides that our employees and directors may, at the discretion of the Board of Directors or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2005 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2005 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the 2005 Plan, awards under the 2005 Plan will fully vest under certain circumstances. The 2005 Plan expired on May 25, 2015. As of June 30, 2016 , there were 1,358,931 outstanding options and 25,046 outstanding shares of restricted stock, restricted stock units and performance based restricted stock under the 2005 Plan. In August 2015, our shareholders approved a stock option and incentive plan (the “2015 Plan”) under which 11,500,000 shares of common stock were reserved for the issuance of awards, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock awards and restricted stock unit awards, performance stock awards and other share-based awards. The 2015 Plan provides that our employees and directors may, at the discretion of the Board of Directors or a duly designated compensation committee, be granted certain share-based awards. In the case of option awards granted under the 2015 Plan, the exercise price of each option is determined based on the date of grant and expire no later than 10 years from the date of grant. Awards granted pursuant to the 2015 Plan are subject to the vesting schedule or performance metrics set forth in the agreements pursuant to which they are granted. Upon a change of control of our Company, as such term is defined in the 2015 Plan, awards under the 2015 Plan will fully vest under certain circumstances. As of June 30, 2016 , there were 1,856,500 outstanding options, 662,608 outstanding shares of restricted stock awards and 8,613,425 shares available for future grant under the 2015 Plan. A summary of stock option transactions during the three months ended June 30, 2016 follows: Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, April 1, 2016 2,447,286 $ 19.55 6.3 574 Granted 856,500 12.87 7.9 Forfeited/Canceled (88,355 ) 21.80 4.8 Outstanding, June 30, 2016 3,215,431 $ 17.59 5.8 $ 238 Vested and expected to vest, June 30, 2016 2,358,931 $ 17.59 5.8 $ 238 Exercisable, June 30, 2016 773,346 $ 26.19 2.3 $ 143 We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions: Three Months Ended June 30, 2016 2015 Expected term 6.0 years 3.8 years Expected volatility 37.4% 38.3% Expected dividends —% 4.1% Risk-free rate 1.5% 1.6% The weighted-average grant date fair value of stock options granted during the three months ended June 30, 2016 and 2015 was $4.92 and $3.67 per share, respectively. During the three months ended June 30, 2016 , a total of 856,500 options to purchase shares of common stock were granted under the 2015 Plan at an exercise price equal to the market price of our common stock on the date of grant, as summarized below: Option Grant Date Number of Shares Exercise Price Vesting Terms (1) Expiration May 31, 2016 100,000 $ 12.71 Five years May 31, 2024 May 25, 2016 216,500 $ 12.78 Four years May 25, 2024 May 24, 2016 540,000 $ 12.93 Four years May 24, 2024 Total 856,500 __________________________________ (1) Options vest in equal annual installments on each grant anniversary date commencing one year following the date of grant. Non-vested stock option award activity during the three months ended June 30, 2016 is summarized as follows: Non-Vested Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2016 1,859,750 $ 4.67 Granted 856,500 4.92 Vested (226,845 ) 5.96 Forfeited/Canceled (47,320 ) 4.53 Outstanding, June 30, 2016 2,442,085 $ 4.64 As of June 30, 2016 , $10,226 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of 4.0 years. This amount does not include the cost of new options that may be granted in future periods or any changes in our forfeiture percentage. The total fair value of options vested during the three months ended June 30, 2016 and 2015 was $1,353 and $1,657 , respectively. Employee Share Purchase Plan On August 11, 2014, our shareholders approved an Employee Share Purchase Plan (the “Purchase Plan”) under which 4,000,000 shares of common stock were reserved for future grant. The Purchase Plan allows eligible employees to purchase shares through payroll deductions of up to 15% of total base salary at a price equal to 90% of the lower of the fair market values of the shares as of the beginning or the end of the corresponding offering period. Any shares purchased under the Purchase Plan are subject to a six-month holding period. Employees are limited to purchasing no more than 1,500 shares on any single purchase date and no more than $25,000 in total fair market value of shares during any one calendar year. As of June 30, 2016 , we have issued 147,464 shares under the Purchase Plan and 3,852,536 shares are available for future issuance. Share-based compensation expense recorded for the employee share purchase plan was $126 for the three months ended June 30 , 2016 and $68 for the three months ended June 30 , 2015 . Restricted Stock Awards Restricted stock awards activity during the three months ended June 30, 2016 is summarized as follows: Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2016 191,247 $ 14.44 Granted 496,974 12.78 Vested (567 ) 20.20 Outstanding, June 30, 2016 687,654 $ 13.23 Share-based compensation expense related to restricted stock awards was $545 for the three months ended June 30 , 2016 and $198 for the three months ended June 30 , 2015 . The weighted-average grant date fair value for the restricted stock awards was estimated using the market price of the common stock on the date of grant. The fair value of the restricted stock awards is amortized on a straight-line basis over the vesting period. As of June 30, 2016 , $7,928 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2.6 years. This amount does not include the cost of new restricted stock awards that may be granted in future periods.

Concentration of Credit Risk

Concentration of Credit Risk	3 Months Ended
	Jun. 30, 2016
Risks and Uncertainties [Abstract]
Concentration of Credit Risk	Concentration of Credit Risk We had cash deposits at U.S. banks and financial institutions which exceeded federally insured limits at June 30, 2016 . We are exposed to credit loss for amounts in excess of insured limits in the event of non-performance by the institutions; however, we do not anticipate non-performance by these institutions.

Commitments, Guarantees and Con

Commitments, Guarantees and Contingencies	3 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments, Guarantees and Contingencies	Commitments, Guarantees and Contingencies Commitments and Guarantees Our software license agreements include a performance guarantee that our software products will substantially operate as described in the applicable program documentation for a period of 365 days after delivery. To date, we have not incurred any significant costs associated with our performance guarantee or other related warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties. Certain arrangements also include performance guarantees related to response time, availability for operational use, and other performance-related guarantees. Certain arrangements also include penalties in the form of maintenance credits should the performance of the software fail to meet the performance guarantees. To date, we have not incurred any significant costs associated with these warranties and do not expect to incur significant warranty costs in the future. Therefore, no accrual has been made for potential costs associated with these warranties. We have historically offered short-term rights of return in certain sales arrangements. If we are able to estimate returns for these types of arrangements and all other criteria for revenue recognition have been met, revenue is recognized and these arrangements are recorded in the consolidated financial statements. If we are unable to estimate returns for these types of arrangements, revenue is not recognized in the consolidated financial statements until the rights of return expire, provided also, that all other criteria of revenue recognition have been met. Certain standard sales agreements contain a money back guarantee providing for a performance guarantee that is already part of the software license agreement as well as training and support. The money back guarantee also warrants that the software will remain robust and flexible to allow participation in the federal health incentive programs. The specific elements of the performance guarantee pertain to aspects of the software, which we have already tested and confirmed to consistently meet using our existing software without any modifications or enhancements. To date, we have not incurred any costs associated with this guarantee and do not expect to incur significant costs in the future. Therefore, no accrual has been made for potential costs associated with this guarantee. Our standard sales agreements contain an indemnification provision pursuant to which we shall indemnify, hold harmless, and reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any United States patent, any copyright or other intellectual property infringement claim by any third-party with respect to our software. As we have not incurred any significant costs to defend lawsuits or settle claims related to these indemnification agreements, we believe that our estimated exposure on these agreements is currently minimal. Accordingly, we have no liabilities recorded for these indemnification obligations. Hussein Litigation On October 7, 2013, a complaint was filed against our Company and certain of our officers and directors in the Superior Court of the State of California for the County of Orange, captioned Ahmed D. Hussein v. Sheldon Razin, Steven Plochocki, Quality Systems, Inc. and Does 1-10, inclusive, No. 30-2013-00679600-CU-NP-CJC, by Ahmed Hussein, a former director and significant shareholder of our Company. We filed a demurrer to the complaint, which the court granted on April 10, 2014. An amended complaint was filed on April 25, 2014. The amended complaint generally alleges fraud and deceit, constructive fraud, negligent misrepresentation and breach of fiduciary duty in connection with statements made to our shareholders regarding our financial condition and projected future performance. The amended complaint seeks actual damages, exemplary and punitive damages and costs. We filed a demurrer to the amended complaint. On July 29, 2014, the court sustained the demurrer with respect to the breach of fiduciary duty claim, and overruled the demurrer with respect to the fraud and deceit claims. On August 28, 2014, we filed an answer and also filed a cross-complaint against the plaintiff, alleging that the plaintiff breached fiduciary duties owed to the Company, Mr. Razin and Mr. Plochocki. On June 26, 2015, we filed a motion for summary judgment, which the court granted on September 16, 2015, dismissing all claims against us. On September 23, 2015, the plaintiff filed an application for reconsideration of the Court's summary judgment order, which the court denied. On October 28, 2015, the plaintiff filed a motion for summary judgment, seeking to dismiss our cross-complaint, which the court denied on March 3, 2016. On May 9, 2016, the plaintiff filed a motion for summary adjudication, seeking to again dismiss our cross-complaint. The hearing for the motion is set for August 4, 2016. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. Federal Securities Class Action On November 19, 2013, a putative class action complaint was filed on behalf of the shareholders of our Company other than the defendants against us and certain of our officers and directors in the United States District Court for the Central District of California by one of our shareholders. After the court appointed lead plaintiffs and lead counsel for this action, and recaptioned the action In re Quality Systems, Inc. Securities Litigation, No. 8L13-cv-01818-CJC(JPRx), lead plaintiffs filed an amended complaint on April 7, 2014. The amended complaint, which is substantially similar to the litigation described above under the caption “Hussein Litigation,” generally alleges that statements made to our shareholders regarding our financial condition and projected future performance were false and misleading in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the individual defendants are liable for such statements because they are controlling persons under Section 20(a) of the Exchange Act. The complaint seeks compensatory damages, court costs and attorneys' fees. We filed a motion to dismiss the amended complaint on June 20, 2014, which the court granted on October 20, 2014, dismissing the complaint with prejudice. Plaintiffs filed a motion for reconsideration of the Court's order, which the court denied on January 5, 2015. On January 30, 2015, Plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit, captioned In re Quality Systems, Inc. Securities Litigation, No. 15-55173. Plaintiffs filed their opening brief and we answered. Oral argument is not yet scheduled. We believe that the plaintiffs' claims are without merit and continue to defend against them vigorously. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim. Shareholder Derivative Litigation On January 24, 2014, a complaint was filed against our Company and certain of our officers and current and former directors in the United States District Court for the Central District of California, captioned Timothy J. Foss, derivatively on behalf of himself and all others similarly situated, vs. Craig A. Barbarosh, George H. Bristol, James C. Malone, Peter M. Neupert, Morris Panner, D. Russell Pflueger, Steven T. Plochocki, Sheldon Razin, Lance E. Rosenzweig and Quality Systems, Inc., No. SACV14-00110-DOC-JPPx, by Timothy J. Foss, a shareholder of ours. The complaint arises from the same allegations described above under the captions “Hussein Litigation” and “Federal Securities Class Action” and generally alleges breach of fiduciary duties, abuse of control and gross mismanagement by our directors, in addition to unjust enrichment and insider selling by individual directors. The complaint seeks compensatory damages, restitution and disgorgement of all profits, court costs, attorneys’ fees and implementation of enhanced corporate governance procedures. The parties have agreed to stay this litigation until the United States Court of Appeals for the Ninth Circuit issues a ruling on the pending appeal described above under the caption “Federal Securities Class Action”. We believe that the plaintiff’s claims are without merit and intend to defend against them vigorously. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this claim.

Operating Segment Information

Operating Segment Information	3 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Operating Segment Information	Operating Segment Information As of June 30, 2016 , we have three reportable segments that are evaluated regularly by our chief operating decision maker (consisting of our Chief Executive Officer) in deciding how to allocate resources and in assessing performance. Operating segment data is as follows: Three Months Ended June 30, 2016 2015 Revenue: NextGen Division $ 95,556 $ 91,615 RCM Services Division 22,365 22,462 QSI Dental Division 4,284 4,418 Hospital Solutions Division (1) — 3,669 Consolidated revenue $ 122,205 $ 122,164 Operating income: NextGen Division $ 45,649 $ 44,858 RCM Services Division 4,458 4,417 QSI Dental Division 1,877 950 Hospital Solutions Division (1) — 955 Corporate and unallocated (51,856 ) (42,146 ) Consolidated operating income $ 128 $ 9,034 ___________________________________ (1) The former Hospital Solutions Division was divested in October 2015. Assets by segment are not tracked or used by our chief operating decision maker to allocate resources or to assess performance, and thus not included in the table above. The major components of the corporate and unallocated amounts are summarized in the table below: Three Months Ended June 30, 2016 2015 Research and development costs, net $ 18,224 $ 17,085 Amortization of capitalized software costs 2,371 2,439 Marketing expense 2,943 3,816 Restructuring costs (see Note 15) 3,753 — Other corporate and overhead costs (1) 24,565 18,806 Total corporate and unallocated $ 51,856 $ 42,146 ___________________________________ (1) The net increase in other corporate and overhead costs in the three months ended June 30, 2016 is primarily related to higher amortization of acquired intangible assets and other general and administrative costs associated with the acquisition of HealthFusion, higher acquisition costs (including fair value adjustments to contingent consideration liabilities), and higher professional services costs. The amounts classified as corporate and unallocated consist primarily of corporate general and administrative costs, acquisition and transaction-related costs, amortization of acquired intangible assets, amortization of capitalized software costs, and costs of other centrally managed overhead and shared-services functions, including accounting and finance, human resources, information services, marketing, legal, and research and development, that are not controlled by segment level leadership. Although the segments may derive direct benefits as a result of such costs, our chief operating decision maker evaluates performance based upon stand-alone segment operating income, which excludes these corporate and unallocated amounts.

Restructuring Plan

Restructuring Plan	3 Months Ended
	Jun. 30, 2016
Restructuring Costs [Abstract]
Restructuring Plan	Restructuring Plan In fiscal year 2016, we initiated a three-phase plan intended to better position our organization for future success. We implemented a series of actions to with the objective of achieving greater synergies and further integration of our products and services in support of our business strategies, and enabling a more efficient, integrated and client-centered delivery of the holistic solutions that we believe is required by our ambulatory care clients. We also transformed our management team with the appointment of a new chief executive officer, chief financial officer, chief technology officer, and chief client officer. In the first phase, we redesigned the organization to more effectively support the execution of our strategy. Under phase two of our reorganization, we will continue building and enhancing the capabilities to drive future revenue growth. The third phase of the plan will consist of developing the services and solutions to accelerate revenue growth. The overall plan also includes a multi-year initiative, called NextGen 2.0, to merge our business units into a single, streamlined, functional-based organization structure and to realign our organizational structure by consolidating the sales, marketing, information services, and software development responsibilities into single, company-wide roles in order to achieve greater efficiency. As a result, our future reportable segments may change due to such changes in the organization of our business. The first phase was completed in April 2016, when we announced a corporate restructuring plan, which was approved by our Board of Directors. Under the restructuring plan, we reduced our domestic headcount by approximately 150 employees, or approximately six percent of our U.S.-based workforce. During the three months ended June 30, 2016 , we recorded $3,753 of restructuring costs within operating expenses in our consolidated statements of comprehensive income. The restructuring costs consist of payroll-related costs, such as severance, outplacement costs, and continuing healthcare coverage, associated with the involuntary separation of employees pursuant to a one-time benefit arrangement, which were accrued when it was probable that the benefits will be paid and the amount were reasonably estimable. As of June 30, 2016 , we had a remaining liability of $1,308 related to our restructuring costs, which we expect to settle in the second quarter of fiscal 2017. The restructuring plan was substantially completed as of June 30, 2016 .

Significant Accounting Policies

Significant Accounting Policies (Policies)	3 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	Principles of Consolidation. The consolidated financial statements include the accounts of Quality Systems, Inc. and its wholly-owned subsidiaries (collectively, the “Company”). Each of the terms “we,” “us,” or “our” as used herein refers collectively to the Company, unless otherwise stated. All intercompany accounts and transactions have been eliminated.
Basis of Presentation	Basis of Presentation. The accompanying unaudited consolidated financial statements as of June 30, 2016 and for the three months ended June 30, 2016 have been prepared in accordance with the requirements of Quarterly Report on Form 10-Q and Article 10 of the Securities and Exchange Commission Regulation S-X and therefore do not include all information and notes which would be presented were such consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements should be read in conjunction with the audited consolidated financial statements presented in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016 . In the opinion of management, the accompanying consolidated financial statements reflect all adjustments which are necessary for a fair statement of the results of operations and cash flows for the periods presented. The results of operations for such interim periods are not necessarily indicative of results of operations to be expected for the full year. References to amounts in the consolidated financial statement sections are in thousands, except shares and per share data, unless otherwise specified.
Recent Accounting Standards	Recent Accounting Standards. Recent accounting pronouncements requiring implementation in future periods are discussed below or in the notes, where applicable. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for and reporting on share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016, with early adoption permitted. The amendments in this update are to be applied differently upon adoption with certain amendments being applied prospectively, retrospectively and under a modified retrospective transition method. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to improve financial reporting about leasing transactions. The new guidance will require entities that lease assets to recognize on their balance sheets the assets and liabilities for the rights and obligations created by those leases and to disclose key information about the leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 is effective for us in the first quarter of fiscal 2019. We are currently in the process of evaluating the potential impact of adoption of this updated authoritative guidance on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory ("ASU 2015-11"), which replaces the concept of subsequently measuring inventory at 'lower of cost or market' with that of 'lower of cost and net realizable value'. The guidance only applies to inventories for which cost is determined by methods other than last-in first-out (LIFO) and the retail inventory method (RIM). ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. This guidance is effective for us for fiscal year ending March 31, 2018. We do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Arrangement ("ASU 2015-05"), which requires a customer to determine whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software or as a service contract. ASU 2015-05 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. Upon adoption, an entity has the option to apply the provisions of ASU 2015-05 either prospectively to all arrangements entered into or materially modified, or retrospectively. The adoption of this new standard did not have material impact on our consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ("ASU 2014-15"), which incorporates and expands upon certain principles that currently exist in U.S. auditing standards. ASU 2014-15 provides guidance regarding management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. The new standard requires management to perform interim and annual evaluations and sets forth principles for considering the mitigating effect of management's plans. The standard mandates certain disclosures when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016, and all annual and interim periods thereafter. Early adoption is permitted. ASU 2014-15 is effective for us for fiscal year ending March 31, 2017. We do not expect the adoption of this new standard to have a material impact on our consolidated financial statements. In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards and GAAP. The core principle of this updated guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosure about revenue and provides improved guidance for multiple element arrangements. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, based on the July 2015 decision and issuance of ASU 2015-14, Deferral of Effective Date ("ASU 2015-14") by the FASB to delay the effective date by one year. Companies are permitted to adopt this new guidance following either a full retrospective or modified retrospective approach. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration ("ASU 2016-08"). In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing ("ASU 2016-10”). In May 2016, the FASB issued ASU 2016-11, Revenue from Contracts with Customers (Topic 606) and Derivatives and Hedging (Topic 815) – Rescission of SEC Guidance Because of ASU 2014-09 and 2014-16 ("ASU 2016-11") and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients ("ASU 2016-12"). The new ASUs do not change the core principle of the guidance in Topic 606 (as amended by ASU 2014-09), but rather help to provide further interpretive clarifications on the new guidance in ASU 2014-09. ASU 2014-09, as amended by ASU 2015-14, is effective for us in the first quarter of fiscal 2019. We are currently in the process of evaluating the potential impact of implementation of the updated authoritative guidance on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective accounting standards, if adopted, would have a material impact on our consolidated financial statements.
Contingent Consideration Policy	Our contingent consideration liabilities relates primarily to the acquisitions of Mirth and HealthFusion. We assess the fair value of contingent consideration liabilities on a recurring basis and any adjustments to fair value subsequent to the measurement period are reflected in the consolidated statements of comprehensive income. Key assumptions include discount rates and probability-adjusted achievement estimates of certain revenue and strategic targets that are not observable in the market. The categorization of the framework used to measure fair value of the contingent consideration liability is considered Level 3 due to the subjective nature of the unobservable inputs used.
Non-Recurring Fair Value Measurements	Non-Recurring Fair Value Measurements We have certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered Level 3 due to the subjective nature of the unobservable inputs used. There were no adjustments to fair value of such assets.

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Stock-based compensation expense	Share-Based Compensation. The following table shows total share-based compensation expense included in the consolidated statements of comprehensive income for the three months ended June 30, 2016 and 2015 : Three Months Ended June 30, 2016 2015 Costs and expenses: Cost of revenue $ 149 $ 97 Research and development costs, net 83 110 Selling, general and administrative 1,027 477 Total share-based compensation 1,259 684 Income tax benefit (412 ) (200 ) Decrease in net income $ 847 $ 484

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair value of assets and liabilities on a recurring basis	The following tables set forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2016 and March 31, 2016 : Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) June 30, ASSETS Cash and cash equivalents (1) $ 26,349 $ 26,349 $ — $ — Restricted cash and cash equivalents 4,842 4,842 — — $ 31,191 $ 31,191 $ — $ — LIABILITIES Contingent consideration related to acquisitions $ 26,417 $ — $ — $ 26,417 $ 26,417 $ — $ — $ 26,417 Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) March 31, ASSETS Cash and cash equivalents (1) $ 27,176 $ 27,176 $ — $ — Restricted cash and cash equivalents 5,320 5,320 — — Marketable securities (2) 9,297 9,297 — — $ 41,793 $ 41,793 $ — $ — LIABILITIES Contingent consideration related to acquisitions $ 23,843 $ — $ — $ 23,843 $ 23,843 $ — $ — $ 23,843 ___________________________________ (1) Cash equivalents consist of money market funds. (2) Marketable securities consist of available-for-sale money market instruments and fixed-income securities, including certificates of deposit, corporate bonds and notes, and municipal securities.
Company's assets and liabilities measured at fair value using significant unobservable inputs (Level 3)	The following table presents activity in our financial assets and liabilities measured at fair value using significant unobservable inputs (Level 3), as of and for the three months ended June 30, 2016 : Total Liabilities Balance as of March 31, 2016 $ 23,843 Fair value adjustments 2,574 Balance as of June 30, 2016 $ 26,417

Business Combinations and Dis24

Business Combinations and Dispositions (Tables)	3 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
Schedule of Business Acquisitions, by Acquisition	Initial purchase price $ 165,000 Contingent consideration 16,700 Preliminary working capital and other adjustments 1,349 Total preliminary purchase price $ 183,049
Summary of purchase price allocation	January 4, 2016 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 2,225 Accounts receivable, net 1,514 Prepaid expenses and other current assets 4,645 Equipment and improvements, net 767 Capitalized software costs, net 307 Other assets 700 Accounts payable (1,085 ) Accrued compensation and related benefits (533 ) Deferred revenue (1,067 ) Deferred income taxes, net (12,027 ) Other liabilities (2,721 ) Total preliminary net tangible assets acquired and liabilities assumed (7,275 ) Preliminary fair value of identifiable intangible assets acquired: Software technology 42,500 Customer relationships 28,500 Trade name 4,000 Goodwill 115,324 Total preliminary identifiable intangible assets acquired 190,324 Total preliminary purchase price $ 183,049

Goodwill (Tables)

Goodwill (Tables)	3 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Summary of Goodwill	Goodwill by reporting unit consists of the following: June 30, March 31, NextGen Division $ 149,258 $ 149,258 RCM Services Division 32,290 32,290 QSI Dental Division (1) 7,289 7,289 Total goodwill $ 188,837 $ 188,837 ___________________________________ (1) QSI Dental Division goodwill is presented on a basis consistent with that of our management reporting structures. However, for the purposes of our annual assessment of goodwill for impairment and as otherwise may be required, the QSI Dental Division goodwill is allocated to the reporting units that derive cash flows from the products associated with the acquired goodwill. For all periods presented in this report, the allocation resulted in substantially all of the QSI Dental Division goodwill being ascribed to the NextGen Division.

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible assets, other than capitalized software development costs	Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows: June 30, 2016 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 50,550 $ 7,368 $ 67,810 $ 125,728 Accumulated amortization (22,043 ) (3,174 ) (14,568 ) (39,785 ) Net intangible assets $ 28,507 $ 4,194 $ 53,242 $ 85,943 March 31, 2016 Customer Relationships Trade Name and Contracts Software Technology Total Gross carrying amount $ 50,550 $ 7,370 $ 67,810 $ 125,730 Accumulated amortization (19,618 ) (2,895 ) (11,542 ) (34,055 ) Net intangible assets $ 30,932 $ 4,475 $ 56,268 $ 91,675
Estimated amortization of intangible assets with determinable lives	The following table represents the remaining estimated amortization of definite-lived intangible assets as of June 30, 2016 : For the year ended March 31, 2017 (remaining nine months) $ 16,729 2018 19,115 2019 16,703 2020 15,706 2021 10,974 2022 and beyond 6,716 Total $ 85,943

Capitalized Software Costs (Tab

Capitalized Software Costs (Tables)	3 Months Ended
	Jun. 30, 2016
Research and Development [Abstract]
Capitalized software development costs	Our capitalized software costs are summarized as follows: June 30, March 31, Gross carrying amount $ 99,648 $ 96,699 Accumulated amortization (85,821 ) (83,449 ) Net capitalized software costs $ 13,827 $ 13,250
Estimated amortization of capitalized software costs	The following table presents the remaining estimated amortization of capitalized software costs as of June 30, 2016 . The estimated amortization is comprised of (i) amortization of released products and (ii) the expected amortization for products that are not yet available for sale based on their estimated economic lives and projected general release dates. For the year ended March 31, 2017 (remaining nine months) $ 5,300 2018 3,900 2019 3,100 2020 1,527 2021 — 2022 and beyond — Total $ 13,827

Composition of Certain Financ28

Composition of Certain Financial Statement Captions (Tables)	3 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Accounts Receivable	June 30, March 31, Accounts receivable, gross $ 93,266 $ 104,467 Sales return reserve (8,434 ) (7,541 ) Allowance for doubtful accounts (3,037 ) (2,902 ) Accounts receivable, net $ 81,795 $ 94,024
Summary of Inventories	Inventories are summarized as follows: June 30, March 31, Computer systems and components $ 430 $ 555
Summary of Prepaid Expense and Other Assets, Current	Prepaid expenses and other current assets are summarized as follows: June 30, March 31, Prepaid expenses $ 11,530 $ 11,804 Other current assets 5,101 3,106 Prepaid expenses and other current assets $ 16,631 $ 14,910
Summary of Equipment and improvements	Equipment and improvements are summarized as follows: June 30, March 31, Computer equipment $ 32,514 $ 32,213 Internal-use software 10,201 10,201 Furniture and fixtures 11,304 9,799 Leasehold improvements 12,995 13,408 67,014 65,621 Accumulated depreciation and amortization (40,331 ) (39,831 ) Equipment and improvements, net $ 26,683 $ 25,790
Summary of Current and non-current deferred revenue	The current portion of deferred revenue are summarized as follows: June 30, March 31, Professional services $ 22,013 $ 23,128 Software license, hardware and other 15,095 14,913 Support and maintenance 11,052 11,902 Software related subscription services 6,201 7,992 Deferred revenue, current $ 54,361 $ 57,935
Summary of Accrued compensation and related benefits	Accrued compensation and related benefits are summarized as follows: June 30, March 31, Vacation $ 8,585 $ 8,987 Payroll, bonus and commission 5,672 9,683 Accrued compensation and related benefits $ 14,257 $ 18,670
Summary of Other current liabilities	Other current and non-current liabilities are summarized as follows: June 30, March 31, Contingent consideration and other liabilities related to acquisitions $ 26,417 $ 24,153 Care services liabilities 4,842 5,339 Customer credit balances and deposits 4,801 4,123 Accrued EDI expense 2,405 2,382 Accrued royalties 2,390 2,341 Self insurance reserve 1,742 1,862 Accrued outsourcing costs 1,609 1,604 Deferred rent 1,308 828 Accrued consulting and outside services 1,197 3,650 Accrued legal expense 819 864 Other accrued expenses 5,130 3,092 Other current liabilities $ 52,660 $ 50,238 Deferred rent $ 9,281 $ 6,577 Uncertain tax position and related liabilities 4,084 4,084 Other noncurrent liabilities $ 13,365 $ 10,661

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Weighted-average shares outstanding for basic and diluted net income per share	The dual presentation of “basic” and “diluted” earnings (loss) per share (“EPS”) is provided below. Share amounts below are in thousands. Three Months Ended June 30, 2016 2015 Earnings (loss) per share — Basic: Net income (loss) $ (647 ) $ 6,362 Weighted-average shares outstanding — Basic 61,179 60,312 Net income (loss) per common share — Basic $ (0.01 ) $ 0.11 Earnings (loss) per share — Diluted: Net income (loss) $ (647 ) $ 6,362 Weighted-average shares outstanding 61,179 60,312 Effect of potentially dilutive securities — 752 Weighted-average shares outstanding — Diluted 61,179 61,064 Net income (loss) per common share — Diluted $ (0.01 ) $ 0.10

Share Based Awards (Tables)

Share Based Awards (Tables)	3 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock Option Activity	A summary of stock option transactions during the three months ended June 30, 2016 follows: Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, April 1, 2016 2,447,286 $ 19.55 6.3 574 Granted 856,500 12.87 7.9 Forfeited/Canceled (88,355 ) 21.80 4.8 Outstanding, June 30, 2016 3,215,431 $ 17.59 5.8 $ 238 Vested and expected to vest, June 30, 2016 2,358,931 $ 17.59 5.8 $ 238 Exercisable, June 30, 2016 773,346 $ 26.19 2.3 $ 143
Schedule of Share Based Compensation Valuation Assumption	We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions: Three Months Ended June 30, 2016 2015 Expected term 6.0 years 3.8 years Expected volatility 37.4% 38.3% Expected dividends —% 4.1% Risk-free rate 1.5% 1.6%
Summary of stock options granted	During the three months ended June 30, 2016 , a total of 856,500 options to purchase shares of common stock were granted under the 2015 Plan at an exercise price equal to the market price of our common stock on the date of grant, as summarized below: Option Grant Date Number of Shares Exercise Price Vesting Terms (1) Expiration May 31, 2016 100,000 $ 12.71 Five years May 31, 2024 May 25, 2016 216,500 $ 12.78 Four years May 25, 2024 May 24, 2016 540,000 $ 12.93 Four years May 24, 2024 Total 856,500
Schedule of Employee Stock Options and Performance Based Awards by Nonvested Stock options	Non-vested stock option award activity during the three months ended June 30, 2016 is summarized as follows: Non-Vested Number of Shares Weighted- Average Grant-Date Fair Value per Share Outstanding, April 1, 2016 1,859,750 $ 4.67 Granted 856,500 4.92 Vested (226,845 ) 5.96 Forfeited/Canceled (47,320 ) 4.53 Outstanding, June 30, 2016 2,442,085 $ 4.64

Operating Segment Information (

Operating Segment Information (Tables)	3 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Operating segment data	Operating segment data is as follows: Three Months Ended June 30, 2016 2015 Revenue: NextGen Division $ 95,556 $ 91,615 RCM Services Division 22,365 22,462 QSI Dental Division 4,284 4,418 Hospital Solutions Division (1) — 3,669 Consolidated revenue $ 122,205 $ 122,164 Operating income: NextGen Division $ 45,649 $ 44,858 RCM Services Division 4,458 4,417 QSI Dental Division 1,877 950 Hospital Solutions Division (1) — 955 Corporate and unallocated (51,856 ) (42,146 ) Consolidated operating income $ 128 $ 9,034 ___________________________________ (1) The former Hospital Solutions Division was divested in October 2015. Assets by segment are not tracked or used by our chief operating decision maker to allocate resources or to assess performance, and thus not included in the table above. The major components of the corporate and unallocated amounts are summarized in the table below: Three Months Ended June 30, 2016 2015 Research and development costs, net $ 18,224 $ 17,085 Amortization of capitalized software costs 2,371 2,439 Marketing expense 2,943 3,816 Restructuring costs (see Note 15) 3,753 — Other corporate and overhead costs (1) 24,565 18,806 Total corporate and unallocated $ 51,856 $ 42,146 ___________________________________ (1) The net increase in other corporate and overhead costs in the three months ended June 30, 2016 is primarily related to higher amortization of acquired intangible assets and other general and administrative costs associated with the acquisition of HealthFusion, higher acquisition costs (including fair value adjustments to contingent consideration liabilities), and higher professional services costs.

Summary of Significant Accoun32

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Costs and expenses:
Total share-based compensation	$ 1,259	$ 684
Income tax benefit	(412)	(200)
Decrease in net income	847	484
Cost of revenue [Member]
Costs and expenses:
Total share-based compensation	149	97
Research and development costs [Member]
Costs and expenses:
Total share-based compensation	83	110
Selling, general and administrative [Member]
Costs and expenses:
Total share-based compensation	$ 1,027	$ 477

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands		Jun. 30, 2016	Mar. 31, 2016
LIABILITIES
Fair value of contingent consideration		$ 26,417	$ 24,153
Fair Value, Measurements, Recurring [Member]
ASSETS
Cash and cash equivalents	[1]	26,349	27,176
Restricted cash and cash equivalents		4,842	5,320
Marketable securities	[2]		9,297
Total		31,191	41,793
LIABILITIES
Fair value of contingent consideration		26,417	23,843
Total		26,417	23,843
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fair Value, Measurements, Recurring [Member]
ASSETS
Cash and cash equivalents	[1]	26,349	27,176
Restricted cash and cash equivalents		4,842	5,320
Marketable securities	[2]		9,297
Total		31,191	41,793
LIABILITIES
Fair value of contingent consideration		0	0
Total		0	0
Significant Other Observable Inputs (Level 2) [Member] | Fair Value, Measurements, Recurring [Member]
ASSETS
Cash and cash equivalents	[1]	0	0
Restricted cash and cash equivalents		0	0
Marketable securities	[2]		0
Total		0	0
LIABILITIES
Fair value of contingent consideration		0	0
Total		0	0
Unobservable Inputs (Level 3) [Member] | Fair Value, Measurements, Recurring [Member]
ASSETS
Cash and cash equivalents	[1]	0	0
Restricted cash and cash equivalents		0	0
Marketable securities	[2]		0
Total		0	0
LIABILITIES
Fair value of contingent consideration		26,417	23,843
Total		$ 26,417	$ 23,843
[1]	Cash equivalents consist of money market funds.
[2]	Marketable securities consist of available-for-sale money market instruments and fixed-income securities, including certificates of deposit, corporate bonds and notes, and municipal securities.

Fair Value Measurements (Deta34

Fair Value Measurements (Details 1) $ in Thousands	3 Months Ended
	Jun. 30, 2016USD ($)
Company's assets measured at fair value using significant unobservable inputs (Level 3)
Balance as of March 31, 2016	$ 23,843
Fair value adjustments	2,574
Balance as of June 30, 2016	$ 26,417

Fair Value Measurement (Details

Fair Value Measurement (Details Textual)	3 Months Ended
	Jun. 30, 2016USD ($)
Fair Value Measurements (Textual)
Fair Value Adjustments	$ 0

Business Combinations and Dis36

Business Combinations and Dispositions - HealthFusion Acquisition - USD ($)	Jan. 04, 2016	Jun. 30, 2016	Mar. 31, 2016
Business Acquisition [Line Items]
Goodwill		$ 188,837,000	$ 188,837,000
HealthFusion [Member]
Business Acquisition [Line Items]
Business Combination, Contingent Consideration Arrangements, Change in Range of Outcomes, Contingent Consideration, Liability, Value, High	$ 25,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	16,700
Initial purchase price	165,000,000
Contingent consideration	16,700,000
Preliminary working capital and other adjustments	1,349,000
Total preliminary purchase price	183,049,000
Acquired cash and cash equivalents	2,225,000
Accounts receivable, net	1,514,000
Prepaid expenses and other current assets	4,645,000
Other assets	700,000
Accounts payable	(1,085,000)
Accrued compensation and related benefits	(533,000)
Deferred revenues	(1,067,000)
Deferred income taxes, net	(12,027,000)
Other liabilities	(2,721,000)
Total preliminary net tangible assets acquired and liabilities assumed	(7,275,000)
Goodwill	115,324,000
Total preliminary identifiable intangible assets acquired	190,324,000
Total preliminary purchase price	183,049,000
HealthFusion [Member] | Computer Software, Intangible Asset [Member]
Business Acquisition [Line Items]
Intangible assets	42,500,000
HealthFusion [Member] | Trade Names [Member]
Business Acquisition [Line Items]
Intangible assets	4,000,000
HealthFusion [Member] | Customer Relationships [Member]
Business Acquisition [Line Items]
Intangible assets	28,500,000
HealthFusion [Member] | Equipment and Improvements, Net [Member]
Business Acquisition [Line Items]
Property, plant and equipment	767,000
HealthFusion [Member] | Software Development [Member]
Business Acquisition [Line Items]
Property, plant and equipment	$ 307,000

Business Combinations and Dis37

Business Combinations and Dispositions (Details 1) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	Jan. 04, 2016
Fair value of identifiable intangible assets acquired:
Goodwill	$ 188,837	$ 188,837
HealthFusion [Member]
Fair value of the net tangible assets acquired and liabilities assumed:
Deferred revenues			$ (1,067)
Fair value of identifiable intangible assets acquired:
Goodwill			$ 115,324

Goodwill (Details)

Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2016		Mar. 31, 2016
Goodwill [Line Items]
Goodwill	$ 188,837		$ 188,837
NextGen Division [Member]
Goodwill [Line Items]
Goodwill	149,258		149,258
RCM Services Division [Member]
Goodwill [Line Items]
Goodwill	32,290		32,290
QSI Dental Division [Member]
Goodwill [Line Items]
Goodwill	$ 7,289	[1]	$ 7,289
[1]	QSI Dental Division goodwill is presented on a basis consistent with that of our management reporting structures. However, for the purposes of our annual assessment of goodwill for impairment and as otherwise may be required, the QSI Dental Division goodwill is allocated to the reporting units that derive cash flows from the products associated with the acquired goodwill. For all periods presented in this report, the allocation resulted in substantially all of the QSI Dental Division goodwill being ascribed to the NextGen Division.

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016
Intangible assets, other than capitalized software development costs
Gross carrying amount	$ 125,728		$ 125,730
Accumulated amortization	(39,785)		(34,055)
Net intangible assets	85,943		91,675
Amortization	(5,732)	$ (1,800)
Operating Expense [Member]
Intangible assets, other than capitalized software development costs
Amortization	(2,704)	(897)
Cost of Revenue [Member]
Intangible assets, other than capitalized software development costs
Amortization	(3,027)	$ (903)
Customer Relationships [Member]
Intangible assets, other than capitalized software development costs
Gross carrying amount	50,550		50,550
Accumulated amortization	(22,043)		(19,618)
Net intangible assets	28,507		30,932
Trade Name & Contracts [Member]
Intangible assets, other than capitalized software development costs
Gross carrying amount	7,368		7,370
Accumulated amortization	(3,174)		(2,895)
Net intangible assets	4,194		4,475
Software Technology [Member]
Intangible assets, other than capitalized software development costs
Gross carrying amount	67,810		67,810
Accumulated amortization	(14,568)		(11,542)
Net intangible assets	$ 53,242		$ 56,268

Intangible Assets (Details 1)

Intangible Assets (Details 1) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Estimated amortization of intangible assets with determinable lives
2017 (remaining nine months)	$ 16,729
2,017	19,115
2,018	16,703
2,019	15,706
2,020	10,974
2022 and beyond	6,716
Net intangible assets	$ 85,943	$ 91,675

Capitalized Software Costs (Det

Capitalized Software Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Capitalized software development costs
Gross carrying amount	$ 99,648	$ 96,699
Accumulated amortization	(85,821)	(83,449)
Net capitalized software costs	$ 13,827	$ 13,250

Capitalized Software Costs (D42

Capitalized Software Costs (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Activity related to net capitalized software costs
Amortization expense related to capitalized software costs	$ (2,371)	$ (2,439)
Estimated amortization of capitalized software costs
2017 (remaining nine months)	5,300
2,017	3,900
2,018	3,100
2,019	1,527
2,020	0
2022 and beyond	0
Total	13,827
Amortization of capitalized software costs	$ 2,371	$ 2,439

Line of Credit (Details)

Line of Credit (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016	Jan. 04, 2016
Line of Credit Facility [Line Items]
Loans outstanding	$ 88,000,000		$ 105,000,000
Remaining borrowing capacity	162,000,000
Interest expense	740,000
Amortization of debt issuance costs	$ 269,000	$ 0
Line of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 250,000
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				10,000
Swing-Line Loans [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 10,000

Composition of Certain Financ44

Composition of Certain Financial Statement Captions (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Summary of Accounts Receivable
Accounts receivable, gross	$ 93,266	$ 104,467
Sales return reserve	(8,434)	(7,541)
Allowance for doubtful accounts	(3,037)	(2,902)
Accounts receivable, net	81,795	94,024
Summary of Inventories
Computer systems and components	430	555
Summary of Prepaid Expense and Other Assets, Current
Prepaid Expense, Current	11,530	11,804
Other Assets, Current	5,101	3,106
Prepaid Expense and Other Assets, Current	16,631	14,910
Summary of Equipment and improvements
Computer equipment	32,514	32,213
Internal-use software	10,201	10,201
Furniture and fixtures	11,304	9,799
Leasehold improvements	12,995	13,408
Equipment and improvements, gross	67,014	65,621
Accumulated depreciation	(40,331)	(39,831)
Equipment and improvements, net	26,683	25,790
Summary of Current and non-current deferred revenue
Professional services	22,013	23,128
Undelivered software, hardware and other	15,095	14,913
Support and Maintenance	11,052	11,902
Software related subscription services	6,201	7,992
Deferred revenue	54,361	57,935
Deferred revenue, net of current	1,476	1,335
Summary of Accrued compensation and related benefits
Vacation	8,585	8,987
Payroll, bonus and commission	5,672	9,683
Accrued compensation and related benefits	14,257	18,670
Summary of Other current liabilities
Contingent consideration and other liabilities related to acquisitions	26,417	24,153
Care Services Liabilities Current	4,842	5,339
Customer Deposits, Current	4,801	4,123
Electronic Data Interchange Expense Current	2,405	2,382
Accrued Royalties, Current	2,390	2,341
Self Insurance Reserve, Current	1,742	1,862
Accrued Outsourcing Expenses	1,609	1,604
Deferred Rent Credit, Current	1,308	828
Accrued consulting services, Current	1,197	3,650
Accrued Professional Fees	819	864
Other Accrued Liabilities, Current	5,130	3,092
Other Liabilities, Current	52,660	50,238
Accrued Rent, Noncurrent	9,281	6,577
Accrued Income Taxes, Noncurrent	4,084	4,084
Other Liabilities, Noncurrent	$ 13,365	$ 10,661

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016
Income Tax Disclosure [Abstract]
Provision for (benefit of) income taxes	$ (317,000)	$ 2,924,000
Effective tax rate (as a percentage)	32.90%	31.50%
Liability for unrecognized tax benefits	$ 3,955,000		$ 3,955
Period within which the company does not anticipate total unrecognized tax benefits to change	within the next twelve months

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Weighted-average shares outstanding for basic and diluted net income per share
Net income (in dollars)	$ (647)	$ 6,362
Basic net income per share:
Weighted-average shares outstanding - Basic	61,179	60,312
Basic net income per common share (in usd per share)	$ (0.01)	$ 0.11
Diluted net income per share:
Weighted-average shares outstanding - Basic	61,179	60,312
Effect of potentially dilutive securities	0	752
Weighted-average shares outstanding - Diluted	61,179	61,064
Diluted net income per common share (in usd per share)	$ (0.01)	$ 0.10

Earnings Per Share (Details Tex

Earnings Per Share (Details Textual) - shares	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Options excluded from the computation of diluted net income per share	2,767	1,768

Share Based Awards (Details Tex

Share Based Awards (Details Textual) - USD ($)	Aug. 11, 2014	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016	Aug. 31, 2015	Oct. 31, 2005
Share Based Awards (Textual) [Abstract]
Outstanding options under 1998 and 2005 plan		3,215,431		2,447,286
Weighted-average grant date fair value per share of stock options		$ 4.92	$ 3.67
Number of shares granted		856,500
Compensation expense		$ 1,259,000	$ 684,000
Fair value of options vested		1,353,000	1,657,000
Employee Stock Option [Member]
Share Based Awards (Textual) [Abstract]
Total unrecognized compensation costs		$ 10,226,000
Stock option recognized over weighted average period (in years)		4 years
Restricted Stock Units Award [Member]
Share Based Awards (Textual) [Abstract]
Compensation expense		$ 545,000	198,000
Total unrecognized compensation costs		$ 7,928,000
Stock option recognized over weighted average period (in years)		2 years 7 months
Employee Share Purchase Plan [Member]
Share Based Awards (Textual) [Abstract]
Compensation expense		$ 126,000	$ 68,000
2005 Stock Options Plan [Member]
Share Based Awards (Textual) [Abstract]
Common stock reserved						4,800,000
Outstanding options under 1998 and 2005 plan		1,358,931
Number of Shares Outstanding		25,046
Two Thousand Fifteen Stock Options Plan [Member]
Share Based Awards (Textual) [Abstract]
Common stock reserved					11,500,000
Outstanding options under 1998 and 2005 plan		1,856,500
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number		662,608
Shares available for future grant		8,613,425
Two Thousand Fifteen Stock Options Plan [Member] | Restricted Stock Units Award [Member]
Share Based Awards (Textual) [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		496,974
Number of Shares Outstanding		687,654		191,247
Two Thousand Fifteen Stock Options Plan [Member] | Employee Stock Option [Member]
Share Based Awards (Textual) [Abstract]
Expiration period (in years)		10 years
Employee Share Purchase Plan [Member]
Employee Stock Purchase Plan [Abstract]
Shares reserved for future grant	4,000,000	3,852,536
Maximum percentage of gross payroll deduction	15.00%
Purchase price as a percentage of fair market value	90.00%
Maximum shares purchase in a single transaction	1,500
Maximum amount purchased in a calendar year	$ 25,000
Shares issued		147,464

Share Based Awards (Details)

Share Based Awards (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2016	Mar. 31, 2016
Number of Shares
Outstanding, April 1, 2016	2,447,286
Granted	856,500
Forfeited/Canceled	(88,355)
Outstanding, June 30, 2016	3,215,431	2,447,286
Vested and expected to vest, June 30, 2016	2,358,931,000
Exercisable, June 30, 2016	773,346,000
Weighted- Average Exercise Price per Share
Outstanding, April 1, 2016 (in dollars per share)	$ 19.55
Granted (in dollars per share)	12.87
Forfeited/Canceled (in dollars per share)	21.80
Outstanding, June 30, 2016 (in dollars per share)	17.59	$ 19.55
Vested and expected to vest, June 30, 2016 (in dollars per share)	17.59
Exercisable, June 30, 2016 (in dollars per share)	$ 26,190
Weighted- Average Remaining Contractual Life (years)
Outstanding	5 years 9 months	6 years 3 months
Granted	7 years 11 months
Forfeited/Canceled	4 years 9 months
Vested and expected to vest, June 30, 2016	5 years 9 months
Exercisable, June 30, 2016	2 years 3 months
Aggregate Intrinsic Value Outstanding Beginning Balance	$ 574
Aggregate Intrinsic Value Outstanding Ending Balance	238	$ 574
Aggregate Intrinsic Value Vested and expected to vest	238
Aggregate Intrinsic Value Exercisable	$ 143

Share Based Awards (Details 1)

Share Based Awards (Details 1) - $ / shares	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Schedule of Share Based Compensation Valuation Assumption
Expected term	6 years	3 years 10 months
Expected volatility	37.40%	38.30%
Expected dividends	0.00%	4.10%
Risk-free rate	1.50%	1.60%
Weighted-average grant date fair value per share of stock options	$ 4.92	$ 3.67

Share Based Awards (Details 2)

Share Based Awards (Details 2)	3 Months Ended
	Jun. 30, 2016$ / sharesshares
Summary of stock options granted
Number of shares granted	856,500
Two Thousand Sixteen Stock Options Plan [Member] | Option Grant Date Thirty First May Two Thousand Sixteen [Member] [Member]
Summary of stock options granted
Option Grant Date	May 31, 2016
Number of shares granted	100,000
Exercise Price Granted (in usd per share) | $ / shares	$ 12.71
Vesting period	5 years
Expiration	May 31, 2024
Two Thousand Sixteen Stock Options Plan [Member] | Option Grant Date Twenty Fifth May Two Thousand Sixteen [Member]
Summary of stock options granted
Option Grant Date	May 25, 2016
Number of shares granted	216,500
Exercise Price Granted (in usd per share) | $ / shares	$ 12.78
Vesting period	4 years
Expiration	May 25, 2024
Two Thousand Sixteen Stock Options Plan [Member] | Option Grant Date May Twenty Fourth Two Thousand Sixteen [Member]
Summary of stock options granted
Option Grant Date	May 24, 2016
Number of shares granted	540,000
Exercise Price Granted (in usd per share) | $ / shares	$ 12.93
Vesting period	4 years
Expiration	May 24, 2024

Share Based Awards (Details 3)

Share Based Awards (Details 3) - $ / shares	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Non-Vested Number of Shares Outstanding Beginning Balance	1,859,750
Non-Vested Number of Shares Granted	856,500
Non-Vested Number of Shares Vested	(226,845)
Non-Vested Number of Shares Forfeited	(47,320)
Non-Vested Number of Shares Outstanding Ending Balance	2,442,085
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted Average Fair Value per Share Price Beginning Balance	$ 4.67
Weighted-average grant date fair value per share of stock options	4.92	$ 3.67
Weighted Average Fair Value per Share Price Vested	5.96
Weighted Average Fair Value per Share Price Forfeited	4.53
Weighted Average Fair Value per Share Price Ending Balance	$ 4.64

Share Based Awards Share Based

Share Based Awards Share Based Awards - Restricted (Details) - Restricted Stock Units Award [Member] - Two Thousand Fifteen Stock Options Plan [Member]	3 Months Ended
	Jun. 30, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Shares Outstanding Beginning Balance | shares	191,247
Granted | shares	496,974
Vested | shares	(567)
Number of Shares Outstanding Ending Balance | shares	687,654
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted Average Grant-Date Fair Value per Share, Beginning of Period (in dollars per share) | $ / shares	$ 14.44
Weighted Average Grant-Date Fair Value per Share, Granted (in dollars per share) | $ / shares	12.78
Weighted Average Grant-Date Fair Value per Share, Vested (in dollars per share) | $ / shares	20.20
Weighted Average Grant-Date Fair Value per Share, End of Period (in dollars per share) | $ / shares	$ 13.23

Commitments Guarantees and Cont

Commitments Guarantees and Contingencies (Details Textual)	3 Months Ended
	Jun. 30, 2016
Commitments Guarantees and Contingencies (Textual)
Applicable program documentation period	365 days

Operating Segment Information55

Operating Segment Information (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016USD ($)segment	Jun. 30, 2015USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment	3
Segment Operating Data
Revenue	$ 122,205	$ 122,164
Operating income	(128)	(9,034)
Research and development costs, net	18,224	17,085
Amortization of capitalized software costs	2,371	2,439
Marketing expense	2,943	3,816
Restructuring costs	3,753	0
Other corporate and overhead costs	24,565	18,806
NextGen Division [Member]
Segment Operating Data
Revenue	95,556	91,615
Operating income	(45,649)	(44,858)
RCM Services Division [Member]
Segment Operating Data
Revenue	22,365	22,462
Operating income	(4,458)	(4,417)
QSI Dental Division [Member]
Segment Operating Data
Revenue	4,284	4,418
Operating income	(1,877)	(950)
Hospital Solutions Division [Member]
Segment Operating Data
Revenue	0	3,669
Operating income	0	(955)
Unallocated corporate expense [Member]
Segment Operating Data
Operating income	$ 51,856	$ 42,146

Restructuring Plan (Details)

Restructuring Plan (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016USD ($)employee	Jun. 30, 2015USD ($)
Restructuring Costs [Abstract]
Number of positions eliminated | employee	150
Percentage of U.S. based positions eliminated	6.00%
Restructuring expense	$ 3,753	$ 0
Restructuring liability	$ 1,308