Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2017 | Jan. 23, 2018 | |
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 | Dec. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 63,713,925 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | $ 23,359 | $ 37,673 | |
Restricted cash and cash equivalents | 3,393 | 4,916 | |
Accounts receivable, net | 79,416 | 83,407 | |
Inventory | 154 | 158 | |
Income taxes receivable | 4,082 | 2,679 | |
Prepaid expenses and other current assets | 17,944 | 17,969 | |
Total current assets | 128,348 | 146,802 | |
Equipment and improvements, net | 27,137 | 27,426 | |
Capitalized software costs, net | 23,209 | 13,607 | |
Deferred income taxes, net | 7,197 | 11,265 | |
Intangibles, net | 80,663 | 69,213 | |
Goodwill | 216,530 | 185,898 | |
Other assets | 18,299 | 19,010 | |
Total assets | 501,383 | 473,221 | |
Current liabilities: | |||
Accounts payable | 3,069 | 4,618 | |
Deferred revenue | 52,843 | 52,383 | |
Accrued compensation and related benefits | 21,898 | 24,513 | |
Income taxes payable | 0 | 405 | |
Other current liabilities | 30,153 | 46,775 | |
Total current liabilities | 107,963 | 128,694 | |
Deferred revenue, net of current | 853 | 1,394 | |
Deferred compensation | 6,473 | 6,629 | |
Line of credit | 39,000 | 15,000 | |
Other noncurrent liabilities | 16,354 | 16,461 | |
Total liabilities | 170,643 | 168,178 | |
Commitments and contingencies (Note 13) | |||
Shareholders' equity: | |||
Common stock, $0.01 par value; authorized 100,000 shares; issued and outstanding 63,719 and 62,455 shares at December 31, 2017 and March 31, 2017, respectively | 637 | 625 | |
Additional paid-in capital | 240,584 | 228,549 | |
Accumulated other comprehensive loss | (235) | (358) | |
Retained earnings | [1] | 89,754 | 76,227 |
Total shareholders' equity | 330,740 | 305,043 | |
Total liabilities and shareholders' equity | $ 501,383 | $ 473,221 | |
[1] | Includes cumulative-effect adjustment related to the adoption of ASU 2016-09, as defined in Note 1. See Note 1 for additional details. |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 63,712,000 | 62,455,000 |
Common stock, shares outstanding | 63,712,000 | 62,455,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | ||||
Software license and hardware | $ 13,131 | $ 16,995 | $ 40,198 | $ 48,966 |
Software related subscription services | 24,690 | 22,546 | 73,584 | 63,911 |
Total software, hardware and related | 37,821 | 39,541 | 113,782 | 112,877 |
Support and maintenance | 40,362 | 39,924 | 123,171 | 116,905 |
Revenue cycle management and related services | 21,922 | 20,048 | 64,327 | 62,037 |
Electronic data interchange and data services | 23,136 | 21,790 | 69,446 | 65,527 |
Professional services | 8,474 | 6,565 | 24,518 | 19,893 |
Total revenues | 131,715 | 127,868 | 395,244 | 377,239 |
Cost of revenue: | ||||
Software license and hardware | 5,726 | 5,680 | 15,947 | 19,227 |
Software related subscription services | 11,693 | 9,345 | 32,822 | 27,107 |
Total software, hardware and related | 17,419 | 15,025 | 48,769 | 46,334 |
Support and maintenance | 7,525 | 7,299 | 22,583 | 20,903 |
Revenue cycle management and related services | 15,401 | 13,462 | 45,615 | 42,052 |
Electronic data interchange and data services | 13,581 | 12,662 | 40,313 | 38,232 |
Professional services | 7,708 | 5,904 | 22,278 | 19,643 |
Total cost of revenue | 61,634 | 54,352 | 179,558 | 167,164 |
Gross profit | 70,081 | 73,516 | 215,686 | 210,075 |
Operating expenses: | ||||
Selling, general and administrative | 43,563 | 37,542 | 127,517 | 120,913 |
Research and development costs, net | 20,645 | 19,714 | 60,161 | 56,230 |
Amortization of acquired intangible assets | 1,956 | 2,568 | 6,015 | 7,889 |
Restructuring costs | 130 | 231 | 130 | 4,685 |
Total operating expenses | 66,294 | 60,055 | 193,823 | 189,717 |
Income from operations | 3,787 | 13,461 | 21,863 | 20,358 |
Interest income | 15 | 0 | 36 | 9 |
Interest expense | (733) | (629) | (2,250) | (2,445) |
Other expense, net | (41) | (4) | (48) | (146) |
Income before provision for income taxes | 3,028 | 12,828 | 19,601 | 17,776 |
Provision for income taxes | 1,487 | 2,342 | 6,134 | 3,950 |
Net income | 1,541 | 10,486 | 13,467 | 13,826 |
Other comprehensive income: | ||||
Foreign currency translation, net of tax | 222 | (89) | 123 | (182) |
Unrealized gain on marketable securities, net of tax | 0 | 0 | 0 | 10 |
Comprehensive income | $ 1,763 | $ 10,397 | $ 13,590 | $ 13,654 |
Net income per share: | ||||
Basic | $ 0.02 | $ 0.17 | $ 0.21 | $ 0.22 |
Diluted | $ 0.02 | $ 0.17 | $ 0.21 | $ 0.22 |
Weighted-average shares outstanding: | ||||
Basic | 63,706 | 62,093 | 63,287 | 61,645 |
Diluted | 63,708 | 62,093 | 63,296 | 61,900 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 13,467 | $ 13,826 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 8,017 | 7,562 |
Amortization of capitalized software costs | 4,409 | 6,626 |
Amortization of other intangibles | 17,350 | 16,953 |
Amortization of debt issuance costs | 807 | 807 |
Provision for bad debts | 5,084 | 2,503 |
Provision for inventory obsolescence | 55 | 369 |
Share-based compensation | 8,585 | 5,177 |
Deferred income taxes | 3,110 | 1,367 |
Excess tax benefit from share-based compensation | 328 | 0 |
Change in fair value of contingent consideration | 0 | 3,797 |
Loss on disposal of equipment and improvements | 150 | 452 |
Changes in assets and liabilities, net of amounts acquired: | ||
Accounts receivable | 960 | 16,005 |
Inventory | (51) | (66) |
Accounts payable | (2,442) | (5,983) |
Deferred revenue | (709) | (8,195) |
Accrued compensation and related benefits | (3,315) | (50) |
Income taxes | (1,956) | 18,060 |
Deferred compensation | (156) | 381 |
Other assets and liabilities | 3,082 | 1,832 |
Net cash provided by operating activities | 56,775 | 81,423 |
Cash flows from investing activities: | ||
Additions to capitalized software costs | (13,647) | (6,371) |
Additions to equipment and improvements | (7,606) | (8,242) |
Proceeds from sales and maturities of marketable securities | 0 | 9,291 |
Payments for acquisitions, net of cash acquired | (58,892) | 0 |
HealthFusion working capital adjustment payment | 0 | (282) |
Net cash used in investing activities | (80,145) | (5,604) |
Cash flows from financing activities: | ||
Proceeds from line of credit | 50,000 | 0 |
Repayments on line of credit | (26,000) | (80,000) |
Payment of contingent consideration related to acquisitions | (18,817) | 0 |
Proceeds from issuance of shares under employee plans | 4,640 | 999 |
Payments for taxes related to net share settlement of equity awards | (767) | 0 |
Net cash provided by (used in) financing activities | 9,056 | (79,001) |
Net decrease in cash and cash equivalents | (14,314) | (3,182) |
Cash and cash equivalents at beginning of period | 37,673 | 27,176 |
Cash and cash equivalents at end of period | 23,359 | 23,994 |
Cash paid for income taxes | 5,786 | 4,455 |
Cash refunds from income taxes | 1,084 | 19,932 |
Cash paid for interest | 1,388 | 1,670 |
Common stock issued for Mirth share-based contingent consideration | 0 | 9,273 |
Tenant improvement allowance from landlord | 1,442 | 3,094 |
Unpaid additions to equipment and improvements | 138 | 80 |
HealthFusion working capital adjustment payment | 0 | (282) |
Entrada [Member] | ||
Cash flows from investing activities: | ||
HealthFusion working capital adjustment payment | (33,856) | 0 |
Cash flows from financing activities: | ||
Fair value of net assets acquired | 35,293 | 0 |
HealthFusion working capital adjustment payment | (33,856) | 0 |
Liabilities assumed | 1,437 | 0 |
EagleDream Health [Member] | ||
Cash flows from investing activities: | ||
HealthFusion working capital adjustment payment | (25,036) | 0 |
Cash flows from financing activities: | ||
Fair value of net assets acquired | 27,895 | 0 |
HealthFusion working capital adjustment payment | (25,036) | 0 |
Liabilities assumed | $ 2,859 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. 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. Business Segments. We have determined that the Company operates in one segment as of June 30, 2017. We have made such determination by first identifying our Chief Executive Officer as our chief operating decision maker ("CODM") and considering the measures used by our CODM to allocate resources. Our CODM utilizes consolidated revenue and consolidated operating results to assess performance and make decisions about allocation of resources. Previously, through the end of fiscal year 2017, we operated under two reportable segments, consisting of the Software and Related Solutions segment and the RCM and Related Services segment, which was consistent with the disaggregated financial information used and evaluated by our CODM to assess performance and make decisions about the allocation of resources. However, as part of our reorganization efforts that were substantially complete as of the end of fiscal year 2017, our internal organizational structure whereby certain functions that formerly existed within each individual operating segment has continued to evolve. Our former Chief Operating Officer was previously responsible for leading the operations of our former RCM and Related Services business while our former Chief Client Officer led our client success organization, consisting of the Software and Related Solutions business and other functions, such as sales and marketing. Upon the resignation of our former Chief Operating Officer in April 2017 and concurrent appointment of our former Chief Client Officer as Chief Operating Officer, our entire portfolio of software and services were aligned under our new Chief Operating Officer in an effort to provide our clients with an even more simplified experience and more effectively deliver a consolidated financial solution to our clients, rather than components of a solution. As a result of such changes in our internal organization structure, the CODM now operates the Company as a single functional organization. The CODM measures company-wide performance by reviewing consolidated revenue and operating results and evaluates the impact of allocating resources to overall profit and margins on a consolidated basis. Basis of Presentation. The accompanying unaudited consolidated financial statements as of December 31, 2017 and for the three and nine months ended December 31, 2017 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, 2017. 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 our significant accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017. Share-Based Compensation. The following table summarizes total share-based compensation expense included in the consolidated statements of comprehensive income for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Costs and expenses: Cost of revenue $ 259 $ 144 $ 686 $ 459 Research and development costs 557 273 1,431 690 Selling, general and administrative 2,637 1,584 6,468 4,028 Total share-based compensation 3,453 2,001 8,585 5,177 Income tax benefit (1,080 ) (718 ) (2,940 ) (1,825 ) Decrease in net income $ 2,373 $ 1,283 $ 5,645 $ 3,352 Recent Accounting Standards. Recent accounting pronouncements requiring implementation in current or future periods are discussed below or in the notes, where applicable. In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In November 2016, the FASB issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers Deferral of Effective Date Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing 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 Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients We have completed our assessment of the potential impacts to our business processes, systems, and internal controls that could result from the implementation of the new revenue guidance. Based on our assessment, we currently believe that the impact on our consolidated financial statements could be material. We expect that revenue related to hardware, EDI, maintenance, and certain subscriptions would remain substantially unchanged, and we are the process of evaluating the impact of the new revenue guidance on our other revenue streams. Due to the complexity of our revenue recognition, a significant amount of work remains as we continue to evaluate all potential impacts of the new revenue guidance, and develop and implement the necessary changes to our current accounting systems, processes, and internal controls. Accordingly, our preliminary assessments are subject to change. We expect that the new revenue guidance will result in additional complexity to our revenue recognition, including the use of an increased amount of significant judgments and estimates, particularly as it relates to our RCM services revenue, as compared to our current revenue recognition. We preliminarily expect our RCM services revenue to decrease subsequent to the adoption of the new revenue guidance as a larger portion of our RCM fees is expected to be allocated to software and subscriptions revenue. Additionally, certain incremental costs incurred to obtain contracts with customers, such as sales commissions, are within the scope of the new revenue guidance and are required to be capitalized and amortized to expense over the remaining performance periods of the contracts. Currently, our sales commission are capitalized and amortized to expense over the related period of revenue recognition. Although the amortization period of capitalized sales commissions may differ upon adoption of the new revenue guidance, we do not expect the adoption of this new revenue standard to have a material impact on our consolidated financial statements with respect to the capitalization and amortization of sales commissions. We currently expect to implement the new revenue guidance when it becomes effective for us in the first quarter of fiscal 2019 utilizing the modified retrospective transition method. Under this transition method, prior period amounts will not be adjusted and the cumulative effect from prior periods of applying the new revenue guidance will be recognized in our consolidated balance sheets as of the date of adoption, including an adjustment to retained earnings. 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 | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 2. 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 December 31, 2017 and March 31, 2017: Balance At Quoted Prices in Active Markets for Significant Other Unobservable December 31, 2017 Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) ASSETS Cash and cash equivalents (1) $ 23,359 $ 23,359 $ — $ — Restricted cash and cash equivalents 3,393 3,393 — — $ 26,752 $ 26,752 $ — $ — Balance At Quoted Prices in Active Markets for Significant Other Unobservable March 31, 2017 Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) ASSETS Cash and cash equivalents (1) $ 37,673 $ 37,673 $ — $ — Restricted cash and cash equivalents 4,916 4,916 — — $ 42,589 $ 42,589 $ — $ — LIABILITIES Contingent consideration related to acquisitions (2) $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — (1) Cash equivalents consist primarily of money market funds. (2) We believe that the fair value of other financial assets and liabilities, including accounts receivable, accounts payable, and line of credit, approximate their respective carrying values due to their nominal credit risk. 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 to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. During the three and nine months ended December 31, 2017, no adjustments were recorded. |
Business Combinations
Business Combinations | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | 3. Business Combinations Entrada Acquisition On April 14, 2017, we completed our acquisition of Entrada, Inc. ("Entrada") pursuant to the terms of the Agreement and Plan of Merger, dated April 11, 2017 (the "Agreement"). Based in Nashville, TN, Entrada is a leading provider of cloud-based solutions that are reshaping the way care is delivered by leveraging the power of mobile whenever and wherever care happens. Entrada’s best-in-class mobile application integrates with multiple clinical platforms and all major electronic health record systems. Entrada enables organizations to maximize their existing technology investments while simultaneously enhancing physician and staff productivity. The acquisition of Entrada and its cloud-based, mobile application is part of our commitment to deliver systematic solutions that meet its clients' transforming work requirements to become increasingly nimble and mobile. The preliminary purchase price totaled $33,958, which included preliminary working capital and other customary adjustments. The acquisition was primarily funded by a draw against our revolving credit agreement (see Note 7). We accounted for the Entrada 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. In connection with the Entrada acquisition, we recorded $15,400 of intangible assets related to customer relationships, trade names and software technology. We are amortizing the Entrada customer relationships over 10 years and trade names and software technology over 5 years. The weighted average amortization period for the total amount of intangible assets acquired is 6.1 years. 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 Entrada is not deductible for tax purposes and is allocated to our single reportable segment. The total preliminary purchase price for the Entrada acquisition is summarized as follows: Initial purchase price $ 34,000 Preliminary working capital and other adjustments (42 ) Total preliminary purchase price $ 33,958 April 14, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 102 Accounts receivable, net 1,835 Prepaid expense and other current assets 145 Equipment and improvements, net 134 Capitalized software costs, net 364 Deferred income taxes, net 1,041 Accounts payable (639 ) Accrued compensation and related benefits (120 ) Deferred revenues (234 ) Other liabilities (444 ) Total preliminary net tangible assets acquired and liabilities assumed 2,184 Preliminary fair value of identifiable intangible assets acquired: Goodwill 16,374 Software technology 10,500 Customer relationships 3,300 Trade name 1,600 Total preliminary identifiable intangible assets acquired 31,774 Total preliminary purchase price $ 33,958 The pro forma effects of the Entrada acquisition would not have been material to the Company's results of operations and are therefore not presented. EagleDream Health Acquisition On August 16, 2017, we completed the acquisition of EagleDream Health, Inc. ("EagleDream") pursuant to the Agreement and Plan of Merger (the “Merger Agreement"), dated July 31, 2017. Headquartered in Rochester, NY, EagleDream is a cloud-based analytics company that drives meaningful insight across clinical, financial and administrative data to optimize practice performance. The preliminary purchase price totaled $25,609, which included preliminary working capital and other customary adjustments. The acquisition was partially funded by a draw against our revolving credit agreement (see Note 7). We accounted for the EagleDream 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. In connection with the EagleDream acquisition, we recorded $13,400 of intangible assets related to customer relationships and software technology. We are amortizing the EagleDream customer relationships over 8 years and software technology over 5 years. The weighted average amortization period for the total amount of intangible assets acquired is 5.1 years. 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 EagleDream is not deductible for tax purposes and is allocated to our single reportable segment. The total preliminary purchase price for the EagleDream acquisition is summarized as follows: Initial purchase price $ 26,000 Preliminary working capital and other adjustments (391 ) Total preliminary purchase price $ 25,609 August 16, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 573 Accounts receivable, net 217 Prepaid expense and other current assets 20 Accounts payable (115 ) Accrued compensation and related benefits (271 ) Deferred revenues (394 ) Deferred income taxes, net (1,957 ) Other liabilities (122 ) Total preliminary net tangible assets acquired and liabilities assumed (2,049 ) Preliminary fair value of identifiable intangible assets acquired: Goodwill 14,258 Software technology 12,800 Customer relationships 600 Total preliminary identifiable intangible assets acquired 27,658 Total preliminary purchase price $ 25,609 The pro forma effects of the EagleDream acquisition would not have been material to the Company's results of operations and are therefore not presented. |
Goodwill
Goodwill | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 4. 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. We have not identified any events or circumstances as of December 31, 2017 that would require an interim goodwill impairment test. We do not amortize goodwill as it has been determined to have an indefinite useful life. The carrying amount of goodwill as of December 31, 2017 was $216,530, which reflects the acquisitions of Entrada and EagleDream (see Note 3). The carrying amount of goodwill as of March 31, 2017 was $185,898. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets Our definite-lived intangible assets, other than capitalized software development costs, are summarized as follows, and reflects the acquisitions of Entrada and EagleDream (see Note 3): December 31, 2017 Customer Trade Name Software Relationships and Contracts Technology Total Gross carrying amount $ 54,450 $ 7,080 $ 91,110 $ 152,640 Accumulated amortization (33,955 ) (3,118 ) (34,904 ) (71,977 ) Net intangible assets $ 20,495 $ 3,962 $ 56,206 $ 80,663 March 31, 2017 Customer Trade Name Software Relationships and Contracts Technology Total Gross carrying amount $ 50,550 $ 5,480 $ 67,810 $ 123,840 Accumulated amortization (28,972 ) (2,088 ) (23,567 ) (54,627 ) Net intangible assets $ 21,578 $ 3,392 $ 44,243 $ 69,213 Amortization expense related to customer relationships and trade name and contracts recorded as operating expenses in the consolidated statements of comprehensive income was $1,956 and $2,568 for the three months ended December 31, 2017 and 2016, respectively. Amortization expense related to software technology recorded as cost of revenue was $4,127 and $3,007 for the three months ended December 31, 2017 and 2016, respectively. Amortization expense related to customer relationships and trade name and contracts was $6,015 and $7,889 for the nine months ended December 31, 2017 and 2016, respectively. Amortization expense related to software technology was $11,335 and $9,064 for the nine months ended December 31, 2017 and 2016, respectively. The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of December 31, 2017: Amortization Expense Recorded As: Operating Expense Cost of Revenue Total For the year ended March 31, 2018 (remaining three $ 1,922 $ 4,128 $ 6,050 2019 5,577 16,511 22,088 2020 4,580 16,511 21,091 2021 3,731 12,628 16,359 2022 2,593 4,840 7,433 2023 and beyond 6,054 1,588 7,642 Total $ 24,457 $ 56,206 $ 80,663 |
Capitalized Software Costs
Capitalized Software Costs | 9 Months Ended |
Dec. 31, 2017 | |
Research And Development [Abstract] | |
Capitalized Software Costs | 6. Capitalized Software Costs Our capitalized software costs are summarized as follows: December 31, 2017 March 31, 2017 Gross carrying amount $ 115,202 $ 104,948 Accumulated amortization (91,993 ) (91,341 ) Net capitalized software costs $ 23,209 $ 13,607 Amortization expense related to capitalized software costs was $1,838 and $1,807 for the three months ended December 31, 2017 and 2016, respectively, and is recorded as cost of revenue in the consolidated statements of comprehensive income. Amortization expense related to capitalized software costs was $4,409 and $6,626 for the nine months ended December 31, 2017 and 2016, respectively. The following table presents the remaining estimated amortization of capitalized software costs as of December 31, 2017. 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, 2018 (remaining three months) $ 2,500 2019 10,500 2020 6,100 2021 3,500 2022 609 Total $ 23,209 |
Line of Credit
Line of Credit | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Line of Credit | 7. 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 December 31, 2017. As of December 31, 2017, we had $39,000 in outstanding loans and $211,000 of unused credit under the Credit Agreement. As of March 31, 2017, we had $15,000 in outstanding loans under the Credit Agreement. Interest expense related to the Credit Agreement was $463 and $359 for the three months ended December 31, 2017 and 2016, respectively. Amortization of deferred debt issuance costs was $269 for both the three months ended December 31, 2017 and 2016. Interest expense related to the Credit Agreement was $1,390 and $1,631 for the nine months ended December 31, 2017 and 2016, respectively. Amortization of deferred debt issuance costs was $807 for both the nine months ended December 31, 2017 and 2016, respectively. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 9 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | 8. Composition of Certain Financial Statement Captions Accounts receivable may include amounts invoiced for undelivered products and services at each period end. Undelivered products and services are included as a component of the deferred revenue balance on the accompanying consolidated balance sheets. December 31, 2017 March 31, 2017 Accounts receivable, gross $ 88,437 $ 93,377 Sales return reserve (5,580 ) (7,213 ) Allowance for doubtful accounts (3,441 ) (2,757 ) Accounts receivable, net $ 79,416 $ 83,407 Inventory is comprised of computer systems and components. Prepaid expenses and other current assets are summarized as follows: December 31, 2017 March 31, 2017 Prepaid expenses $ 16,409 $ 14,884 Other current assets 1,535 3,085 Prepaid expenses and other current assets $ 17,944 $ 17,969 Equipment and improvements are summarized as follows: December 31, 2017 March 31, 2017 Computer equipment $ 26,886 $ 22,014 Internal-use software 14,359 13,053 Furniture and fixtures 11,448 10,472 Leasehold improvements 16,231 16,360 Equipment and improvements, gross 68,924 61,899 Accumulated depreciation and amortization (41,787 ) (34,473 ) Equipment and improvements, net $ 27,137 $ 27,426 The current portion of deferred revenues are summarized as follows: December 31, 2017 March 31, 2017 Professional services $ 21,887 $ 21,889 Software license, hardware and other 12,251 12,680 Support and maintenance 9,436 9,691 Software related subscription services 9,269 8,123 Deferred revenue $ 52,843 $ 52,383 Accrued compensation and related benefits are summarized as follows: December 31, 2017 March 31, 2017 Payroll, bonus and commission $ 13,198 $ 15,836 Vacation 8,700 8,677 Accrued compensation and related benefits $ 21,898 $ 24,513 Other current and noncurrent liabilities are summarized as follows: December 31, 2017 March 31, 2017 Customer credit balances and deposits $ 4,406 $ 4,124 Care services liabilities 3,393 4,957 Accrued self insurance expense 2,880 1,697 Accrued consulting and outside services 2,384 2,496 Deferred rent and lease obligations 2,228 2,427 Accrued EDI expense 2,025 2,490 Accrued royalties 1,891 2,033 Accrued outsourcing costs 1,853 1,588 Accrued legal expense 1,560 853 Accrued hosting costs 973 401 Employee benefit plan withholdings 655 739 Sales tax payable 601 448 Contingent consideration and other liabilities related to acquisitions — 18,817 Other accrued expenses 5,304 3,705 Other current liabilities $ 30,153 $ 46,775 Deferred rent and lease obligations $ 11,116 $ 11,402 Uncertain tax positions 4,890 4,762 Other liabilities 348 297 Other noncurrent liabilities $ 16,354 $ 16,461 |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The provision for income taxes in the three months ended December 31, 2017 and 2016 was $1,487 and $2,342, respectively. The effective tax rates were 49.1% and 18.3% for the three months ended December 31, 2017 and 2016, respectively. The provision for income taxes for the nine months ended December 31, 2017 and 2016 was $6,134 and $3,950, respectively. The effective tax rates were 31.3% and 22.2% for the nine months ended December 31, 2017 and 2016, respectively. The increase in the effective tax rate for the three and nine months ended December 31, 2017 compared to the prior year periods was primarily due to a one-time revaluation of deferred and foreign transition taxes, which was a result of new tax reform legislation enacted on December 22, 2017, as described further below. This increase in the effective tax rate was offset by a favorable benefit due to an increase in the research and development credit The deferred tax assets and liabilities are presented 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, state net operating loss carryforwards, and foreign accumulated minimum tax credits, for which we have recorded a valuation allowance. Uncertain tax positions We had liabilities of $4,890 and $4,762 for unrecognized tax benefits related to various federal, state and local income tax matters as of December 31, 2017 and March 31, 2017, respectively. If recognized, this amount would reduce our effective tax rate. We are no longer subject to United States federal income tax examinations for tax years before fiscal year ended 2014. With a few exceptions, we are no longer subject to state or local income tax examinations for tax years before fiscal year ended 2013. We do not anticipate the total unrecognized tax benefits to significantly change due to the settlement of audits or the expiration of statute of limitations within the next twelve months. United States Tax Reform On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform”). This new tax legislation, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that will impact our Company. Below is a summary of the provisions of the Tax Reform that we believe will be most impactful to our Company. We are subject to the provisions of FASB Accounting Standards Codification 740-10, Income Taxes The Tax Reform also required a one-time transition tax based on total post-1986 foreign cumulative earnings and profits previously deferred from United States federal taxation, which was reasonably estimated at December 31, 2017 and recorded as a one-time income tax expense of $1,354 in the current period. This liability is expected to be paid with our annual tax returns for the fiscal year ended March 31, 2018. We will continue to analyze the calculation of cumulative foreign earnings and finalize the amounts held in cash or other specified assets. We have recorded the provisional impacts of the Tax Reform at December 31, 2017 based on our most reasonable estimates, as noted above. The Tax Reform legislation includes various other provisions with effective dates for the Company beginning April 1, 2018 and beyond. For other changes that impact business related income, exclusions, deductions and credits with effective dates for our fiscal year beginning April 1, 2018, we will continue to account for those items based on our existing accounting under ASC 740, Income Taxes |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. Earnings per Share The dual presentation of “basic” and “diluted” earnings per share is provided below. Share amounts below are in thousands. Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Earnings per share — Basic: Net income $ 1,541 $ 10,486 $ 13,467 $ 13,826 Weighted-average shares outstanding — Basic 63,706 62,093 63,287 61,645 Net income per common share — Basic $ 0.02 $ 0.17 $ 0.21 $ 0.22 Earnings per share — Diluted: Net income $ 1,541 $ 10,486 $ 13,467 $ 13,826 Weighted-average shares outstanding 63,706 62,093 63,287 61,645 Effect of potentially dilutive securities 2 - 9 255 Weighted-average shares outstanding — Diluted 63,708 62,093 63,296 61,900 Net income per common share — Diluted $ 0.02 $ 0.17 $ 0.21 $ 0.22 The computation of diluted net income per share does not include 3,228 and 2,785 options to acquire shares of common stock for the three and nine months ended December 31, 2017, respectively, because their inclusion would have an anti-dilutive effect on net income per share. The computation of diluted net income per share does not include 3,054 and 3,015 options to acquire shares of common stock for the three and nine months ended December 31, 2016, respectively, because their inclusion would have an anti-dilutive effect on net income per share. |
Share-Based Awards
Share-Based Awards | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Awards | 11. 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 ("Board") 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 December 31, 2017, there were 689,260 outstanding options 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. In August 2017, our shareholders approved an amendment to our 2015 Equity Incentive Plan, (the “Amended 2015 Plan”), to, among other items, increase the number of shares of common stock reserved for issuance thereunder by 6,000,000. The Amended 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 Amended 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 Amended 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 Amended 2015 Plan, awards under the Amended 2015 Plan will fully vest under certain circumstances. As of December 31, 2017, there were 3,134,375 outstanding options, 1,601,580 outstanding shares of restricted stock awards, 86,187 outstanding shares of performance stock awards, and 9,269,858 shares available for future grant under the Amended 2015 Plan. The following table summarizes the stock option transactions during the nine months ended December 31, 2017: Weighted- Weighted- Average Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares per Share Life (years) (in Outstanding, April 1, 2017 2,885,415 $ 15.41 6.2 $ 3,150 Granted 1,479,000 14.56 7.8 Exercised (216,405 ) 16.62 6.0 $ 119 Forfeited/Canceled (324,375 ) 17.93 4.7 Outstanding, December 31, 2017 3,823,635 $ 15.73 6.3 $ 733 Vested and expected to vest, December 31, 2017 3,401,964 $ 15.90 6.3 $ 654 Exercisable, December 31, 2017 923,480 $ 19.96 4.4 $ 190 We utilize the Black-Scholes valuation model for estimating the fair value of share-based compensation with the following assumptions: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Expected term 5.6 - 6.1 years 6.3 years 5.6 - 6.1 years 6.0 - 6.6 years Expected volatility 37.0% - 37.5% 37.1% 37.0% - 37.7% 36.9% - 37.4% Expected dividends 0.0% 0.0% 0.0% 0.0% Risk-free rate 2.1% - 2.2% 1.5% 1.9% - 2.2% 1.2% - 1.5% The weighted-average grant date fair value of stock options granted during the nine months ended December 31, 2017 and 2016 was $5.59 and $4.92 per share, respectively. During the nine months ended December 31, 2017, a total of 1,479,000 options to purchase shares of common stock were granted under the Amended 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 June 13, 2017 249,000 $ 16.37 Four Years June 13, 2025 May 24, 2017 60,000 $ 14.57 Four Years May 24, 2025 August 4, 2017 25,000 $ 16.13 Four Years August 4, 2025 October 31, 2017 915,000 $ 14.07 Four Years October 31, 2025 December 4, 2017 230,000 $ 14.38 Four Years December 4, 2025 Fiscal year 2018 grants 1,479,000 (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 nine months ended December 31, 2017 is summarized as follows: Weighted- Average Grant-Date Number of Fair Value Shares per Share Outstanding, April 1, 2017 2,073,295 $ 5.09 Granted 1,479,000 5.59 Vested (442,690 ) 4.86 Forfeited/Canceled (209,450 ) 4.57 Outstanding, December 31, 2017 2,900,155 $ 5.16 As of December 31, 2017, $12,861 of total unrecognized compensation costs related to stock options is expected to be recognized over a weighted-average period of 3.2 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 nine months ended December 31, 2017 and 2016 was $2,154 and $1,189, respectively. Restricted stock awards activity during the nine months ended December 31, 2017 is summarized as follows: Weighted- Average Grant-Date Number of Fair Value Restricted Stock Shares per Share Outstanding, April 1, 2017 902,948 $ 12.92 Granted 1,140,374 15.50 Vested (344,659 ) 12.66 Canceled (97,083 ) 14.10 Outstanding, December 31, 2017 1,601,580 $ 14.82 Share-based compensation expense related to restricted stock awards was $2,333 and $1,054 for the three months ended December 31, 2017 and 2016, respectively. Share-based compensation expense related to restricted stock awards was $6,079 and $2,571 for the nine months ended December 31, 2017 and 2016, respectively. 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, which is generally between one to three years. As of December 31, 2017, $19,034 of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of 2.2 years. This amount does not include the cost of new restricted stock awards that may be granted in future periods. On December 29, 2016, the Compensation Committee of the Board granted 123,082 performance stock awards to certain executive officers, of which 86,187 shares are currently outstanding. The performance stock awards vest in four equal increments on each of the first four anniversaries of the grant date, subject in each case to the executive officer’s continued service and achievement of certain Company performance goals, including strong Company stock price performance. Share-based compensation expense related to the performance stock awards was $77 and $227 for the three and nine months ended December 31, 2017, 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 December 31, 2017, we have issued 315,368 shares under the Purchase Plan and 3,684,632 shares are available for future issuance. Share-based compensation expense recorded for the employee share purchase plan was $88 and $70 for the three months ended December 31, 2017 and 2016, respectively. Share-based compensation expense recorded for the employee share purchase plan was $265 and $277 for the nine months ended December 31, 2017 and 2016, respectively. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Dec. 31, 2017 | |
Risks And Uncertainties [Abstract] | |
Concentration of Credit Risk | 12. Concentration of Credit Risk We had cash deposits at United States banks and financial institutions which exceeded federally insured limits at December 31, 2017. 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 | 9 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingencies | 13. Commitments, Guarantees and Contingencies The following table summarizes our significant contractual obligations at December 31, 2017 and the effect that such obligations are expected to have on our liquidity and cash in future periods: For the year ended March 31, Contractual Obligations Total 2018 (remaining three months) 2019 2020 2021 2022 2023 and beyond Operating lease obligations $ 60,114 $ 2,219 $ 9,321 $ 9,013 $ 8,998 $ 8,726 $ 21,837 Remaining lease obligations for vacated properties (1) 4,659 547 1,413 794 816 551 538 Line of credit obligations (Note 7) 39,000 - - - 39,000 - - Purchase commitments (2) 32,322 312 3,840 5,297 7,073 7,900 7,900 Total $ 136,095 $ 3,078 $ 14,574 $ 15,104 $ 55,887 $ 17,177 $ 30,275 (1) Remaining lease obligations for vacated properties relates to remaining lease obligations at certain locations, including Austin, Solana Beach, Costa Mesa, and a portion of Horsham, that we have vacated and are actively marketing the locations for sublease as part of our reorganization efforts. Total obligations have not been reduced by projected sublease rentals or by minimum sublease rentals of $1,258 due in future periods under non-cancelable subleases. (2) The deferred compensation liability as of December 31, 2017 was $6,473, which is not included in the table above as the timing of future benefit payments to employees is not determinable. The uncertain tax position liability as of December 31, 2017 was $4,890, which is not included in the table above as the timing of expected payments is not determinable. 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. 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 Hussein, alleging that he breached fiduciary duties owed to the Company, Mr. Razin and Mr. Plochocki. Mr. Razin and Mr. Plochocki have dismissed their claims against Hussein, leaving QSI as the sole plaintiff in the cross-complaint. On June 26, 2015, we filed a motion for summary judgment with respect to Hussein’s claims, which the Court granted on September 16, 2015, dismissing all of Hussein’s claims against us. On September 23, 2015, Hussein filed an application for reconsideration of the Court's summary judgment order, which the Court denied. Hussein filed a renewed application for reconsideration of the Court’s summary judgment order on August 3, 2017. The Court again denied Hussein’s application. On October 28, 2015, May 9, 2016, and August 5, 2016, Hussein filed a motion for summary judgment, motion for summary adjudication, and motion for judgment on the pleadings, respectively, seeking to dismiss our cross-complaint. The Court denied each motion. Trial on our cross-complaint began June 12, 2017. On July 26, 2017, the Court issued a statement of decision granting Hussein’s motion for judgment on our cross-complaint. Final judgment over Hussein’s claims and our cross-claims was entered on January 9, 2018. Hussein has noticed his appeal of the order granting summary judgment over his claims, and we are evaluating a potential cross-appeal. 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. 8:13-cv-01818-CJC-JPR, 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. On July 28, 2017, the Ninth Circuit issued a decision reversing and remanding the District Court's order on our motion to dismiss. On September 5, 2017, we filed a petition for rehearing en banc, which was denied on September 29, 2017. After the Ninth Circuit issued its mandate, the District Court reopened the case. The parties have begun discovery. We believe that the plaintiffs' claims are without merit and continue to defend against them vigorously, including by evaluating potential challenges to the Ninth Circuit decision. 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 purported 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 matter was stayed pending the Ninth Circuit’s decision in the appeal described above under the caption, “Federal Securities Class Action.” This stay now has been lifted and, pursuant to a stipulated briefing schedule, Defendants’ motion to dismiss is due February 2, 2018. On September 28, 2017, a complaint was filed against our Company and certain of our current and former officers and directors in the United States District Court for the Central District of California, captioned Kusumam Koshy, derivatively on behalf of Quality Systems Inc. vs. Craig Barbarosh, George H. Bristol, James C. Malone, Peter M. Neupert, Morris Panner, D. Russell Pflueger, Steven T. Plochocki, Sheldon Razin, Lance E. Rosenzweig, Paul A. Holt, and Quality Systems, Inc., No. 8:17-cv-01694, by Kusumam Koshy, a purported shareholder of ours. The complaint alleges breach of fiduciary duties and abuse of control, as well as unjust enrichment and insider selling by individual directors arising out of the allegations described above under the captions “Hussein Litigation” and “Federal Securities Class Action,” QSI’s adoption of revised indemnification agreements, and the resignation of certain officers of the Company. The complaint seeks restitution and disgorgement, court costs and attorneys’ fees, and enhanced corporate governance reforms and internal control procedures. On January 12, 2018, Defendants filed a motion to dismiss the derivative complaint. We believe that the plaintiffs’ 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. Other Regulatory Matters In April 2017, we received a request for documents and information from the United States Attorney's Office for the District of Vermont pursuant to a Civil Investigative Demand (“CID”). The CID relates to an investigation concerning the certification we obtained for our software under the United States Department of Health and Human Services' Electronic Health Record Incentive Program. We have provided documents and information in response to that CID. On December 11, 2017, we received a subpoena from the United States Department of Justice in connection with the same matter seeking among other things records relating to (a) data used to determine objectives and measures under the Meaningful Use (MU) and the Physician Quality Reporting System (PQRS) programs, (b) EHR software code used in certifying the 2014 EHR software, and information, and (c) payments provided for the referral of EHR business. Given the highly-regulated nature of our industry, we may, from time to time, be subject to subpoenas, requests for information, or investigations from various government agencies. It is our practice to respond to such matters in a cooperative, thorough and timely manner. We continue to respond to this CID and subpoena and intend to cooperate fully with the government. Requests and investigations of this nature may lead to the assertion of claims or the commencement of legal proceedings against us, as well as other material liabilities. In addition, our responses to these requests require time and effort, which can result in additional cost to us. At this time, we are unable to estimate the probability or the amount of liability, if any, related to this matter. |
Restructuring Plan
Restructuring Plan | 9 Months Ended |
Dec. 31, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Plan | 14. Restructuring Plan In fiscal year 2016, as part of our reorganization efforts, we recorded $7,078 of restructuring costs within operating expenses in our consolidated statements of net income and comprehensive income. The restructuring plan was substantially complete by the end of fiscal 2017. The restructuring costs consisted primarily 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 would be paid and the amounts were reasonably estimable. Also included in restructuring costs were certain facilities-related costs associated with accruals for the remaining lease obligations at certain locations, including Solana Beach, Costa Mesa, and a portion of Horsham with contractual lease terms ending between January 2018 and September 2023. We have vacated each of the locations or portions thereof and are actively marketing the locations for sublease. We estimated the remaining lease obligations at fair value as of the cease-use date for each location based on the future contractual lease obligations, reduced by projected sublease rentals that could be reasonably obtained for the locations after a period of marketing, and adjusted for the effect deferred rents that have been recognized under the lease. The effect of discounting future cash flows using a credit-adjusted risk free rate was not significant. Sublease income and commencement dates were estimated based on data available from rental activity in the local markets. Significant judgment was required to estimate the remaining lease obligations at fair value and actual results could vary from the estimates, resulting in potential future adjustments to amounts previously recorded. As of December 31, 2017, the remaining lease obligation, net of estimated projected sublease rentals, was $1,363. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [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. |
Business Segments | Business Segments. We have determined that the Company operates in one segment as of June 30, 2017. We have made such determination by first identifying our Chief Executive Officer as our chief operating decision maker ("CODM") and considering the measures used by our CODM to allocate resources. Our CODM utilizes consolidated revenue and consolidated operating results to assess performance and make decisions about allocation of resources. Previously, through the end of fiscal year 2017, we operated under two reportable segments, consisting of the Software and Related Solutions segment and the RCM and Related Services segment, which was consistent with the disaggregated financial information used and evaluated by our CODM to assess performance and make decisions about the allocation of resources. However, as part of our reorganization efforts that were substantially complete as of the end of fiscal year 2017, our internal organizational structure whereby certain functions that formerly existed within each individual operating segment has continued to evolve. Our former Chief Operating Officer was previously responsible for leading the operations of our former RCM and Related Services business while our former Chief Client Officer led our client success organization, consisting of the Software and Related Solutions business and other functions, such as sales and marketing. Upon the resignation of our former Chief Operating Officer in April 2017 and concurrent appointment of our former Chief Client Officer as Chief Operating Officer, our entire portfolio of software and services were aligned under our new Chief Operating Officer in an effort to provide our clients with an even more simplified experience and more effectively deliver a consolidated financial solution to our clients, rather than components of a solution. As a result of such changes in our internal organization structure, the CODM now operates the Company as a single functional organization. The CODM measures company-wide performance by reviewing consolidated revenue and operating results and evaluates the impact of allocating resources to overall profit and margins on a consolidated basis. |
Basis of Presentation | Basis of Presentation. The accompanying unaudited consolidated financial statements as of December 31, 2017 and for the three and nine months ended December 31, 2017 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, 2017. 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 current or future periods are discussed below or in the notes, where applicable. In May 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-09, Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting In January 2017, the FASB issued ASU 2017-04, Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In November 2016, the FASB issued Accounting Standards Update ("ASU") 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In October 2016, the FASB issued ASU 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB, along with the International Accounting Standards Board, issued ASU 2014-09, Revenue from Contracts with Customers Deferral of Effective Date Revenue from Contracts with Customers (Topic 606) –Principal versus Agent Consideration Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing 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 Revenue from Contracts with Customers (Topic 606) –Narrow Scope Improvements and Practical Expedients We have completed our assessment of the potential impacts to our business processes, systems, and internal controls that could result from the implementation of the new revenue guidance. Based on our assessment, we currently believe that the impact on our consolidated financial statements could be material. We expect that revenue related to hardware, EDI, maintenance, and certain subscriptions would remain substantially unchanged, and we are the process of evaluating the impact of the new revenue guidance on our other revenue streams. Due to the complexity of our revenue recognition, a significant amount of work remains as we continue to evaluate all potential impacts of the new revenue guidance, and develop and implement the necessary changes to our current accounting systems, processes, and internal controls. Accordingly, our preliminary assessments are subject to change. We expect that the new revenue guidance will result in additional complexity to our revenue recognition, including the use of an increased amount of significant judgments and estimates, particularly as it relates to our RCM services revenue, as compared to our current revenue recognition. We preliminarily expect our RCM services revenue to decrease subsequent to the adoption of the new revenue guidance as a larger portion of our RCM fees is expected to be allocated to software and subscriptions revenue. Additionally, certain incremental costs incurred to obtain contracts with customers, such as sales commissions, are within the scope of the new revenue guidance and are required to be capitalized and amortized to expense over the remaining performance periods of the contracts. Currently, our sales commission are capitalized and amortized to expense over the related period of revenue recognition. Although the amortization period of capitalized sales commissions may differ upon adoption of the new revenue guidance, we do not expect the adoption of this new revenue standard to have a material impact on our consolidated financial statements with respect to the capitalization and amortization of sales commissions. We currently expect to implement the new revenue guidance when it becomes effective for us in the first quarter of fiscal 2019 utilizing the modified retrospective transition method. Under this transition method, prior period amounts will not be adjusted and the cumulative effect from prior periods of applying the new revenue guidance will be recognized in our consolidated balance sheets as of the date of adoption, including an adjustment to retained earnings. 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 | The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion, which was settled during the quarter ended June 30, 2017. The measurement period of the contingent consideration liability ended on December 31, 2016, and thus the actual revenue achievement rate was utilized to compute the ending contingent consideration liability as of March 31, 2017. Accordingly, the contingent consideration liability was reflected under a Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. |
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 to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used. During the three and nine months ended December 31, 2017, no adjustments were recorded. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes total share-based compensation expense included in the consolidated statements of comprehensive income for the three and nine months ended December 31, 2017 and 2016: Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Costs and expenses: Cost of revenue $ 259 $ 144 $ 686 $ 459 Research and development costs 557 273 1,431 690 Selling, general and administrative 2,637 1,584 6,468 4,028 Total share-based compensation 3,453 2,001 8,585 5,177 Income tax benefit (1,080 ) (718 ) (2,940 ) (1,825 ) Decrease in net income $ 2,373 $ 1,283 $ 5,645 $ 3,352 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 and March 31, 2017: Balance At Quoted Prices in Active Markets for Significant Other Unobservable December 31, 2017 Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) ASSETS Cash and cash equivalents (1) $ 23,359 $ 23,359 $ — $ — Restricted cash and cash equivalents 3,393 3,393 — — $ 26,752 $ 26,752 $ — $ — Balance At Quoted Prices in Active Markets for Significant Other Unobservable March 31, 2017 Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) ASSETS Cash and cash equivalents (1) $ 37,673 $ 37,673 $ — $ — Restricted cash and cash equivalents 4,916 4,916 — — $ 42,589 $ 42,589 $ — $ — LIABILITIES Contingent consideration related to acquisitions (2) $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — $ 18,817 $ — (1) Cash equivalents consist primarily of money market funds. (2) |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The total preliminary purchase price for the Entrada acquisition is summarized as follows: Initial purchase price $ 34,000 Preliminary working capital and other adjustments (42 ) Total preliminary purchase price $ 33,958 Initial purchase price $ 26,000 Preliminary working capital and other adjustments (391 ) Total preliminary purchase price $ 25,609 |
Summary of Purchase Price Allocation | April 14, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 102 Accounts receivable, net 1,835 Prepaid expense and other current assets 145 Equipment and improvements, net 134 Capitalized software costs, net 364 Deferred income taxes, net 1,041 Accounts payable (639 ) Accrued compensation and related benefits (120 ) Deferred revenues (234 ) Other liabilities (444 ) Total preliminary net tangible assets acquired and liabilities assumed 2,184 Preliminary fair value of identifiable intangible assets acquired: Goodwill 16,374 Software technology 10,500 Customer relationships 3,300 Trade name 1,600 Total preliminary identifiable intangible assets acquired 31,774 Total preliminary purchase price $ 33,958 August 16, 2017 Preliminary fair value of the net tangible assets acquired and liabilities assumed: Acquired cash and cash equivalents $ 573 Accounts receivable, net 217 Prepaid expense and other current assets 20 Accounts payable (115 ) Accrued compensation and related benefits (271 ) Deferred revenues (394 ) Deferred income taxes, net (1,957 ) Other liabilities (122 ) Total preliminary net tangible assets acquired and liabilities assumed (2,049 ) Preliminary fair value of identifiable intangible assets acquired: Goodwill 14,258 Software technology 12,800 Customer relationships 600 Total preliminary identifiable intangible assets acquired 27,658 Total preliminary purchase price $ 25,609 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
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, and reflects the acquisitions of Entrada and EagleDream (see Note 3): December 31, 2017 Customer Trade Name Software Relationships and Contracts Technology Total Gross carrying amount $ 54,450 $ 7,080 $ 91,110 $ 152,640 Accumulated amortization (33,955 ) (3,118 ) (34,904 ) (71,977 ) Net intangible assets $ 20,495 $ 3,962 $ 56,206 $ 80,663 March 31, 2017 Customer Trade Name Software Relationships and Contracts Technology Total Gross carrying amount $ 50,550 $ 5,480 $ 67,810 $ 123,840 Accumulated amortization (28,972 ) (2,088 ) (23,567 ) (54,627 ) Net intangible assets $ 21,578 $ 3,392 $ 44,243 $ 69,213 |
Estimated Amortization of Intangible Assets with Determinable Lives | The following table summarizes the remaining estimated amortization of definite-lived intangible assets as of December 31, 2017: Amortization Expense Recorded As: Operating Expense Cost of Revenue Total For the year ended March 31, 2018 (remaining three $ 1,922 $ 4,128 $ 6,050 2019 5,577 16,511 22,088 2020 4,580 16,511 21,091 2021 3,731 12,628 16,359 2022 2,593 4,840 7,433 2023 and beyond 6,054 1,588 7,642 Total $ 24,457 $ 56,206 $ 80,663 |
Capitalized Software Costs (Tab
Capitalized Software Costs (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Research And Development [Abstract] | |
Capitalized Software Development Costs | Our capitalized software costs are summarized as follows: December 31, 2017 March 31, 2017 Gross carrying amount $ 115,202 $ 104,948 Accumulated amortization (91,993 ) (91,341 ) Net capitalized software costs $ 23,209 $ 13,607 |
Estimated Amortization of Capitalized Software Costs | The following table presents the remaining estimated amortization of capitalized software costs as of December 31, 2017. 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, 2018 (remaining three months) $ 2,500 2019 10,500 2020 6,100 2021 3,500 2022 609 Total $ 23,209 |
Composition of Certain Financ26
Composition of Certain Financial Statement Captions (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Accounts Receivable | Accounts receivable may include amounts invoiced for undelivered products and services at each period end. Undelivered products and services are included as a component of the deferred revenue balance on the accompanying consolidated balance sheets. December 31, 2017 March 31, 2017 Accounts receivable, gross $ 88,437 $ 93,377 Sales return reserve (5,580 ) (7,213 ) Allowance for doubtful accounts (3,441 ) (2,757 ) Accounts receivable, net $ 79,416 $ 83,407 |
Summary of Inventories | Inventory is comprised of computer systems and components. |
Summary of Prepaid Expense and Other Assets, Current | Prepaid expenses and other current assets are summarized as follows: December 31, 2017 March 31, 2017 Prepaid expenses $ 16,409 $ 14,884 Other current assets 1,535 3,085 Prepaid expenses and other current assets $ 17,944 $ 17,969 |
Summary of Equipment and improvements | Equipment and improvements are summarized as follows: December 31, 2017 March 31, 2017 Computer equipment $ 26,886 $ 22,014 Internal-use software 14,359 13,053 Furniture and fixtures 11,448 10,472 Leasehold improvements 16,231 16,360 Equipment and improvements, gross 68,924 61,899 Accumulated depreciation and amortization (41,787 ) (34,473 ) Equipment and improvements, net $ 27,137 $ 27,426 |
Summary of Current and non-current deferred revenue | The current portion of deferred revenues are summarized as follows: December 31, 2017 March 31, 2017 Professional services $ 21,887 $ 21,889 Software license, hardware and other 12,251 12,680 Support and maintenance 9,436 9,691 Software related subscription services 9,269 8,123 Deferred revenue $ 52,843 $ 52,383 |
Summary of Accrued compensation and related benefits | Accrued compensation and related benefits are summarized as follows: December 31, 2017 March 31, 2017 Payroll, bonus and commission $ 13,198 $ 15,836 Vacation 8,700 8,677 Accrued compensation and related benefits $ 21,898 $ 24,513 |
Summary of Other current liabilities | Other current and noncurrent liabilities are summarized as follows: December 31, 2017 March 31, 2017 Customer credit balances and deposits $ 4,406 $ 4,124 Care services liabilities 3,393 4,957 Accrued self insurance expense 2,880 1,697 Accrued consulting and outside services 2,384 2,496 Deferred rent and lease obligations 2,228 2,427 Accrued EDI expense 2,025 2,490 Accrued royalties 1,891 2,033 Accrued outsourcing costs 1,853 1,588 Accrued legal expense 1,560 853 Accrued hosting costs 973 401 Employee benefit plan withholdings 655 739 Sales tax payable 601 448 Contingent consideration and other liabilities related to acquisitions — 18,817 Other accrued expenses 5,304 3,705 Other current liabilities $ 30,153 $ 46,775 Deferred rent and lease obligations $ 11,116 $ 11,402 Uncertain tax positions 4,890 4,762 Other liabilities 348 297 Other noncurrent liabilities $ 16,354 $ 16,461 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Weighted Average Shares Outstanding for Basic and Diluted Net Income Per Share | The dual presentation of “basic” and “diluted” earnings per share is provided below. Share amounts below are in thousands. Three Months Ended December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Earnings per share — Basic: Net income $ 1,541 $ 10,486 $ 13,467 $ 13,826 Weighted-average shares outstanding — Basic 63,706 62,093 63,287 61,645 Net income per common share — Basic $ 0.02 $ 0.17 $ 0.21 $ 0.22 Earnings per share — Diluted: Net income $ 1,541 $ 10,486 $ 13,467 $ 13,826 Weighted-average shares outstanding 63,706 62,093 63,287 61,645 Effect of potentially dilutive securities 2 - 9 255 Weighted-average shares outstanding — Diluted 63,708 62,093 63,296 61,900 Net income per common share — Diluted $ 0.02 $ 0.17 $ 0.21 $ 0.22 |
Share Based Awards (Tables)
Share Based Awards (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | The following table summarizes the stock option transactions during the nine months ended December 31, 2017: Weighted- Weighted- Average Average Aggregate Exercise Remaining Intrinsic Number of Price Contractual Value Shares per Share Life (years) (in Outstanding, April 1, 2017 2,885,415 $ 15.41 6.2 $ 3,150 Granted 1,479,000 14.56 7.8 Exercised (216,405 ) 16.62 6.0 $ 119 Forfeited/Canceled (324,375 ) 17.93 4.7 Outstanding, December 31, 2017 3,823,635 $ 15.73 6.3 $ 733 Vested and expected to vest, December 31, 2017 3,401,964 $ 15.90 6.3 $ 654 Exercisable, December 31, 2017 923,480 $ 19.96 4.4 $ 190 |
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 December 31, Nine Months Ended December 31, 2017 2016 2017 2016 Expected term 5.6 - 6.1 years 6.3 years 5.6 - 6.1 years 6.0 - 6.6 years Expected volatility 37.0% - 37.5% 37.1% 37.0% - 37.7% 36.9% - 37.4% Expected dividends 0.0% 0.0% 0.0% 0.0% Risk-free rate 2.1% - 2.2% 1.5% 1.9% - 2.2% 1.2% - 1.5% |
Summary of Stock Options Granted | During the nine months ended December 31, 2017, a total of 1,479,000 options to purchase shares of common stock were granted under the Amended 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 June 13, 2017 249,000 $ 16.37 Four Years June 13, 2025 May 24, 2017 60,000 $ 14.57 Four Years May 24, 2025 August 4, 2017 25,000 $ 16.13 Four Years August 4, 2025 October 31, 2017 915,000 $ 14.07 Four Years October 31, 2025 December 4, 2017 230,000 $ 14.38 Four Years December 4, 2025 Fiscal year 2018 grants 1,479,000 (1) Options vest in equal annual installments on each grant anniversary date commencing one year following the date of grant. |
Schedule of Employee Stock Options and Performance Based Awards by Non-vested Stock Options | Non-vested stock option award activity during the nine months ended December 31, 2017 is summarized as follows: Weighted- Average Grant-Date Number of Fair Value Shares per Share Outstanding, April 1, 2017 2,073,295 $ 5.09 Granted 1,479,000 5.59 Vested (442,690 ) 4.86 Forfeited/Canceled (209,450 ) 4.57 Outstanding, December 31, 2017 2,900,155 $ 5.16 |
Schedule of Other Share-based Compensation, Activity | Restricted stock awards activity during the nine months ended December 31, 2017 is summarized as follows: Weighted- Average Grant-Date Number of Fair Value Restricted Stock Shares per Share Outstanding, April 1, 2017 902,948 $ 12.92 Granted 1,140,374 15.50 Vested (344,659 ) 12.66 Canceled (97,083 ) 14.10 Outstanding, December 31, 2017 1,601,580 $ 14.82 |
Commitments, Guarantees and C29
Commitments, Guarantees and Contingencies (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Significant Contractual Obligations | The following table summarizes our significant contractual obligations at December 31, 2017 and the effect that such obligations are expected to have on our liquidity and cash in future periods: For the year ended March 31, Contractual Obligations Total 2018 (remaining three months) 2019 2020 2021 2022 2023 and beyond Operating lease obligations $ 60,114 $ 2,219 $ 9,321 $ 9,013 $ 8,998 $ 8,726 $ 21,837 Remaining lease obligations for vacated properties (1) 4,659 547 1,413 794 816 551 538 Line of credit obligations (Note 7) 39,000 - - - 39,000 - - Purchase commitments (2) 32,322 312 3,840 5,297 7,073 7,900 7,900 Total $ 136,095 $ 3,078 $ 14,574 $ 15,104 $ 55,887 $ 17,177 $ 30,275 (1) Remaining lease obligations for vacated properties relates to remaining lease obligations at certain locations, including Austin, Solana Beach, Costa Mesa, and a portion of Horsham, that we have vacated and are actively marketing the locations for sublease as part of our reorganization efforts. Total obligations have not been reduced by projected sublease rentals or by minimum sublease rentals of $1,258 due in future periods under non-cancelable subleases. (2) |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Additional Information (Details) - segment | Jun. 30, 2017 | Mar. 31, 2017 |
Accounting Policies [Abstract] | ||
Number of operating segments | 1 | |
Number of reportable segments | 2 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Costs and expenses: | ||||
Total share-based compensation | $ 3,453 | $ 2,001 | $ 8,585 | $ 5,177 |
Income tax benefit | (1,080) | (718) | (2,940) | (1,825) |
Decrease in net income | 2,373 | 1,283 | 5,645 | 3,352 |
Cost of revenue [Member] | ||||
Costs and expenses: | ||||
Total share-based compensation | 259 | 144 | 686 | 459 |
Research and development costs [Member] | ||||
Costs and expenses: | ||||
Total share-based compensation | 557 | 273 | 1,431 | 690 |
Selling, general and administrative | ||||
Costs and expenses: | ||||
Total share-based compensation | $ 2,637 | $ 1,584 | $ 6,468 | $ 4,028 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities on a Recurring Basis (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 | |
ASSETS | |||
Cash and cash equivalents | [1] | $ 23,359 | $ 37,673 |
Restricted cash and cash equivalents | 3,393 | 4,916 | |
Total | 26,752 | 42,589 | |
LIABILITIES | |||
Contingent consideration related to acquisitions | [2] | 18,817 | |
Total | 18,817 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 23,359 | 37,673 |
Restricted cash and cash equivalents | 3,393 | 4,916 | |
Total | 26,752 | 42,589 | |
LIABILITIES | |||
Contingent consideration related to acquisitions | [2] | 0 | |
Total | 0 | ||
Significant Other Observable Inputs (Level 2) [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 | |
Total | 0 | 0 | |
LIABILITIES | |||
Contingent consideration related to acquisitions | [2] | 18,817 | |
Total | 18,817 | ||
Unobservable Inputs (Level 3) [Member] | |||
ASSETS | |||
Cash and cash equivalents | [1] | 0 | 0 |
Restricted cash and cash equivalents | 0 | 0 | |
Total | $ 0 | 0 | |
LIABILITIES | |||
Contingent consideration related to acquisitions | [2] | 0 | |
Total | $ 0 | ||
[1] | Cash equivalents consist primarily of money market funds. | ||
[2] | The contingent consideration liability as of March 31, 2017 relates to the acquisition of HealthFusion, which was settled during the quarter ended June 30, 2017. The measurement period of the contingent consideration liability ended on December 31, 2016, and thus the actual revenue achievement rate was utilized to compute the ending contingent consideration liability as of March 31, 2017. Accordingly, the contingent consideration liability was reflected under a Level 2 valuation hierarchy because the fair value was determined based on other significant observable inputs. |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | Aug. 16, 2017 | Apr. 14, 2017 | Dec. 31, 2017 |
Entrada [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, effective date of acquisition | Apr. 14, 2017 | ||
Business acquisition, date of acquisition agreement | Apr. 11, 2017 | ||
Total preliminary purchase price | $ 33,958 | ||
Finite-lived Intangible Assets Acquired | $ 15,400 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years 1 month 7 days | ||
Entrada [Member] | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||
Entrada [Member] | Trade Names | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Entrada [Member] | Computer Software, Intangible Asset | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
EagleDream Health [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, effective date of acquisition | Aug. 16, 2017 | ||
Business acquisition, date of acquisition agreement | Jul. 31, 2017 | ||
Total preliminary purchase price | $ 25,609 | ||
Finite-lived Intangible Assets Acquired | $ 13,400 | ||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years 1 month 7 days | ||
EagleDream Health [Member] | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||
EagleDream Health [Member] | Computer Software, Intangible Asset | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years |
Business Combinations - Schedul
Business Combinations - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) $ in Thousands | Aug. 16, 2017 | Apr. 14, 2017 |
Entrada [Member] | ||
Business Acquisition [Line Items] | ||
Initial purchase price | $ 34,000 | |
Preliminary working capital and other adjustments | (42) | |
Total preliminary purchase price | $ 33,958 | |
EagleDream Health [Member] | ||
Business Acquisition [Line Items] | ||
Initial purchase price | $ 26,000 | |
Preliminary working capital and other adjustments | (391) | |
Total preliminary purchase price | $ 25,609 |
Business Combinations - Summary
Business Combinations - Summary of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Aug. 16, 2017 | Apr. 14, 2017 | Mar. 31, 2017 |
Preliminary fair value of identifiable intangible assets acquired: | ||||
Goodwill | $ 216,530 | $ 185,898 | ||
Entrada [Member] | ||||
Preliminary fair value of the net tangible assets acquired and liabilities assumed: | ||||
Acquired cash and cash equivalents | $ 102 | |||
Accounts receivable, net | 1,835 | |||
Prepaid expense and other current assets | 145 | |||
Equipment and improvements, net | 134 | |||
Capitalized software costs, net | 364 | |||
Deferred income taxes, net | 1,041 | |||
Accounts payable | (639) | |||
Accrued compensation and related benefits | (120) | |||
Deferred revenues | (234) | |||
Other liabilities | (444) | |||
Total preliminary net tangible assets acquired and liabilities assumed | 2,184 | |||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Goodwill | 16,374 | |||
Total preliminary identifiable intangible assets acquired | 31,774 | |||
Total preliminary purchase price | 33,958 | |||
Entrada [Member] | Computer Software, Intangible Asset | ||||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Total preliminary identifiable intangible assets acquired | 10,500 | |||
Entrada [Member] | Customer Relationships | ||||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Total preliminary identifiable intangible assets acquired | 3,300 | |||
Entrada [Member] | Trade Names | ||||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Total preliminary identifiable intangible assets acquired | $ 1,600 | |||
EagleDream Health [Member] | ||||
Preliminary fair value of the net tangible assets acquired and liabilities assumed: | ||||
Acquired cash and cash equivalents | $ 573 | |||
Accounts receivable, net | 217 | |||
Prepaid expense and other current assets | 20 | |||
Accounts payable | (115) | |||
Accrued compensation and related benefits | (271) | |||
Deferred revenues | (394) | |||
Other liabilities | (122) | |||
Total preliminary net tangible assets acquired and liabilities assumed | (2,049) | |||
Deferred income taxes, net | (1,957) | |||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Goodwill | 14,258 | |||
Total preliminary identifiable intangible assets acquired | 27,658 | |||
Total preliminary purchase price | 25,609 | |||
EagleDream Health [Member] | Computer Software, Intangible Asset | ||||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Total preliminary identifiable intangible assets acquired | 12,800 | |||
EagleDream Health [Member] | Customer Relationships | ||||
Preliminary fair value of identifiable intangible assets acquired: | ||||
Total preliminary identifiable intangible assets acquired | $ 600 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 216,530 | $ 185,898 |
Intangible Assets - Intangible
Intangible Assets - Intangible Assets, Other than Capitalized Software Development Costs (Details) - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 152,640 | $ 123,840 |
Accumulated amortization | (71,977) | (54,627) |
Net intangible assets | 80,663 | 69,213 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 54,450 | 50,550 |
Accumulated amortization | (33,955) | (28,972) |
Net intangible assets | 20,495 | 21,578 |
Trade Name & Contracts [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 7,080 | 5,480 |
Accumulated amortization | (3,118) | (2,088) |
Net intangible assets | 3,962 | 3,392 |
Computer Software, Intangible Asset | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 91,110 | 67,810 |
Accumulated amortization | (34,904) | (23,567) |
Net intangible assets | $ 56,206 | $ 44,243 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of other intangibles | $ 17,350 | $ 16,953 | ||
Customer relations, trade name and contracts [Member] | Operating Expense [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of other intangibles | $ 1,956 | $ 2,568 | 6,015 | 7,889 |
Computer Software, Intangible Asset | Cost of revenue [Member] | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization of other intangibles | $ 4,127 | $ 3,007 | $ 11,335 | $ 9,064 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization of Intangible Assets with Determinable Lives (Details) - USD ($) | Dec. 31, 2017 | Mar. 31, 2017 |
Finite Lived Intangible Assets [Line Items] | ||
2018 (remaining three months) | $ 6,050 | |
2,019 | 22,088 | |
2,020 | 21,091 | |
2,021 | 16,359 | |
2,022 | 7,433 | |
2023 and beyond | 7,642 | |
Net intangible assets | 80,663 | $ 69,213 |
Operating Expense [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
2018 (remaining three months) | 1,922 | |
2,019 | 5,577 | |
2,020 | 4,580 | |
2,021 | 3,731 | |
2,022 | 2,593 | |
2023 and beyond | 6,054 | |
Net intangible assets | 24,457 | |
Cost of revenue [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
2018 (remaining three months) | 4,128 | |
2,019 | 16,511 | |
2,020 | 16,511 | |
2,021 | 12,628 | |
2,022 | 4,840 | |
2023 and beyond | 1,588 | |
Net intangible assets | $ 56,206 |
Capitalized Software Costs - Ca
Capitalized Software Costs - Capitalized Software Development Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Research And Development [Abstract] | ||
Gross carrying amount | $ 115,202 | $ 104,948 |
Accumulated amortization | (91,993) | (91,341) |
Net capitalized software costs | $ 23,209 | $ 13,607 |
Capitalized Software Costs - Ad
Capitalized Software Costs - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Research And Development [Abstract] | ||||
Amortization of capitalized software costs | $ 1,838 | $ 1,807 | $ 4,409 | $ 6,626 |
Capitalized Software Costs - Es
Capitalized Software Costs - Estimated Amortization of Capitalized Software Costs (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Research And Development [Abstract] | |
2018 (remaining three months) | $ 2,500 |
2,019 | 10,500 |
2,020 | 6,100 |
2,021 | 3,500 |
2,022 | 609 |
Total | $ 23,209 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Jan. 04, 2016 | |
Line Of Credit Facility [Line Items] | ||||||
Line of credit | $ 39,000,000 | $ 39,000,000 | $ 15,000,000 | |||
Remaining borrowing capacity | 211,000,000 | 211,000,000 | ||||
Interest expense | 463,000 | $ 359,000 | 1,390,000 | $ 1,631,000 | ||
Amortization of debt issuance costs | $ 269,000 | $ 269,000 | $ 807,000 | $ 807,000 | ||
Revolving Credit Facility | ||||||
Line Of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 250,000,000 | |||||
Credit agreement maturity date | Jan. 4, 2021 | |||||
Letter of Credit [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 10,000,000 | |||||
Swing-Line Loans [Member] | ||||||
Line Of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 10,000,000 |
Composition of Certain Financ44
Composition of Certain Financial Statement Captions - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Accounts Receivable Net Current [Abstract] | ||
Accounts receivable, gross | $ 88,437 | $ 93,377 |
Sales return reserve | (5,580) | (7,213) |
Allowance for doubtful accounts | (3,441) | (2,757) |
Accounts receivable, net | $ 79,416 | $ 83,407 |
Composition of Certain Financ45
Composition of Certain Financial Statement Captions - Summary of Prepaid Expense and Other Assets, Current (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expenses | $ 16,409 | $ 14,884 |
Other current assets | 1,535 | 3,085 |
Prepaid expenses and other current assets | $ 17,944 | $ 17,969 |
Composition of Certain Financ46
Composition of Certain Financial Statement Captions - Summary of Equipment and Improvements (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Equipment and improvements, gross | $ 68,924 | $ 61,899 |
Accumulated depreciation and amortization | (41,787) | (34,473) |
Equipment and improvements, net | 27,137 | 27,426 |
Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Equipment and improvements, gross | 26,886 | 22,014 |
Internal-Use Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Equipment and improvements, gross | 14,359 | 13,053 |
Furniture and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Equipment and improvements, gross | 11,448 | 10,472 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Equipment and improvements, gross | $ 16,231 | $ 16,360 |
Composition of Certain Financ47
Composition of Certain Financial Statement Captions - Summary of Current and Non-Current Deferred Revenue (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 52,843 | $ 52,383 |
Professional Services [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 21,887 | 21,889 |
Software License, Hardware and Other [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 12,251 | 12,680 |
Support and Maintenance [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | 9,436 | 9,691 |
Software Related Subscription Services [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 9,269 | $ 8,123 |
Composition of Certain Financ48
Composition of Certain Financial Statement Captions - Summary of Accrued Compensation and Related Benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Employee Related Liabilities Current [Abstract] | ||
Payroll, bonus and commission | $ 13,198 | $ 15,836 |
Vacation | 8,700 | 8,677 |
Accrued compensation and related benefits | $ 21,898 | $ 24,513 |
Composition of Certain Financ49
Composition of Certain Financial Statement Captions - Summary of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Other Liabilities [Abstract] | ||
Customer credit balances and deposits | $ 4,406 | $ 4,124 |
Care services liabilities | 3,393 | 4,957 |
Accrued self insurance expense | 2,880 | 1,697 |
Accrued consulting and outside services | 2,384 | 2,496 |
Deferred rent and lease obligations | 2,228 | 2,427 |
Accrued EDI expense | 2,025 | 2,490 |
Accrued royalties | 1,891 | 2,033 |
Accrued outsourcing costs | 1,853 | 1,588 |
Accrued legal expense | 1,560 | 853 |
Accrued hosting costs | 973 | 401 |
Employee benefit plan withholdings | 655 | 739 |
Sales tax payable | 601 | 448 |
Contingent consideration and other liabilities related to acquisitions | 0 | 18,817 |
Other accrued expenses | 5,304 | 3,705 |
Other current liabilities | 30,153 | 46,775 |
Deferred rent and lease obligations | 11,116 | 11,402 |
Uncertain tax positions | 4,890 | 4,762 |
Other liabilities | 348 | 297 |
Other noncurrent liabilities | $ 16,354 | $ 16,461 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 21, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 |
Income Tax Disclosure [Abstract] | |||||||
Provision for income taxes | $ 1,487 | $ 2,342 | $ 6,134 | $ 3,950 | |||
Effective tax rate (as a percentage) | 49.10% | 18.30% | 31.30% | 22.20% | |||
Liability for unrecognized tax benefits | $ 4,890 | $ 4,890 | $ 4,762 | ||||
Period within which the company does not anticipate total unrecognized tax benefits to change | within the next twelve months | ||||||
Federal corporate tax rate | 21.00% | 35.00% | |||||
Estimated effective tax rate (as a percentage) | 31.50% | ||||||
Decrease in net deferred tax assets due to tax reform | $ (3,095) | ||||||
Income tax expense due to tax reform | $ 1,354 |
Earnings Per Share - Weighted A
Earnings Per Share - Weighted Average Shares Outstanding for Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings per share — Basic: | ||||
Net income | $ 1,541 | $ 10,486 | $ 13,467 | $ 13,826 |
Weighted-average shares outstanding — Basic | 63,706 | 62,093 | 63,287 | 61,645 |
Net income per common share — Basic | $ 0.02 | $ 0.17 | $ 0.21 | $ 0.22 |
Earnings per share — Diluted: | ||||
Net income | $ 1,541 | $ 10,486 | $ 13,467 | $ 13,826 |
Weighted-average shares outstanding — Basic | 63,706 | 62,093 | 63,287 | 61,645 |
Effect of potentially dilutive securities | 2 | 9 | 255 | |
Weighted-average shares outstanding — Diluted | 63,708 | 62,093 | 63,296 | 61,900 |
Net income per common share — Diluted | $ 0.02 | $ 0.17 | $ 0.21 | $ 0.22 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Options excluded from the computation of diluted net income per share | 3,228 | 3,054 | 2,785 | 3,015 |
Share Based Awards - Additional
Share Based Awards - Additional Information (Details) - USD ($) | Aug. 04, 2017 | Dec. 29, 2016 | Aug. 11, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Oct. 31, 2015 | Aug. 31, 2015 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Outstanding stock options | 3,823,635 | 3,823,635 | 2,885,415 | |||||||
Weighted-average grant date fair value per share of stock options | $ 5.59 | $ 4.92 | ||||||||
Granted | 1,479,000 | |||||||||
Fair value of options vested | $ 2,154,000 | $ 1,189,000 | ||||||||
Total share-based compensation | $ 3,453,000 | $ 2,001,000 | 8,585,000 | 5,177,000 | ||||||
Number of shares granted | 123,082 | |||||||||
Employee Stock Option [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Total unrecognized compensation costs | 12,861,000 | $ 12,861,000 | ||||||||
Stock option recognized over weighted average period (in years) | 3 years 1 month 6 days | |||||||||
Restricted Stock Units Award [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock option recognized over weighted average period (in years) | 2 years 2 months 13 days | |||||||||
Total share-based compensation | 2,333,000 | 1,054,000 | $ 6,079,000 | 2,571,000 | ||||||
Total unrecognized compensation costs | 19,034,000 | $ 19,034,000 | ||||||||
Restricted Stock Units Award [Member] | Minimum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Restricted Stock Units Award [Member] | Maximum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Vesting period | 3 years | |||||||||
Performance Shares [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Total share-based compensation | $ 77,000 | $ 227,000 | ||||||||
2005 Stock Options Plan [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Common stock reserved | 4,800,000 | |||||||||
Outstanding stock options | 689,260 | 689,260 | ||||||||
2005 Stock Options Plan [Member] | Employee Stock Option [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Expiration period (in years) | 10 years | |||||||||
Share-based compensation award plan , expiration date | May 25, 2015 | |||||||||
Two Thousand Fifteen Plan [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Common stock reserved | 11,500,000 | |||||||||
Two Thousand Fifteen Plan [Member] | Performance Shares [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 86,187 | 86,187 | ||||||||
Amended Two Thousand Fifteen Plan [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Outstanding stock options | 3,134,375 | 3,134,375 | ||||||||
Increase in number of shares of common stock reserved for issuance | 6,000,000 | |||||||||
Shares available for future grant | 9,269,858 | 9,269,858 | ||||||||
Granted | 1,479,000 | |||||||||
Amended Two Thousand Fifteen Plan [Member] | Employee Stock Option [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Expiration period (in years) | 10 years | |||||||||
Amended Two Thousand Fifteen Plan [Member] | Restricted Stock Units Award [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 1,601,580 | 1,601,580 | ||||||||
Amended Two Thousand Fifteen Plan [Member] | Performance Shares [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 86,187 | 86,187 | ||||||||
Employee Share Purchase Plan [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Common stock reserved | 4,000,000 | 3,684,632 | 3,684,632 | |||||||
Total share-based compensation | $ 88,000 | $ 70,000 | $ 265,000 | $ 277,000 | ||||||
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 | 315,368 | 315,368 |
Share Based Awards - Summary of
Share Based Awards - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Mar. 31, 2017 | |
Number of Shares | ||
Outstanding, April 1, 2017 | 2,885,415 | |
Granted | 1,479,000 | |
Exercised | (216,405) | |
Forfeited/Canceled | (324,375) | |
Outstanding, December 31, 2017 | 3,823,635 | 2,885,415 |
Vested and expected to vest, December 31, 2017 | 3,401,964 | |
Exercisable, December 31, 2017 | 923,480 | |
Weighted- Average Exercise Price per Share | ||
Outstanding, April 1, 2017 (in dollars per share) | $ 15.41 | |
Granted (in dollars per share) | 14.56 | |
Exercised (in dollars per share) | 16.62 | |
Forfeited/Canceled (in dollars per share) | 17.93 | |
Outstanding, September 30, 2017 (in dollars per share) | 15.73 | $ 15.41 |
Vested and expected to vest, September 30, 2017 (in dollars per share) | 15.90 | |
Exercisable, September 30, 2017 (in dollars per share) | $ 19.96 | |
Weighted- Average Remaining Contractual Life (years) | ||
Outstanding | 6 years 3 months 18 days | 6 years 2 months 12 days |
Granted | 7 years 9 months 18 days | |
Exercised | 6 years | |
Forfeited/Canceled | 4 years 8 months 12 days | |
Vested and expected to vest, December 31, 2017 | 6 years 3 months 18 days | |
Exercisable, December 31, 2017 | 4 years 4 months 24 days | |
Aggregate Intrinsic Value | ||
Outstanding, April 1, 2017 | $ 3,150 | |
Exercised | 119 | |
Outstanding, December 31, 2017 | 733 | $ 3,150 |
Vested and expected to vest, December 31, 2017 | 654 | |
Exercisable, December 31, 2017 | $ 190 |
Share Based Awards - Schedule o
Share Based Awards - Schedule of Share Based Compensation Valuation Assumption (Details) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 3 months 19 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 37.10% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 37.00% | 37.00% | 36.90% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 37.50% | 37.70% | 37.40% | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | 0.00% | 0.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.50% | |||
Minimum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 5 years 7 months 6 days | 5 years 7 months 6 days | 6 years | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.10% | 1.90% | 1.20% | |
Maximum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 7 months 6 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.20% | 2.20% | 1.50% |
Share Based Awards - Summary 56
Share Based Awards - Summary of Stock Options Granted (Details) - $ / shares | Dec. 29, 2016 | Dec. 31, 2017 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 123,082 | |
Exercise Price Granted (in usd per share) | $ 14.56 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 1,479,000 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Thirteen June Two Thousand Seventeen [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 249,000 | |
Exercise Price Granted (in usd per share) | $ 16.37 | |
Vesting period | 4 years | |
Expiration | Jun. 13, 2025 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Twenty-four May Two Thousand Seventeen [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 60,000 | |
Exercise Price Granted (in usd per share) | $ 14.57 | |
Vesting period | 4 years | |
Expiration | May 24, 2025 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Fourth August Two Thousand Seventeen [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 25,000 | |
Exercise Price Granted (in usd per share) | $ 16.13 | |
Vesting period | 4 years | |
Expiration | Aug. 4, 2025 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Thirty First October Two Thousand Seventeen [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 915,000 | |
Exercise Price Granted (in usd per share) | $ 14.07 | |
Vesting period | 4 years | |
Expiration | Oct. 31, 2025 | |
Amended Two Thousand Fifteen Stock Options Plan [Member] | Option Grant Date Fourth December Two Thousand Seventeen [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of shares granted | 230,000 | |
Exercise Price Granted (in usd per share) | $ 14.38 | |
Vesting period | 4 years | |
Expiration | Dec. 4, 2025 |
Share Based Awards - Schedule57
Share Based Awards - Schedule of Employee Stock Options and Performance Based Awards by Non-vested Stock Options (Details) - $ / shares | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Non-Vested Number of Shares Outstanding Beginning Balance | 2,073,295 | |
Non-Vested Number of Shares Granted | 1,479,000 | |
Non-Vested Number of Shares Vested | (442,690) | |
Non-Vested Number of Shares Forfeited | (209,450) | |
Non-Vested Number of Shares Outstanding Ending Balance | 2,900,155 | |
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 | $ 5.09 | |
Weighted-average grant date fair value per share of stock options | 5.59 | $ 4.92 |
Weighted Average Fair Value per Share Price Vested | 4.86 | |
Weighted Average Fair Value per Share Price Forfeited | 4.57 | |
Weighted Average Fair Value per Share Price Ending Balance | $ 5.16 |
Share Based Awards - Schedule58
Share Based Awards - Schedule of Other Share-based Compensation, Activity (Details) - Restricted Stock Units Award [Member] - Two Thousand Fifteen Stock Options Plan [Member] | 9 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Number of Shares Outstanding Beginning Balance | shares | 902,948 |
Granted | shares | 1,140,374 |
Vested | shares | (344,659) |
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | shares | (97,083) |
Number of Shares Outstanding Ending Balance | shares | 1,601,580 |
Weighted Average Grant-Date Fair Value per Share, Beginning of Period | $ / shares | $ 12.92 |
Weighted Average Grant-Date Fair Value per Share, Granted | $ / shares | 15.50 |
Weighted Average Grant-Date Fair Value per Share, Vested | $ / shares | 12.66 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | 14.10 |
Weighted Average Grant-Date Fair Value per Share, End of Period | $ / shares | $ 14.82 |
Commitments, Guarantees and C59
Commitments, Guarantees and Contingencies - Schedule of Significant Contractual Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating lease obligation, Total | $ 60,114 | |
Operating lease obligation, 2018 (remaining three months) | 2,219 | |
Operating lease obligation, 2019 | 9,321 | |
Operating lease obligation, 2020 | 9,013 | |
Operating lease obligation, 2021 | 8,998 | |
Operating lease obligation, 2022 | 8,726 | |
Operating lease obligation, 2023 and beyond | 21,837 | |
Remaining lease obligations for vacated properties, Total | 4,659 | |
Remaining lease obligations for vacated properties, 2018 (remaining three months) | 547 | |
Remaining lease obligations for vacated properties, 2019 | 1,413 | |
Remaining lease obligations for vacated properties, 2020 | 794 | |
Remaining lease obligations for vacated properties, 2021 | 816 | |
Remaining lease obligations for vacated properties, 2022 | 551 | |
Remaining lease obligations for vacated properties, 2023 and beyond | 538 | |
Line of credit | 39,000 | $ 15,000 |
Line of credit obligations, Noncurrent | 39,000 | |
Purchase commitments ,Total | 32,322 | |
Purchase commitments, 2018 (remaining three months) | 312 | |
Purchase commitments, 2019 | 3,840 | |
Purchase commitments, 2020 | 5,297 | |
Purchase commitments, 2021 | 7,073 | |
Purchase commitments, 2022 | 7,900 | |
Purchase commitments, 2023 and beyond | 7,900 | |
Contractual obligations, Total | 136,095 | |
Contractual obligations, 2018 (remaining three months) | 3,078 | |
Contractual obligations, 2019 | 14,574 | |
Contractual obligations, 2020 | 15,104 | |
Contractual obligations, 2021 | 55,887 | |
Contractual obligations, 2022 | 17,177 | |
Contractual obligations, 2023 and beyond | $ 30,275 |
Commitments, Guarantees and C60
Commitments, Guarantees and Contingencies - Schedule of Significant Contractual Obligations (Details) (Parenthetical) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Operating leases, future minimum payments due, future minimum sublease rentals | $ 1,258 |
Commitments, Guarantees and C61
Commitments, Guarantees and Contingencies - Additional Information (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Commitments Guarantees and Contingencies (Textual) | |
Deferred compensation liability, current | $ 6,473 |
Liability for uncertainty in income taxes, current | $ 4,890 |
Applicable program documentation period | 365 days |
Restructuring Plan - Additional
Restructuring Plan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | |
Restructuring Cost And Reserve [Line Items] | |||||
Restructuring costs | $ 130 | $ 231 | $ 130 | $ 4,685 | $ 7,078 |
Restructuring and Related Cost, Expected Cost | $ 1,363 | $ 1,363 | |||
Minimum [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Contractual lease expiration date | Jan. 31, 2018 | ||||
Maximum [Member] | |||||
Restructuring Cost And Reserve [Line Items] | |||||
Contractual lease expiration date | Sep. 30, 2023 |