Cover
Cover - USD ($) | 12 Months Ended | ||
Mar. 31, 2023 | May 30, 2023 | Sep. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --03-31 | ||
Document Period End Date | Mar. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-13449 | ||
Entity Registrant Name | QUANTUM CORP /DE/ | ||
Entity Incorporation, State | DE | ||
Entity Tax Identification Number | 94-2665054 | ||
Entity Address, Street | 224 Airport Parkway | ||
Entity Address, Suite | Suite 550 | ||
Entity Address, City | San Jose | ||
Entity Address, State | CA | ||
Entity Address, Postal Zip Code | 95110 | ||
City Area Code | (408) | ||
Local Phone Number | 944-4000 | ||
Title of each class | Common Stock, $0.01 par value per share | ||
Trading Symbol | QMCO | ||
Name of each exchange on which registered | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 65,877,520 | ||
Entity Common Stock, Shares Outstanding | 93,698,287 | ||
Documents Incorporated by Reference | The portions of the registrant's proxy statement to be filed in connection with the Annual Meeting of Stockholders to be held in 2023 have been incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0000709283 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Mar. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 32 |
Auditor Name | ArmaninoLLP |
Auditor Location | San Ramon, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 25,963 | $ 5,210 |
Restricted cash | 212 | 283 |
Accounts receivable, net of allowance for doubtful accounts of $201 and $422, respectively | 72,464 | 69,354 |
Manufacturing inventories | 19,441 | 33,546 |
Service parts inventories | 25,304 | 24,254 |
Prepaid expenses | 4,158 | 7,853 |
Other current assets | 5,513 | 4,697 |
Total current assets | 153,055 | 145,197 |
Property and equipment, net | 16,555 | 12,853 |
Intangible assets, net | 4,941 | 9,584 |
Goodwill | 12,969 | 12,969 |
Right-of-use assets, net | 10,291 | 11,107 |
Other long-term assets | 15,846 | 9,925 |
Total assets | 213,657 | 201,635 |
Current liabilities: | ||
Accounts payable | 35,716 | 34,220 |
Deferred revenue, current portion | 82,504 | 86,517 |
Long-term debt, current portion | 5,000 | 4,375 |
Accrued compensation | 15,710 | 16,141 |
Other accrued liabilities | 13,666 | 16,562 |
Total current liabilities | 152,596 | 157,815 |
Deferred revenue, net of current portion | 43,306 | 41,580 |
Revolving credit facility | 16,750 | 17,735 |
Term loan | 66,354 | 89,448 |
Operating lease liabilities | 10,169 | 9,891 |
Other long-term liabilities | 11,370 | 11,849 |
Total liabilities | 300,545 | 328,318 |
Commitments and Contingencies (Note 11) | ||
Preferred stock: | ||
Preferred stock, 20,000 shares authorized; no shares issued as of March 31, 2023 and 2022 | 0 | 0 |
Common stock: | ||
Common stock, $0.01 par value; 225,000 shares authorized; 93,574 and 60,433 shares issued and outstanding at March 31, 2023 and 2022, respectively | 936 | 605 |
Additional paid-in capital | 722,603 | 645,038 |
Accumulated deficit | (808,846) | (770,903) |
Accumulated other comprehensive loss | (1,581) | (1,423) |
Total stockholders' deficit | (86,888) | (126,683) |
Total liabilities and stockholders' deficit | $ 213,657 | $ 201,635 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 201 | $ 422 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 93,574,000 | 60,433,000 |
Common stock, shares outstanding (in shares) | 93,574,000 | 60,433,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | |||
Revenue | $ 412,752 | $ 372,827 | $ 349,576 |
Cost of revenue | |||
Cost of revenue | 278,813 | 225,792 | 198,823 |
Gross profit | 133,939 | 147,035 | 150,753 |
Operating expenses | |||
Research and development | 44,555 | 51,812 | 41,703 |
Sales and marketing | 66,034 | 62,957 | 54,945 |
General and administrative | 47,752 | 45,256 | 42,001 |
Restructuring charges | 1,605 | 850 | 3,701 |
Total operating expenses | 159,946 | 160,875 | 142,350 |
Income (loss) from operations | (26,007) | (13,840) | 8,403 |
Other income (expense), net | 1,956 | (251) | (1,312) |
Interest expense | (10,560) | (11,888) | (27,522) |
Loss on debt extinguishment, net | (1,392) | (4,960) | (14,789) |
Net loss before income taxes | (36,003) | (30,939) | (35,220) |
Income tax provision | 1,940 | 1,341 | 239 |
Net loss | (37,943) | (32,280) | (35,459) |
Deemed dividend on warrants | (389) | 0 | 0 |
Net loss attributable to common stockholders- basic | (38,332) | (32,280) | (35,459) |
Net loss attributable to common stockholders- diluted | $ (38,332) | $ (32,280) | $ (35,459) |
Net loss per share - basic (in dollars per share) | $ (0.42) | $ (0.55) | $ (0.83) |
Net loss per share -diluted (in dollars per share) | $ (0.42) | $ (0.55) | $ (0.83) |
Weighted average shares - basic (in shares) | 90,348 | 58,871 | 42,852 |
Weighted average shares - diluted (in shares) | 90,348 | 58,871 | 42,852 |
Foreign currency translation adjustments, net of income taxes | $ (158) | $ (567) | $ 666 |
Total comprehensive loss | (38,101) | (32,847) | (34,793) |
Product | |||
Revenue | |||
Revenue | 266,537 | 223,761 | 209,808 |
Cost of revenue | |||
Cost of revenue | 220,031 | 169,780 | 150,257 |
Service and subscription | |||
Revenue | |||
Revenue | 132,510 | 133,689 | 124,904 |
Cost of revenue | |||
Cost of revenue | 58,782 | 56,012 | 48,566 |
Royalty | |||
Revenue | |||
Revenue | $ 13,705 | $ 15,377 | $ 14,864 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | |||
Net loss | $ (37,943) | $ (32,280) | $ (35,459) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 10,118 | 9,418 | 5,697 |
Amortization of debt issuance costs | 1,624 | 2,414 | 6,301 |
Long-term debt related costs | 992 | 8,471 | 167 |
Provision for manufacturing and service inventories | 18,052 | 5,740 | 6,334 |
Gain on PPP loan extinguishment | 0 | (10,000) | 0 |
Stock-based compensation | 10,750 | 13,829 | 9,624 |
Non-cash income tax benefit | 0 | 0 | (577) |
Non-cash loss on debt extinguishment | 0 | 0 | 10,087 |
Other non-cash | (2,067) | (832) | 704 |
Changes in assets and liabilities, net of effect of acquisitions: | |||
Accounts receivable | (2,966) | 3,651 | (1,625) |
Manufacturing inventories | (1,839) | (12,069) | 924 |
Service parts inventories | (3,503) | (4,400) | (5,879) |
Accounts payable | 1,158 | (1,939) | (1,994) |
Prepaid expenses | 3,695 | (3,959) | (594) |
Deferred revenue | (2,286) | (2,514) | 418 |
Accrued restructuring charges | 0 | (580) | 580 |
Accrued compensation | (431) | (3,073) | 4,257 |
Other assets | (1,270) | (2,602) | 2,809 |
Other liabilities | 1,022 | (3,003) | (2,541) |
Net cash used in operating activities | (4,894) | (33,728) | (767) |
Investing activities | |||
Purchases of property and equipment | (12,581) | (6,316) | (6,931) |
Business acquisitions | (3,020) | (7,808) | (2,655) |
Net cash used in investing activities | (15,601) | (14,124) | (9,586) |
Financing activities | |||
Borrowings of long-term debt, net of debt issuance costs | 0 | 94,961 | 19,400 |
Repayments of long-term debt | (24,596) | (94,301) | (92,782) |
Borrowings of credit facility | 497,280 | 309,000 | 309,920 |
Repayments of credit facility | (498,665) | (291,265) | (313,065) |
Borrowings of paycheck protection program | 0 | 0 | 10,000 |
Proceeds from secondary offering, net | 0 | 0 | 96,756 |
Payment of taxes due upon vesting of restricted stock | 0 | 0 | (236) |
Proceeds from issuance of common stock | 67,146 | 1,762 | 1,335 |
Net cash provided by financing activities | 41,165 | 20,157 | 31,328 |
Effect of exchange rate changes on cash and cash equivalents | 12 | 51 | (108) |
Net change in cash, cash equivalents, and restricted cash | 20,682 | (27,644) | 20,867 |
Cash, cash equivalents, and restricted cash at beginning of period | 5,493 | 33,137 | 12,270 |
Cash, cash equivalents, and restricted cash at end of period | 26,175 | 5,493 | 33,137 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 8,701 | 9,140 | 24,324 |
Cash paid for income taxes, net of refunds | 1,418 | 944 | (2,283) |
Non-cash transactions | |||
Purchases of property and equipment included in accounts payable | 1,049 | 147 | 258 |
Paid-in-kind interest | 319 | 0 | 0 |
Deemed dividend | 389 | 0 | 0 |
Transfer of manufacturing inventory to services inventory | |||
Non-cash transactions | |||
Transfer of manufacturing inventory | 4,045 | 211 | 918 |
Transfer of manufacturing inventory to property and equipment | |||
Non-cash transactions | |||
Transfer of manufacturing inventory | $ 343 | $ 818 | $ 429 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - Cash Reconciliation (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows: | |||
Cash and cash equivalents | $ 25,963 | $ 5,210 | $ 27,430 |
Restricted cash, current | 212 | 283 | 707 |
Restricted cash, long-term | 0 | 0 | 5,000 |
Total cash, cash equivalents and restricted cash at the end of period | $ 26,175 | $ 5,493 | $ 33,137 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance at Mar. 31, 2020 | $ (198,525) | $ 399 | $ 505,762 | $ (703,164) | $ (1,522) |
Beginning balance (in shares) at Mar. 31, 2020 | 39,905 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (35,459) | (35,459) | |||
Foreign currency translation adjustments, net of income taxes | 666 | 666 | |||
Shares issued under employee stock purchase plan | 1,335 | $ 4 | 1,331 | ||
Shares issued under employee stock purchase plan (in shares) | 320 | ||||
Shares issued under employee incentive plans, net | 0 | $ 13 | (13) | ||
Shares issued under employee stock incentive plans, net (in shares) | 1,264 | ||||
Shares surrendered for employees' tax liability upon settlement of restricted stock units | (236) | (236) | |||
Shares surrendered for employees' tax liability upon settlement of restricted stock units (in shares) | (44) | ||||
Shares issued in connection with business acquisition | 2,080 | $ 3 | 2,077 | ||
Shares issued in connection with business acquisition (in shares) | 361 | ||||
Shares issued in connection with secondary equity offering, net | 96,755 | $ 151 | 96,604 | ||
Shares issued in connection with secondary equity offering (in shares) | 15,109 | ||||
Warrants issued related to long-term debt | 11,515 | 11,515 | |||
Deemed dividend on warrants | 0 | ||||
Stock-based compensation | 9,624 | 9,624 | |||
Ending balance at Mar. 31, 2021 | (112,245) | $ 570 | 626,664 | (738,623) | (856) |
Ending balance (in shares) at Mar. 31, 2021 | 56,915 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (32,280) | (32,280) | |||
Foreign currency translation adjustments, net of income taxes | (567) | (567) | |||
Shares issued under employee stock purchase plan | 1,762 | $ 4 | 1,758 | ||
Shares issued under employee stock purchase plan (in shares) | 389 | ||||
Shares issued under employee incentive plans, net | 0 | $ 23 | (23) | ||
Shares issued under employee stock incentive plans, net (in shares) | 2,308 | ||||
Shares issued in connection with business acquisition | 2,818 | $ 8 | 2,810 | ||
Shares issued in connection with business acquisition (in shares) | 821 | ||||
Deemed dividend on warrants | 0 | ||||
Stock-based compensation | 13,829 | 13,829 | |||
Ending balance at Mar. 31, 2022 | $ (126,683) | $ 605 | 645,038 | (770,903) | (1,423) |
Ending balance (in shares) at Mar. 31, 2022 | 60,433 | 60,433 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | $ (37,943) | (37,943) | |||
Foreign currency translation adjustments, net of income taxes | (158) | (158) | |||
Shares issued under employee stock purchase plan | 897 | $ 6 | 891 | ||
Shares issued under employee stock purchase plan (in shares) | 600 | ||||
Shares issued under employee incentive plans, net | 0 | $ 21 | (21) | ||
Shares issued under employee stock incentive plans, net (in shares) | 2,180 | ||||
Shares issued in connection with business acquisition | 0 | $ 4 | (4) | ||
Shares issued in connection with business acquisition (in shares) | 361 | ||||
Shares issued in connection with secondary equity offering, net | 66,249 | $ 300 | 65,949 | ||
Shares issued in connection with secondary equity offering (in shares) | 30,000 | ||||
Settlement of warrant down round provision | 389 | 389 | |||
Deemed dividend on warrants | (389) | (389) | |||
Stock-based compensation | 10,750 | 10,750 | |||
Ending balance at Mar. 31, 2023 | $ (86,888) | $ 936 | $ 722,603 | $ (808,846) | $ (1,581) |
Ending balance (in shares) at Mar. 31, 2023 | 93,574 | 93,574 |
DESCRIPTION OF BUSINESS AND SIG
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Quantum Corporation, together with its consolidated subsidiaries (“Quantum” or the “Company”), is a leader in storing and managing digital video and other forms of unstructured data, delivering top streaming performance for video and rich media applications, along with low-cost, long-term storage systems for data protection and archiving. The Company helps customers around the world capture, create and share digital data and preserve and protect it for decades. The Company’s software-defined, hyperconverged storage solutions span from non-violate memory express (“NVMe”), to solid state drives, (“SSD”), hard disk drives, (“HDD”), tape and the cloud and are tied together leveraging a single namespace view of the entire data environment. The Company works closely with a broad network of distributors, value-added resellers (“VARs”), direct marketing resellers (“DMRs”), original equipment manufacturers (“OEMs”) and other suppliers to meet customers’ evolving needs. Basis of Presentation The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated. The Company reviews subsidiaries and affiliates, as well as other entities, to determine if they should be considered variable interest entities (“VIE”), and whether it should change the consolidation determinations based on changes in their characteristics. The Company considers an entity a VIE if its equity investors own an interest therein that lacks the characteristics of a controlling financial interest or if such investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or if the entity is structured with non-substantive voting interests. To determine whether or not the entity is consolidated with the Company’s results, the Company also evaluates which interests are variable interests in the VIE and which party is the primary beneficiary of the VIE. Liquidity The accompanying consolidated financial statements of the Company have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company generated negative cash flows from operations of approximately $4.9 million, $33.7 million and $0.8 million for the fiscal years ended March 31, 2023, 2022 and 2021, respectively, and generated net losses of approximately $37.9 million, $32.3 million, and $35.5 million for the fiscal years ended March 31, 2023, 2022 and 2021, respectively. The Company has funded operations through the sale of common stock, term debt borrowings and revolving credit facility borrowings described in Note 5: Debt . Management believes that it has the ability to obtain additional debt or equity financing, if required, and has historically been able to do so. Management also believes that current working capital, borrowings available under the revolving credit facility and future equity financing or debt financing (including additional Term Debt borrowings described in Note 13: Subsequent Events) will provide the Company with sufficient capital to fund operations for at least one year from the consolidated financial statement issuance date. There is no assurance that the Company would be able to obtain sufficient additional funds when needed or that such funds, if available, would be obtainable on terms satisfactory to the Company. Principles of Consolidation The consolidated financial statements include the accounts of Quantum and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions due to risks and uncertainties. Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, useful lives of intangible assets and property and equipment, stock-based compensation and provision for income taxes including related reserves. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Cash and Cash Equivalents The Company has cash deposits and cash equivalents deposited in or managed by major financial institutions. Cash equivalents include all highly liquid investment instruments with an original maturity of three months or less and consist primarily of money market accounts. At times the related amounts are in excess of amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses with these financial institutions and does not believe such balances are exposed to significant credit risk. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses based on historical experience and expected collectability of outstanding accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, and for the majority of its customers require no collateral. For customers that do not meet the Company’s credit standards, the Company may require a form of collateral, such as cash deposits or letters of credit, prior to the completion of a transaction. These credit evaluations require significant judgment and are based on multiple sources of information. The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in customer payment terms. The Company will write-off customer balances in full to the reserve when it has determined that the balance is not recoverable. Changes in the allowance for doubtful accounts are recorded in general and administrative expenses. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other than quoted prices that are observable in the market for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Inputs are unobservable and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company's financial instruments consist of Level 3 liabilities. Manufacturing Inventories Manufacturing inventory is recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Costs include material, direct labor, and an allocation of overhead in the case of work in process. Adjustments to reduce the cost of manufacturing inventory to its net realizable value, if required, are made for estimated excess, obsolete or impaired balances. Factors influencing these adjustments include declines in demand, rapid technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from the Company’s estimates. Service Parts Inventories Service parts inventories are recorded at the lower of cost or net realizable value, with cost being determined on a FIFO basis. The Company carries service parts because it generally provides product warranty for one Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization, computed on a straight-line basis over the estimated useful lives of the assets as follows: Machinery and equipment 3 to 5 years Computer equipment 3 to 5 years Other software 3 years Furniture and fixtures 5 years Other office equipment 5 years Leasehold improvements Shorter of useful life or life of lease When assets are retired or otherwise disposed of, the related costs and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive income (loss) in the period realized. The Company evaluates the recoverability of the carrying amount of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. A potential impairment charge is evaluated when the undiscounted expected cash flows derived from an asset group are less than its carrying amount. Impairment losses, if applicable, are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. Judgment is used when applying these impairment rules to determine the timing of impairment testing, the undiscounted cash flows used to assess impairments and the fair value of the asset group. Business Combinations The Company allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The results of operations of an acquired business is included in its consolidated financial statements from the date of acquisition. Acquisition-related expenses are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price consideration over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed in a business combination. Goodwill is evaluated for impairment annually in the third quarter of the Company's fiscal year as a single reporting unit, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company may elect to qualitatively assess whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. If the Company opts not to qualitatively assess, a quantitative goodwill impairment test is performed. The quantitative test compares its reporting unit's carrying amount, including goodwill, to its fair value calculated based on its enterprise value. If the carrying amount exceeds its fair value, an impairment loss is recognized for the excess. The Company did not recognize any impairment of goodwill in any of the periods presented in the consolidated financial statements. Purchased Intangible Assets Purchased intangible assets with finite lives are stated at cost, net of accumulated amortization. The Company amortizes its intangible assets on a straight-line basis over an estimated useful life of two Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company measures the recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If the total of the future undiscounted cash flows is less than the carrying amount of an asset, the Company records an impairment charge for the amount by which the carrying amount of the asset exceeds its fair market value. Operating Leases The Company determines if an arrangement contains a lease at inception. Lease liabilities are recognized at the present value of the future lease payments at commencement date. The interest rate implicit in the Company's operating leases is not readily determinable, and therefore an incremental borrowing rate is estimated to determine the present value of future payments. The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. The operating lease right-of-use ("ROU") asset is determined based on the lease liability initially established and reduced for any prepaid lease payments and any lease incentives. The Company accounts for the lease and non-lease components of operating lease contract consideration as a single lease component. Certain of the operating lease agreements contain rent concession, rent escalation, and option to renew provisions. Rent concession and rent escalation provisions are considered in determining the lease cost. Lease cost is recognized on a straight-line basis over the lease term commencing on the date the Company has the right to use the leased property. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that an extension or termination option will be exercised. In addition, certain operating lease agreements contain tenant improvement allowances from the Company's landlords. These allowances are accounted for as lease incentives and reduce its ROU asset and lease cost over the lease term. For short-term leases which have a lease term less than twelve months and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, the Company recognizes rent expense in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred. Revenue Recognition The Company generates revenue from three main sources: (1) product, (2) professional services, and (3) royalties. Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. The Company's performance obligations are satisfied at a point in time or over time as stand ready obligations. The majority of revenue is recognized at a point in time when products are accepted, installed or delivered. Product Revenue The Company's product revenue is comprised of multiple storage solution hardware and software offerings targeted towards consumer and enterprise customers. Revenue from product sales is recognized at the point in time when the customer takes control of the product. If there are significant post-delivery obligations, the related revenue is deferred until such obligations are fulfilled. Revenue from contracts with customer acceptance criteria are recognized upon end user acceptance. Service and Subscription Revenue Service and subscription revenue consists of four components: (a) post-contract customer support agreements, (b) software subscriptions, (c) installation, and (d) consulting & training. Customers have the option to choose between different levels of hardware and software support. The Company's support plans include various stand-ready obligations such as technical assistance hot-lines, replacement parts maintenance, and remote monitoring that are delivered whenever called upon by its customers. Support plans provide additional services and assurance outside the scope of the Company's primary product warranties. Revenue from support plans is recognized ratably over the contractual term of the service contract. The Company also sells software subscriptions that include term licenses which are recognized as revenue when the license is delivered to the customer and related customer support which is recognized ratably over the service period. The Company offers installation services on all its products. Customers can opt to either have Quantum or a Quantum-approved third-party service provider install its products. Installation services are typically completed within a short period of time and revenue from these services are recognized at the point when installation is complete. A majority of the Company's consulting and training revenue does not take significant time to complete therefore these obligations are satisfied upon completion of such services at a point in time. Royalty Revenue The Company licenses certain intellectual property to third party manufacturers which gives the manufacturers rights to intellectual property including the right to either manufacture or include the intellectual property in their products for resale. Licensees pay the Company a per-unit royalty for sales of their products that incorporate its intellectual property. On a periodic and timely basis, the licensees provide the Company with reports containing units sold to end users subject to the royalties. The reports substantiate that the performance obligation has been satisfied therefore revenue is recognized based on the reports or when amounts can be reasonably estimated. Deferred Revenue Deferred revenue primarily consists of amounts that have been invoiced but have not yet been recognized as revenue and performance obligations pertaining to subscription services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet dates. Significant Judgements The Company generally enters into contracts with customers to provide storage solutions to meet their individual needs. Most of the Company’s contracts contain multiple goods and services designed to meet each customers’ unique storage needs. Contracts with multiple goods and services have multiple distinct performance obligations as the promise to transfer hardware, installation services, and support services are capable of being distinct and provide economic benefit to customers on their own. Stand-alone selling price For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) of the good or service underlying each performance obligation. The SSP represents the amount for which the Company would sell the good or service to a customer on a standalone basis (i.e., not sold as a bundle with any other products or services). Where SSP may not be directly observable (e.g., the performance obligation is not sold separately), the Company maximized the use of observable inputs by using information including reviewing discounting practices, performance obligations with similar customers and product groupings. The Company evaluated all methods included in ASC 606 to determine SSP and concluded that invoice price is the best representation of what the Company expects to receive from the delivery of each performance obligation. Variable consideration Product revenue includes multiple types of variable consideration, such as rebates, returns, or stock rotations. All contracts with variable consideration require payment upon satisfaction of the performance obligation typically with net 45-day payment terms. The Company does not include significant financing components in its contracts. The Company constrains estimates of variable consideration to amounts that are not expected to result in a significant revenue reversal in the future, primarily based on the most likely level of consideration to be returned to the customer under the specific terms of the underlying programs. The expected value method is used to estimate the consideration expected to be returned to the customer. The Company uses historical data and current trends to drive the estimates. The Company records a reduction to revenue to account for these programs. The Company initially measures this asset at the carrying amount of the inventory, less any expected costs to recover the goods including potential decreases in the value of the returned goods. Cost of Service and Subscription Revenue The Company classifies expenses as service cost of revenue by estimating the portion of its total cost of revenue that relates to providing field support to its customers under contract. These estimates are based upon a variety of factors, including the nature of the support activity and the level of infrastructure required to support the activities from which it earns service and subscription revenue. In the event its service business changes, its estimates of cost of service and subscription revenue may be impacted. Research and Development Costs Expenditures relating to the development of new products and processes are expensed as incurred. These costs include expenditures for employee compensation, materials used in the development effort, other internal costs, as well as expenditures for third party professional services. The Company has determined that technological feasibility for its software products is reached shortly before the products are released to manufacturing. Costs incurred after technological feasibility is established have not been material. The Company expenses software-related research and development costs as incurred. Internal-use Software Costs The Company capitalizes costs incurred to implement software solely for its internal use, including (i) hosted applications used to deliver the Company's support services, and (ii) certain implementation costs incurred in a hosting arrangement that is a service contract when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, and it is probable the project will be completed and used to perform the intended function. Software implementation costs are capitalized to either other current assets or other long-term assets on the Company's consolidated balance sheet and amortized over 10 years. Software implementation costs capitalized were $5.6 million, $3.1 million and $3.1 million for fiscal 2023, 2022 and 2021, respectively. Related amortization expense for software implementation costs was $0.1 million, $0.1 million and $0 during fiscal 2023, 2022 and 2021, respectively. Advertising Expense Advertising expense is recorded as incurred and was $3.2 million, $3.5 million, and $1.5 million in fiscal 2023, 2022 and 2021, respectively. Shipping and Handling Fees Shipping and handling fees are included in cost of revenue and were $12.1 million, $11.5 million, and $9.4 million in fiscal 2023, 2022 and 2021, respectively. Restructuring Reserves Restructuring reserves include charges related to the realignment and restructuring of the Company’s business operations. These charges represent judgments and estimates of the Company’s costs of severance, closure and consolidation of facilities and settlement of contractual obligations under its operating leases, including sublease rental rates, asset write-offs and other related costs. The Company reassesses the reserve requirements to complete each individual plan under the restructuring programs at the end of each reporting period. If these estimates change in the future or actual results differ from the Company’s estimates, additional charges may be required. Foreign Currency Translation The Company's international operations generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are reported as a component of other comprehensive loss and recorded in accumulated other comprehensive loss in the accompanying consolidated balance sheets. Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, in which deferred tax asset and liabilities are recognized based on differences between the financial reporting carrying values of assets and liabilities and the tax basis of those assets and liabilities, measured at the enacted tax rates expected to apply to taxable income in the years in which those tax assets or liabilities are expected to be realized or settled. A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance, if any, that results from a change in circumstances, and which causes a change in the Company’s judgment about the realizability of the related deferred tax asset, is included in the tax provision. The Company assesses whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law. The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations. Asset Retirement Obligations The Company records an asset retirement obligation for the fair value of legal obligations associated with the retirement of tangible long-lived assets and a corresponding increase in the carrying amount of the related asset in the period in which the obligation is incurred. In periods subsequent to initial measurement, the Company recognizes changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate. Over time, the liability is accreted to its present value and the capitalized cost is depreciated over the estimated useful life of the asset. The Company’s obligations relate primarily to certain legal obligations to remediate leased property on which certain assets are located. Warranty Expense The Company warranties its products against certain defects and the terms range from one Debt Issuance Costs Debt issuance costs for revolving credit agreements are capitalized and amortized over the term of the underlying agreements on a straight-line basis. Amortization of these debt issuance costs is included in interest expense while the unamortized debt issuance cost balance is included in other current assets or other assets. Debt issuance costs for the Company’s term loans are recorded as a reduction to the carrying amount and are amortized over their terms using the effective interest method. Amortization of these debt issuance costs is included in interest expense. Stock-Based Compensation The Company classifies stock-based awards granted in exchange for services as either equity awards or liability awards. The classification of an award as either an equity award or a liability award is generally based upon cash settlement options. Equity awards are measured based on the fair value of the award at the grant date. Liability awards are re-measured to fair value each reporting period. Each reporting period, the Company recognizes the change in fair value of awards issued to non-employees as expense. The Company recognizes stock-based compensation on a straight-line basis over the award’s requisite service period, which is generally the vesting period of the award, less actual forfeitures. No compensation expense is recognized for awards for which participants do not render the requisite services. For equity and liability awards earned based on performance or upon occurrence of a contingent event, when and if the awards will be earned is estimated. If an award is not considered probable of being earned, no amount of stock-based compensation is recognized. If the award is deemed probable of being earned, related compensation expense is recorded over the estimated service period. To the extent the estimate of awards considered probable of being earned changes, the amount of stock-based compensation recognized will also change. Concentration of Credit Risk The Company sells products to customers in a wide variety of industries on a worldwide basis. In countries or industries where the Company is exposed to material credit risk, the Company may require collateral, including cash deposits and letters of credit, prior to the completion of a transaction. The Company does not believe it has significant credit risk beyond that provided for in the consolidated financial statements in the ordinary course of business. During the fiscal year ended March 31, 2023, one customer represented more than 10% of the Company's total revenue. In fiscal 2022 and 2021, no customers represented 10% or more of the Company’s total revenue. One customer comprised approximately 22% of accounts receivable as of March 31, 2023. One customer comprised approximately 21% of accounts receivable as of March 31, 2022. If the Company is unable to obtain adequate quantities of the inventory needed to sell its products, the Company could face costs increases or delays or discontinuations in product shipments, which could have a material adverse effect on the Company’s results of operations. In many cases, the Company’s chosen vendor may be the sole source of supply for the products or parts they manufacture, or services they provide, for the Company. Some of the products the Company purchases from these sources are proprietary or complex in nature, and therefore cannot be readily or easily replaced by alternative sources. Segment Reporting The Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, the Company has a one reportable segment and operates in three geographic regions: (a) Americas; (b) Europe, Middle East, and Africa (“EMEA”); and (c) Asia Pacific (“APAC”). The following table summarizes property and equipment, net by geographic region (in thousands): For the year ended March 31, 2023 2022 United States $ 16,289 $ 12,506 International 266 347 Total $ 16,555 $ 12,853 Defined Contribution Plan The Company sponsors a qualified 401(k) retirement plan for its U.S. employees. The plan covers substantially all employees who have attained the age of 18. Participants may voluntarily contribute to the plan up to the maximum limits established by Internal Revenue Service regulations. For the years ended March 31, 2023, 2022 and 2021, the Company incurred $1.7 million, $1.7 million, and $1.2 million in matching contributions, respectively. Recently Adopted Accounting Pronouncements There are no recently issued accounting pronouncements that are expected to have a material impact on our consolidated financial statements and accompanying disclosures. |
REVENUE
REVENUE | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE In the following table, revenue is disaggregated by major product offering and geographies (in thousands): Year Ended March 31, 2023 % 2022 % 2021 % Americas 1 Product revenue 172,332 124,952 118,653 Service and subscription 77,863 81,608 76,039 Total revenue 250,195 61 % 206,560 55 % 194,692 56 % EMEA Product revenue 67,485 70,730 67,509 Service and subscription 44,675 44,187 41,261 Total revenue 112,160 27 % 114,917 31 % 108,770 31 % APAC Product revenue 26,720 28,079 23,646 Service and subscription 9,972 7,894 7,604 Total revenue 36,692 9 % 35,973 10 % 31,250 9 % Consolidated Product revenue 266,537 223,761 209,808 Service and subscription 132,510 133,689 124,904 Royalty 2 13,705 3 % 15,377 4 % 14,864 4 % Total revenue 412,752 100 % 372,827 100 % 349,576 100 % 1 Revenue for Americas geographic region outside of the United States is not significant. 2 Royalty revenue is not allocable to geographic regions. Revenue by Solution Year Ended March 31, 2023 % 2022 % 2021 % Primary storage systems 57,578 14 % 60,697 16 % 70,286 20 % Secondary storage systems 175,508 43 % 118,310 32 % 89,000 25 % Device and media 42,371 10 % 50,030 13 % 51,164 15 % Service 123,590 30 % 128,413 35 % 124,262 36 % Royalty 13,705 3 % 15,377 4 % 14,864 4 % Total revenue 1 412,752 100 % 372,827 100 % 349,576 100 % 1 Subscription revenue of $8.9 million, $5.3 million and $0.6 million allocated to Primary and Secondary storage systems for the fiscal years ended 2023, 2022 and 2021, respectively. Contract Balances The following table presents the Company’s contract liabilities and certain information related to this balance as of March 31, 2023 (in thousands): March 31, 2023 Deferred revenue $ 125,810 Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period $ 82,609 Remaining Performance Obligations Remaining performance obligations consisted of the following (in thousands): Current Non-Current Total As of March 31, 2023 $ 95,584 $ 44,579 $ 140,163 The table below reflects our deferred revenue as of March 31, 2023 (in thousands): Deferred revenue by period (in thousands) Total 1 year or less 1 – 3 Years 3 year or greater Service revenue $ 111,041 $ 75,211 $ 33,750 $ 2,080 Subscription revenue 14,769 7,293 6,648 828 Total $ 125,810 $ 82,504 $ 40,398 $ 2,908 The Company expects to recognize approximately 68.2% of the remaining performance obligations within the next 12 months. The majority of the Company’s noncurrent remaining performance obligations is expected to be recognized in the next 13 to 60 months. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS Pivot3 In July 2021, the Company purchased specified assets related to the video surveillance business of PV3 (an ABC) LLC, a Delaware limited liability company as assignee for the benefit of Pivot3, Inc., a Delaware corporation (“Pivot 3”). The transaction costs associated with the acquisition were not material and were expensed as incurred. Goodwill generated from this acquisition is primarily attributable to the expected post-acquisition synergies from integrating Pivot3's video surveillance portfolio and assets. Goodwill obtained in an asset acquisition is deductible for tax purposes. The total purchase consideration for the acquisition of Pivot3 was $7.8 million, which consisted of the following (in thousands): Cash $ 5,000 Fair value of stock consideration 2,818 Total $ 7,818 The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of the acquisition (in thousands): Amount Estimated Useful Life Goodwill $ 9,503 Identified intangible assets: Developed technology 1,700 2 years Customer lists 3,700 4 years Property, plant and equipment 4,300 3 years Net liabilities assumed (11,385) Total $ 7,818 Pivot3 has also agreed to license to the Company certain intellectual property rights related to the business. The historical results of operations for Pivot3 were not significant to the Company's consolidated results of operations for the periods presented. EnCloudEn |
BALANCE SHEET INFORMATION
BALANCE SHEET INFORMATION | 12 Months Ended |
Mar. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET INFORMATION | BALANCE SHEET INFORMATION Certain significant amounts included in the Company's consolidated balance sheets consist of the following (in thousands): Manufacturing inventories March 31, 2023 2022 Manufactured finished goods $ 6,958 $ 14,607 Work in progress 1,304 2,546 Raw materials 11,179 16,393 Total manufacturing inventories $ 19,441 $ 33,546 Service inventories March 31, 2023 2022 Finished goods $ 19,834 $ 19,234 Component parts 5,470 5,020 Total service inventories $ 25,304 $ 24,254 Property and equipment, net March 31, 2023 2022 Machinery and equipment, and software $ 46,170 $ 46,831 Leasehold improvements 14,405 6,029 Furniture and fixtures 848 838 61,423 53,698 Less: accumulated depreciation (44,868) (40,845) Total property, plant and equipment, net $ 16,555 $ 12,853 Depreciation and amortization expense for property and equipment amounted to $10.1 million, $9.4 million, and $5.7 million for the years ended March 31, 2023, 2022, and 2021, respectively. Intangibles, net March 31, 2023 March 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 9,013 $ (6,269) $ 2,744 $ 9,208 $ (3,121) $ 6,087 Customer lists 4,398 (2,201) 2,197 4,600 (1,103) 3,497 Intangible assets, net $ 13,411 $ (8,470) $ 4,941 $ 13,808 $ (4,224) $ 9,584 Intangible assets amortization expense was $4.6 million, $3.7 million, and $0.1 million for the years ended March 31, 2023, 2022, and 2021, respectively. As of March 31, 2023, the remaining weighted-average amortization period for definite-lived intangible assets was approximately 1.6 years. The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the consolidated statements of operations. As of March 31, 2023, the future expected amortization expense for intangible assets is as follows (in thousands): Fiscal year ending Estimated future amortization expense 2024 $ 3,488 2025 1,453 Thereafter — Total $ 4,941 Goodwill Amount Balance at March 31, 2022 $ 12,969 Goodwill acquired — Balance at March 31, 2023 $ 12,969 Other accrued liabilities March 31, 2023 2022 Accrued expenses $ 1,988 $ 4,984 Asset retirement obligation 2,513 4,590 Accrued income taxes 1,509 943 Accrued warranty 2,094 1,899 Accrued interest 494 278 Lease liability 1,364 1,727 Other 3,704 2,141 Total other accrued liabilities $ 13,666 $ 16,562 The following table details the change in the accrued warranty balance (in thousands): Year Ended March 31, 2023 2022 2021 Balance as of April 1 $ 1,899 $ 2,383 2,668 Current period accruals 3,477 3,717 4,699 Adjustments to prior estimates (18) (156) (472) Charges incurred (3,264) (4,045) (4,512) Balance as of March 31 $ 2,094 $ 1,899 $ 2,383 |
DEBT
DEBT | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the Company's borrowing as of the dates presented (in thousands): Year Ended March 31, 2023 2022 Term Loan 74,667 98,723 PNC Credit Facility 16,750 17,735 Less: current portion (5,000) (4,375) Less unamortized debt issuance costs (1) (3,313) (4,899) Long-term debt, net $ 83,104 $ 107,184 (1) The unamortized debt issuance costs related to the Term Loan are presented as a reduction of the carrying amount of the corresponding debt balance on the accompanying consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying consolidated balance sheets. Term Loan On December 27, 2018, the Company entered into a senior secured term loan (the "Senior Secured Term Loan”) and amended its Revolving Credit and Security Agreement with PNC Bank, National Association (the "PNC Credit Facility"). On February 11, 2021, the Company prepaid $92.3 million of its outstanding Senior Secured Term Loan. On August 5, 2021, the Company entered into a new senior secured term loan to borrow an aggregate of $100.0 million (the “Term Loan”). A portion of the proceeds were used to repay in full all outstanding borrowings under the Senior Secured Term Loan. Borrowings under the Term Loan mature on August 5, 2026. Principal is payable at a rate per annum equal to (a) 2.5% of the original principal balance thereof during the first year following the closing date of the Term Loan and (b) 5% of the original principal balance thereof thereafter. Principal and interest payments are payable on a quarterly basis. On April 25, 2022, the Company entered into amendments to the Term Loan and the PNC Credit Facility. The Term Loan amendment, among other things, (a) amended the total net leverage ratio financial covenant and the minimum liquidity financial covenant commencing with the fiscal quarter ended June 30, 2022; and; (b) replaced the benchmark rate for LIBOR Rate Loans with a rate based on the Secured Overnight Financing Rate ("SOFR"). The amendment to the Term Loan was accounted for as a modification. The Company incurred $0.4 million in costs related to the modification which are reflected as a reduction to the carrying amount of the Term Loan and amortized to interest expense over the remaining loan term. Loans under the Term Loan designated as ABR Loans bear interest at a rate per annum equal to the greatest of (i) 1.75%; (ii) the Federal funds rate plus 0.50%; (iii) the SOFR Rate based upon an interest period of one month plus 1.0%; and (iv) the “Prime Rate” last quoted by the Wall Street Journal, plus an applicable margin of 5.00%. Loans designated as SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 6.00%. The SOFR Rate is subject to a floor of 0.75%. The Company can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion. The PNC Credit Facility amendment, among other things, (a) increased the principal amount of revolving commitments from $30.0 million to $40.0 million; (b) waived compliance with the fixed charge coverage ratio financial covenant until the fiscal quarter ended March 31, 2025; (c) amended the total net leverage ratio financial covenant and the minimum liquidity financial covenant commencing with the fiscal quarter ended June 30, 2022; and (d) replaced the benchmark rate for PNC LIBOR Rate Loans with a rate based on SOFR. The amendment to the PNC Credit Facility was accounted for as a modification. The Company incurred $0.4 million in costs which were recorded to other assets and amortized to interest expense over the remaining term of the agreement. Loans designated as PNC SOFR Loans bear interest at a rate per annum equal to the SOFR Rate plus 2.75% until December 31, 2023 and thereafter between 2.25% and 2.75% determined based on the Company’s Total Net Leverage Ratio, (as defined in the PNC Bank Credit Facility Agreement) for the most recently completed fiscal quarter (the "PNC SOFR Loan Interest Rate"). Loans under the PNC Credit Facility designated as PNC Domestic Rate Loans and Swing Loans bear interest at a rate per annum equal to the greatest of (i) the base commercial lending rate of PNC Bank; (ii) the Overnight Bank Funding Rate plus 0.5%; and (iii) the daily SOFR Rate plus 1.0%, plus 1.75% until December 31, 2023 and thereafter between 1.25% and 1.75% determined based on the Company’s Total Net Leverage Ratio (the “PNC Domestic Loan Interest Rate”). With respect to any PNC SOFR Rate Loan, the Company has agreed to pay affiliates of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 6.50%, minus (y) the PNC SOFR Loan Interest Rate, plus (z) if the SOFR Rate applicable to such interest payment is less than 0.75%, (i) 0.75% minus (ii) such SOFR Rate. With respect to any Domestic Rate Loan or Swing Loan, the Company has agreed to pay an affiliate of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 5.50%, minus (y) the PNC Domestic Loan Interest Rate, plus (z) if the Alternative Base Rate applicable to such interest payment is less than 1.00%, (i) 1.00% minus (ii) such Alternative Base Rate. During the quarter ended December 31, 2022, the Company recorded a loss on debt extinguishment of $1.4 million related to a $20.0 million prepayment of the Term Loan which was comprised of a $0.4 million prepayment penalty and the write-off of unamortized debt issuance costs of $1.0 million. As of March 31, 2023, the interest rate on the Term Loan was 10.8% and the interest rate on the PNC Credit Facility for Domestic Rate Loans and Swing Loans was 9.75% and the PNC SOFR Rate Loan was 7.5%. As of March 31, 2023, the PNC Credit Facility had an available borrowing base of $36.8 million, of which $20.0 million was available to borrow at that date. Subsequent to year end these terms were renegotiated, please See Note 13: Subsequent Event for more information. |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES Supplemental balance sheet information related to leases is as follows (in thousands): Operating leases March 31, 2023 March 31, 2022 Operating lease right-of-use assets $ 10,291 $ 11,107 Other current liabilities $ 1,364 $ 1,727 Operating lease liability 10,169 9,891 Total operating lease liabilities $ 11,533 $ 11,618 The components of lease expense were as follows (in thousands): Year Ended March 31, Lease expense 2023 2022 Operating lease expense $ 4,276 $ 3,727 Variable lease expense 753 643 Short-term lease expense — 15 Total lease expense $ 5,029 $ 4,385 Maturity of Lease Liabilities Operating Leases 2023 $ 2,700 2024 2,208 2025 1,781 2026 1,606 2027 1,436 Thereafter 13,262 Total lease payments $ 22,993 Less: Imputed interest (11,460) Present value of lease liabilities $ 11,533 Lease Term and Discount Rate March 31, 2023 2022 Weighted average remaining operating lease term (years) 10.85 10.88 Weighted average discount rate for operating leases 12.66 % 12.9 % Operating cash outflows related to operating leases totaled $3.5 million and $3.7 million for the fiscal years ended March 31, 2023 and March 31, 2022, respectively. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES During fiscal years 2023, 2022 and 2021, the Company approved certain restructuring plans to improve operational efficiencies and rationalize its cost structure. The following tables show the activity and the estimated timing of future payouts for accrued restructuring (in thousands): Severance and Facilities Total Balance as of March 31, 2020 $ — $ — $ — Restructuring costs 3,701 — 3,701 Cash payments (3,121) — (3,121) Balance as of March 31, 2021 580 — 580 Adjustments of prior estimates — — — Cash payments 850 — 850 Other non-cash (1,430) — (1,430) Balance as of March 31, 2022 — — — Restructuring costs 1,605 — 1,605 Cash payments (1,605) — (1,605) Balance as of March 31, 2023 $ — $ — $ — |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
COMMON STOCK | COMMON STOCK In the quarter ended September 30, 2022, the Company’s shareholders approved an increase in its authorized shares of common stock from 125 million to 225 million. Common Stock Rights Offering On April 22, 2022, the Company completed a rights offering of 30 million shares of its common stock for $2.25 per share (the “Rights Offering”). The proceeds net of offering expenses was $66.2 million. A portion of the proceeds from the Rights Offering was used to prepay $20.0 million of the Company’s Term Loan. Secondary Public Offering On February 8, 2021, the Company closed a secondary public offering of 15,109,489 shares of its common stock for gross proceeds of $103.5 million. The Company received net proceeds of $96.8 million after deducting underwriters' discounts and other offering related expenses. Amended and Restated 2012 Long-Term Incentive Plan The Company has a stockholder-approved 2012 Long-Term Incentive Plan (the “Plan”) that has 7.0 million shares authorized for issuance of new shares, with 5.6 million performance shares and restricted shares outstanding, and 1.4 million shares available for future issuance under the Plan as of March 31, 2023. The majority of performance share units, restricted stock units and stock options granted to employees typically vest between one 2021 Inducement Plan The Company's 2021 Inducement Plan became effective on February 1, 2021 and provides for issuance of inducement equity awards to individuals who were not previously an employee or non-employee director of the Company as an inducement material to such individual's entering into employment with the Company. The term of each stock option and restricted stock unit under the plan will not exceed seven years, and each award generally vests between two On December 30, 2022 the Leadership and Compensation Committee of the Board of Directors approved an amendment to the 2021 Inducement Plan to increase the number of shares of common stock of the Company authorized for issuance thereunder from 770,000 to 1.5 million. There were 0.6 million shares available for future issuance as of March 31, 2023. The Company accounts for all forfeitures of stock-based awards when they occur. Employee Stock Purchase Plan The Company's has an Employee Stock Purchase Plan (the "ESPP") which enables eligible employees to purchase shares of its common stock at a discount. Purchases will be accomplished through participation in discrete offering periods. On each purchase date, eligible employees will purchase the Company's common stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company's common stock on the first trading day of the offering period, and (ii) the fair market value of the Company's common stock on the purchase date. The Company has reserved shares of common stock for future issuance under its ESPP as follows (in thousands): March 31, 2023 2022 Shares available for issuance at beginning of period 688 1,077 Shares issued during the period (600) (389) Total shares available for future issuance at end of period 88 688 The Company uses the Black-Scholes-Merton option-pricing model (“Black-Scholes”) to determine the fair value for stock options, shares forecasted to be issued pursuant to its ESPP, and warrants. This requires the use of assumptions about expected life, stock price, volatility, risk-free interest rates and expected dividends. Expected Life —The expected term was based on historical experience with similar awards, giving consideration to the contractual terms, exercise patterns and post-vesting forfeitures. Volatility —The expected stock price volatility for the Company's common stock was based on the historical volatility of its common stock over the most recent period corresponding with the estimated expected life of the award. Risk-Free Rate —The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. Dividend Yield —The Company has never declared or paid any cash dividends and does not currently plan to pay cash dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. The weighted-average grant date fair value and the assumptions used in calculating fair values of shares forecasted to be issued pursuant to the Company's ESPP are as follows: Year Ended March 31, 2023 2022 2021 Expected life 0.5 years 0.5 years 0.5 years Volatility 96% 51% - 57% 55% - 133% Risk-free interest rate 3.10% 0.06% - 0.23% 0.05% - 0.11% Dividend yield —% —% —% Fair value of common stock $1.85 $4.60 - $6.40 $4.99 - $8.05 Performance Stock Units The Company granted 0.4 million, 0.6 million, and 0.9 million of performance share units with market conditions (“Market PSUs”) in fiscal 2023, 2022, and 2021, respectively. Market PSUs vest one Assumptions used in the Monte Carlo model to calculate fair values of market PSU’s during each fiscal period are as follows: Weighted-Average 2023 2022 2021 Discount period (years) 3.00 2.98 2.54 Risk-free interest rate 2.84% 0.93% 0.31% Stock price volatility 80.00% 75.00% 82.00% Grant date fair value $1.17 $5.40 $3.77 The Company granted 0.9 million, 0.0 million and 0.5 million of performance share units with financial performance conditions (“Performance PSUs”) in the fiscal years ended March 31, 2023, 2022 and 2021, respectively. Performance PSUs become eligible for vesting based on the Company achieving certain financial performance targets, and are contingent upon continued service of the holder of the award during the vesting period. Performance PSUs are valued at the market closing share price on the date of grant and compensation expense for Performance PSUs is recognized when it is probable that the performance conditions will be achieved. Compensation expense recognized related to Performance PSUs is reversed if the Company determines that it is no longer probable that the performance conditions will be achieved. The following table summarizes activity for Market PSUs and Performance PSUs for the year ended March 31, 2023 (shares in thousands) : Shares Weighted-Average Outstanding as of March 31, 2022 1,579 $ 4.58 Granted 1,357 $ 1.33 Vested (555) $ 5.07 Forfeited or cancelled (768) $ 2.41 Outstanding as of March 31, 2023 1,613 $ 2.72 As of March 31, 2023 , there was $1.6 million and $0.0 million of unrecognized stock-based compensation related to Market PSUs and Performance PSUs, respectively, which is expected to be recognized over a weighted-average period of one year. The total grant date fair value of shares vested during fiscal years ended March 31, 2023 , 2022, and 2021 was $1.9 million, $3.9 million, and $2.9 million, respectively. Restricted Stock Units The Company granted 2.9 million, 2.8 million, and 2.4 million of service-based restricted stock units (“RSUs”) in the fiscal years ended March 31, 2023, 2022 and 2021, respectively, which generally vest ratably over a three-year service period. RSUs are valued at the market closing share price on the date of grant and compensation expense for RSUs is recognized ratably over the applicable vesting period. The following table summarizes activity for restricted stock units for the year ended March 31, 2023 (shares in thousands) : Shares Weighted-Average Outstanding as of March 31, 2022 3,856 $ 5.46 Granted 2,920 $ 1.43 Vested (1,625) $ 5.32 Forfeited or cancelled (657) $ 4.13 Outstanding as of March 31, 2023 4,494 $ 3.09 As of March 31, 2023 , there was $9.2 million of total unrecognized stock-based compensation related to RSUs, which is expected to be recognized over a weighted-average period of two years. The total grant date fair value of RSUs vested during fiscal years ended March 31, 2023, 2022, and 2021 was $5.2 million, $5.0 million, and $2.1 million, respectively. Compensation Expense The following table details the Company's stock-based compensation expense, net of forfeitures (in thousands): Year Ended March 31, 2023 2022 2021 Cost of revenue $ 929 $ 1,112 $ 672 Research and development 2,997 5,843 2,881 Sales and marketing 2,397 2,516 1,757 General and administrative 4,427 4,358 4,314 Total stock-based compensation $ 10,750 $ 13,829 $ 9,624 Year Ended March 31, 2023 2022 2021 Restricted stock units $ 9,299 $ 9,331 $ 4,041 Performance share units 878 3,811 4,904 Employee stock purchase plan 573 687 679 Total stock-based compensation $ 10,750 $ 13,829 $ 9,624 Warrants As of March 31, 2023 and 2022, the Company had outstanding warrants to purchase 7,110,616 shares of the Company’s common stock exercisable until December 27, 2028 at an exercise price of $1.33 per share (the "$1.33 Warrants"). As of March 31, 2022 and the date of the Rights Offering, the Company had outstanding warrants to purchase 3,400,000 shares of the Company's common stock exercisable until June 16, 2030 at an exercise price of $3.00 per share (the “$3.00 Warrants"). The exercise price and the number of shares underlying the $1.33 Warrants and the $3.00 Warrants are subject to adjustment in the event of specified events, including dilutive issuances of common stock linked equity instruments at a price lower than the exercise price of the warrants, a subdivision or combination of the Company’s common stock, a reclassification of the Company’s common stock or specified dividend payments (the “Down Round Feature”). The Rights Offering triggered the Down Round Feature on April 22, 2022, the for the $3.00 Warrants due to the price per share received in the Rights Offering being lower than the exercise price. The exercise price for the $3.00 Warrants was adjusted to $2.79 per share and an additional 256,113 warrants were subsequently issued with an exercise price of $2.79. The Company calculated the difference between the $3.00 Warrants’ fair value before and after the Down Round Feature was triggered using the original exercise price and the new exercise price in addition to the value of the newly issued warrants. The difference in fair value of the effect of the Down Round Feature of $0.4 million was reflected as a deemed dividend and a reduction to income available to common stockholders in the basic and diluted earnings per share calculations. The Company used the Black-Scholes-Merton option-pricing model to determine the fair value of the deemed dividend. The assumptions used in the model are as follows: dividend rate of 0%; expected term of 8 years; volatility of 56%; and a risk-free rate 2.85%. As of March 31, 2023 and 2022, the Company had outstanding warrants to purchase 50,000 shares of the Company's common stock exercisable until June 16, 2030 at an exercise price of $3.00 per share. Upon exercise, the aggregate exercise price may be paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the Company’s common stock at the time of exercise. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE Equity Instruments Outstanding The Company has stock options, performance share units, restricted stock units and options to purchase shares under its ESPP, granted under various stock incentive plans that, upon exercise and vesting, would increase shares outstanding. The Company has also issued warrants to purchase shares of the Company’s stock. The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net loss per share attributable to common stock for the periods presented because their effect would have been anti-dilutive (in thousands): Year Ended March 31, 2023 2022 2021 Stock awards 543 1,996 1,818 Warrants 3,538 6,886 6,573 ESPP 8 11 223 Total 4,089 8,893 8,614 The dilutive impact related to common shares from stock incentive plans and outstanding warrants is determined by applying the treasury stock method to the assumed vesting of outstanding performance share units and restricted stock units and the exercise of outstanding options and warrants. The dilutive impact related to common shares from contingently issuable performance share units is determined by applying a two-step approach using both the contingently issuable share guidance and the treasury stock method. The Company had outstanding market based restricted stock units as of March 31, 2023 that were eligible to vest into shares of common stock subject to the achievement of certain stock price targets in addition to a time-based vesting period. These contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. There were 0.4 million shares of contingently issuable market-based restricted stock units that were excluded from the table above as the market conditions were not satisfied as of March 31, 2023. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Pre-tax loss reflected in the consolidated statements of operations for the years ended March 31, 2023, 2022 and 2021 is as follows (in thousands): Year Ended March 31, 2023 2022 2021 U.S. $ (38,004) $ (31,489) $ (36,648) Foreign 2,001 550 1,428 Total $ (36,003) $ (30,939) $ (35,220) Income tax provision consists of the following (in thousands): Year Ended March 31, 2023 2022 2021 Current tax expense Federal $ — $ — $ (76) State 70 477 339 Foreign 2,045 1,381 747 Total current tax expense 2,115 1,858 1,010 Deferred tax expense Federal 23 9 (577) State 108 22 9 Foreign (306) (548) (203) Total deferred tax expense (benefit) (175) (517) (771) Income tax provision $ 1,940 $ 1,341 $ 239 The income tax provision differs from the amount computed by applying the federal statutory rate of 21% to loss before income taxes as follows (in thousands): For the year ended March 31, 2023 2022 2021 Expense (benefit) at the federal statutory rate $ (7,560) $ (6,493) $ (7,396) Equity compensation 1,945 195 345 Permanent items 1,498 1,941 1,295 Foreign taxes 586 1,761 (129) State income taxes (373) (402) (969) Valuation allowance 5,096 (4,899) 5,444 Uncertain tax positions (3,791) (6,349) (6,695) Tax reform — — — Credit monetization — (2,100) — Expiration of attributes 5,734 18,345 9,862 Research and development credits (1,582) (2,094) (1,829) Other 387 1,436 311 Income tax provision $ 1,940 $ 1,341 $ 239 Significant components of deferred tax assets and liabilities are as follows (in thousands): As of March 31, 2023 2022 Deferred tax assets Loss carryforwards $ 56,675 $ 59,636 Deferred revenue 28,389 29,485 Capitalized research and development 23,949 16,289 Tax credits 15,894 16,085 Disallowed interest 13,162 12,296 Other accruals and reserves not currently deductible for tax purposes 4,494 4,450 Lease obligations 2,384 2,514 Inventory 2,715 1,701 Accrued warranty expense 495 447 Acquired intangibles 961 853 Gross deferred tax assets 149,118 143,756 Valuation allowance (143,704) (138,365) Total deferred tax assets, net of valuation allowance $ 5,414 $ 5,391 Deferred tax liabilities Depreciation $ (2,009) $ (1,921) Lease assets (2,128) (2,439) Other (548) (1,048) Total deferred tax liabilities $ (4,685) $ (5,408) Net deferred tax assets (liabilities) $ 729 $ (17) The valuation allowance increased by $5.3 million during the year ended March 31, 2023, increased by $4.9 million during the year ended March 31, 2022, and decreased by $5.4 million during the year ended March 31, 2021, respectively. A reconciliation of the gross unrecognized tax benefits is as follows (in thousands): For the year ended March 31, 2023 2022 2021 Beginning Balance $ 99,603 $ 101,119 $ 107,282 Increase in balances related to tax positions in current period 2,778 2,785 2,560 Increase in balances related to tax positions in prior period — 4,881 — Increase in balances related to acquisitions — — 511 Decrease in balances related to tax positions in prior period (817) (1,020) (522) Decrease in balances due to lapse in statute of limitations (5,221) (8,162) (8,712) Ending balance $ 96,343 $ 99,603 $ 101,119 During fiscal 2023, excluding interest and penalties, there was a $3.3 million change in the Company's unrecognized tax benefits. Including interest and penalties, the total unrecognized tax benefit at March 31, 2023 was $97.0 million, of which $78.3 million, if recognized, would favorably affect the effective tax rate. At March 31, 2023, accrued interest and penalties totaled $1.2 million. The Company's practice is to recognize interest and penalties related to income tax matters in the income tax provision in the consolidated statements of operations. As of March 31, 2023, $90.3 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the consolidated balance sheets and $7.2 million (including interest and penalties) were included in other long-term liabilities in the consolidated balances sheets. The Company files its tax returns as prescribed by the laws of the jurisdictions in which it operates. The Company's U.S. tax returns have been audited for years through 2002 by the Internal Revenue Service. In other major jurisdictions, the Company is generally open to examination for the most recent three to five fiscal years. During the next 12 months, it is reasonably possible that approximately $3.5 million of tax benefits, inclusive of interest and penalties, that are currently unrecognized could be recognized as a result of the expiration of applicable statutes of limitations. Upon recognition of the tax benefit related to the expiring statutes of limitation $2.9 million will be offset by the establishment of a related valuation allowance. The net tax benefit recognized in the income statement is estimated to be $0.6 million. As of March 31, 2023, the Company had federal net operating loss and tax credit carryforwards of approximately $246.5 million and $48.2 million, respectively. The net operating loss and tax credit carryforwards expire in varying amounts in fiscal year 2024 if not previously utilized, and $12.8 million are indefinite-lived net operating loss carryforwards. These carryforwards include $11.1 million of acquired net operating losses and $4.4 million of acquired credits, the utilization of which is subject to various limitations due to prior changes in ownership. Certain changes in stock ownership could result in a limitation on the amount of both acquired and self generated net operating loss and tax credit carryovers that can be utilized each year. If the Company has previously undergone, or should it experience in the future, such a change in stock ownership, it could severely limit the usage of these carryover tax attributes against future income, resulting in additional tax charges. Due to its history of net losses and the difficulty in predicting future results, Quantum believes that it cannot rely on projections of future taxable income to realize the deferred tax assets. Accordingly, it has established a full valuation allowance against its U.S. and certain foreign net deferred tax assets. Significant management judgement is required in determining the Company's deferred tax assets and liabilities and valuation allowances for purposes of assessing its ability to realize any future benefit from its net deferred tax assets. The Company intends to maintain this valuation allowance until sufficient positive evidence exists to support the reversal of the valuation allowance. The Company's income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, its valuation allowance. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments to Purchase Inventory The Company uses contract manufacturers for its manufacturing operations. Under these arrangements, the contract manufacturer procures inventory to manufacture products based upon its forecast of customer demand. The Company has similar arrangements with certain other suppliers. The Company is responsible for the financial impact on the supplier or contract manufacturer of any reduction or product mix shift in the forecast relative to materials that the third party had already purchased under a prior forecast. Such a variance in forecasted demand could require a cash payment for inventory in excess of current customer demand or for costs of excess or obsolete inventory. As of March 31, 2023, the Company had issued non-cancelable commitments for $28.7 million to purchase inventory from its contract manufacturers and suppliers. Leases At the end of fiscal 2023, the Company had various non-cancelable operating for office facilities. Refer to Note 6: Leases for additional information regarding lease commitments. Legal Proceedings Realtime Data Matter On July 22, 2016, Realtime Data LLC d/b/a IXO (“Realtime Data”) filed a patent infringement lawsuit against the Company in the U.S. District Court for the Eastern District of Texas, alleging infringement of U.S. Patents Nos. 7,161,506, 7,378,992, 7,415,530, 8,643,513, 9,054,728, and 9,116,908. The lawsuit was thereafter transferred to the U.S. District Court for the Northern District of California for further proceedings. Realtime Data asserts that the Company has incorporated Realtime Data’s patented technology into its compression products and services. On July 31, 2017, the Court in the Northern District of California stayed proceedings in this litigation pending the outcome of Inter Partes Review proceedings before the Patent Trial and Appeal Board relating to the asserted Realtime patents. In those proceedings the asserted claims of the ’506 patent, the ’992 patent, and the ’513 patent were found unpatentable. In addition, on July 19, 2019, the United States District Court for the District of Delaware issued a decision finding that all claims of the ’728 patent, the ’530 patent, and the ’908 patent are not eligible for patent protection under 35 U.S.C. § 101 (the “Delaware Action”). On appeal, the Federal Circuit vacated the decision in the Delaware Action and remanded for the Court to “elaborate on its ruling.” In opinions dated May 4, 2021 and August 23, 2021, the Court in the Delaware Action reaffirmed its earlier ruling and granted defendants’ motions to dismiss under Section 101. Realtime Data has appealed those decisions to the Federal Circuit. The Federal Circuit argument occurred on February 10, 2023 and a decision is expected sometime in the latter half of the year. The case pending against Quantum in the Northern District of California remains stayed pending the final outcome of the appeal in the Delaware Action. Quantum believes the probability that this lawsuit will have a material adverse effect on its business, operating results or financial condition is remote. Starboard Matter On July 14, 2020, Starboard Value LP, Starboard Value and Opportunity Master Fund Ltd., Starboard Value and Opportunity S LLC, and Starboard Value and Opportunity C LP (collectively, “Starboard”) filed a lawsuit against Quantum Corporation, Quantum’s former CEO and board member Jon Gacek, and former Quantum board member Paul Auvil in the California Superior Court in Santa Clara County alleging that between 2012 and 2014, Starboard purchased shares of Quantum’s common stock, obtained three seats on the Board of Directors and then, in July 2014, entered into an agreement with Quantum whereby Starboard would not seek control of the Board of Directors but would instead support Quantum’s slate of board nominees so long as Quantum met certain performance objectives by the end of fiscal 2015. The lawsuit further alleges that Quantum hid its failure to meet those performance objectives by improperly recognizing revenue in fiscal 2015. Also as previously reported, the California action was stayed and then dismissed. On April 14, 2021, Starboard filed a new action in the Delaware Court of Chancery, naming as defendants Messrs. Gacek and Auvil and Quantum. The new action largely repeats the allegations of the California action, alleging claims for fraud against all defendants, fraudulent concealment against all defendants, negligent misrepresentation against all defendants, breach of contract against Quantum, breach of the implied covenant of good faith and fair dealing against Quantum, and breach of fiduciary duty against Messrs. Gacek and Auvil. As of January 12, 2023, all parties signed a settlement agreement amicably resolving both actions. The litigation will have no material effect on the Company’s financial statements or business operations. Indemnifications The Company has certain financial guarantees, both express and implied, related to product liability and potential infringement of intellectual property. Other than certain product warranty liabilities recorded as of March 31, 2023 and 2022, the Company did not record a liability associated with these guarantees, as the Company has little, or no history of costs associated with such indemnification requirements. Contingent liabilities associated with product liability may be mitigated by insurance coverage that the Company maintains. In the normal course of business to facilitate transactions of the Company’s services and products, the Company indemnifies certain parties with respect to certain matters. The Company has agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws contain similar indemnification obligations to its agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of the Company’s indemnification claims, and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material impact on its operating results, financial position, or cash flows. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when an impairment is recognized. These assets include property and equipment and amortizable intangible assets. The Company did not record impairments to any non-financial assets in the fiscal years ended March 31, 2023, 2022 and 2021. The Company does not have any non-financial liabilities measured and recorded at fair value on a non-recurring basis. The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their respective fair values because of the short-term nature of these accounts. The table below represents the carrying value and total estimated fair value of long-term debt as of March 31, 2023 and March 31, 2022, respectively. The fair value has been classified as Level 2 within the fair value hierarchy. March 31, 2023 2022 Carrying Value Fair Value Carrying Value Fair Value Term Loan 74,667 66,684 98,723 98,723 PNC Credit Facility 16,750 15,918 17,735 17,735 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Debt Amendments On June 1, 2023, the Company entered into amendments to the Term Loan and the PNC Credit Facility. The amendments, among other things, (a) amended the total net leverage ratio financial covenant commencing with the fiscal quarter ended June 30, 2023; (b) amended the minimum liquidity financial covenant to decrease the minimum liquidity to $15 million; and (c) amended the “EBITDA” definition to increase the add-back cap on non-recurring items including restructuring charges during the fiscal years ended March 31, 2024 and 2025. The Term Loan amendment (the “June 2023 Term Loan Amendment”) also provided an advance of $15 million in additional Term Loan borrowings. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated. The Company reviews subsidiaries and affiliates, as well as other entities, to determine if they should be considered variable interest entities (“VIE”), and whether it should change the consolidation determinations based on changes in their characteristics. The Company considers an entity a VIE if its equity investors own an interest therein that lacks the characteristics of a controlling financial interest or if such investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or if the entity is structured with non-substantive voting interests. To determine whether or not the entity is consolidated with the Company’s results, the Company also evaluates which interests are variable interests in the VIE and which party is the primary beneficiary of the VIE. |
Principle of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Quantum and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions due to risks and uncertainties. Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, useful lives of intangible assets and property and equipment, stock-based compensation and provision for income taxes including related reserves. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company has cash deposits and cash equivalents deposited in or managed by major financial institutions. Cash equivalents include all highly liquid investment instruments with an original maturity of three months or less and consist primarily of money market accounts. At times the related amounts are in excess of amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses with these financial institutions and does not believe such balances are exposed to significant credit risk. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses based on historical experience and expected collectability of outstanding accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, and for the majority of its customers require no collateral. For customers that do not meet the Company’s credit standards, the Company may require a form of collateral, such as cash deposits or letters of credit, prior to the completion of a transaction. These credit evaluations require significant judgment and are based on multiple sources of information. The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in customer payment terms. The Company will write-off customer balances in full to the reserve when it has determined that the balance is not recoverable. Changes in the allowance for doubtful accounts are recorded in general and administrative expenses. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Other than quoted prices that are observable in the market for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Inputs are unobservable and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. |
Inventories | Manufacturing Inventories Manufacturing inventory is recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Costs include material, direct labor, and an allocation of overhead in the case of work in process. Adjustments to reduce the cost of manufacturing inventory to its net realizable value, if required, are made for estimated excess, obsolete or impaired balances. Factors influencing these adjustments include declines in demand, rapid technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from the Company’s estimates. Service Parts Inventories Service parts inventories are recorded at the lower of cost or net realizable value, with cost being determined on a FIFO basis. The Company carries service parts because it generally provides product warranty for one |
Property and Equipment | Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization, computed on a straight-line basis over the estimated useful lives of the assets as follows: Machinery and equipment 3 to 5 years Computer equipment 3 to 5 years Other software 3 years Furniture and fixtures 5 years Other office equipment 5 years Leasehold improvements Shorter of useful life or life of lease When assets are retired or otherwise disposed of, the related costs and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive income (loss) in the period realized. The Company evaluates the recoverability of the carrying amount of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. A potential impairment charge is evaluated when the undiscounted expected cash flows derived from an asset group are less than its carrying amount. Impairment losses, if applicable, are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. Judgment is used when applying these impairment rules to determine the timing of impairment testing, the undiscounted cash flows used to assess impairments and the fair value of the asset group. |
Business Combinations | Business Combinations The Company allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The results of operations of an acquired business is included in its consolidated financial statements from the date of acquisition. Acquisition-related expenses are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price consideration over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed in a business combination. Goodwill is evaluated for impairment annually in the third quarter of the Company's fiscal year as a single reporting unit, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company may elect to qualitatively assess whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. If the Company opts not to qualitatively assess, a quantitative goodwill impairment test is performed. The quantitative test compares its reporting unit's carrying amount, including goodwill, to its fair value calculated based on its enterprise value. If the carrying amount exceeds its fair value, an impairment loss is recognized for the excess. The Company did not recognize any impairment of goodwill in any of the periods presented in the consolidated financial statements. |
Purchased Intangible Assets | Purchased Intangible Assets Purchased intangible assets with finite lives are stated at cost, net of accumulated amortization. The Company amortizes its intangible assets on a straight-line basis over an estimated useful life of two |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company measures the recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If the total of the future undiscounted cash flows is less than the carrying amount of an asset, the Company records an impairment charge for the amount by which the carrying amount of the asset exceeds its fair market value. |
Operating Leases | Operating Leases The Company determines if an arrangement contains a lease at inception. Lease liabilities are recognized at the present value of the future lease payments at commencement date. The interest rate implicit in the Company's operating leases is not readily determinable, and therefore an incremental borrowing rate is estimated to determine the present value of future payments. The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. The operating lease right-of-use ("ROU") asset is determined based on the lease liability initially established and reduced for any prepaid lease payments and any lease incentives. The Company accounts for the lease and non-lease components of operating lease contract consideration as a single lease component. Certain of the operating lease agreements contain rent concession, rent escalation, and option to renew provisions. Rent concession and rent escalation provisions are considered in determining the lease cost. Lease cost is recognized on a straight-line basis over the lease term commencing on the date the Company has the right to use the leased property. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that an extension or termination option will be exercised. In addition, certain operating lease agreements contain tenant improvement allowances from the Company's landlords. These allowances are accounted for as lease incentives and reduce its ROU asset and lease cost over the lease term. For short-term leases which have a lease term less than twelve months and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, the Company recognizes rent expense in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred. |
Revenue Recognition | Revenue Recognition The Company generates revenue from three main sources: (1) product, (2) professional services, and (3) royalties. Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. The Company's performance obligations are satisfied at a point in time or over time as stand ready obligations. The majority of revenue is recognized at a point in time when products are accepted, installed or delivered. Product Revenue The Company's product revenue is comprised of multiple storage solution hardware and software offerings targeted towards consumer and enterprise customers. Revenue from product sales is recognized at the point in time when the customer takes control of the product. If there are significant post-delivery obligations, the related revenue is deferred until such obligations are fulfilled. Revenue from contracts with customer acceptance criteria are recognized upon end user acceptance. Service and Subscription Revenue Service and subscription revenue consists of four components: (a) post-contract customer support agreements, (b) software subscriptions, (c) installation, and (d) consulting & training. Customers have the option to choose between different levels of hardware and software support. The Company's support plans include various stand-ready obligations such as technical assistance hot-lines, replacement parts maintenance, and remote monitoring that are delivered whenever called upon by its customers. Support plans provide additional services and assurance outside the scope of the Company's primary product warranties. Revenue from support plans is recognized ratably over the contractual term of the service contract. The Company also sells software subscriptions that include term licenses which are recognized as revenue when the license is delivered to the customer and related customer support which is recognized ratably over the service period. The Company offers installation services on all its products. Customers can opt to either have Quantum or a Quantum-approved third-party service provider install its products. Installation services are typically completed within a short period of time and revenue from these services are recognized at the point when installation is complete. A majority of the Company's consulting and training revenue does not take significant time to complete therefore these obligations are satisfied upon completion of such services at a point in time. Royalty Revenue The Company licenses certain intellectual property to third party manufacturers which gives the manufacturers rights to intellectual property including the right to either manufacture or include the intellectual property in their products for resale. Licensees pay the Company a per-unit royalty for sales of their products that incorporate its intellectual property. On a periodic and timely basis, the licensees provide the Company with reports containing units sold to end users subject to the royalties. The reports substantiate that the performance obligation has been satisfied therefore revenue is recognized based on the reports or when amounts can be reasonably estimated. Deferred Revenue Deferred revenue primarily consists of amounts that have been invoiced but have not yet been recognized as revenue and performance obligations pertaining to subscription services. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet dates. |
Significant Judgements | Significant Judgements The Company generally enters into contracts with customers to provide storage solutions to meet their individual needs. Most of the Company’s contracts contain multiple goods and services designed to meet each customers’ unique storage needs. Contracts with multiple goods and services have multiple distinct performance obligations as the promise to transfer hardware, installation services, and support services are capable of being distinct and provide economic benefit to customers on their own. Stand-alone selling price For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) of the good or service underlying each performance obligation. The SSP represents the amount for which the Company would sell the good or service to a customer on a standalone basis (i.e., not sold as a bundle with any other products or services). Where SSP may not be directly observable (e.g., the performance obligation is not sold separately), the Company maximized the use of observable inputs by using information including reviewing discounting practices, performance obligations with similar customers and product groupings. The Company evaluated all methods included in ASC 606 to determine SSP and concluded that invoice price is the best representation of what the Company expects to receive from the delivery of each performance obligation. Variable consideration Product revenue includes multiple types of variable consideration, such as rebates, returns, or stock rotations. All contracts with variable consideration require payment upon satisfaction of the performance obligation typically with net 45-day payment terms. The Company does not include significant financing components in its contracts. The Company constrains estimates of variable consideration to amounts that are not expected to result in a significant revenue reversal in the future, primarily based on the most likely level of consideration to be returned to the customer under the specific terms of the underlying programs. The expected value method is used to estimate the consideration expected to be returned to the customer. The Company uses historical data and current trends to drive the estimates. The Company records a reduction to revenue to account for these programs. The Company initially measures this asset at the carrying amount of the inventory, less any expected costs to recover the goods including potential decreases in the value of the returned goods. |
Cost of Revenue | Cost of Service and Subscription Revenue The Company classifies expenses as service cost of revenue by estimating the portion of its total cost of revenue that relates to providing field support to its customers under contract. These estimates are based upon a variety of factors, including the nature of the support activity and the level of infrastructure required to support the activities from which it earns service and subscription revenue. In the event its service business changes, its estimates of cost of service and subscription revenue may be impacted. Shipping and Handling Fees Shipping and handling fees are included in cost of revenue and were $12.1 million, $11.5 million, and $9.4 million in fiscal 2023, 2022 and 2021, respectively. |
Research and Development Costs | Research and Development CostsExpenditures relating to the development of new products and processes are expensed as incurred. These costs include expenditures for employee compensation, materials used in the development effort, other internal costs, as well as expenditures for third party professional services. The Company has determined that technological feasibility for its software products is reached shortly before the products are released to manufacturing. Costs incurred after technological feasibility is established have not been material. The Company expenses software-related research and development costs as incurred. |
Internal-use Software Costs | Internal-use Software Costs The Company capitalizes costs incurred to implement software solely for its internal use, including (i) hosted applications used to deliver the Company's support services, and (ii) certain implementation costs incurred in a hosting arrangement that is a service contract when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, and it is probable the project will be completed and used to perform the intended function. Software implementation costs are capitalized to either other current assets or other long-term assets on the Company's consolidated balance sheet and amortized over 10 years. Software implementation costs capitalized were $5.6 million, $3.1 million and $3.1 million for fiscal 2023, 2022 and 2021, respectively. Related amortization expense for software implementation costs was $0.1 million, $0.1 million and $0 during fiscal 2023, 2022 and 2021, respectively. |
Advertising Expense | Advertising Expense Advertising expense is recorded as incurred and was $3.2 million, $3.5 million, and $1.5 million in fiscal 2023, 2022 and 2021, respectively. |
Restructuring Charges | Restructuring Reserves Restructuring reserves include charges related to the realignment and restructuring of the Company’s business operations. These charges represent judgments and estimates of the Company’s costs of severance, closure and consolidation of facilities and settlement of contractual obligations under its operating leases, including sublease rental rates, asset write-offs and other related costs. The Company reassesses the reserve requirements to complete each individual plan under the restructuring programs at the end of each reporting period. If these estimates change in the future or actual results differ from the Company’s estimates, additional charges may be required. |
Foreign Currency Translation | Foreign Currency Translation The Company's international operations generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are reported as a component of other comprehensive loss and recorded in accumulated other comprehensive loss in the accompanying consolidated balance sheets. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, in which deferred tax asset and liabilities are recognized based on differences between the financial reporting carrying values of assets and liabilities and the tax basis of those assets and liabilities, measured at the enacted tax rates expected to apply to taxable income in the years in which those tax assets or liabilities are expected to be realized or settled. A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance, if any, that results from a change in circumstances, and which causes a change in the Company’s judgment about the realizability of the related deferred tax asset, is included in the tax provision. The Company assesses whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law. The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations. |
Asset Retirement Obligations | Asset Retirement Obligations The Company records an asset retirement obligation for the fair value of legal obligations associated with the retirement of tangible long-lived assets and a corresponding increase in the carrying amount of the related asset in the period in which the obligation is incurred. In periods subsequent to initial measurement, the Company recognizes changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate. Over time, the liability is accreted to its present value and the capitalized cost is depreciated over the estimated useful life of the asset. The Company’s obligations relate primarily to certain legal obligations to remediate leased property on which certain assets are located. |
Warranty Expense | Warranty Expense The Company warranties its products against certain defects and the terms range from one |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs for revolving credit agreements are capitalized and amortized over the term of the underlying agreements on a straight-line basis. Amortization of these debt issuance costs is included in interest expense while the unamortized debt issuance cost balance is included in other current assets or other assets. Debt issuance costs for the Company’s term loans are recorded as a reduction to the carrying amount and are amortized over their terms using the effective interest method. Amortization of these debt issuance costs is included in interest expense. |
Stock-Based Compensation | Stock-Based Compensation The Company classifies stock-based awards granted in exchange for services as either equity awards or liability awards. The classification of an award as either an equity award or a liability award is generally based upon cash settlement options. Equity awards are measured based on the fair value of the award at the grant date. Liability awards are re-measured to fair value each reporting period. Each reporting period, the Company recognizes the change in fair value of awards issued to non-employees as expense. The Company recognizes stock-based compensation on a straight-line basis over the award’s requisite service period, which is generally the vesting period of the award, less actual forfeitures. No compensation expense is recognized for awards for which participants do not render the requisite services. For equity and liability awards earned based on performance or upon occurrence of a contingent event, when and if the awards will be earned is estimated. If an award is not considered probable of being earned, no amount of stock-based compensation is recognized. If the award is deemed probable of being earned, related compensation expense is recorded over the estimated service period. To the extent the estimate of awards considered probable of being earned changes, the amount of stock-based compensation recognized will also change. |
Concentration of Credit Risk | Concentration of Credit Risk The Company sells products to customers in a wide variety of industries on a worldwide basis. In countries or industries where the Company is exposed to material credit risk, the Company may require collateral, including cash deposits and letters of credit, prior to the completion of a transaction. The Company does not believe it has significant credit risk beyond that provided for in the consolidated financial statements in the ordinary course of business. During the fiscal year ended March 31, 2023, one customer represented more than 10% of the Company's total revenue. In fiscal 2022 and 2021, no customers represented 10% or more of the Company’s total revenue. One customer comprised approximately 22% of accounts receivable as of March 31, 2023. One customer comprised approximately 21% of accounts receivable as of March 31, 2022. If the Company is unable to obtain adequate quantities of the inventory needed to sell its products, the Company could face costs increases or delays or discontinuations in product shipments, which could have a material adverse effect on the Company’s results of operations. In many cases, the Company’s chosen vendor may be the sole source of supply for the products or parts they manufacture, or services they provide, for the Company. Some of the products the Company purchases from these sources are proprietary or complex in nature, and therefore cannot be readily or easily replaced by alternative sources. |
Segment Reporting | Segment ReportingThe Company’s chief operating decision-maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, the Company has a |
Defined Contribution Plan | Defined Contribution Plan The Company sponsors a qualified 401(k) retirement plan for its U.S. employees. The plan covers substantially all employees who have attained the age of 18. Participants may voluntarily contribute to the plan up to the maximum limits established by Internal Revenue Service regulations. For the years ended March 31, 2023, 2022 and 2021, the Company incurred $1.7 million, $1.7 million, and $1.2 million in matching contributions, respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There are no recently issued accounting pronouncements that are expected to have a material impact on our consolidated financial statements and accompanying disclosures. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of property and equipment | Property and equipment are carried at cost, less accumulated depreciation and amortization, computed on a straight-line basis over the estimated useful lives of the assets as follows: Machinery and equipment 3 to 5 years Computer equipment 3 to 5 years Other software 3 years Furniture and fixtures 5 years Other office equipment 5 years Leasehold improvements Shorter of useful life or life of lease Property and equipment, net March 31, 2023 2022 Machinery and equipment, and software $ 46,170 $ 46,831 Leasehold improvements 14,405 6,029 Furniture and fixtures 848 838 61,423 53,698 Less: accumulated depreciation (44,868) (40,845) Total property, plant and equipment, net $ 16,555 $ 12,853 |
Property and equipment, net by geographic region | The following table summarizes property and equipment, net by geographic region (in thousands): For the year ended March 31, 2023 2022 United States $ 16,289 $ 12,506 International 266 347 Total $ 16,555 $ 12,853 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue from external customers by geographic areas | In the following table, revenue is disaggregated by major product offering and geographies (in thousands): Year Ended March 31, 2023 % 2022 % 2021 % Americas 1 Product revenue 172,332 124,952 118,653 Service and subscription 77,863 81,608 76,039 Total revenue 250,195 61 % 206,560 55 % 194,692 56 % EMEA Product revenue 67,485 70,730 67,509 Service and subscription 44,675 44,187 41,261 Total revenue 112,160 27 % 114,917 31 % 108,770 31 % APAC Product revenue 26,720 28,079 23,646 Service and subscription 9,972 7,894 7,604 Total revenue 36,692 9 % 35,973 10 % 31,250 9 % Consolidated Product revenue 266,537 223,761 209,808 Service and subscription 132,510 133,689 124,904 Royalty 2 13,705 3 % 15,377 4 % 14,864 4 % Total revenue 412,752 100 % 372,827 100 % 349,576 100 % 1 Revenue for Americas geographic region outside of the United States is not significant. 2 Royalty revenue is not allocable to geographic regions. Revenue by Solution Year Ended March 31, 2023 % 2022 % 2021 % Primary storage systems 57,578 14 % 60,697 16 % 70,286 20 % Secondary storage systems 175,508 43 % 118,310 32 % 89,000 25 % Device and media 42,371 10 % 50,030 13 % 51,164 15 % Service 123,590 30 % 128,413 35 % 124,262 36 % Royalty 13,705 3 % 15,377 4 % 14,864 4 % Total revenue 1 412,752 100 % 372,827 100 % 349,576 100 % 1 Subscription revenue of $8.9 million, $5.3 million and $0.6 million allocated to Primary and Secondary storage systems for the fiscal years ended 2023, 2022 and 2021, respectively. |
Schedule of deferred revenue, by arrangement | The following table presents the Company’s contract liabilities and certain information related to this balance as of March 31, 2023 (in thousands): March 31, 2023 Deferred revenue $ 125,810 Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period $ 82,609 |
Schedule of remaining performance obligations | Remaining performance obligations consisted of the following (in thousands): Current Non-Current Total As of March 31, 2023 $ 95,584 $ 44,579 $ 140,163 |
Schedule of deferred revenue, by arrangement, disclosure | The table below reflects our deferred revenue as of March 31, 2023 (in thousands): Deferred revenue by period (in thousands) Total 1 year or less 1 – 3 Years 3 year or greater Service revenue $ 111,041 $ 75,211 $ 33,750 $ 2,080 Subscription revenue 14,769 7,293 6,648 828 Total $ 125,810 $ 82,504 $ 40,398 $ 2,908 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Schedule of purchase consideration for the acquisition | The total purchase consideration for the acquisition of Pivot3 was $7.8 million, which consisted of the following (in thousands): Cash $ 5,000 Fair value of stock consideration 2,818 Total $ 7,818 |
Schedule of finite lived intangibles acquired | The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of the acquisition (in thousands): Amount Estimated Useful Life Goodwill $ 9,503 Identified intangible assets: Developed technology 1,700 2 years Customer lists 3,700 4 years Property, plant and equipment 4,300 3 years Net liabilities assumed (11,385) Total $ 7,818 |
BALANCE SHEET INFORMATION (Tabl
BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of manufacturing inventories | Certain significant amounts included in the Company's consolidated balance sheets consist of the following (in thousands): Manufacturing inventories March 31, 2023 2022 Manufactured finished goods $ 6,958 $ 14,607 Work in progress 1,304 2,546 Raw materials 11,179 16,393 Total manufacturing inventories $ 19,441 $ 33,546 |
Schedule of service inventories | Service inventories March 31, 2023 2022 Finished goods $ 19,834 $ 19,234 Component parts 5,470 5,020 Total service inventories $ 25,304 $ 24,254 |
Schedule of property and equipment | Property and equipment are carried at cost, less accumulated depreciation and amortization, computed on a straight-line basis over the estimated useful lives of the assets as follows: Machinery and equipment 3 to 5 years Computer equipment 3 to 5 years Other software 3 years Furniture and fixtures 5 years Other office equipment 5 years Leasehold improvements Shorter of useful life or life of lease Property and equipment, net March 31, 2023 2022 Machinery and equipment, and software $ 46,170 $ 46,831 Leasehold improvements 14,405 6,029 Furniture and fixtures 848 838 61,423 53,698 Less: accumulated depreciation (44,868) (40,845) Total property, plant and equipment, net $ 16,555 $ 12,853 |
Summary of carrying value of intangible assets | Intangibles, net March 31, 2023 March 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 9,013 $ (6,269) $ 2,744 $ 9,208 $ (3,121) $ 6,087 Customer lists 4,398 (2,201) 2,197 4,600 (1,103) 3,497 Intangible assets, net $ 13,411 $ (8,470) $ 4,941 $ 13,808 $ (4,224) $ 9,584 |
Future expected amortization expense for intangible assets | As of March 31, 2023, the future expected amortization expense for intangible assets is as follows (in thousands): Fiscal year ending Estimated future amortization expense 2024 $ 3,488 2025 1,453 Thereafter — Total $ 4,941 |
Goodwill rollforward | Goodwill Amount Balance at March 31, 2022 $ 12,969 Goodwill acquired — Balance at March 31, 2023 $ 12,969 |
Schedule of other accrued liabilities | Other accrued liabilities March 31, 2023 2022 Accrued expenses $ 1,988 $ 4,984 Asset retirement obligation 2,513 4,590 Accrued income taxes 1,509 943 Accrued warranty 2,094 1,899 Accrued interest 494 278 Lease liability 1,364 1,727 Other 3,704 2,141 Total other accrued liabilities $ 13,666 $ 16,562 |
Schedule of accrued warranty balance | The following table details the change in the accrued warranty balance (in thousands): Year Ended March 31, 2023 2022 2021 Balance as of April 1 $ 1,899 $ 2,383 2,668 Current period accruals 3,477 3,717 4,699 Adjustments to prior estimates (18) (156) (472) Charges incurred (3,264) (4,045) (4,512) Balance as of March 31 $ 2,094 $ 1,899 $ 2,383 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The following table summarizes the Company's borrowing as of the dates presented (in thousands): Year Ended March 31, 2023 2022 Term Loan 74,667 98,723 PNC Credit Facility 16,750 17,735 Less: current portion (5,000) (4,375) Less unamortized debt issuance costs (1) (3,313) (4,899) Long-term debt, net $ 83,104 $ 107,184 (1) The unamortized debt issuance costs related to the Term Loan are presented as a reduction of the carrying amount of the corresponding debt balance on the accompanying consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying consolidated balance sheets. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Supplemental balance sheet | Supplemental balance sheet information related to leases is as follows (in thousands): Operating leases March 31, 2023 March 31, 2022 Operating lease right-of-use assets $ 10,291 $ 11,107 Other current liabilities $ 1,364 $ 1,727 Operating lease liability 10,169 9,891 Total operating lease liabilities $ 11,533 $ 11,618 |
Components of lease cost | The components of lease expense were as follows (in thousands): Year Ended March 31, Lease expense 2023 2022 Operating lease expense $ 4,276 $ 3,727 Variable lease expense 753 643 Short-term lease expense — 15 Total lease expense $ 5,029 $ 4,385 Lease Term and Discount Rate March 31, 2023 2022 Weighted average remaining operating lease term (years) 10.85 10.88 Weighted average discount rate for operating leases 12.66 % 12.9 % |
Maturity of operating lease liability | Maturity of Lease Liabilities Operating Leases 2023 $ 2,700 2024 2,208 2025 1,781 2026 1,606 2027 1,436 Thereafter 13,262 Total lease payments $ 22,993 Less: Imputed interest (11,460) Present value of lease liabilities $ 11,533 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of activity for accrued restructuring | The following tables show the activity and the estimated timing of future payouts for accrued restructuring (in thousands): Severance and Facilities Total Balance as of March 31, 2020 $ — $ — $ — Restructuring costs 3,701 — 3,701 Cash payments (3,121) — (3,121) Balance as of March 31, 2021 580 — 580 Adjustments of prior estimates — — — Cash payments 850 — 850 Other non-cash (1,430) — (1,430) Balance as of March 31, 2022 — — — Restructuring costs 1,605 — 1,605 Cash payments (1,605) — (1,605) Balance as of March 31, 2023 $ — $ — $ — |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of shares reserved fro future issuance under the ESPP | The Company has reserved shares of common stock for future issuance under its ESPP as follows (in thousands): March 31, 2023 2022 Shares available for issuance at beginning of period 688 1,077 Shares issued during the period (600) (389) Total shares available for future issuance at end of period 88 688 |
Schedule of valuation assumptions | The weighted-average grant date fair value and the assumptions used in calculating fair values of shares forecasted to be issued pursuant to the Company's ESPP are as follows: Year Ended March 31, 2023 2022 2021 Expected life 0.5 years 0.5 years 0.5 years Volatility 96% 51% - 57% 55% - 133% Risk-free interest rate 3.10% 0.06% - 0.23% 0.05% - 0.11% Dividend yield —% —% —% Fair value of common stock $1.85 $4.60 - $6.40 $4.99 - $8.05 Assumptions used in the Monte Carlo model to calculate fair values of market PSU’s during each fiscal period are as follows: Weighted-Average 2023 2022 2021 Discount period (years) 3.00 2.98 2.54 Risk-free interest rate 2.84% 0.93% 0.31% Stock price volatility 80.00% 75.00% 82.00% Grant date fair value $1.17 $5.40 $3.77 |
Summary of activity for PSUs | The following table summarizes activity for Market PSUs and Performance PSUs for the year ended March 31, 2023 (shares in thousands) : Shares Weighted-Average Outstanding as of March 31, 2022 1,579 $ 4.58 Granted 1,357 $ 1.33 Vested (555) $ 5.07 Forfeited or cancelled (768) $ 2.41 Outstanding as of March 31, 2023 1,613 $ 2.72 |
Summary of activity relating to restricted stock | The following table summarizes activity for restricted stock units for the year ended March 31, 2023 (shares in thousands) : Shares Weighted-Average Outstanding as of March 31, 2022 3,856 $ 5.46 Granted 2,920 $ 1.43 Vested (1,625) $ 5.32 Forfeited or cancelled (657) $ 4.13 Outstanding as of March 31, 2023 4,494 $ 3.09 |
Summary of share-based compensation expense | The following table details the Company's stock-based compensation expense, net of forfeitures (in thousands): Year Ended March 31, 2023 2022 2021 Cost of revenue $ 929 $ 1,112 $ 672 Research and development 2,997 5,843 2,881 Sales and marketing 2,397 2,516 1,757 General and administrative 4,427 4,358 4,314 Total stock-based compensation $ 10,750 $ 13,829 $ 9,624 Year Ended March 31, 2023 2022 2021 Restricted stock units $ 9,299 $ 9,331 $ 4,041 Performance share units 878 3,811 4,904 Employee stock purchase plan 573 687 679 Total stock-based compensation $ 10,750 $ 13,829 $ 9,624 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities excluded from computation of diluted net income (loss) per share | The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net loss per share attributable to common stock for the periods presented because their effect would have been anti-dilutive (in thousands): Year Ended March 31, 2023 2022 2021 Stock awards 543 1,996 1,818 Warrants 3,538 6,886 6,573 ESPP 8 11 223 Total 4,089 8,893 8,614 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of pre-tax income (loss) | Pre-tax loss reflected in the consolidated statements of operations for the years ended March 31, 2023, 2022 and 2021 is as follows (in thousands): Year Ended March 31, 2023 2022 2021 U.S. $ (38,004) $ (31,489) $ (36,648) Foreign 2,001 550 1,428 Total $ (36,003) $ (30,939) $ (35,220) |
Schedule of income tax provision | Income tax provision consists of the following (in thousands): Year Ended March 31, 2023 2022 2021 Current tax expense Federal $ — $ — $ (76) State 70 477 339 Foreign 2,045 1,381 747 Total current tax expense 2,115 1,858 1,010 Deferred tax expense Federal 23 9 (577) State 108 22 9 Foreign (306) (548) (203) Total deferred tax expense (benefit) (175) (517) (771) Income tax provision $ 1,940 $ 1,341 $ 239 |
Schedule of federal income tax rate reconciliation | The income tax provision differs from the amount computed by applying the federal statutory rate of 21% to loss before income taxes as follows (in thousands): For the year ended March 31, 2023 2022 2021 Expense (benefit) at the federal statutory rate $ (7,560) $ (6,493) $ (7,396) Equity compensation 1,945 195 345 Permanent items 1,498 1,941 1,295 Foreign taxes 586 1,761 (129) State income taxes (373) (402) (969) Valuation allowance 5,096 (4,899) 5,444 Uncertain tax positions (3,791) (6,349) (6,695) Tax reform — — — Credit monetization — (2,100) — Expiration of attributes 5,734 18,345 9,862 Research and development credits (1,582) (2,094) (1,829) Other 387 1,436 311 Income tax provision $ 1,940 $ 1,341 $ 239 |
Schedule of components of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities are as follows (in thousands): As of March 31, 2023 2022 Deferred tax assets Loss carryforwards $ 56,675 $ 59,636 Deferred revenue 28,389 29,485 Capitalized research and development 23,949 16,289 Tax credits 15,894 16,085 Disallowed interest 13,162 12,296 Other accruals and reserves not currently deductible for tax purposes 4,494 4,450 Lease obligations 2,384 2,514 Inventory 2,715 1,701 Accrued warranty expense 495 447 Acquired intangibles 961 853 Gross deferred tax assets 149,118 143,756 Valuation allowance (143,704) (138,365) Total deferred tax assets, net of valuation allowance $ 5,414 $ 5,391 Deferred tax liabilities Depreciation $ (2,009) $ (1,921) Lease assets (2,128) (2,439) Other (548) (1,048) Total deferred tax liabilities $ (4,685) $ (5,408) Net deferred tax assets (liabilities) $ 729 $ (17) |
Reconciliation of gross unrecognized tax benefits | A reconciliation of the gross unrecognized tax benefits is as follows (in thousands): For the year ended March 31, 2023 2022 2021 Beginning Balance $ 99,603 $ 101,119 $ 107,282 Increase in balances related to tax positions in current period 2,778 2,785 2,560 Increase in balances related to tax positions in prior period — 4,881 — Increase in balances related to acquisitions — — 511 Decrease in balances related to tax positions in prior period (817) (1,020) (522) Decrease in balances due to lapse in statute of limitations (5,221) (8,162) (8,712) Ending balance $ 96,343 $ 99,603 $ 101,119 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and total estimated fair value | The table below represents the carrying value and total estimated fair value of long-term debt as of March 31, 2023 and March 31, 2022, respectively. The fair value has been classified as Level 2 within the fair value hierarchy. March 31, 2023 2022 Carrying Value Fair Value Carrying Value Fair Value Term Loan 74,667 66,684 98,723 98,723 PNC Credit Facility 16,750 15,918 17,735 17,735 |
DESCRIPTION OF BUSINESS AND S_4
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 USD ($) region customer segment | Mar. 31, 2022 USD ($) customer | Mar. 31, 2021 USD ($) | |
Concentration Risk | |||
Operating cash flows | $ 4,894 | $ 33,728 | $ 767 |
Net loss | $ 37,943 | 32,280 | 35,459 |
Performance obligation, term | 45 days | ||
Software implementation costs capitalized | $ 5,600 | 3,100 | 3,100 |
Software cost | 100 | 100 | 0 |
Advertising expense | 3,200 | 3,500 | 1,500 |
Shipping and handling fees | $ 12,100 | 11,500 | 9,400 |
Number of reportable segments | segment | 1 | ||
Number of geographic regions | region | 3 | ||
Employer contributions | $ 1,700 | $ 1,700 | $ 1,200 |
Software Development | |||
Concentration Risk | |||
Estimated useful lives of the assets | 10 years | ||
Minimum | |||
Concentration Risk | |||
Product warranty term | 1 year | ||
Finite lived assets useful life (years) | 2 years | ||
Maximum | |||
Concentration Risk | |||
Product warranty term | 3 years | ||
Finite lived assets useful life (years) | 4 years | ||
Accounts Receivable | Customer Concentration Risk | Customer One | |||
Concentration Risk | |||
Number of customers (customer) | customer | 1 | ||
Concentration risk percentage | 22% | ||
Accounts Receivable | Customer Concentration Risk | Customer Two | |||
Concentration Risk | |||
Number of customers (customer) | customer | 1 | ||
Concentration risk percentage | 21% |
DESCRIPTION OF BUSINESS AND S_5
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Mar. 31, 2023 | |
Machinery and equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 5 years |
Computer equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 3 years |
Computer equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 5 years |
Other software | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 5 years |
Other office equipment | |
Property, Plant and Equipment | |
Estimated useful lives of the assets | 5 years |
DESCRIPTION OF BUSINESS AND S_6
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, Net by Geographic Region (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Revenues from External Customers and Long-Lived Assets | ||
Property and equipment, net | $ 16,555 | $ 12,853 |
United States | ||
Revenues from External Customers and Long-Lived Assets | ||
Property and equipment, net | 16,289 | 12,506 |
International | ||
Revenues from External Customers and Long-Lived Assets | ||
Property and equipment, net | $ 266 | $ 347 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 412,752 | $ 372,827 | $ 349,576 |
Americas | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 250,195 | $ 206,560 | $ 194,692 |
Americas | Geographic Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 61% | 55% | 56% |
EMEA | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 112,160 | $ 114,917 | $ 108,770 |
EMEA | Geographic Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 27% | 31% | 31% |
APAC | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 36,692 | $ 35,973 | $ 31,250 |
APAC | Geographic Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 9% | 10% | 9% |
Product revenue | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 266,537 | $ 223,761 | $ 209,808 |
Product revenue | Americas | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 172,332 | 124,952 | 118,653 |
Product revenue | EMEA | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 67,485 | 70,730 | 67,509 |
Product revenue | APAC | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 26,720 | 28,079 | 23,646 |
Service and subscription | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 132,510 | 133,689 | 124,904 |
Service and subscription | Americas | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 77,863 | 81,608 | 76,039 |
Service and subscription | EMEA | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 44,675 | 44,187 | 41,261 |
Service and subscription | APAC | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | 9,972 | 7,894 | 7,604 |
Primary storage systems | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 57,578 | $ 60,697 | $ 70,286 |
Primary storage systems | Product Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 14% | 16% | 20% |
Secondary storage systems | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 175,508 | $ 118,310 | $ 89,000 |
Secondary storage systems | Product Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 43% | 32% | 25% |
Device and media | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 42,371 | $ 50,030 | $ 51,164 |
Device and media | Product Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 10% | 13% | 15% |
Royalty | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 13,705 | $ 15,377 | $ 14,864 |
Royalty | Geographic Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 3% | 4% | 4% |
Royalty | Product Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 3% | 4% | 4% |
Subscriptions | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 8,900 | $ 5,300 | $ 600 |
Service and subscription | |||
Revenues from External Customers and Long-Lived Assets | |||
Revenue | $ 123,590 | $ 128,413 | $ 124,262 |
Service and subscription | Product Concentration Risk | Revenue Benchmark | |||
Revenues from External Customers and Long-Lived Assets | |||
Concentration risk percentage | 30% | 35% | 36% |
REVENUE - Certain Information R
REVENUE - Certain Information Related to Contract Liabilities (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue | $ 125,810 |
Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period | $ 82,609 |
REVENUE - Remaining Performance
REVENUE - Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Current | $ 95,584 |
Non-Current | 44,579 |
Total | $ 140,163 |
REVENUE - Deferred Revenue, by
REVENUE - Deferred Revenue, by Arrangement, Disclosure (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Disaggregation of Revenue | |
Total | $ 125,810 |
1 year or less | 82,504 |
1 – 3 Years | 40,398 |
3 year or greater | 2,908 |
Service revenue | |
Disaggregation of Revenue | |
Total | 111,041 |
1 year or less | 75,211 |
1 – 3 Years | 33,750 |
3 year or greater | 2,080 |
Subscription revenue | |
Disaggregation of Revenue | |
Total | 14,769 |
1 year or less | 7,293 |
1 – 3 Years | 6,648 |
3 year or greater | $ 828 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 12 Months Ended |
Mar. 31, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Percentage of revenue for which commitments are to be honored | 68.20% |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation, timing of satisfaction | 13 months |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation, timing of satisfaction | 60 months |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Jul. 20, 2021 | Oct. 31, 2021 | |
Pivot3 Inc | ||
Business Acquisition | ||
Consideration transferred | $ 7,818 | |
Developed technology | En Cloud En | ||
Business Acquisition | ||
Consideration for assets acquired | $ 2,800 | |
Payments to acquire intangible assets | 2,600 | |
Deferred consideration | $ 200 | |
Finite lived assets useful life (years) | 3 years |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase Consideration For The Acquisition (Details) - Pivot3 Inc $ in Thousands | Jul. 20, 2021 USD ($) |
Business Acquisition | |
Cash | $ 5,000 |
Fair value of stock consideration | 2,818 |
Total | $ 7,818 |
BUSINESS ACQUISITIONS - Schedul
BUSINESS ACQUISITIONS - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Jul. 20, 2021 | Mar. 31, 2023 | Mar. 31, 2022 |
Business Acquisition | |||
Goodwill | $ 12,969 | $ 12,969 | |
Pivot3 Inc | |||
Business Acquisition | |||
Goodwill | $ 9,503 | ||
Property, plant and equipment | 4,300 | ||
Net liabilities assumed | (11,385) | ||
Net liabilities assumed | $ 7,818 | ||
Estimated Useful Life | 3 years | ||
Pivot3 Inc | Developed technology | |||
Business Acquisition | |||
Identified intangible assets | $ 1,700 | ||
Estimated Useful Life | 2 years | ||
Pivot3 Inc | Customer lists | |||
Business Acquisition | |||
Identified intangible assets | $ 3,700 | ||
Estimated Useful Life | 4 years |
BALANCE SHEET INFORMATION - Sch
BALANCE SHEET INFORMATION - Schedule of Manufacturing Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Inventory | ||
Work in progress | $ 1,304 | $ 2,546 |
Raw materials | 11,179 | 16,393 |
Total manufacturing inventories | 19,441 | 33,546 |
Manufactured finished goods | ||
Inventory | ||
Manufactured finished goods | $ 6,958 | $ 14,607 |
BALANCE SHEET INFORMATION - S_2
BALANCE SHEET INFORMATION - Schedule of Service Parts Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Inventory | ||
Finished goods | $ 19,834 | $ 19,234 |
Component parts | 5,470 | 5,020 |
Total service inventories | $ 25,304 | $ 24,254 |
BALANCE SHEET INFORMATION - S_3
BALANCE SHEET INFORMATION - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Property, Plant and Equipment | ||
Property and equipment, gross | $ 61,423 | $ 53,698 |
Less: accumulated depreciation | (44,868) | (40,845) |
Total property, plant and equipment, net | 16,555 | 12,853 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 46,170 | 46,831 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 14,405 | 6,029 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 848 | $ 838 |
BALANCE SHEET INFORMATION - Nar
BALANCE SHEET INFORMATION - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation and amortization | $ 10,118 | $ 9,418 | $ 5,697 |
Intangible assets amortization expense | $ 4,600 | $ 3,700 | $ 100 |
Weighted-average remaining amortization period | 1 year 7 months 6 days |
BALANCE SHEET INFORMATION - S_4
BALANCE SHEET INFORMATION - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Finite-Lived Intangible Assets | ||
Gross | $ 13,411 | $ 13,808 |
Accumulated Amortization | (8,470) | (4,224) |
Net | 4,941 | 9,584 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross | 9,013 | 9,208 |
Accumulated Amortization | (6,269) | (3,121) |
Net | 2,744 | 6,087 |
Customer lists | ||
Finite-Lived Intangible Assets | ||
Gross | 4,398 | 4,600 |
Accumulated Amortization | (2,201) | (1,103) |
Net | $ 2,197 | $ 3,497 |
BALANCE SHEET INFORMATION - S_5
BALANCE SHEET INFORMATION - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Estimated future amortization expense | ||
2024 | $ 3,488 | |
2025 | 1,453 | |
Thereafter | 0 | |
Net | $ 4,941 | $ 9,584 |
BALANCE SHEET INFORMATION - Goo
BALANCE SHEET INFORMATION - Goodwill (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill | |
Beginning Balance | $ 12,969 |
Goodwill acquired | 0 |
Ending Balance | $ 12,969 |
BALANCE SHEET INFORMATION - S_6
BALANCE SHEET INFORMATION - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued expenses | $ 1,988 | $ 4,984 |
Asset retirement obligation | 2,513 | 4,590 |
Accrued income taxes | 1,509 | 943 |
Accrued warranty | 2,094 | 1,899 |
Accrued interest | 494 | 278 |
Lease liability | 1,364 | 1,727 |
Other | 3,704 | 2,141 |
Total other accrued liabilities | $ 13,666 | $ 16,562 |
BALANCE SHEET INFORMATION - S_7
BALANCE SHEET INFORMATION - Schedule of Change in Accrued Warranty Balance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Change in accrued warranty: | |||
Balance as of April 1 | $ 1,899 | $ 2,383 | $ 2,668 |
Current period accruals | 3,477 | 3,717 | 4,699 |
Adjustments to prior estimates | (18) | (156) | (472) |
Charges incurred | (3,264) | (4,045) | (4,512) |
Balance as of March 31 | $ 2,094 | $ 1,899 | $ 2,383 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Instrument | ||
PNC Credit Facility | $ 16,750 | $ 17,735 |
Less: current portion | (5,000) | (4,375) |
Less unamortized debt issuance costs | (3,313) | (4,899) |
Long-term debt, net | 83,104 | 107,184 |
Term Loan | Secured Debt | ||
Debt Instrument | ||
Term loan | 74,667 | 98,723 |
PNC Credit Facility | Line of Credit | ||
Debt Instrument | ||
PNC Credit Facility | $ 16,750 | $ 17,735 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Apr. 25, 2022 | Dec. 31, 2021 | Feb. 11, 2021 | Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | Apr. 24, 2022 | Aug. 05, 2021 | |
Debt Instrument | |||||||||
Repayments of long-term debt | $ 24,596,000 | $ 94,301,000 | $ 92,782,000 | ||||||
Gain (loss) on extinguishment of debt | 1,392,000 | $ 4,960,000 | $ 14,789,000 | ||||||
PNC credit facility | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing amount | 36,800,000 | ||||||||
Line of credit, current borrowing capacity | $ 20,000,000 | ||||||||
Senior Secured Term Loan | Secured Debt | |||||||||
Debt Instrument | |||||||||
Repayments of long-term debt | $ 92,300,000 | ||||||||
Debt amendment costs | $ 400,000 | ||||||||
Term Loan Credit Agreement | Term Loan | |||||||||
Debt Instrument | |||||||||
Repayments of long-term debt | $ 20,000,000 | ||||||||
Long-term debt, gross | $ 100,000,000 | ||||||||
Write off of debt issuance cost | 1,000,000 | ||||||||
Gain (loss) on extinguishment of debt | 1,400,000 | ||||||||
Prepayment penalty expense | $ 400,000 | ||||||||
Term Loan Credit Agreement | Term Loan | Base rate | |||||||||
Debt Instrument | |||||||||
Interest rate | 1.75% | ||||||||
Term Loan Credit Agreement | Term Loan | Federal funds rate | |||||||||
Debt Instrument | |||||||||
Interest rate | 0.50% | ||||||||
Term Loan Credit Agreement | Term Loan | One month LIBOR | |||||||||
Debt Instrument | |||||||||
Interest rate | 1% | ||||||||
Term Loan Credit Agreement | Term Loan | Prime rate | |||||||||
Debt Instrument | |||||||||
Interest rate | 5% | ||||||||
Term Loan Credit Agreement | Term Loan | SOFR | |||||||||
Debt Instrument | |||||||||
Interest rate | 6% | ||||||||
Term Loan Credit Agreement | Term Loan | SOFR | Minimum | |||||||||
Debt Instrument | |||||||||
Interest rate | 0.75% | ||||||||
Term Loan | Line of Credit | |||||||||
Debt Instrument | |||||||||
Stated interest rate | 10.80% | ||||||||
PNC Credit Facility | Line of Credit | |||||||||
Debt Instrument | |||||||||
Long-term debt, gross | $ 400,000 | ||||||||
Line of credit facility, maximum borrowing amount | $ 40,000,000 | $ 30,000,000 | |||||||
Loan servicing fee (percent) | 6.50% | ||||||||
PNC Credit Facility | Line of Credit | SOFR | |||||||||
Debt Instrument | |||||||||
Loan servicing trigger (percent) | 0.75% | ||||||||
Loan servicing trigger, rate below libor (percent) | 0.75% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | |||||||||
Debt Instrument | |||||||||
Loan servicing fee (percent) | 5.50% | ||||||||
Loan servicing trigger (percent) | 1% | ||||||||
Loan servicing trigger, rate below libor (percent) | 1% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | Minimum | |||||||||
Debt Instrument | |||||||||
Interest rate | 1.25% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | Maximum | |||||||||
Debt Instrument | |||||||||
Interest rate | 1.75% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | Overnight Bank Funding Rate | |||||||||
Debt Instrument | |||||||||
Interest rate | 0.50% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | Daily Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument | |||||||||
Interest rate | 1% | ||||||||
Covenant Period One | Term Loan Credit Agreement | |||||||||
Debt Instrument | |||||||||
Stated interest rate | 2.50% | ||||||||
Covenant Period One | PNC Credit Facility | Line of Credit | SOFR | |||||||||
Debt Instrument | |||||||||
Interest rate | 2.75% | ||||||||
Covenant Period Two | Term Loan Credit Agreement | Term Loan | |||||||||
Debt Instrument | |||||||||
Stated interest rate | 5% | ||||||||
Covenant Period Two | PNC Credit Facility | Line of Credit | |||||||||
Debt Instrument | |||||||||
Interest rate | 7.50% | ||||||||
Covenant Period Two | PNC Credit Facility | Line of Credit | SOFR | Minimum | |||||||||
Debt Instrument | |||||||||
Interest rate | 2.25% | ||||||||
Covenant Period Two | PNC Credit Facility | Line of Credit | SOFR | Maximum | |||||||||
Debt Instrument | |||||||||
Interest rate | 2.75% | ||||||||
Covenant Period Two | Domestic Rate And Swing Line Loans | Line of Credit | |||||||||
Debt Instrument | |||||||||
Stated interest rate | 9.75% |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 10,291 | $ 11,107 |
Lease liability | $ 1,364 | $ 1,727 |
Operating Lease, Liability, Current, Statement of Financial Position | Other accrued liabilities | Other accrued liabilities |
Operating lease liabilities | $ 10,169 | $ 9,891 |
Total operating lease liabilities | $ 11,533 | $ 11,618 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 4,276 | $ 3,727 |
Variable lease expense | 753 | 643 |
Short-term lease expense | 0 | 15 |
Total lease expense | $ 5,029 | $ 4,385 |
LEASES - Schedule of Lessee Ope
LEASES - Schedule of Lessee Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Maturity of Lease Liabilities | ||
2023 | $ 2,700 | |
2024 | 2,208 | |
2025 | 1,781 | |
2026 | 1,606 | |
2027 | 1,436 | |
Thereafter | 13,262 | |
Total lease payments | 22,993 | |
Less: Imputed interest | (11,460) | |
Present value of lease liabilities | $ 11,533 | $ 11,618 |
LEASES - Lease Term and Discoun
LEASES - Lease Term and Discount Rate (Details) | Mar. 31, 2023 | Mar. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining operating lease term (years) | 10 years 10 months 6 days | 10 years 10 months 17 days |
Weighted average discount rate for operating leases | 12.66% | 12.90% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Cash outflows related to operating leases | $ 3.5 | $ 3.7 |
RESTRUCTURING CHARGES - Summary
RESTRUCTURING CHARGES - Summary of Restructuring Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Restructuring Reserve | |||
Beginning balance | $ 0 | $ 580 | $ 0 |
Restructuring costs | 1,605 | 850 | 3,701 |
Cash payments | (1,605) | 850 | (3,121) |
Adjustments of prior estimates | 0 | ||
Other non-cash | (1,430) | ||
Ending balance | 0 | 0 | 580 |
Severance and benefits | |||
Restructuring Reserve | |||
Beginning balance | 0 | 580 | 0 |
Restructuring costs | 1,605 | 3,701 | |
Cash payments | (1,605) | 850 | (3,121) |
Adjustments of prior estimates | 0 | ||
Other non-cash | (1,430) | ||
Ending balance | 0 | 0 | 580 |
Facilities | |||
Restructuring Reserve | |||
Beginning balance | 0 | 0 | 0 |
Restructuring costs | 0 | 0 | |
Cash payments | 0 | 0 | 0 |
Adjustments of prior estimates | 0 | ||
Other non-cash | 0 | ||
Ending balance | $ 0 | $ 0 | $ 0 |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||||
Apr. 22, 2022 USD ($) yr $ / shares shares | Feb. 08, 2021 USD ($) shares | Feb. 01, 2021 | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2021 USD ($) shares | Dec. 30, 2022 shares | Dec. 29, 2022 shares | Sep. 30, 2022 shares | Sep. 29, 2022 shares | Apr. 21, 2022 $ / shares | Jun. 16, 2020 | |
Share-based compensation expense: | ||||||||||||
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 | 225,000,000 | 125,000,000 | ||||||||
Repayments of long-term debt | $ | $ 24,596 | $ 94,301 | $ 92,782 | |||||||||
Total shares reserved for future issuance (in shares) | 600,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 1.33 | |||||||||||
Warrant, down round feature, increase (decrease) in equity, amount | $ | $ (389) | |||||||||||
Senior Secured Term Loan | ||||||||||||
Share-based compensation expense: | ||||||||||||
Minimum registrable securities to request a S-1 | 40% | |||||||||||
$1.33 Warrants | ||||||||||||
Share-based compensation expense: | ||||||||||||
Warrants issued (in shares) | 7,110,616 | 7,110,616 | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 1.33 | $ 1.33 | $ 1.33 | |||||||||
$3.00 Warrants | ||||||||||||
Share-based compensation expense: | ||||||||||||
Warrants issued (in shares) | 3,400,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 2.79 | $ 3 | $ 3 | $ 3 | ||||||||
Class of warrant or right, additional warrants issued (in shares) | 256,113 | |||||||||||
Warrant, down round feature, increase (decrease) in equity, amount | $ | $ 400 | |||||||||||
Warrants rights outstanding (in shares) | 50,000 | 50,000 | ||||||||||
$3.00 Warrants | Measurement Input, Discount Rate | ||||||||||||
Share-based compensation expense: | ||||||||||||
Measurement input | 0 | |||||||||||
$3.00 Warrants | Measurement Input, Expected Term | ||||||||||||
Share-based compensation expense: | ||||||||||||
Measurement input | yr | 8 | |||||||||||
$3.00 Warrants | Measurement Input, Option Volatility | ||||||||||||
Share-based compensation expense: | ||||||||||||
Measurement input | 0.56 | |||||||||||
$3.00 Warrants | Measurement Input, Risk Free Interest Rate | ||||||||||||
Share-based compensation expense: | ||||||||||||
Measurement input | 0.0285 | |||||||||||
Restricted stock units | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 3 years | |||||||||||
Shares granted (in shares) | 2,900,000 | 2,800,000 | 2,400,000 | |||||||||
Unrecognized compensation cost related to stock options granted | $ | $ 9,200 | |||||||||||
Weighted-average period for recognition (in years) | 2 years | |||||||||||
Awards vested, fair value | $ | $ 5,200 | $ 5,000 | $ 2,100 | |||||||||
Employee stock purchase plan | ||||||||||||
Share-based compensation expense: | ||||||||||||
Shares available for future equity grants (in shares) | 88,000 | 688,000 | 1,077,000 | |||||||||
Common stock purchase price, percentage | 85% | |||||||||||
Market (PSUs) | ||||||||||||
Share-based compensation expense: | ||||||||||||
Shares granted (in shares) | 400,000 | 600,000 | 900,000 | |||||||||
Unrecognized compensation cost related to stock options granted | $ | $ 1,600 | |||||||||||
Weighted-average period for recognition (in years) | 1 year | |||||||||||
Market (PSUs) | Minimum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 1 year | |||||||||||
Market (PSUs) | Maximum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 3 years | |||||||||||
Performance PSUs | ||||||||||||
Share-based compensation expense: | ||||||||||||
Shares granted (in shares) | 900,000 | 0 | 500,000 | |||||||||
Unrecognized compensation cost related to stock options granted | $ | $ 0 | |||||||||||
Weighted-average period for recognition (in years) | 1 year | |||||||||||
Performance share units | ||||||||||||
Share-based compensation expense: | ||||||||||||
Awards vested, fair value | $ | $ 1,900 | $ 3,900 | $ 2,900 | |||||||||
2012 Long-Term Incentive Plan | ||||||||||||
Share-based compensation expense: | ||||||||||||
Shares authorized (in shares) | 7,000,000 | |||||||||||
Shares available for future equity grants (in shares) | 1,400,000 | |||||||||||
Plan term | 7 years | |||||||||||
2012 Long-Term Incentive Plan | Nonemployee director | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 1 year | |||||||||||
2012 Long-Term Incentive Plan | Minimum | Employee | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 1 year | |||||||||||
2012 Long-Term Incentive Plan | Maximum | Employee | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 3 years | |||||||||||
2012 Long-Term Incentive Plan | Stock options, PSUs, and Restricted Shares | ||||||||||||
Share-based compensation expense: | ||||||||||||
Shares outstanding (in shares) | 5,600,000 | |||||||||||
2021 Inducement Plan | ||||||||||||
Share-based compensation expense: | ||||||||||||
Common stock, shares authorized (in shares) | 1,500,000 | 770,000 | ||||||||||
2021 Inducement Plan | Stock options | ||||||||||||
Share-based compensation expense: | ||||||||||||
Plan term | 7 years | |||||||||||
2021 Inducement Plan | Stock options | Minimum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 2 years | |||||||||||
2021 Inducement Plan | Stock options | Maximum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 3 years | |||||||||||
2021 Inducement Plan | Restricted stock units | ||||||||||||
Share-based compensation expense: | ||||||||||||
Plan term | 7 years | |||||||||||
2021 Inducement Plan | Restricted stock units | Minimum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 2 years | |||||||||||
2021 Inducement Plan | Restricted stock units | Maximum | ||||||||||||
Share-based compensation expense: | ||||||||||||
Vesting period | 3 years | |||||||||||
Rights Offering | ||||||||||||
Share-based compensation expense: | ||||||||||||
Number of shares issued in transaction (in shares) | 30,000,000 | |||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 2.25 | |||||||||||
Maximum available amount | $ | $ 66,200 | |||||||||||
Repayments of long-term debt | $ | $ 20,000 | |||||||||||
Secondary Offering | ||||||||||||
Share-based compensation expense: | ||||||||||||
Number of shares issued in transaction (in shares) | 15,109,489 | |||||||||||
Maximum available amount | $ | $ 96,800 | |||||||||||
Sale of stock, gross consideration received on transaction | $ | $ 103,500 |
COMMON STOCK - Schedule of Rese
COMMON STOCK - Schedule of Reserved Shares for Future Issuance under ESPP (Details) - Employee stock purchase plan - shares shares in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Stock Options | ||
Shares available for issuance at beginning of period (in shares) | 688 | 1,077 |
Shares issued during the period (in shares) | (600) | (389) |
Shares available for issuance at end of period (in shares) | 88 | 688 |
COMMON STOCK - Schedule of Assu
COMMON STOCK - Schedule of Assumptions Used to Valuing Stock Purchase Plan (Details) - Employee stock purchase plan - $ / shares | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Expected life | 6 months | 6 months | 6 months |
Volatility | 96% | ||
Risk-free interest rate | 3.10% | ||
Dividend yield | 0% | 0% | 0% |
Weighted-average grant date fair value (in dollars per share) | $ 1.85 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Volatility | 51% | 55% | |
Risk-free interest rate | 0.06% | 0.05% | |
Weighted-average grant date fair value (in dollars per share) | $ 4.60 | $ 4.99 | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Volatility | 57% | 133% | |
Risk-free interest rate | 0.23% | 0.11% | |
Weighted-average grant date fair value (in dollars per share) | $ 6.40 | $ 8.05 |
COMMON STOCK - Fair Value Assum
COMMON STOCK - Fair Value Assumptions PSUs (Details) - Market (PSUs) - $ / shares | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Discount period (years) | 3 years | 2 years 11 months 23 days | 2 years 6 months 14 days |
Risk-free interest rate | 2.84% | 0.93% | 0.31% |
Stock price volatility | 80% | 75% | 82% |
Grant date fair value (in dollars per share) | $ 1.17 | $ 5.40 | $ 3.77 |
COMMON STOCK - Schedule of Perf
COMMON STOCK - Schedule of Performance Stock Unit Activity (Details) - Performance share units shares in Thousands | 12 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Shares | |
Beginning balance (in shares) | shares | 1,579 |
Granted (in shares) | shares | 1,357 |
Vested (in shares) | shares | (555) |
Forfeited or cancelled (in shares) | shares | (768) |
Ending balance (in shares) | shares | 1,613 |
Weighted-Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 4.58 |
Granted (in dollars per share) | $ / shares | 1.33 |
Vested (in dollars per share) | $ / shares | 5.07 |
Forfeited or cancelled (in dollars per share) | $ / shares | 2.41 |
Ending balance (in dollars per share) | $ / shares | $ 2.72 |
COMMON STOCK - Schedule of Rest
COMMON STOCK - Schedule of Restricted Stock Activity (Details) - Restricted stock units shares in Thousands | 12 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Shares | |
Beginning balance (in shares) | shares | 3,856 |
Granted (in shares) | shares | 2,920 |
Vested (in shares) | shares | (1,625) |
Forfeited or cancelled (in shares) | shares | (657) |
Ending balance (in shares) | shares | 4,494 |
Weighted-Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 5.46 |
Granted (in dollars per share) | $ / shares | 1.43 |
Vested (in dollars per share) | $ / shares | 5.32 |
Forfeited or cancelled (in dollars per share) | $ / shares | 4.13 |
Ending balance (in dollars per share) | $ / shares | $ 3.09 |
COMMON STOCK - Schedule of Shar
COMMON STOCK - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based compensation expense: | |||
Total stock-based compensation | $ 10,750 | $ 13,829 | $ 9,624 |
Restricted stock units | |||
Share-based compensation expense: | |||
Total stock-based compensation | 9,299 | 9,331 | 4,041 |
Performance share units | |||
Share-based compensation expense: | |||
Total stock-based compensation | 878 | 3,811 | 4,904 |
Employee stock purchase plan | |||
Share-based compensation expense: | |||
Total stock-based compensation | 573 | 687 | 679 |
Cost of revenue | |||
Share-based compensation expense: | |||
Total stock-based compensation | 929 | 1,112 | 672 |
Research and development | |||
Share-based compensation expense: | |||
Total stock-based compensation | 2,997 | 5,843 | 2,881 |
Sales and marketing | |||
Share-based compensation expense: | |||
Total stock-based compensation | 2,397 | 2,516 | 1,757 |
General and administrative | |||
Share-based compensation expense: | |||
Total stock-based compensation | $ 4,427 | $ 4,358 | $ 4,314 |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive shares excluded from the computations of diluted net income (loss) (Details) (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 4,089 | 8,893 | 8,614 |
Stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 543 | 1,996 | 1,818 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 3,538 | 6,886 | 6,573 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 8 | 11 | 223 |
NET LOSS PER SHARE - Narrative
NET LOSS PER SHARE - Narrative (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 4,089 | 8,893 | 8,614 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive shares excluded (in shares) | 400 |
INCOME TAXES - Schedule of Pre-
INCOME TAXES - Schedule of Pre-tax Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (38,004) | $ (31,489) | $ (36,648) |
Foreign | 2,001 | 550 | 1,428 |
Net loss before income taxes | $ (36,003) | $ (30,939) | $ (35,220) |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Current tax expense | |||
Federal | $ 0 | $ 0 | $ (76) |
State | 70 | 477 | 339 |
Foreign | 2,045 | 1,381 | 747 |
Total current tax expense | 2,115 | 1,858 | 1,010 |
Deferred tax expense | |||
Federal | 23 | 9 | (577) |
State | 108 | 22 | 9 |
Foreign | (306) | (548) | (203) |
Total deferred tax expense (benefit) | (175) | (517) | (771) |
Income tax provision | $ 1,940 | $ 1,341 | $ 239 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Rate Reconciliation Amount (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Expense (benefit) at the federal statutory rate | $ (7,560) | $ (6,493) | $ (7,396) |
Equity compensation | 1,945 | 195 | 345 |
Permanent items | 1,498 | 1,941 | 1,295 |
Foreign taxes | 586 | 1,761 | (129) |
State income taxes | (373) | (402) | (969) |
Valuation allowance | 5,096 | (4,899) | 5,444 |
Uncertain tax positions | (3,791) | (6,349) | (6,695) |
Tax reform | 0 | 0 | 0 |
Credit monetization | 0 | (2,100) | 0 |
Expiration of attributes | 5,734 | 18,345 | 9,862 |
Research and development credits | (1,582) | (2,094) | (1,829) |
Other | 387 | 1,436 | 311 |
Income tax provision | $ 1,940 | $ 1,341 | $ 239 |
Federal statutory rate (as a percent) | 21% |
INCOME TAXES - Schedule of Co_2
INCOME TAXES - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Deferred tax assets | ||
Loss carryforwards | $ 56,675 | $ 59,636 |
Deferred revenue | 28,389 | 29,485 |
Capitalized research and development | 23,949 | 16,289 |
Tax credits | 15,894 | 16,085 |
Disallowed interest | 13,162 | 12,296 |
Other accruals and reserves not currently deductible for tax purposes | 4,494 | 4,450 |
Lease obligations | 2,384 | 2,514 |
Inventory | 2,715 | 1,701 |
Accrued warranty expense | 495 | 447 |
Acquired intangibles | 961 | 853 |
Gross deferred tax assets | 149,118 | 143,756 |
Valuation allowance | (143,704) | (138,365) |
Total deferred tax assets, net of valuation allowance | 5,414 | 5,391 |
Deferred tax liabilities | ||
Depreciation | (2,009) | (1,921) |
Lease assets | (2,128) | (2,439) |
Other | (548) | (1,048) |
Total deferred tax liabilities | (4,685) | (5,408) |
Net deferred tax assets (liabilities) | $ 729 | |
Net deferred tax assets (liabilities) | $ (17) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Contingency [Line Items] | ||||
Increase (decrease) in valuation allowance | $ 5,300 | $ 4,900 | $ (5,400) | |
Increase in balances related to tax positions in prior period | 3,300 | |||
Total unrecognized tax benefit including interest and penalties | 97,000 | |||
Unrecognized tax benefits that would impact effective tax rate | 78,300 | |||
Accrued interest and penalties | 1,200 | |||
Unrecognized tax benefits | 96,343 | $ 99,603 | $ 101,119 | $ 107,282 |
Increase in unrecognized tax benefits is reasonably possible | 3,500 | |||
Increase in unrecognized tax benefits valuation allowance is reasonably possible | 2,900 | |||
Increase in unrecognized tax benefits net is reasonably possible | 600 | |||
Federal net operating loss | 246,500 | |||
Tax credit carryforwards | 48,200 | |||
Indefinite lived operating loss carry forward | 12,800 | |||
Acquired net operating losses included in carryforwards | 11,100 | |||
Acquired credits included in carryforwards | 4,400 | |||
Other long-term assets | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits | 90,300 | |||
Other long-term liabilities | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits | $ 7,200 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | |||
Beginning Balance | $ 99,603 | $ 101,119 | $ 107,282 |
Increase in balances related to tax positions in current period | 2,778 | 2,785 | 2,560 |
Increase in balances related to tax positions in prior period | 0 | 4,881 | 0 |
Increase in balances related to acquisitions | 0 | 0 | 511 |
Decrease in balances related to tax positions in prior period | (817) | (1,020) | (522) |
Decrease in balances due to lapse in statute of limitations | (5,221) | (8,162) | (8,712) |
Ending balance | $ 96,343 | $ 99,603 | $ 101,119 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining purchase commitments | $ 28.7 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Debt (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Carrying Value | Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Term Loan | $ 74,667 | $ 98,723 |
Carrying Value | PNC Credit Facility | Line of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
PNC Credit Facility | 16,750 | 17,735 |
Fair Value | Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Term Loan | 66,684 | |
Fair Value | PNC Credit Facility | Line of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
PNC Credit Facility | $ 15,918 | $ 17,735 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 12 Months Ended | |||
Jun. 01, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Subsequent Event | ||||
Proceeds of senior secured term loan | $ 0 | $ 94,961,000 | $ 19,400,000 | |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||
Warrant exercise price (in dollars per share) | $ 1.33 | |||
Subsequent event | Common Stock | ||||
Subsequent Event | ||||
Warrants issued (in shares) | 1,250,000 | |||
Common stock, par value (in usd per share) | $ 0.01 | |||
Warrant exercise price (in dollars per share) | $ 1 | |||
Subsequent event | PNC Credit Facility | ||||
Subsequent Event | ||||
Debt instrument covenant minimum liquidity | $ 15,000,000 | |||
Subsequent event | Term Loan | Secured Debt | ||||
Subsequent Event | ||||
Proceeds of senior secured term loan | $ 15,000,000 |