Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Jul. 22, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | F5 NETWORKS INC | |
Entity Central Index Key | 1,048,695 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 66,204,638 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Sep. 30, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 429,597 | $ 390,460 |
Short-term investments | 381,111 | 383,882 |
Accounts receivable, net of allowances of $1,700 and $1,979 | 263,249 | 279,434 |
Inventories | 33,805 | 33,717 |
Deferred tax assets | 49,460 | 50,128 |
Other current assets | 50,741 | 50,519 |
Total current assets | 1,207,963 | 1,188,140 |
Property and equipment, net | 115,135 | 95,909 |
Long-term investments | 313,488 | 397,656 |
Deferred tax assets | 700 | 6,492 |
Goodwill | 555,965 | 555,965 |
Other assets, net | 60,532 | 68,128 |
Total assets | 2,253,783 | 2,312,290 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Accounts payable | 37,452 | 50,814 |
Accrued liabilities | 135,122 | 130,401 |
Deferred revenue | 626,836 | 573,908 |
Total current liabilities | 799,410 | 755,123 |
Other long-term liabilities | 30,761 | 30,136 |
Deferred revenue, long-term | 229,332 | 209,402 |
Deferred tax liabilities | 7,215 | 901 |
Total long-term liabilities | 267,308 | 240,439 |
Commitments and contingencies | ||
Shareholders’ equity | ||
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding | 0 | 0 |
Common stock, no par value; 200,000 shares authorized, 66,204 and 70,138 shares issued and outstanding | 9,996 | 10,159 |
Accumulated other comprehensive loss | (13,317) | (15,288) |
Retained earnings | 1,190,386 | 1,321,857 |
Total shareholders’ equity | 1,187,065 | 1,316,728 |
Total liabilities and shareholders’ equity | $ 2,253,783 | $ 2,312,290 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1,700 | $ 1,979 |
Preferred stock, par value (dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 66,204,000 | 70,138,000 |
Common stock, shares outstanding | 66,204,000 | 70,138,000 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net revenues | ||||
Products | $ 231,366 | $ 248,767 | $ 691,485 | $ 733,820 |
Services | 265,156 | 234,819 | 778,200 | 684,702 |
Total | 496,522 | 483,586 | 1,469,685 | 1,418,522 |
Cost of net revenues | ||||
Products | 40,474 | 44,050 | 123,033 | 129,720 |
Services | 43,869 | 41,609 | 129,223 | 117,883 |
Total | 84,343 | 85,659 | 252,256 | 247,603 |
Gross profit | 412,179 | 397,927 | 1,217,429 | 1,170,919 |
Operating expenses | ||||
Sales and marketing | 156,620 | 150,833 | 470,545 | 450,887 |
Research and development | 83,042 | 74,337 | 250,481 | 218,918 |
General and administrative | 34,182 | 32,627 | 103,238 | 95,814 |
Litigation expense | (527) | 0 | 8,421 | 0 |
Total | 273,317 | 257,797 | 832,685 | 765,619 |
Income from operations | 138,862 | 140,130 | 384,744 | 405,300 |
Other income, net | 978 | 720 | 2,246 | 6,580 |
Income before income taxes | 139,840 | 140,850 | 386,990 | 411,880 |
Provision for income taxes | 48,051 | 47,678 | 130,070 | 143,903 |
Net income | $ 91,789 | $ 93,172 | $ 256,920 | $ 267,977 |
Net income per share — basic (dollars per share) | $ 1.37 | $ 1.30 | $ 3.78 | $ 3.70 |
Weighted average shares — basic (shares) | 66,851 | 71,509 | 67,990 | 72,370 |
Net income per share — diluted (dollars per share) | $ 1.37 | $ 1.29 | $ 3.75 | $ 3.67 |
Weighted average shares — diluted (shares) | 67,235 | 71,957 | 68,429 | 72,937 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 91,789 | $ 93,172 | $ 256,920 | $ 267,977 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (142) | 470 | 1,449 | (3,728) |
Unrealized gains (losses) on securities, net of taxes of $236 and $(321) for the three months ended June 30, 2016 and 2015, respectively, and $310 and $25 for the nine months ended June 30, 2016 and 2015, respectively | 393 | (546) | 516 | 43 |
Reclassification adjustment for realized (gains) losses included in net income, net of taxes of $6 and $33 for the three months ended June 30, 2016 and 2015, respectively, and $(3) and $51 for the nine months ended June 30, 2016 and 2015, respectively | (9) | (55) | 6 | (86) |
Net change in unrealized gains (losses) on available-for-sale securities, net of tax | 384 | (601) | 522 | (43) |
Total other comprehensive income (loss) | 242 | (131) | 1,971 | (3,771) |
Comprehensive income | $ 92,031 | $ 93,041 | $ 258,891 | $ 264,206 |
Consolidated Statements Of Com6
Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Tax effect of unrealized gain (loss) on securities | $ 236 | $ (321) | $ 310 | $ 25 |
Tax effect of reclassification adjustment for realized (gains) losses | $ 6 | $ 33 | $ (3) | $ 51 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||
Net income | $ 256,920 | $ 267,977 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Realized loss (gain) on disposition of assets and investments | 22 | (69) |
Stock-based compensation | 118,443 | 103,919 |
Provisions for doubtful accounts and sales returns | 876 | 1,268 |
Depreciation and amortization | 42,284 | 39,225 |
Deferred income taxes | 9,295 | (5,203) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 15,307 | (20,094) |
Inventories | (87) | (5,556) |
Other current assets | (80) | (6,127) |
Other assets | 549 | 437 |
Accounts payable and accrued liabilities | (8,922) | 19,625 |
Deferred revenue | 72,858 | 105,796 |
Net cash provided by operating activities | 507,465 | 501,198 |
Investing activities | ||
Purchases of investments | (225,226) | (347,683) |
Maturities of investments | 244,905 | 391,900 |
Sales of investments | 62,836 | 198,401 |
Decrease (increase) in restricted cash | 29 | (401) |
Acquisition of intangible assets | (3,250) | (6,224) |
Purchases of property and equipment | (45,909) | (41,715) |
Net cash provided by investing activities | 33,385 | 194,278 |
Financing activities | ||
Excess tax benefit from stock-based compensation | 1,596 | 6,611 |
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan | 44,848 | 40,426 |
Repurchase of common stock | (550,101) | (456,863) |
Net cash used in financing activities | (503,657) | (409,826) |
Net increase in cash and cash equivalents | 37,193 | 285,650 |
Effect of exchange rate changes on cash and cash equivalents | 1,944 | (4,972) |
Cash and cash equivalents, beginning of period | 390,460 | 281,502 |
Cash and cash equivalents, end of period | $ 429,597 | $ 562,180 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business F5 Networks, Inc. (the “Company”) is the leading developer and provider of software-defined application services. The Company’s core technology is a full-proxy, programmable, highly-scalable software platform called TMOS, which supports a broad array of features and functions designed to ensure that applications delivered over Internet Protocol (IP) networks are secure, fast and available. The Company’s TMOS-based offerings include software products for local and global traffic management, network and application security, access management, web acceleration and a number of other network and application services. These products are available as modules that can run individually or as part of an integrated solution on the Company’s high-performance, scalable, purpose-built BIG-IP appliances and VIPRION chassis-based hardware, or as software-only Virtual Editions. The Company also offers distributed denial-of-service ( DDoS) protection, application security and other application services by subscription on its cloud-based Silverline platform. In connection with its products, the Company offers a broad range of support services including consulting, training, installation and maintenance. Basis of Presentation The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for their fair statement in conformity with accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 . Certain prior year amounts, specifically relating to the tax effects of unrealized gains and losses on securities, have been corrected and reclassified as tax expenses and benefits, respectively, to conform to the current year presentation in the Consolidated Statements of Comprehensive Income. The corrected and reclassified amounts are considered immaterial and there was no change to comprehensive income as a result. Revenue Recognition The Company sells products through distributors, resellers, and directly to end users. Revenue is recognized provided that all of the following criteria have been met: • Persuasive evidence of an arrangement exists. Evidence of an arrangement generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement. • Delivery has occurred. The Company uses shipping or related documents, or written evidence of customer acceptance, when applicable, to verify delivery or completion of any performance terms. • The sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. • Collectability is reasonably assured. The Company assesses collectability primarily based on the creditworthiness of the customer as determined by credit checks and related analysis, as well as the Customer’s payment history. Revenue from the sale of products is generally recognized when the product has been shipped and the customer is obligated to pay for the product. When rights of return are present and the Company cannot estimate returns, revenue is recognized when such rights of return lapse. Payment terms to domestic customers are generally net 30 days to net 45 days. Payment terms to international customers range from net 30 days to net 120 days based on normal and customary trade practices in the individual markets. The Company offers extended payment terms to certain customers, in which case, revenue is recognized when payments are due. Revenues for post-contract customer support (PCS) are recognized on a straight-line basis over the service contract term. PCS includes a limited period of telephone support, updates, repair or replacement of any failed product or component that fails during the term of the agreement, bug fixes and rights to upgrades, when and if available. Consulting services are customarily billed at fixed hourly rates, plus out-of-pocket expenses, and revenues are recognized when the consulting has been completed. Training revenue is recognized when the training has been completed. Arrangement consideration is first allocated between software (consisting of nonessential and stand-alone software) and non-software deliverables. The majority of the Company’s products are hardware appliances which contain software essential to the overall functionality of the products. Hardware appliances are generally sold with PCS and on occasion, with consulting and/or training services. Arrangement consideration in such multiple element transactions is allocated to each element based on a fair value hierarchy, where the selling price for an element is based on vendor specific objective evidence (VSOE), if available, third-party evidence (TPE), if available and VSOE is not available; or the best estimate of selling price (BESP), if neither VSOE or TPE is available. For software deliverables, the Company allocates revenue between multiple elements based on software revenue recognition guidance. Software revenue recognition guidance requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair values of those elements. The fair value of an element must be based on VSOE. Where VSOE of the fair value of delivered elements is not available, revenue is recognized on the “residual method” based on the fair value of undelivered elements. If evidence of fair value of one or more undelivered elements does not exist, all revenue is deferred and recognized at the earlier of the delivery of those elements or the establishment of fair value of the remaining undelivered elements. The Company establishes VSOE for its products, PCS, consulting and training services based on the sales price charged for each element when sold separately. The sales price is discounted from the applicable list price based on various factors including the type of customer, volume of sales, geographic region and program level. The Company’s list prices are generally not fair value as discounts may be given based on the factors enumerated above. The Company uses historical sales transactions to determine whether VSOE can be established for each of the elements. In most instances, VSOE of fair value is the sales price of actual standalone (unbundled) transactions within the past 12 month period, when a substantial majority of transactions (more than 80% ) are priced within a narrow range, which the Company has determined to be plus or minus 15% of the median sales price. The Company believes that the VSOE of fair value of training and consulting services is represented by the billable rate per hour, based on the rates charged to customers when they purchase standalone training or consulting services. The price of consulting services is not based on the type of customer, volume of sales, geographic region or program level. The Company is typically not able to determine VSOE or TPE for non-software products. TPE is determined based on competitor prices for similar elements when sold separately. Generally, the Company’s go-to-market strategy differs from that of other competitive products or services in its markets and the Company’s offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine the selling prices on a stand-alone basis of similar products offered by its competitors. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The Company has been able to establish BESP through the list price, less a discount deemed appropriate to maintain a reasonable gross margin. Management regularly reviews the gross margin information. Non-software product BESP is determined through the Company’s review of historical sales transactions within the past 12 month period. Additional factors considered in determining an appropriate BESP include, but are not limited to, cost of products, pricing practices, geographies, customer classes, and distribution channels. The Company regularly validates the VSOE of fair value and BESP for elements in its multiple element arrangements. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excluded these amounts from revenues. Goodwill and Acquired Intangible Assets Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. The Company tests goodwill for impairment on an annual basis and between annual tests when impairment indicators are identified, and goodwill is written down when impaired. Goodwill was recorded in connection with the acquisition of Defense.Net, Inc. in fiscal year 2014, Versafe Ltd. and LineRate Systems, Inc. in fiscal year 2013, Traffix Systems in fiscal year 2012, Acopia Networks, Inc. in fiscal year 2007, Swan Labs, Inc. in fiscal year 2006, MagniFire Websystems, Inc. in fiscal year 2004 and uRoam, Inc. in fiscal year 2003. For its annual goodwill impairment test in all periods to date, the Company has operated under one reporting unit and the fair value of its reporting unit has been determined by the Company’s enterprise value. The Company performs its annual goodwill impairment test during the second fiscal quarter. As part of the annual goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of the Company’s reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. Examples of events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount include macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the Company’s reporting unit is less than its carrying amount, the provisions of authoritative guidance require that the Company perform a two-step impairment test on goodwill. The first step of the test identifies whether potential impairment may have occurred, while the second step of the test measures the amount of the impairment, if any. Impairment is recognized when the carrying amount of goodwill exceeds its fair value. In March 2016, the Company completed a qualitative assessment of potential impairment indicators and concluded that it was more-likely-than-not that the fair value of its reporting unit exceeded its carrying amount. The Company considered potential impairment indicators of goodwill and acquired intangible assets at June 30, 2016 and noted no indicators of impairment. Software Development Costs The authoritative guidance requires certain internal software development costs related to software to be sold to be capitalized upon the establishment of technological feasibility. The Company's software development costs incurred subsequent to achieving technological feasibility have not been significant, and all software development costs have been expensed as research and development activities as incurred. Internal Use Software In accordance with the authoritative guidance, the Company capitalizes application development stage costs associated with the development of new functionality for internal-use software and software developed related to its SaaS-based product offerings. The capitalized costs are then amortized over the estimated useful life of the software, which is generally three to five years, and are included in property and equipment in the accompanying consolidated balance sheets. Stock-Based Compensation The Company accounts for stock-based compensation using the straight-line attribution method for recognizing compensation expense. The Company recognized $38.4 million and $36.5 million of stock-based compensation expense for the three months ended June 30, 2016 and 2015 , respectively, and $118.4 million and $103.9 million for the nine months ended June 30, 2016 and 2015 , respectively. As of June 30, 2016 , there was $153.8 million of total unrecognized stock-based compensation cost, the majority of which will be recognized over the next two years. Going forward, stock-based compensation expenses may increase as the Company issues additional equity-based awards to continue to attract and retain key employees. The Company issues incentive awards to its employees through stock-based compensation consisting of restricted stock units (RSUs). On October 30, 2015 , the Company’s Compensation Committee approved 1,272,331 RSUs to employees and executive officers pursuant to the Company’s annual equity awards program. The value of RSUs is determined using the fair value method, which in this case, is based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant. The Company recognizes compensation expense for only the portion of restricted stock units that are expected to vest. Therefore, the Company applies estimated forfeiture rates that are derived from historical employee termination behavior. Based on historical differences with forfeitures of stock-based awards granted to the Company’s executive officers and Board of Directors versus grants awarded to all other employees, the Company has developed separate forfeiture expectations for these two groups. The Company issues incentive awards to certain current executive officers as part of its annual equity awards program. Fifty percent of the aggregate number of RSUs issued to executive officers vest in equal quarterly increments, and 50% are subject to the Company achieving specified quarterly revenue and EBITDA goals. In each case, 70% of the quarterly performance stock grant is based on achieving at least 80% of the quarterly revenue goal set by the Company's Board of Directors, and the other 30% is based on achieving at least 80% of the quarterly EBITDA goal set by the Company's Board of Directors. The quarterly performance stock grant is paid linearly over 80% of the targeted goals. At least 100% of both goals must be attained in order for the quarterly performance stock grant to be awarded over 100% . Each goal is evaluated individually and subject to the 80% achievement threshold and the 100% over-achievement threshold. Each goal is also capped at achievement of 200% above target. As of June 30, 2016 , the following annual equity grants for executive officers or a portion thereof are outstanding: Grant Date RSUs Granted Vesting Schedule Vesting Period Date Fully Vested November 2, 2015 145,508 Quarterly 4 years November 1, 2019 November 1, 2014 171,575 Quarterly 4 years November 1, 2018 November 1, 2013 231,320 Quarterly 4 years November 1, 2017 November 1, 2012 290,415 Quarterly 4 years November 1, 2016 The Company recognizes compensation costs for awards with performance conditions when it concludes it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at each balance sheet date and adjusts compensation costs based on the probability assessment. Common Stock Repurchase On April 20, 2016 , the Company announced that its Board of Directors authorized an additional $1.0 billion for its common stock share repurchase program. This new authorization is incremental to the existing $2.4 billion program, initially approved in October 2010 and expanded in each fiscal year. Acquisitions for the share repurchase programs will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. The programs can be terminated at any time. As of June 30, 2016 , the Company had repurchased and retired 5,402,131 shares at an average price of $101.83 per share during fiscal year 2016 and the Company had $923.8 million remaining authorized to purchase shares. Earnings Per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. The Company’s nonvested restricted stock awards and restricted stock units do not have nonforfeitable rights to dividends or dividend equivalents and are not considered participating securities that should be included in the computation of earnings per share under the two-class method. The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three months ended Nine months ended 2016 2015 2016 2015 Numerator Net income $ 91,789 $ 93,172 $ 256,920 $ 267,977 Denominator Weighted average shares outstanding — basic 66,851 71,509 67,990 72,370 Dilutive effect of common shares from stock options and restricted stock units 384 448 439 567 Weighted average shares outstanding — diluted 67,235 71,957 68,429 72,937 Basic net income per share $ 1.37 $ 1.30 $ 3.78 $ 3.70 Diluted net income per share $ 1.37 $ 1.29 $ 3.75 $ 3.67 An immaterial amount of common shares potentially issuable from stock options for the three and nine months ended June 30, 2016 and 2015 , are excluded from the calculation of diluted earnings per share because the exercise price was greater than the average market price of common stock for the respective period. Comprehensive Income Comprehensive income includes certain changes in equity that are excluded from net income. Specifically, unrealized gains or losses on securities and foreign currency translation adjustments are included in accumulated other comprehensive income or loss. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 and the related amendments outline a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. In accordance with the agreed upon delay, ASU 2014-09 and all related amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05), which provides guidance on determining whether a cloud computing arrangement contains a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11), which changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which requires that all deferred tax assets and liabilities be classified as noncurrent in a classified balance sheet. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02), which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and is required to be applied with a modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Company determines fair value using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances and expands disclosure about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date, essentially the exit price. The levels of fair value hierarchy are: Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date that the Company has the ability to access. Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs for which there is little or no market data available. These inputs reflect management’s assumptions of what market participants would use in pricing the asset or liability. Level 1 investments are valued based on quoted market prices in active markets and include the Company’s cash equivalent investments. Level 2 investments, which include investments that are valued based on quoted prices in markets that are not active, broker or dealer quotations, actual trade data, benchmark yields or alternative pricing sources with reasonable levels of price transparency, include the Company’s certificates of deposit, corporate bonds and notes, municipal bonds and notes, U.S. government securities, U.S. government agency securities and international government securities. Fair values for the Company’s level 2 investments are based on similar assets without applying significant judgments. In addition, all of the Company’s level 2 investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments. A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements at June 30, 2016 , were as follows (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at June 30, 2016 Cash equivalents $ 49,907 $ — $ — $ 49,907 Short-term investments Available-for-sale securities — corporate bonds and notes — 246,847 — 246,847 Available-for-sale securities — municipal bonds and notes — 41,312 — 41,312 Available-for-sale securities — U.S. government securities — 70,068 — 70,068 Available-for-sale securities — U.S. government agency securities — 22,884 — 22,884 Long-term investments Available-for-sale securities — corporate bonds and notes — 135,209 — 135,209 Available-for-sale securities — municipal bonds and notes — 45,175 — 45,175 Available-for-sale securities — U.S. government securities — 30,074 — 30,074 Available-for-sale securities — U.S. government agency securities — 103,030 — 103,030 Total $ 49,907 $ 694,599 $ — $ 744,506 The Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements at September 30, 2015 , were as follows (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at September 30, 2015 Cash equivalents $ 60,142 $ — $ — $ 60,142 Short-term investments Available-for-sale securities — corporate bonds and notes — 224,693 — 224,693 Available-for-sale securities — municipal bonds and notes — 39,518 — 39,518 Available-for-sale securities — U.S. government securities — 58,530 — 58,530 Available-for-sale securities — U.S. government agency securities — 58,323 — 58,323 Available-for-sale securities — international government securities — 2,818 — 2,818 Long-term investments Available-for-sale securities — corporate bonds and notes — 244,973 — 244,973 Available-for-sale securities — municipal bonds and notes — 74,505 — 74,505 Available-for-sale securities — U.S. government securities — 26,089 — 26,089 Available-for-sale securities — U.S. government agency securities — 52,089 — 52,089 Total $ 60,142 $ 781,538 $ — $ 841,680 The Company uses the fair value hierarchy for financial assets and liabilities. The Company’s non-financial assets and liabilities, which include goodwill, intangible assets, and long-lived assets, are not required to be carried at fair value on a recurring basis. These non-financial assets and liabilities 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 impairment is recognized. The Company reviews goodwill and intangible assets for impairment annually, during the second quarter of each fiscal year, or as circumstances indicate the possibility of impairment. The Company monitors the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate its carrying amount may not be recoverable. During the three and nine months ended June 30, 2016 , the Company did not recognize any impairment charges related to goodwill, intangible assets, or long-lived assets. |
Short-Term and Long-Term Invest
Short-Term and Long-Term Investments | 9 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-Term and Long-Term Investments | Short-Term and Long-Term Investments Short-term investments consist of the following (in thousands): June 30, 2016 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 246,805 $ 77 $ (35 ) $ 246,847 Municipal bonds and notes 41,299 17 (4 ) 41,312 U.S. government securities 70,034 34 — 70,068 U.S. government agency securities 22,884 1 (1 ) 22,884 $ 381,022 $ 129 $ (40 ) $ 381,111 September 30, 2015 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 224,635 $ 100 $ (42 ) $ 224,693 Municipal bonds and notes 39,497 24 (3 ) 39,518 U.S. government securities 58,499 31 — 58,530 U.S. government agency securities 58,318 10 (5 ) 58,323 International government securities 2,819 — (1 ) 2,818 $ 383,768 $ 165 $ (51 ) $ 383,882 Long-term investments consist of the following (in thousands): June 30, 2016 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 134,753 $ 485 $ (29 ) $ 135,209 Municipal bonds and notes 45,010 166 (1 ) 45,175 U.S. government securities 29,966 108 — 30,074 U.S. government agency securities 102,933 110 (13 ) 103,030 $ 312,662 $ 869 $ (43 ) $ 313,488 September 30, 2015 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 245,224 $ 152 $ (403 ) $ 244,973 Municipal bonds and notes 74,349 169 (13 ) 74,505 U.S. government securities 26,075 15 (1 ) 26,089 U.S. government agency securities 52,042 47 — 52,089 $ 397,690 $ 383 $ (417 ) $ 397,656 The amortized cost and fair value of fixed maturities at June 30, 2016 , by contractual years-to-maturity, are presented below (in thousands): Cost or Amortized Cost Fair Value One year or less $ 381,022 $ 381,111 Over one year 312,662 313,488 $ 693,684 $ 694,599 The following table summarizes investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for more than 12 months as of June 30, 2016 (in thousands): Less Than 12 Months 12 Months or Greater Total June 30, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and notes $ 50,180 $ (19 ) $ 70,980 $ (45 ) $ 121,160 $ (64 ) Municipal bonds and notes 4,449 (1 ) 10,087 (4 ) 14,536 (5 ) U.S. government agency securities 30,455 (13 ) 15,362 (1 ) 45,817 (14 ) Total $ 85,084 $ (33 ) $ 96,429 $ (50 ) $ 181,513 $ (83 ) The Company invests in securities that are rated investment grade or better. The Company reviews the individual securities in its portfolio to determine whether a decline in a security's fair value below the amortized cost basis is other-than-temporary. The Company determined that as of June 30, 2016 , there were no investments in its portfolio that were other-than-temporarily impaired. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The Company outsources the manufacturing of its pre-configured hardware platforms to contract manufacturers, who assemble each product to the Company’s specifications. As protection against component shortages and to provide replacement parts for its service teams, the Company also stocks limited supplies of certain key product components. The Company reduces inventory to net realizable value based on excess and obsolete inventories determined primarily by historical usage and forecasted demand. Inventories consist of hardware and related component parts and are recorded at the lower of cost or market (as determined by the first-in, first-out method). Inventories consist of the following (in thousands): June 30, September 30, Finished goods $ 24,296 $ 24,346 Raw materials 9,509 9,371 $ 33,805 $ 33,717 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Guarantees and Product Warranties In the normal course of business to facilitate sales of its products, the Company indemnifies other parties, including customers, resellers, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed to hold the other party 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. The Company has entered into indemnification agreements with its officers and directors and certain other employees, and the Company’s bylaws contain similar indemnification obligations to the Company’s agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. The Company generally offers warranties of one year for hardware for those customers without service contracts, with the option of purchasing additional warranty coverage in yearly increments. The Company accrues for warranty costs as part of its cost of sales based on associated material product costs and technical support labor costs. Accrued warranty costs as of June 30, 2016 and June 30, 2015 were not considered material. Commitments As of June 30, 2016 , the Company’s principal commitments consisted of obligations outstanding under operating leases. The Company leases its facilities under operating leases that expire at various dates through 2025. There have been no material changes in the Company’s principal lease commitments compared to those discussed in Note 7 to its annual consolidated financial statements. The Company currently has arrangements with contract manufacturers and other suppliers for the manufacturing of its products. The arrangement with the primary contract manufacturer allows them to procure component inventory on the Company’s behalf based on a rolling production forecast provided by the Company. The Company is obligated to the purchase of component inventory that the contract manufacturer procures in accordance with the forecast, unless it gives notice of order cancellation in advance of applicable lead times. There have been no material changes in the Company's inventory purchase obligations compared to those discussed in Note 7 to its annual consolidated financial statements. Legal Proceedings On May 1, 2013, Radware, Ltd. and Radware, Inc. (Radware), filed a complaint for patent infringement against the Company in the United States District Court for the Northern District of California seeking an unspecified amount of monetary damages, as well as interest, costs, and injunctive relief based upon allegations that the Company infringed three Radware patents related to devices for ISP link load balancing. The Company answered the Complaint, denied the substantive allegations, and sought a declaratory judgment that the asserted claims were invalid. The Company also counter-claimed alleging that Radware infringes certain Company patents and is seeking an unspecified amount of monetary damages, as well as interest, costs, and injunctive relief for Radware’s infringement of its patents. F5 was granted summary judgment of non-infringement of one of Radware’s three patents before trial. Radware’s remaining infringement claims proceeded to trial and on March 15, 2016, the jury returned a verdict finding that F5 had not proven that the asserted patents were invalid, that the Company willfully infringed one of the two patents and awarded Radware $6.4 million in damages against the Company. On July 11, 2016, Radware filed various post-trial motions seeking permanent injunctive relief, an accounting with respect to infringing sales that were not accounted for at trial, and a motion seeking treble damages and attorneys ’ fees. F5 had previously moved for judgment as a matter of law on Radware’s willfulness claim, and that motion is still pending before the court. Radware’s motions are currently scheduled to be heard on August 19, 2016. The Company’s counter-claims against Radware were resolved through an acceptance of an offer for judgment. In addition, on April 4, 2016, the Company sued Radware, Inc. in the United States District Court for the Western District of Washington accusing Radware products of infringing three additional Company patents. The Company’s complaint seeks a jury trial and an unspecified amount of monetary damages, as well as interest, costs, and injunctive relief. In addition to the above referenced matters, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business, including intellectual property litigation. Management believes that the Company has meritorious defenses to the allegations made in its pending cases and intends to vigorously defend these lawsuits; however, the Company is unable currently to determine the ultimate outcome of these or similar matters or the potential exposure to loss, if any. There are many uncertainties associated with any litigation and these actions or other third-party claims against the Company may cause it to incur costly litigation and/or substantial settlement charges that could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows. The Company records an accrual for loss contingencies for legal proceedings when it believes that an unfavorable outcome is both (a) probable and (b) the amount or range of any possible loss is reasonably estimable. In the second quarter of fiscal 2016, the Company recorded an accrual related to the Radware litigation mentioned above of $6.4 million for the verdict and $2.5 million for legal fees and other costs associated with the litigation. In the current quarter, the Company recorded a credit of $0.5 million related to other costs associated with the litigation. The Company has not recorded any other accruals for loss contingencies associated with other legal proceedings. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate was 34.4% and 33.6% for the three and nine months ended June 30, 2016 , respectively, compared to 33.8% and 34.9% for the three and nine months ended June 30, 2015 , respectively. At June 30, 2016 , the Company had $10.5 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate. It is anticipated that the Company’s existing liabilities for unrecognized tax benefits will change within the next twelve months due to audit settlements or the expiration of statutes of limitations. The Company does not expect these changes to be material to the consolidated financial statements. The Company recognizes interest and, if applicable, penalties for any uncertain tax positions as a component of income tax expense. The Company and its subsidiaries are subject to U.S. federal income tax as well as the income tax of multiple state and foreign jurisdictions. The Company has concluded all U.S. federal income tax matters for fiscal years through September 30, 2012. The Company is currently under audit by the IRS for fiscal year 2014 and by various states for fiscal years 2011 through 2014. Major jurisdictions where there are wholly owned subsidiaries of F5 Networks, Inc. which require income tax filings include the United Kingdom, Japan, Singapore and Australia. The earliest periods open for review by local taxing authorities are fiscal years 2013 for the United Kingdom, 2010 for Japan, 2011 for Singapore, and 2012 for Australia. Within the next four fiscal quarters, the statute of limitations will begin to close on the fiscal years 2011, 2012 and 2013 state income tax returns. |
Geographic Sales and Significan
Geographic Sales and Significant Customers | 9 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Geographic Sales and Significant Customers | Geographic Sales and Significant Customers Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Management has determined that the Company is organized as, and operates in, one reportable operating segment: the development, marketing and sale of application delivery networking products that optimize the security, performance and availability of network applications, servers and storage systems. The Company does business in four main geographic regions: the Americas (primarily the United States); Europe, the Middle East, and Africa (EMEA); Japan; and the Asia Pacific region (APAC). The Company’s chief operating decision-making group reviews financial information presented on a consolidated basis accompanied by information about revenues by geographic region. The Company’s foreign offices conduct sales, marketing and support activities. Revenues are attributed by geographic location based on the location of the customer. The Company’s assets are primarily located in the United States. Therefore, geographic information is presented only for net revenue. The following presents revenues by geographic region (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Americas: United States $ 256,518 $ 259,916 $ 737,792 $ 735,620 Other 23,835 22,403 81,574 73,707 Total Americas 280,353 282,319 819,366 809,327 EMEA 117,286 118,095 367,155 348,370 Japan 24,034 20,896 71,345 67,494 Asia Pacific 74,849 62,276 211,819 193,331 $ 496,522 $ 483,586 $ 1,469,685 $ 1,418,522 The following distributors of the Company's products accounted for more than 10% of total net revenue: Three months ended Nine months ended 2016 2015 2016 2015 Westcon Group, Inc. 18.8 % 19.2 % 18.9 % 17.8 % Ingram Micro, Inc. 14.9 % 16.7 % 14.8 % 16.3 % Avnet Technology Solutions 13.7 % 13.5 % 13.6 % 13.6 % Arrow ECS 1 — — 10.1 % 10.6 % 1. Arrow ECS accounted for under 10% of total net revenue for the three months ended June 30, 2016 and June 30, 2015 No other distributors accounted for more than 10% of total net revenue. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policy) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business F5 Networks, Inc. (the “Company”) is the leading developer and provider of software-defined application services. The Company’s core technology is a full-proxy, programmable, highly-scalable software platform called TMOS, which supports a broad array of features and functions designed to ensure that applications delivered over Internet Protocol (IP) networks are secure, fast and available. The Company’s TMOS-based offerings include software products for local and global traffic management, network and application security, access management, web acceleration and a number of other network and application services. These products are available as modules that can run individually or as part of an integrated solution on the Company’s high-performance, scalable, purpose-built BIG-IP appliances and VIPRION chassis-based hardware, or as software-only Virtual Editions. The Company also offers distributed denial-of-service ( DDoS) protection, application security and other application services by subscription on its cloud-based Silverline platform. In connection with its products, the Company offers a broad range of support services including consulting, training, installation and maintenance. |
Basis of Presentation | Basis of Presentation The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for their fair statement in conformity with accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015 . Certain prior year amounts, specifically relating to the tax effects of unrealized gains and losses on securities, have been corrected and reclassified as tax expenses and benefits, respectively, to conform to the current year presentation in the Consolidated Statements of Comprehensive Income. The corrected and reclassified amounts are considered immaterial and there was no change to comprehensive income |
Revenue Recognition | Revenue Recognition The Company sells products through distributors, resellers, and directly to end users. Revenue is recognized provided that all of the following criteria have been met: • Persuasive evidence of an arrangement exists. Evidence of an arrangement generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement. • Delivery has occurred. The Company uses shipping or related documents, or written evidence of customer acceptance, when applicable, to verify delivery or completion of any performance terms. • The sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. • Collectability is reasonably assured. The Company assesses collectability primarily based on the creditworthiness of the customer as determined by credit checks and related analysis, as well as the Customer’s payment history. Revenue from the sale of products is generally recognized when the product has been shipped and the customer is obligated to pay for the product. When rights of return are present and the Company cannot estimate returns, revenue is recognized when such rights of return lapse. Payment terms to domestic customers are generally net 30 days to net 45 days. Payment terms to international customers range from net 30 days to net 120 days based on normal and customary trade practices in the individual markets. The Company offers extended payment terms to certain customers, in which case, revenue is recognized when payments are due. Revenues for post-contract customer support (PCS) are recognized on a straight-line basis over the service contract term. PCS includes a limited period of telephone support, updates, repair or replacement of any failed product or component that fails during the term of the agreement, bug fixes and rights to upgrades, when and if available. Consulting services are customarily billed at fixed hourly rates, plus out-of-pocket expenses, and revenues are recognized when the consulting has been completed. Training revenue is recognized when the training has been completed. Arrangement consideration is first allocated between software (consisting of nonessential and stand-alone software) and non-software deliverables. The majority of the Company’s products are hardware appliances which contain software essential to the overall functionality of the products. Hardware appliances are generally sold with PCS and on occasion, with consulting and/or training services. Arrangement consideration in such multiple element transactions is allocated to each element based on a fair value hierarchy, where the selling price for an element is based on vendor specific objective evidence (VSOE), if available, third-party evidence (TPE), if available and VSOE is not available; or the best estimate of selling price (BESP), if neither VSOE or TPE is available. For software deliverables, the Company allocates revenue between multiple elements based on software revenue recognition guidance. Software revenue recognition guidance requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the relative fair values of those elements. The fair value of an element must be based on VSOE. Where VSOE of the fair value of delivered elements is not available, revenue is recognized on the “residual method” based on the fair value of undelivered elements. If evidence of fair value of one or more undelivered elements does not exist, all revenue is deferred and recognized at the earlier of the delivery of those elements or the establishment of fair value of the remaining undelivered elements. The Company establishes VSOE for its products, PCS, consulting and training services based on the sales price charged for each element when sold separately. The sales price is discounted from the applicable list price based on various factors including the type of customer, volume of sales, geographic region and program level. The Company’s list prices are generally not fair value as discounts may be given based on the factors enumerated above. The Company uses historical sales transactions to determine whether VSOE can be established for each of the elements. In most instances, VSOE of fair value is the sales price of actual standalone (unbundled) transactions within the past 12 month period, when a substantial majority of transactions (more than 80% ) are priced within a narrow range, which the Company has determined to be plus or minus 15% of the median sales price. The Company believes that the VSOE of fair value of training and consulting services is represented by the billable rate per hour, based on the rates charged to customers when they purchase standalone training or consulting services. The price of consulting services is not based on the type of customer, volume of sales, geographic region or program level. The Company is typically not able to determine VSOE or TPE for non-software products. TPE is determined based on competitor prices for similar elements when sold separately. Generally, the Company’s go-to-market strategy differs from that of other competitive products or services in its markets and the Company’s offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Company is unable to reliably determine the selling prices on a stand-alone basis of similar products offered by its competitors. When the Company is unable to establish selling price using VSOE or TPE, the Company uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Company would transact a sale if the product or service were sold on a stand-alone basis. The Company has been able to establish BESP through the list price, less a discount deemed appropriate to maintain a reasonable gross margin. Management regularly reviews the gross margin information. Non-software product BESP is determined through the Company’s review of historical sales transactions within the past 12 month period. Additional factors considered in determining an appropriate BESP include, but are not limited to, cost of products, pricing practices, geographies, customer classes, and distribution channels. The Company regularly validates the VSOE of fair value and BESP for elements in its multiple element arrangements. The Company accounts for taxes collected from customers and remitted to governmental authorities on a net basis and excluded these amounts from revenues. |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill represents the excess purchase price over the estimated fair value of net assets acquired as of the acquisition date. The Company tests goodwill for impairment on an annual basis and between annual tests when impairment indicators are identified, and goodwill is written down when impaired. Goodwill was recorded in connection with the acquisition of Defense.Net, Inc. in fiscal year 2014, Versafe Ltd. and LineRate Systems, Inc. in fiscal year 2013, Traffix Systems in fiscal year 2012, Acopia Networks, Inc. in fiscal year 2007, Swan Labs, Inc. in fiscal year 2006, MagniFire Websystems, Inc. in fiscal year 2004 and uRoam, Inc. in fiscal year 2003. For its annual goodwill impairment test in all periods to date, the Company has operated under one reporting unit and the fair value of its reporting unit has been determined by the Company’s enterprise value. The Company performs its annual goodwill impairment test during the second fiscal quarter. As part of the annual goodwill impairment test, the Company first performs a qualitative assessment to determine whether further impairment testing is necessary. If, as a result of its qualitative assessment, it is more-likely-than-not (i.e. greater than 50% chance) that the fair value of the Company’s reporting unit is less than its carrying amount, the quantitative impairment test will be required. Otherwise, no further testing will be required. Examples of events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount include macro-economic conditions such as deterioration in the entity’s operating environment or industry or market considerations; entity-specific events such as increasing costs, declining financial performance, or loss of key personnel; or other events such as an expectation that a reporting unit will be sold or a sustained decrease in the stock price on either an absolute basis or relative to peers. If it is determined, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the Company’s reporting unit is less than its carrying amount, the provisions of authoritative guidance require that the Company perform a two-step impairment test on goodwill. The first step of the test identifies whether potential impairment may have occurred, while the second step of the test measures the amount of the impairment, if any. Impairment is recognized when the carrying amount of goodwill exceeds its fair value. In March 2016, the Company completed a qualitative assessment of potential impairment indicators and concluded that it was more-likely-than-not that the fair value of its reporting unit exceeded its carrying amount. The Company considered potential impairment indicators of goodwill and acquired intangible assets at June 30, 2016 and noted no indicators of impairment. |
Software Development Costs | Software Development Costs The authoritative guidance requires certain internal software development costs related to software to be sold to be capitalized upon the establishment of technological feasibility. The Company's software development costs incurred subsequent to achieving technological feasibility have not been significant, and all software development costs have been expensed as research and development activities as incurred. |
Internal Use Software | Internal Use Software In accordance with the authoritative guidance, the Company capitalizes application development stage costs associated with the development of new functionality for internal-use software and software developed related to its SaaS-based product offerings. The capitalized costs are then amortized over the estimated useful life of the software, which is generally three to five years, and are included in property and equipment in the accompanying consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the straight-line attribution method for recognizing compensation expense. The Company recognized $38.4 million and $36.5 million of stock-based compensation expense for the three months ended June 30, 2016 and 2015 , respectively, and $118.4 million and $103.9 million for the nine months ended June 30, 2016 and 2015 , respectively. As of June 30, 2016 , there was $153.8 million of total unrecognized stock-based compensation cost, the majority of which will be recognized over the next two years. Going forward, stock-based compensation expenses may increase as the Company issues additional equity-based awards to continue to attract and retain key employees. The Company issues incentive awards to its employees through stock-based compensation consisting of restricted stock units (RSUs). On October 30, 2015 , the Company’s Compensation Committee approved 1,272,331 RSUs to employees and executive officers pursuant to the Company’s annual equity awards program. The value of RSUs is determined using the fair value method, which in this case, is based on the number of shares granted and the quoted price of the Company’s common stock on the date of grant. The Company recognizes compensation expense for only the portion of restricted stock units that are expected to vest. Therefore, the Company applies estimated forfeiture rates that are derived from historical employee termination behavior. Based on historical differences with forfeitures of stock-based awards granted to the Company’s executive officers and Board of Directors versus grants awarded to all other employees, the Company has developed separate forfeiture expectations for these two groups. The Company issues incentive awards to certain current executive officers as part of its annual equity awards program. Fifty percent of the aggregate number of RSUs issued to executive officers vest in equal quarterly increments, and 50% are subject to the Company achieving specified quarterly revenue and EBITDA goals. In each case, 70% of the quarterly performance stock grant is based on achieving at least 80% of the quarterly revenue goal set by the Company's Board of Directors, and the other 30% is based on achieving at least 80% of the quarterly EBITDA goal set by the Company's Board of Directors. The quarterly performance stock grant is paid linearly over 80% of the targeted goals. At least 100% of both goals must be attained in order for the quarterly performance stock grant to be awarded over 100% . Each goal is evaluated individually and subject to the 80% achievement threshold and the 100% over-achievement threshold. Each goal is also capped at achievement of 200% above target. As of June 30, 2016 , the following annual equity grants for executive officers or a portion thereof are outstanding: Grant Date RSUs Granted Vesting Schedule Vesting Period Date Fully Vested November 2, 2015 145,508 Quarterly 4 years November 1, 2019 November 1, 2014 171,575 Quarterly 4 years November 1, 2018 November 1, 2013 231,320 Quarterly 4 years November 1, 2017 November 1, 2012 290,415 Quarterly 4 years November 1, 2016 The Company recognizes compensation costs for awards with performance conditions when it concludes it is probable that the performance condition will be achieved. The Company reassesses the probability of vesting at each balance sheet date and adjusts compensation costs based on the probability assessment. |
Common Stock Repurchase | Common Stock Repurchase On April 20, 2016 , the Company announced that its Board of Directors authorized an additional $1.0 billion for its common stock share repurchase program. This new authorization is incremental to the existing $2.4 billion program, initially approved in October 2010 and expanded in each fiscal year. Acquisitions for the share repurchase programs will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. The programs can be terminated at any time. As of June 30, 2016 , the Company had repurchased and retired 5,402,131 shares at an average price of $101.83 per share during fiscal year 2016 and the Company had $923.8 million remaining authorized to purchase shares. |
Earnings Per Share | Earnings Per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. The Company’s nonvested restricted stock awards and restricted stock units do not have nonforfeitable rights to dividends or dividend equivalents and are not considered participating securities that should be included in the computation of earnings per share under the two-class method. |
Comprehensive Income | Comprehensive Income Comprehensive income includes certain changes in equity that are excluded from net income. Specifically, unrealized gains or losses on securities and foreign currency translation adjustments are included in accumulated other comprehensive income or loss. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09). ASU 2014-09 and the related amendments outline a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. In accordance with the agreed upon delay, ASU 2014-09 and all related amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period (ASU 2014-12), which requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05), which provides guidance on determining whether a cloud computing arrangement contains a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11), which changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which requires that all deferred tax assets and liabilities be classified as noncurrent in a classified balance sheet. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02), which requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a corresponding lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and is required to be applied with a modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which is intended to simplify several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact that this updated standard will have on its consolidated financial statements and footnote disclosures. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | As of June 30, 2016 , the following annual equity grants for executive officers or a portion thereof are outstanding: Grant Date RSUs Granted Vesting Schedule Vesting Period Date Fully Vested November 2, 2015 145,508 Quarterly 4 years November 1, 2019 November 1, 2014 171,575 Quarterly 4 years November 1, 2018 November 1, 2013 231,320 Quarterly 4 years November 1, 2017 November 1, 2012 290,415 Quarterly 4 years November 1, 2016 |
Schedule of Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three months ended Nine months ended 2016 2015 2016 2015 Numerator Net income $ 91,789 $ 93,172 $ 256,920 $ 267,977 Denominator Weighted average shares outstanding — basic 66,851 71,509 67,990 72,370 Dilutive effect of common shares from stock options and restricted stock units 384 448 439 567 Weighted average shares outstanding — diluted 67,235 71,957 68,429 72,937 Basic net income per share $ 1.37 $ 1.30 $ 3.78 $ 3.70 Diluted net income per share $ 1.37 $ 1.29 $ 3.75 $ 3.67 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | The Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements at June 30, 2016 , were as follows (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at June 30, 2016 Cash equivalents $ 49,907 $ — $ — $ 49,907 Short-term investments Available-for-sale securities — corporate bonds and notes — 246,847 — 246,847 Available-for-sale securities — municipal bonds and notes — 41,312 — 41,312 Available-for-sale securities — U.S. government securities — 70,068 — 70,068 Available-for-sale securities — U.S. government agency securities — 22,884 — 22,884 Long-term investments Available-for-sale securities — corporate bonds and notes — 135,209 — 135,209 Available-for-sale securities — municipal bonds and notes — 45,175 — 45,175 Available-for-sale securities — U.S. government securities — 30,074 — 30,074 Available-for-sale securities — U.S. government agency securities — 103,030 — 103,030 Total $ 49,907 $ 694,599 $ — $ 744,506 The Company’s financial assets measured at fair value on a recurring basis subject to the disclosure requirements at September 30, 2015 , were as follows (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value at September 30, 2015 Cash equivalents $ 60,142 $ — $ — $ 60,142 Short-term investments Available-for-sale securities — corporate bonds and notes — 224,693 — 224,693 Available-for-sale securities — municipal bonds and notes — 39,518 — 39,518 Available-for-sale securities — U.S. government securities — 58,530 — 58,530 Available-for-sale securities — U.S. government agency securities — 58,323 — 58,323 Available-for-sale securities — international government securities — 2,818 — 2,818 Long-term investments Available-for-sale securities — corporate bonds and notes — 244,973 — 244,973 Available-for-sale securities — municipal bonds and notes — 74,505 — 74,505 Available-for-sale securities — U.S. government securities — 26,089 — 26,089 Available-for-sale securities — U.S. government agency securities — 52,089 — 52,089 Total $ 60,142 $ 781,538 $ — $ 841,680 |
Short-Term and Long-Term Inve18
Short-Term and Long-Term Investments (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Schedule of Investments [Line Items] | |
Schedule of Amortized Cost and Fair Value of Fixed Maturities by Contractual Years-To-Maturity | The amortized cost and fair value of fixed maturities at June 30, 2016 , by contractual years-to-maturity, are presented below (in thousands): Cost or Amortized Cost Fair Value One year or less $ 381,022 $ 381,111 Over one year 312,662 313,488 $ 693,684 $ 694,599 |
Schedule of Investments That Have Been in a Continuous Unrealized Loss Position | The following table summarizes investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for more than 12 months as of June 30, 2016 (in thousands): Less Than 12 Months 12 Months or Greater Total June 30, 2016 Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate bonds and notes $ 50,180 $ (19 ) $ 70,980 $ (45 ) $ 121,160 $ (64 ) Municipal bonds and notes 4,449 (1 ) 10,087 (4 ) 14,536 (5 ) U.S. government agency securities 30,455 (13 ) 15,362 (1 ) 45,817 (14 ) Total $ 85,084 $ (33 ) $ 96,429 $ (50 ) $ 181,513 $ (83 ) |
Short-Term Investments [Member] | |
Schedule of Investments [Line Items] | |
Schedule of Short-Term and Long-Term Investments | Short-term investments consist of the following (in thousands): June 30, 2016 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 246,805 $ 77 $ (35 ) $ 246,847 Municipal bonds and notes 41,299 17 (4 ) 41,312 U.S. government securities 70,034 34 — 70,068 U.S. government agency securities 22,884 1 (1 ) 22,884 $ 381,022 $ 129 $ (40 ) $ 381,111 September 30, 2015 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 224,635 $ 100 $ (42 ) $ 224,693 Municipal bonds and notes 39,497 24 (3 ) 39,518 U.S. government securities 58,499 31 — 58,530 U.S. government agency securities 58,318 10 (5 ) 58,323 International government securities 2,819 — (1 ) 2,818 $ 383,768 $ 165 $ (51 ) $ 383,882 |
Long-Term Investments [Member] | |
Schedule of Investments [Line Items] | |
Schedule of Short-Term and Long-Term Investments | Long-term investments consist of the following (in thousands): June 30, 2016 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 134,753 $ 485 $ (29 ) $ 135,209 Municipal bonds and notes 45,010 166 (1 ) 45,175 U.S. government securities 29,966 108 — 30,074 U.S. government agency securities 102,933 110 (13 ) 103,030 $ 312,662 $ 869 $ (43 ) $ 313,488 September 30, 2015 Cost or Cost Gross Gains Gross Losses Fair Value Corporate bonds and notes $ 245,224 $ 152 $ (403 ) $ 244,973 Municipal bonds and notes 74,349 169 (13 ) 74,505 U.S. government securities 26,075 15 (1 ) 26,089 U.S. government agency securities 52,042 47 — 52,089 $ 397,690 $ 383 $ (417 ) $ 397,656 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventories | Inventories consist of the following (in thousands): June 30, September 30, Finished goods $ 24,296 $ 24,346 Raw materials 9,509 9,371 $ 33,805 $ 33,717 |
Geographic Sales and Signific20
Geographic Sales and Significant Customers (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Region | The following presents revenues by geographic region (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Americas: United States $ 256,518 $ 259,916 $ 737,792 $ 735,620 Other 23,835 22,403 81,574 73,707 Total Americas 280,353 282,319 819,366 809,327 EMEA 117,286 118,095 367,155 348,370 Japan 24,034 20,896 71,345 67,494 Asia Pacific 74,849 62,276 211,819 193,331 $ 496,522 $ 483,586 $ 1,469,685 $ 1,418,522 |
Schedule of Revenue by Major Customers by Reporting Segments | The following distributors of the Company's products accounted for more than 10% of total net revenue: Three months ended Nine months ended 2016 2015 2016 2015 Westcon Group, Inc. 18.8 % 19.2 % 18.9 % 17.8 % Ingram Micro, Inc. 14.9 % 16.7 % 14.8 % 16.3 % Avnet Technology Solutions 13.7 % 13.5 % 13.6 % 13.6 % Arrow ECS 1 — — 10.1 % 10.6 % 1. Arrow ECS accounted for under 10% of total net revenue for the three months ended June 30, 2016 and June 30, 2015 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | Oct. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Apr. 20, 2016 | Jan. 21, 2015 |
Schedule Of Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of Reportable Segments | 1 | ||||||
Revenue Recognition | |||||||
VSOE percentage which constitutes substantial majority of transactions priced within a narrow range | 80.00% | ||||||
Range of VSOE to median sales price | 15.00% | ||||||
Stock-Based Compensation | |||||||
Share-based compensation expense | $ 38,400,000 | $ 36,500,000 | $ 118,400,000 | $ 103,900,000 | |||
Unrecognized stock-based compensation cost | 153,800,000 | $ 153,800,000 | |||||
Unrecognized stock-based compensation cost, period for recognition | 2 years | ||||||
Common Stock Repurchase | |||||||
Stock Repurchase Program, Number Of Shares Repurchased And Retired | 5,402,131 | ||||||
Treasury Stock Acquired, Average Cost Per Share | $ 101.83 | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 923,800,000 | $ 923,800,000 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Approved RSUs to employees and executive officers pursuant to the Company's annual equity awards program | 1,272,331 | ||||||
Minimum [Member] | |||||||
Revenue Recognition | |||||||
Domestic accounts receivable terms of payment | 30 days | ||||||
International accounts receivable terms of payment | 30 days | ||||||
Maximum [Member] | |||||||
Revenue Recognition | |||||||
Domestic accounts receivable terms of payment | 45 days | ||||||
International accounts receivable terms of payment | 120 days | ||||||
October Twenty Six Two Thousand Ten Program [Member] | |||||||
Common Stock Repurchase | |||||||
Stock Repurchase Program, Authorized Amount | $ 1,000,000,000 | $ 2,400,000,000 | |||||
Annual Equity Program [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Percentage of the aggregate number of RSUs granted that vest in equal quarterly increments | 50.00% | ||||||
Portion of RSU grant subject to Company achieving specified quarterly revenue and EBITDA goals | 50.00% | ||||||
Percentage of quarterly performance stock grant based on achieving quarterly revenue goal | 70.00% | ||||||
Percentage of quarterly revenue goal to be achieved for performance stock grant | 80.00% | ||||||
Percentage of quarterly performance stock grant based on achieving EBITDA goal | 30.00% | ||||||
Percentage Of Quarterly Ebitda Goal To Be Achieved For Performance Stock Grant | 80.00% | ||||||
Threshold percentage of targeted goals above which quarterly performance stock grant is paid linearly | 80.00% | ||||||
Percentage of over-achievement threshold to which the goals are entitled | 100.00% | ||||||
Percentage Of Over-Achievement To Which Quarterly Performance Based Vesting Cannot Exceed | 200.00% | ||||||
Annual Equity Program [Member] | November 2, 2015 [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Approved RSUs to employees and executive officers pursuant to the Company's annual equity awards program | 145,508 | ||||||
Annual equity awards program vesting period | 4 years | ||||||
Annual Equity Program [Member] | November 1, 2014 [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Approved RSUs to employees and executive officers pursuant to the Company's annual equity awards program | 171,575 | ||||||
Annual equity awards program vesting period | 4 years | ||||||
Annual Equity Program [Member] | November 1, 2013 [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Approved RSUs to employees and executive officers pursuant to the Company's annual equity awards program | 231,320 | ||||||
Annual equity awards program vesting period | 4 years | ||||||
Annual Equity Program [Member] | November 1, 2012 [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation | |||||||
Approved RSUs to employees and executive officers pursuant to the Company's annual equity awards program | 290,415 | ||||||
Annual equity awards program vesting period | 4 years |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Schedule Of Computation Of Basic And Diluted Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Net income | $ 91,789 | $ 93,172 | $ 256,920 | $ 267,977 |
Weighted average shares outstanding - basic | 66,851 | 71,509 | 67,990 | 72,370 |
Dilutive effect of common shares from stock options and restricted stock units | 384 | 448 | 439 | 567 |
Weighted average shares outstanding - diluted | 67,235 | 71,957 | 68,429 | 72,937 |
Basic net income per share (dollars per share) | $ 1.37 | $ 1.30 | $ 3.78 | $ 3.70 |
Diluted net income per share (dollars per share) | $ 1.37 | $ 1.29 | $ 3.75 | $ 3.67 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Financial Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Sep. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | $ 49,907 | $ 60,142 |
Investments, fair value | 694,599 | |
Financial assets measured at fair value on a recurring basis, total | 744,506 | 841,680 |
Quoted Prices In Active Markets For Identical Securities (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Cash equivalents, fair value | 49,907 | 60,142 |
Financial assets measured at fair value on a recurring basis, total | 49,907 | 60,142 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Financial assets measured at fair value on a recurring basis, total | 694,599 | 781,538 |
Short-Term Investments [Member] | Corporate Bonds and Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 246,847 | 224,693 |
Short-Term Investments [Member] | Corporate Bonds and Notes [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 246,847 | 224,693 |
Short-Term Investments [Member] | Municipal Bonds and Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 41,312 | 39,518 |
Short-Term Investments [Member] | Municipal Bonds and Notes [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 41,312 | 39,518 |
Short-Term Investments [Member] | U.S. Government Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 70,068 | 58,530 |
Short-Term Investments [Member] | U.S. Government Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 70,068 | 58,530 |
Short-Term Investments [Member] | U.S. Government Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 22,884 | 58,323 |
Short-Term Investments [Member] | U.S. Government Agency Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 22,884 | 58,323 |
Short-Term Investments [Member] | Foreign Government Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 2,818 | |
Short-Term Investments [Member] | Foreign Government Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 2,818 | |
Long-Term Investments [Member] | Corporate Bonds and Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 135,209 | 244,973 |
Long-Term Investments [Member] | Corporate Bonds and Notes [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 135,209 | 244,973 |
Long-Term Investments [Member] | Municipal Bonds and Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 45,175 | 74,505 |
Long-Term Investments [Member] | Municipal Bonds and Notes [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 45,175 | 74,505 |
Long-Term Investments [Member] | U.S. Government Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 30,074 | 26,089 |
Long-Term Investments [Member] | U.S. Government Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 30,074 | 26,089 |
Long-Term Investments [Member] | U.S. Government Agency Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | 103,030 | 52,089 |
Long-Term Investments [Member] | U.S. Government Agency Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items] | ||
Investments, fair value | $ 103,030 | $ 52,089 |
Short-Term and Long-Term Inve24
Short-Term and Long-Term Investments (Schedule of Short-Term and Long-Term Investments) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Sep. 30, 2015 |
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | $ 693,684 | |
Fair Value | 694,599 | |
Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 381,022 | $ 383,768 |
Gross Unrealized Gains | 129 | 165 |
Gross Unrealized Losses | (40) | (51) |
Fair Value | 381,111 | 383,882 |
Long-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 312,662 | 397,690 |
Gross Unrealized Gains | 869 | 383 |
Gross Unrealized Losses | (43) | (417) |
Fair Value | 313,488 | 397,656 |
Corporate Bonds and Notes [Member] | Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 246,805 | 224,635 |
Gross Unrealized Gains | 77 | 100 |
Gross Unrealized Losses | (35) | (42) |
Fair Value | 246,847 | 224,693 |
Corporate Bonds and Notes [Member] | Long-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 134,753 | 245,224 |
Gross Unrealized Gains | 485 | 152 |
Gross Unrealized Losses | (29) | (403) |
Fair Value | 135,209 | 244,973 |
Municipal Bonds and Notes [Member] | Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 41,299 | 39,497 |
Gross Unrealized Gains | 17 | 24 |
Gross Unrealized Losses | (4) | (3) |
Fair Value | 41,312 | 39,518 |
Municipal Bonds and Notes [Member] | Long-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 45,010 | 74,349 |
Gross Unrealized Gains | 166 | 169 |
Gross Unrealized Losses | (1) | (13) |
Fair Value | 45,175 | 74,505 |
U.S. Government Securities [Member] | Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 70,034 | 58,499 |
Gross Unrealized Gains | 34 | 31 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 70,068 | 58,530 |
U.S. Government Securities [Member] | Long-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 29,966 | 26,075 |
Gross Unrealized Gains | 108 | 15 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 30,074 | 26,089 |
U.S. Government Agency Securities [Member] | Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 22,884 | 58,318 |
Gross Unrealized Gains | 1 | 10 |
Gross Unrealized Losses | (1) | (5) |
Fair Value | 22,884 | 58,323 |
U.S. Government Agency Securities [Member] | Long-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 102,933 | 52,042 |
Gross Unrealized Gains | 110 | 47 |
Gross Unrealized Losses | (13) | 0 |
Fair Value | $ 103,030 | 52,089 |
Foreign Government Debt Securities [Member] | Short-Term Investments [Member] | ||
Schedule of Investments [Line Items] | ||
Cost or Amortized Cost | 2,819 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (1) | |
Fair Value | $ 2,818 |
Short-Term and Long-Term Inve25
Short-Term and Long-Term Investments (Schedule of Amortized Cost And Fair Value of Fixed Maturities by Contractual Years-To-Maturity) (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Cost or Amortized Cost, Fixed Maturities, One year or less | $ 381,022 |
Cost or Amortized Cost, Fixed Maturities, Over one year | 312,662 |
Cost or Amortized Cost | 693,684 |
Fair Value, Fixed Maturities, One year or less | 381,111 |
Fair Value, Fixed Maturities, Over one year | 313,488 |
Fair Value | $ 694,599 |
Short-Term and Long-Term Inve26
Short-Term and Long-Term Investments (Schedule of Investments That Have Been in a Continuous Unrealized Loss Position) (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | $ 85,084 |
Gross Unrealized Losses, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | (33) |
Fair Value, Continuous Loss Position, Unrealized Loss, 12 Months or Greater | 96,429 |
Gross Unrealized Losses, Continuous Loss Position, 12 Months or Greater | (50) |
Fair Value, Continuous Loss Position, Unrealized Loss, Total | 181,513 |
Gross Unrealized Losses, Continuous Loss Position, Total | (83) |
Corporate Bonds and Notes [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | 50,180 |
Gross Unrealized Losses, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | (19) |
Fair Value, Continuous Loss Position, Unrealized Loss, 12 Months or Greater | 70,980 |
Gross Unrealized Losses, Continuous Loss Position, 12 Months or Greater | (45) |
Fair Value, Continuous Loss Position, Unrealized Loss, Total | 121,160 |
Gross Unrealized Losses, Continuous Loss Position, Total | (64) |
Municipal Bonds and Notes [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | 4,449 |
Gross Unrealized Losses, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | (1) |
Fair Value, Continuous Loss Position, Unrealized Loss, 12 Months or Greater | 10,087 |
Gross Unrealized Losses, Continuous Loss Position, 12 Months or Greater | (4) |
Fair Value, Continuous Loss Position, Unrealized Loss, Total | 14,536 |
Gross Unrealized Losses, Continuous Loss Position, Total | (5) |
U.S. Government Agency Securities [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Fair Value, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | 30,455 |
Gross Unrealized Losses, Continuous Loss Position, Unrealized Loss, Less Than 12 Months | (13) |
Fair Value, Continuous Loss Position, Unrealized Loss, 12 Months or Greater | 15,362 |
Gross Unrealized Losses, Continuous Loss Position, 12 Months or Greater | (1) |
Fair Value, Continuous Loss Position, Unrealized Loss, Total | 45,817 |
Gross Unrealized Losses, Continuous Loss Position, Total | $ (14) |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Sep. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 24,296 | $ 24,346 |
Raw materials | 9,509 | 9,371 |
Inventories, Total | $ 33,805 | $ 33,717 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Product warranty period | 1 year | ||
Litigation Settlement, Amount | $ (6.4) | ||
Litigation Settlement, Expense | $ 2.5 | ||
Loss Contingency Accrual, Period Increase (Decrease) | $ (0.5) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 34.40% | 33.80% | 33.60% | 34.90% |
Unrecognized tax benefit | $ 10.5 | $ 10.5 |
Geographic Sales and Signific30
Geographic Sales and Significant Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Number of Reportable Segments | 1 | |||
Revenue | $ 496,522 | $ 483,586 | $ 1,469,685 | $ 1,418,522 |
Americas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 280,353 | 282,319 | 819,366 | 809,327 |
United States [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 256,518 | 259,916 | 737,792 | 735,620 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 23,835 | 22,403 | 81,574 | 73,707 |
EMEA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 117,286 | 118,095 | 367,155 | 348,370 |
Japan [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 24,034 | 20,896 | 71,345 | 67,494 |
Asia Pacific [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 74,849 | $ 62,276 | $ 211,819 | $ 193,331 |
Worldwide Distributor 1 [Member] | Net Revenue [Member] | Geographic Concentration [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 18.80% | 19.20% | 18.90% | 17.80% |
Worldwide Distributor 2 [Member] | Net Revenue [Member] | Geographic Concentration [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 14.90% | 16.70% | 14.80% | 16.30% |
Worldwide Distributor 3 [Member] | Net Revenue [Member] | Geographic Concentration [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 13.70% | 13.50% | 13.60% | 13.60% |
Worldwide Distributor4 [Member] | Net Revenue [Member] | Geographic Concentration [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk percentage | 0.00% | 0.00% | 10.10% | 10.60% |