Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2017 | Jan. 25, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NETSCOUT SYSTEMS INC | |
Entity Central Index Key | 1,078,075 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NTCT | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 87,267,106 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 331,912 | $ 304,880 |
Marketable securities | 47,895 | 137,892 |
Accounts receivable and unbilled costs, net of allowance for doubtful accounts of $1,675 and $2,066 at December 31, 2017 and March 31, 2017, respectively | 249,939 | 294,374 |
Inventories and deferred costs | 36,592 | 40,002 |
Prepaid income taxes | 23,483 | 40,346 |
Prepaid expenses and other current assets (related party balances of $3,082 and $3,585 at December 31, 2017 and March 31, 2017, respectively) | 23,686 | 36,972 |
Total current assets | 713,507 | 854,466 |
Fixed assets, net | 53,646 | 61,393 |
Goodwill | 1,716,371 | 1,718,162 |
Intangible assets, net | 859,160 | 931,269 |
Deferred income taxes | 5,725 | 6,580 |
Long-term marketable securities | 3,187 | 21,933 |
Other assets | 7,423 | 7,710 |
Total assets | 3,359,019 | 3,601,513 |
Current liabilities: | ||
Accounts payable (related party balances of $362 and $444 at December 31, 2017 and March 31, 2017, respectively) | 32,469 | 37,407 |
Accrued compensation | 54,010 | 77,607 |
Accrued other | 30,335 | 29,522 |
Income taxes payable | 3,240 | 5,057 |
Deferred revenue and customer deposits | 299,271 | 310,594 |
Total current liabilities | 419,325 | 460,187 |
Other long-term liabilities | 7,412 | 3,976 |
Deferred tax liability | 177,598 | 277,599 |
Accrued long-term retirement benefits | 35,589 | 32,117 |
Long-term deferred revenue and customer deposits | 87,747 | 86,595 |
Long-term debt | 300,000 | 300,000 |
Contingent liabilities | 0 | 4,789 |
Total liabilities | 1,027,671 | 1,165,263 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or outstanding at December 31, 2017 and March 31, 2017 | 0 | 0 |
Common stock, $0.001 par value, 300,000,000 shares authorized; 117,331,491 and 115,917,431 shares issued and 87,267,106 and 92,041,288 shares outstanding at December 31, 2017 and March 31, 2017, respectively | 117 | 116 |
Additional paid-in capital | 2,735,387 | 2,693,846 |
Accumulated other comprehensive income (loss) | 46 | (3,472) |
Treasury stock at cost, 30,064,385 and 23,876,143 shares at December 31, 2017 and March 31, 2017, respectively | (783,878) | (570,921) |
Retained earnings | 379,676 | 316,681 |
Total stockholders' equity | 2,331,348 | 2,436,250 |
Total liabilities and stockholders' equity | $ 3,359,019 | $ 3,601,513 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Related Party Transaction [Line Items] | ||
Accounts receivable, allowance for doubtful accounts | $ 1,675 | $ 2,066 |
Related party prepaid expenses and other current assets | 23,686 | 36,972 |
Related party accounts payable | $ 32,469 | $ 37,407 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 117,331,491 | 115,917,431 |
Common stock, shares outstanding (in shares) | 87,267,106 | 92,041,288 |
Treasury stock, shares (in shares) | 30,064,385 | 23,876,143 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Related party prepaid expenses and other current assets | $ 3,082 | $ 3,585 |
Related party accounts payable | $ 362 | $ 444 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | ||||
Product | $ 153,179 | $ 192,010 | $ 417,282 | $ 525,472 |
Service | 115,765 | 110,182 | 334,281 | 317,720 |
Total revenue | 268,944 | 302,192 | 751,563 | 843,192 |
Cost of revenue: | ||||
Product (related party balances of $0, $45, $245 and $7,108, respectively) | 41,327 | 55,296 | 125,013 | 171,770 |
Service (related party balances of $192, $122, $480, and $594, respectively) | 23,182 | 26,382 | 80,301 | 81,452 |
Total cost of revenue | 64,509 | 81,678 | 205,314 | 253,222 |
Gross profit | 204,435 | 220,514 | 546,249 | 589,970 |
Operating expenses: | ||||
Research and development (related party balances of $0, $43, $3, and $1,616, respectively) | 44,287 | 58,084 | 161,762 | 179,681 |
Sales and marketing (related party balances of $0, $(49), $2 and $2,423, respectively) | 77,270 | 83,212 | 239,897 | 241,506 |
General and administrative (related party balances of $753, $307, $1,697 and $3,850, respectively) | 23,033 | 28,540 | 82,400 | 90,994 |
Amortization of acquired intangible assets | 18,221 | 17,515 | 54,902 | 52,646 |
Restructuring charges | 3,363 | (199) | 3,821 | 1,730 |
Total operating expenses | 166,174 | 187,152 | 542,782 | 566,557 |
Income from operations | 38,261 | 33,362 | 3,467 | 23,413 |
Interest and other expense, net: | ||||
Interest income | 307 | 207 | 1,196 | 627 |
Interest expense | (2,798) | (2,260) | (7,914) | (6,783) |
Other expense | (616) | (695) | (2,847) | (1,926) |
Total interest and other expense, net | (3,107) | (2,748) | (9,565) | (8,082) |
Income (loss) before income tax expense (benefit) | 35,154 | 30,614 | (6,098) | 15,331 |
Income tax expense (benefit) | (54,531) | 9,369 | (69,093) | 4,350 |
Net income | $ 89,685 | $ 21,245 | $ 62,995 | $ 10,981 |
Basic net income per share (in USD per share) | $ 1.03 | $ 0.23 | $ 0.71 | $ 0.12 |
Diluted net income per share (in USD per share) | $ 1.02 | $ 0.23 | $ 0.70 | $ 0.12 |
Weighted average common shares outstanding used in computing: | ||||
Net loss per share - basic (in shares) | 87,210 | 91,762 | 88,985 | 92,337 |
Net loss per share - diluted (in shares) | 87,860 | 92,402 | 89,882 | 92,997 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||
Related party product | $ 41,327 | $ 55,296 | $ 125,013 | $ 171,770 |
Related party service | 23,182 | 26,382 | 80,301 | 81,452 |
Related party research and development | 44,287 | 58,084 | 161,762 | 179,681 |
Related party selling and marketing | 77,270 | 83,212 | 239,897 | 241,506 |
Related party general and administrative expense | 23,033 | 28,540 | 82,400 | 90,994 |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party product | 0 | 45 | 245 | 7,108 |
Related party service | 192 | 122 | 480 | 594 |
Related party research and development | 0 | 43 | 3 | 1,616 |
Related party selling and marketing | 0 | (49) | 2 | 2,423 |
Related party general and administrative expense | $ 753 | $ 307 | $ 1,697 | $ 3,850 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 89,685 | $ 21,245 | $ 62,995 | $ 10,981 |
Other comprehensive income (loss): | ||||
Cumulative translation adjustments | (195) | (2,022) | 3,435 | (2,109) |
Changes in market value of investments: | ||||
Changes in unrealized losses, net of taxes of ($22), $0, ($16) and $0, respectively | (41) | (49) | (32) | (88) |
Total net change in market value of investments | (41) | (49) | (32) | (88) |
Changes in market value of derivatives: | ||||
Changes in market value of derivatives, net of taxes (benefits) of ($47), ($189), $299 and ($242), respectively | (66) | (299) | 497 | (384) |
Reclassification adjustment for net gains (losses) included in net income, net of taxes (benefits) of ($96), $73, ($238), and $77, respectively | (157) | 120 | (382) | 127 |
Total net change in market value of derivatives | (223) | (179) | 115 | (257) |
Other comprehensive income (loss) | (459) | (2,250) | 3,518 | (2,454) |
Total comprehensive income | $ 89,226 | $ 18,995 | $ 66,513 | $ 8,527 |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Changes in unrealized (losses) gains, (benefit) tax | $ (22) | $ 0 | $ (16) | $ 0 |
Changes in market value of derivatives, tax (benefit) | (47) | (189) | 299 | (242) |
Reclassification adjustment for net gains included in net income (loss), taxes | $ (96) | $ 73 | $ (238) | $ 77 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 62,995 | $ 10,981 |
Adjustments to reconcile net income to cash provided by operating activities, net of the effects of acquisitions: | ||
Depreciation and amortization | 112,859 | 120,889 |
Loss on disposal of fixed assets | 458 | 99 |
Deal-related compensation expense and accretion charges | 114 | 114 |
Share-based compensation expense associated with equity awards | 35,254 | 30,271 |
Deferred income taxes | (100,042) | (38,257) |
Other gains (losses) | 68 | (371) |
Changes in assets and liabilities | ||
Accounts receivable and unbilled costs | 47,439 | (38,602) |
Due from related party | 554 | 24,679 |
Inventories | (1,222) | (2,543) |
Prepaid expenses and other assets | 29,324 | 7,587 |
Accounts payable | (5,378) | 2,445 |
Accrued compensation and other expenses | (18,884) | 2,926 |
Due to related party | (82) | (506) |
Income taxes payable | (1,286) | (3,162) |
Deferred revenue | (13,253) | 14,285 |
Net cash provided by operating activities | 148,918 | 130,835 |
Cash flows from investing activities: | ||
Purchase of marketable securities | (71,323) | (135,737) |
Proceeds from maturity of marketable securities | 180,018 | 144,937 |
Purchase of fixed assets | (12,352) | (21,699) |
Purchase of intangible assets | (505) | (1,022) |
(Increase) decrease in deposits | (26) | 22 |
Acquisition of businesses, net of cash acquired | (8,334) | (4,606) |
Contingent purchase consideration | 523 | 660 |
Collection of contingently returnable consideration from related party | 0 | 12,864 |
Capitalized software development costs | (136) | (1,346) |
Net cash provided by (used in) investing activities | 87,865 | (5,927) |
Cash flows from financing activities: | ||
Issuance of common stock under stock plans | 1 | 2 |
Payment of contingent consideration | (660) | 0 |
Treasury stock repurchases | (200,000) | (79,289) |
Tax withholding on restricted stock units | (12,957) | (8,844) |
Net cash used in financing activities | (213,616) | (88,131) |
Effect of exchange rate changes on cash and cash equivalents | 3,929 | (1,995) |
Net increase in cash and cash equivalents | 27,096 | 34,782 |
Cash and cash equivalents and restricted cash, beginning of period | 305,726 | 210,897 |
Cash and cash equivalents and restricted cash, end of period | 332,822 | 245,679 |
Non-cash transactions: | ||
Transfers of inventory to fixed assets | 5,556 | 4,928 |
Additions to property, plant and equipment included in accounts payable | 314 | 1,057 |
Issuance of common stock under employee stock plans | 8,603 | 6,943 |
Contingent consideration related to acquisition, included in accrued other | $ 523 | $ 660 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position, results of operations and cash flows. 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. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 filed with the Securities and Exchange Commission on May 24, 2017. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company is currently assessing the potential impact of the adoption of ASU 2017-12 on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost (ASU 2017-07) which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2017 and should be applied retrospectively to all periods presented. ASU 2017-07 is effective for the Company beginning April 1, 2018. The Company does not believe the adoption of ASU 2017-07 will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of addressing whether transactions involving in-substance nonfinancial assets, held directly or in a subsidiary, should be accounted for as acquisitions or disposals of nonfinancial assets or of businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017. ASU 2017-01 is effective for the Company beginning April 1, 2018. Early adoption is permitted for transactions, including acquisitions or dispositions, which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company does not believe the adoption of ASU 2017-01 will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance retrospectively on April 1, 2017. The Company does not have a material amount of restricted cash. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-16 is effective for the Company beginning April 1, 2018. The Company is evaluating the new guidance and does not believe the adoption of ASU 2016-16 will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 and does not expect a material impact on its consolidated statement of cash flows. 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 simplifies several aspects of the accounting for employee 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 Company adopted this guidance on April 1, 2017, which had the following impact on the consolidated financial statements: • On a prospective basis, as required, the Company recorded an excess tax shortfall of $0.4 million and an excess tax benefit of $0.8 million to the provision for income taxes in the consolidated statement of operations for the three and nine months ended December 31, 2017 , respectively, instead of additional paid-in capital in the consolidated balance sheets. As a result, net income decreased $0.4 million and increased $0.8 million , for the three and nine months ended December 31, 2017 , respectively. Basic and diluted earnings per share decreased $0.01 for the three months ended December 31, 2017, while basic and diluted earnings per share increased $0.01 for the nine months ended December 31, 2017 . • Excess tax benefits are presented as operating cash activity instead of financing cash activity in the consolidated statements of cash flows, which the Company elected to apply on a retrospective basis. As a result, the Company classified $0.8 million and $1.4 million of excess tax benefits for the nine months ended December 31, 2017 and 2016, respectively, as operating cash outflows included within the change in income taxes payable in the consolidated statements of cash flows. The retrospective classification resulted in decreases in cash provided by operating activities and cash used in financing activities of $1.4 million for the nine months ended December 31, 2016. • The Company prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have a material impact on diluted earnings per share for the three and nine months ended December 31, 2017. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, December 2016 and September 2017, within ASU 2015-04, 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-13 and ASU 2017-14, respectively (collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in applying this process, it is possible that more judgments and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company on April 1, 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this standard. The Company believes it will elect the modified retrospective transition approach. However, the Company is still quantifying the impact of this new accounting standard. The adoption will most likely result in a reduction in deferred revenue as of April 1, 2018 for performance obligations that are deferred under current guidance that may not be deferred under Topic 606. Upon adoption of Topic 606, the Company expects to recognize a greater proportion of revenue upon delivery of its products, whereas some of its current product sales are initially recorded in deferred revenue and recognized over a period of time. Since the Company is currently expensing sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact on the consolidated financial statements in the year of adoption. The Company does not foresee any material impact on its cash flows. The Company will continue to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | 9 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS | CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS Financial instruments that potentially subject us to concentration of credit risk consist primarily of investments, trade accounts receivable and accounts payable. The Company's cash, cash equivalents, and marketable securities are placed with financial institutions with high credit standings. At December 31, 2017 and March 31, 2017 , the Company had no direct customers or indirect channel partners which accounted for more than 10% of the accounts receivable balance. During the three and nine months ended December 31, 2017 , no direct customers or indirect channel partners accounted for more than 10% of the Company's total revenue. During the three and nine months ended December 31, 2016 , one direct customer, Verizon, accounted for more than 10% of the Company's total revenue, while no indirect channel partners accounted for more than 10% of total revenue. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties included within prepaid expenses and other current assets, that represent a concentration of credit risk of $3.1 million and $3.6 million at December 31, 2017 and March 31, 2017 , respectively. Historically, the Company has not experienced any significant failure of its customers' ability to meet their payment obligations nor does the Company anticipate material non-performance by its customers in the future; accordingly, the Company does not require collateral from its customers. However, if the Company's assumptions are incorrect, there could be an adverse impact on its allowance for doubtful accounts. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended, and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Cost of product revenue $ 301 $ 255 $ 807 $ 716 Cost of service revenue 1,287 1,015 3,597 3,058 Research and development 3,730 3,456 10,820 9,961 Sales and marketing 4,022 3,367 11,613 9,704 General and administrative 3,085 2,368 8,417 6,832 $ 12,425 $ 10,461 $ 35,254 $ 30,271 Employee Stock Purchase Plan – The Company maintains the ESPP for all eligible employees as described in the Company's Annual Report on Form 10-K for the year ended March 31, 2017 . Under the ESPP, shares of the Company's common stock may be purchased on the last day of each bi-annual offering period at 85% of the fair value on the last day of such offering period. The offering periods run from March 1st through August 31st and from September 1st through the last day of February each year. During the nine months ended December 31, 2017 , employees purchased 262,685 shares under the ESPP and the value per share was $32.75 . |
CASH, CASH EQUIVALENTS, RESTRIC
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES | 9 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents and those investments with original maturities greater than three months to be marketable securities. Cash and cash equivalents consisted of money market instruments and cash maintained with various financial institutions at December 31, 2017 and March 31, 2017 . Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): December 31, March 31, 2017 December 31, March 31, 2016 Cash and cash equivalents $ 331,912 $ 304,880 $ 244,833 $ 210,711 Restricted cash 910 846 846 186 Total cash, cash equivalents and restricted cash $ 332,822 $ 305,726 $ 245,679 $ 210,897 The Company's restricted cash includes cash balances which are legally or contractually restricted. The Company's restricted cash is included within prepaid and other current assets and consists of amounts related to holdbacks associated with prior acquisitions. Marketable Securities The following is a summary of marketable securities held by NetScout at December 31, 2017 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 41,957 $ (74 ) $ 41,883 Commercial paper 5,007 — 5,007 Corporate bonds 1,006 (1 ) 1,005 Total short-term marketable securities 47,970 (75 ) 47,895 U.S. government and municipal obligations 3,203 (16 ) 3,187 Total long-term marketable securities 3,203 (16 ) 3,187 Total marketable securities $ 51,173 $ (91 ) $ 51,082 The following is a summary of marketable securities held by NetScout at March 31, 2017 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 98,989 $ (21 ) $ 98,968 Commercial paper 29,469 — 29,469 Corporate bonds 7,959 (3 ) 7,956 Certificates of deposit 1,499 — 1,499 Total short-term marketable securities 137,916 (24 ) 137,892 U.S. government and municipal obligations 21,952 (19 ) 21,933 Total long-term marketable securities 21,952 (19 ) 21,933 Total marketable securities $ 159,868 $ (43 ) $ 159,825 Contractual maturities of the Company's marketable securities held at December 31, 2017 and March 31, 2017 were as follows (in thousands): December 31, March 31, Available-for-sale securities: Due in 1 year or less $ 47,895 $ 137,892 Due after 1 year through 5 years 3,187 21,933 $ 51,082 $ 159,825 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs, and Level 3 includes fair values estimated using significant non-observable inputs. The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at December 31, 2017 and March 31, 2017 (in thousands): Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 331,912 $ — $ — $ 331,912 U.S. government and municipal obligations 17,010 28,060 — 45,070 Commercial paper — 5,007 — 5,007 Corporate bonds 1,005 — — 1,005 Derivative financial instruments — 153 — 153 $ 349,927 $ 33,220 $ — $ 383,147 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,426 ) $ (5,426 ) Derivative financial instruments — (63 ) — (63 ) $ — $ (63 ) $ (5,426 ) $ (5,489 ) Fair Value Measurements at March 31, 2017 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 304,880 $ — $ — $ 304,880 U.S. government and municipal obligations 40,628 80,273 — 120,901 Commercial paper — 29,469 — 29,469 Corporate bonds 7,956 — — 7,956 Certificate of deposits — 1,499 — 1,499 Derivative financial instruments — 110 — 110 $ 353,464 $ 111,351 $ — $ 464,815 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,449 ) $ (5,449 ) Derivative financial instruments — (213 ) — (213 ) $ — $ (213 ) $ (5,449 ) $ (5,662 ) This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments. The Company's Level 1 investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. The Company's Level 2 investments are classified as such because fair value is calculated using market observable data for similar but not identical instruments, or a discounted cash flow model using the contractual interest rate as compared with the underlying interest yield curve. The Company classifies municipal obligations as level 2 because the fair values are determined using quoted prices from markets the Company considers to be inactive. Commercial paper is classified as Level 2 because the Company uses market information from similar but not identical instruments and discounted cash flow models based on interest rate yield curves to determine fair value. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level 2 because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. The Company's Level 3 liabilities consist of contingent purchase consideration. The Company's contingent purchase consideration at March 31, 2017 included $660 thousand related to the acquisition of certain assets and liabilities of Avvasi Inc. (Avvasi) in the second quarter of fiscal year 2017. The contingent purchase consideration represented amounts deposited into an escrow account, which was established to cover damages the Company suffers related to any liabilities that the Company did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. The contingent purchase consideration was paid to the seller in August 2017. The fair value of contingent purchase consideration related to the acquisition of Simena LLC (Simena) in November 2011 for future consideration to be paid to the seller is $4.9 million at December 31, 2017 . The contingent purchase consideration is included as a contingent liability within accrued other in the Company's consolidated balance sheet at December 31, 2017 and included as a long-term contingent liability at March 31, 2017 . The Company's contingent purchase consideration also includes $523 thousand related to the acquisition of certain assets and liabilities of Efflux Systems, Inc. (Efflux) in the second quarter of fiscal year 2018. The contingent purchase consideration represents amounts deposited into an escrow account, which was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. The contingent purchase consideration is included as accrued other in the Company's consolidated balance sheet at December 31, 2017 . The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial assets and liabilities for the nine months ended December 31, 2017 (in thousands): Contingent Purchase Consideration Balance at March 31, 2017 $ (5,449 ) Additions to Level 3 (523 ) Increase in fair value and accretion expense (included within research and development expense) (114 ) Payments made 660 Balance at December 31, 2017 $ (5,426 ) Deal-related compensation expense and accretion charges related to the contingent consideration for the nine months ended December 31, 2017 was $114 thousand and was included as part of earnings. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of actual cost or net realizable value. Cost is determined by using the first in, first out (FIFO) method. Inventories consist of the following (in thousands): December 31, March 31, Raw materials $ 23,039 $ 22,305 Work in process 484 998 Finished goods and deferred costs 13,069 16,699 $ 36,592 $ 40,002 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Efflux On July 12, 2017 (the Efflux Closing Date), the Company completed the acquisition of Efflux for $8.6 million . Efflux's technology detects, analyzes and correlates threat activity within enterprise networks. The Efflux technology and engineering talent have been integrated into Arbor Networks in order to support the ongoing enhancement of Arbor Spectrum TM for advanced threat detection. The Company has completed the purchase accounting related to the Efflux acquisition. The following table summarizes the allocation of the purchase price (in thousands): Initial cash payment $ 8,104 Estimated fair value of contingent purchase consideration 523 Estimated purchase price $ 8,627 Estimated fair value of assets acquired and liabilities assumed (in thousands): Cash $ 93 Accounts receivable 3 Prepaid and other current assets 208 Property, plant and equipment 8 Intangible assets 2,590 Deferred tax asset 841 Accounts payable (7 ) Accrued other liabilities (200 ) Deferred revenue (8 ) Deferred tax liabilities (978 ) Goodwill $ 6,077 Of the total consideration, $523 thousand was deposited into an escrow account. The escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. Generally, indemnification claims that Efflux would be liable for are limited to the total amount of the escrow account such account and shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Efflux's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $523 thousand will be paid to the seller on July 12, 2018. In connection with the Efflux acquisition, certain former employees of Efflux will receive cash retention payments subject to such employee's continued employment with the Company through the next regularly scheduled payroll dates following each of the first and second anniversaries of the Efflux Closing Date. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment is automatically forfeited upon termination of employment. The Company will record the liability over the period it is earned as compensation expense for post-combination services. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $6.1 million from the acquisition was included within the Security reporting unit. Goodwill and intangible assets recorded as part of the acquisition are not deductible for tax purposes. The fair values of intangible assets were based on valuations using an income approach. These assumptions include estimates of future revenues associated with the technology purchased as part of the acquisition and the migration of the current technology to a more advanced version of the software. This fair value measurement was based on significant inputs not observable in the market and thus represents Level 3 fair value measurements. The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 1,980 10 Customer relationships 610 10 $ 2,590 The weighted average useful life of identifiable intangible assets acquired from Efflux is 10 years. Avvasi On August 19, 2016, the Company acquired certain assets and liabilities of Avvasi for $4.6 million . Avvasi's technology allows service providers to measure, improve and monetize video in their networks. This acquisition builds on the Company's ongoing investment to enhance its service assurance capabilities for video traffic over 4G/LTE networks. Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill of $2.0 million from the acquisition was included within the Service Assurance reporting unit. Communications Business On July 14, 2015 (Closing Date), the Company completed the acquisition of Danaher Corporation's (Danaher) Communications Business (Communications Business), which included certain assets, liabilities, technology and employees within Tektronix Communications, VSS Monitoring, Arbor Networks and certain portions of the Fluke Networks Enterprise business, which excluded Danaher's data communications cable installation business and its communication service provider business (the Comms Transaction), which was structured as a Reverse Morris Trust transaction whereby Danaher contributed its Communications Business to a new subsidiary, Potomac Holding LLC (Newco). The total equity consideration was approximately $2.3 billion based on issuing approximately 62.5 million new shares of NetScout common stock to the existing common unit holders of Newco, based on the July 13, 2015 NetScout common stock closing share price of $36.89 per share. On the Closing Date, the Company did not gain control over certain foreign entities due to regulatory and other compliance requirements (Delayed Close Entities). The Company closed on the acquisition of these Delayed Close Entities on October 7, 2015. In connection with the Comms Transaction, under the Employee Matters Agreement dated July 14, 2015 by and among the Company, Danaher and Newco, Danaher funded certain contracts under which employees provided post-combination services to the Company. 1) For any outstanding Danaher restricted stock units or stock options held by employees of the Communications Business transferred to Newco (Newco Employees) that vested from July 14, 2015 through August 4, 2015, the awards continued to vest in Danaher shares. These awards met the definition of a derivative under ASC 815 and as such, the Company determined the fair value of these awards on July 14, 2015 and recorded them separately from the business combination as prepaid compensation. The derivative was amortized into compensation expense through August 4, 2015, the post-combination requisite settlement date. 2) All outstanding Danaher restricted stock units or stock options held by Newco Employees that were due to vest after August 4, 2015 were cancelled and replaced by NetScout with a cash retention award equal to one half of the value of the employee's cancelled Danaher equity award and up to an aggregate of $15 million of restricted stock units relating to shares of NetScout common stock equal to the remaining one half of the value of the employee’s cancelled Danaher equity award. The restricted stock units issued are considered new share-based payment awards granted by NetScout to the former employees of Danaher. NetScout accounted for these new awards separately from the business combination. The Company recognized share-based compensation net of an estimated forfeiture rate and only recognized compensation cost for those shares expected to vest on a straight-line basis over the requisite service period of the award. The cash retention award was paid on August 4, 2016, to those employees that continued their employment with NetScout through the applicable vesting date of August 4, 2016. Danaher reimbursed NetScout for the amount of the cash retention payments (net of any applicable employment taxes and tax deductions). The cash retention award liability was accounted for separately from the business combination as the cash retention award was automatically forfeited upon termination of employment. NetScout recorded the cash retention award liability over the period it was earned as compensation expense for post-combination services. The reimbursement by Danaher to NetScout of the cash retention award payment was accounted for separately from the business combination on the date of the acquisition. For the nine months ended December 31, 2017 and 2016, $0.0 and $4.3 million , respectively, was recorded as compensation expense for post-combination services. 3) Newco Employees that were entitled to receive an incentive bonus under the Danaher annual bonus plan and who continued to be employed by NetScout through December 31, 2015 received a cash incentive bonus payment. The cash incentive bonus liability was accounted for separately from the business combination as the cash incentive bonus is automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. 4) Certain Newco Employees received cash retention payments that were subject to the employee's continued employment with NetScout through October 16, 2015, ninety ( 90 ) days after the close of the acquisition. The cash retention payment liability was accounted for separately from the business combination as the cash retention payment was automatically forfeited upon termination of employment. NetScout recorded the liability over the period it was earned as compensation expense for post-combination services. The payment of the cash retention award, which was reimbursed by Danaher to NetScout, was accounted for separately from the business combination on the date of the acquisition. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company has two reporting units: (1) Service Assurance and (2) Security. The Company assesses goodwill for impairment at the reporting unit level at least annually, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. The Company completed its annual impairment test on January 31, 2017. The Company performed an interim quantitative test as of December 31, 2017 related to its fiscal year 2018 guidance change. The estimated fair value of both reporting units significantly exceeded their carrying value, as did the fair value of the non-amortizing trade name. At December 31, 2017 , goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $555.3 million , respectively. At March 31, 2017, goodwill attributable to our Service Assurance and Security reporting units was $1.2 billion and $548.5 million , respectively. The change in the carrying amount of goodwill for the nine months ended December 31, 2017 is due to the acquisition of Efflux and the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. The changes in the carrying amount of goodwill for the nine months ended December 31, 2017 are as follows (in thousands): Balance at March 31, 2017 $ 1,718,162 Goodwill attributable to the Efflux acquisition 6,077 Foreign currency translation impact (7,868 ) Balance as of December 31, 2017 $ 1,716,371 Intangible Assets The net carrying amounts of intangible assets were $859.2 million and $ 931.3 million at December 31, 2017 and March 31, 2017 , respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General Central Corporation (Network General) acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite-lived trade name is evaluated for potential impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at December 31, 2017 (in thousands): Cost Accumulated Amortization Net Developed technology $ 260,586 $ (140,225 ) $ 120,361 Customer relationships 841,403 (155,874 ) 685,529 Distributor relationships and technology licenses 6,949 (3,517 ) 3,432 Definite-lived trademark and trade name 44,210 (16,653 ) 27,557 Core technology 7,271 (6,522 ) 749 Net beneficial leases 336 (336 ) — Non-compete agreements 306 (306 ) — Leasehold interest 2,600 (1,807 ) 793 Backlog 18,419 (18,417 ) 2 Capitalized software 3,183 (1,356 ) 1,827 Other 1,208 (898 ) 310 $ 1,186,471 $ (345,911 ) $ 840,560 Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2017 (in thousands): Cost Accumulated Amortization Net Developed technology $ 254,005 $ (110,200 ) $ 143,805 Customer relationships 831,731 (105,319 ) 726,412 Distributor relationships and technology licenses 8,290 (3,068 ) 5,222 Definite-lived trademark and trade name 43,817 (12,078 ) 31,739 Core technology 7,108 (6,009 ) 1,099 Net beneficial leases 336 (336 ) — Non-compete agreements 278 (278 ) — Leasehold interest 2,600 (998 ) 1,602 Backlog 18,142 (18,133 ) 9 Capitalized software 3,047 (594 ) 2,453 Other 1,208 (880 ) 328 $ 1,170,562 $ (257,893 ) $ 912,669 Amortization included as product revenue consists of amortization of backlog. Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and nine months ended December 31, 2017 and 2016, respectively (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Amortization of intangible assets included as: Product revenue $ 3 $ 2,850 $ 7 $ 8,596 Cost of product revenue 10,088 11,773 30,032 33,202 Operating expense 18,227 17,548 54,919 52,811 $ 28,318 $ 32,171 $ 84,958 $ 94,609 The following is the expected future amortization expense at December 31, 2017 for the fiscal years ending March 31 (in thousands): 2018 (remaining three months) $ 28,345 2019 107,734 2020 98,383 2021 86,253 2022 75,116 Thereafter 444,729 $ 840,560 The weighted-average amortization period of developed technology and core technology is 11.5 years . The weighted-average amortization period for customer and distributor relationships is 16.1 years . The weighted-average amortization period for trademarks and trade names is 8.5 years . The weighted-average amortization period for leasehold interests is 5.6 years . The weighted-average amortization period for backlog is 2.0 years . The weighted-average amortization period for capitalized software is 4.0 years . The weighted-average amortization period for amortizing all intangible assets is 14.6 years . |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES NetScout operates internationally and, in the normal course of business, is exposed to fluctuations in foreign currency exchange rates. The exposures result from costs that are denominated in currencies other than the U.S. Dollar, primarily the Euro, British Pound, Canadian Dollar, and Indian Rupee. The Company manages its foreign cash flow risk by hedging forecasted cash flows for operating expenses denominated in foreign currencies for up to twelve months, within specified guidelines through the use of forward contracts. The Company enters into foreign currency exchange contracts to hedge cash flow exposures from costs that are denominated in currencies other than the U.S. Dollar. These hedges are designated as cash flow hedges at inception. All of the Company's derivative instruments are utilized for risk management purposes, and the Company does not use derivatives for speculative trading purposes. These contracts will mature over the next twelve months and are expected to impact earnings on or before maturity. The notional amounts and fair values of derivative instruments in the consolidated balance sheets at December 31, 2017 and March 31, 2017 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other December 31, March 31, December 31, March 31, December 31, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 10,207 $ 14,752 $ 153 $ 110 $ 63 $ 213 (a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended December 31, 2017 and 2016 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Forward contracts $ (113 ) $ (488 ) Research and development $ (24 ) $ 12 Research and development $ 9 $ 39 Sales and marketing (229 ) 181 Sales and marketing (28 ) (21 ) $ (113 ) $ (488 ) $ (253 ) $ 193 $ (19 ) $ 18 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the nine months ended December 31, 2017 and 2016 (in thousands): Derivatives in Cash Effective Portion Ineffective Portion Gain (Loss) Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Forward contracts $ 796 $ (626 ) Research and $ (106 ) $ (6 ) Research and $ 46 $ 70 Sales and (514 ) 210 Sales and (102 ) (113 ) $ 796 $ (626 ) $ (620 ) $ 204 $ (56 ) $ (43 ) (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On July 14, 2015, the Company entered into a certain credit facility with a syndicate of lenders pursuant to a Credit Agreement (Credit Agreement), dated as of July 14, 2015, by and among: the Company; JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent and collateral agent; J.P. Morgan Securities LLC, KeyBanc Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners; Santander Bank, N.A., SunTrust Bank, N.A. and U.S. Bank National Association, as co-documentation agents; and the lenders party thereto. The Credit Agreement provides for a five -year, $800 million senior secured revolving credit facility, including a letter of credit sub-facility of up to $50 million . The Company may elect to use this credit facility for working capital purposes or to finance the repurchase of up to 20 million shares of common stock under the Company's common stock repurchase plan. The commitments under the Credit Agreement will expire on July 14, 2020, and any outstanding loans will be due on that date. At December 31, 2017 , $300 million was outstanding under this credit facility. At the Company's election, revolving loans under the Credit Agreement bear interest at either (a) an Alternate Base Rate per annum equal to the greatest of (1) JPMorgan's prime rate, (2) 0.50% in excess of the Federal Funds effective rate, or (3) an adjusted one month LIBOR rate plus 1% ; or (b) such adjusted LIBOR rate (for the interest period selected by the Company), in each case plus an applicable margin. For the period from the delivery of the Company's financial statements for the quarter ended September 30, 2017 until the Company has delivered financial statements for the quarter ended December 31, 2017 , the applicable margin was 1.50% per annum for LIBOR loans and 0.50% per annum for Alternate Base Rate loans, and thereafter the applicable margin will vary depending on the Company's leverage ratio, ranging from 1.00% per annum for Base Rate loans and 2.00% per annum for LIBOR loans if the Company's consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.25% per annum for Alternate Base Rate loans and 1.25% per annum for LIBOR loans if the Company's consolidated leverage ratio is equal to or less than 1.00 to 1.00. The Company's consolidated leverage ratio is the ratio of its total funded debt compared to its consolidated adjusted EBITDA. Consolidated adjusted EBITDA includes certain adjustments, including, without limitation, adjustments relating to extraordinary, unusual or non-recurring charges, certain restructuring charges, non-cash charges, certain transaction costs and expenses and certain pro forma adjustments in connection with material acquisitions and dispositions, all as set forth in detail in the definition of consolidated adjusted EBITDA in the Credit Agreement. Commitment fees will accrue on the daily unused amount of the credit facility. For the period from the delivery of the Company's financial statements for the quarter ended September 30, 2017 until the Company has delivered financial statements for the quarter ended December 31, 2017 , the commitment fee was 0.25% per annum, and thereafter the commitment fee will vary depending on the Company's consolidated leverage ratio, ranging from 0.35% per annum if the Company's consolidated leverage ratio is greater than 2.50 to 1.00, down to 0.20% per annum if the Company's consolidated leverage ratio is equal to or less than 1.00 to 1.00. Letter of credit participation fees are payable to each lender on the amount of such lender's letter of credit exposure, during the period from the closing date of the Credit Agreement to but excluding the date which is the later of (i) the date on which such lender's commitment terminates or (ii) the date on which such lender ceases to have any letter of credit exposure, at a rate per annum equal to the applicable margin for LIBOR loans. Additionally, the Company will pay a fronting fee to each issuing bank in amounts to be agreed to between the Company and the applicable issuing bank. Interest on Alternate Base Rate loans is payable at the end of each calendar quarter. Interest on LIBOR loans is payable at the end of each interest rate period or at the end of each three-month interval within an interest rate period if the period is longer than three months. The Company may also prepay loans under the Credit Agreement at any time, without penalty, subject to certain notice requirements. Debt is recorded at the amount drawn on the revolving credit facility plus interest based on floating rates reflective of changes in the market which approximates fair value. The loans and other obligations under the credit facility are (a) guaranteed by each of the Company's wholly owned material domestic restricted subsidiaries, subject to certain exceptions, and (b) are secured by substantially all of the assets of the Company and the subsidiary guarantors, including a pledge of all the capital stock of material subsidiaries held directly by the Company and the subsidiary guarantors (which pledge, in the case of any foreign subsidiary, is limited to 65% of the voting stock), subject to certain customary exceptions and limitations. The Credit Agreement generally prohibits any other liens on the assets of the Company and its restricted subsidiaries, subject to certain exceptions as described in the Credit Agreement. The Credit Agreement contains certain covenants applicable to the Company and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, including sale-leaseback transactions, speculative hedge agreements, payment of junior financing, changes in business and other limitations customary in senior secured credit facilities. In addition, the Company is required to maintain certain consolidated leverage and interest coverage ratios. These covenants and limitations are more fully described in the Credit Agreement. At December 31, 2017 , the Company was in compliance with all of these covenants. The Credit Agreement provides that events of default will exist in certain circumstances, including failure to make payment of principal or interest on the loans when required, failure to perform certain obligations under the Credit Agreement and related documents, defaults under certain other indebtedness, certain insolvency events, certain events arising under ERISA, a change of control and certain other events. Upon an event of default, the administrative agent with the consent of, or at the request of, the holders of more than 50% in principal amount of the loans and commitments may terminate the commitments and accelerate the maturity of the loans and enforce certain other remedies under the Credit Agreement and the other loan documents. In connection with the Company's revolving credit facility described above, effective as of the closing date of the Credit Agreement, the Company terminated its existing term loan and revolving credit facility pursuant to the Credit and Security Agreement, dated as of November 22, 2011, by and among the Company, KeyBank National Association, as joint lead arranger, sole book runner and administrative agent, Wells Fargo Bank, National Association, as joint lead arranger and co-syndication agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger, Bank of America, N.A., as co-syndication agent, and Silicon Valley Bank and Comerica Bank, as co-documentation agents, and the Lenders party thereto. The Company capitalized $6.6 million of debt issuance costs associated with the origination of the Credit Agreement, which are being amortized over the life of the revolving credit facility. The unamortized balance was $3.4 million as of December 31, 2017 . The balance of $1.4 million was included as prepaid expenses and other current assets and a balance of $2.0 million was included as other assets in the Company's consolidated balance sheet. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES During the quarter ended March 31, 2017, the Company restructured certain departments to better align functions subsequent to the Comms Transaction, resulting in the termination of forty-one employees. Communication of the plan to the impacted employees was substantially completed on March 31, 2017. As a result of the workforce reduction, during the twelve months ended March 31, 2017, the Company recorded a restructuring charge totaling $1.9 million related to one-time termination benefits and $0.4 million in facility related charges. All of the workforce reduction was completed during the quarter ended September 30, 2017. The Company recorded an additional charge for one-time termination benefits of $0.7 million during the six months ended September 30, 2017. The one-time termination benefits and facilities-related costs were paid in full during the quarter ended December 31, 2017. During the quarter ended December 31, 2017, the Company restructured certain departments to better align functions resulting in the termination of sixty-seven employees. As a result of the workforce reduction, during the three months ended December 31, 2017, the Company recorded a restructuring charge totaling $3.6 million related to one-time termination benefits for the employees that were notified during the period. Additional one-time termination benefit charges and facility-related costs of approximately $2.7 million are anticipated to be recorded in the next nine months. The one-time termination benefits will be paid in full during the fiscal year ended March 31, 2019. The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): Q4 FY2017 Plan Q3 FY 2018 Plan Employee-Related Facilities Related Employee-Related Total Balance at March 31, 2017 $ 1,550 $ 405 $ — $ 1,955 Restructuring charges to operations 729 208 $ 3,590 $ 4,527 Cash payments (1,867 ) (374 ) (380 ) $ (2,621 ) Other adjustments (412 ) (239 ) — $ (651 ) Balance at December 31, 2017 $ — $ — $ 3,210 $ 3,210 The accrual for employee-related severance is included as accrued compensation in the Company's consolidated balance sheets. The balance is expected to be paid in full within the next twelve months. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Acquisition related – The Company has a contingent liability related to the acquisition of Simena in November 2011 for future consideration to be paid to the seller which had an initial fair value of $8.0 million at the time of acquisition. At December 31, 2017 , the present value of the future consideration was $4.9 million . The Company has a contingent liability for $523 thousand related to the acquisition of Efflux in July 2017 for which an escrow account was established to cover damages NetScout suffers related to any liabilities that NetScout did not agree to assume or as a result of the breach of representations and warranties of the seller as described in the merger agreement. Generally, indemnification claims that Efflux would be liable for are limited to the total amount of the escrow account and shall be the sole source for the satisfaction of any damages to the Company for such claims, but such limitation does not apply with respect to seller's breach of certain fundamental representations or related to other specified indemnity items, for which certain of Efflux's shareholders may be liable for additional amounts in excess of the escrow amount. Except to the extent that valid indemnification claims are made prior to such time, the $523 thousand will be paid to the seller on July 12, 2018. In addition, the Company had a contingent liability at March 31, 2017 for $660 thousand related to the acquisition of Avvasi in August 2016. The $660 thousand was paid to the seller in August 2017. Legal – From time to time, NetScout is subject to legal proceedings and claims in the ordinary course of business. In the opinion of management, the amount of ultimate expense with respect to any current legal proceedings and claims, if determined adversely, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. As previously disclosed, in Part II, Item 1, in March 2016, Packet Intelligence LLC (“Packet Intelligence” or “Plaintiff”) filed a Complaint against NetScout and two subsidiary entities in the United States District Court for the Eastern District of Texas asserting infringement of five United States patents. Plaintiff’s Complaint alleged that legacy Tektronix GeoProbe products, including the G10 and GeoBlade products, infringed these patents. NetScout filed an Answer denying Plaintiff’s allegations and asserting that Plaintiff’s patents were, among other things, invalid, not infringed, and unenforceable due to inequitable conduct. In October 2017, a jury trial was held to address the parties’ claims and counterclaims regarding infringement of three patents by the G10 and GeoBlade products, invalidity of these patents, and damages. On October 13, 2017, the jury rendered a verdict finding in favor of the Plaintiff and that Plaintiff was entitled to $3,500,000 for pre-suit damages and $2,250,000 for post-suit damages. The jury indicated that the awarded damages amounts were intended to reflect a running royalty. The Court also conducted a bench trial on whether these patents were unenforceable due to, among other things, inequitable conduct. The Court has not yet rendered a decision on the equitable issues or entered final judgment in this matter. NetScout has concluded that the risk of loss from this matter is currently neither remote nor probable, and therefore, under U.S. GAAP definitions, the risk of loss is termed "reasonably possible". Therefore, accounting rules require NetScout to provide an estimate for the range of potential liability. Netscout currently estimates that the estimated range of liability is between $0 and the aggregate amount awarded by the jury, plus potential additional pre- and post-judgment interest amounts, subject to other adjustments that the Court may make. NetScout intends to continue to vigorously dispute Packet Intelligence’s claims including through appeal, if necessary. |
PENSION BENEFIT PLANS
PENSION BENEFIT PLANS | 9 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
PENSION BENEFIT PLANS | PENSION BENEFIT PLANS Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the Comms Transaction on July 14, 2015. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan's funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors. The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and nine months ended December 31, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Service cost $ 67 $ 103 $ 208 $ 268 Interest cost 132 199 405 520 Net periodic pension cost $ 199 $ 302 $ 613 $ 788 Expected Contributions During the nine months ended December 31, 2017 , the Company made contributions of $0.2 million to its defined benefit pension plans. During the fiscal year ending March 31, 2018, the Company's cash contribution requirements for its defined benefit pension plans are expected to be less than $1.0 million . As a majority of the participants within the Company's plans are all active employees, the benefit payments are not expected to be material in the foreseeable future. |
TREASURY STOCK
TREASURY STOCK | 9 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
TREASURY STOCK | TREASURY STOCK On May 19, 2015, the Company's board of directors approved a share repurchase program, conditional upon the completion of the Comms Transaction. This program enables the Company to repurchase up to 20 million shares of its common stock. This plan became effective on July 14, 2015 upon the completion of the Comms Transaction. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe under this program. Through December 31, 2017 , the Company has repurchased 19,029,350 shares totaling $580.0 million in the open market under this stock repurchase plan. At December 31, 2017 , 970,650 shares of common stock remained available to be purchased under the plan. The Company repurchased 5,802,788 shares for $200.0 million under the program during the nine months ended December 31, 2017 . On October 24, 2017, the Company’s Board of Directors approved a new share repurchase program that will enable the Company to repurchase up to twenty-five million shares of its common stock. This new program will become effective once the Company’s previously disclosed twenty million share repurchase program is completed. The Company plans to acquire shares in open market transactions that may use a 10b5-1 plan, and the Company may also repurchase shares via accelerated stock buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases under this new program will be funded from one or a combination of (i) existing cash balances, (ii) future free cash flow and (iii) indebtedness. The Company is not obligated to acquire any specific amount of common stock within any particular timeframe as a result of its new share repurchase program. The timing and amount of future repurchase activity under the new program will depend on market conditions, corporate considerations, debt agreements and regulatory requirements. The new program may be modified, suspended or terminated at any time by the Board. In connection with the delivery of common shares upon vesting of restricted stock units, the Company withheld 385,454 shares at a cost of $13.0 million related to minimum statutory tax withholding requirements on these restricted stock units during the nine months ended December 31, 2017 . These withholding transactions do not fall under the repurchase program described above, and therefore do not reduce the amount that is available for repurchase under that program. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Calculations of the basic and diluted net income per share and potential common shares are as follows (in thousands, except for per share data): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Numerator: Net income $ 89,685 $ 21,245 $ 62,995 $ 10,981 Denominator: Denominator for basic net income per share - weighted average common shares outstanding 87,210 91,762 88,985 92,337 Dilutive common equivalent shares: Weighted average restricted stock units 650 640 897 660 Denominator for diluted net income per share - weighted average shares outstanding 87,860 92,402 89,882 92,997 Net income per share: Basic net income per share $ 1.03 $ 0.23 $ 0.71 $ 0.12 Diluted net income per share $ 1.02 $ 0.23 $ 0.70 $ 0.12 The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be anti-dilutive (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Restricted stock units 1,873 1,207 1,405 1,718 Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic earnings per share. Diluted net income per share is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding stock options, restricted shares and restricted stock units using the treasury stock method. The calculation of the dilutive effect of outstanding equity awards under the treasury stock method includes consideration of proceeds from the assumed exercise of stock options and unrecognized compensation expense as additional proceeds. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's effective income tax rates were (155.1)% and 30.6% for the three months ended December 31, 2017 and 2016 , respectively. Generally, the effective tax rate differs from the statutory tax rate due to the impact of the domestic production activities deduction, research and development credit, the impact of state taxes and income generated in jurisdictions that have a different tax rate than the U.S. statutory rate. The effective tax rate for the three months ended December 31, 2017 is lower than the effective rate for the three months ended December 31, 2016 , primarily due to the enactment of the Tax Cuts and Jobs Act during the quarter. As a result of the enactment, the Company recorded a significant tax benefit during the quarter ended December 31, 2017. The Company's effective income tax rates were 1,133.0% and 28.4% for the nine months ended December 31, 2017 and 2016, respectively. The effective tax rate for the nine months ended December 31, 2017 is higher than the effective rate for the nine months ended December 31, 2016 , primarily due to the enactment of the Tax Cuts and Jobs Act during the quarter. As a result of the enactment, the Company recorded a significant tax benefit during the quarter ended December 31, 2017. This benefit has the effect of increasing the tax rate due to losses being generated in the nine months ended December 31, 2017 . On December 22, 2017, the Tax Cuts and Jobs Act (Tax Legislation) was signed into law. The Tax Legislation significantly revises the U.S. tax code by, among other things, lowering the corporate tax rate from 35% to 21% ; imposing a minimum tax on certain foreign earnings; limiting the deductibility of interest expense; implementing a territorial tax system and imposing a one-time transition tax on deemed repatriating earnings of foreign subsidiaries. Due to the effective date of the rate reduction on our fiscal year, the Company will record a blended statutory rate for the year ended March 31, 2018. While the Company continues to assess the impact of the new law on our consolidated financial statements, the Company has recorded a provisional amount increasing current tax expense by approximately $2 million related to the transition tax associated with the deemed repatriation of foreign earnings. Additionally, the Company has recorded a provisional deferred tax benefit of approximately $83 million related to the re-measurement of deferred tax assets and liabilities. The aforementioned provisional amounts may differ from actual results due to a variety of factors, including, among others, (i) finalization of the annual financial closing and reporting process which may impact the re measurement of deferred taxes; (ii) management’s further assessment of the Tax Legislation and related regulatory guidance; (iii) guidance that may be issued; (iv) finalization of earnings and profits amounts and cash balances held by foreign subsidiaries impacting the transitions tax (v) potential imposition of the minimum tax and (vi) actions the Company may take as a result of the Tax Legislation. Any adjustments to these provisional amounts made during the measurement period will be included in income from continuing operations as an adjustment to tax expense or benefit in the reporting period the amounts are determined. The Company may be subject to the tax on the Global Intangible Low-Taxed Income (GILTI) in future years but has not completed its analysis of the applicability of the tax. The Company will continue to gather and evaluate information as to the impact of this tax, and therefore will not make a policy election on how to account for GILTI (as part of deferred taxes or as a period expense) until management has received and evaluated the necessary information. Accordingly, no amounts related to GILTI are included within deferred taxes. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The Company reports revenues and income under one reportable segment. The Company manages its business in the following geographic areas: United States, Europe, Asia and the rest of the world. In accordance with United States export control regulations, the Company does not sell or do business with countries subject to economic sanctions and export controls. Total revenue by geography is as follows (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 United States $ 156,511 $ 175,591 $ 448,761 $ 524,958 Europe 53,938 58,058 132,488 140,795 Asia 23,076 26,360 67,804 70,978 Rest of the world 35,419 42,183 102,510 106,461 $ 268,944 $ 302,192 $ 751,563 $ 843,192 The United States revenue includes sales to resellers in the United States. These resellers fulfill customer orders and may subsequently ship the Company’s products to international locations. The Company reports these shipments as United States revenue because the Company ships the products to a United States location. Further, the Company determines the geography of its sales after considering where the contract originated. Beginning in the first quarter of fiscal year 2018, the Company changed the structure of its sales force. As a result, consideration was given to this change when determining revenue by geography for the three and nine months ended December 31, 2017 . Prior periods in fiscal year 2017 were recast to conform to the current presentation. A majority of revenue attributable to locations outside of the United States is a result of export sales. Substantially all of the Company’s identifiable assets are located in the United States. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS During our fiscal year ended March 31, 2016 and the three months ended June 30, 2016, a member of the Company's Board of Directors served as an executive officer of Danaher. As part of the split off of Danaher's Communications Business and the Company's subsequent acquisition of that business from Newco's shareholders, NetScout has entered into multiple transactions with Danaher which include: transition services agreements, lease agreements, closing agreements, and compensation for post-combination services provisions within the separation and distribution agreement. This board member is now the founding President and CEO of Fortive Corporation (Fortive), which spun off of Danaher in July 2016. As part of the spin-off of Fortive, the transition services agreement was amended to, among other things, assign Danaher's rights, duties, obligations and liabilities under the transition services agreement to Fluke Corporation, a subsidiary of Fortive. The Company will continue to report the wind down of preexisting transactions as related party transactions through the Company's fiscal year 2018. The Company has disclosed the transactions with Danaher and Fortive parenthetically within the financial statements. As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands): December 31, 2017 March 31, 2017 Danaher $ 194 $ 404 Fortive 2,888 3,181 $ 3,082 $ 3,585 As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands): December 31, 2017 March 31, 2017 Fortive $ 362 $ 444 $ 362 $ 444 As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Danaher: Cost of product revenue $ — $ — $ — $ 4,690 Cost of service revenue — 27 — 485 Research and development expenses — 43 — 1,720 Sales and marketing — (49 ) 2 2,273 General and administrative expenses 3 46 7 2,548 $ 3 $ 67 $ 9 $ 11,716 Fortive: Cost of product revenue $ — $ 45 $ 245 $ 2,418 Cost of service revenue 192 95 480 109 Research and development expenses — — 3 (104 ) Sales and marketing — — — 150 General and administrative expenses 750 261 1,690 1,302 $ 942 $ 401 $ 2,418 $ 3,875 As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands): Nine Months Ended December 31, 2017 2016 Due from related party: Danaher $ 154 $ 16,955 Fortive 400 7,724 Total $ 554 $ 24,679 Due to related party: Danaher $ — $ (712 ) Fortive (82 ) 206 Total $ (82 ) $ (506 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 16, 2018, the Company amended and expanded its existing credit agreement (Restated Credit Agreement). The Restated Credit Agreement provides for a five -year $1.0 billion senior secured revolving credit facility, including a letter of credit sub-facility of up to $75.0 million. The Company may elect to use the new credit facility for general corporate purposes or to repurchase shares of common stock under the Company's common stock repurchase plan. The commitments under the Credit Agreement will expire on January 16, 2023, and any outstanding loans will be due on that date. On February 1, 2018, the Company also announced that it entered into agreements with JPMorgan Chase Bank, National Association and Bank of America, N.A. (the Dealers) to repurchase an aggregate of $300 million of the Company common stock via accelerated stock repurchase transactions (the ASR) under the Company's previously disclosed 25 million share repurchase program. On February 1, 2018, the Company borrowed $300 million aggregate principal amount under its revolving credit facility, dated as of July 14, 2015, as amended on January 16, 2018 in order to finance the payment of the initial purchase price of its common stock to each of the Dealers under the ASR. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited interim consolidated financial statements have been prepared by NetScout Systems, Inc., or NetScout or the Company. Certain information and footnote disclosures normally included in financial statements prepared under United States generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's financial position, results of operations and cash flows. 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. The results reported in these unaudited interim consolidated financial statements are not necessarily indicative of results that may be expected for the entire year. All significant intercompany accounts and transactions are eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 filed with the Securities and Exchange Commission on May 24, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12). ASU 2017-12 intends to better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments expand and refine hedge accounting for both non-financial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2017-12 is effective for the Company beginning April 1, 2019. The Company is currently assessing the potential impact of the adoption of ASU 2017-12 on its consolidated financial statements. In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-Retirement Benefit Cost (ASU 2017-07) which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2017 and should be applied retrospectively to all periods presented. ASU 2017-07 is effective for the Company beginning April 1, 2018. The Company does not believe the adoption of ASU 2017-07 will have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of addressing whether transactions involving in-substance nonfinancial assets, held directly or in a subsidiary, should be accounted for as acquisitions or disposals of nonfinancial assets or of businesses. ASU 2017-01 is effective for annual periods beginning after December 15, 2017. ASU 2017-01 is effective for the Company beginning April 1, 2018. Early adoption is permitted for transactions, including acquisitions or dispositions, which occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company does not believe the adoption of ASU 2017-01 will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) related to the presentation of restricted cash in the statement of cash flows. The pronouncement requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. Entities will also have to disclose the nature of restricted cash and restricted cash equivalent balances. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company adopted this guidance retrospectively on April 1, 2017. The Company does not have a material amount of restricted cash. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 requires that entities recognize the income tax effects of intra-entity transfers of assets other than inventory when the transfer occurs. Current GAAP prohibits the recognition of those tax effects until the asset has been sold to an outside party. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. ASU 2016-16 is effective for the Company beginning April 1, 2018. The Company is evaluating the new guidance and does not believe the adoption of ASU 2016-16 will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 is intended to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. ASU 2016-15 is effective for the Company beginning April 1, 2018. The Company is currently assessing the potential impact of the adoption of ASU 2016-15 and does not expect a material impact on its consolidated statement of cash flows. 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 simplifies several aspects of the accounting for employee 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 Company adopted this guidance on April 1, 2017, which had the following impact on the consolidated financial statements: • On a prospective basis, as required, the Company recorded an excess tax shortfall of $0.4 million and an excess tax benefit of $0.8 million to the provision for income taxes in the consolidated statement of operations for the three and nine months ended December 31, 2017 , respectively, instead of additional paid-in capital in the consolidated balance sheets. As a result, net income decreased $0.4 million and increased $0.8 million , for the three and nine months ended December 31, 2017 , respectively. Basic and diluted earnings per share decreased $0.01 for the three months ended December 31, 2017, while basic and diluted earnings per share increased $0.01 for the nine months ended December 31, 2017 . • Excess tax benefits are presented as operating cash activity instead of financing cash activity in the consolidated statements of cash flows, which the Company elected to apply on a retrospective basis. As a result, the Company classified $0.8 million and $1.4 million of excess tax benefits for the nine months ended December 31, 2017 and 2016, respectively, as operating cash outflows included within the change in income taxes payable in the consolidated statements of cash flows. The retrospective classification resulted in decreases in cash provided by operating activities and cash used in financing activities of $1.4 million for the nine months ended December 31, 2016. • The Company prospectively excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share under the treasury stock method, which did not have a material impact on diluted earnings per share for the three and nine months ended December 31, 2017. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Section A - Leases: Amendments to the FASB Accounting Standards Codification (ASU 2016-02), its new standard on accounting for leases. This update requires the recognition of leased assets and lease obligations by lessees for those leases currently classified as operating leases under existing lease guidance. Short term leases with a term of 12 months or less are not required to be recognized. The update also requires disclosure of key information about leasing arrangements to increase transparency and comparability among organizations. ASU 2016-02 is effective for annual reporting periods beginning after December 31, 2018 and interim periods within those fiscal years, and early adoption is permitted. The Company is currently assessing the potential impact of the adoption of ASU 2016-02 on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09) and issued subsequent amendments to the initial guidance in August 2015, March 2016, April 2016, May 2016, December 2016 and September 2017, within ASU 2015-04, 2016-08, ASU 2016-10, ASU 2016-12, ASU 2016-20, ASU 2017-13 and ASU 2017-14, respectively (collectively, Topic 606). Topic 606 supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of Topic 606 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in applying this process, it is possible that more judgments and estimates may be required within the revenue recognition process than are required under existing GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation, among others. Topic 606 will be effective for the Company on April 1, 2018. Entities have the option of using either a full retrospective or a modified retrospective approach to adopt this standard. The Company believes it will elect the modified retrospective transition approach. However, the Company is still quantifying the impact of this new accounting standard. The adoption will most likely result in a reduction in deferred revenue as of April 1, 2018 for performance obligations that are deferred under current guidance that may not be deferred under Topic 606. Upon adoption of Topic 606, the Company expects to recognize a greater proportion of revenue upon delivery of its products, whereas some of its current product sales are initially recorded in deferred revenue and recognized over a period of time. Since the Company is currently expensing sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact on the consolidated financial statements in the year of adoption. The Company does not foresee any material impact on its cash flows. The Company will continue to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-Based Compensation Expense | The following is a summary of share-based compensation expense including restricted stock units granted pursuant to the Company's 2007 Equity Incentive Plan, as amended, and employee stock purchases made under the Company's 2011 Employee Stock Purchase Plan (ESPP) based on estimated fair values within the applicable cost and expense lines identified below (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Cost of product revenue $ 301 $ 255 $ 807 $ 716 Cost of service revenue 1,287 1,015 3,597 3,058 Research and development 3,730 3,456 10,820 9,961 Sales and marketing 4,022 3,367 11,613 9,704 General and administrative 3,085 2,368 8,417 6,832 $ 12,425 $ 10,461 $ 35,254 $ 30,271 |
CASH, CASH EQUIVALENTS, RESTR30
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands): December 31, March 31, 2017 December 31, March 31, 2016 Cash and cash equivalents $ 331,912 $ 304,880 $ 244,833 $ 210,711 Restricted cash 910 846 846 186 Total cash, cash equivalents and restricted cash $ 332,822 $ 305,726 $ 245,679 $ 210,897 |
Summary of Marketable Securities | The following is a summary of marketable securities held by NetScout at December 31, 2017 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 41,957 $ (74 ) $ 41,883 Commercial paper 5,007 — 5,007 Corporate bonds 1,006 (1 ) 1,005 Total short-term marketable securities 47,970 (75 ) 47,895 U.S. government and municipal obligations 3,203 (16 ) 3,187 Total long-term marketable securities 3,203 (16 ) 3,187 Total marketable securities $ 51,173 $ (91 ) $ 51,082 The following is a summary of marketable securities held by NetScout at March 31, 2017 , classified as short-term and long-term (in thousands): Amortized Cost Unrealized Losses Fair Value Type of security: U.S. government and municipal obligations $ 98,989 $ (21 ) $ 98,968 Commercial paper 29,469 — 29,469 Corporate bonds 7,959 (3 ) 7,956 Certificates of deposit 1,499 — 1,499 Total short-term marketable securities 137,916 (24 ) 137,892 U.S. government and municipal obligations 21,952 (19 ) 21,933 Total long-term marketable securities 21,952 (19 ) 21,933 Total marketable securities $ 159,868 $ (43 ) $ 159,825 |
Summary of Contractual Maturities of Marketable Securities | Contractual maturities of the Company's marketable securities held at December 31, 2017 and March 31, 2017 were as follows (in thousands): December 31, March 31, Available-for-sale securities: Due in 1 year or less $ 47,895 $ 137,892 Due after 1 year through 5 years 3,187 21,933 $ 51,082 $ 159,825 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following tables present the Company's financial assets and liabilities measured on a recurring basis using the fair value hierarchy at December 31, 2017 and March 31, 2017 (in thousands): Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 331,912 $ — $ — $ 331,912 U.S. government and municipal obligations 17,010 28,060 — 45,070 Commercial paper — 5,007 — 5,007 Corporate bonds 1,005 — — 1,005 Derivative financial instruments — 153 — 153 $ 349,927 $ 33,220 $ — $ 383,147 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,426 ) $ (5,426 ) Derivative financial instruments — (63 ) — (63 ) $ — $ (63 ) $ (5,426 ) $ (5,489 ) Fair Value Measurements at March 31, 2017 Level 1 Level 2 Level 3 Total ASSETS: Cash and cash equivalents $ 304,880 $ — $ — $ 304,880 U.S. government and municipal obligations 40,628 80,273 — 120,901 Commercial paper — 29,469 — 29,469 Corporate bonds 7,956 — — 7,956 Certificate of deposits — 1,499 — 1,499 Derivative financial instruments — 110 — 110 $ 353,464 $ 111,351 $ — $ 464,815 LIABILITIES: Contingent purchase consideration $ — $ — $ (5,449 ) $ (5,449 ) Derivative financial instruments — (213 ) — (213 ) $ — $ (213 ) $ (5,449 ) $ (5,662 ) |
Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets | The following table sets forth a reconciliation of changes in the fair value of the Company's Level 3 financial assets and liabilities for the nine months ended December 31, 2017 (in thousands): Contingent Purchase Consideration Balance at March 31, 2017 $ (5,449 ) Additions to Level 3 (523 ) Increase in fair value and accretion expense (included within research and development expense) (114 ) Payments made 660 Balance at December 31, 2017 $ (5,426 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): December 31, March 31, Raw materials $ 23,039 $ 22,305 Work in process 484 998 Finished goods and deferred costs 13,069 16,699 $ 36,592 $ 40,002 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the allocation of the purchase price (in thousands): Initial cash payment $ 8,104 Estimated fair value of contingent purchase consideration 523 Estimated purchase price $ 8,627 Estimated fair value of assets acquired and liabilities assumed (in thousands): Cash $ 93 Accounts receivable 3 Prepaid and other current assets 208 Property, plant and equipment 8 Intangible assets 2,590 Deferred tax asset 841 Accounts payable (7 ) Accrued other liabilities (200 ) Deferred revenue (8 ) Deferred tax liabilities (978 ) Goodwill $ 6,077 |
Schedule of Fair value of Acquired Identifiable Intangible Assets and Related Estimates of Useful Lives | The following table reflects the fair value of the acquired identifiable intangible assets and related estimates of useful lives (in thousands): Fair Value Useful Life (Years) Developed technology $ 1,980 10 Customer relationships 610 10 $ 2,590 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine months ended December 31, 2017 are as follows (in thousands): Balance at March 31, 2017 $ 1,718,162 Goodwill attributable to the Efflux acquisition 6,077 Foreign currency translation impact (7,868 ) Balance as of December 31, 2017 $ 1,716,371 |
Schedule of Intangible Assets | Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at December 31, 2017 (in thousands): Cost Accumulated Amortization Net Developed technology $ 260,586 $ (140,225 ) $ 120,361 Customer relationships 841,403 (155,874 ) 685,529 Distributor relationships and technology licenses 6,949 (3,517 ) 3,432 Definite-lived trademark and trade name 44,210 (16,653 ) 27,557 Core technology 7,271 (6,522 ) 749 Net beneficial leases 336 (336 ) — Non-compete agreements 306 (306 ) — Leasehold interest 2,600 (1,807 ) 793 Backlog 18,419 (18,417 ) 2 Capitalized software 3,183 (1,356 ) 1,827 Other 1,208 (898 ) 310 $ 1,186,471 $ (345,911 ) $ 840,560 Intangible assets include the indefinite-lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2017 (in thousands): Cost Accumulated Amortization Net Developed technology $ 254,005 $ (110,200 ) $ 143,805 Customer relationships 831,731 (105,319 ) 726,412 Distributor relationships and technology licenses 8,290 (3,068 ) 5,222 Definite-lived trademark and trade name 43,817 (12,078 ) 31,739 Core technology 7,108 (6,009 ) 1,099 Net beneficial leases 336 (336 ) — Non-compete agreements 278 (278 ) — Leasehold interest 2,600 (998 ) 1,602 Backlog 18,142 (18,133 ) 9 Capitalized software 3,047 (594 ) 2,453 Other 1,208 (880 ) 328 $ 1,170,562 $ (257,893 ) $ 912,669 |
Finite-lived Intangible Assets Amortization Expense | The following table provides a summary of amortization expense for the three and nine months ended December 31, 2017 and 2016, respectively (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Amortization of intangible assets included as: Product revenue $ 3 $ 2,850 $ 7 $ 8,596 Cost of product revenue 10,088 11,773 30,032 33,202 Operating expense 18,227 17,548 54,919 52,811 $ 28,318 $ 32,171 $ 84,958 $ 94,609 |
Schedule of Expected Future Amortization Expense | The following is the expected future amortization expense at December 31, 2017 for the fiscal years ending March 31 (in thousands): 2018 (remaining three months) $ 28,345 2019 107,734 2020 98,383 2021 86,253 2022 75,116 Thereafter 444,729 $ 840,560 |
DERIVATIVE INSTRUMENTS AND HE35
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet | The notional amounts and fair values of derivative instruments in the consolidated balance sheets at December 31, 2017 and March 31, 2017 were as follows (in thousands): Notional Amounts (a) Prepaid Expenses and Other Current Assets Accrued Other December 31, March 31, December 31, March 31, December 31, March 31, Derivatives Designated as Hedging Instruments: Forward contracts $ 10,207 $ 14,752 $ 153 $ 110 $ 63 $ 213 (a) Notional amounts represent the gross contract/notional amount of the derivatives outstanding. |
Summary of Effect of Foreign Exchange Forward Contracts on OCI and Results of Operations | The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the three months ended December 31, 2017 and 2016 (in thousands): Derivatives in Cash Flow Hedging Relationships Effective Portion Ineffective Portion Gain (Loss) Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) (c) December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Forward contracts $ (113 ) $ (488 ) Research and development $ (24 ) $ 12 Research and development $ 9 $ 39 Sales and marketing (229 ) 181 Sales and marketing (28 ) (21 ) $ (113 ) $ (488 ) $ (253 ) $ 193 $ (19 ) $ 18 (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. The following table provides the effect foreign exchange forward contracts had on other comprehensive income (loss) (OCI) and results of operations for the nine months ended December 31, 2017 and 2016 (in thousands): Derivatives in Cash Effective Portion Ineffective Portion Gain (Loss) Recognized in Gain (Loss) Reclassified from Gain (Loss) Recognized in Income (Amount December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Location December 31, 2017 December 31, 2016 Forward contracts $ 796 $ (626 ) Research and $ (106 ) $ (6 ) Research and $ 46 $ 70 Sales and (514 ) 210 Sales and (102 ) (113 ) $ 796 $ (626 ) $ (620 ) $ 204 $ (56 ) $ (43 ) (a) The amount represents the change in fair value of derivative contracts due to changes in spot rates. (b) The amount represents reclassification from other comprehensive income to earnings that occurs when the hedged item affects earnings. (c) The amount represents the change in fair value of derivative contracts due to changes in the difference between the spot price and forward price that is excluded from the assessment of hedge effectiveness and therefore recognized in earnings. No gains or losses were reclassified as a result of discontinuance of cash flow hedges. |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Liability | The following table provides a summary of the activity related to the restructuring plans and the related restructuring liability (in thousands): Q4 FY2017 Plan Q3 FY 2018 Plan Employee-Related Facilities Related Employee-Related Total Balance at March 31, 2017 $ 1,550 $ 405 $ — $ 1,955 Restructuring charges to operations 729 208 $ 3,590 $ 4,527 Cash payments (1,867 ) (374 ) (380 ) $ (2,621 ) Other adjustments (412 ) (239 ) — $ (651 ) Balance at December 31, 2017 $ — $ — $ 3,210 $ 3,210 |
PENSION BENEFIT PLANS (Tables)
PENSION BENEFIT PLANS (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans | The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the three and nine months ended December 31, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Service cost $ 67 $ 103 $ 208 $ 268 Interest cost 132 199 405 520 Net periodic pension cost $ 199 $ 302 $ 613 $ 788 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of the Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares | Calculations of the basic and diluted net income per share and potential common shares are as follows (in thousands, except for per share data): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Numerator: Net income $ 89,685 $ 21,245 $ 62,995 $ 10,981 Denominator: Denominator for basic net income per share - weighted average common shares outstanding 87,210 91,762 88,985 92,337 Dilutive common equivalent shares: Weighted average restricted stock units 650 640 897 660 Denominator for diluted net income per share - weighted average shares outstanding 87,860 92,402 89,882 92,997 Net income per share: Basic net income per share $ 1.03 $ 0.23 $ 0.71 $ 0.12 Diluted net income per share $ 1.02 $ 0.23 $ 0.70 $ 0.12 |
Summary of Antidilutive Securities Excluded from Computation of Diluted EPS | The following table sets forth restricted stock units excluded from the calculation of diluted net income per share, since their inclusion would be anti-dilutive (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Restricted stock units 1,873 1,207 1,405 1,718 |
SEGMENT AND GEOGRAPHIC INFORM39
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Total Revenue by Geography | Total revenue by geography is as follows (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 United States $ 156,511 $ 175,591 $ 448,761 $ 524,958 Europe 53,938 58,058 132,488 140,795 Asia 23,076 26,360 67,804 70,978 Rest of the world 35,419 42,183 102,510 106,461 $ 268,944 $ 302,192 $ 751,563 $ 843,192 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | As disclosed parenthetically within the Company's consolidated balance sheet, the Company has receivables from related parties. The following table summarizes those balances (in thousands): December 31, 2017 March 31, 2017 Danaher $ 194 $ 404 Fortive 2,888 3,181 $ 3,082 $ 3,585 As disclosed parenthetically within the Company's consolidated balance sheet, the Company has payables due to related parties. The following table summarizes those balances (in thousands): December 31, 2017 March 31, 2017 Fortive $ 362 $ 444 $ 362 $ 444 As disclosed parenthetically within the Company's consolidated statements of operations, the Company has recorded expenses from related parties. The following table summarizes those balances (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Danaher: Cost of product revenue $ — $ — $ — $ 4,690 Cost of service revenue — 27 — 485 Research and development expenses — 43 — 1,720 Sales and marketing — (49 ) 2 2,273 General and administrative expenses 3 46 7 2,548 $ 3 $ 67 $ 9 $ 11,716 Fortive: Cost of product revenue $ — $ 45 $ 245 $ 2,418 Cost of service revenue 192 95 480 109 Research and development expenses — — 3 (104 ) Sales and marketing — — — 150 General and administrative expenses 750 261 1,690 1,302 $ 942 $ 401 $ 2,418 $ 3,875 As disclosed within the Company's consolidated statements of cash flows, the Company has cash flows resulting from amounts due to related parties and due from related parties. The following table summarizes those cash flows (in thousands): Nine Months Ended December 31, 2017 2016 Due from related party: Danaher $ 154 $ 16,955 Fortive 400 7,724 Total $ 554 $ 24,679 Due to related party: Danaher $ — $ (712 ) Fortive (82 ) 206 Total $ (82 ) $ (506 ) |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Excess tax benefit (shortfall) amount | $ (400) | $ 800 | ||
Net income | 89,685 | $ 21,245 | 62,995 | $ 10,981 |
Decrease in cash used in financing activities | 1,400 | |||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income | $ (400) | $ 800 | ||
Basic and diluted earnings per share | $ (0.01) | $ 0.01 | ||
Excess tax benefit (shortfall) from stock based compensation awards | $ 800 | 1,400 | ||
Decrease in cash provided by operating activities | $ 1,400 |
CONCENTRATION OF CREDIT RISK 42
CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 23,686 | $ 36,972 |
Affiliated Entity | ||
Concentration Risk [Line Items] | ||
Related party prepaid expenses and other current assets | $ 3,082 | $ 3,585 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 12,425 | $ 10,461 | $ 35,254 | $ 30,271 |
Cost of product revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 301 | 255 | 807 | 716 |
Cost of service revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,287 | 1,015 | 3,597 | 3,058 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,730 | 3,456 | 10,820 | 9,961 |
Sales and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 4,022 | 3,367 | 11,613 | 9,704 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 3,085 | $ 2,368 | $ 8,417 | $ 6,832 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - ESPP | 9 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of common stock price for employees | 85.00% |
Number of shares purchased by employees | shares | 262,685 |
Share price (in dollars per share) | $ / shares | $ 32.75 |
CASH, CASH EQUIVALENTS, RESTR45
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 331,912 | $ 304,880 | $ 244,833 | $ 210,711 |
Restricted cash | 910 | 846 | 846 | 186 |
Total cash, cash equivalents and restricted cash | $ 332,822 | $ 305,726 | $ 245,679 | $ 210,897 |
CASH, CASH EQUIVALENTS, RESTR46
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 51,173 | $ 159,868 |
Unrealized Losses | (91) | (43) |
Fair Value | 51,082 | 159,825 |
U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 45,070 | 120,901 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 5,007 | 29,469 |
Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 1,005 | 7,956 |
Certificate of deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 1,499 | |
Short-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 47,970 | 137,916 |
Unrealized Losses | (75) | (24) |
Fair Value | 47,895 | 137,892 |
Short-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 41,957 | 98,989 |
Unrealized Losses | (74) | (21) |
Fair Value | 41,883 | 98,968 |
Short-term marketable securities | Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 5,007 | 29,469 |
Unrealized Losses | 0 | 0 |
Fair Value | 5,007 | 29,469 |
Short-term marketable securities | Corporate bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,006 | 7,959 |
Unrealized Losses | (1) | (3) |
Fair Value | 1,005 | 7,956 |
Short-term marketable securities | Certificate of deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,499 | |
Unrealized Losses | 0 | |
Fair Value | 1,499 | |
Long-term marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,203 | 21,952 |
Unrealized Losses | (16) | (19) |
Fair Value | 3,187 | 21,933 |
Long-term marketable securities | U.S. government and municipal obligations | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,203 | 21,952 |
Unrealized Losses | (16) | (19) |
Fair Value | $ 3,187 | $ 21,933 |
CASH, CASH EQUIVALENTS, RESTR47
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND MARKETABLE SECURITIES - Summary of Contractual Maturities of Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Available-for-sale securities: | ||
Due in 1 year or less | $ 47,895 | $ 137,892 |
Due after 1 year through 5 years | 3,187 | 21,933 |
Fair Value | $ 51,082 | $ 159,825 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
ASSETS: | ||
Cash and cash equivalents | $ 331,912 | $ 304,880 |
Available-for-sale securities | 51,082 | 159,825 |
Derivative financial instruments | 153 | 110 |
Total assets | 383,147 | 464,815 |
LIABILITIES: | ||
Contingent purchase consideration | (5,426) | (5,449) |
Derivative financial instruments | (63) | (213) |
Total liabilities | (5,489) | (5,662) |
U.S. government and municipal obligations | ||
ASSETS: | ||
Available-for-sale securities | 45,070 | 120,901 |
Commercial paper | ||
ASSETS: | ||
Available-for-sale securities | 5,007 | 29,469 |
Corporate bonds | ||
ASSETS: | ||
Available-for-sale securities | 1,005 | 7,956 |
Certificate of deposits | ||
ASSETS: | ||
Available-for-sale securities | 1,499 | |
Level 1 | ||
ASSETS: | ||
Cash and cash equivalents | 331,912 | 304,880 |
Derivative financial instruments | 0 | 0 |
Total assets | 349,927 | 353,464 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available-for-sale securities | 17,010 | 40,628 |
Level 1 | Commercial paper | ||
ASSETS: | ||
Available-for-sale securities | 0 | 0 |
Level 1 | Corporate bonds | ||
ASSETS: | ||
Available-for-sale securities | 1,005 | 7,956 |
Level 1 | Certificate of deposits | ||
ASSETS: | ||
Available-for-sale securities | 0 | |
Level 2 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 153 | 110 |
Total assets | 33,220 | 111,351 |
LIABILITIES: | ||
Contingent purchase consideration | 0 | 0 |
Derivative financial instruments | (63) | (213) |
Total liabilities | (63) | (213) |
Level 2 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available-for-sale securities | 28,060 | 80,273 |
Level 2 | Commercial paper | ||
ASSETS: | ||
Available-for-sale securities | 5,007 | 29,469 |
Level 2 | Corporate bonds | ||
ASSETS: | ||
Available-for-sale securities | 0 | 0 |
Level 2 | Certificate of deposits | ||
ASSETS: | ||
Available-for-sale securities | 1,499 | |
Level 3 | ||
ASSETS: | ||
Cash and cash equivalents | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 0 | 0 |
LIABILITIES: | ||
Contingent purchase consideration | (5,426) | (5,449) |
Derivative financial instruments | 0 | 0 |
Total liabilities | (5,426) | (5,449) |
Level 3 | U.S. government and municipal obligations | ||
ASSETS: | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Commercial paper | ||
ASSETS: | ||
Available-for-sale securities | 0 | 0 |
Level 3 | Corporate bonds | ||
ASSETS: | ||
Available-for-sale securities | $ 0 | 0 |
Level 3 | Certificate of deposits | ||
ASSETS: | ||
Available-for-sale securities | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Dec. 31, 2017 | Aug. 21, 2017 | Mar. 31, 2017 | Nov. 30, 2011 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | $ 5,426 | $ 5,449 | ||
Fair value, measurements, recurring | Contingent Purchase Consideration | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Deal related compensation expense, accretion charges and changes related to settlements of contractual non-compliance liabilities | 114 | |||
Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | 5,426 | 5,449 | ||
Avvasi | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | $ 660 | 660 | ||
Avvasi | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | $ 660 | |||
Simena | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | $ 8,000 | |||
Simena | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | 4,900 | |||
Efflux | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | 523 | |||
Efflux | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Estimated fair value of contingent purchase consideration | $ 523 |
FAIR VALUE MEASUREMENTS - Sch50
FAIR VALUE MEASUREMENTS - Schedule of Reconciliation of Changes in Fair Value of Level III Financial Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments made | $ 660 | $ 0 |
Fair value, measurements, recurring | Contingent Purchase Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at March 31, 2017 | (5,449) | |
Additions to Level 3 | (523) | |
Increase in fair value and accretion expense (included within research and development expense) | (114) | |
Payments made | 660 | |
Balance at December 31, 2017 | $ (5,426) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 23,039 | $ 22,305 |
Work in process | 484 | 998 |
Finished goods and deferred costs | 13,069 | 16,699 |
Total inventories | $ 36,592 | $ 40,002 |
ACQUISITIONS - Efflux (Details)
ACQUISITIONS - Efflux (Details) - USD ($) $ in Thousands | Jul. 12, 2017 | Dec. 31, 2017 | Mar. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,716,371 | $ 1,718,162 | |
Weighted average useful life of acquired intangible assets | 14 years 7 months | ||
Efflux | |||
Business Acquisition [Line Items] | |||
Initial cash payment | $ 8,104 | ||
Estimated fair value of contingent purchase consideration | 523 | ||
Estimated purchase price | 8,627 | ||
Cash | 93 | ||
Accounts receivable | 3 | ||
Prepaid and other current assets | 208 | ||
Property, plant and equipment | 8 | ||
Intangible assets | 2,590 | ||
Deferred tax asset | 841 | ||
Accounts payable | (7) | ||
Accrued other liabilities | (200) | ||
Deferred revenue | (8) | ||
Deferred tax liabilities | (978) | ||
Goodwill | 6,077 | ||
Fair value of acquired identifiable intangible assets | $ 2,590 | ||
Weighted average useful life of acquired intangible assets | 10 years | ||
Efflux | Developed technology | |||
Business Acquisition [Line Items] | |||
Fair value of acquired identifiable intangible assets | $ 1,980 | ||
Weighted average useful life of acquired intangible assets | 10 years | ||
Efflux | Customer relationships | |||
Business Acquisition [Line Items] | |||
Fair value of acquired identifiable intangible assets | $ 610 | ||
Weighted average useful life of acquired intangible assets | 10 years |
ACQUISITIONS - Avvasi and Commu
ACQUISITIONS - Avvasi and Communications Business (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Aug. 19, 2016 | Jul. 14, 2015 | Oct. 07, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Jul. 13, 2015 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,716,371 | $ 1,718,162 | |||||
Service Assurance | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 1,200,000 | $ 1,200,000 | |||||
Cash retention award | Vesting after August 4, 2015 | |||||||
Business Acquisition [Line Items] | |||||||
Percent of cancelled Danaher equity awards replaced | 50.00% | ||||||
Restricted stock units | Vesting after August 4, 2015 | |||||||
Business Acquisition [Line Items] | |||||||
Percent of cancelled Danaher equity awards replaced | 50.00% | ||||||
Business acquisition, equity interest issued, value | $ 15,000 | ||||||
Post combination compensation expense, Danaher equity awards | Vesting after August 4, 2015 | |||||||
Business Acquisition [Line Items] | |||||||
Post combination compensation expense | $ 0 | $ 4,300 | |||||
Common stock | |||||||
Business Acquisition [Line Items] | |||||||
Share price (in dollars per share) | $ 36.89 | ||||||
Avvasi | |||||||
Business Acquisition [Line Items] | |||||||
Estimated purchase price | $ 4,600 | ||||||
Avvasi | Service Assurance | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 2,000 | ||||||
Communications Business | |||||||
Business Acquisition [Line Items] | |||||||
Total equity consideration | $ 2,300,000 | ||||||
Communications Business | Common stock | Newco | |||||||
Business Acquisition [Line Items] | |||||||
Shares issued in business acquisition (in shares) | 62.5 |
GOODWILL AND INTANGIBLE ASSET54
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) $ in Thousands | 9 Months Ended | |
Dec. 31, 2017USD ($)reporting_unit | Mar. 31, 2017USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Number of reporting units | reporting_unit | 2 | |
Goodwill | $ 1,716,371 | $ 1,718,162 |
Carrying value of intangible assets | $ 859,160 | 931,269 |
Weighted average useful life of acquired intangible assets | 14 years 7 months | |
Developed and core technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 11 years 5 months 15 days | |
Customer and distributor relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 16 years 1 month | |
Trademarks and trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 8 years 6 months | |
Leasehold interest | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 5 years 7 months 6 days | |
Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 2 years | |
Capitalized software | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life of acquired intangible assets | 4 years | |
Trade name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 18,600 | 18,600 |
Service Assurance | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 1,200,000 | 1,200,000 |
Security | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 555,300 | $ 548,500 |
GOODWILL AND INTANGIBLE ASSET55
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
Balance at March 31, 2017 | $ 1,718,162 |
Goodwill attributable to the Efflux acquisition | 6,077 |
Foreign currency translation impact | (7,868) |
Balance as of December 31, 2017 | $ 1,716,371 |
GOODWILL AND INTANGIBLE ASSET56
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,186,471 | $ 1,170,562 |
Accumulated Amortization | (345,911) | (257,893) |
Net | 840,560 | 912,669 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 260,586 | 254,005 |
Accumulated Amortization | (140,225) | (110,200) |
Net | 120,361 | 143,805 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 841,403 | 831,731 |
Accumulated Amortization | (155,874) | (105,319) |
Net | 685,529 | 726,412 |
Distributor relationships and technology licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 6,949 | 8,290 |
Accumulated Amortization | (3,517) | (3,068) |
Net | 3,432 | 5,222 |
Definite-lived trademark and trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 44,210 | 43,817 |
Accumulated Amortization | (16,653) | (12,078) |
Net | 27,557 | 31,739 |
Core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,271 | 7,108 |
Accumulated Amortization | (6,522) | (6,009) |
Net | 749 | 1,099 |
Net beneficial leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 336 | 336 |
Accumulated Amortization | (336) | (336) |
Net | 0 | 0 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 306 | 278 |
Accumulated Amortization | (306) | (278) |
Net | 0 | 0 |
Leasehold interest | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,600 | 2,600 |
Accumulated Amortization | (1,807) | (998) |
Net | 793 | 1,602 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 18,419 | 18,142 |
Accumulated Amortization | (18,417) | (18,133) |
Net | 2 | 9 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 3,183 | 3,047 |
Accumulated Amortization | (1,356) | (594) |
Net | 1,827 | 2,453 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,208 | 1,208 |
Accumulated Amortization | (898) | (880) |
Net | $ 310 | $ 328 |
GOODWILL AND INTANGIBLE ASSET57
GOODWILL AND INTANGIBLE ASSETS - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 28,318 | $ 32,171 | $ 84,958 | $ 94,609 |
Product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 3 | 2,850 | 7 | 8,596 |
Cost of product revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | 10,088 | 11,773 | 30,032 | 33,202 |
Operating expense | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of acquired intangible assets | $ 18,227 | $ 17,548 | $ 54,919 | $ 52,811 |
GOODWILL AND INTANGIBLE ASSET58
GOODWILL AND INTANGIBLE ASSETS - Schedule of Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2018 (remaining three months) | $ 28,345 | |
2,019 | 107,734 | |
2,020 | 98,383 | |
2,021 | 86,253 | |
2,022 | 75,116 | |
Thereafter | 444,729 | |
Net | $ 840,560 | $ 912,669 |
DERIVATIVE INSTRUMENTS AND HE59
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) | 9 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Managing period of hedging forecasted cash flows for operating expenses denominated in foreign currencies | 12 months |
Contract maturity period | 12 months |
DERIVATIVE INSTRUMENTS AND HE60
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Notional Amounts and Fair Values of Derivative Instruments on Consolidated Balance Sheet (Details) - Forward contracts - Cash flow hedges - Designated as hedging instrument - USD ($) $ in Thousands | Dec. 31, 2017 | Mar. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Notional Amounts | $ 10,207 | $ 14,752 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Prepaid Expenses and Other Current Assets | 153 | 110 |
Accrued Other | ||
Derivatives, Fair Value [Line Items] | ||
Accrued Other | $ 63 | $ 213 |
DERIVATIVE INSTRUMENTS AND HE61
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Effect of Foreign Exchange Forward Contracts on Other Comprehensive Income and Results of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassified gain (loss) as a result of discontinuance of cash flow hedges | $ 0 | $ 0 | $ 0 | $ 0 |
Forward contracts | Cash flow hedges | Designated as hedging instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Recognized in OCI on Derivative | (113,000) | (488,000) | 796,000 | (626,000) |
Gain (Loss) Reclassified from Accumulated OCI into Income | (253,000) | 193,000 | (620,000) | 204,000 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | (19,000) | 18,000 | (56,000) | (43,000) |
Forward contracts | Cash flow hedges | Designated as hedging instrument | Research and development | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from Accumulated OCI into Income | (24,000) | 12,000 | (106,000) | (6,000) |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | 9,000 | 39,000 | 46,000 | 70,000 |
Forward contracts | Cash flow hedges | Designated as hedging instrument | Sales and marketing | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (Loss) Reclassified from Accumulated OCI into Income | (229,000) | 181,000 | (514,000) | 210,000 |
Gain (Loss) Recognized in Income (Amount Excluded from Effectiveness Testing) | $ (28,000) | $ (21,000) | $ (102,000) | $ (113,000) |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Jul. 14, 2015USD ($)shares | Dec. 31, 2017USD ($) |
Common Stock Repurchase Plan | ||
Debt Instrument [Line Items] | ||
Stock authorized to repurchase under stock repurchase program (in shares) | shares | 20,000,000 | |
Senior secured revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Debt term | 5 years | |
Credit facility | $ 800,000,000 | |
Amount outstanding under credit facility | $ 300,000,000 | |
Commitment fee percentage | 0.25% | |
Debt default, acceleration clause, required consent percentage | 50.00% | |
Unamortized debt issuance costs | $ 6,600,000 | $ 3,400,000 |
Senior secured revolving credit facility | Line of credit | Prepaid expenses and other current assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | 1,400,000 | |
Senior secured revolving credit facility | Line of credit | Other assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 2,000,000 | |
Senior secured revolving credit facility | Line of credit | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 2.50 | 2.50 |
Commitment fee percentage | 0.35% | |
Senior secured revolving credit facility | Line of credit | Maximum | Foreign Subsidiaries | ||
Debt Instrument [Line Items] | ||
Voting stock pledge limit for any foreign subsidiary | 65.00% | |
Senior secured revolving credit facility | Line of credit | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1 | 1 |
Commitment fee percentage | 0.20% | |
Senior secured revolving credit facility | Line of credit | Federal funds effective rate | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.50% | |
Senior secured revolving credit facility | Line of credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.00% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.50% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 2.00% | |
Senior secured revolving credit facility | Line of credit | LIBOR | LIBOR loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.25% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.50% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 1.00% | |
Senior secured revolving credit facility | Line of credit | Base rate | Base rate loans | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of effective rate | 0.25% | |
Letter of credit sub-facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 50,000,000 |
RESTRUCTURING CHARGES - Narrati
RESTRUCTURING CHARGES - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017USD ($)Employee | Sep. 30, 2017USD ($) | Mar. 31, 2017Employee | Dec. 31, 2016USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring charges | $ 3,363 | $ (199) | $ 3,821 | $ 1,730 | ||||
Q4 FY2017 Plan | Employee-Related | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of employees terminated | Employee | 41 | |||||||
Restructuring charges | $ 700 | $ 1,900 | ||||||
Q4 FY2017 Plan | Facilities Related | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring charges | $ 400 | |||||||
Q3 FY 2018 Plan | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Expected restructuring costs to be recorded | $ 2,700 | $ 2,700 | ||||||
Q3 FY 2018 Plan | Employee-Related | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Number of employees terminated | Employee | 67 | |||||||
Restructuring charges | $ 3,600 |
RESTRUCTURING CHARGES - Schedul
RESTRUCTURING CHARGES - Schedule of Restructuring Liability (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | $ 1,955 |
Restructuring charges to operations | 4,527 |
Cash payments | (2,621) |
Other adjustments | (651) |
Balance at December 31, 2017 | 3,210 |
Q4 FY2017 Plan | Employee-Related | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | 1,550 |
Restructuring charges to operations | 729 |
Cash payments | (1,867) |
Other adjustments | (412) |
Balance at December 31, 2017 | 0 |
Q4 FY2017 Plan | Facilities Related | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | 405 |
Restructuring charges to operations | 208 |
Cash payments | (374) |
Other adjustments | (239) |
Balance at December 31, 2017 | 0 |
Q3 FY 2018 Plan | Employee-Related | |
Restructuring Reserve [Roll Forward] | |
Balance at March 31, 2017 | 0 |
Restructuring charges to operations | 3,590 |
Cash payments | (380) |
Other adjustments | 0 |
Balance at December 31, 2017 | $ 3,210 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Oct. 13, 2017 | Dec. 31, 2017 | Aug. 21, 2017 | Mar. 31, 2017 | Nov. 30, 2011 |
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 5,426,000 | $ 5,449,000 | |||
Minimum | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated litigation liability | 0 | ||||
Simena | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 8,000,000 | ||||
Present value of future consideration | 4,900,000 | ||||
Efflux | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 523,000 | ||||
Avvasi | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Estimated fair value of contingent purchase consideration | $ 660,000 | $ 660,000 | |||
Pre-suit damages | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Damages sought | $ 3,500,000 | ||||
Post-suit damages | |||||
Commitments and Contingencies Disclosure [Line Items] | |||||
Damages sought | $ 2,250,000 |
PENSION BENEFIT PLANS - Narrati
PENSION BENEFIT PLANS - Narrative (Details) $ in Millions | 9 Months Ended |
Dec. 31, 2017USD ($)Employee | |
Defined Benefit Plan Disclosure [Line Items] | |
Contributions to defined benefit pension plans | $ 0.2 |
Expected cash contribution requirements for defined benefit pension plans, less than | $ 1 |
Danaher | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Number of employees participating in noncontributory defined benefit pension plans | Employee | 0 |
PENSION BENEFIT PLANS - Schedul
PENSION BENEFIT PLANS - Schedule of Net Periodic Pension Costs of Noncontributory Defined Benefit Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 67 | $ 103 | $ 208 | $ 268 |
Interest cost | 132 | 199 | 405 | 520 |
Net periodic pension cost | $ 199 | $ 302 | $ 613 | $ 788 |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ in Thousands | 9 Months Ended | 30 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Oct. 24, 2017 | May 19, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Shares repurchased during the period, value | $ 200,000 | $ 79,289 | |||
Share repurchase program, May 2015 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock authorized to repurchase under stock repurchase program (in shares) | 20,000,000 | ||||
Shares repurchased during the period (in shares) | 5,802,788 | 19,029,350 | |||
Shares repurchased during the period, value | $ 200,000 | $ 580,000 | |||
Stock remaining to be purchased (in shares) | 970,650 | 970,650 | |||
Share repurchase program, October 2017 | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | ||||
Restricted stock units | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Shares paid for tax withholding | 385,454 | ||||
Cost related to tax withholding | $ 13,000 |
NET INCOME PER SHARE - Schedule
NET INCOME PER SHARE - Schedule of Calculations of Basic and Diluted Net Income (Loss) Per Share and Potential Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | ||||
Net income | $ 89,685 | $ 21,245 | $ 62,995 | $ 10,981 |
Denominator: | ||||
Denominator for basic net income per share - weighted average common shares outstanding (in shares) | 87,210 | 91,762 | 88,985 | 92,337 |
Dilutive common equivalent shares: | ||||
Weighted average restricted stock units (in shares) | 650 | 640 | 897 | 660 |
Denominator for diluted net income per share - weighted average shares outstanding (in shares) | 87,860 | 92,402 | 89,882 | 92,997 |
Net income per share: | ||||
Basic net income per share (in USD per share) | $ 1.03 | $ 0.23 | $ 0.71 | $ 0.12 |
Diluted net income per share (in USD per share) | $ 1.02 | $ 0.23 | $ 0.70 | $ 0.12 |
NET INCOME PER SHARE - Summary
NET INCOME PER SHARE - Summary of Antidilutive Securities Excluded from Computation of Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 1,873 | 1,207 | 1,405 | 1,718 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 21, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||||||
Effective income tax rate | (155.10%) | 30.60% | 1133.00% | 28.40% | ||
Federal statutory income tax rate | 21.00% | 35.00% | ||||
Income tax expense related to transition tax associated with repatriation foreign earnings, Tax Cuts And Jobs Act Of 2017 | $ 2 | |||||
Deferred tax benefit related to re-measurement of deferred tax assets and liabilities, Tax Cuts And Jobs Act Of 2017 | $ 83 | $ 83 |
SEGMENT AND GEOGRAPHIC INFORM72
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) | 9 Months Ended |
Dec. 31, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHIC INFORM73
SEGMENT AND GEOGRAPHIC INFORMATION - Summary of Total Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 268,944 | $ 302,192 | $ 751,563 | $ 843,192 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 156,511 | 175,591 | 448,761 | 524,958 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 53,938 | 58,058 | 132,488 | 140,795 |
Asia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 23,076 | 26,360 | 67,804 | 70,978 |
Rest of the world | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 35,419 | $ 42,183 | $ 102,510 | $ 106,461 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Feb. 01, 2018 | Jan. 16, 2018 | Jul. 14, 2015 | Oct. 24, 2017 |
Share repurchase program, October 2017 | ||||
Subsequent Event [Line Items] | ||||
Stock authorized to repurchase under stock repurchase program (in shares) | 25,000,000 | |||
Line of credit | Senior secured revolving credit facility | ||||
Subsequent Event [Line Items] | ||||
Debt term | 5 years | |||
Subsequent Event | ASR Agreements | ||||
Subsequent Event [Line Items] | ||||
Authorized amount of share repurchase program | $ 300,000,000 | |||
Subsequent Event | Secured debt | Senior secured revolving credit facility | ||||
Subsequent Event [Line Items] | ||||
Debt term | 5 years | |||
Debt face amount | $ 1,000,000,000 | |||
Subsequent Event | Secured debt | Letter of credit sub-facility | ||||
Subsequent Event [Line Items] | ||||
Debt face amount | $ 75,000,000 | |||
Subsequent Event | Line of credit | Senior secured revolving credit facility | ||||
Subsequent Event [Line Items] | ||||
Proceeds from line of credit | $ 300,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | $ 23,686 | $ 23,686 | $ 36,972 | ||
Related party accounts payable | 32,469 | 32,469 | 37,407 | ||
Cost of product revenue | 41,327 | $ 55,296 | 125,013 | $ 171,770 | |
Cost of service revenue | 23,182 | 26,382 | 80,301 | 81,452 | |
Research and development expenses | 44,287 | 58,084 | 161,762 | 179,681 | |
Sales and marketing | 77,270 | 83,212 | 239,897 | 241,506 | |
General and administrative expenses | 23,033 | 28,540 | 82,400 | 90,994 | |
Cash flows, due from related party | (554) | (24,679) | |||
Cash flows, due to related party | (82) | (506) | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 3,082 | 3,082 | 3,585 | ||
Related party accounts payable | 362 | 362 | 444 | ||
Cost of product revenue | 0 | 45 | 245 | 7,108 | |
Cost of service revenue | 192 | 122 | 480 | 594 | |
Research and development expenses | 0 | 43 | 3 | 1,616 | |
Sales and marketing | 0 | (49) | 2 | 2,423 | |
General and administrative expenses | 753 | 307 | 1,697 | 3,850 | |
Cash flows, due from related party | 554 | 24,679 | |||
Cash flows, due to related party | (82) | (506) | |||
Danaher | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 194 | 194 | 404 | ||
Cost of product revenue | 0 | 0 | 0 | 4,690 | |
Cost of service revenue | 0 | 27 | 0 | 485 | |
Research and development expenses | 0 | 43 | 0 | 1,720 | |
Sales and marketing | 0 | (49) | 2 | 2,273 | |
General and administrative expenses | 3 | 46 | 7 | 2,548 | |
Related party transaction, Total | 3 | 67 | 9 | 11,716 | |
Cash flows, due from related party | 154 | 16,955 | |||
Cash flows, due to related party | 0 | (712) | |||
Fortive | Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Related party prepaid expenses and other current assets | 2,888 | 2,888 | 3,181 | ||
Related party accounts payable | 362 | 362 | $ 444 | ||
Cost of product revenue | 0 | 45 | 245 | 2,418 | |
Cost of service revenue | 192 | 95 | 480 | 109 | |
Research and development expenses | 0 | 0 | 3 | (104) | |
Sales and marketing | 0 | 0 | 0 | 150 | |
General and administrative expenses | 750 | 261 | 1,690 | 1,302 | |
Related party transaction, Total | $ 942 | $ 401 | 2,418 | 3,875 | |
Cash flows, due from related party | 400 | 7,724 | |||
Cash flows, due to related party | $ (82) | $ 206 |