Cover
Cover | 12 Months Ended |
Mar. 31, 2020 | |
Cover [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | Dynatrace, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Amendment Flag | false |
Entity Central Index Key | 0001773383 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 213,170 | $ 51,314 |
Accounts receivable, net of allowance for doubtful accounts | 157,058 | 115,431 |
Deferred commissions, current | 38,509 | 27,705 |
Prepaid expenses and other current assets | 61,188 | 18,768 |
Total current assets | 469,925 | 213,218 |
Property and equipment, net | 31,508 | 17,925 |
Goodwill | 1,270,733 | 1,270,120 |
Other intangible assets, net | 201,592 | 259,123 |
Deferred tax assets, net | 20,460 | 10,678 |
Deferred commissions, non-current | 39,736 | 31,545 |
Other assets | 8,126 | 8,757 |
Total assets | 2,042,080 | 1,811,366 |
Current liabilities: | ||
Accounts payable | 11,112 | 6,559 |
Accrued expenses, current | 93,728 | 64,920 |
Current portion of long-term debt | 0 | 9,500 |
Deferred revenue, current | 384,060 | 272,772 |
Payable to related party | 0 | 597,150 |
Total current liabilities | 488,900 | 950,901 |
Deferred revenue, non-current | 60,711 | 92,973 |
Accrued expenses, non-current | 20,987 | 98,359 |
Deferred tax liabilities | 0 | 47,598 |
Long-term debt, net of current portion | 509,985 | 1,011,793 |
Total liabilities | 1,080,583 | 2,201,624 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity / member's deficit: | ||
Common shares, $0.001 par value, 600,000,000 shares authorized, 280,784,786 shares issued and outstanding at December 31, 2019 | 281 | 0 |
Common units, no par value, 100 units authorized, issued and outstanding at March 31, 2019 | 0 | 0 |
Additional paid-in capital | 1,573,347 | (184,546) |
Accumulated deficit | (594,026) | (176,002) |
Accumulated other comprehensive loss | (18,105) | (29,710) |
Total shareholders' equity / member's deficit | 961,497 | (390,258) |
Total liabilities and shareholders' equity / member's deficit | $ 2,042,080 | $ 1,811,366 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common unit, authorized | 100 | 100 |
Common unit, issued | 100 | 100 |
Common units, outstanding (in units) | 100 | 100 |
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares, authorized (in shares) | 600,000,000 | 600,000,000 |
Common shares, issued (in shares) | 280,853,040 | 280,853,040 |
Common shares, outstanding (in shares) | 280,853,040 | 280,853,040 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue: | |||
Total revenue | $ 545,803 | $ 430,966 | $ 398,047 |
Cost of revenue: | |||
Amortization of acquired technology | 16,449 | 18,338 | 17,948 |
Total cost of revenue | 128,931 | 106,801 | 96,534 |
Gross profit | 416,872 | 324,165 | 301,513 |
Operating expenses: | |||
Research and development | 119,281 | 76,759 | 58,320 |
Sales and marketing | 266,175 | 178,886 | 145,350 |
General and administrative | 161,983 | 91,778 | 64,114 |
Amortization of other intangibles | 40,280 | 47,686 | 50,498 |
Restructuring and other | 1,092 | 1,763 | 4,990 |
Total operating expenses | 588,811 | 396,872 | 323,272 |
Loss from operations | (171,939) | (72,707) | (21,759) |
Interest expense, net | (45,397) | (69,845) | (35,220) |
Other (expense) income, net | (1,197) | 2,641 | 5,204 |
Loss before income taxes | (218,533) | (139,911) | (51,775) |
Income tax (expense) benefit | (199,491) | 23,717 | 60,997 |
Net (loss) income | $ (418,024) | $ (116,194) | $ 9,222 |
Net (loss) income per share: | |||
Net income (loss) per share, basic and diluted (in dollars per share) | $ (1.58) | $ (0.49) | $ 0.04 |
Weighted average shares outstanding: | |||
Weighted average shares outstanding, basic and diluted (in shares) | 264,933 | 235,939 | 231,956 |
Subscription | |||
Revenue: | |||
Total revenue | $ 487,817 | $ 349,830 | $ 257,576 |
Cost of revenue: | |||
Cost of revenues | 73,193 | 56,934 | 48,270 |
License | |||
Revenue: | |||
Total revenue | 12,686 | 40,354 | 98,756 |
Service | |||
Revenue: | |||
Total revenue | 45,300 | 40,782 | 41,715 |
Cost of revenue: | |||
Cost of revenues | $ 39,289 | $ 31,529 | $ 30,316 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net (loss) income | $ (418,024) | $ (116,194) | $ 9,222 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment, net of tax | 4,982 | (3,912) | (8,680) |
Change of ownership interest in subsidiary | 6,623 | 0 | 0 |
Total other comprehensive income (loss) | 11,605 | (3,912) | (8,680) |
Comprehensive (loss) income | $ (406,419) | $ (120,106) | $ 542 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity / Members' Deficit - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2017 | 0 | ||||
Beginning balance at Mar. 31, 2017 | $ (264,506) | $ 0 | $ (178,358) | $ (69,030) | $ (17,118) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation, net of tax | (8,680) | (8,680) | |||
Transfers to related parties | (3,920) | (3,920) | |||
Equity repurchases | (806) | (806) | |||
Net (loss) income | 9,222 | 9,222 | |||
Ending balance (in shares) at Mar. 31, 2018 | 0 | ||||
Ending balance at Mar. 31, 2018 | (268,690) | $ 0 | (183,084) | (59,808) | (25,798) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation, net of tax | (3,912) | (3,912) | |||
Transfers to related parties | (813) | (813) | |||
Equity repurchases | (649) | (649) | |||
Net (loss) income | $ (116,194) | (116,194) | |||
Ending balance (in shares) at Mar. 31, 2019 | 280,853,040 | 0 | |||
Ending balance at Mar. 31, 2019 | $ (390,258) | $ 0 | (184,546) | (176,002) | (29,710) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation, net of tax | 4,982 | 4,982 | |||
Equity repurchases | (156) | (156) | |||
Reclassification of related party payable upon reorganization | 600,622 | 600,622 | |||
Common units, issued (in shares) | 38,873,000 | ||||
Common units, issued | 585,297 | $ 39 | 585,258 | ||
Effect of reorganization (in shares) | 241,547,118 | ||||
Effect of reorganization | 278,248 | $ 242 | 271,383 | 6,623 | |
Contribution for taxes associated with reorganization | 265,000 | 265,000 | |||
Restricted stock units vested (in shares) | 503,000 | ||||
Restricted stock awards forfeited (in shares) | (70,000) | ||||
Share-based compensation | 35,786 | 35,786 | |||
Net (loss) income | $ (418,024) | (418,024) | |||
Ending balance (in shares) at Mar. 31, 2020 | 280,853,040 | 280,853,000 | |||
Ending balance at Mar. 31, 2020 | $ 961,497 | $ 281 | $ 1,573,347 | $ (594,026) | $ (18,105) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (418,024) | $ (116,194) | $ 9,222 |
Adjustments to reconcile net (loss) income to cash (used in) provided by operations: | |||
Depreciation | 7,864 | 7,319 | 8,783 |
Amortization | 58,457 | 72,792 | 73,455 |
Share-based compensation | 222,478 | 71,151 | 22,294 |
Deferred income taxes | (59,276) | (34,214) | (73,196) |
Other | 6,129 | (1,140) | 400 |
Net change in operating assets and liabilities: | |||
Accounts receivable | (44,021) | 17,979 | (14,727) |
Deferred commissions | (20,107) | (19,968) | (14,062) |
Prepaid expenses and other assets | (39,737) | (12,401) | 1,996 |
Accounts payable and accrued expenses | 52,415 | 34,787 | 26,797 |
Deferred revenue | 91,367 | 127,030 | 77,876 |
Net cash (used in) provided by operating activities | (142,455) | 147,141 | 118,838 |
Cash flows from investing activities: | |||
Purchase of property and equipment | (19,721) | (7,377) | (11,606) |
Capitalized software additions | (892) | (1,873) | (3,623) |
Acquisitions, net of cash acquired | 0 | 0 | (11,302) |
Net cash used in investing activities | (20,613) | (9,250) | (26,531) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of underwriters' discounts and commissions | 590,297 | 0 | 0 |
Offering costs | (5,000) | 0 | 0 |
Proceeds from term loans | 0 | 1,120,000 | 0 |
Debt issuance costs | (866) | (16,288) | 0 |
Repayments of Secured Debt | 515,189 | 83,871 | 0 |
Payments to related parties | 0 | (1,177,021) | (74,616) |
Contribution for tax associated with reorganization | 265,000 | 0 | 0 |
Equity repurchases | (156) | (649) | (885) |
Installments related to acquisitions | (4,694) | (3,653) | 0 |
Net cash provided by (used in) financing activities | 329,392 | (161,482) | (75,501) |
Effect of exchange rates on cash and cash equivalents | (4,468) | (2,676) | 2,827 |
Net increase (decrease) in cash and cash equivalents | 161,856 | (26,267) | 19,633 |
Cash and cash equivalents, beginning of year | 51,314 | 77,581 | 57,948 |
Cash and cash equivalents, end of year | 213,170 | 51,314 | 77,581 |
Supplemental cash flow data: | |||
Cash paid for interest | 39,568 | 40,969 | 38 |
Cash paid for tax, net | 266,708 | 5,928 | 12,906 |
Noncash investing and financing activities: | |||
Installments due related to acquisition | 0 | 0 | 8,488 |
Reclassification of related party payable upon reorganization | (600,622) | 0 | 0 |
Transactions with related parties | 0 | 14,263 | 35,168 |
Modification of MIU Plan awards | $ 278,248 | 0 | 0 |
Debt Service And Shared Costs | Affiliated Entity | |||
Cash flows from financing activities: | |||
Payments to related parties | (1,177,000) | (74,600) | |
Other Related Party Settlements | Affiliated Entity | |||
Noncash investing and financing activities: | |||
Related Party Transaction, Amounts of Transaction | $ 14,300 | $ 35,200 |
Description of the Business
Description of the Business | 12 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business Business Dynatrace, Inc. (“Dynatrace”, or the “Company”) offers a software intelligence platform, purpose-built for multi-cloud environments. As enterprises embrace the cloud to effect their digital transformation, the Company’s all-in-one intelligence platform is designed to address the growing complexity faced by technology and digital business teams. The Company’s platform does so by utilizing artificial intelligence at its core and continuous automation to provide answers, not just data, about the performance of applications, the underlying hybrid cloud infrastructure, and the experience of its customers’ users. The Company designed its software intelligence platform to allow its customers to modernize and automate IT operations, develop and release high quality software faster, and improve user experiences for better business outcomes. Thoma Bravo (“TB”), a private equity investment firm, completed its acquisition of Compuware Corporation on December 15, 2014. Following the acquisition, Compuware Corporation was restructured following which Compuware Parent, LLC became the owner of Dynatrace Holding Corporation (“DHC”), under which the Compuware and Dynatrace businesses were separated, establishing Dynatrace as a standalone business. Following the corporate reorganization described below, Dynatrace became wholly owned by Dynatrace, Inc. (formerly Dynatrace Holdings LLC). Fiscal Year The Company’s fiscal year ends on March 31. References to Fiscal 2020 , for example, refer to the fiscal year ended March 31, 2020 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation and Consolidation Prior to July 30, 2019, Dynatrace Holdings LLC, a Delaware limited liability company, was an indirect equity holder of DHC that indirectly and wholly owned Dynatrace, LLC. On July 31, 2019, Dynatrace Holdings LLC (i) converted into a Delaware corporation with the name Dynatrace, Inc. and (ii) through a series of corporate reorganization steps, became the parent company of DHC. Additionally, as part of the reorganization, two wholly owned subsidiaries of DHC, Compuware Corporation (“Compuware”) and SIGOS LLC (“SIGOS”), were spun out from the corporate structure to the DHC shareholders. As a result of these transactions, DHC is a wholly owned indirect subsidiary of Dynatrace, Inc. These reorganization steps are collectively referred to as the “reorganization.” In connection with the reorganization, the equity holders of Compuware Parent, LLC received 222,021,708 units of Dynatrace Holdings LLC in exchange for their equity interests in Compuware Parent, LLC based on the fair value of a unit of Dynatrace Holdings LLC on July 30, 2019, which was determined to be $16.00 per unit by a committee of the board of managers of Dynatrace Holdings LLC, and all of the outstanding units of Dynatrace Holdings LLC then converted into shares of Dynatrace, Inc. Additionally, 19,525,510 units of Dynatrace Holdings LLC were issued upon exchange of Dynatrace, LLC Management Incentive Units (“MIUs”) and Appreciation Units (“AUs”) for a total of 241,547,218 outstanding units in Dynatrace Holdings LLC immediately prior to the closing of the Company’s initial public offering (“IPO”). The reorganization was completed between entities that have been under common control since December 15, 2014. Therefore, these financial statements retroactively reflect DHC and Dynatrace, Inc. on a consolidated basis for the periods presented. The spin-offs of Compuware Corporation and SIGOS LLC from DHC have been accounted for retroactively as a change in reporting entity and accordingly, these financial statements exclude their accounts and results. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in the accompanying financial statements. The income tax amounts in the accompanying consolidated financial statements have been calculated based on a separate return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. As described in Note 17 , prior to the reorganization the consolidated financial statements reflected the debt and debt service associated with subordinated demand promissory notes payable of DHC to a related party. The financial statements also reflect certain expenses incurred by the Company for certain functions including shared services for the periods prior to the reorganization, which are immaterial to these financial statements. These expenses were allocated to Dynatrace on the basis of direct usage when identifiable, and for resources indirectly used by Dynatrace. Allocations were based on a proportional cost allocation methodology to reflect estimated usage by Dynatrace. Management considers the allocation methodology and results to be reasonable for all periods presented. However, the financial information presented in these financial statements may not reflect the consolidated financial position, operating results and cash flows of Dynatrace had the Dynatrace business been a separate stand-alone entity during all of the periods presented. Actual costs that would have been incurred if Dynatrace had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas. Initial Public Offering On August 1, 2019, the Company completed its initial public offering (the “IPO”), in which it sold and issued 38,873,174 shares of common stock, inclusive of the underwriters’ option to purchase additional shares that was exercised in full, at an issue price of $16.00 per share. The Company received a total of $622.0 million in gross proceeds from the offering, or approximately $585.3 million in net proceeds after deducting approximately $36.7 million for underwriting discounts, commissions and offering-related expenses. The IPO also included the sale of 2.1 million shares of common stock, by selling stockholders, inclusive of the underwriters’ option to purchase additional shares that was exercised in full. The Company did not receive any proceeds from the sale of common stock by the selling stockholders. Prior to the closing of the IPO, the 241,547,218 outstanding units of Dynatrace Holdings, LLC were converted on a one -for-one basis into shares of common stock in accordance with the terms of the certificate of incorporation. Follow-on Offerings by Selling Stockholders On December 10, 2019, the Company completed a follow-on offering for the sale of 31,625,000 shares of common stock by selling stockholders, inclusive of the underwriters’ option to purchase additional shares that was exercised in full, at an offering price of $24.75 per share. The Company did not receive any proceeds from the sale of common stock by the selling stockholders. On February 25, 2020, the Company completed a second follow-on offering for the sale of 25,000,000 shares of common stock by selling stockholders at an offering price of $34.50 per share. The Company did not receive any proceeds from the sale of common stock by the selling stockholders. Foreign Currency Translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the Company’s principal foreign subsidiaries is the currency of the country in which each entity operates. Accordingly, assets and liabilities in the consolidated balance sheet have been translated at the rate of exchange at the balance sheet date, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations and are reported as accumulated other comprehensive loss within the consolidated statements of shareholders’ equity / member’s deficit. Transaction gains and losses generated by the effect of changes in foreign currency exchange rates on recorded assets and liabilities denominated in a currency different than the functional currency of the applicable entity are recorded in “ Other income (expense), net ” in the consolidated statements of operations. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, the Company makes estimates with respect to the stand-alone selling price for each distinct performance obligation in customer contracts with multiple performance obligations, the uncollectible accounts receivable, the fair value of tangible and intangible assets acquired, and liabilities assumed in a business combination, valuation of long-lived assets, equity-based compensation expense and income taxes, among other things. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. The World Health Organization declared in March 2020 that the recent outbreak of the coronavirus disease named COVID-19 constitutes a pandemic. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on the Company’s customers and its sales cycles, which are uncertain and cannot be predicted. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. Segment Information The Company operates as one operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. Business Combinations When the Company acquires a business, management allocates the purchase price to the net tangible and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted average cost of capital and the cost savings expected to be derived from acquiring an asset. Deferred Offering Costs Deferred offering costs consist primarily of legal, accounting, printer, and other direct fees and costs related to the Company’s initial public offering. Prior to the IPO, all deferred offering costs were capitalized in “ Prepaid expenses and other current assets ” in the consolidated balance sheets. After the IPO, all deferred offering costs were reclassified into shareholders’ equity as a reduction of the IPO proceeds in the consolidated balance sheets. At March 31, 2019 , the Company had capitalized $1.6 million of offering costs which are included in “ Prepaid expenses and other current assets ” in the consolidated balance sheets. During the year ended March 31, 2020 , the Company completed its IPO and reclassified $5.0 million of offering costs into shareholders’ equity. Revenue Recognition The Company elected to early adopt Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers, effective April 1, 2018, using the full retrospective transition method. Under this method, the Company is presenting the consolidated financial statements for the year ended March 31, 2018 as if ASC 606 had been effective for that period. The Company applied a practical expedient not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original expected duration of one year or less. The Company sells software licenses, subscriptions, maintenance and support, and professional services together in contracts with its customers, which include end-customers and channel partners. The Company’s software license agreements provide customers with a right to use software perpetually or for a defined term. As required under applicable accounting principles, the goods and services that the Company promises to transfer to a customer are accounted for separately if they are distinct from one another. Promised items that are not distinct are bundled as a combined performance obligation. The transaction price is allocated to the performance obligations based on the relative estimated standalone selling prices of those performance obligations. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these goods or services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer The Company considers the terms and conditions of the contract in identifying the contracts. The Company determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, it has been determined the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company will evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit, and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. The Company’s performance obligations consist of (i) software licenses, (ii) subscription services, (ii) maintenance and support for software licenses, and (iv) professional services. 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s contracts do not contain a significant financing component. 4. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) for arrangements not including software licenses or subscription services. The Company has determined that its pricing for software licenses and subscription services is highly variable and therefore allocates the transaction price to those performance obligations using the residual approach. 5. Recognition of revenue when, or as a performance obligation is satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Subscription Subscription revenue relates to performance obligations for which the Company recognizes revenue over time as control of the product or service is transferred to the customer. Subscription revenue includes arrangements that permit customers to access and utilize the Company’s hosted software delivered on a software-as-a-service (“SaaS”) basis, term-based and perpetual licenses of the Company’s Dynatrace Software, as well as maintenance. The when-and-if available updates of the Dynatrace Software, which are part of the maintenance agreement, are critical to the continued utility of the Dynatrace Software; therefore, the Company has determined the Dynatrace Software and the related when-and-if available updates to be a combined performance obligation. Accordingly, when Dynatrace Software is sold under a term-based license, the revenue associated with this combined performance obligation is recognized ratably over the license term as maintenance is included for the duration of the license term. The Company has determined that perpetual licenses of Dynatrace Software provide customers with a material right to acquire additional goods or services that they would not receive without entering into the initial contract as the renewal option for maintenance services allows the customer to extend the utility of the Dynatrace Software without having to again make the initial payment of the perpetual software license fee. The associated material right is deferred and recognized ratably over the term of the expected optional maintenance renewals. Subscription revenue also includes maintenance services relating to the Company’s Classic offerings as that revenue is recognized over time given that our obligation is a stand-ready obligation to provide customer support and when-and-if available updates to the Classic software as well as certain other stand-ready obligations. License License revenue relates to performance obligations for which the Company recognizes revenue at the point that the license is transferred to the customer. License revenue includes these perpetual and term-based licenses that relate to the Company’s Classic offerings (“Classic Software Licenses”), which are focused on traditional customer approaches to building, operating and monitoring software in less dynamic environments. The Company requires customers purchasing perpetual licenses of Classic Software and Dynatrace Software, as defined below, to also purchase maintenance services covering at least one year from the beginning of the perpetual license. The Company has determined that the Classic Software Licenses and the related maintenance services are separate performance obligations with different patterns of recognition. Revenue from Classic Software Licenses is recognized upon delivery of the license. Revenue from maintenance is recognized over the period of time of the maintenance agreement and is included in “ Subscription ”. Service The Company offers implementation, consulting and training services for the Company’s software solutions and SaaS offerings. Services fees are generally based on hourly rates. Revenues from services are recognized in the period the services are performed, provided that collection of the related receivable is reasonably assured. Deferred commissions Deferred sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit which the Company has estimated to be three years . The period of benefit has been determined by taking into consideration the duration of customer contracts, the life of the technology, renewals of maintenance and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in “ Sales and marketing ” expenses on the consolidated statements of operations. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred commissions. There were no impairment losses recorded during the periods presented. Deferred revenue Deferred revenue consists primarily of billed subscription and maintenance fees related to the future service period of subscription and maintenance agreements in effect at the reporting date. Deferred licenses are also included in deferred revenue for those billed arrangements that are being recognized over time. Short-term deferred revenue represents the unearned revenue that will be earned within twelve months of the balance sheet date; whereas, long-term deferred revenue represents the unearned revenue that will be earned after twelve months from the balance sheet date. Payment terms Payment terms and conditions vary by contract type, although the Company’s terms generally include a requirement of payment within 30 to 60 days . In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers or to provide customers with financing. Contract modification Contract modifications are assessed to determine (i) if the additional goods and services are distinct from the goods and services in the original arrangement and (ii) if the amount of the consideration expected for the added goods and services reflects the stand-alone selling price of those goods and services, as adjusted for contract-specific circumstances. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract, which the Company accounts for on a prospective basis as a termination for contract specific circumstances. The Company’s additional goods and services offered have historically been distinct. If such additional goods and services reflect their stand-alone selling price, the Company accounts for the modification as a separate contract. If such additional goods and services do not reflect their stand-alone selling price, the Company accounts for the modification prospectively as a termination of the existing contract and the creation of a new contract. Cost of Revenues Cost of subscription Cost of subscription revenue includes all direct costs to deliver the Company’s subscription products including salaries, benefits, share-based compensation and related expenses such as employer taxes, allocated overhead for facilities, IT, third-party hosting fees related to the Company’s cloud services, and amortization of internally developed capitalized software technology. The Company recognizes these expenses as they are incurred. Cost of service Cost of service revenue includes salaries, benefits, share-based compensation and related expenses such as employer taxes for our services organization, allocated overhead for depreciation of equipment, facilities and IT, and amortization of acquired intangible assets. The Company recognizes expense related to its services organization as they are incurred. Amortization of Acquired Technology Amortization of acquired technology includes amortization expense for technology acquired in business combinations. Research and Development Research and development (“R&D”) costs, which primarily include the cost of programming personnel, including share-based compensation, amounted to $58.3 million , $76.8 million , and $119.3 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively. R&D costs related to the Company’s software solutions are reported as “ Research and development ” in the consolidated statements of operations. Advertising Advertising costs are expensed as incurred and are included in “ Sales and marketing ” expense in the consolidated statements of operations. Advertising expense was $1.8 million , $2.1 million , and $5.7 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively. Leases The Company primarily leases facilities under operating leases. For leases that contain rent escalation or rent concession provisions, rent expense is recorded on a straight-line basis over the term of the lease. The difference between the rent paid and the straight-line rent expense is recorded as current and non-current deferred rent liability, as appropriate on the consolidated balance sheets. Rent expense, exclusive of sublease income, for operating leases was $8.7 million , $11.3 million , and $14.0 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively. Sublease income was $2.5 million , $4.3 million , and $4.5 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively. Restructuring Expense The Company defines restructuring expense as costs directly associated with exit or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs are probable and estimable. For one-time termination benefits (i.e., no substantive plan) and employee retention costs, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. There is presently no concentration of credit risk for customers as no individual entity represented more than 10% of the balance in accounts receivable as of March 31, 2018 , 2019 , and 2020 or 10% of revenue for the years ended March 31, 2018 , 2019 , and 2020 . Cash and Cash Equivalents All highly-liquid investments with a maturity of three months or less when purchased are considered cash and cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts The Company continuously assesses the collectability of outstanding customer invoices and in doing so, assesses the need to maintain an allowance for estimated losses resulting from the non-collection of customer receivables. In estimating this allowance, the Company considers factors such as: historical collection experience, a customer’s current creditworthiness, customer concentrations, age of outstanding balances, both individually and in the aggregate, and existing economic conditions. Actual customer collections could differ from the Company’s estimates. Allowance for doubtful accounts totaled $3.4 million and $3.1 million , and is classified as “ Accounts receivable, net of allowance for doubtful accounts ” in the consolidated balance sheets as of March 31, 2019 , and 2020 , respectively. Property and Equipment, net The Company states property and equipment, net, at the acquisition cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the useful lives of the assets or the related lease. The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term Property and equipment are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if an impairment exists. If the asset is determined to be impaired, the impairment loss is measured based on the excess of its carrying value over its fair value. Assets to be disposed of are reported at the lower of carrying value or net realizable value. There was no impairment of property and equipment during the years ended March 31, 2018 , 2019 , and 2020 . Goodwill and Other Intangible Assets The Company’s goodwill and intangible assets primarily relate to the push-down of such assets relating to Thoma Bravo’s December 15, 2014 acquisition of Compuware Corporation based on their relative fair values at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter of the Company’s fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. Since the Company’s acquisition by Thoma Bravo through March 31, 2020 , the Company did not have any goodwill impairment. Intangible assets consist primarily of customer relationships, developed technology, trade names and trademarks, all of which have a finite useful life, as well as goodwill. Intangible assets are amortized based on either the pattern in which the economic benefits of the intangible assets are estimated to be realized or on a straight-line basis, which approximates the manner in which the economic benefits of the intangible asset will be consumed. Capitalized Software The Company’s capitalized software includes the costs of internally developed software technology and software technology purchased through acquisition. Internally developed software technology consists of development costs associated with software products to be sold (“software products”) and internal use software associated with hosted software. Costs associated with the development of software technology are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software technology is available for general release to customers. Technological feasibility is established when management has authorized and committed to funding a project and it is probable that the project will be completed, and the software will be used to perform the function intended. For internal use software, capitalization begins during the application development stage. The Company capitalized $3.6 million , $1.9 million , and $0.9 million for internally developed software technology during the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is recorded within “ Other intangible assets, net ” in the consolidated balance sheets. The amortization of capitalized software technology is computed on a project-by-project basis. The annual amortization is the greater of the amount computed using (a) the ratio of current gross revenues compared with the total of current and anticipated future revenues for the software technology or (b) the straight-line method over the remaining estimated economic life of the software technology, including the period being reported on. Amortization begins when the software technology is available for general release to customers. The amortization period for capitalized software is generally three to five years . Amortization of internally developed capitalized software technology is $5.0 million , $6.8 million , and $1.7 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is recorded within “ Cost of subscription ” in the consolidated statements of operations. Impairment of Long-lived Assets Long-lived assets, including amortized intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is estimated by the Company using discounted cash flows and other market-related valuation models, including earnings multiples and comparable asset market values. If circumstances change |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue The following table is a summary of the Company’s total revenues by geographic region (in thousands, except percentages): Fiscal Year Ended March 31, 2018 2019 2020 Amount % Amount % Amount % North America $ 232,521 58 % $ 248,012 57 % $ 318,299 58 % Europe, Middle East and Africa 111,295 28 % 125,615 29 % 150,418 28 % Asia Pacific 39,275 10 % 45,563 11 % 60,418 11 % Latin America 14,956 4 % 11,776 3 % 16,668 3 % Total revenue $ 398,047 $ 430,966 $ 545,803 For the years ended March 31, 2018 , 2019 , and 2020 , the United States was the only country that represented more than 10% of the Company’s revenues in any period, constituting $216.6 million and 54% , $233.3 million and 54% and $299.5 million and 55% of total revenue, respectively. Deferred Commissions The following table represents a rollforward of the Company’s deferred commissions (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Beginning balance $ 25,219 $ 39,282 $ 59,250 Additions to deferred commissions 30,835 43,212 54,969 Amortization of deferred commissions (16,772 ) (23,244 ) (35,974 ) Ending Balance $ 39,282 $ 59,250 $ 78,245 Deferred commissions, current 18,763 27,705 38,509 Deferred commissions, non-current 20,519 31,545 39,736 Total deferred commissions $ 39,282 $ 59,250 $ 78,245 Deferred Revenue Revenue recognized from amounts included in deferred revenue as of March 31, 2017 was $169.2 million during the year ended March 31, 2018 . Revenue recognized from amounts included in deferred revenue as of March 31, 2018 was $211.4 million during the year ended March 31, 2019 . Revenue recognized from amounts included in deferred revenue as of March 31, 2019 was $274.7 million during the year ended March 31, 2020 . Remaining Performance Obligations As of March 31, 2020 , the aggregate amount of the transaction price allocated to remaining performance obligations was $859.7 million , which consists of both billed consideration in the amount of $444.8 million and unbilled consideration in the amount of $414.9 million that the Company expects to recognize as subscription and service revenue. The Company expects to recognize 58% of this amount as revenue in the year ended March 31, 2021 and 99% of this amount as revenue over the three years ending March 31, 2023 with the remaining 1% recognized thereafter. |
Business Combinations
Business Combinations | 12 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations In November 2017, the Company completed the acquisition of Qumram AG (Qumram), a Swiss company whose technology allows organizations to gain insight into user behavior and enhance customer experience by recording, analyzing and visually replaying user sessions, for an aggregate purchase price of $20.8 million . Total cash consideration net of cash acquired was $11.3 million . The Company recorded a payment obligation of $8.5 million , of which $4.8 million was classified as “Accrued expenses, current” in its consolidated balance sheet for the year ended March 31, 2019 and no purchase obligations are outstanding as of March 31, 2020 . Of the total purchase price, $1.7 million was allocated to acquired technology and an immaterial amount to net tangible assets acquired, with the excess $18.7 million of the purchase price over the fair value of net tangible and intangible assets acquired recorded as goodwill. The Company also recognized transaction costs of approximately $0.2 million , which are included in “ General and administrative ” expense in its consolidated statement of operations for the year ended March 31, 2018. The acquired technology has an estimated useful life of 6 years and is recorded within “ Other intangible assets, net ” in the consolidated balance sheets. The acquisition has been accounted for as a business combination under the acquisition method. Goodwill generated from the acquisition is attributable to expected synergies from future growth and potential future monetization opportunities, and is not deductible for tax purposes. Pro forma revenue and results of operations have not been presented because the historical results of Qumram were not material to the Company’s consolidated financial statements in any period presented. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Mar. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2019 2020 Prepaid expenses $ 13,334 $ 13,189 Income taxes refundable 4,078 47,489 Other 1,356 510 Prepaid expenses and other current assets $ 18,768 $ 61,188 |
Property and Equipment, Net (No
Property and Equipment, Net (Notes) | 12 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2019 2020 Computer equipment and software $ 37,745 $ 19,550 Furniture and fixtures 6,701 7,679 Leasehold improvements 11,741 21,562 Other 1,260 3,111 Total property and equipment 57,447 51,902 Less: accumulated depreciation and amortization (39,522 ) (20,394 ) Property and equipment, net $ 17,925 $ 31,508 Depreciation and amortization of property and equipment totaled $8.8 million , $7.3 million , and $7.9 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, net | Goodwill and Other Intangible Assets, Net Changes in the carrying amount of goodwill on a consolidated basis for fiscal 2020 consist of the following (in thousands): March 31, 2020 Balance, beginning of year $ 1,270,120 Foreign currency impact 613 Balance, end of year $ 1,270,733 Other intangible assets, net excluding goodwill consist of the following (in thousands): Weighted Average Useful Life (in months) March 31, 2019 2020 Capitalized software 107 $ 188,608 $ 189,554 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 595,166 596,112 Less: accumulated amortization (336,043 ) (394,520 ) Total other intangible assets, net $ 259,123 $ 201,592 Amortization of other intangible assets totaled $73.5 million , $72.8 million , and $58.5 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively. As of March 31, 2020 , the estimated future amortization expense of the Company’s other intangible assets in the table above is as follows (in thousands): Fiscal Year Ended March 31, 2021 2022 2023 2024 2025 Capitalized software $ 17,195 $ 15,938 $ 15,584 $ 15,277 $ 10,621 Customer relationships 29,243 24,660 20,794 17,534 10,473 Trademarks and tradenames 5,501 5,501 5,501 4,753 3,017 Total amortization $ 51,939 $ 46,099 $ 41,879 $ 37,564 $ 24,111 |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Provision Loss before income taxes and the income tax (expense) benefit include the following (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Domestic $ (64,391 ) $ (163,385 ) $ (245,177 ) Foreign 12,616 23,474 26,644 Total $ (51,775 ) $ (139,911 ) $ (218,533 ) The income tax provision includes the following (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Income tax (benefit) expense Federal $ (393 ) $ 3,213 $ 198,307 State 1,198 575 47,992 Foreign 11,638 5,920 12,468 Total current tax position 12,443 9,708 258,767 Federal (72,336 ) (29,021 ) (50,086 ) State (990 ) (5,464 ) (5,839 ) Foreign (114 ) 1,060 (3,351 ) Total deferred tax provision (73,440 ) (33,425 ) (59,276 ) Total income tax (benefit) expense $ (60,997 ) $ (23,717 ) $ 199,491 The Company’s income tax benefit of $61.0 million for the year ended March 31, 2018 differed from the amount computed on pre-tax income at the U.S. federal blended rate of 31.5% primarily due to the enactment of the Tax Cuts and Jobs Act (“TCJA”). The Company recognized a tax benefit of $50.0 million from revaluing U.S. net deferred tax liabilities to the reduced U.S. federal income tax rate of 21.0% . The Transition Tax had no impact on the Company’s income tax provision. The Company’s income tax benefit of $23.7 million for the year ended March 31, 2019 differed from the amount computed on pre-tax loss at the U.S. federal income tax rate of 21.0% primarily because of non-deductible share-based compensation, the effects of which were partially offset by U.S. tax credits generated during the year. The Company evaluated the provisions of the TCJA and recorded a $1.8 million tax benefit to the financial statements for the year ended March 31, 2019 exclusively related to the foreign derived intangible income (“FDII”). The Company’s income tax expense of $199.5 million for the year ended March 31, 2020 differed from the amount computed on pre-tax loss at the U.S. federal income tax rate of 21.0% , because of non-deductible share-based compensation and the effects of the reorganization transactions, which produced gain on the difference between the fair market value of the Compuware assets distributed and the adjusted tax basis in such assets, generating a tax liability that was only partially offset by the use of U.S. foreign tax credits that previously were subject to a valuation allowance. The Company evaluated the provisions of the Tax Cuts and Jobs Act (“TCJA”) and recorded a $3.9 million tax benefit to the financial statements for the year ended March 31, 2020 exclusively related to the FDII. Refer to the tax legislation section below for further discussion of these legislative matters. The tax rate reconciliation is as follows (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Income tax (benefit) at U.S. federal statutory income tax rate $ (16,309 ) $ (29,381 ) $ (45,892 ) State and local tax expense 208 (4,890 ) (3,100 ) Foreign tax rate differential 3,619 2,051 3,521 Branch income 384 1,824 1,601 Non-deductible expenses 8,645 11,807 35,874 Tax credits (6,173 ) (13,233 ) (35,354 ) Sharing of consolidated tax attributes (8,890 ) — — Foreign derived intangibles deduction — (1,790 ) (3,901 ) Tax associated with reorganization — — 251,819 Changes in tax law (50,033 ) — — Changes in valuation allowance 5,133 6,087 (9,682 ) Foreign withholding tax 2,701 3,086 4,231 Other adjustments (282 ) 722 374 Total income tax (benefit) expense $ (60,997 ) $ (23,717 ) $ 199,491 Deferred Tax Assets and Liabilities Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the jurisdictional cumulative loss incurred over the three year period ended March 31, 2020 . Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. On the basis of this evaluation, a valuation allowance of $31.7 million and $22.0 million has been recorded as of March 31, 2019 and 2020, respectively. Only the portion of the deferred tax asset that is more likely than not to be realized has been recorded. It is reasonably possible a material adjustment in the amount of the deferred tax asset considered realizable will occur within one year if estimates of future taxable income during the carryforward period are reduced or increased, if objective negative evidence in the form of cumulative losses is no longer present, or if additional weight is given to subjective evidence such as the Company’s projections for growth. Temporary differences and carryforwards that give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands): March 31, 2019 2020 Deferred revenue $ 4,752 $ 27,681 Capitalized research and development costs — 11,140 Accrued expenses 5,983 6,625 Share-based compensation 4,776 16,660 Fixed assets 447 279 Net operating loss carryforwards 4,470 4,046 Other tax carryforwards, primarily foreign tax credits 32,630 14,603 Other 1,183 2,823 Total deferred tax assets before valuation allowance 54,241 83,857 Less: valuation allowance (31,678 ) (21,996 ) Net deferred tax assets 22,563 61,861 Intangible assets 51,531 40,270 Capitalized research and development costs 822 — State taxes 6,090 251 Other 1,040 880 Total deferred tax liabilities 59,483 41,401 Net deferred tax (liabilities) assets $ (36,920 ) $ 20,460 Long-term deferred tax assets 10,678 20,460 Long-term deferred tax liabilities (47,598 ) — Net deferred tax (liabilities) assets $ (36,920 ) $ 20,460 At March 31, 2019 and 2020 , the Company had net operating losses (tax-effected) and tax credit carryforwards for income tax purposes before valuation allowance of, $37.1 million and $18.6 million , respectively, that expire in the tax years as follows (in thousands): Fiscal Year Ended March 31, Expiration 2019 2020 Non-U.S. net operating losses $ 4,301 $ 3,726 Indefinite Non-U.S. net operating losses 169 159 2021 - 2026 U.S. federal and state tax carryforwards 2,657 161 Indefinite U.S. federal and state tax carryforwards, primarily foreign tax credits 29,973 14,603 2026 - 2027 Total carryforwards $ 37,100 $ 18,649 Uncertain Tax Positions The amount of gross unrecognized tax benefits was $9.7 million and $17.4 million as of March 31, 2019 and 2020 , respectively, all of which would favorably affect the Company’s effective tax rate if recognized in future periods. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended March 31, 2018 , 2019 , and 2020 (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Gross unrecognized tax benefit, beginning of year $ 8,770 $ 9,143 $ 9,653 Gross increases to tax positions for prior periods 257 20 438 Gross decreases to tax positions for prior periods (482 ) (70 ) (6,210 ) Gross increases to tax positions for current period 598 560 13,543 Gross unrecognized tax benefit, end of year $ 9,143 $ 9,653 $ 17,424 As of March 31, 2019 and 2020 , the net interest and penalties payable associated with its uncertain tax positions was $0.1 million and $0.2 million , respectively. During the years ended March 31, 2018 and 2019 , the Company recognized an immaterial amount of net interest expense. During the year ended March 31, 2020 , the Company recognized expense related to interest and penalties of $0.1 million . |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses, current consisted of the following (in thousands): March 31, 2019 2020 Accrued employee - related expenses $ 35,192 $ 40,687 Accrued tax liabilities 6,274 13,350 Accrued restructuring 1,488 1,065 Accrued professional fees 3,440 2,103 Accrued installments for acquisition 4,832 — Income taxes payable 3,811 20,756 Other 9,883 15,767 Total accrued expenses, current $ 64,920 $ 93,728 Accrued expenses, non-current consisted of the following (in thousands): March 31, 2019 2020 Share-based compensation $ 92,047 $ — Income tax reserve 2,876 17,108 Other 3,436 3,879 Total accrued expenses, non-current $ 98,359 $ 20,987 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt On August 23, 2018, the Company entered into the First Lien Credit Agreement (the “First Lien Term Loan”) in which the Company borrowed an aggregate principal amount of $950.0 million , which matures on August 23, 2025 . On February 6, 2020, the Company entered into the Second Amendment to Credit Agreement (the “Second Amendment”) which provides for a decrease in the applicable margin on the First Lien Term Loan and the Revolving Credit Facility and an increase to the letter of credit sublimit by $10.0 million . The First Lien Term Loan and the Second Amendment are collectively referred to as the “Amended First Lien Term Loan”. Borrowings under the Amended First Lien Term Loan bear interest, at the Company’s election, at either (i) the Alternative Base Rate, as defined per the credit agreement, plus 1.25% per annum, or (ii) LIBOR plus 2.25% per annum. Interest payments are due quarterly, or more frequently, based on the terms of the credit agreement. As of March 31, 2020 , the Company has satisfied all required principal payments under the Amended First Lien Term Loan and the remainder is due at maturity. The Amended First Lien Term Loan requires prepayments in the case of certain events including: property or asset sale in excess of $5.0 million , proceeds in excess of $5.0 million from an insurance settlement, or proceeds from a new debt agreement. An additional prepayment may be required under the Amended First Lien Term Loan related to excess cash flow for the respective measurement periods. All of the indebtedness under the Amended First Lien Term Loan is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors. The Amended First Lien Term Loan contains customary negative covenants. At March 31, 2020 , the Company was in compliance with all applicable covenants. On August 23, 2018, the Company entered into the Second Lien Credit Agreement (the “Second Lien Term Loan”) in which the Company borrowed an aggregate principal amount of $170.0 million . Borrowings under the Second Lien Term Loan bore interest, at the Company’s election, at either (i) the Alternative Base Rate, as defined per the credit agreement, plus 6.00% per annum, or (ii) LIBOR plus 7.00% per annum. The maturity date on the Second Lien Term Loan was August 23, 2026 , with principal payment due in full on the maturity date. Interest payments were due quarterly, or more frequently, based on the terms of the credit agreement. During the second quarter of fiscal 2020, the Company repaid all outstanding borrowings, including accrued interest, under the Second Lien Term Loan and recognized a loss on debt extinguishment of $2.7 million within “ Interest expense, net ” in the consolidated statement of operations for the year ended March 31, 2020 . The Amended First Lien Term Loan and Second Lien Term Loan are collectively referred to as the “Term Loans”. Debt issuance costs and original issuance discount of $16.4 million , which includes $0.9 million additional transaction fees related to the Second Amendment, were incurred in connection with the Term Loans. These debt issuance costs and original issuance discount will be amortized into interest expense over the contractual term of the Term Loans. The Company recognized $1.2 million and $1.7 million of amortization of debt issuance costs and original issuance discount for the years ended March 31, 2019 and 2020 , respectively, which is included in the accompanying consolidated statements of operations. At March 31, 2019 , the Company had an aggregate principal amount outstanding of $947.6 million and $88.7 million for the First Lien Term Loan and Second Lien Term Loan, respectively, bearing interest at 5.7% and 9.5% , respectively. At March 31, 2020 , the Company had an aggregate principal amount outstanding of $521.1 million for the First Lien Term Loan bearing interest at 3.2% . At March 31, 2019 and March 31, 2020 , the Company had $14.3 million and $10.6 million of unamortized debt issuance costs and original issuance discount which is recorded as a reduction of the debt balance on the Company’s consolidated balance sheets. Revolving Facility The First Lien Credit Agreement further provided for a revolving credit facility (the “Revolving Facility”) in an aggregate amount of $60.0 million , which matures on August 23, 2023 . Borrowings under the Revolving Facility currently bear interest, at the Company’s election, at either (i) the Alternative Base Rate, as defined per the credit agreement, plus 1.25% per annum, or (ii) LIBOR plus 2.25% per annum. The Revolving Facility includes a $25.0 million letter of credit sub-facility. The Company incurs fees with respect to the Revolving Facility, including (i) a commitment fee of 0.25% per annum of unused commitments under the Revolving Facility, (ii) facility fees equal to the applicable margin in effect for Eurodollar Rate Loans, as defined per the credit agreement, times the average daily stated amount of letters of credit, (iii) a fronting fee equal to either (a) 0.125% per annum on the stated amount of each letter of credit or (b) such other rate per annum as agreed to by the parties subject to the letters of credit, and (iv) customary administrative fees. All of the indebtedness under the Revolving Facility is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors. Debt issuance costs of $0.8 million were incurred in connection with the entry into the Revolving Facility. These debt issuance costs are amortized into interest expense over the contractual term of the loan. The Company recognized $0.1 million and $0.2 million of amortization of debt issuance costs for the years ended March 31, 2019 and 2020 , respectively, which is included in the accompanying consolidated statements of operations. There were $0.7 million and $0.5 million of unamortized debt issuance costs included as a reduction of the debt balance on the accompanying consolidated balance sheets as of March 31, 2019 and 2020 , respectively. The Revolving Facility contains customary negative covenants and does not include any financial maintenance covenants other than a springing minimum net leverage ratio not exceeding 7.50 to 1.00 on the last day of any fiscal quarter, which will be tested only upon the occurrence of an event of default or certain other conditions as specified in the agreement. At March 31, 2020 , the Company was in compliance with all applicable covenants pertaining to the Revolving Facility. As of March 31, 2019 and 2020 , there were no amounts outstanding under the Revolving Facility and there were $0.5 million and $15.3 million of letters of credit issued, respectively. The Company had $59.5 million and $44.7 million of availability under the Revolving Facility as of March 31, 2019 and 2020 , respectively. Debt Maturities The maturities of outstanding debt are as follows (in thousands): Fiscal year Amount 2021 $ — 2022 — 2023 — 2024 — 2025 — Thereafter 521,125 Total future payments $ 521,125 |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities The Company has undertaken various restructuring activities to achieve its strategic and financial objectives. Restructuring activities include, but are not limited to product offering cancellation and termination of related employees, office relocation, administrative cost structure realignment and consolidation of resources. The Company expects to finance restructuring programs through cash on hand and cash generated from operations. Restructuring costs are estimated based on information available at the time such charges are recorded. In general, management anticipates that restructuring activities will be completed within a time frame such that significant changes to the plan are not likely. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated. The Company recorded restructuring expenses of $4.6 million , $1.7 million , and $0.9 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively. Facility Exit Costs Starting in October 2016, the Company began undertaking plans to optimize its U.S. offices, and as result, exited certain leased office spaces. Accordingly, the Company calculated and recorded a liability at the “cease-use” date related to those operating leases based on the difference between the present value of the estimated future sublease rental income and the present value of remaining lease obligations, adjusted for the effects of any prepaid or deferred items. The Company recorded facility exit charges of $0.8 million to “Restructuring expenses” during the year ended March 31, 2018 . There were no facility exit charges during the years ended March 31, 2019 and 2020 . The related liability is recorded in “ Accrued expenses, current ” on the consolidated balance sheets. Transformation Activities During the year ended March 31, 2019 , the Company announced a restructuring program designed to better align employee resources with its product offering and future plans. Accordingly, the Company calculated and recorded a liability of the estimated termination benefits of $1.7 million . During the year ended March 31, 2020 , the Company announced a restructuring program designed to better align employee resources with its product offerings and future plans. Accordingly, the Company calculated and recorded a liability of the estimated termination benefits of $0.9 million . Restructuring Reserves Restructuring reserve balances of $1.5 million and $1.1 million as of March 31, 2019 and 2020 , respectively, are classified as “ Accrued expenses, current ” on the consolidated balance sheets. The Company anticipates that the activities associated with the restructuring reserve balance as of March 31, 2020 will be substantially complete by the end of fiscal 2021 . The Company’s consolidated restructuring reserves and related activity are summarized below. Employee Termination Benefits Lease Abandonment Costs Total Balance, March 31, 2018 $ 718 $ 1,235 $ 1,953 Expense 1,715 — 1,715 Utilization (1,557 ) (623 ) (2,180 ) Balance, March 31, 2019 876 612 1,488 Expense 905 — 905 Utilization (1,076 ) (252 ) (1,328 ) Balance, March 31, 2020 $ 705 $ 360 $ 1,065 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Tax Liability In connection with the initial public offering completed in the second quarter of fiscal 2020, the Company undertook a series of transactions to spin out two wholly owned businesses from the corporate structure. These transactions generated a taxable gain upon their occurrence which will be reported on tax returns for the year ended March 31, 2020 . On July 31, 2019, Compuware Corporation distributed $265 million to the Company to partially or wholly fund the tax liability pursuant to an agreement with the Company which is recorded as a contribution within “ Additional paid-in capital ” on the consolidated statements of shareholders’ equity / member’s deficit. The Company has estimated an expense of $251.8 million and made estimated tax payments to the relevant taxing authorities. Commitment for Operating Leases The Company’s commitments for various operating lease agreements related to office space for various periods that extend through as late as fiscal 2030. Total rent expense under these agreements were approximately $8.7 million , $11.3 million , and $14.0 million for the year ended March 31, 2018 , 2019 , and 2020 , respectively. Certain of these lease agreements contain provisions for renewal options and escalation clauses. The following table summarizes payments under the Company’s operating lease commitments as of March 31, 2020 (in thousands): Fiscal year Amount 2021 $ 14,210 2022 11,663 2023 11,235 2024 10,864 2025 8,020 Thereafter 16,331 Total future contractual payments $ 72,323 Legal Matters |
Shareholder's Equity
Shareholder's Equity | 12 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Shareholder's Equity | Shareholders’ Equity The Company is authorized to issue 600,000,000 shares of common stock, par value of $0.001 per share. Dynatrace Holdings LLC was reorganized on April 1, 2015 and had 100 common units as of March 31, 2019 . In connection with the reorganization transactions described in Note 2, an additional 241,547,118 common units of Dynatrace Holdings LLC were issued and subsequently exchanged for 241,547,218 shares of common stock in Dynatrace, Inc. during the second quarter of fiscal 2020 . This amount of additional common units includes 16,687,436 common units issued upon the exchange of vested MIUs and AUs. At March 31, 2020 , there were 280,853,040 shares of common stock issued and outstanding. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Management Incentive Unit Program Under the Management Incentive Unit program, or the MIU Plan, Compuware Parent LLC’s board of directors had authorized the issuance of 24.1 million Management Incentive Units and 0.8 million Appreciation Units to certain executive officers and key employees of Dynatrace. The MIUs and AUs consisted of two types of units which were classified as performance-vested units and time-vested units. Performance-vested units included four performance targets which vested 25% after each fiscal year end, upon the board of director’s confirmation that the performance target was met for such fiscal year. These units had a requisite service period that varied based on the grant date, but the service period began on the grant date and ended on achievement of the final fiscal year performance target. The performance criterion for vesting of performance units had been based on the Company’s EBITDA compared to the target established and approved for each fiscal year. Units that were vested based upon performance for any given year for which the target was not met did not vest, and were subject to repurchase by the Company, Compuware Parent LLC, or TB at any time; provided, that if the target was not met for a given year, but the target for the subsequent year was met, the unvested performance-based units for the previous year would become vested when the target for the subsequent year was met. Time-vested units vested at 25% one year after grant date (or one year after the vesting start date, if different) and the remaining 75% vested ratably over a 36-month period. These units had a requisite service period of 48 months (or the period from the grant until three years from the date that the first 25% vested) and could be repurchased by the Company, Compuware Parent LLC, or TB at any time. In connection with the reorganization transactions occurring in the second quarter of fiscal 2020, as described in Note 2, outstanding awards granted under the MIU Plan were converted into shares of common stock, restricted stock, and restricted stock units which were granted under the 2019 Plan, as defined below. Upon conversion, the MIUs and AUs were modified and ceased to be classified as liability awards. This modification impacted 306 participants and resulted in the recognition of incremental stock compensation expense of $145.3 million during the year ended March 31, 2020 to record the liability awards at fair value immediately prior to the modification. Upon modification, the liability balance of $278.2 million related to these MIUs and AUs was reclassified into additional paid-in capital. The following table shows the MIU activity for the year ended March 31, 2020 : Number of Units Weighted Average Participation Threshold Fair Value (in thousands) (per unit) (per unit) MIUs outstanding as of March 31, 2019 24,112 $ 0.36 $ 5.45 Units granted during the year 469 7.71 Units exchanged for AUs during the year (106 ) 1.99 Units forfeited/repurchased during the year (3,009 ) 0.06 Modification of MIU Plan awards (21,466 ) 0.56 MIUs outstanding as of March 31, 2020 — $ — $ — MIUs vested as of March 31, 2020 — The following table shows the AU activity for the year ended March 31, 2020 : Number of Units Weighted Average Participation Threshold Fair Value (in thousands) (per unit) (per unit) AUs outstanding as of March 31, 2019 819 $ 1.18 $ 5.45 Units converted from MIUs 106 1.99 Units granted during the year 53 7.71 Units forfeited/repurchased during the year (5 ) 1.63 Modification of MIU Plan awards (973 ) 1.62 AUs outstanding as of March 31, 2020 — $ — $ — AUs vested as of March 31, 2020 — The fair value of the equity units underlying the MIUs and AUs had historically been determined by the board of directors as there was no public market for the equity units. The board of directors determined the fair value of the Company’s equity units by considering a number of objective and subjective factors including: the valuation of comparable companies, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. The participation threshold was determined by the board of directors, based on the fair market value on the grant issuance date upon vesting or settlement, the value associated with the MIUs and AUs was the difference between the fair value of the unit and the associated participation threshold. Prior to the modification, the awards were marked to market at the balance sheet date. Upon modification, the awards were marked to market immediately prior to the modification. The weighted average grant date fair value of units granted during the years ended March 31, 2018 , 2019 , and 2020 was $0.82 , $3.62 , and $7.71 , respectively. The total fair value of vested units during the years ended March 31, 2018 , 2019 , and 2020 was $22.6 million , $92.0 million , and $278.2 million , respectively. The following key assumptions were used to determine the fair value of the MIUs and AUs for fiscal 2018 , 2019 , and 2020 : 2018 2019 2020 Expected dividend yield — — — Expected volatility 50 % 50% - 60% 35% - 55% Expected term (years) 2.5 1.0 - 1.5 0.5 - 1.25 Risk-free interest rate 2.34 % 2.33% - 2.40% 1.86% - 2.09% 2019 Equity Incentive Plan In July 2019, the Company’s board of directors (the “Board”), upon the recommendation of the compensation committee of the board of directors, adopted the 2019 Equity Incentive Plan, or the 2019 Plan, which was subsequently approved by the Company’s shareholders. The 2019 Plan became effective on July 30, 2019 and serves as the successor to the Company’s MIU Plan. The Company initially reserved 52,000,000 shares of common stock, or the Initial Limit, for the issuance of awards under the 2019 Plan. The 2019 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each April 1, beginning on April 1, 2020, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. Stock options The following table summarizes activity for stock options during the period ended March 31, 2020 : Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balance, March 31, 2019 — $ — Granted 7,322 16.26 Exercised — — Forfeited (175 ) 16.18 Balance, March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Options vested and expected to vest at March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Options vested and exercisable at March 31, 2020 — $ — 0.0 $ — As of March 31, 2020 , the total unrecognized compensation expense related to non-vested stock options granted is $38.8 million and is expected to be recognized over a weighted average period of 3.4 years . For the year ended March 31, 2020 , the Company recognized $7.2 million of share-based compensation expense related to stock options. The fair value for the Company’s stock options granted during the year ended March 31, 2020 was estimated at the date of grant using a Black-Scholes option-pricing model using the following assumptions: March 31, 2020 Expected dividend yield — Expected volatility 37.1% - 38.9% Expected term (years) 6.1 Risk-free interest rate 0.8% - 1.9% The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. The computation of expected volatility is based on a calculation using the historical volatility of a group of publicly traded peer companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of the Company’s traded stock price. The computation of expected term was based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options’ remaining vesting term and contractual expiration period, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the award. Restricted shares and units During the year ended March 31, 2020 , the Company granted an aggregate of 6,569,783 restricted shares to certain key employees and non-employee directors. The total grants consisted of: (i) 3,379,170 time-based restricted shares that vest 25% after the grant date (or one year after the vesting start date, if different) and the remaining 75% vest ratably over a 36 -month period; (ii) 696,873 performance-based restricted shares; (iii) 2,443,740 time-based restricted shares that vest 25% one year after the grant date and the remaining 75% vest ratably on a quarterly basis over 3 years, and (iv) 50,000 time-based restricted shares that vest on August 15, 2020 or upon Board approval at the annual shareholder meeting, if earlier. The performance criteria for the performance-based shares include four performance targets which vest 25% after each fiscal year end, upon the Board’s confirmation that the performance target was met for such fiscal year. These shares have a requisite service period that varies based on the grant date, but the service period begins on the grant date and ends on achievement of the final fiscal year performance target. The performance criterion for vesting of performance shares has been based on an adjusted EBITDA metric compared to the target established and approved by the Company’s board of directors for each fiscal year. Shares that are vested based upon performance for any given year for which the target was not met shall not vest; provided, that if the target is not met for a given year, but the target for the subsequent year is met, the unvested performance-based shares for the previous year shall become vested when the target for the subsequent year was met. The restricted shares are generally subject to forfeiture if employment terminates prior to the vesting date. The Company expenses the cost of the restricted shares, which is determined to be the fair market value of the shares of common stock underlying the restricted shares on the date of grant, ratably over the period during which the vesting restrictions lapse. The following table provides a summary of the changes in the number of restricted shares for the year ended March 31, 2020 : Number of Shares of Restricted Stock Awards Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2019 — $ — — $ — Granted 2,855 16.00 3,715 16.33 Vested (784 ) 16.00 (503 ) 16.00 Forfeited (87 ) 16.00 (89 ) 16.42 Balance, March 31, 2020 1,984 $ 16.00 3,123 $ 16.39 As of March 31, 2020 , the total unrecognized compensation expense related to unvested restricted stock is $22.9 million and is expected to be recognized over a weighted average period of 1.9 years . As of March 31, 2020 , the total unrecognized compensation expense related to unvested restricted stock units is $44.4 million and is expected to be recognized over a weighted average period of 3.0 years . For the year ended March 31, 2020 , the Company recognized $27.9 million of share-based compensation expense related to restricted shares and units. Employee Stock Purchase Plan In July 2019, the board of directors adopted, and the Company’s shareholders approved, the 2019 Employee Stock Purchase Plan for the issuance of up to a total of 6,250,000 shares of common stock, subject to automatic annual increases. The Company expects to offer, sell and issue shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The initial offering period began on November 29, 2019 and will end on May 28, 2020. Except for the initial offering period, the ESPP provides for 6 -month offering periods beginning May 15 and November 15 of each year, and each offering period will consist of six-month purchase periods. On each purchase date, eligible employees will purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. As of March 31, 2020 , there was approximately $0.4 million of unrecognized stock-based compensation related to the ESPP that is expected to be recognized over the remaining term of the initial offering period. The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: March 31, 2020 Expected dividend yield — Expected volatility 35.9 % Expected term (years) 0.5 Risk-free interest rate 1.6 % The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. The computation of expected volatility is based on a calculation using the historical volatility of a group of publicly traded peer companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of the Company’s traded stock price. The computation of expected term was based on the offering period, which is six months. The risk-free interest rate is based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant. Share-based Compensation The following table summarizes the components of total share-based compensation expense included the consolidated financial statements for each period presented (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Cost of revenue $ 1,720 $ 5,777 $ 18,685 Research and development 3,858 12,566 38,670 Sales and marketing 7,536 24,673 84,698 General and administrative 9,180 28,135 80,425 Total share-based compensation expense $ 22,294 $ 71,151 $ 222,478 |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share On August 1, 2019, the Company completed its IPO in which the Company issued and sold 38,873,174 shares of common stock at a price to the public of $16.00 per share. These shares are included in the common stock outstanding as of that date. For the years ended March 31, 2018 , 2019 , and 2020 , basic and diluted net income (loss) per share have been retrospectively adjusted to reflect the conversion of equity in connection with the reorganization transactions described in Note 2. Basic and diluted net income (loss) per share was derived from a unit conversion factor of $16.00 per share as determined by the board of managers of Dynatrace Holdings LLC on July 30, 2019. The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Fiscal Year Ended March 31, 2018 2019 2020 Numerator: Net income (loss) $ 9,222 $ (116,194 ) $ (418,024 ) Denominator: Weighted average shares outstanding, basic and diluted 231,956 235,939 264,933 Net income (loss) per share, basic and diluted $ 0.04 $ (0.49 ) $ (1.58 ) The effect of certain common share equivalents were excluded from the computation of weighted average diluted shares outstanding for the years ended March 31, 2018 , 2019 , and 2020 as inclusion would have resulted in anti-dilution. A summary of these weighted-average anti-dilutive common share equivalents is provided in the table below (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Stock options — — 4,763 Unvested restricted stock and RSUs — — 3,819 Shares committed under ESPP — — 64 Unvested equity awards 10,038 6,399 — |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company had agreements with Thoma Bravo, LLC for financial and management advisory services. During the years ended March 31, 2018 , 2019 , and 2020 , the Company incurred $4.9 million , $4.9 million , and $1.6 million , respectively, related to these services. The related expense is reflected in “ General and administrative ” expense in the consolidated statements of operations. Upon completion of the Company’s initial public offering, these agreements were terminated. During the years ended March 31, 2018 and 2019 , the Company has transfers to related parties of $3.9 million and $0.8 million , respectively, which are included in “ Additional paid-in capital ” in the consolidated balance sheets. During the years ended March 31, 2018 and 2019 , the Company transferred cash to related parties of $74.6 million and $1,177.0 million , respectively, related to debt service and shared costs. Other related party settlements resulted in an increase in payables to related parties of $35.2 million and $14.3 million for the years ended March 31, 2018 and 2019 , respectively. On April 1, 2015, the Company entered into $1.8 billion in subordinated demand promissory notes payable to Compuware, a related party. The promissory notes were established in connection with Compuware’s external debt financing. All payments of principal and interest were payable on the earliest to occur of (i) demand by the holder, (ii) June 1, 2023 and (iii) the date of acceleration of the promissory notes as a result of the occurrence of an event of default. As a result of the August 23, 2018 financing transaction, as described in Note 10 , Long-term Debt, the amount was reduced by net proceeds of the financing obtained by Dynatrace LLC, leaving $478.5 million in principal and accrued interest of $118.7 million , at a rate of 2.72% per annum, which is included in “ Payable to related party ” in the consolidated balance sheets at March 31, 2019 . Interest expense on the promissory notes were $35.2 million , $27.4 million , and $4.1 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is included in the consolidated statements of operations in “ Interest expense, net .” In connection with the reorganization during the second quarter of fiscal 2020, the corresponding receivable at Compuware was contributed to the Company and the payable to related party was eliminated. |
Related Party Debt
Related Party Debt | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Debt | Related Party Transactions The Company had agreements with Thoma Bravo, LLC for financial and management advisory services. During the years ended March 31, 2018 , 2019 , and 2020 , the Company incurred $4.9 million , $4.9 million , and $1.6 million , respectively, related to these services. The related expense is reflected in “ General and administrative ” expense in the consolidated statements of operations. Upon completion of the Company’s initial public offering, these agreements were terminated. During the years ended March 31, 2018 and 2019 , the Company has transfers to related parties of $3.9 million and $0.8 million , respectively, which are included in “ Additional paid-in capital ” in the consolidated balance sheets. During the years ended March 31, 2018 and 2019 , the Company transferred cash to related parties of $74.6 million and $1,177.0 million , respectively, related to debt service and shared costs. Other related party settlements resulted in an increase in payables to related parties of $35.2 million and $14.3 million for the years ended March 31, 2018 and 2019 , respectively. On April 1, 2015, the Company entered into $1.8 billion in subordinated demand promissory notes payable to Compuware, a related party. The promissory notes were established in connection with Compuware’s external debt financing. All payments of principal and interest were payable on the earliest to occur of (i) demand by the holder, (ii) June 1, 2023 and (iii) the date of acceleration of the promissory notes as a result of the occurrence of an event of default. As a result of the August 23, 2018 financing transaction, as described in Note 10 , Long-term Debt, the amount was reduced by net proceeds of the financing obtained by Dynatrace LLC, leaving $478.5 million in principal and accrued interest of $118.7 million , at a rate of 2.72% per annum, which is included in “ Payable to related party ” in the consolidated balance sheets at March 31, 2019 . Interest expense on the promissory notes were $35.2 million , $27.4 million , and $4.1 million for the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is included in the consolidated statements of operations in “ Interest expense, net .” In connection with the reorganization during the second quarter of fiscal 2020, the corresponding receivable at Compuware was contributed to the Company and the payable to related party was eliminated. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company has established a 401(k) tax-deferred savings plan (the “401(k) Plan”), which permits participants to make contributions by salary deduction pursuant to Section 401(k) of the Code. The Company is responsible for administrative costs of the 401(k) Plan and may, at its discretion, make matching contributions to the 401(k) Plan. For the years ended March 31, 2018 , 2019 , and 2020 , the Company made contributions of $1.4 million , $1.9 million and $3.1 million to the 401(k) Plan, respectively. |
Geographic Information
Geographic Information | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Revenue Revenues by geography are based on legal jurisdiction. Refer to Note 3 , Revenue Recognition, for a disaggregation of revenue by geographic region. Property and Equipment, net The following tables present property and equipment by geographic region for the periods presented (in thousands): March 31, 2019 2020 North America $ 10,036 $ 11,296 Europe, Middle East and Africa 7,347 18,590 Asia Pacific 376 1,564 Latin America 166 58 Total property and equipment, net $ 17,925 $ 31,508 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Fiscal year | Fiscal Year The Company’s fiscal year ends on March 31. References to Fiscal 2020 , for example, refer to the fiscal year ended March 31, 2020 . |
Consolidation | As described in Note 17 , prior to the reorganization the consolidated financial statements reflected the debt and debt service associated with subordinated demand promissory notes payable of DHC to a related party. The financial statements also reflect certain expenses incurred by the Company for certain functions including shared services for the periods prior to the reorganization, which are immaterial to these financial statements. These expenses were allocated to Dynatrace on the basis of direct usage when identifiable, and for resources indirectly used by Dynatrace. Allocations were based on a proportional cost allocation methodology to reflect estimated usage by Dynatrace. Management considers the allocation methodology and results to be reasonable for all periods presented. However, the financial information presented in these financial statements may not reflect the consolidated financial position, operating results and cash flows of Dynatrace had the Dynatrace business been a separate stand-alone entity during all of the periods presented. Actual costs that would have been incurred if Dynatrace had been a stand-alone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas. Prior to July 30, 2019, Dynatrace Holdings LLC, a Delaware limited liability company, was an indirect equity holder of DHC that indirectly and wholly owned Dynatrace, LLC. On July 31, 2019, Dynatrace Holdings LLC (i) converted into a Delaware corporation with the name Dynatrace, Inc. and (ii) through a series of corporate reorganization steps, became the parent company of DHC. Additionally, as part of the reorganization, two wholly owned subsidiaries of DHC, Compuware Corporation (“Compuware”) and SIGOS LLC (“SIGOS”), were spun out from the corporate structure to the DHC shareholders. As a result of these transactions, DHC is a wholly owned indirect subsidiary of Dynatrace, Inc. These reorganization steps are collectively referred to as the “reorganization.” In connection with the reorganization, the equity holders of Compuware Parent, LLC received 222,021,708 units of Dynatrace Holdings LLC in exchange for their equity interests in Compuware Parent, LLC based on the fair value of a unit of Dynatrace Holdings LLC on July 30, 2019, which was determined to be $16.00 per unit by a committee of the board of managers of Dynatrace Holdings LLC, and all of the outstanding units of Dynatrace Holdings LLC then converted into shares of Dynatrace, Inc. Additionally, 19,525,510 units of Dynatrace Holdings LLC were issued upon exchange of Dynatrace, LLC Management Incentive Units (“MIUs”) and Appreciation Units (“AUs”) for a total of 241,547,218 outstanding units in Dynatrace Holdings LLC immediately prior to the closing of the Company’s initial public offering (“IPO”). The reorganization was completed between entities that have been under common control since December 15, 2014. Therefore, these financial statements retroactively reflect DHC and Dynatrace, Inc. on a consolidated basis for the periods presented. The spin-offs of Compuware Corporation and SIGOS LLC from DHC have been accounted for retroactively as a change in reporting entity and accordingly, these financial statements exclude their accounts and results. |
Basis of presentation | The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in the accompanying financial statements. The income tax amounts in the accompanying consolidated financial statements have been calculated based on a separate return methodology and presented as if the Company’s operations were separate taxpayers in the respective jurisdictions. |
Foreign currency translation | Foreign Currency Translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of the Company’s principal foreign subsidiaries is the currency of the country in which each entity operates. Accordingly, assets and liabilities in the consolidated balance sheet have been translated at the rate of exchange at the balance sheet date, and revenues and expenses have been translated at average exchange rates prevailing during the period the transactions occurred. Translation adjustments have been excluded from the results of operations and are reported as accumulated other comprehensive loss within the consolidated statements of shareholders’ equity / member’s deficit. Transaction gains and losses generated by the effect of changes in foreign currency exchange rates on recorded assets and liabilities denominated in a currency different than the functional currency of the applicable entity are recorded in “ Other income (expense), net ” in the consolidated statements of operations. |
Use of estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Management periodically evaluates such estimates and assumptions for continued reasonableness. In particular, the Company makes estimates with respect to the stand-alone selling price for each distinct performance obligation in customer contracts with multiple performance obligations, the uncollectible accounts receivable, the fair value of tangible and intangible assets acquired, and liabilities assumed in a business combination, valuation of long-lived assets, equity-based compensation expense and income taxes, among other things. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. Actual results could differ from those estimates. The World Health Organization declared in March 2020 that the recent outbreak of the coronavirus disease named COVID-19 constitutes a pandemic. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on the Company’s customers and its sales cycles, which are uncertain and cannot be predicted. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, judgments or revise the carrying value of its assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. |
Segment information | Segment Information The Company operates as one operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. |
Business combinations | Business Combinations When the Company acquires a business, management allocates the purchase price to the net tangible and identifiable intangible assets acquired. Any residual purchase price is recorded as goodwill. The allocation of the purchase price requires management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets. These estimates can include but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted average cost of capital and the cost savings expected to be derived from acquiring an asset. |
Deferred offering costs | Deferred Offering Costs Deferred offering costs consist primarily of legal, accounting, printer, and other direct fees and costs related to the Company’s initial public offering. Prior to the IPO, all deferred offering costs were capitalized in “ Prepaid expenses and other current assets ” in the consolidated balance sheets. After the IPO, all deferred offering costs were reclassified into shareholders’ equity as a reduction of the IPO |
Revenue recognition | Revenue Recognition The Company elected to early adopt Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers, effective April 1, 2018, using the full retrospective transition method. Under this method, the Company is presenting the consolidated financial statements for the year ended March 31, 2018 as if ASC 606 had been effective for that period. The Company applied a practical expedient not to disclose the amount of the transaction price allocated to the remaining performance obligations for contracts with an original expected duration of one year or less. The Company sells software licenses, subscriptions, maintenance and support, and professional services together in contracts with its customers, which include end-customers and channel partners. The Company’s software license agreements provide customers with a right to use software perpetually or for a defined term. As required under applicable accounting principles, the goods and services that the Company promises to transfer to a customer are accounted for separately if they are distinct from one another. Promised items that are not distinct are bundled as a combined performance obligation. The transaction price is allocated to the performance obligations based on the relative estimated standalone selling prices of those performance obligations. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these goods or services. The Company determines revenue recognition through the following steps: 1. Identification of the contract, or contracts, with a customer The Company considers the terms and conditions of the contract in identifying the contracts. The Company determines a contract with a customer to exist when the contract is approved, each party’s rights regarding the services to be transferred can be identified, the payment terms for the services can be identified, it has been determined the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company will evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit, and financial information pertaining to the customer. 2. Identification of the performance obligations in the contract Performance obligations promised in a contract are identified based on the services and the products that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services and the products is separately identifiable from other promises in the contract. The Company’s performance obligations consist of (i) software licenses, (ii) subscription services, (ii) maintenance and support for software licenses, and (iv) professional services. 3. Determination of the transaction price The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s contracts do not contain a significant financing component. 4. Allocation of the transaction price to the performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”) for arrangements not including software licenses or subscription services. The Company has determined that its pricing for software licenses and subscription services is highly variable and therefore allocates the transaction price to those performance obligations using the residual approach. 5. Recognition of revenue when, or as a performance obligation is satisfied Revenue is recognized at the time the related performance obligation is satisfied by transferring the control of the promised service to a customer. Revenue is recognized when control of the service is transferred to the customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Subscription Subscription revenue relates to performance obligations for which the Company recognizes revenue over time as control of the product or service is transferred to the customer. Subscription revenue includes arrangements that permit customers to access and utilize the Company’s hosted software delivered on a software-as-a-service (“SaaS”) basis, term-based and perpetual licenses of the Company’s Dynatrace Software, as well as maintenance. The when-and-if available updates of the Dynatrace Software, which are part of the maintenance agreement, are critical to the continued utility of the Dynatrace Software; therefore, the Company has determined the Dynatrace Software and the related when-and-if available updates to be a combined performance obligation. Accordingly, when Dynatrace Software is sold under a term-based license, the revenue associated with this combined performance obligation is recognized ratably over the license term as maintenance is included for the duration of the license term. The Company has determined that perpetual licenses of Dynatrace Software provide customers with a material right to acquire additional goods or services that they would not receive without entering into the initial contract as the renewal option for maintenance services allows the customer to extend the utility of the Dynatrace Software without having to again make the initial payment of the perpetual software license fee. The associated material right is deferred and recognized ratably over the term of the expected optional maintenance renewals. Subscription revenue also includes maintenance services relating to the Company’s Classic offerings as that revenue is recognized over time given that our obligation is a stand-ready obligation to provide customer support and when-and-if available updates to the Classic software as well as certain other stand-ready obligations. License License revenue relates to performance obligations for which the Company recognizes revenue at the point that the license is transferred to the customer. License revenue includes these perpetual and term-based licenses that relate to the Company’s Classic offerings (“Classic Software Licenses”), which are focused on traditional customer approaches to building, operating and monitoring software in less dynamic environments. The Company requires customers purchasing perpetual licenses of Classic Software and Dynatrace Software, as defined below, to also purchase maintenance services covering at least one year from the beginning of the perpetual license. The Company has determined that the Classic Software Licenses and the related maintenance services are separate performance obligations with different patterns of recognition. Revenue from Classic Software Licenses is recognized upon delivery of the license. Revenue from maintenance is recognized over the period of time of the maintenance agreement and is included in “ Subscription ”. Service The Company offers implementation, consulting and training services for the Company’s software solutions and SaaS offerings. Services fees are generally based on hourly rates. Revenues from services are recognized in the period the services are performed, provided that collection of the related receivable is reasonably assured. Deferred commissions Deferred sales commissions earned by the Company’s sales force are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit which the Company has estimated to be three years . The period of benefit has been determined by taking into consideration the duration of customer contracts, the life of the technology, renewals of maintenance and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in “ Sales and marketing ” expenses on the consolidated statements of operations. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred commissions. There were no impairment losses recorded during the periods presented. Deferred revenue Deferred revenue consists primarily of billed subscription and maintenance fees related to the future service period of subscription and maintenance agreements in effect at the reporting date. Deferred licenses are also included in deferred revenue for those billed arrangements that are being recognized over time. Short-term deferred revenue represents the unearned revenue that will be earned within twelve months of the balance sheet date; whereas, long-term deferred revenue represents the unearned revenue that will be earned after twelve months from the balance sheet date. Payment terms Payment terms and conditions vary by contract type, although the Company’s terms generally include a requirement of payment within 30 to 60 days . In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing products and services, not to receive financing from customers or to provide customers with financing. Contract modification Contract modifications are assessed to determine (i) if the additional goods and services are distinct from the goods and services in the original arrangement and (ii) if the amount of the consideration expected for the added goods and services reflects the stand-alone selling price of those goods and services, as adjusted for contract-specific circumstances. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract, which the Company accounts for on a prospective basis as a termination for contract specific circumstances. The Company’s additional goods and services offered have historically been distinct. If such additional goods and services reflect their stand-alone selling price, the Company accounts for the modification as a separate contract. If such additional goods and services do not reflect their stand-alone selling price, the Company accounts for the modification prospectively as a termination of the existing contract and the creation of a new contract. Cost of Revenues Cost of subscription Cost of subscription revenue includes all direct costs to deliver the Company’s subscription products including salaries, benefits, share-based compensation and related expenses such as employer taxes, allocated overhead for facilities, IT, third-party hosting fees related to the Company’s cloud services, and amortization of internally developed capitalized software technology. The Company recognizes these expenses as they are incurred. Cost of service Cost of service revenue includes salaries, benefits, share-based compensation and related expenses such as employer taxes for our services organization, allocated overhead for depreciation of equipment, facilities and IT, and amortization of acquired intangible assets. The Company recognizes expense related to its services organization as they are incurred. |
Amortization of acquired technology | Amortization of Acquired Technology Amortization of acquired technology includes amortization expense for technology acquired in business combinations. |
Research and development | Research and Development Research and development (“R&D”) costs, which primarily include the cost of programming personnel, including share-based compensation, amounted to $58.3 million , $76.8 million , and $119.3 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively. R&D costs related to the Company’s software solutions are reported as “ Research and development ” in the consolidated statements of operations. |
Leases | Leases |
Restructuring expense | Restructuring Expense The Company defines restructuring expense as costs directly associated with exit or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs are probable and estimable. For one-time termination benefits (i.e., no substantive plan) and employee retention costs, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred. |
Concentration of credit risk | Concentration of Credit Risk |
Cash and cash equivalents | Cash and Cash Equivalents All highly-liquid investments with a maturity of three months or less when purchased are considered cash and cash equivalents. |
Accounts receivable and allowance for doubtful accounts | Accounts Receivable and Allowance for Doubtful Accounts |
Property, plant and equipment, net | Property and Equipment, net The Company states property and equipment, net, at the acquisition cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the useful lives of the assets or the related lease. The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term |
Goodwill and other intangible assets | Goodwill and Other Intangible Assets The Company’s goodwill and intangible assets primarily relate to the push-down of such assets relating to Thoma Bravo’s December 15, 2014 acquisition of Compuware Corporation based on their relative fair values at the date of acquisition. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. Goodwill is evaluated for impairment annually in the fourth quarter of the Company’s fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. Since the Company’s acquisition by Thoma Bravo through March 31, 2020 , the Company did not have any goodwill impairment. Intangible assets consist primarily of customer relationships, developed technology, trade names and trademarks, all of which have a finite useful life, as well as goodwill. Intangible assets are amortized based on either the pattern in which the economic benefits of the intangible assets are estimated to be realized or on a straight-line basis, which approximates the manner in which the economic benefits of the intangible asset will be consumed. |
Capitalized software | Capitalized Software The Company’s capitalized software includes the costs of internally developed software technology and software technology purchased through acquisition. Internally developed software technology consists of development costs associated with software products to be sold (“software products”) and internal use software associated with hosted software. Costs associated with the development of software technology are expensed prior to the establishment of technological feasibility and capitalized thereafter until the related software technology is available for general release to customers. Technological feasibility is established when management has authorized and committed to funding a project and it is probable that the project will be completed, and the software will be used to perform the function intended. For internal use software, capitalization begins during the application development stage. The Company capitalized $3.6 million , $1.9 million , and $0.9 million for internally developed software technology during the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is recorded within “ Other intangible assets, net ” in the consolidated balance sheets. The amortization of capitalized software technology is computed on a project-by-project basis. The annual amortization is the greater of the amount computed using (a) the ratio of current gross revenues compared with the total of current and anticipated future revenues for the software technology or (b) the straight-line method over the remaining estimated economic life of the software technology, including the period being reported on. Amortization begins when the software technology is available for general release to customers. The amortization period for capitalized software is generally three to five years . Amortization of internally developed capitalized software technology is $5.0 million , $6.8 million , and $1.7 million during the years ended March 31, 2018 , 2019 , and 2020 , respectively, and is recorded within “ Cost of subscription ” in the consolidated statements of operations. |
Impairment of long-lived assets | Impairment of Long-lived Assets Long-lived assets, including amortized intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is estimated by the Company using discounted cash flows and other market-related valuation models, including earnings multiples and comparable asset market values. If circumstances change or events occur to indicate that the Company’s fair market value has fallen below book value, the Company will compare the estimated fair value of long-lived assets (including goodwill) to its book value. If the book value exceeds the estimated fair value, the Company will recognize the difference as an impairment loss in the consolidated |
Income taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company has the ability to permanently reinvest any earnings in its foreign subsidiaries and therefore does not recognize any deferred tax liabilities that arise from outside basis differences in its investment in subsidiaries. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would reduce deferred tax assets. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. Interest and penalties related to uncertain income tax positions are included in the income tax provision. |
Fair value of assets and liabilities | Fair Value of Assets and Liabilities Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: • Level 1: Observable inputs that reflect quoted prices for identical assets or liabilities in active markets; • Level 2: Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The Company’s carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities approximate their fair values due to their short maturities. |
Share-based compensation | Share-based Compensation Prior to the IPO, certain employees were granted management incentive units and appreciation units which made a holder eligible to participate in distributions of cash, property, or securities of Compuware Parent LLC made in respect of the Company (whether by way of dividend, repurchase, recapitalization, or otherwise). In the event the employee was no longer employed by the Company, including due to a change in control, as defined, all the MIUs and AUs were subject to a repurchase arrangement, at the discretion of the Company, Compuware Parent LLC, or Thoma Bravo and certain Thoma Bravo affiliated funds that held equity in Compuware Parent LLC (collectively, “TB”). There were no distributions during the years ended March 31, 2018 , 2019 , and 2020 . The MIUs and AUs were settled in cash and were accounted for as liability-based awards. Liabilities for awards under these plans were required to be measured at fair value at each reporting date until the date of settlement. The fair value of the equity units underlying the MIUs and AUs was determined by the board of managers as there was no public market for the equity units. The board of managers determined the fair value of the Company’s equity units by considering a number of objective and subjective factors including: the valuation of comparable companies, the Company’s operating and financial performance, the lack of liquidity of common stock, and general and industry specific economic outlook, amongst other factors. The liability for these share-based awards was recorded in “ Accrued expenses, non-current ” on the consolidated balance sheets for the year ended March 31, 2019. In connection with the reorganization during the second quarter of fiscal 2020, the Company converted all outstanding MIUs and AUs into common stock, restricted stock, or restricted stock units (“RSUs”) of Dynatrace, Inc. After the IPO, the Company uses the publicly quoted price as reported on the New York Stock Exchange as the fair value of its common stock. The Company measures the cost of employee services received in exchange for an award of equity instruments, including stock options, restricted stock, RSUs, and the purchase rights under the employee stock purchase plan (the “ESPP”), based on the estimated grant-date fair value of the award. The fair value is recognized as an expense following the straight-line attribution method over the requisite service period of the entire award for stock options, restricted stock, and RSUs; and over the offering period for the purchase rights issued under the ESPP. The Company calculates the fair value of stock options and the purchase rights under the ESPP using the Black-Scholes option-pricing model. This requires the input of assumptions, including the fair value of the Company’s underlying common stock, the expected term of stock options and purchase rights, the expected volatility of the price of the Company’s common stock, risk-free interest rates, and the expected dividend yield of the Company’s common stock. The assumptions used in the Company’s option-pricing model represent its best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future. The resulting fair value, net of actual forfeitures, is recognized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award. Excess tax benefits of awards related to awards exercises are recognized as an income tax benefit in the income statement and reflected in operating activities in the statement of cash flows. Share-based compensation cost that has been included in income from continuing operations amounted to $22.3 million , $71.2 million , and $222.5 million for the years ended March 31, 2018 , 2019 , and 2020 . The total income tax benefit recognized in the consolidated statements of operations for share-based compensation arrangements was $0.7 million , $4.8 million , and zero for the years ended March 31, 2018 , 2019 , and 2020 , respectively. |
Net income (loss) per share | Net Income (Loss) Per Share Basic net income (loss) per share attributable to common shareholders is calculated by dividing the net income (loss) attributable to common shareholders for the period by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net income (loss) |
Reclassification | Reclassification Certain reclassifications of prior period amounts have been made in the Company’s consolidated balance sheets and notes to the consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on the reported results of operations. |
Recently adopted and recently issued accounting pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The amendments supersede current lease requirements in Topic 840 which require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. This new guidance is effective for public companies for annual reporting periods beginning after December 15, 2018, and interim periods within those periods, except for emerging growth companies who may elect to adopt the standard for annual reporting periods beginning after December 15, 2019. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements that allows entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to elect this new transition guidance upon adoption of the standard on April 1, 2020. The Company will use the package of practical expedients which allows Dynatrace to not (1) reassess whether any expired or existing contracts are considered or contain leases; (2) reassess the lease classification for any expired or existing leases; and (3) reassess the initial direct costs for any existing leases. The Company expects that this standard will have a material effect on its consolidated balance sheets. While the Company continues to assess all of the effects of adoption, the Company currently believes the most significant effects relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for the Company’s office space operating leases. The right-of-use assets and corresponding lease liabilities will be based on the present value of future minimum lease payments. The adoption is not expected to have a material impact on the consolidated statements of operations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. ASU 2016-13 is effective for annual periods, and interim periods within those years, beginning after December 15, 2019. The Company does not expect the standard to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract; Disclosures for Implementation Costs Incurred for Internal-Use Software and Cloud Computing Arrangements, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset. ASU 2018-15 is effective for annual periods, and interim periods within those years, beginning after December 15, 2020, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company is currently evaluating the effects the standard will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions for investments, intraperiod allocations and interim calculations, and adds guidance to reduce complexity in accounting for income taxes. ASU 2019-12 is effective for annual periods, and interim periods within those years, beginning after December 15, 2020. The Company is currently evaluating the effects the standard will have on its consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of the Company's Property and Equipment | The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2019 2020 Computer equipment and software $ 37,745 $ 19,550 Furniture and fixtures 6,701 7,679 Leasehold improvements 11,741 21,562 Other 1,260 3,111 Total property and equipment 57,447 51,902 Less: accumulated depreciation and amortization (39,522 ) (20,394 ) Property and equipment, net $ 17,925 $ 31,508 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table is a summary of the Company’s total revenues by geographic region (in thousands, except percentages): Fiscal Year Ended March 31, 2018 2019 2020 Amount % Amount % Amount % North America $ 232,521 58 % $ 248,012 57 % $ 318,299 58 % Europe, Middle East and Africa 111,295 28 % 125,615 29 % 150,418 28 % Asia Pacific 39,275 10 % 45,563 11 % 60,418 11 % Latin America 14,956 4 % 11,776 3 % 16,668 3 % Total revenue $ 398,047 $ 430,966 $ 545,803 |
Schedule of Capitalized Contract Cost | The following table represents a rollforward of the Company’s deferred commissions (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Beginning balance $ 25,219 $ 39,282 $ 59,250 Additions to deferred commissions 30,835 43,212 54,969 Amortization of deferred commissions (16,772 ) (23,244 ) (35,974 ) Ending Balance $ 39,282 $ 59,250 $ 78,245 Deferred commissions, current 18,763 27,705 38,509 Deferred commissions, non-current 20,519 31,545 39,736 Total deferred commissions $ 39,282 $ 59,250 $ 78,245 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): March 31, 2019 2020 Prepaid expenses $ 13,334 $ 13,189 Income taxes refundable 4,078 47,489 Other 1,356 510 Prepaid expenses and other current assets $ 18,768 $ 61,188 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment by Major Class | The following table presents the estimated useful lives of the Company’s property and equipment: Computer equipment and software 3 - 5 years Furniture and fixtures 5 - 10 years Leasehold improvements Shorter of the useful life of the asset or the lease term The following table summarizes, by major classification, the components of property and equipment (in thousands): March 31, 2019 2020 Computer equipment and software $ 37,745 $ 19,550 Furniture and fixtures 6,701 7,679 Leasehold improvements 11,741 21,562 Other 1,260 3,111 Total property and equipment 57,447 51,902 Less: accumulated depreciation and amortization (39,522 ) (20,394 ) Property and equipment, net $ 17,925 $ 31,508 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill on a consolidated basis for fiscal 2020 consist of the following (in thousands): March 31, 2020 Balance, beginning of year $ 1,270,120 Foreign currency impact 613 Balance, end of year $ 1,270,733 |
Schedule of Intangible Assets | Other intangible assets, net excluding goodwill consist of the following (in thousands): Weighted Average Useful Life (in months) March 31, 2019 2020 Capitalized software 107 $ 188,608 $ 189,554 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 595,166 596,112 Less: accumulated amortization (336,043 ) (394,520 ) Total other intangible assets, net $ 259,123 $ 201,592 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of March 31, 2020 , the estimated future amortization expense of the Company’s other intangible assets in the table above is as follows (in thousands): Fiscal Year Ended March 31, 2021 2022 2023 2024 2025 Capitalized software $ 17,195 $ 15,938 $ 15,584 $ 15,277 $ 10,621 Customer relationships 29,243 24,660 20,794 17,534 10,473 Trademarks and tradenames 5,501 5,501 5,501 4,753 3,017 Total amortization $ 51,939 $ 46,099 $ 41,879 $ 37,564 $ 24,111 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Loss before income taxes and the income tax (expense) benefit include the following (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Domestic $ (64,391 ) $ (163,385 ) $ (245,177 ) Foreign 12,616 23,474 26,644 Total $ (51,775 ) $ (139,911 ) $ (218,533 ) |
Schedule of Income Tax Provision/(Benefit) | The income tax provision includes the following (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Income tax (benefit) expense Federal $ (393 ) $ 3,213 $ 198,307 State 1,198 575 47,992 Foreign 11,638 5,920 12,468 Total current tax position 12,443 9,708 258,767 Federal (72,336 ) (29,021 ) (50,086 ) State (990 ) (5,464 ) (5,839 ) Foreign (114 ) 1,060 (3,351 ) Total deferred tax provision (73,440 ) (33,425 ) (59,276 ) Total income tax (benefit) expense $ (60,997 ) $ (23,717 ) $ 199,491 |
Schedule of Tax Rate Reconciliation | The tax rate reconciliation is as follows (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Income tax (benefit) at U.S. federal statutory income tax rate $ (16,309 ) $ (29,381 ) $ (45,892 ) State and local tax expense 208 (4,890 ) (3,100 ) Foreign tax rate differential 3,619 2,051 3,521 Branch income 384 1,824 1,601 Non-deductible expenses 8,645 11,807 35,874 Tax credits (6,173 ) (13,233 ) (35,354 ) Sharing of consolidated tax attributes (8,890 ) — — Foreign derived intangibles deduction — (1,790 ) (3,901 ) Tax associated with reorganization — — 251,819 Changes in tax law (50,033 ) — — Changes in valuation allowance 5,133 6,087 (9,682 ) Foreign withholding tax 2,701 3,086 4,231 Other adjustments (282 ) 722 374 Total income tax (benefit) expense $ (60,997 ) $ (23,717 ) $ 199,491 |
Schedule of Deferred Tax Assets and Liabilities | Temporary differences and carryforwards that give rise to a significant portion of deferred tax assets and liabilities are as follows (in thousands): March 31, 2019 2020 Deferred revenue $ 4,752 $ 27,681 Capitalized research and development costs — 11,140 Accrued expenses 5,983 6,625 Share-based compensation 4,776 16,660 Fixed assets 447 279 Net operating loss carryforwards 4,470 4,046 Other tax carryforwards, primarily foreign tax credits 32,630 14,603 Other 1,183 2,823 Total deferred tax assets before valuation allowance 54,241 83,857 Less: valuation allowance (31,678 ) (21,996 ) Net deferred tax assets 22,563 61,861 Intangible assets 51,531 40,270 Capitalized research and development costs 822 — State taxes 6,090 251 Other 1,040 880 Total deferred tax liabilities 59,483 41,401 Net deferred tax (liabilities) assets $ (36,920 ) $ 20,460 Long-term deferred tax assets 10,678 20,460 Long-term deferred tax liabilities (47,598 ) — Net deferred tax (liabilities) assets $ (36,920 ) $ 20,460 At March 31, 2019 and 2020 , the Company had net operating losses (tax-effected) and tax credit carryforwards for income tax purposes before valuation allowance of, $37.1 million and $18.6 million , respectively, that expire in the tax years as follows (in thousands): Fiscal Year Ended March 31, Expiration 2019 2020 Non-U.S. net operating losses $ 4,301 $ 3,726 Indefinite Non-U.S. net operating losses 169 159 2021 - 2026 U.S. federal and state tax carryforwards 2,657 161 Indefinite U.S. federal and state tax carryforwards, primarily foreign tax credits 29,973 14,603 2026 - 2027 Total carryforwards $ 37,100 $ 18,649 |
Schedule of Net Operating Loss Carryforwards | At March 31, 2019 and 2020 , the Company had net operating losses (tax-effected) and tax credit carryforwards for income tax purposes before valuation allowance of, $37.1 million and $18.6 million , respectively, that expire in the tax years as follows (in thousands): Fiscal Year Ended March 31, Expiration 2019 2020 Non-U.S. net operating losses $ 4,301 $ 3,726 Indefinite Non-U.S. net operating losses 169 159 2021 - 2026 U.S. federal and state tax carryforwards 2,657 161 Indefinite U.S. federal and state tax carryforwards, primarily foreign tax credits 29,973 14,603 2026 - 2027 Total carryforwards $ 37,100 $ 18,649 |
Schedule of Reconciliation of Unrecognized Tax Benefits | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended March 31, 2018 , 2019 , and 2020 (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Gross unrecognized tax benefit, beginning of year $ 8,770 $ 9,143 $ 9,653 Gross increases to tax positions for prior periods 257 20 438 Gross decreases to tax positions for prior periods (482 ) (70 ) (6,210 ) Gross increases to tax positions for current period 598 560 13,543 Gross unrecognized tax benefit, end of year $ 9,143 $ 9,653 $ 17,424 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses, current consisted of the following (in thousands): March 31, 2019 2020 Accrued employee - related expenses $ 35,192 $ 40,687 Accrued tax liabilities 6,274 13,350 Accrued restructuring 1,488 1,065 Accrued professional fees 3,440 2,103 Accrued installments for acquisition 4,832 — Income taxes payable 3,811 20,756 Other 9,883 15,767 Total accrued expenses, current $ 64,920 $ 93,728 Accrued expenses, non-current consisted of the following (in thousands): March 31, 2019 2020 Share-based compensation $ 92,047 $ — Income tax reserve 2,876 17,108 Other 3,436 3,879 Total accrued expenses, non-current $ 98,359 $ 20,987 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Outstanding Debt | The maturities of outstanding debt are as follows (in thousands): Fiscal year Amount 2021 $ — 2022 — 2023 — 2024 — 2025 — Thereafter 521,125 Total future payments $ 521,125 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of the Company's Restructuring Reserves and Related Activities | The Company’s consolidated restructuring reserves and related activity are summarized below. Employee Termination Benefits Lease Abandonment Costs Total Balance, March 31, 2018 $ 718 $ 1,235 $ 1,953 Expense 1,715 — 1,715 Utilization (1,557 ) (623 ) (2,180 ) Balance, March 31, 2019 876 612 1,488 Expense 905 — 905 Utilization (1,076 ) (252 ) (1,328 ) Balance, March 31, 2020 $ 705 $ 360 $ 1,065 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Payments Under Company's Operating Lease Commitments | The following table summarizes payments under the Company’s operating lease commitments as of March 31, 2020 (in thousands): Fiscal year Amount 2021 $ 14,210 2022 11,663 2023 11,235 2024 10,864 2025 8,020 Thereafter 16,331 Total future contractual payments $ 72,323 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of MIU and AU Activity | The following table shows the MIU activity for the year ended March 31, 2020 : Number of Units Weighted Average Participation Threshold Fair Value (in thousands) (per unit) (per unit) MIUs outstanding as of March 31, 2019 24,112 $ 0.36 $ 5.45 Units granted during the year 469 7.71 Units exchanged for AUs during the year (106 ) 1.99 Units forfeited/repurchased during the year (3,009 ) 0.06 Modification of MIU Plan awards (21,466 ) 0.56 MIUs outstanding as of March 31, 2020 — $ — $ — MIUs vested as of March 31, 2020 — The following table shows the AU activity for the year ended March 31, 2020 : Number of Units Weighted Average Participation Threshold Fair Value (in thousands) (per unit) (per unit) AUs outstanding as of March 31, 2019 819 $ 1.18 $ 5.45 Units converted from MIUs 106 1.99 Units granted during the year 53 7.71 Units forfeited/repurchased during the year (5 ) 1.63 Modification of MIU Plan awards (973 ) 1.62 AUs outstanding as of March 31, 2020 — $ — $ — AUs vested as of March 31, 2020 — |
Schedule of Fair Value Assumptions | The following key assumptions were used to determine the fair value of the MIUs and AUs for fiscal 2018 , 2019 , and 2020 : 2018 2019 2020 Expected dividend yield — — — Expected volatility 50 % 50% - 60% 35% - 55% Expected term (years) 2.5 1.0 - 1.5 0.5 - 1.25 Risk-free interest rate 2.34 % 2.33% - 2.40% 1.86% - 2.09% |
Schedule of Activity for Stock Options | The following table summarizes activity for stock options during the period ended March 31, 2020 : Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (per share) (years) (in thousands) Balance, March 31, 2019 — $ — Granted 7,322 16.26 Exercised — — Forfeited (175 ) 16.18 Balance, March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Options vested and expected to vest at March 31, 2020 7,147 $ 16.26 9.3 $ 54,423 Options vested and exercisable at March 31, 2020 — $ — 0.0 $ — |
Schedule of Fair value Assumptions for Stock Options | The fair value for the Company’s stock options granted during the year ended March 31, 2020 was estimated at the date of grant using a Black-Scholes option-pricing model using the following assumptions: March 31, 2020 Expected dividend yield — Expected volatility 37.1% - 38.9% Expected term (years) 6.1 Risk-free interest rate 0.8% - 1.9% The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: March 31, 2020 Expected dividend yield — Expected volatility 35.9 % Expected term (years) 0.5 Risk-free interest rate 1.6 % |
Schedule of Restricted Stock Activity | The following table provides a summary of the changes in the number of restricted shares for the year ended March 31, 2020 : Number of Shares of Restricted Stock Awards Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2019 — $ — — $ — Granted 2,855 16.00 3,715 16.33 Vested (784 ) 16.00 (503 ) 16.00 Forfeited (87 ) 16.00 (89 ) 16.42 Balance, March 31, 2020 1,984 $ 16.00 3,123 $ 16.39 |
Schedule of Share-based Compensation Expense | The following table summarizes the components of total share-based compensation expense included the consolidated financial statements for each period presented (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Cost of revenue $ 1,720 $ 5,777 $ 18,685 Research and development 3,858 12,566 38,670 Sales and marketing 7,536 24,673 84,698 General and administrative 9,180 28,135 80,425 Total share-based compensation expense $ 22,294 $ 71,151 $ 222,478 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data): Fiscal Year Ended March 31, 2018 2019 2020 Numerator: Net income (loss) $ 9,222 $ (116,194 ) $ (418,024 ) Denominator: Weighted average shares outstanding, basic and diluted 231,956 235,939 264,933 Net income (loss) per share, basic and diluted $ 0.04 $ (0.49 ) $ (1.58 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | A summary of these weighted-average anti-dilutive common share equivalents is provided in the table below (in thousands): Fiscal Year Ended March 31, 2018 2019 2020 Stock options — — 4,763 Unvested restricted stock and RSUs — — 3,819 Shares committed under ESPP — — 64 Unvested equity awards 10,038 6,399 — |
Geographic Information (Tables)
Geographic Information (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Property and Equipment by Geographical Region | The following tables present property and equipment by geographic region for the periods presented (in thousands): March 31, 2019 2020 North America $ 10,036 $ 11,296 Europe, Middle East and Africa 7,347 18,590 Asia Pacific 376 1,564 Latin America 166 58 Total property and equipment, net $ 17,925 $ 31,508 |
Significant Accounting Polici_4
Significant Accounting Policies - Basis of Presentation and Consolidation (Details) | Jul. 31, 2019subsidiary | Jul. 30, 2019$ / sharesshares | Mar. 31, 2020shares | Mar. 31, 2019shares |
Class of Stock [Line Items] | ||||
Number of wholly owned subsidiaries | subsidiary | 2 | |||
Share of equity interest (per unit) | $ / shares | $ 16 | |||
Common units, outstanding (in units) | 100 | 100 | ||
Dynatrace Holdings LLC | ||||
Class of Stock [Line Items] | ||||
Common units, issued (in shares) | 19,525,510 | |||
Common units, outstanding (in units) | 241,547,218 | |||
Compuware Parent, LLC, Equity Holders | Dynatrace Holdings LLC | ||||
Class of Stock [Line Items] | ||||
Common units, issued (in shares) | 222,021,708 |
Significant Accounting Polici_5
Significant Accounting Policies - Initial Public Offering and Follow-on Offering by Selling Stockholders (Details) $ / shares in Units, $ in Thousands | Feb. 25, 2020$ / sharesshares | Dec. 10, 2019$ / sharesshares | Aug. 01, 2019USD ($)$ / sharesshares | Jul. 31, 2019shares | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019shares |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | $ 590,297 | $ 0 | $ 0 | |||||
Payment of underwriting discounts, commissions and estimated offering related expense | $ 5,000 | $ 0 | $ 0 | |||||
IPO | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares sold and issued (in shares) | shares | 38,873,174 | |||||||
Sale of stock price per share (USD per share) | $ / shares | $ 16 | |||||||
Proceeds from initial public offering, net of underwriters' discounts and commissions | $ 622,000 | |||||||
Consideration received on sale of stock | 585,300 | |||||||
Payment of underwriting discounts, commissions and estimated offering related expense | $ 36,700 | |||||||
IPO, Sale of Stockholders | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Number of shares sold and issued (in shares) | shares | 25,000,000 | 31,625,000 | 2,100,000 | |||||
Sale of stock price per share (USD per share) | $ / shares | $ 34.50 | $ 24.75 | ||||||
Dynatrace Holdings LLC | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Common units, issued during the exchange (in shares) | shares | 241,547,218 | 241,547,218 | ||||||
Common Class A | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Conversion of stock, conversion ratio | 1 |
Significant Accounting Polici_6
Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Mar. 31, 2019segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Significant Accounting Polici_7
Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 31, 2019 |
Accounting Policies [Abstract] | ||
Deferred offering costs | $ 5 | $ 1.6 |
Significant Accounting Polici_8
Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Minimum period covered by maintenance service contracts from the beginning of the perpetual license | 1 year | ||
Estimated term to defer sales commissions | 3 years | ||
Impairment losses recorded on deferred commissions | $ 0 | $ 0 | $ 0 |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 30 days | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Payment terms | 60 days |
Significant Accounting Polici_9
Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | |||
Research and development | $ 119,281 | $ 76,759 | $ 58,320 |
Significant Accounting Polic_10
Significant Accounting Policies - Advertising (Details) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | |||
Advertising Expense | $ 5.7 | $ 2.1 | $ 1.8 |
Significant Accounting Polic_11
Significant Accounting Policies - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | |||
Rent expense for operating leases | $ 14 | $ 11.3 | $ 8.7 |
Sublease Income | $ 4.5 | $ 4.3 | $ 2.5 |
Significant Accounting Polic_12
Significant Accounting Policies - Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Mar. 31, 2019 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 3.1 | $ 3.4 |
Significant Accounting Polic_13
Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Impairment of property and equipment | $ 0 | $ 0 | $ 0 |
Computer equipment and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | P3Y | ||
Computer equipment and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | P5Y | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | P5Y | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | P10Y |
Significant Accounting Polic_14
Significant Accounting Policies - Capitalized Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Capitalized software, additions | $ 0.9 | $ 1.9 | $ 3.6 |
Capitalized software, amortization | $ 1.7 | $ 6.8 | $ 5 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period for capitalized software | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period for capitalized software | 5 years |
Significant Accounting Polic_15
Significant Accounting Policies - Impairment of Long-lived Assets (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Significant Accounting Polic_16
Significant Accounting Policies - Share-based Compensation (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total share-based compensation expense | $ 222,478,000 | $ 71,151,000 | $ 22,294,000 |
Income tax benefit recognized on shares-based compensation arrangements | $ 0 | $ 4,800,000 | $ 700,000 |
Management Incentive Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Distributions during the period (in shares) | 0 | 0 | 0 |
Appreciation Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Distributions during the period (in shares) | 0 | 0 | 0 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 545,803 | $ 430,966 | $ 398,047 |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 318,299 | 248,012 | 232,521 |
Europe, Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 150,418 | 125,615 | 111,295 |
Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 60,418 | 45,563 | 39,275 |
Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,668 | 11,776 | 14,956 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 299,500 | $ 233,300 | $ 216,600 |
Geographic Concentration Risk | Revenue Benchmark | North America | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 58.00% | 57.00% | 58.00% |
Geographic Concentration Risk | Revenue Benchmark | Europe, Middle East and Africa | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 28.00% | 29.00% | 28.00% |
Geographic Concentration Risk | Revenue Benchmark | Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 11.00% | 11.00% | 10.00% |
Geographic Concentration Risk | Revenue Benchmark | Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 3.00% | 3.00% | 4.00% |
Geographic Concentration Risk | Revenue Benchmark | United States | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk percentage | 55.00% | 54.00% | 54.00% |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Deferred Commissions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Capitalized Contract Cost [Roll Forward] | ||||||
Beginning balance | $ 59,250 | $ 39,282 | $ 25,219 | |||
Additions to deferred commissions | 54,969 | 43,212 | 30,835 | |||
Amortization of deferred commissions | (35,974) | (23,244) | (16,772) | |||
Ending Balance | 78,245 | 59,250 | 39,282 | |||
Deferred commissions, current | $ 38,509 | $ 27,705 | $ 18,763 | |||
Deferred commissions, non-current | 39,736 | 31,545 | 20,519 | |||
Total deferred commissions | $ 78,245 | $ 59,250 | $ 39,282 | $ 78,245 | $ 59,250 | $ 39,282 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized | $ 274.7 | $ 211.4 | $ 169.2 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Narrative) (Details) $ in Millions | Mar. 31, 2020USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 859.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 58.00% |
Remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 1.00% |
Remaining performance obligation, expected timing of satisfaction, period | |
Extended Recognition Period | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 99.00% |
Remaining performance obligation, expected timing of satisfaction, period | 3 years |
Billed consideration | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 444.8 |
Unbilled consideration | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Remaining performance obligation, amount | $ 414.9 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Business Acquisition [Line Items] | ||||
Cash consideration paid | $ 4,694,000 | $ 3,653,000 | $ 0 | |
Current accrued expenses | 0 | 4,832,000 | ||
Goodwill | 1,270,733,000 | 1,270,120,000 | ||
Qumram | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 20,800,000 | |||
Cash consideration paid | 11,300,000 | |||
Payment obligation | 8,500,000 | |||
Current accrued expenses | $ 0 | $ 4,800,000 | ||
Goodwill | 18,700,000 | |||
Acquisition transaction costs | $ 200,000 | |||
Qumram | Acquired Technology | ||||
Business Acquisition [Line Items] | ||||
Purchase price allocated to intangibles | $ 1,700,000 | |||
Estimated useful live of acquired intangibles | 6 years |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 13,189 | $ 13,334 |
Income taxes refundable | 47,489 | 4,078 |
Other | 510 | 1,356 |
Prepaid expenses and other current assets | $ 61,188 | $ 18,768 |
Property and Equipment, Net - T
Property and Equipment, Net - Table (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 51,902 | $ 57,447 |
Less: accumulated depreciation and amortization | (20,394) | (39,522) |
Property and equipment, net | 31,508 | 17,925 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 19,550 | 37,745 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 7,679 | 6,701 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 21,562 | 11,741 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 3,111 | $ 1,260 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $ 7.9 | $ 7.3 | $ 8.8 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of year | $ 1,270,120 |
Foreign currency impact | 613 |
Balance, end of year | $ 1,270,733 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 596,112 | $ 595,166 |
Less: accumulated amortization | (394,520) | (336,043) |
Total other intangible assets, net | $ 201,592 | 259,123 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 107 months | |
Total intangible assets | $ 189,554 | 188,608 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 120 months | |
Total intangible assets | $ 351,555 | 351,555 |
Trademarks and tradenames | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 120 months | |
Total intangible assets | $ 55,003 | $ 55,003 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of other intangibles | $ 58,457 | $ 72,792 | $ 73,455 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets, net - Schedule of Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2021 | $ 51,939 |
2022 | 46,099 |
2023 | 41,879 |
2024 | 37,564 |
2025 | 24,111 |
Capitalized software | |
Finite-Lived Intangible Assets [Line Items] | |
2021 | 17,195 |
2022 | 15,938 |
2023 | 15,584 |
2024 | 15,277 |
2025 | 10,621 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
2021 | 29,243 |
2022 | 24,660 |
2023 | 20,794 |
2024 | 17,534 |
2025 | 10,473 |
Trademarks and tradenames | |
Finite-Lived Intangible Assets [Line Items] | |
2021 | 5,501 |
2022 | 5,501 |
2023 | 5,501 |
2024 | 4,753 |
2025 | $ 3,017 |
Income Taxes - Income_(Loss) Be
Income Taxes - Income/(Loss) Before Income Tax Privision/(Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (245,177) | $ (163,385) | $ (64,391) |
Foreign | 26,644 | 23,474 | 12,616 |
Loss before income taxes | $ (218,533) | $ (139,911) | $ (51,775) |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 |
Income Tax Disclosure [Abstract] | ||||
Federal | $ 198,307 | $ 3,213 | $ (393) | |
State | 47,992 | 575 | 1,198 | |
Foreign | 12,468 | 5,920 | 11,638 | |
Total current tax position | 258,767 | 9,708 | 12,443 | |
Federal | (50,086) | (29,021) | (72,336) | |
State | (5,839) | (5,464) | (990) | |
Foreign | (3,351) | 1,060 | (114) | |
Total deferred tax provision | (59,276) | (33,425) | (73,440) | |
Total income tax expense (benefit) | $ 199,491 | $ (23,717) | $ (60,997) | |
Effective income tax rate | 35.00% | 21.00% | 21.00% | 31.50% |
Income tax benefit from revaluating U.S. net deferred tax liabilities | $ 50,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | Dec. 22, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (expense) | $ (199,491,000) | $ 23,717,000 | $ 60,997,000 | ||
Effective income tax rate | 35.00% | 21.00% | 21.00% | 31.50% | |
Income tax benefit from revaluating U.S. net deferred tax liabilities | $ 50,000,000 | ||||
Tax benefit recorded for the provisions of the Tax Cuts and Jobs Act | $ 3,900,000 | $ 1,800,000 | |||
Valuation allowance | 21,996,000 | 31,678,000 | |||
Net operating loss carryforwards | 18,649,000 | 37,100,000 | |||
Gross unrecognized tax benefits | 17,424,000 | 9,653,000 | 9,143,000 | $ 8,770,000 | |
Net interest and penalties payable associated with uncertain tax positions | 200,000 | 100,000 | |||
Interest and penalties recognized | $ 100,000 | $ 0 | $ 0 |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income tax (benefit) at U.S. federal statutory income tax rate | $ (45,892) | $ (29,381) | $ (16,309) |
State and local tax expense | (3,100) | (4,890) | 208 |
Foreign tax rate differential | 3,521 | 2,051 | 3,619 |
Branch income | (1,601) | (1,824) | (384) |
Non-deductible expenses | 35,874 | 11,807 | 8,645 |
Tax credits | (35,354) | (13,233) | (6,173) |
Sharing of consolidated tax attributes | 0 | 0 | (8,890) |
Foreign derived intangibles deduction | 3,901 | 1,790 | 0 |
Spin tax | 251,819 | 0 | 0 |
Changes in tax law | 0 | 0 | (50,033) |
Changes in valuation allowance | (9,682) | 6,087 | 5,133 |
Foreign withholding tax | 4,231 | 3,086 | 2,701 |
Other adjustments | 374 | 722 | (282) |
Total income tax expense (benefit) | $ 199,491 | $ (23,717) | $ (60,997) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred revenue | $ 27,681 | $ 4,752 |
Capitalized research and development costs | 11,140 | 0 |
Accrued expenses | 6,625 | 5,983 |
Share-based compensation | 16,660 | 4,776 |
Fixed assets | (279) | (447) |
Net operating loss carryforwards | 4,046 | 4,470 |
Other tax carryforwards, primarily foreign tax credits | 14,603 | 32,630 |
Other | 2,823 | 1,183 |
Total deferred tax assets before valuation allowance | 83,857 | 54,241 |
Less: valuation allowance | (21,996) | (31,678) |
Net deferred tax assets | 61,861 | 22,563 |
Intangible assets | 40,270 | 51,531 |
Capitalized research and development costs | 0 | 822 |
State taxes | 251 | 6,090 |
Other | 880 | 1,040 |
Total deferred tax liabilities | 41,401 | 59,483 |
Net deferred tax (liabilities) assets | (36,920) | |
Net deferred tax (liabilities) assets | 20,460 | |
Long-term deferred tax assets | 20,460 | 10,678 |
Long-term deferred tax liabilities | $ 0 | $ (47,598) |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Losses Carryforwards (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Operating Loss Carryforwards [Line Items] | ||
Total carryforwards | $ 18,649 | $ 37,100 |
Non-U.S. | ||
Operating Loss Carryforwards [Line Items] | ||
Indefinite net operating losses | 3,726 | 4,301 |
Net tax carryforwards | 159 | 169 |
U.S. federal and state | ||
Operating Loss Carryforwards [Line Items] | ||
Indefinite net operating losses | 161 | 2,657 |
Net tax carryforwards | $ 14,603 | $ 29,973 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Net operating loss carryforwards | $ 18,649 | $ 37,100 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefit, end of year | 9,653 | 9,143 | $ 8,770 |
Gross increases to tax positions for prior periods | 438 | 20 | 257 |
Gross decreases to tax positions for prior periods | (6,210) | (70) | (482) |
Gross increases to tax positions for current period | 13,543 | 560 | 598 |
Gross unrecognized tax benefit, beginning of year | $ 17,424 | $ 9,653 | $ 9,143 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Accrued Expenses, Current | ||
Accrued employee - related expenses | $ 40,687 | $ 35,192 |
Accrued tax liabilities | 13,350 | 6,274 |
Accrued restructuring | 1,065 | 1,488 |
Accrued professional fees | 2,103 | 3,440 |
Accrued installments for acquisition | 0 | 4,832 |
Income taxes payable | 20,756 | 3,811 |
Other | 15,767 | 9,883 |
Total accrued expenses, current | 93,728 | 64,920 |
Accrued Expenses, Non-Current | ||
Share-based compensation | 0 | 92,047 |
Income tax reserve | 17,108 | 2,876 |
Other | 3,879 | 3,436 |
Total accrued expenses, non-current | $ 20,987 | $ 98,359 |
Long-term Debt - Term Loans (De
Long-term Debt - Term Loans (Details) - USD ($) $ in Thousands | Aug. 23, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 06, 2020 |
Debt Instrument [Line Items] | ||||
Aggregate principal amount outstanding | $ 521,125 | |||
Secured Debt | First Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 950,000 | |||
Debt issuance costs and original issuance discount, gross | $ 900 | |||
Aggregate principal amount outstanding | $ 521,100 | $ 947,600 | ||
Interest rate | 3.20% | 5.70% | ||
Secured Debt | First Lien Term Loan | Alternative Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 1.25% | |||
Secured Debt | First Lien Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 2.25% | |||
Secured Debt | First And Second Lien Term Loans | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs and original issuance discount, gross | $ 16,400 | |||
Threshold of sale of property or assets that requires loan prepayments | $ 5,000 | |||
Threshold of proceeds received from insurance settlement or new debt agreements that require loan prepayments | 5,000 | |||
Debt issuance costs and original issuance discount | 10,600 | $ 14,300 | ||
Amortization of debt issuance costs and original issuance discount | $ 1,700 | 1,200 | ||
Secured Debt | Second Lien Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 170,000 | |||
Aggregate principal amount outstanding | $ 88,700 | |||
Interest rate | 9.50% | |||
Secured Debt | Second Lien Term Loan | Alternative Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 6.00% | |||
Secured Debt | Second Lien Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 7.00% | |||
Letter Of Credit Sublimit | Secured Debt | Revolving Facility | ||||
Debt Instrument [Line Items] | ||||
Increase in borrowing capacity | $ 10,000 |
Long-term Debt - Revolving Faci
Long-term Debt - Revolving Facility (Details) - USD ($) | Aug. 23, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Line of Credit Facility [Line Items] | |||
Aggregate principal amount outstanding | $ 521,125,000 | ||
Revolving Facility | Line of Credit | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 60,000,000 | ||
Commitment fee percentage | 0.25% | ||
Fronting fee percentage | 0.125% | ||
Line of credit, debt issuance costs incurred | $ 800,000 | ||
Amortization of debt issuance costs | 200,000 | $ 100,000 | |
Debt issuance costs, net | 500,000 | 700,000 | |
Covenant, maximum net leverage ratio | 750.00% | ||
Aggregate principal amount outstanding | 0 | ||
Available borrowing capacity | 44,700,000 | 59,500,000 | |
Revolving Facility | Line of Credit | Revolving Credit Facility | Alternative Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable interest rate | 1.25% | ||
Revolving Facility | Line of Credit | Revolving Credit Facility | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable interest rate | 2.25% | ||
Revolving Facility | Line of Credit | Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | ||
Letters of credit issued | $ 15,300,000 | $ 500,000 |
Long-term Debt Long-term Debt -
Long-term Debt Long-term Debt - Maturities of Outstanding Debt (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 521,125 |
Total future payments | $ 521,125 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | $ 905 | $ 1,715 | $ 4,600 |
Exit charges | 800 | ||
Restructuring reserve | 1,065 | 1,488 | 1,953 |
Employee Termination Benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring expenses | 905 | 1,715 | |
Restructuring reserve | $ 705 | $ 876 | $ 718 |
Restructuring Activities - Rest
Restructuring Activities - Restructuring Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | $ 1,488 | $ 1,953 | |
Expense | 905 | 1,715 | $ 4,600 |
Utilization | (1,328) | (2,180) | |
Restructuring Reserve, Ending Balance | 1,065 | 1,488 | 1,953 |
Employee Termination Benefits | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | 876 | 718 | |
Expense | 905 | 1,715 | |
Utilization | (1,076) | (1,557) | |
Restructuring Reserve, Ending Balance | 705 | 876 | 718 |
Lease Abandonment Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | 612 | 1,235 | |
Expense | 0 | 0 | |
Utilization | (252) | (623) | |
Restructuring Reserve, Ending Balance | $ 360 | $ 612 | $ 1,235 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Jul. 31, 2019USD ($) | Sep. 30, 2019business | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Loss Contingencies [Line Items] | |||||
Number of wholly owned businesses spun out from the corporate structure | business | 2 | ||||
Tax expense incurred upon reorganization transaction | $ 251.8 | ||||
Operating lease agreement, rent payment | $ 14 | $ 11.3 | $ 8.7 | ||
Compuware Corporation | |||||
Loss Contingencies [Line Items] | |||||
Payment for estimated tax liability | $ 265 |
Commitments and Contingencies_2
Commitments and Contingencies - Payments Under Operating Lease Commitments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 14,210 |
2022 | 11,663 |
2023 | 11,235 |
2024 | 10,864 |
2025 | 8,020 |
Thereafter | 16,331 |
Total future contractual payments | $ 72,323 |
Shareholder's Equity (Details)
Shareholder's Equity (Details) - $ / shares | Jul. 30, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Jul. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 |
Class of Stock [Line Items] | |||||||
Common shares, authorized (in shares) | 600,000,000 | 600,000,000 | |||||
Par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Common units, outstanding (in units) | 100 | 100 | |||||
Common shares, outstanding (in shares) | 280,853,040 | 280,853,040 | |||||
Dynatrace Holdings LLC | |||||||
Class of Stock [Line Items] | |||||||
Common units, outstanding (in units) | 241,547,218 | ||||||
Common units, issued during the exchange (in shares) | 241,547,218 | 241,547,218 | |||||
Common units, issued (in shares) | 19,525,510 | ||||||
Management Incentive Units and Appreciation Units | |||||||
Class of Stock [Line Items] | |||||||
Common units, issued (in shares) | 16,687,436 | ||||||
Common Shares | |||||||
Class of Stock [Line Items] | |||||||
Effect of reorganization (in shares) | 241,547,118 | ||||||
Common units, issued (in shares) | 38,873,000 | ||||||
Common shares, outstanding (in shares) | 280,853,000 | 0 | 0 | 0 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) | 12 Months Ended | |||
Mar. 31, 2020USD ($)award_typeparticipantperformance_target$ / sharesshares | Mar. 31, 2019USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Jul. 31, 2019shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of award types | award_type | 2 | |||
Effect of reorganization | $ | $ 278,248,000 | |||
Weighted average grant date fair value of units granted (in dollars per share) | $ / shares | $ 7.71 | $ 3.62 | $ 0.82 | |
Total fair value of units vested | $ | $ 278,200,000 | $ 92,000,000 | $ 22,600,000 | |
Share-based compensation expense | $ | $ 222,478,000 | 71,151,000 | $ 22,294,000 | |
Expected term (years) | 6 years 1 month 6 days | |||
Management Incentive Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units authorized for issuance (in units) | 24,100,000 | |||
Number of awards granted (in shares) | 469,000 | |||
Expected term (years) | 2 years 6 months | |||
Risk-free interest rate | 2.34% | |||
Fair value of units outstanding | $ | $ 0 | 5.45 | ||
Weighted average participation threshold, exchanged/converted (dollars per share) | $ / shares | $ 1.99 | |||
Weighted average participation threshold, granted (in dollars per share) | $ / shares | 7.71 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 0.06 | |||
Weighted average participation threshold, modification of MIU plan awards (in dollars per share) | $ / shares | $ 0.56 | |||
Number of units vested (in shares) | 0 | |||
Appreciation Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units authorized for issuance (in units) | 800,000 | |||
Number of awards granted (in shares) | 53,000 | |||
Fair value of units outstanding | $ | $ 0 | $ 5.45 | ||
Weighted average participation threshold, exchanged/converted (dollars per share) | $ / shares | $ 1.99 | |||
Weighted average participation threshold, granted (in dollars per share) | $ / shares | 7.71 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 1.63 | |||
Weighted average participation threshold, modification of MIU plan awards (in dollars per share) | $ / shares | $ 1.62 | |||
Number of units vested (in shares) | 0 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of performance targets | performance_target | 4 | |||
Vesting percentage | 25.00% | |||
Time-Vested Units | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Award vesting period | 1 year | |||
Requisite service period | 48 months | |||
Time-Vested Units | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 75.00% | |||
Award vesting period | 36 months | |||
Requisite service period | 3 years | |||
Management Incentive Units and Appreciation Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of participants impacted by the plan modification | participant | 306 | |||
Incremental stock compensation expense recognized from the plan modification | $ | $ 145,300,000 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation cost not yet recognized | $ | $ 38,800,000 | |||
Weighted average period of recognition | 3 years 4 months 24 days | |||
Share-based compensation expense | $ | $ 7,200,000 | |||
Unvested restricted stock and RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ | $ 27,900,000 | |||
Number of awards granted (in shares) | 6,569,783 | |||
Restricted Stock And Restricted Stock Units, Performance-Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of performance targets | 4 | |||
Vesting percentage | 25.00% | |||
Number of awards granted (in shares) | 696,873 | |||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of recognition | 1 year 10 months 24 days | |||
Number of awards granted (in shares) | 2,855,000 | |||
Total unrecognized compensation cost | $ | $ 22,900,000 | |||
Weighted average participation threshold, granted (in dollars per share) | $ / shares | $ 16 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | $ 16 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of recognition | 3 years | |||
Number of awards granted (in shares) | 3,715,000 | |||
Total unrecognized compensation cost | $ | $ 44,400,000 | |||
Weighted average participation threshold, granted (in dollars per share) | $ / shares | $ 16.33 | |||
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | $ 16.42 | |||
Shares committed under ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP offering period | 6 months | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 0.80% | |||
Minimum | Management Incentive Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 6 months | 1 year | ||
Risk-free interest rate | 1.86% | 2.33% | ||
Minimum | Appreciation Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 6 months | 1 year | 2 years 6 months | |
Risk-free interest rate | 1.86% | 2.33% | 2.34% | |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.90% | |||
Maximum | Management Incentive Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 1 year 3 months | 1 year 6 months | ||
Risk-free interest rate | 2.09% | 2.40% | ||
Maximum | Appreciation Unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 1 year 3 months | 1 year 6 months | ||
Risk-free interest rate | 2.09% | 2.40% | ||
2019 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost | $ | $ 400,000 | |||
Expected term (years) | 15 days | |||
Risk-free interest rate | 1.60% | |||
Award Period One | Restricted Stock And Restricted Stock Units, Time-Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 3,379,170 | |||
Award Period One | Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Award vesting period | 1 year | |||
Award Period One | Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 75.00% | |||
Award vesting period | 36 months | |||
Award Period Two | Restricted Stock And Restricted Stock Units, Time-Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 2,443,740 | |||
Award Period Two | Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Award vesting period | 1 year | |||
Award Period Two | Restricted Stock And Restricted Stock Units, Time-Based | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 75.00% | |||
Award vesting period | 3 years | |||
Award Period Three | Restricted Stock And Restricted Stock Units, Time-Based | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 50,000 | |||
Common Class A | Shares committed under ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP, maximum percentage of the common stock available for purchase | 85.00% | |||
Common Class A | 2019 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for future issuance (in shares) | 6,250,000 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Management Incentive Unit | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of awards, beginning balance (in shares) | 24,112 | |
Number of awards granted (in shares) | 469 | |
Number of units exchanged/converted (in shares) | 106 | |
Number of units forfeited/repurchased (in shares) | (3,009) | |
Number of units modification of MIU plan award (in shares) | (21,466) | |
Number of awards, ending balance (in shares) | 0 | 24,112 |
Number of units vested (in shares) | 0 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | ||
Weighted average grant date fair value, units outstanding (in dollars per share) | $ 0.36 | |
Weighted average participation threshold, granted (in dollars per share) | 7.71 | |
Weighted average participation threshold, exchanged/converted (dollars per share) | 1.99 | |
Weighted average participation threshold, forfeited/repurchased (in dollars per share) | 0.06 | |
Weighted average participation threshold, modification of MIU plan awards (in dollars per share) | 0.56 | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ 0 | $ 0.36 |
Fair value of units outstanding | $ 0 | $ 5.45 |
Appreciation Unit | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Number of awards, beginning balance (in shares) | 819 | |
Number of awards granted (in shares) | 53 | |
Number of units exchanged/converted (in shares) | (106) | |
Number of units forfeited/repurchased (in shares) | (5) | |
Number of units modification of MIU plan award (in shares) | (973) | |
Number of awards, ending balance (in shares) | 0 | 819 |
Number of units vested (in shares) | 0 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | ||
Weighted average grant date fair value, units outstanding (in dollars per share) | $ 1.18 | |
Weighted average participation threshold, granted (in dollars per share) | 7.71 | |
Weighted average participation threshold, exchanged/converted (dollars per share) | 1.99 | |
Weighted average participation threshold, forfeited/repurchased (in dollars per share) | 1.63 | |
Weighted average participation threshold, modification of MIU plan awards (in dollars per share) | 1.62 | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ 0 | $ 1.18 |
Fair value of units outstanding | $ 0 | $ 5.45 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of Fair Value Assumptions (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | ||
Expected term (years) | 6 years 1 month 6 days | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 37.10% | ||
Risk-free interest rate | 0.80% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 38.90% | ||
Risk-free interest rate | 1.90% | ||
2019 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | ||
Expected volatility | 35.90% | ||
Expected term (years) | 15 days | ||
Risk-free interest rate | 1.60% | ||
Management Incentive Unit | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | $ 0 | $ 0 |
Expected volatility | 50.00% | ||
Expected term (years) | 2 years 6 months | ||
Risk-free interest rate | 2.34% | ||
Management Incentive Unit | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 35.00% | 50.00% | |
Expected term (years) | 6 months | 1 year | |
Risk-free interest rate | 1.86% | 2.33% | |
Management Incentive Unit | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 55.00% | 60.00% | |
Expected term (years) | 1 year 3 months | 1 year 6 months | |
Risk-free interest rate | 2.09% | 2.40% | |
Appreciation Unit | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | ||
Expected volatility | 35.00% | 50.00% | 50.00% |
Expected term (years) | 6 months | 1 year | 2 years 6 months |
Risk-free interest rate | 1.86% | 2.33% | 2.34% |
Appreciation Unit | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | $ 0 | ||
Expected volatility | 55.00% | 60.00% | |
Expected term (years) | 1 year 3 months | 1 year 6 months | |
Risk-free interest rate | 2.09% | 2.40% |
Share-based Compensation - Opti
Share-based Compensation - Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 7,322 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | (175) |
Ending balance (in shares) | shares | 7,147 |
Options vested and expected to vest (in shares) | shares | 7,147 |
Options vested and exercisable (in shares) | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price, beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 16.26 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 16.18 |
Weighted average exercise price, end of period (in dollars per share) | $ / shares | 16.26 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | 16.26 |
Vested and exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 0 |
Weighted average remaining contractual term, options outstanding | 9 years 3 months 18 days |
Weighted average remaining contractual term, options vested and expected to vest | 9 years 3 months 18 days |
Weighted average remaining contractual term, options vested and exercisable | 0 years |
Aggregate intrinsic value, options outstanding | $ | $ 54,423 |
Aggregate intrinsic value, options vested and expected to vest | $ | 54,423 |
Aggregate intrinsic value, options vested and exercisable | $ | $ 0 |
Share-based Compensation - Rest
Share-based Compensation - Restricted Stock Activity (Details) shares in Thousands | 12 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of awards, beginning balance (in shares) | shares | 0 |
Number of awards granted (in shares) | shares | 2,855 |
Number of awards vested (in shares) | shares | (784) |
Number of awards forfeited (in shares) | shares | (87) |
Number of awards, ending balance (in shares) | shares | 1,984 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 0 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 16 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 16 |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 16 |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 16 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of awards, beginning balance (in shares) | shares | 0 |
Number of awards granted (in shares) | shares | 3,715 |
Number of awards vested (in shares) | shares | (503) |
Number of awards forfeited (in shares) | shares | (89) |
Number of awards, ending balance (in shares) | shares | 3,123 |
Share-Based Compensation Arrangement By Share-Based Payment Award, Non Options, Weighted Average Participation Threshold [Roll Forward] | |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 0 |
Weighted average grant date fair value, granted (in dollars per share) | $ / shares | 16.33 |
Weighted average grant date fair value, vested (in dollars per share) | $ / shares | 16 |
Weighted average grant date fair value, forfeited (in dollars per share) | $ / shares | 16.42 |
Weighted average grant date fair value, units outstanding (in dollars per share) | $ / shares | $ 16.39 |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 222,478 | $ 71,151 | $ 22,294 |
Cost of revenues | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 18,685 | 5,777 | 1,720 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 38,670 | 12,566 | 3,858 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | 84,698 | 24,673 | 7,536 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total share-based compensation expense | $ 80,425 | $ 28,135 | $ 9,180 |
Net Income (Loss) Per Share - N
Net Income (Loss) Per Share - Narrative (Details) - $ / shares | Aug. 01, 2019 | Jul. 30, 2019 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, conversion price (in USD per share) | $ 16 | |
IPO | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares sold and issued (in shares) | 38,873,174 | |
Sale of stock price per share (USD per share) | $ 16 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | |||
Net (loss) income | $ (418,024) | $ (116,194) | $ 9,222 |
Denominator: | |||
Weighted average shares outstanding, basic and diluted (in shares) | 264,933 | 235,939 | 231,956 |
Net income (loss) per share, basic and diluted (in dollars per share) | $ (1.58) | $ (0.49) | $ 0.04 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 4,763 | 0 | 0 |
Unvested restricted stock and RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 3,819 | 0 | 0 |
Shares committed under ESPP | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 64 | 0 | 0 |
Unvested equity awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive common share equivalents (in shares) | 0 | 6,399 | 10,038 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Cash payments to related parties | $ 0 | $ 1,177,021 | $ 74,616 |
Contribution for taxes associated with reorganization | 265,000 | ||
Affiliated Entity | Financial And Management Advisory Services | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | 1,600 | 4,900 | 4,900 |
Affiliated Entity | Debt Service And Shared Costs | |||
Related Party Transaction [Line Items] | |||
Cash payments to related parties | 1,177,000 | 74,600 | |
Affiliated Entity | Other Related Party Settlements | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | (14,300) | (35,200) | |
Additional Paid-In Capital | |||
Related Party Transaction [Line Items] | |||
Contribution for taxes associated with reorganization | $ 265,000 | ||
Additional Paid-In Capital | Affiliated Entity | Transfers To Related Parties | |||
Related Party Transaction [Line Items] | |||
Transfers to related parties | $ (800) | $ (3,900) |
Related Party Debt (Details)
Related Party Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Apr. 01, 2015 | |
Related Party Transaction [Line Items] | ||||
Related party debt outstanding | $ 0 | $ 597,150 | ||
Subordinated Debt | Subordinated Demand Promissory Notes | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument, face amount | $ 1,800,000 | |||
Related party debt outstanding | 478,500 | |||
Accrued interest | $ 118,700 | |||
Interest rate | 2.72% | |||
Interest expense | $ 4,100 | $ 27,400 | $ 35,200 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Employer discretionary contribution amount | $ 3.1 | $ 1.9 | $ 1.4 |
Geographic Information - Summar
Geographic Information - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 31,508 | $ 17,925 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 11,296 | 10,036 |
Europe, Middle East and Africa | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 18,590 | 7,347 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 1,564 | 376 |
Latin America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 58 | $ 166 |