Cover
Cover - shares | 3 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39010 | |
Entity Registrant Name | Dynatrace, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-2386428 | |
Entity Address, Address Line One | 1601 Trapelo Road, Suite 116 | |
Entity Address, Postal Zip Code | 02451 | |
Entity Address, City or Town | Waltham, | |
Entity Address, State or Province | MA | |
City Area Code | 781 | |
Local Phone Number | 530-1000 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | DT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 293,290,050 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001773383 | |
Current Fiscal Year End Date | --03-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 700,703 | $ 555,348 |
Accounts receivable, net | 238,275 | 442,518 |
Deferred commissions, current | 83,007 | 83,029 |
Prepaid expenses and other current assets | 52,443 | 37,289 |
Total current assets | 1,074,428 | 1,118,184 |
Property and equipment, net | 54,382 | 53,576 |
Operating lease right-of-use assets, net | 71,226 | 68,074 |
Goodwill | 1,282,134 | 1,281,812 |
Other intangible assets, net | 53,915 | 63,599 |
Deferred tax assets, net | 99,068 | 79,822 |
Deferred commissions, non-current | 78,053 | 86,232 |
Other assets | 14,106 | 14,048 |
Total assets | 2,727,312 | 2,765,347 |
Current liabilities: | ||
Accounts payable | 6,065 | 21,953 |
Accrued expenses, current | 156,146 | 188,380 |
Deferred revenue, current | 721,817 | 811,058 |
Operating lease liabilities, current | 15,925 | 15,652 |
Total current liabilities | 899,953 | 1,037,043 |
Deferred revenue, non-current | 28,710 | 34,423 |
Accrued expenses, non-current | 30,723 | 29,212 |
Operating lease liabilities, non-current | 62,692 | 59,520 |
Deferred tax liabilities | 302 | 280 |
Total liabilities | 1,022,380 | 1,160,478 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity: | ||
Common shares, $0.001 par value, 600,000,000 shares authorized, 293,159,681 and 290,411,108 shares issued and outstanding at June 30, 2023 and March 31, 2023, respectively | 293 | 290 |
Additional paid-in capital | 2,053,086 | 1,989,797 |
Accumulated deficit | (315,201) | (353,389) |
Accumulated other comprehensive loss | (33,246) | (31,829) |
Total shareholders' equity | 1,704,932 | 1,604,869 |
Total liabilities and shareholders' equity | $ 2,727,312 | $ 2,765,347 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
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) | 293,159,681 | 290,411,108 |
Common shares, outstanding (in shares) | 293,159,681 | 290,411,108 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue: | ||
Total revenue | $ 332,886 | $ 267,273 |
Cost of revenue: | ||
Amortization of acquired technology | 3,898 | 3,892 |
Total cost of revenue | 62,344 | 51,798 |
Gross profit | 270,542 | 215,475 |
Operating expenses: | ||
Research and development | 66,282 | 49,411 |
Sales and marketing | 125,117 | 105,673 |
General and administrative | 39,094 | 34,734 |
Amortization of other intangibles | 5,760 | 6,573 |
Restructuring and other | 1 | (10) |
Total operating expenses | 236,254 | 196,381 |
Income from operations | 34,288 | 19,094 |
Interest income (expense), net | 7,146 | (2,175) |
Other income (expense), net | 252 | (2,250) |
Income before income taxes | 41,686 | 14,669 |
Income tax expense | (3,498) | (12,555) |
Net income | $ 38,188 | $ 2,114 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.13 | $ 0.01 |
Diluted (in dollars per share) | $ 0.13 | $ 0.01 |
Weighted average shares outstanding: | ||
Basic (in shares) | 291,325 | 286,203 |
Diluted (in shares) | 296,387 | 290,024 |
Subscription | ||
Revenue: | ||
Total revenue | $ 316,454 | $ 249,558 |
Cost of revenue: | ||
Cost of revenues | 42,904 | 32,738 |
Service | ||
Revenue: | ||
Total revenue | 16,432 | 17,715 |
Cost of revenue: | ||
Cost of revenues | $ 15,542 | $ 15,168 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 38,188 | $ 2,114 |
Other comprehensive (loss) income | ||
Foreign currency translation adjustment | (1,417) | 480 |
Total other comprehensive (loss) income | (1,417) | 480 |
Comprehensive income | $ 36,771 | $ 2,594 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Mar. 31, 2022 | 286,053,000 | ||||
Beginning balance at Mar. 31, 2022 | $ 1,304,446 | $ 286 | $ 1,792,197 | $ (461,348) | $ (26,689) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation | 480 | 480 | |||
Restricted stock units vested (in shares) | 886,000 | ||||
Restricted stock units vested | $ 1 | (1) | |||
Restricted stock awards forfeited (in shares) | (14,000) | ||||
Issuance of common stock related to employee stock purchase plan (in shares) | 266,000 | ||||
Issuance of common stock related to employee stock purchase plan | 8,627 | 8,627 | |||
Exercise of stock options (in shares) | 68,000 | ||||
Exercise of stock options | 1,275 | 1,275 | |||
Share-based compensation | 28,695 | 28,695 | |||
Equity repurchases | (11) | (11) | |||
Net income | 2,114 | 2,114 | |||
Ending balance (in shares) at Jun. 30, 2022 | 287,259,000 | ||||
Ending balance at Jun. 30, 2022 | $ 1,345,626 | $ 287 | 1,830,782 | (459,234) | (26,209) |
Beginning balance (in shares) at Mar. 31, 2023 | 290,411,108 | 290,411,000 | |||
Beginning balance at Mar. 31, 2023 | $ 1,604,869 | $ 290 | 1,989,797 | (353,389) | (31,829) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Foreign currency translation | (1,417) | (1,417) | |||
Restricted stock units vested (in shares) | 1,821,000 | ||||
Restricted stock units vested | $ 2 | (2) | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 313,000 | ||||
Issuance of common stock related to employee stock purchase plan | $ 9,584 | 9,584 | |||
Exercise of stock options (in shares) | 615,000 | 615,000 | |||
Exercise of stock options | $ 13,190 | $ 1 | 13,189 | ||
Share-based compensation | 40,518 | 40,518 | |||
Net income | $ 38,188 | 38,188 | |||
Ending balance (in shares) at Jun. 30, 2023 | 293,159,681 | 293,160,000 | |||
Ending balance at Jun. 30, 2023 | $ 1,704,932 | $ 293 | $ 2,053,086 | $ (315,201) | $ (33,246) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 38,188 | $ 2,114 |
Adjustments to reconcile net income to cash provided by operations: | ||
Depreciation | 3,916 | 2,798 |
Amortization | 9,681 | 10,571 |
Share-based compensation | 40,518 | 28,695 |
Deferred income taxes | (19,327) | 0 |
Other | (154) | 2,748 |
Net change in operating assets and liabilities: | ||
Accounts receivable | 204,228 | 151,404 |
Deferred commissions | 8,545 | 2,079 |
Prepaid expenses and other assets | (16,426) | 33,096 |
Accounts payable and accrued expenses | (39,641) | (29,815) |
Operating leases, net | 277 | (142) |
Deferred revenue | (95,902) | (60,450) |
Net cash provided by operating activities | 133,903 | 143,098 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (10,267) | (6,906) |
Net cash used in investing activities | (10,267) | (6,906) |
Cash flows from financing activities: | ||
Repayment of term loans | 0 | (30,000) |
Proceeds from employee stock purchase plan | 9,584 | 8,627 |
Proceeds from exercise of stock options | 13,190 | 1,275 |
Equity repurchases | 0 | (11) |
Net cash provided by (used in) financing activities | 22,774 | (20,109) |
Effect of exchange rates on cash and cash equivalents | (1,055) | (7,705) |
Net increase in cash and cash equivalents | 145,355 | 108,378 |
Cash and cash equivalents, beginning of period | 555,348 | 462,967 |
Cash and cash equivalents, end of period | 700,703 | 571,345 |
Supplemental cash flow data: | ||
Cash paid for interest | 212 | 2,066 |
Cash paid for (received from) tax, net | $ 13,151 | $ (31,542) |
Description of the Business
Description of the Business | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Description of the Business Business Dynatrace, Inc. (“Dynatrace”, or the “Company”) designed its unified observability and security platform with analytics and automation at its core to address the growing complexity faced by technology and digital business teams as these enterprises further embrace the cloud to effect their digital transformation. Artificial intelligence and continuous automation deliver precise answers about the performance and security of applications, the underlying infrastructure, and the experience of its customers’ users that enable organizations to innovate faster, operate more efficiently, and improve user experiences for consistently better business outcomes. Fiscal year The Company’s fiscal year ends on March 31. References to fiscal 2024, for example, refer to the fiscal year ending March 31, 2024. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of presentation and consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. All intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. There were no new recently issued accounting pronouncements that were expected to have a material impact on the condensed consolidated financial statements and related notes. Unaudited interim consolidated financial information The accompanying interim condensed consolidated balance sheet as of June 30, 2023 and the interim condensed consolidated statements of operations, statements of comprehensive income, statements of shareholders’ equity, and statements of cash flows for the three months ended June 30, 2023 and 2022, and the related disclosures, are unaudited. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and includes all normal and recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2023, its results of operations for the three months ended June 30, 2023 and 2022, and its cash flows for the three months ended June 30, 2023 and 2022 in accordance with U.S. GAAP. The results for the three months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (the “Annual Report”). Reclassification During the fourth quarter of fiscal 2023, the Company refined its methodology used to allocate depreciation expense for certain property and equipment to better align the expense with the related use of property and equipment. This change in allocating depreciation expense has been applied retrospectively to April 1, 2022, and had no impact on the Company’s income from operations and net income. Prior period amounts have been reclassified to conform to the current period presentation. The following table presents the effect of the reclassification and the impact on the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2022 Previous Method Current Method Effect of Change Research and development $ 48,482 $ 49,411 $ 929 Sales and marketing 105,015 105,673 658 General and administrative 36,321 34,734 (1,587) Net income 2,114 2,114 — Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with U.S. 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 unaudited condensed 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 allowance for credit losses, the fair value of tangible and intangible assets acquired, the valuation of long-lived assets, the period of benefit for deferred commissions and material rights, income taxes, equity-based compensation expense, and the determination of the incremental borrowing rate used for operating lease liabilities, 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. Significant accounting policies The Company’s significant accounting policies are discussed in Note 2, Significant Accounting Policies, in the Company’s Annual Report. There have been no changes to the Company’s significant accounting policies described in the Company’s Annual Report that have had a material impact on its condensed consolidated financial statements and related notes. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of revenue The following table is a summary of the Company’s total revenue by geographic region (in thousands, except percentages): Three Months Ended June 30, 2023 2022 Amount % Amount % North America $ 198,537 60 % $ 156,749 59 % Europe, Middle East and Africa 83,149 25 % 70,148 26 % Asia Pacific 29,808 9 % 26,095 10 % Latin America 21,392 6 % 14,281 5 % Total revenue $ 332,886 $ 267,273 For the three months ended June 30, 2023 and 2022, the United States was the only country that represented more than 10% of the Company’s revenue in any period, constituting $188.0 million and 56% and $147.5 million and 55% of total revenue during the three months ended June 30, 2023 and 2022, respectively. Deferred revenue Revenue recognized during the three months ended June 30, 2023 and 2022, which was included in the deferred revenue balance at the beginning of each respective period, was $297.3 million and $258.5 million, respectively. Remaining performance obligations As of June 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,859.7 million, which consists of both billed consideration in the amount of $750.5 million and unbilled consideration in the amount of $1,109.2 million that the Company expects to recognize as subscription and service revenue. The Company expects to recognize 59% of the total remaining performance obligations as revenue over the next twelve months and the remainder thereafter. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Jun. 30, 2023 | |
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 for the three months ended June 30, 2023 consists of the following (in thousands): June 30, 2023 Balance, beginning of period $ 1,281,812 Foreign currency impact 322 Balance, end of period $ 1,282,134 Other intangible assets, net excluding goodwill consists of the following (in thousands): Weighted June 30, 2023 March 31, 2023 Capitalized software 107 $ 191,886 $ 191,863 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 598,444 598,421 Less: accumulated amortization (544,529) (534,822) Total other intangible assets, net $ 53,915 $ 63,599 Amortization of other intangible assets t otaled $9.7 million |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate to income from operations and adjusts the provision for discrete tax items occurring in the period. The Company’s effective tax rate for the three months ended June 30, 2023 was 8% compared to 86% for the three months ended June 30, 2022. The decrease in the effective tax rate for the three months ended June 30, 2023 was primarily due to an increase in share-based compensation windfall benefits as well as additional tax benefits, primarily related to the deferred tax asset resulting from capitalized research and development expenses under Section 174 of the Internal Revenue Code, recognized in the current year due to the reversal of the U.S. valuation allowance as of March 31, 2023. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt On December 2, 2022, the Company entered into a Credit Agreement for a senior secured revolving credit facility (the “Credit Facility”) in an aggregate amount of $400.0 million. The Credit Facility has sublimits for swing line loans up to $30.0 million and for the issuance of standby letters of credit in a face amount up to $45.0 million. The Credit Facility will mature on December 2, 2027. As of June 30, 2023 and March 31, 2023, there were no amounts outstanding under the Credit Facility. There were $12.1 million and $15.5 million letters of credit issued as of June 30, 2023 and March 31, 2023, respectively. The Company had $387.9 million and $384.5 million of availability under the Credit Facility as of June 30, 2023 and March 31, 2023, respectively. Borrowings under the Credit Facility are available in U.S. dollars, Euros, Pounds Sterling and Canadian Dollars, with a sublimit of $100.0 million for non-U.S. dollar-denominated borrowings. Borrowings under the Credit Agreement currently bear interest at (i) the Term Secured Overnight Financing Rate plus 0.10%, (ii) the Adjusted Euro Interbank Offer Rate, (iii) the Canadian Dollar Offered Rate, (iv) the Base Rate, as defined per the Credit Agreement, or (v) the Sterling Overnight Index Average, in each case plus an applicable margin as defined per the Credit Agreement. Interest payments are due quarterly, or more frequently, based on the terms of the Credit Agreement. The Company incurs fees with respect to the Credit Facility, including (i) a commitment fee ranging from 0.175% to 0.35% per annum, dependent on the Company’s leverage ratio, as defined per the Credit Agreement, of the unused commitment under the Credit Facility, (ii) a fronting fee of 0.125% per annum of the face amount of each letter of credit, (iii) a participation fee equal to the applicable margin, as defined per the Credit Agreement, applied to the daily average face amount of letters of credit, and (iv) customary administrative fees. Debt issuance costs of $1.9 million were incurred in connection with the Credit Facility. The debt issuance costs are included within “Other assets” in the condensed consolidated balance sheets and will be amortized into interest expense over the contractual term of the Credit Facility. There were $1.7 million and $1.8 million of unamortized debt issuance costs as of June 30, 2023 and March 31, 2023, respectively. Pursuant to the Credit Agreement, obligations owed under the Credit Facility are secured by a first priority security interest on substantially all assets of Dynatrace LLC, including a pledge of the capital stock and other equity interests of certain subsidiaries. Under certain circumstances, the guarantees may be released without action by, or consent of, the holder of the Credit Facility. The Credit Agreement contains customary affirmative and negative covenants, including financial covenants that require the Company to maintain specified financial ratios. At June 30, 2023, the Company was in compliance with all applicable covenants. First lien credit facilities The Company’s First Lien Credit Agreement, as amended, provided for a term loan facility (the “First Lien Term Loan”) in an aggregate principal amount of $950.0 million and a senior secured revolving credit facility (the “Revolving Facility”), in an aggregate amount of $60.0 million. The Revolving Facility included a $25.0 million letter of credit sub-facility. Borrowings under the First Lien Term Loan and Revolving Facility bore 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 maturity date on the First Lien Term Loan and Revolving Facility was August 23, 2025 and August 23, 2023, respectively, with payment due in full on the maturity date. Interest payments were due quarterly, or more frequently, based on the terms of the credit agreement. |
Leases
Leases | 3 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2024 to 2033. As of June 30, 2023, the weighted average remaining lease term was 6.1 years and the weighted average discount rate was 4.6%. The Company does not have any finance leases as of June 30, 2023. The Company has a sublease of a former office which expires in fiscal 2025. Sublease income from operating leases, which is recorded as a reduction of rental expense, was $0.6 million for each of the three months ended June 30, 2023 and 2022. The following table presents information about leases on the condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2023 2022 Operating lease expense (1) $ 3,769 $ 2,924 Short-term lease expense $ 435 $ 364 Variable lease expense $ 453 $ 269 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Three Months Ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 4,488 $ 3,844 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 7,254 $ 116 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. As of June 30, 2023, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2024 $ 14,057 2025 17,101 2026 14,031 2027 12,882 2028 8,592 Thereafter 22,294 Total operating lease payments (1) 88,957 Less: imputed interest (10,340) Total operating lease liabilities $ 78,617 _________________ (1) Presented gross of sublease income. As of June 30, 2023, the Company had commitments of $78.5 million fo r operating leases that have no t yet commenced and therefore are not included in the right-of-use assets or operating lease liabilities . These operating leases are expected to commence during the fiscal years ended March 31, 2024 through March 31, 2026 with lease terms ranging from 2 to 10 years. |
Leases | Leases The Company leases office space under non-cancelable operating leases which expire at various dates from fiscal 2024 to 2033. As of June 30, 2023, the weighted average remaining lease term was 6.1 years and the weighted average discount rate was 4.6%. The Company does not have any finance leases as of June 30, 2023. The Company has a sublease of a former office which expires in fiscal 2025. Sublease income from operating leases, which is recorded as a reduction of rental expense, was $0.6 million for each of the three months ended June 30, 2023 and 2022. The following table presents information about leases on the condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2023 2022 Operating lease expense (1) $ 3,769 $ 2,924 Short-term lease expense $ 435 $ 364 Variable lease expense $ 453 $ 269 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Three Months Ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 4,488 $ 3,844 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 7,254 $ 116 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. As of June 30, 2023, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2024 $ 14,057 2025 17,101 2026 14,031 2027 12,882 2028 8,592 Thereafter 22,294 Total operating lease payments (1) 88,957 Less: imputed interest (10,340) Total operating lease liabilities $ 78,617 _________________ (1) Presented gross of sublease income. As of June 30, 2023, the Company had commitments of $78.5 million fo r operating leases that have no t yet commenced and therefore are not included in the right-of-use assets or operating lease liabilities . These operating leases are expected to commence during the fiscal years ended March 31, 2024 through March 31, 2026 with lease terms ranging from 2 to 10 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesLegal mattersThe Company is, from time to time, party to legal proceedings and subject to claims in the ordinary course of business. Although the outcome of legal proceedings and claims cannot be predicted with certainty, the Company currently believes that the resolution of any such matters will not have a material adverse effect on its business, operating results, financial condition, or cash flows. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation Amended and Restated 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, as amended and restated (the “2019 Plan”) which was subsequently approved by the Company’s shareholders and was later amended and restated by the Board in January 2021. 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. As of June 30, 2023, 51,252,373 shares of common stock were available for future issuance under the 2019 Plan. Stock options The following table summarizes activity for stock options during the period ended June 30, 2023: 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, 2023 4,636 $ 22.25 6.5 $ 94,565 Exercised (615) 21.46 Forfeited or expired (20) 44.73 Balance, June 30, 2023 4,001 $ 22.26 6.3 $ 117,198 Options vested and expected to vest at June 30, 2023 4,001 $ 22.26 6.3 $ 117,198 Options vested and exercisable at June 30, 2023 3,243 $ 20.85 6.2 $ 99,499 As of June 30, 2023, the total unrecognized compensation expense related to non-vested stock options is $6.7 million and is expected to be recognized over a weighted average period of 0.7 years. The Company recognized $3.3 million and $5.2 million of share-based compensation expense related to stock options for the three months ended June 30, 2023 and 2022, respectively. Restricted shares and units The following table provides a summary of the changes in the number of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) for the period ended June 30, 2023: Number of Weighted Average Grant Date Fair Value Number of RSUs Weighted Average (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2023 4 $ 16.00 8,836 $ 41.76 Granted — — 4,371 52.23 Vested (4) 16.00 (1,821) 40.36 Forfeited — — (131) 43.00 Balance, June 30, 2023 — $ — 11,255 $ 46.05 RSUs outstanding as of June 30, 2023 were comprised of 10.2 million RSUs with only service conditions and 1.0 million RSUs with both service and performance conditions (“PSUs”). During the three months ended June 30, 2023, the Company granted PSUs to certain key employees that generally vest 33% one year after the grant date and the remaining 67% vest ratably on a quarterly basis over the following two years (the “Annual PSUs”). The number of shares that may be earned pursuant to the Annual PSUs is based on specific company metrics related to the Company’s fiscal year ending March 31, 2024. No Annual PSUs will be earned with respect to any metric if the applicable “threshold” percentage of the specific metric is not achieved, and the overall number of shares that may be earned shall not exceed 200% of the target award. Once the Annual PSUs are earned, they are then also subject to time-based vesting, with 33% of the earned Annual PSUs vesting on the first anniversary of the grant date, and with the remaining 67% vesting in eight equal quarterly installments over the following two years, and provided that the key employee remains employed by the Company through the applicable vesting date. As of June 30, 2023, the total unrecognized compensation expense related to unvested restricted stock units was $462.1 million and is expected to be recognized over a weighted average period of 2.4 years. The Company recognized $35.5 million and $22.0 million of share-based compensation expense related to restricted shares and units for the three months ended June 30, 2023 and 2022, respectively. Employee Stock Purchase Plan In July 2019, the Board adopted, and the Company’s shareholders approved, the 2019 Employee Stock Purchase Plan (“ESPP”). The Company offers, sells and issues 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 ESPP provides for six-month offering periods and each offering period consists of six-month purchase periods. On each purchase date, eligible employees 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. For the three months ended June 30, 2023, 313,127 shares of common stock were purchased under the ESPP. As of June 30, 2023, 16,085,682 shares of common stock were available for future issuance under the ESPP. As of June 30, 2023, there was approximately $3.0 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period. The Company recognized $1.7 million and $1.5 million of share-based compensation expense related to the ESPP for the three months ended June 30, 2023 and 2022, respectively. Share-based compensation The following table summarizes the components of total share-based compensation expense included in the condensed consolidated financial statements for each period presented (in thousands): Three Months Ended June 30, 2023 2022 Cost of revenue $ 5,488 $ 3,890 Research and development 13,264 7,285 Sales and marketing 13,999 10,076 General and administrative 7,767 7,444 Total share-based compensation $ 40,518 $ 28,695 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is calculated by dividing the net income for the period by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net income per share includes the dilutive effect of common share equivalents and is calculated using the weighted-average number of common shares and the common share equivalents outstanding during the reporting period. An anti-dilutive impact is an increase in net income per share or a reduction in net loss per share resulting from the conversion, exercise, or contingent issuance of certain securities. The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three Months Ended June 30, 2023 2022 Numerator: Net income $ 38,188 $ 2,114 Denominator: Weighted average shares outstanding, basic 291,325 286,203 Dilutive effect of stock-based awards 5,062 3,821 Weighted average shares outstanding, diluted 296,387 290,024 Net income per share, basic $ 0.13 $ 0.01 Net income per share, diluted $ 0.13 $ 0.01 The effect of certain common share equivalents were excluded from the computation of weighted-average diluted shares outstanding for the three months ended June 30, 2023 and 2022 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): Three Months Ended June 30, 2023 2022 Stock options 220 889 Unvested RSAs and RSUs 1,507 2,274 Shares committed under ESPP 13 10 |
Geographic Information
Geographic Information | 3 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information Revenue Revenues by geography are based on legal jurisdiction. See Note 3, Revenue Recognition, for a disaggregation of revenue by geographic region. Property and equipment, net The following table presents property and equipment by geographic region for the periods presented (in thousands): June 30, 2023 March 31, 2023 North America $ 22,652 $ 22,124 Europe, Middle East and Africa 29,620 29,142 Asia Pacific 1,968 2,194 Latin America 142 116 Total property and equipment, net $ 54,382 $ 53,576 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn July 30, 2023, the Company entered into a definitive agreement to acquire a 100% equity interest in Rookout, Ltd. (“Rookout”) for $33.9 million of preliminary consideration, subject to customary post-closing adjustments. The Company intends to acquire Rookout utilizing cash on hand. Rookout is a provider of enterprise-ready and privacy-aware solutions that enable developers to quickly troubleshoot and debug actively running code in Kubernetes-hosted cloud-native applications. The acquisition is expected to close during the second quarter of fiscal year 2024. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||
Net income | $ 38,188 | $ 2,114 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Fiscal year | Fiscal year The Company’s fiscal year ends on March 31. References to fiscal 2024, for example, refer to the fiscal year ending March 31, 2024. |
Basis of presentation and consolidation | Basis of presentation and consolidation The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. All intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. |
Unaudited interim consolidated financial information | Unaudited interim consolidated financial information The accompanying interim condensed consolidated balance sheet as of June 30, 2023 and the interim condensed consolidated statements of operations, statements of comprehensive income, statements of shareholders’ equity, and statements of cash flows for the three months ended June 30, 2023 and 2022, and the related disclosures, are unaudited. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and includes all normal and recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2023, its results of operations for the three months ended June 30, 2023 and 2022, and its cash flows for the three months ended June 30, 2023 and 2022 in accordance with U.S. GAAP. The results for the three months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (the “Annual Report”). |
Use of estimates | Use of estimates The preparation of unaudited condensed consolidated financial statements in accordance with U.S. 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 unaudited condensed 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 allowance for credit losses, the fair value of tangible and intangible assets acquired, the valuation of long-lived assets, the period of benefit for deferred commissions and material rights, income taxes, equity-based compensation expense, and the determination of the incremental borrowing rate used for operating lease liabilities, 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. |
Reclassification | Reclassification During the fourth quarter of fiscal 2023, the Company refined its methodology used to allocate depreciation expense for certain property and equipment to better align the expense with the related use of property and equipment. This change in allocating depreciation expense has been applied retrospectively to April 1, 2022, and had no impact on the Company’s income from operations and net income. Prior period amounts have been reclassified to conform to the current period presentation. The following table presents the effect of the reclassification and the impact on the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2022 Previous Method Current Method Effect of Change Research and development $ 48,482 $ 49,411 $ 929 Sales and marketing 105,015 105,673 658 General and administrative 36,321 34,734 (1,587) Net income 2,114 2,114 — |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table presents the effect of the reclassification and the impact on the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2022 Previous Method Current Method Effect of Change Research and development $ 48,482 $ 49,411 $ 929 Sales and marketing 105,015 105,673 658 General and administrative 36,321 34,734 (1,587) Net income 2,114 2,114 — |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table is a summary of the Company’s total revenue by geographic region (in thousands, except percentages): Three Months Ended June 30, 2023 2022 Amount % Amount % North America $ 198,537 60 % $ 156,749 59 % Europe, Middle East and Africa 83,149 25 % 70,148 26 % Asia Pacific 29,808 9 % 26,095 10 % Latin America 21,392 6 % 14,281 5 % Total revenue $ 332,886 $ 267,273 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the three months ended June 30, 2023 consists of the following (in thousands): June 30, 2023 Balance, beginning of period $ 1,281,812 Foreign currency impact 322 Balance, end of period $ 1,282,134 |
Schedule of Intangible Assets | Other intangible assets, net excluding goodwill consists of the following (in thousands): Weighted June 30, 2023 March 31, 2023 Capitalized software 107 $ 191,886 $ 191,863 Customer relationships 120 351,555 351,555 Trademarks and tradenames 120 55,003 55,003 Total intangible assets 598,444 598,421 Less: accumulated amortization (544,529) (534,822) Total other intangible assets, net $ 53,915 $ 63,599 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expense and Supplemental Cash Flow Information | The following table presents information about leases on the condensed consolidated statements of operations (in thousands): Three Months Ended June 30, 2023 2022 Operating lease expense (1) $ 3,769 $ 2,924 Short-term lease expense $ 435 $ 364 Variable lease expense $ 453 $ 269 _________________ (1) Presented gross of sublease income. The following table presents supplemental cash flow information about the Company’s leases (in thousands): Three Months Ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities $ 4,488 $ 3,844 Operating lease assets obtained in exchange for new operating lease liabilities (1) $ 7,254 $ 116 _________________ (1) Includes the impact of new leases as well as remeasurements and modifications of existing leases. |
Schedule of Maturities of Lease Liabilities | As of June 30, 2023, remaining maturities of lease liabilities were as follows (in thousands): Fiscal Years Ending March 31, Amount 2024 $ 14,057 2025 17,101 2026 14,031 2027 12,882 2028 8,592 Thereafter 22,294 Total operating lease payments (1) 88,957 Less: imputed interest (10,340) Total operating lease liabilities $ 78,617 _________________ (1) Presented gross of sublease income. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity for Stock Options | The following table summarizes activity for stock options during the period ended June 30, 2023: 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, 2023 4,636 $ 22.25 6.5 $ 94,565 Exercised (615) 21.46 Forfeited or expired (20) 44.73 Balance, June 30, 2023 4,001 $ 22.26 6.3 $ 117,198 Options vested and expected to vest at June 30, 2023 4,001 $ 22.26 6.3 $ 117,198 Options vested and exercisable at June 30, 2023 3,243 $ 20.85 6.2 $ 99,499 |
Summary of Activity for Restricted Shares | The following table provides a summary of the changes in the number of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) for the period ended June 30, 2023: Number of Weighted Average Grant Date Fair Value Number of RSUs Weighted Average (in thousands) (per share) (in thousands) (per share) Balance, March 31, 2023 4 $ 16.00 8,836 $ 41.76 Granted — — 4,371 52.23 Vested (4) 16.00 (1,821) 40.36 Forfeited — — (131) 43.00 Balance, June 30, 2023 — $ — 11,255 $ 46.05 |
Schedule of Share-based Compensation Expense | The following table summarizes the components of total share-based compensation expense included in the condensed consolidated financial statements for each period presented (in thousands): Three Months Ended June 30, 2023 2022 Cost of revenue $ 5,488 $ 3,890 Research and development 13,264 7,285 Sales and marketing 13,999 10,076 General and administrative 7,767 7,444 Total share-based compensation $ 40,518 $ 28,695 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data): Three Months Ended June 30, 2023 2022 Numerator: Net income $ 38,188 $ 2,114 Denominator: Weighted average shares outstanding, basic 291,325 286,203 Dilutive effect of stock-based awards 5,062 3,821 Weighted average shares outstanding, diluted 296,387 290,024 Net income per share, basic $ 0.13 $ 0.01 Net income per share, diluted $ 0.13 $ 0.01 |
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): Three Months Ended June 30, 2023 2022 Stock options 220 889 Unvested RSAs and RSUs 1,507 2,274 Shares committed under ESPP 13 10 |
Geographic Information (Tables)
Geographic Information (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Summary of Property and Equipment by Geographical Region | The following table presents property and equipment by geographic region for the periods presented (in thousands): June 30, 2023 March 31, 2023 North America $ 22,652 $ 22,124 Europe, Middle East and Africa 29,620 29,142 Asia Pacific 1,968 2,194 Latin America 142 116 Total property and equipment, net $ 54,382 $ 53,576 |
Significant Accounting Polici_4
Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Reclassification [Line Items] | ||
Research and development | $ 66,282 | $ 49,411 |
Sales and marketing | 125,117 | 105,673 |
General and administrative | 39,094 | 34,734 |
Net income | $ 38,188 | 2,114 |
Previous Method | ||
Reclassification [Line Items] | ||
Research and development | 48,482 | |
Sales and marketing | 105,015 | |
General and administrative | 36,321 | |
Net income | 2,114 | |
Effect of Change | ||
Reclassification [Line Items] | ||
Research and development | 929 | |
Sales and marketing | 658 | |
General and administrative | (1,587) | |
Net income | $ 0 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Amount | $ 332,886 | $ 267,273 |
North America | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 198,537 | $ 156,749 |
North America | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 60% | 59% |
Europe, Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 83,149 | $ 70,148 |
Europe, Middle East and Africa | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 25% | 26% |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 29,808 | $ 26,095 |
Asia Pacific | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 9% | 10% |
Latin America | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 21,392 | $ 14,281 |
Latin America | Revenue Benchmark | Geographic Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 6% | 5% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue and Deferred Revenue (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 332,886 | $ 267,273 |
Revenue recognized | 297,300 | 258,500 |
Revenue Benchmark | Geographic Concentration Risk | UNITED STATES | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 188,000 | $ 147,500 |
Concentration risk percentage | 56% | 55% |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligations (Narrative) (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1,859.7 |
Billed consideration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | 750.5 |
Unbilled consideration | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1,109.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 59% |
Remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 43% |
Remaining performance obligation, expected timing of satisfaction, period |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 1,281,812 |
Foreign currency impact | 322 |
Balance, end of period | $ 1,282,134 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 598,444 | $ 598,421 |
Less: accumulated amortization | (544,529) | (534,822) |
Total other intangible assets, net | $ 53,915 | 63,599 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in months) | 107 years | |
Total intangible assets | $ 191,886 | 191,863 |
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 | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of other intangibles | $ 9,681 | $ 10,571 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 8% | 86% |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - USD ($) | 3 Months Ended | |||
Dec. 02, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
First Lien Term Loan | Secured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, face amount | $ 950,000,000 | |||
Loss on extinguishment of debt | $ 5,900,000 | |||
First Lien Term Loan | Secured Debt | Alternative Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable interest rate | 1.25% | |||
First Lien Term Loan | Secured Debt | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable interest rate | 2.25% | |||
Revolving Credit Facility | Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 400,000,000 | |||
Long-term line of credit | $ 0 | $ 0 | ||
Available borrowing capacity | 387,900,000 | 384,500,000 | ||
Fronting fee (in percent) | 0.125% | |||
Debt issuance costs, gross | 1,900,000 | |||
Debt issuance costs | 1,700,000 | 1,800,000 | ||
Revolving Credit Facility | Credit Agreement | Line of Credit | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee (in percent) | 0.175% | |||
Revolving Credit Facility | Credit Agreement | Line of Credit | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee (in percent) | 0.35% | |||
Revolving Credit Facility | Credit Agreement | Line of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable interest rate | 0.10% | |||
Revolving Credit Facility | Revolving Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 60,000,000 | |||
Bridge Loan | Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 | |||
Letter of Credit | Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, face amount | 45,000,000 | |||
Letter of Credit | Revolving Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 25,000,000 | |||
Letters of credit issued | $ 12,100,000 | $ 15,500,000 | ||
Foreign Line of Credit | Credit Agreement | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term | 6 years 1 month 6 days | |
Weighted average discount rate | 4.60% | |
Sublease Income | $ 0.6 | $ 0.6 |
Operating lease that has not yet commenced | $ 78.5 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease that has not yet commenced, term | 2 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease that has not yet commenced, term | 10 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 3,769 | $ 2,924 |
Short-term lease expense | 435 | 364 |
Variable lease expense | $ 453 | $ 269 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 4,488 | $ 3,844 |
Operating lease assets obtained in exchange for new operating lease liabilities | $ 7,254 | $ 116 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 14,057 |
2025 | 17,101 |
2026 | 14,031 |
2027 | 12,882 |
2028 | 8,592 |
Thereafter | 22,294 |
Total operating lease payments | 88,957 |
Less: imputed interest | (10,340) |
Total operating lease liabilities | $ 78,617 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2019 shares | Jun. 30, 2023 USD ($) installment shares | Jun. 30, 2022 USD ($) | Mar. 31, 2023 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost | $ | $ 6,700 | |||
Stock compensation expense | $ | $ 40,518 | $ 28,695 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of recognition | 8 months 12 days | |||
Stock compensation expense | $ | $ 3,300 | 5,200 | ||
Unvested RSAs and RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ | $ 35,500 | 22,000 | ||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding shares (in shares) | 0 | 4,000 | ||
Number of units granted (in shares) | 0 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period of recognition | 2 years 4 months 24 days | |||
Outstanding shares (in shares) | 11,255,000 | 8,836,000 | ||
Number of units granted (in shares) | 4,371,000 | |||
Total unrecognized compensation cost | $ | $ 462,100 | |||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding shares (in shares) | 10,200,000 | |||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of units granted (in shares) | 1,000,000 | |||
Performance-Based Restricted Stock Units, Annual PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum percentage of shares issued based on performance target award | 2 | |||
Performance-Based Restricted Stock Units, Annual PSUs | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33% | |||
Award vesting period | 1 year | |||
Performance-Based Restricted Stock Units, Annual PSUs | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 67% | |||
Award vesting period | 2 years | |||
Number of equal installments | installment | 8 | |||
Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP offering period | 6 months | |||
ESPP purchase period | 6 months | |||
Employee Stock | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
ESPP, maximum percentage of the common stock available for purchase | 85% | |||
Performance-Based Restricted Stock Units, Incentive PSUs | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.30% | |||
Performance-Based Restricted Stock Units, Incentive PSUs | Share-based Payment Arrangement, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.30% | |||
Performance-Based Restricted Stock Units, Incentive PSUs | Share-based Payment Arrangement, Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.30% | |||
Equity Incentive Plan 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units authorized for issuance (in shares) | 52,000,000 | 51,252,373 | ||
Annual increase in shares reserved for future issuance based off of shares outstanding | 4% | |||
2019 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock compensation expense | $ | $ 1,700 | $ 1,500 | ||
Total unrecognized compensation cost | $ | $ 3,000 | |||
2019 Employee Stock Purchase Plan | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units authorized for issuance (in shares) | 16,085,682 | |||
Issuance of common stock related to employee stock purchase plan (in shares) | 313,127 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Mar. 31, 2023 | |
Number of Options | ||
Beginning balance (in shares) | 4,636 | |
Exercised (in shares) | (615) | |
Forfeited or expired (in shares) | (20) | |
Ending balance (in shares) | 4,001 | 4,636 |
Options vested and expected to vest (in shares) | 4,001 | |
Options vested and exercisable (in shares) | 3,243 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 22.25 | |
Exercised (in dollars per share) | 21.46 | |
Forfeited or expired (in dollars per share) | 44.73 | |
Ending valance (in dollars per share) | 22.26 | $ 22.25 |
Weighted average exercise price, options vested and expected to vest (in dollars per share) | 22.26 | |
Weighted average exercise price, options vested and exercisable (in dollars per share) | $ 20.85 | |
Weighted average remaining contractual term | 6 years 3 months 18 days | 6 years 6 months |
Weighted average remaining contractual term, options vested and expected to vest | 6 years 3 months 18 days | |
Weighted average remaining contractual term, options vested and exercisable | 6 years 2 months 12 days | |
Aggregate intrinsic value | $ 117,198 | $ 94,565 |
Aggregate intrinsic value, options vested and expected to vest | 117,198 | |
Aggregate intrinsic value, options vested and exercisable | $ 99,499 | |
Restricted Stock | ||
Number of Restricted Shares | ||
Beginning balance (in shares) | 4 | |
Granted (in shares) | 0 | |
Vested (in shares) | (4) | |
Forfeited or expired (in shares) | 0 | |
Ending balance (in shares) | 0 | 4 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 16 | |
Granted (in dollars per share) | 0 | |
Vested (in dollars per share) | 16 | |
Forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 0 | $ 16 |
Restricted Stock Units (RSUs) | ||
Number of Restricted Shares | ||
Beginning balance (in shares) | 8,836 | |
Granted (in shares) | 4,371 | |
Vested (in shares) | (1,821) | |
Forfeited or expired (in shares) | (131) | |
Ending balance (in shares) | 11,255 | 8,836 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 41.76 | |
Granted (in dollars per share) | 52.23 | |
Vested (in dollars per share) | 40.36 | |
Forfeited (in dollars per share) | 43 | |
Ending balance (in dollars per share) | $ 46.05 | $ 41.76 |
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | ||
Number of Restricted Shares | ||
Granted (in shares) | 1,000 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 40,518 | $ 28,695 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 5,488 | 3,890 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 13,264 | 7,285 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 13,999 | 10,076 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 7,767 | $ 7,444 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||
Net income | $ 38,188 | $ 2,114 |
Denominator: | ||
Weighted average shares outstanding, basic (in shares) | 291,325 | 286,203 |
Dilutive effect of stock-based awards (in shares) | 5,062 | 3,821 |
Weighted average shares outstanding, diluted (in shares) | 296,387 | 290,024 |
Net income per share, basic (in dollars per share) | $ 0.13 | $ 0.01 |
Net income per share, diluted (in dollars per share) | $ 0.13 | $ 0.01 |
Net Income Per Share - Antidilu
Net Income Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 220 | 889 |
Unvested RSAs and RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 1,507 | 2,274 |
Shares committed under ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 13 | 10 |
Geographic Information - Summar
Geographic Information - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 54,382 | $ 53,576 |
North America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 22,652 | 22,124 |
Europe, Middle East and Africa | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 29,620 | 29,142 |
Asia Pacific | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 1,968 | 2,194 |
Latin America | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 142 | $ 116 |
Subsequent Events (Details)
Subsequent Events (Details) - Rookout, Ltd. (“Rookout”) - Forecast $ in Millions | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Subsequent Event [Line Items] | |
Voting interest acquired (in percent) | 100% |
Consideration transferred | $ 33.9 |