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v3.19.3.a.u2

Summary of Significant Accounting Policies (Tables) | 12 Months Ended
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Oct. 31, 2019
Accounting Policies [Abstract] |
Schedule of Accounts Receivable, net | The following table represents the components of accounts receivable, net:
| October 31,
| 2019 |  | 2018
| (in thousands)
Accounts receivable | $ | 524,766 |  |  | $ | 495,763 |
Unbilled accounts receivable | 38,175 |  |  | 64,067 |
Total accounts receivable | 562,941 |  |  | 559,830 |
Less allowance for doubtful accounts | (9,046 | ) |  | (5,613 | )
Total accounts receivable, net | $ | 553,895 |  |  | $ | 554,217 |
Changes in Allowance for Doubtful Accounts | The following table presents the changes in the allowance for doubtful accounts:
Fiscal Year | Balance at Beginning of Period |  | Provisions |  | Write-offs(1) |  | Balance at End of Period
| (in thousands)
2019 | $ | 5,613 |  |  | $ | 11,669 |  |  | $ | (8,236 | ) |  | $ | 9,046 |
2018 | $ | 5,165 |  |  | $ | 3,368 |  |  | $ | (2,920 | ) |  | $ | 5,613 |
2017 | $ | 3,201 |  |  | $ | 2,149 |  |  | $ | (185 | ) |  | $ | 5,165 |
(1) Balances written off, net of recoveries.
Components of Property and Equipment | A summary of property and equipment, at cost less accumulated depreciation and amortization, as of October 31, 2019 and 2018 is as follows:
| October 31,
| 2019 |  | 2018
| (in thousands)
Computer and other equipment | $ | 678,901 |  |  | $ | 604,117 |
Buildings | 68,708 |  |  | 68,522 |
Furniture and fixtures | 72,437 |  |  | 61,070 |
Land | 18,849 |  |  | 18,849 |
Leasehold improvements | 273,985 |  |  | 183,430 |
| 1,112,880 |  |  | 935,988 |
Less accumulated depreciation and amortization(1) | (683,348 | ) |  | (626,678 | )
Total | $ | 429,532 |  |  | $ | 309,310 |
(1) Accumulated depreciation and amortization includes write-offs due to retirement of fully amortized fixed assets.
Useful Lives of Depreciable Assets | The useful lives of depreciable assets are as follows:
| Useful Life in Years
Computer and other equipment | 3-8
Buildings | 30
Furniture and fixtures | 5
Leasehold improvements | Shorter of the lease term or the estimated useful life
Components of Accounts Payable and Accrued Liabilities | The balance consists of:
| October 31,
| 2019 |  | 2018
| (in thousands)
Payroll and related benefits | $ | 417,157 |  |  | $ | 413,307 |
Other accrued liabilities | 69,487 |  |  | 79,973 |
Accounts payable | 19,815 |  |  | 85,046 |
Total | $ | 506,459 |  |  | $ | 578,326 |
Components of Other Long Term Liabilities | The balance consists of:
| October 31,
| 2019 |  | 2018
| (in thousands)
Deferred compensation liability (See Note 10) | $ | 249,822 |  |  | $ | 212,165 |
Other long-term liabilities | 73,903 |  |  | 53,395 |
Total | $ | 323,725 |  |  | $ | 265,560 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table summarizes the effects of adopting ASC 606 on the consolidated statements of operations for fiscal 2019:
| Year Ended October 31, 2019
| As reported under ASC 606 |  | Adjustments |  | Adjusted under ASC 605
| (in thousands, except per share amounts)
Revenue: |  |  |  |  |
Time-based products | $ | 2,197,965 |  |  | $ | 206,904 |  |  | $ | 2,404,869 |
Upfront products | 619,791 |  |  | (235,398 | ) |  | 384,393 |
Maintenance and service | 542,938 |  |  | (74,037 | ) |  | 468,901 |
Total revenue | 3,360,694 |  |  | (102,531 | ) |  | 3,258,163 |
Cost of Revenue: |  |  |  |  |  |
Products | 459,127 |  |  | — |  |  | 459,127 |
Maintenance and service | 234,196 |  |  | — |  |  | 234,196 |
Amortization of intangible assets | 59,623 |  |  | — |  |  | 59,623 |
Total cost of revenue | 752,946 |  |  | — |  |  | 752,946 |
Gross margin | 2,607,748 |  |  | (102,531 | ) |  | 2,505,217 |
Operating expenses: |  |  |  |  |  |
Research and development | 1,136,932 |  |  | — |  |  | 1,136,932 |
Sales and marketing | 632,890 |  |  | 4,121 |  |  | 637,011 |
General and administrative | 229,218 |  |  | — |  |  | 229,218 |
Amortization of intangible assets | 41,291 |  |  | — |  |  | 41,291 |
Restructuring charges | 47,186 |  |  | — |  |  | 47,186 |
Total operating expenses | 2,087,517 |  |  | 4,121 |  |  | 2,091,638 |
Operating income | 520,231 |  |  | (106,652 | ) |  | 413,579 |
Other income (expense), net | 25,275 |  |  | — |  |  | 25,275 |
Income before income taxes | 545,506 |  |  | (106,652 | ) |  | 438,854 |
Provision (benefit) for income taxes | 13,139 |  |  | (18,499 | ) |  | (5,360 | )
Net income | $ | 532,367 |  |  | $ | (88,153 | ) |  | $ | 444,214 |
Net income per share: |  |  |  |  |  |
Basic | $ | 3.55 |  |  | $ | (0.59 | ) |  | $ | 2.96 |
Diluted | $ | 3.45 |  |  | $ | (0.57 | ) |  | $ | 2.88 |
Shares used in computing per share amounts: |  |  |  |  |  |
Basic | 149,872 |  |  |  |  | 149,872 |
Diluted | 154,190 |  |  |  |  | 154,190 |
The following table summarizes the effects of adopting ASC 606 on certain account balances of the consolidated balance sheets that were impacted as of October 31, 2019:
Disaggregation of Revenue | The following table shows the percentage of revenue by product groups:
| Year Ended October 31,
| 2019 |  | 2018 |  | 2017
EDA | 59 | % |  | 62 | % |  | 66 | %
IP & System Integration | 31 | % |  | 29 | % |  | 28 | %
Software Integrity Products & Services | 10 | % |  | 9 | % |  | 6 | %
Other | — | % |  | — | % |  | — | %
Total | 100 | % |  | 100 | % |  | 100 | %
Contract with Customer, Asset and Liability | Contract balances are as follows:
| Balance as of October 31, 2019 |  | Balance as of October 31, 2018
|  |  | as adjusted
| (in thousands)
Contract assets | $ | 210,557 |  |  | $ | 126,897 |
Unbilled receivables | 38,175 |  |  | 36,699 |
Deferred revenue | 1,302,578 |  |  | 1,104,110 |
Reconciliation of Weighted Average Common Shares Used to Calculate Basic Net Income Per Share | The table below reconciles the weighted average common shares used to calculate basic net income per share with the weighted average common shares used to calculate diluted net income per share:
| Year Ended October 31,
| 2019 |  | 2018 |  | 2017
| (in thousands, except per share amounts)
Numerator: |  |  |  |  |
Net income | $ | 532,367 |  |  | $ | 432,518 |  |  | $ | 136,563 |
Denominator: |  |  |  |  |
Weighted average common shares for basic net income per share | 149,872 |  |  | 149,036 |  |  | 150,457 |
Dilutive effect of common share equivalents from equity-based compensation | 4,318 |  |  | 4,357 |  |  | 4,417 |
Weighted average common shares for diluted net income per share | 154,190 |  |  | 153,393 |  |  | 154,874 |
Net income per share: |  |  |  |  |
Basic | $ | 3.55 |  |  | $ | 2.90 |  |  | $ | 0.91 |
Diluted | $ | 3.45 |  |  | $ | 2.82 |  |  | $ | 0.88 |
Anti-dilutive employee stock-based awards excluded(1) | 171 |  |  | 850 |  |  | 345 |
(1) These stock options and unvested restricted stock units were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future.

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