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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Jul. 31, 2019

Accounting Policies [Abstract]

Schedule of Topic 606 Impact

The following table summarizes the effects of adopting ASC 606 on certain account balances of the unaudited condensed consolidated balance sheet that were impacted as of July 31, 2019:

	As reported under ASC 606				Adjustments				Adjusted balance under ASC 605
	(in thousands)
Receivables, net	$	457,390			$	64,122			$	521,512
Prepaid and other current assets	288,616				(205,822		)		82,794
Deferred income taxes	339,354				76,891				416,245
Other long-term assets	383,509				(94,626		)		288,883
Accounts payable and other accrued liabilities	471,629				(10,413		)		461,216
Deferred revenue	1,138,993				132,450				1,271,443
Long-term deferred revenue	91,229				41,585				132,814
Other long-term liabilities (1)	338,928				(16,671		)		322,257
Retained earnings	3,003,430				(306,386		)		2,697,044

(1) Includes long-term deferred tax liabilities.

The following table summarizes the effects of adopting ASC 606 on the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2019:

	Three Months Ended   July 31, 2019												Nine Months Ended   July 31, 2019
	As reported under ASC 606				Adjustments				Adjusted under ASC 605				As reported under ASC 606				Adjustments				Adjusted under ASC 605
	(in thousands, except per share amounts)
Revenue:
Time-based products	$	537,569			$	55,604			$	593,173			$	1,649,590			$	158,222			$	1,807,812
Upfront products	177,552				(73,267		)		104,285				451,466				(151,110		)		300,356
Maintenance and service	137,849				(26,914		)		110,935				408,557				(57,707		)		350,850
Total revenue	852,970				(44,577		)		808,393				2,509,613				(50,595		)		2,459,018
Cost of Revenue:
Products	113,533				—				113,533				346,163				—				346,163
Maintenance and service	59,496				—				59,496				178,113				—				178,113
Amortization of intangible assets	13,603				—				13,603				45,927				—				45,927
Total cost of revenue	186,632				—				186,632				570,203				—				570,203
Gross margin	666,338				(44,577		)		621,761				1,939,410				(50,595		)		1,888,815
Operating expenses:
Research and development	284,804				—				284,804				846,429				—				846,429
Sales and marketing	157,109				(2,731		)		154,378				471,720				10,395				482,115
General and administrative	67,382				—				67,382				165,794				—				165,794
Amortization of intangible assets	10,111				—				10,111				31,211				—				31,211
Restructuring	19,338				—				19,338				33,746				—				33,746
Total operating expenses	538,744				(2,731		)		536,013				1,548,900				10,395				1,559,295
Operating income	127,594				(41,846		)		85,748				390,510				(60,990		)		329,520
Other income (expense), net	5,317				—				5,317				23,373				—				23,373
Income before provision for income taxes	132,911				(41,846		)		91,065				413,883				(60,990		)		352,893
Provision (benefit) for income taxes	32,982				(9,127		)		23,855				42,230				(12,198		)		30,032
Net income	$	99,929			$	(32,719	)		$	67,210			$	371,653			$	(48,792	)		$	322,861
Net income per share:
Basic	$	0.67			$	(0.22	)		$	0.45			$	2.48			$	(0.32	)		$	2.16
Diluted	$	0.65			$	(0.22	)		$	0.43			$	2.42			$	(0.32	)		$	2.10
Shares used in computing per share amounts:
Basic	150,123								150,123				149,708								149,708
Diluted	154,600								154,600				153,859								153,859

Schedule of Disaggregation of Revenue

The following table shows the percentage of revenue by product groups:

	Three Months Ended July 31,						Nine Months Ended July 31,
	2019			2018			2019			2018
EDA	57	%		64	%		59	%		63	%
IP & System Integration	33	%		27	%		31	%		28	%
Software Integrity Products & Services	10	%		9	%		10	%		9	%
Other	—	%		—	%		—	%		—	%
Total	100	%		100	%		100	%		100	%

Schedule of Contract Assets and Liabilities

Contract balances are as follows:

	As of July 31, 2019				As of October 31, 2018
					as adjusted
	(in thousands)
Contract assets	$	205,822			$	126,897
Unbilled receivables	38,965				36,699
Deferred revenue	1,230,222				1,104,110

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