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Discontinued Operations | 3 Months Ended
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Jan. 31, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On September 30, 2024, we completed the sale of our former Software Integrity business to entities controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners (together, the Sponsors). The aggregate consideration for the sale was $1.65 billion, comprised of: (i) cash of $1.48 billion received upon closing; (ii) $121.5 million reflecting the present value of $125 million in deferred consideration receivable in equal installments over five fiscal quarters beginning on January 17, 2025, subject to acceleration at our option prior to the closing of our pending acquisition of ANSYS Inc. (Ansys); (iii) $22.2 million reflecting the fair value of contingent consideration of up to $475 million receivable upon the Sponsors achieving a specified rate of return in the event of one or more potential liquidity transactions; and (iv) additional consideration receivable of $27.1 million as a result of net working capital adjustments. As a result of the Software Integrity Divestiture, we derecognized net assets of $720.5 million and incurred transaction costs of $61.7 million, resulting in a pre-tax gain of $868.8 million in fiscal 2024, subject to certain post-closing adjustments that are expected to be finalized in the second quarter of fiscal 2025. We received the first deferred consideration installment in the amount of $25 million in the first quarter of fiscal 2025 and remeasured the fair value of contingent consideration at the quarter end, with no material change noted. The financial results of the Software Integrity business were presented as income from discontinued operations, net of income taxes in our condensed consolidated statements of income. The following table presents the major components of financial results of our Software Integrity business for the period presented:
|  |  | Three Months Ended January 31, |  |
|  |  | 2024 |  |  |  |
|  |  | (in thousands) |  |  |  |
Revenue |  |  | $ | 138,241 |  |  |  |  |
Cost of revenue |  |  | 49,982 |  |  |  |  |
Operating expenses |  |  | 81,265 |  |  |  |  |
Interest and other income, net |  |  | 656 |  |  |  |  |
Income from discontinued operations before income taxes |  |  | 7,650 |  |  |  |  |
Income tax benefits |  |  | 4,012 |  |  |  |  |
Income from discontinued operations, net of income taxes |  |  | $ | 11,662 |  |  |  |  |
The following table presents significant non-cash items and capital expenditures of discontinued operations for the period presented:
|  |  | Three Months Ended January 31,
|  |  | 2024
|  |  | (in thousands)
Amortization and depreciation |  |  | $ | 11,140 |
Reduction of operating lease right-of-use assets |  |  | $ | 1,304 |
Amortization of capitalized costs to obtain revenue contracts |  |  | $ | 7,486 |
Stock-based compensation |  |  | $ | 15,147 |
Deferred income taxes |  |  | $ | 13,562 |
Purchases of property and equipment |  |  | $ | 348 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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