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Leases Leases
 12 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Operating leases Leases
We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as either operating or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
The following table presents the lease balances within the accompanying consolidated balance sheet as of September 30, 2021 and 2020:
Balance Sheet LocationSeptember 30,
20212020
(In thousands)
Assets
Operating leasesOperating lease right-of-use assets$47,275 $57,656 
Finance leases (*)Property and equipment, net— 5,021 
    Total lease assets$47,275 $62,677 
Liabilities
Current:
   Operating leasesOther accrued liabilities$22,074 $22,787 
   Finance leasesOther accrued liabilities— 2,186 
Non-current:
   Operating leasesOperating lease liabilities53,670 73,207 
   Finance leasesOther liabilities— 3,076 
       Total lease liabilities$75,744 $101,256 
(*) Finance leases were recorded net of accumulated depreciation of $1.5 million at September 30, 2020.
The components of our operating and finance lease expenses were as follows:
Year Ended September 30,
20212020
(In thousands)
Operating lease cost$19,551 $23,624 
Finance lease cost:
     Depreciation of lease assets175 2,078 
     Interest on lease liabilities11 186 
Short-term lease cost85 1,171 
Variable lease cost1,190 3,264 
     Total lease cost$21,012 $30,323 
The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating and finance leases:
September 30,
20212020
Operating lease:
     Weighted-average remaining lease term (in months)5363
     Weighted-average discount rate3.64 %3.86 %
Finance lease:
     Weighted-average remaining lease term (in months)029
     Weighted-average discount rate— %2.56 %
Supplemental cash flow information related to our operating and finance leases was as follows:
Year Ended September 30,
20212020
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
    Operating cash outflow for operating leases$23,260 $18,801 
    Operating cash outflow for finance leases11 186 
    Financing cash outflow for finance leases176 1,716 
Lease assets obtained in exchange for new lease liabilities:
    Operating leases5,413 11,457 
    Finance leases— 1,387 
Future lease payments under our non-cancellable leases as of September 30, 2021 were as follows:
(In thousands)Operating Leases
Fiscal 2022$24,441 
Fiscal 202319,621 
Fiscal 202414,025 
Fiscal 20258,639 
Fiscal 20267,602 
Thereafter7,522 
      Total future undiscounted lease payments81,850 
         Less imputed interest(6,106)
      Total reported lease liability$75,744 
Finance leases Leases
We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as either operating or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term.
Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
The following table presents the lease balances within the accompanying consolidated balance sheet as of September 30, 2021 and 2020:
Balance Sheet LocationSeptember 30,
20212020
(In thousands)
Assets
Operating leasesOperating lease right-of-use assets$47,275 $57,656 
Finance leases (*)Property and equipment, net— 5,021 
    Total lease assets$47,275 $62,677 
Liabilities
Current:
   Operating leasesOther accrued liabilities$22,074 $22,787 
   Finance leasesOther accrued liabilities— 2,186 
Non-current:
   Operating leasesOperating lease liabilities53,670 73,207 
   Finance leasesOther liabilities— 3,076 
       Total lease liabilities$75,744 $101,256 
(*) Finance leases were recorded net of accumulated depreciation of $1.5 million at September 30, 2020.
The components of our operating and finance lease expenses were as follows:
Year Ended September 30,
20212020
(In thousands)
Operating lease cost$19,551 $23,624 
Finance lease cost:
     Depreciation of lease assets175 2,078 
     Interest on lease liabilities11 186 
Short-term lease cost85 1,171 
Variable lease cost1,190 3,264 
     Total lease cost$21,012 $30,323 
The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating and finance leases:
September 30,
20212020
Operating lease:
     Weighted-average remaining lease term (in months)5363
     Weighted-average discount rate3.64 %3.86 %
Finance lease:
     Weighted-average remaining lease term (in months)029
     Weighted-average discount rate— %2.56 %
Supplemental cash flow information related to our operating and finance leases was as follows:
Year Ended September 30,
20212020
(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
    Operating cash outflow for operating leases$23,260 $18,801 
    Operating cash outflow for finance leases11 186 
    Financing cash outflow for finance leases176 1,716 
Lease assets obtained in exchange for new lease liabilities:
    Operating leases5,413 11,457 
    Finance leases— 1,387 
Future lease payments under our non-cancellable leases as of September 30, 2021 were as follows:
(In thousands)Operating Leases
Fiscal 2022$24,441 
Fiscal 202319,621 
Fiscal 202414,025 
Fiscal 20258,639 
Fiscal 20267,602 
Thereafter7,522 
      Total future undiscounted lease payments81,850 
         Less imputed interest(6,106)
      Total reported lease liability$75,744