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v3.19.1

Revenue from Contracts with Customers (Tables) | 6 Months Ended
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Mar. 30, 2019
Revenue from Contract with Customer [Abstract] |
Contract with Customer, Asset and Liability [Table Text Block] | Contract Assets and Contract Liabilities
| March 30, 2019 |  | October 1, 2018, as adjusted
| (in thousands)
Contract asset | $ | 19,628 |  |  | $ | 26,265 |
Deferred revenue | $ | 391,807 |  |  | $ | 357,490 |
Disaggregation of Revenue [Table Text Block] | Disaggregation of Revenue
|  | Three months ended |  | Six months ended
|  | As Reported ASC 606 |  | ASC 605 |  | As Reported ASC 605 |  | As Reported ASC 606 |  | ASC 605 |  | As Reported ASC 605
|  | March 30, 2019 |  | March 30, 2019 |  | March 31, 2018 |  | March 30, 2019 |  | March 30, 2019 |  | March 31, 2018
Revenue |  |  |  |  |  |
|  | (in thousands)
Subscription license |  | $ | 51,540 |  |  |  |  |  |  | $ | 115,057 |  |  |  |  |
Subscription support & cloud services |  | 83,228 |  |  |  |  |  |  | 160,652 |  |  |  |  |
Total Subscription |  | 134,768 |  |  | $ | 162,070 |  |  | $ | 112,931 |  |  | 275,709 |  |  | $ | 310,483 |  |  | $ | 212,939 |
Perpetual support |  | 104,417 |  |  | 103,564 |  |  | 126,683 |  |  | 214,914 |  |  | 212,789 |  |  | 257,880 |
Total recurring revenue |  | 239,185 |  |  | 265,634 |  |  | 239,614 |  |  | 490,623 |  |  | 523,272 |  |  | 470,819 |
Perpetual license |  | 10,336 |  |  | 11,267 |  |  | 22,839 |  |  | 52,141 |  |  | 53,017 |  |  | 56,824 |
Total software revenue |  | 249,521 |  |  | 276,901 |  |  | 262,453 |  |  | 542,764 |  |  | 576,289 |  |  | 527,643 |
Professional services |  | 40,930 |  |  | 38,598 |  |  | 45,430 |  |  | 82,376 |  |  | 77,967 |  |  | 86,884 |
Total revenue |  | $ | 290,451 |  |  | $ | 315,499 |  |  | $ | 307,883 |  |  | $ | 625,140 |  |  | $ | 654,256 |  |  | $ | 614,527 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The following tables present our Balance Sheets and Statements of Operations as reported under ASC 606 for the current period with comparative periods reported under ASC 605:
| As Reported ASC 606 |  | ASC 605 |  | As Reported ASC 605
| March 30, 2019 |  | March 30, 2019 |  | September 30, 2018
ASSETS |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 294,299 |  |  | $ | 294,299 |  |  | $ | 259,946 |
Short-term marketable securities | 25,428 |  |  | 25,428 |  |  | 25,836 |
Accounts receivable (1) | 352,217 |  |  | 110,510 |  |  | 129,297 |
Prepaid expenses | 66,210 |  |  | 66,509 |  |  | 48,997 |
Other current assets (2) | 52,448 |  |  | 153,687 |  |  | 169,708 |
Total current assets | 790,602 |  |  | 650,433 |  |  | 633,784 |
Property and equipment, net | 106,837 |  |  | 106,837 |  |  | 80,613 |
Goodwill | 1,229,541 |  |  | 1,229,541 |  |  | 1,182,457 |
Acquired intangible assets, net | 192,372 |  |  | 192,372 |  |  | 200,202 |
Long-term marketable securities | 30,987 |  |  | 30,987 |  |  | 30,115 |
Deferred tax assets (3) | 195,884 |  |  | 228,776 |  |  | 165,566 |
Other assets (4) | 169,596 |  |  | 41,750 |  |  | 36,285 |
Total assets | $ | 2,715,819 |  |  | $ | 2,480,696 |  |  | $ | 2,329,022 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 36,685 |  |  | $ | 36,685 |  |  | $ | 53,473 |
Accrued expenses and other current liabilities (5) | 100,319 |  |  | 73,719 |  |  | 74,388 |
Accrued compensation and benefits | 73,408 |  |  | 73,408 |  |  | 101,784 |
Accrued income taxes (3) | 6,579 |  |  | 1,181 |  |  | 18,044 |
Deferred revenue (6) | 381,392 |  |  | 545,168 |  |  | 487,590 |
Total current liabilities | 598,383 |  |  | 730,161 |  |  | 735,279 |
Long-term debt | 738,700 |  |  | 738,700 |  |  | 643,268 |
Deferred tax liabilities (3) | 36,326 |  |  | 6,079 |  |  | 5,589 |
Deferred revenue (6) | 10,415 |  |  | 8,541 |  |  | 11,852 |
Other liabilities | 84,287 |  |  | 84,287 |  |  | 58,445 |
Total liabilities | 1,468,111 |  |  | 1,567,768 |  |  | 1,454,433 |
Stockholders’ equity: |  |  |  |  |
Preferred stock | — |  |  | — |  |  | — |
Common stock | 1,181 |  |  | 1,181 |  |  | 1,180 |
Additional paid-in capital | 1,523,949 |  |  | 1,523,949 |  |  | 1,558,403 |
Accumulated deficit | (182,298 | ) |  | (519,930 | ) |  | (599,409 | )
Accumulated other comprehensive loss | (95,124 | ) |  | (92,272 | ) |  | (85,585 | )
Total stockholders’ equity | 1,247,708 |  |  | 912,928 |  |  | 874,589 |
Total liabilities and stockholders’ equity | $ | 2,715,819 |  |  | $ | 2,480,696 |  |  | $ | 2,329,022 |
The changes in balance sheet accounts due to the adoption of ASC 606 are due primarily to the following:
(1) | Up front license recognition under our subscription contracts and billed but uncollected support and subscription receivables that had corresponding deferred revenue, which were included in other current assets prior to our adoption of ASC 606.
(2) Contract assets and capitalized commission costs.
(3) | The tax effect of the accumulated deficit impact related to the acceleration of revenue and deferral of costs (primarily commissions).
(4) The long-term portion of unbilled receivables due to the acceleration of license revenue on multi-year subscription contracts and the long-term portion of capitalized commission costs. (5) Refund liability, primarily associated with the annual right to exchange on-premise subscription software described above in Judgments and Estimates. (6) The decrease in deferred revenue recorded to accumulated deficit upon adoption of ASC 606 primarily related to on-premise subscription software licenses.
| Three months ended |  | Six months ended
| As Reported ASC 606 |  | ASC 605 |  | As Reported ASC 605 |  | As Reported ASC 606 |  | ASC 605 |  | As Reported ASC 605
| March 30, 2019 |  | March 30, 2019 |  | March 31, 2018 |  | March 30, 2019 |  | March 30, 2019 |  | March 31, 2018
Revenue: |  |  |  |  |  |  |  |  |  |  |
License (1) | $ | 61,876 |  |  | $ | 156,131 |  |  | $ | 120,505 |  |  | $ | 167,198 |  |  | $ | 330,036 |  |  | $ | 240,023 |
Support and cloud services (1) | 187,645 |  |  | 120,770 |  |  | 141,948 |  |  | 375,566 |  |  | 246,253 |  |  | 287,620 |
Total software revenue | 249,521 |  |  | 276,901 |  |  | 262,453 |  |  | 542,764 |  |  | 576,289 |  |  | 527,643 |
Professional services | 40,930 |  |  | 38,598 |  |  | 45,430 |  |  | 82,376 |  |  | 77,967 |  |  | 86,884 |
Total revenue | 290,451 |  |  | 315,499 |  |  | 307,883 |  |  | 625,140 |  |  | 654,256 |  |  | 614,527 |
Cost of revenue: |  |  |  |  |  |  |  |  |  |  |
Cost of license revenue | 12,875 |  |  | 12,245 |  |  | 11,854 |  |  | 25,438 |  |  | 24,592 |  |  | 23,968 |
Cost of support and cloud services revenue | 32,874 |  |  | 32,977 |  |  | 34,335 |  |  | 64,071 |  |  | 63,607 |  |  | 68,837 |
Total cost of software revenue | 45,749 |  |  | 45,222 |  |  | 46,189 |  |  | 89,509 |  |  | 88,199 |  |  | 92,805 |
Cost of professional services revenue | 34,155 |  |  | 32,745 |  |  | 37,519 |  |  | 67,747 |  |  | 64,964 |  |  | 73,938 |
Total cost of revenue (2) | 79,904 |  |  | 77,967 |  |  | 83,708 |  |  | 157,256 |  |  | 153,163 |  |  | 166,743 |
Gross margin | 210,547 |  |  | 237,532 |  |  | 224,175 |  |  | 467,884 |  |  | 501,093 |  |  | 447,784 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing (3) | 103,722 |  |  | 109,421 |  |  | 98,390 |  |  | 207,940 |  |  | 216,725 |  |  | 197,765 |
Research and development | 61,402 |  |  | 61,402 |  |  | 62,197 |  |  | 122,184 |  |  | 122,184 |  |  | 126,169 |
General and administrative | 35,371 |  |  | 35,371 |  |  | 33,369 |  |  | 73,235 |  |  | 73,235 |  |  | 68,389 |
Amortization of acquired intangible assets | 5,930 |  |  | 5,930 |  |  | 7,895 |  |  | 11,866 |  |  | 11,866 |  |  | 15,716 |
Restructuring and other charges, net | 26,980 |  |  | 26,980 |  |  | 114 |  |  | 45,473 |  |  | 45,473 |  |  | 219 |
Total operating expenses | 233,405 |  |  | 239,104 |  |  | 201,965 |  |  | 460,698 |  |  | 469,483 |  |  | 408,258 |
Operating income | (22,858 | ) |  | (1,572 | ) |  | 22,210 |  |  | 7,186 |  |  | 31,610 |  |  | 39,526 |
Interest expense | (11,383 | ) |  | (11,383 | ) |  | (10,379 | ) |  | (21,659 | ) |  | (21,659 | ) |  | (20,426 | )
Other income (expense), net | 821 |  |  | 1,065 |  |  | (285 | ) |  | 1,475 |  |  | 1,613 |  |  | (1,083 | )
Income (loss) before income taxes | (33,420 | ) |  | (11,890 | ) |  | 11,546 |  |  | (12,998 | ) |  | 11,564 |  |  | 18,017 |
Provision (benefit) for income taxes (4) | 10,093 |  |  | 140 |  |  | 3,624 |  |  | 9,530 |  |  | 4,346 |  |  | (3,782 | )
Net income (loss) | $ | (43,513 | ) |  | $ | (12,030 | ) |  | $ | 7,922 |  |  | $ | (22,528 | ) |  | $ | 7,218 |  |  | $ | 21,799 |
(1) | The reduction in license revenue and increase in support revenue is a result of the support component of subscription licenses which is included in license revenue under ASC 605. Additionally, for the three months ended March 30, 2019, license revenue decreased by approximately $58.3 million as a result of the revenue recorded to accumulated deficit, which would have been recognized during the period and approximately $15.0 million as a result of revenue recognized during the first quarter of 2019 which would have been recognized during the period. For the six months ended March 30, 2019, license revenue decreased by approximately $123.3 million as a result of the revenue recorded to accumulated deficit which would have been recognized during the period. This was partially offset by approximately $48.5 million and $92.0 million of upfront license revenue recognition on new and renewal bookings for the three- and six-months ending March 30, 2019, respectively.
(2) Cost of revenue under ASC 606 is higher than under ASC 605 due to the treatment of deferred professional services costs under the new accounting guidance, partially offset by the timing of revenue recognition under ASC 606 resulting in lower associated royalty costs. (3) Sales and marketing costs are lower under ASC 606 due to the amortization of commissions costs capitalized upon adoption of ASC 606, offset by the deferral of ongoing commission expenses under the new accounting guidance. (4) The benefit for income taxes under ASC 606 includes indirect effects of the adoption.

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