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Business Combinations | 12 Months Ended
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Sep. 30, 2023
Business Combinations [Abstract] |
Business Combinations | Business Combinations Fiscal Year 2023 Acquisition of Lilac Cloud, Inc. On January 22, 2023, the Company entered into a Merger Agreement (the “Lilac Merger Agreement”) with Lilac Cloud, Inc. ("Lilac"), a provider of innovative application delivery services. The transaction closed on February 1, 2023 with Lilac becoming a wholly-owned subsidiary of F5. The addition of Lilac’s Content Delivery Network ("CDN") technologies enhances F5’s portfolio of solutions that secure and optimize any application and Application Programming Interface ("API") anywhere. The acquired assets and assumed liabilities of Lilac were not material and the acquisition did not have a material impact to the Company's operating results. Fiscal Year 2022 Acquisition of Threat Stack, Inc. In September 2021, the Company entered into a Merger Agreement (the “Threat Stack Merger Agreement”) with Threat Stack, Inc. ("Threat Stack"), a provider of cloud security and workload protection solutions. The transaction closed on October 1, 2021 with Threat Stack becoming a wholly-owned subsidiary of F5. The addition of Threat Stack’s cloud security capabilities to F5’s application and API protection solutions enhances visibility across application infrastructure and workloads to deliver more actionable security insights for customers. Pursuant to the Threat Stack Merger Agreement, at the effective time of the Merger, the capital stock of Threat Stack and the vested outstanding and unexercised stock options in Threat Stack were cancelled and converted to the right to receive $68.9 million in cash, subject to certain adjustments and conditions set forth in the Threat Stack Merger Agreement. Transaction costs associated with the acquisition were not material. As a result of the acquisition, the Company acquired all the assets and assumed all the liabilities of Threat Stack. The goodwill related to the Threat Stack acquisition is comprised primarily of expected synergies from combining operations and the acquired intangible assets that do not qualify for separate recognition. Goodwill related to the Threat Stack acquisition was not deductible for tax purposes. The results of operations of Threat Stack have been included in the Company's consolidated financial statements from the date of acquisition. The allocated purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values is presented in the following table (in thousands):
|  |  |  | Estimated
|  |  |  | Useful Life
Assets acquired |  |  |  |
Deferred tax assets |  | $ | 14,041 |  |  |
Other net tangible assets acquired, at fair value |  | 5,481 |  |  |
Cash, cash equivalents, and restricted cash |  | 911 |  |  |
Identifiable intangible assets: |  |  |  |
Developed technology |  | 11,400 |  |  | 5 years
Customer relationships |  | 4,400 |  |  | 5 years
Goodwill |  | 43,282 |  |  |
Total assets acquired |  | $ | 79,515 |  |  |
Liabilities assumed |  |  |  |
Deferred revenue |  | $ | (10,591) |  |  |
Total liabilities assumed |  | $ | (10,591) |  |  |
Net assets acquired |  | $ | 68,924 |  |  |
The measurement period for the Threat Stack acquisition lapsed during the first quarter of fiscal 2023. The Company recorded immaterial adjustments to consideration exchanged for the purchase of Threat Stack within the post-close measurement period. The developed technology intangible asset is amortized on a straight-line basis over its estimated useful life of five years and included in cost of net product revenues. The customer relationships intangible asset is amortized on a straight-line basis over its estimated useful life of five years and included in sales and marketing expenses. The weighted-average life of the amortizable intangible assets recognized from the Threat Stack acquisition was five years as of October 1, 2021, the date the transaction closed. The estimated useful lives for the acquired intangible assets were based on the expected future cash flows associated with the respective asset. The pro forma financial information, as well as the revenue and earnings generated by Threat Stack, were not material to the Company's operations for the periods presented. Fiscal Year 2021 Acquisition of Volterra, Inc. On January 5, 2021, the Company entered into a Merger Agreement (the “Volterra Merger Agreement”) with Volterra, Inc. ("Volterra"), a provider of edge-as-a-service platform solutions. The transaction closed on January 22, 2021 with Volterra becoming a wholly-owned subsidiary of F5. With the addition of Volterra’s technology platform, F5 is creating an edge platform built for enterprises and service providers that will be security-first and app-driven with unlimited scale. Pursuant to the Volterra Merger Agreement, at the effective time of the Merger, the capital stock of Volterra and the vested outstanding and unexercised stock options in Volterra were cancelled and converted to the right to receive $427.2 million in cash, subject to certain adjustments and conditions set forth in the Volterra Merger Agreement. The unvested stock options and restricted stock units in Volterra held by continuing employees of Volterra were assumed by F5, on the terms and conditions set forth in the Volterra Merger Agreement. The Company incurred $9.5 million of transaction costs associated with the acquisition which was included in General and Administrative expenses in fiscal 2021. As a result of the acquisition, the Company acquired all the assets and assumed all the liabilities of Volterra. The goodwill related to the Volterra acquisition is comprised primarily of expected synergies from combining operations and the acquired intangible assets that do not qualify for separate recognition. Goodwill related to the Volterra acquisition was not deductible for tax purposes. The results of operations of Volterra have been included in the Company's consolidated financial statements from the date of acquisition. The allocated purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values is presented in the following table (in thousands):
|  |  |  | Estimated
|  |  |  | Useful Life
Assets acquired |  |  |  |
Cash, cash equivalents, and restricted cash |  | $ | 14,012 |  |  |
Other tangible assets acquired, at fair value |  | 7,499 |  |  |
Identifiable intangible assets: |  |  |  |
Developed technology |  | 59,500 |  |  | 7 years
Customer relationships |  | 500 |  |  | 1 year
Goodwill |  | 350,863 |  |  |
Total assets acquired |  | 432,374 |  |  |
Liabilities assumed |  | (5,233) |  |  |
Net assets acquired |  | $ | 427,141 |  |  |
The measurement period for the Volterra acquisition lapsed during the second quarter of fiscal 2022. The Company recorded immaterial adjustments to consideration exchanged for the purchase of Volterra within the post-close measurement period. The developed technology intangible asset is being amortized on a straight-line basis over its estimated useful life of seven years and included in cost of net product revenues. The customer relationships intangible asset was amortized on a straight-line basis over its estimated useful life of one year and included in sales and marketing expenses. The weighted-average life of the amortizable intangible assets recognized from the Volterra acquisition was 6.95 years as of January 22, 2021, the date the transaction closed. The estimated useful lives for the acquired intangible assets were based on the expected future cash flows associated with the respective asset. The pro forma financial information, as well as the revenue and earnings generated by Volterra, were not material to the Company's operations for the periods presented.

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