XML 27 R16.htm IDEA: XBRL DOCUMENT v3.25.3
Business Combinations
 6 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
Pathway Acquisition
On July 29, 2025, the Company completed the acquisition of all outstanding shares of Pathway Medical Inc. (“the Pathway acquisition”), an AI-based medical knowledge platform, primarily to enhance our platform with the acquired technology and engineering workforce. The acquisition-date fair value of the consideration was $36.3 million. This included cash consideration of $26.7 million. Additionally, the Company granted certain Pathway employees joining the Company $23.9 million of restricted stock units ("RSUs"), which vest quarterly over 5 years. A portion of these RSUs with an estimated fair value of $9.6 million, which vest up to the second anniversary of the acquisition date, are guaranteed and not contingent on future events or activities, and, as a result, the related cost is included in the total purchase consideration. The remaining tranches are subject to continuing service with the Company. The related expense is accounted for as post-acquisition stock-based compensation expense.
In connection with the acquisition, the Company granted $4 million of performance-based restricted stock units (“PSUs”) and $1 million of RSUs to certain Pathway employees joining the Company. The PSUs will vest in full on November 15, 2026, subject to both service and performance-based vesting conditions. The aggregate grant date fair value of these awards is accounted for as post-acquisition stock-based compensation expense on a straight-line basis, to the extent the performance metrics are achieved. The RSUs vest quarterly over 4 years, the related expense of which is also accounted for as post-acquisition stock-based compensation expense on a straight-line basis.
The Company also committed to issue an additional $8 million of PSUs over the next two fiscal years, beginning in fiscal 2027. The performance targets will be established in the beginning of each fiscal year. These awards are subject to both service and performance-based vesting conditions. As of September 30, 2025, these PSUs are not considered granted from an accounting perspective as the performance targets have not been established.
The Pathway acquisition was accounted for as a business combination. The purchase consideration was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill as shown below. The purchase consideration allocation was as follows (in thousands):
Assets acquired:
Cash
$196 
Accounts receivable
148 
Prepaid expenses
494 
Deferred taxes
94 
Developed technology18,700 
Total assets acquired$19,632 
Liabilities assumed:
Accrued expenses and other current liabilities
$391 
Net assets acquired, excluding goodwill19,241 
Goodwill$17,033 
Total purchase consideration$36,274 
Goodwill generated from the Pathway acquisition represents the future benefits from the developed technology and the assembled workforce. Goodwill from this business combination is deductible for income tax purposes.
Intangible assets acquired are comprised of Pathway’s developed technology with an estimated useful life of 5 years. The developed technology was valued using a replacement cost approach, which is based on the cost of a market participant to reconstruct a substitute asset of comparable utility. The results of operations of this business combination have been included in the consolidated financial statements from the acquisition date.
The acquisition-related costs were not material and were recorded as general and administrative expense in the consolidated statements of operations.
Separate operating results and pro forma results of operations for Pathway have not been presented as the effect of this acquisition was not material to the Company’s financial results.