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Business Combination | 9 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Business Combination | Business Combination Appranix, Inc. Acquisition On April 15, 2024, we completed the acquisition of 100% of the shares of Appranix, a Boston-based cloud cyber resilience company, for a purchase price of $26,272, which consisted of $21,032 in cash (exclusive of $340 of contingent consideration) and $4,900 of unregistered restricted stock units. These stock units were valued based on the volume weighted average price of our share price for the thirty days preceding the close date. As a result, 50 unregistered restricted stock units were issued at a fair value of $98.98 per share. The primary reason for the business combination is to extend and enhance our product and service offerings in the cyber resiliency market. None of the goodwill recorded is expected to be deductible for income tax purposes. During the three and nine months ended December 31, 2024, we incurred costs related to the acquisition of Appranix of approximately $101 and $679, respectively, which were included in general and administrative expenses. The following table summarizes the purchase price and preliminary purchase price allocation as of the date of acquisition:
Purchase price allocation: |
Cash consideration | $ | 21,032 |
Fair value of unregistered restricted stock units | 4,900 |
Fair value of contingent consideration | 340 |
Total purchase price | $ | 26,272 |
Assets acquired and liabilities assumed: |
Cash | $ | 32 |
Trade accounts receivable | 239 |
Developed technology | 5,300 |
Accrued liabilities | (36) |
Deferred revenue | (98) |
Deferred tax liability | (1,457) |
Total identifiable net assets acquired and liabilities assumed | 3,980 |
Goodwill | 22,292 |
Total purchase price | $ | 26,272 |
The purchase price allocation is preliminary as it relates to the valuation of income taxes. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date. Contingent Consideration The contingent consideration arrangement requires us to pay up to $4,000 in cash to the former owner of Appranix, contingent upon the achievement of certain financial metrics measured on December 31, 2024 and June 30, 2025. The actual consideration can range from $0 to $4,000. The fair value of the contingent liability on the acquisition date was estimated to be $340 using a Monte Carlo simulation model and is included in accrued liabilities on the consolidated balance sheets. At the end of each reporting period after the acquisition date, the arrangement is remeasured at its fair value, with changes in fair value recorded through the consolidated statements of operations as operating expenses. As of December 31, 2024, we estimate the fair value of the liability at $2,826 and have recorded $2,486 in operating expenses during the third quarter of fiscal 2025 related to changes in the estimated fair value. Clumio, Inc. Acquisition On October 1, 2024, we completed the acquisition of certain assets of Clumio, Inc. ("Clumio"), a California-based data backup and recovery provider, for a purchase price of $44,909 in cash consideration. The primary reason for the business combination is to extend our product offerings in our existing cyber resiliency market. We expect that substantially all of the goodwill acquired in this transaction will be deductible for income tax purposes. During the three and nine months ended December 31, 2024, we incurred costs related to the acquisition of Clumio of approximately $314 and $1,661, respectively, which were included in general and administrative expenses. The following table summarizes the preliminary purchase price allocation as of the date of acquisition:
Assets acquired and liabilities assumed: |
Trade accounts receivable | $ | 1,161 |
Other current assets | 394 |
Deferred tax asset | 377 |
Intangible assets | 18,100 |
Accounts payable and accrued liabilities | (3,087) |
Deferred revenue | (8,370) |
Total identifiable net assets acquired and liabilities assumed | 8,575 |
Goodwill | 36,334 |
Total purchase price | $ | 44,909 |
The purchase price allocation is preliminary as it relates to customary closing adjustments and the valuation of income taxes. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date. We also entered into compensation arrangements with the co-founders and certain employees of Clumio, which included granting approximately $13,000 in performance stock units and restricted stock units that vest over the next three years. The related stock-based compensation expense is determined based on the value of the underlying shares on the date of grant and is recognized over the vesting term using the straight-line method. Refer to Note 10 for further discussion of stock awards. Actual and Unaudited Pro Forma Information We completed the acquisition of Appranix on April 15, 2024, and the acquisition of Clumio on October 1, 2024. Accordingly, the operations of both Appranix and Clumio are included in our consolidated statements of operations from the dates of the acquisitions to December 31, 2024. Appranix contributed revenues of approximately $680 and $1,673, and estimated net loss of approximately $43 and $463, for the three and nine months ended December 31, 2024, respectively. Clumio contributed revenues of approximately $6,412, and estimated net loss of approximately $3,014, for both the three and nine months ended December 31, 2024. The following unaudited pro forma results of operations have been prepared using the acquisition method of accounting to give effect to the Appranix and Clumio acquisitions as though they occurred on April 1, 2023. The pro forma amounts reflect certain adjustments, such as expenses related to the noncash amortization of intangible assets, stock-based compensation, and acquisition-related costs. The fiscal 2025 supplemental pro forma net income was adjusted to exclude $2,340 of acquisition-related costs and $2,486 of expense related to changes in the estimated fair value of contingent consideration incurred in fiscal 2025. The fiscal 2024 supplemental pro forma net income was adjusted to include these charges. In addition, both periods include noncash amortization expenses related to intangible assets and stock-based compensation as if the acquisitions had taken place on April 1, 2023. The unaudited pro forma financial information is presented for illustrative purposes only, is based on a purchase price allocation, and is not necessarily indicative of the results of operations that would have actually been reported had the acquisitions occurred on April 1, 2023, nor is it necessarily indicative of the future results of operations of the combined companies.
| Unaudited
| Three Months Ended December 31, |  | Nine Months Ended December 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Revenue | $ | 262,630 |  |  | $ | 222,022 |  |  | $ | 733,599 |  |  | $ | 629,574 |
Net income | $ | 13,922 |  |  | $ | 3,257 |  |  | $ | 23,877 |  |  | $ | 6,408 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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