TOPIC 606 ADOPTION IMPACT AND REVENUE FROM CONTRACTS WITH CUSTOMERS:

12 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

TOPIC 606 ADOPTION IMPACT AND REVENUE FROM CONTRACTS WITH CUSTOMERS:

On April 1, 2018, we adopted Topic 606 using the modified retrospective method applied to those contracts that were not completed as of April 1, 2018. Results for reporting periods beginning after April 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic reporting under Topic 605.

We recorded a net increase to our opening retained earnings of $12.7 million, net of tax, due to the cumulative impact of adopting Topic 606, with the impact primarily related to the capitalization of costs of obtaining customer contracts.

The details of the significant changes and quantitative impact of the changes are disclosed below.

Costs of Obtaining Customer Contracts

The Company previously recognized commission payments made for obtaining a contract as an operating expense when incurred. Under Topic 606, the Company capitalizes incremental costs to acquire contracts and amortizes them over the expected period of benefit, which we have determined to be four years. As of March 31, 2019, the unamortized contract costs were $10.7 million and are included in deferred commissions, net, in the consolidated balance sheet. Net capitalized costs of $4.3 million were recorded as a reduction to operating expense for the year ended March 31, 2019. No impairment was recognized for the year ended March 31, 2019.

Impacts on Financial Statements


Consolidated Balance Sheet	Impact of changes in accounting policies
	As reported March 31, 2019		Adjustments		Balances without adoption of Topic 606
Deferred income taxes	35		2,556		2,591
Deferred commissions, net	10,741		(10,741)		—
Others	1,462,135		—		1,462,135
Total assets	$	1,472,911	$	(8,185)	$	1,464,726



Total liabilities	142,079		—		142,079

Retained earnings	1,669,605		(8,185)		1,661,420
Other equity	(338,773)		—		(338,773)
Total equity	1,330,832		(8,185)		1,322,647
Total liabilities and equity	$	1,472,911	$	(8,185)	$	1,464,726


Consolidated Statement of Operations	Impact of changes in accounting policies
	As reported for the fiscal year ended March 31, 2019		Adjustments		Balances without adoption of Topic 606
Revenues	$	285,620	$	—	$	285,620
Cost of revenue	120,718		—		120,718
Gross profit	$	164,902	$	—	$	164,902

Operating expenses:
Sales and marketing	$	158,540	$	4,298	$	162,838
Other operating expenses	204,508		—		204,508
Total operating expenses	363,048		4,298		367,346

Loss from operations	(198,146)		(4,298)		(202,444)
Total other income	18,790		—		18,790
Loss from continuing operations before income taxes	(179,356)		(4,298)		(183,654)
Income taxes (benefit)	(45,409)		(1,023)		(46,432)
Net loss from continuing operations	$	(133,947)	$	(3,275)	$	(137,222)


Consolidated Statement of Comprehensive Income	Impact of changes in accounting policies
	As reported for the fiscal year ended March 31, 2019		Adjustments		Balances without adoption of Topic 606
Net earnings	$	1,028,547	$	(3,275)	$	1,025,272
Other comprehensive loss:
Change in foreign currency translation adjustment	(2,966)		—		(2,966)
Comprehensive income	$	1,025,581	$	(3,275)	$	1,022,306


Consolidated Statement of Cash Flows	Impact of changes in accounting policies
	As reported for the fiscal year ended March 31, 2019		Adjustments		Balances without adoption of Topic 606
Net earnings	$	1,028,547	$	(3,275)	$	1,025,272
Earnings from discontinued operations	(1,162,494)		—		(1,162,494)
Adjustments for:
Deferred income taxes	9,894		(1,023)		8,871
Others	143,033		—		143,033
Changes in:
Accounts receivable, net	(44,411)		—		(44,411)
Deferred commissions	(4,298)		4,298		—
Other assets	(3,106)		—		(3,106)
Accounts payable and other liabilities	25,308		—		25,308
Income taxes	5,087		—		5,087
Deferred revenue	462		—		462
Net cash from operating activities	(1,978)		—		(1,978)
Net cash from investing activities	(11,142)		—		(11,142)
Net cash from financing activities	(841,508)		—		(841,508)
Net cash from discontinued operations	1,777,833		—		1,777,833
Effect of exchange rate changes on cash	(1,750)		—		(1,750)

Net change in cash and cash equivalents	921,455		—		921,455
Cash and cash equivalents at beginning of period	140,018		—		140,018
Cash and cash equivalents at end of period	$	1,061,473	$	—	$	1,061,473

Disaggregation of Revenue

In the following table, revenue is disaggregated by primary geographical market and major service offerings (dollars in thousands).


	For the twelve months ended
Primary Geographical Markets	March 31, 2019		March 31, 2018		March 31, 2017
United States	$	262,135	$	197,613	$	162,231
Europe	18,566		18,397		9,298
APAC	4,919		4,091		3,231
	$	285,620	$	220,101	$	174,760

Major Offerings/Services
Subscription	236,718		172,079		114,531
Marketplace and Other	48,902		48,022		39,854
Impact	—		—		20,375
	$	285,620	$	220,101	$	174,760

Transaction Price Allocated to the Remaining Performance Obligations

We have performance obligations associated with fixed commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements. The amount of fixed revenue not yet recognized was $345.0 million as of March 31, 2019. The Company expects to recognize revenue on substantially all of these remaining performance obligations by March 31, 2024 with the balance recognized thereafter.