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GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended
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Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill The Company has one reporting unit. Goodwill is tested for impairment at a reporting unit level at least annually, as of January 31, or on an interim basis if an event occurs or circumstances change (a "Triggering Event") that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. During fiscal year 2024, the Company recorded $217.3 million in goodwill impairment charges as a result of the sustained decline in the Company's stock price and overall market capitalization. During the first quarter of fiscal year 2025, due to the continued decrease in the Company's stock price and overall market capitalization, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, it was determined a Triggering Event occurred, indicating goodwill may be impaired. Accordingly, the Company conducted a quantitative impairment test of its goodwill at June 30, 2024. The Company estimated the implied fair value of its goodwill using a market approach. As a result of the quantitative impairment test performed during the first quarter of fiscal year 2025, the Company determined goodwill was impaired and recorded a goodwill impairment charge of $427.0 million during the three months ended June 30, 2024. The additional impairment charge recorded in the first quarter of fiscal year 2025 was primarily due to the continued decrease in the Company's stock price from March 31, 2024 to June 30, 2024, an increase in the Company's weighted-average cost of capital, and the refinement to the expected cost synergies that could be realized by a hypothetical buyer as a result of the voluntary separation program (VSP) implemented by the Company in the first quarter of fiscal year 2025, which impacted the company-specific control premium used to determine the fair value of the reporting unit under the market approach. At September 30, 2024, the Company performed a Triggering Event assessment and concluded no event or circumstances occurred that indicated goodwill was further impaired. Throughout the remainder of the fiscal year 2025, the Company will continue to monitor relevant facts and circumstances, including future changes in its stock price. The Company may be required to record additional goodwill impairment charges. While management cannot predict if or when additional goodwill impairments may occur, future goodwill impairments could have material adverse effects on the Company's results of operations and financial condition. At September 30, 2024 and March 31, 2024, the carrying amounts of goodwill were $1.1 billion and $1.5 billion, respectively. The change in the carrying amount of goodwill for the six months ended September 30, 2024 was due to the impairment of goodwill, and the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar. The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2024 as follows (in thousands):
Balance at March 31, 2024 | $ | 1,502,820 |
Goodwill impairment | (426,967) |
Foreign currency translation impact | (2,498) |
Balance at September 30, 2024 | $ | 1,073,355 |
Intangible Assets The net carrying amounts of intangible asse t s were $285.6 million and $308.7 million at September 30, 2024 and March 31, 2024, respectively. Intangible assets acquired in a business co mbination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives. The Company reviews definite-lived intangible assets for impairment when an event occurs that may indicate potential impairment. In connection with the goodwill impairment analysis performed at June 30, 2024, the Company conducted an impairment test of its definite-lived intangible assets at June 30, 2024. Based on this assessment, the Company concluded that the carrying values of the Company's definite-lived intangible assets were recoverable. At September 30, 2024, the Company performed a Triggering Event assessment and concluded no events or circumstances occurred that indicated intangible assets may be impaired. However, if future events occur or if business conditions deteriorate, the Company may be required to record an impairment loss, and or accelerate the amortization of definite-live intangible assets in the future, which could be material to its results of operations and financial condition. Intangible assets include the foll owing amortizable intangible assets at September 30, 2024 (in thousands):
| Cost |  | Accumulated Amortization |  | Net
Developed technology | $ | 249,169 |  |  | $ | (241,238) |  |  | $ | 7,931 |
Customer relationships | 766,732 |  |  | (498,997) |  |  | 267,735 |
Distributor relationships and technology licenses | 5,154 |  |  | (3,890) |  |  | 1,264 |
Definite-lived trademark and trade name | 57,822 |  |  | (49,323) |  |  | 8,499 |
Core technology | 7,192 |  |  | (7,192) |  |  | — |
Capitalized software | 3,317 |  |  | (3,317) |  |  | — |
Other | 1,208 |  |  | (1,032) |  |  | 176 |
| $ | 1,090,594 |  |  | $ | (804,989) |  |  | $ | 285,605 |
Intangible assets include the following amortizable intangible assets at March 31, 2024 (in thousands):
| Cost |  | Accumulated Amortization |  | Net
Developed technology | $ | 248,385 |  |  | $ | (238,470) |  |  | $ | 9,915 |
Customer relationships | 763,943 |  |  | (475,592) |  |  | 288,351 |
Distributor relationships and technology licenses | 7,785 |  |  | (7,463) |  |  | 322 |
Definite-lived trademark and trade name | 57,699 |  |  | (47,814) |  |  | 9,885 |
Core technology | 7,192 |  |  | (7,192) |  |  | — |
Capitalized software | 3,317 |  |  | (3,317) |  |  | — |
Other | 1,208 |  |  | (1,022) |  |  | 186 |
| $ | 1,089,529 |  |  | $ | (780,870) |  |  | $ | 308,659 |
Amortization included as cost of product revenue consists of amortization of developed technology, and distributor relationships and technology licenses. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense for the three and six months ended September 30, 2024 and 2023, respectively (in thousands):
| Three Months Ended |  | Six Months Ended
| September 30, |  | September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Amortization of intangible assets included as: |  |  |  |  |  |  |
Cost of product revenue | $ | 1,073 |  |  | $ | 1,909 |  |  | $ | 2,339 |  |  | $ | 3,826 |
Operating expense | 11,647 |  |  | 12,555 |  |  | 23,266 |  |  | 25,267 |
| $ | 12,720 |  |  | $ | 14,464 |  |  | $ | 25,605 |  |  | $ | 29,093 |
The following is the expected future amortization expense at September 30, 2024 for the fiscal years ending March 31 (in thousands):
2025 (remaining six months) | $ | 25,497 |
2026 | 46,937 |
2027 | 44,050 |
2028 | 41,088 |
2029 | 31,691 |
Thereafter | 96,342 |
| $ | 285,605 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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