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Fair Value Measurements | 12 Months Ended
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Mar. 31, 2022
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value: •Level 1—Quoted prices in active markets for identical assets or liabilities. •Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following table presents the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company's defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands):
|  | March 31, 2022 |  | March 31, 2021
|  | Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  | $ | 762,055 |  |  | $ | — |  |  | $ | — |  |  | $ | 669,759 |  |  | $ | — |  |  | $ | — |
Investments for deferred compensation plan included in other assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 108 |  |  | $ | — |  |  | $ | — |  |  | $ | 31 |  |  | $ | — |  |  | $ | — |
Common stock |  | 2,329 |  |  | — |  |  | — |  |  | 1,569 |  |  | — |  |  | — |
Money market funds |  | 6,765 |  |  | — |  |  | — |  |  | 6,734 |  |  | — |  |  | — |
Mutual funds |  | 19,229 |  |  | — |  |  | — |  |  | 16,475 |  |  | — |  |  | — |
Total of investments for deferred compensation plan |  | $ | 28,431 |  |  | $ | — |  |  | $ | — |  |  | $ | 24,809 |  |  | $ | — |  |  | $ | — |
Currency derivative assets included in other current assets |  | $ | — |  |  | $ | 1,517 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,452 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration included in accrued and other current liabilities |  | $ | — |  |  | $ | — |  |  | $ | 8,042 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,430 |
Contingent consideration included in other non-current liabilities |  | $ | — |  |  | $ | — |  |  | $ | 3,971 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Currency derivative liabilities included in accrued and other current liabilities |  | $ | — |  |  | $ | 165 |  |  | $ | — |  |  | $ | — |  |  | $ | 100 |  |  | $ | — |
The following table summarizes the change in the fair value of the Company's contingent consideration balance during fiscal year 2022 and 2021 (in thousands):
| Year Ended March 31,
| 2022 |  | 2021
Contingent consideration, beginning of the year | $ | 6,967 |  |  | $ | 23,284 |
Fair value of contingent consideration upon acquisition (1) | 9,973 |  | 6,430 |
Change in fair value of contingent consideration | (3,509) |  |  | 5,716 |
Settlements of contingent consideration (2) | (1,172) |  | (28,463) |
Contingent consideration, end of the year | $ | 12,259 |  |  | $ | 6,967 |
(1) The amount for fiscal year 2022 relates to the technology acquisition in fiscal year 2022. The amount for fiscal year 2021 relates to the Mevo acquisition and the other technology acquisition in fiscal year 2021. See Contingent Consideration for Business Acquisition section below for more information. (2) As of June 30, 2020, the earn-out period was completed in connection with the Company's acquisition of Streamlabs as disclosed below. The fair value of contingent consideration of $29.0 million as of June 30, 2020 is based on the actual net sales of Streamlabs services during the earn-out period and is no longer subject to fair value measurement and was accordingly transferred out of Level 3. During the third quarter of fiscal year 2021, $28.5 million of the contingent consideration was transferred from other current liabilities to equity upon settlement of the contingent consideration through the issuance of shares out of treasury stock. During the fourth quarter of fiscal year 2022, an additional $0.3 million of the contingent consideration was transferred from other current liabilities to equity upon settlement of the contingent consideration through the issuance of shares out of treasury stock. The remaining $0.2 million is held back in escrow for claims made against the escrow and for the payment of taxes. Investments for Deferred Compensation Plan The marketable securities for the Company's deferred compensation plan are recorded at a fair value of $28.4 million and $24.8 million as of March 31, 2022 and 2021, respectively, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Unrealized gains related to marketable securities for fiscal years 2022, 2021 and 2020 are included in other income (expense), net in the consolidated statements of operations (see Note 6). Contingent Consideration for Business Acquisitions The contingent consideration arising from the technology acquisition on May 19, 2021 (see Note 3) represents the future potential earn-out payments of up to $10.0 million payable in cash upon the achievement of three technical development milestones required to be completed as of December 31, 2021, June 30, 2022, and June 30, 2023. The fair value of the contingent consideration as of the acquisition date was $10.0 million, which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During the third quarter of fiscal year 2022, $0.9 million of the contingent consideration was released from other current liabilities upon cash settlement of the contingent consideration for the first technical development milestone. The contingent consideration arising from the Mevo Acquisition on February 17, 2021 (see Note 3) represents the future potential earn-out payments of up to $17.0 million payable in cash only upon the achievement of certain net sales for the period beginning on December 26, 2020 and ending on December 31, 2021. The fair value of the contingent consideration as of the acquisition date was $3.4 million, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the value of the earn-out payment, and discounted at the risk-free rate. The valuation included significant assumptions and unobservable inputs such as the projected sales of Mevo over the earn-out period, risk-free rate, and the net sales volatility. Projected sales were based on the Company's internal projections, including analysis of the target market and historical sales of Mevo products. As of March 31, 2021 the fair value of the contingent consideration remained as $3.4 million. As of December 31, 2021, the fair value of the contingent consideration was released from other current liabilities as the net sales milestone was not achieved upon completion of the earn-out period. The contingent consideration arising from the technology acquisition on January 4, 2021 (see Note 3) represents the future potential earn-out payments of up to $3.0 million payable in cash upon the achievement of two technical development milestones required to be completed as of December 31, 2021 and March 31, 2022. The fair value of the contingent consideration was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. The contingent consideration is expected to be paid in the first two quarters of fiscal year 2023. In connection with the acquisition of Streamlabs on October 31, 2019 (see Note 3), the Company agreed to pay a total earn out payment of $29.0 million, payable in stock, only upon the achievement of certain net revenues for the period beginning on January 1, 2020 and ending on June 30, 2020. The fair value of the contingent consideration as of the acquisition date was $0.04 million, and increased to $23.3 million as of March 31, 2020, which was determined by using a Black-Scholes-Merton valuation model to calculate the probability of the earn-out threshold being met, times the value of the earn-out payment, and discounted at the risk-free rate. The fair value was increased by $5.7 million to $29.0 million as of June 30, 2020, based on actual sales. During the third quarter of fiscal year 2021 and the fourth quarter of fiscal year 2022, the Company issued 390,397 and 4,010 shares, respectively, out of treasury stock to former security holders of Streamlabs, in satisfaction of payment of the contingent consideration that was earned during the earn-out period. The issuances of such shares were deemed to be exempt from registration under the Securities Act of 1933 (the "Securities Act"), in reliance on Regulation D of the Securities Act as transactions by an issuer not involving a public offering. Although the estimate of contingent consideration is based on management’s best knowledge of current events, the estimate could change significantly from period to period. Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have a material impact on future results of operations. Equity Method Investments The Company has certain non-marketable investments included in other assets that are accounted for under the equity method of accounting, with a carrying value of $40.2 million and $40.7 million as of March 31, 2022 and 2021, respectively. Unrealized gains (losses) related to equity investments for fiscal years 2022, 2021 and 2020 are included in other income (expense), net in the Company's consolidated statements of operations. There was no impairment of these assets during fiscal years 2022, 2021 and 2020. On March 2, 2020, the Company sold its $5.5 million investment, in a privately held company, for proceeds with a total fair value of $45.3 million consisting of cash, a 6% subordinated note due in five years, and a Series A preferred units and Series B common units in Marlin-SL Topco, LP ("Marlin"). As of March 31, 2022, the investment represents an ownership interest of approximately 8.9% in Marlin. The Company has evaluated whether Marlin qualifies as a variable interest entity ("VIE") pursuant to the accounting guidance of ASC 810, Consolidations. On the basis that the total equity investment in Marlin may not be sufficient to absorb its expected losses, the Company concluded that Marlin is currently a VIE. However, considering the Company's minority interest and limited involvement with the Marlin business, the Company concluded it is not required to consolidate Marlin. Rather, the Company accounts for this investment under the equity method as it represents an ownership interest in a limited partnership that is more than minor. The promissory note is accounted for as a loan receivable and is included in other assets in the consolidated balance sheets. The Company's maximum exposure to any losses incurred by Marlin is limited to its investment. As of March 31, 2022 and 2021, the carrying value of the investment in Marlin was $21.4 million and $26.7 million, respectively. The Company's investment related to this VIE was not individually significant to the Company's consolidated financial statements. Assets Measured at Fair Value on a Nonrecurring Basis Financial Assets. The Company has certain investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. The carrying value is also adjusted for observable price changes with the same or similar security from the same issuer. The amount of these investments included in other assets was not material as of March 31, 2022 and 2021. There is no impairment recorded in fiscal year 2022. During fiscal year 2021, the Company recorded impairment charges of $2.0 million for its equity securities without readily determinable fair values, which had an initial cost basis of $2.0 million, as it was determined the carrying value of the investments were not recoverable. Non-Financial Assets. Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur (or tested at least annually for goodwill) such that a non-financial instrument is required to be evaluated for impairment and an impairment is recorded to reduce the non-financial instrument's carrying value to the fair value as a result of such triggering events, the non-financial assets and liabilities are measured at fair value during such period. See Note 2 for additional information about how the Company tests various asset classes for impairment. During the year ended March 31, 2022, the Company recorded impairment charges of $7.0 million for the Jaybird-related intangible assets (see Note 11).

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