(State or Other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated Filer | ☐ | ||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||
Emerging Growth Company |
Page | ||||
Item 1. | Condensed Consolidated Financial Statements: | |||
Consolidated Statements of Operations for the three and nine months ended June 30, 2020 and 2019 | ||||
Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2020 and 2019 | ||||
Consolidated Balance Sheets at June 30, 2020 and September 30, 2019 | ||||
Consolidated Statements of Stockholders’ Equity for the three and nine months ended June 30, 2020 and 2019 | ||||
Consolidated Statements of Cash Flows for the nine months ended June 30, 2020 and 2019 | ||||
Notes to Condensed Consolidated Financial Statements | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Item 1. | ||||
Item 1A. | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Item 5. | ||||
Item 6. | ||||
Certifications |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Unaudited) (In thousands, except per share amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Hosting and professional services | $ | $ | $ | $ | |||||||||||
Product and licensing | |||||||||||||||
Maintenance and support | |||||||||||||||
Total revenues | |||||||||||||||
Cost of revenues: | |||||||||||||||
Hosting and professional services | |||||||||||||||
Product and licensing | |||||||||||||||
Maintenance and support | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Total cost of revenues | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses: | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Acquisition-related costs, net | |||||||||||||||
Restructuring and other charges, net | |||||||||||||||
Total operating expenses | |||||||||||||||
Income from operations | |||||||||||||||
Other income (expense): | |||||||||||||||
Interest income | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income (expense), net | ( | ) | |||||||||||||
Income (loss) before income taxes | ( | ) | |||||||||||||
(Benefit) provision for income taxes | ( | ) | ( | ) | |||||||||||
Net income (loss) from continuing operations | ( | ) | ( | ) | |||||||||||
Net income (loss) from discontinued operations | ( | ) | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income (loss) per common share - basic: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | |||||||||
Discontinued operations | ( | ) | |||||||||||||
Total net income per basic common share | $ | $ | $ | $ | |||||||||||
Net income (loss) per common share - diluted: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | |||||||||
Discontinued operations | ( | ) | |||||||||||||
Total net income per diluted common share | $ | $ | $ | $ | |||||||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustment | ( | ) | |||||||||||||
Cerence Spin-off | |||||||||||||||
Pension adjustments | ( | ) | |||||||||||||
Unrealized gain (loss) on marketable securities | ( | ) | |||||||||||||
Total other comprehensive income, net | |||||||||||||||
Comprehensive income | $ | $ | $ | $ |
June 30, 2020 | September 30, 2019 | ||||||
(Unaudited) | |||||||
(In thousands, except per share amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Marketable securities | |||||||
Accounts receivable, less allowances for doubtful accounts of $12,283 and $9,797 | |||||||
Prepaid expenses and other current assets | |||||||
Current assets of discontinued operations | |||||||
Total current assets | |||||||
Marketable securities | |||||||
Land, building and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Right-of-use assets | |||||||
Other assets | |||||||
Long-term assets of discontinued operations | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | $ | |||||
Contingent and deferred acquisition payments | |||||||
Accounts payable | |||||||
Accrued expenses and other current liabilities | |||||||
Deferred revenue | |||||||
Current liabilities of discontinued operations | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Deferred revenue, net of current portion | |||||||
Deferred tax liabilities | |||||||
Operating lease liabilities | |||||||
Other liabilities | |||||||
Long-term liabilities of discontinued operations | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 15) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.001 par value per share; 560,000 shares authorized; 285,125 and 289,680 shares issued and 281,375 and 285,930 shares outstanding, respectively | |||||||
Additional paid-in capital | |||||||
Treasury stock, at cost (3,751 shares) | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Accumulated deficit | ( | ) | ( | ) | |||
Total Nuance Communications, Inc. stockholders’ equity | |||||||
Noncontrolling interests | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total Stockholders' Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||
Issuance of common stock under employee stock plans | |||||||||||||||||||||||||||||||||
Cancellation of restricted stock, and repurchase of common stock at cost for employee tax withholding | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interests | Total Stockholders' Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||
Cerence Spin-off | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Issuance of common stock under employee stock plans | |||||||||||||||||||||||||||||||||
Cancellation of restricted stock, and repurchase of common stock at cost for employee tax withholding | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||
Repurchases and retirement of common stock | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Repurchases of convertible notes (a) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ) | ( | ) | |||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | $ |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||
Issuance of common stock under employee stock plans | ( | ) | |||||||||||||||||||||||||||
Cancellation of restricted stock, and repurchase of common stock at cost for employee tax withholding | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
Repurchase and retirement of common stock | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||
Adoption of ASC 606 | |||||||||||||||||||||||||||||
Issuance of common stock under employee stock plans | |||||||||||||||||||||||||||||
Cancellation of restricted stock, and repurchase of common stock at cost for employee tax withholding | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
Repurchase and retirement of common stock | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
Reclassification of currency translation differences into earnings as a result of the disposition of our Imaging business | |||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
Nine Months Ended June 30, | |||||||
2020 | 2019 | ||||||
(Unaudited) (In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) from continuing operations | $ | $ | ( | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation | |||||||
Amortization | |||||||
Stock-based compensation | |||||||
Non-cash interest expense | |||||||
Deferred tax benefit | ( | ) | ( | ) | |||
Loss on extinguishment of debt | |||||||
Other | ( | ) | |||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | |||||||
Accounts receivable | |||||||
Prepaid expenses and other assets | ( | ) | |||||
Accounts payable | ( | ) | |||||
Accrued expenses and other liabilities | ( | ) | |||||
Deferred revenue | |||||||
Net cash provided by operating activities - continuing operations | |||||||
Net cash (used in) provided by operating activities - discontinued operations | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Proceeds from disposition of businesses, net of transaction fees | |||||||
Purchases of marketable securities and other investments | ( | ) | ( | ) | |||
Proceeds from sales and maturities of marketable securities and other investments | |||||||
Other | ( | ) | |||||
Net cash provided by investing activities | |||||||
Cash flows from financing activities: | |||||||
Repurchase and redemption of debt | ( | ) | ( | ) | |||
Net distribution from Cerence upon the spin-off | |||||||
Payments for repurchase of common stock | ( | ) | ( | ) | |||
Proceeds from issuance of common stock from employee stock plans | |||||||
Proceeds from the revolving credit facility | |||||||
Repayment of the revolving credit facility | ( | ) | |||||
Payments for taxes related to net share settlement of equity awards | ( | ) | ( | ) | |||
Other financing activities | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Effects of exchange rate changes on cash and cash equivalents | ( | ) | |||||
Net (decrease) increase in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ |
• | identification of the contract, or contracts, with a customer; |
• | identification of the performance obligations in the contract, including whether they are distinct within the context of the contract; |
• | determination of the transaction price, including the constraint on variable consideration; |
• | allocation of the transaction price to the performance obligations in the contract; and |
• | recognition of revenue when, or as, performance obligations are satisfied. |
• | the pricing of standalone sales (in the instances where available); |
• | the pricing established by management when setting prices for deliverables that are intended to be sold on a standalone basis; |
• | contractually stated prices for deliverables that are intended to be sold on a standalone basis; and |
• | other pricing factors, such as the geographical region in which the products are sold and expected discounts based on the customer size and type. |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||
Hosting and professional services | Product and licensing | Maintenance and support | Total | Hosting and professional services | Product and licensing | Maintenance and support | Total | ||||||||||||||||||||||||
Healthcare | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Enterprise | |||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||
Hosting and professional services | Product and licensing | Maintenance and support | Total | Hosting and professional services | Product and licensing | Maintenance and support | Total | ||||||||||||||||||||||||
Healthcare | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Enterprise | |||||||||||||||||||||||||||||||
Other | ( | ) | |||||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ | $ | $ | $ | $ |
Contract assets | |||
Balance as of September 30, 2019 | $ | ||
Revenues recognized but not billed | |||
Amounts reclassified to accounts receivable | ( | ) | |
Balance at June 30, 2020 | $ |
Deferred revenue | |||
Balance as of September 30, 2019 | $ | ||
Amounts bill but not recognized | |||
Revenue recognized | ( | ) | |
Balance at June 30, 2020 | $ |
Within One Year | Two to Four Years | Greater than Four Years | Total | ||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended June 30, | |||||||||||||||
2020 | 2019 | ||||||||||||||
Automotive | Imaging | Automotive | Total | ||||||||||||
Major line items constituting net income of discontinued operations: | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Cost of revenue | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Acquisition-related costs, net | |||||||||||||||
Restructuring and other charges, net | |||||||||||||||
Other | |||||||||||||||
Income from discontinued operations before income taxes | |||||||||||||||
Benefit for income taxes | ( | ) | ( | ) | |||||||||||
Gain on disposition | |||||||||||||||
Net income from discontinued operations | $ | $ | $ | $ | |||||||||||
Supplemental information: | |||||||||||||||
Depreciation | $ | $ | $ | $ | |||||||||||
Amortization | $ | $ | $ | $ | |||||||||||
Stock compensation | $ | $ | $ | $ | |||||||||||
Capital expenditures | $ | $ | $ | ( | ) | $ | ( | ) |
Nine Months Ended June 30, | |||||||||||||||
2020 | 2019 | ||||||||||||||
Automotive | Imaging | Automotive | Total | ||||||||||||
Major line items constituting net income of discontinued operations: | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Cost of revenue | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Acquisition-related costs, net | ( | ) | |||||||||||||
Restructuring and other charges, net | |||||||||||||||
Other | ( | ) | ( | ) | |||||||||||
(Loss) income from discontinued operations before income taxes | ( | ) | ( | ) | |||||||||||
Provision (benefit) for income taxes | ( | ) | ( | ) | ( | ) | |||||||||
Gain on disposition | |||||||||||||||
Net (loss) income from discontinued operations | $ | ( | ) | $ | $ | $ | |||||||||
Supplemental information: | |||||||||||||||
Depreciation | $ | $ | $ | $ | |||||||||||
Amortization | $ | $ | $ | $ | |||||||||||
Stock compensation | $ | $ | $ | $ | |||||||||||
Capital expenditures | $ | $ | $ | ( | ) | $ | ( | ) |
September 30, 2019 | |||
Major classes of assets of discontinued operations: | |||
Accounts receivable, net | $ | ||
Prepaid expenses and other current assets | |||
Land, building and equipment, net | |||
Goodwill | |||
Intangible assets, net | |||
Other assets | |||
Total assets | $ | ||
Major classes of liabilities of discontinued operations: | |||
Accounts payable | $ | ||
Accrued expenses and other current liabilities | |||
Deferred revenue | |||
Other liabilities | |||
Total liabilities | $ |
Healthcare | Enterprise | Other | Total | ||||||||||||
Balance as of September 30, 2019 | $ | $ | $ | $ | |||||||||||
Purchase accounting adjustments | ( | ) | ( | ) | |||||||||||
Effect of foreign currency translation | |||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ |
Intangible Assets | |||
Balance at September 30, 2019 | $ | ||
Amortization | ( | ) | |
Effect of foreign currency translation | |||
Balance at June 30, 2020 | $ |
Derivatives Not Designated as Hedges | Balance Sheet Classification | Fair Value | ||||||||
June 30, 2020 | September 30, 2019 | |||||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $ | $ | |||||||
Foreign currency forward contracts | Accrued expenses and other current liabilities | $ | ( | ) | $ | ( | ) |
Income Statement Classification | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||
Derivatives Not Designated as Hedges | Income (Loss) Recognized | 2020 | 2019 | 2020 | 2019 | |||||||||||||
Foreign currency forward contracts | Other income (expense), net | $ | $ | ( | ) | $ | $ | ( | ) |
• | Level 1: Quoted prices for identical assets or liabilities in active markets. |
• | Level 2: Observable inputs other than those described as Level 1. |
• | Level 3: Unobservable inputs that are supportable by little or no market activities and are based on significant assumptions and estimates. |
June 30, 2020 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Money market funds (a) | $ | $ | $ | $ | |||||||||||
Time deposits (b) | |||||||||||||||
Commercial paper, $15,128 at cost (b) | |||||||||||||||
Corporate notes and bonds, $15,460 at cost (b) | |||||||||||||||
Foreign currency exchange contracts (b) | |||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||
Liabilities: | |||||||||||||||
Foreign currency exchange contracts (b) | $ | ( | ) | $ | $ | ( | ) | ||||||||
Contingent acquisition payments (c) | ( | ) | ( | ) | |||||||||||
Total liabilities at fair value | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
September 30, 2019 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | |||||||||||||||
Money market funds (a) | $ | $ | $ | $ | |||||||||||
Time deposits (b) | |||||||||||||||
Commercial paper, $77,089 at cost (b) | |||||||||||||||
Corporate notes and bonds, $37,504 at cost (b) | |||||||||||||||
Foreign currency exchange contracts (b) | |||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||
Liabilities: | |||||||||||||||
Foreign currency exchange contracts (b) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Contingent acquisition payments (c) | ( | ) | ( | ) | |||||||||||
Total liabilities at fair value | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(a) | Money market funds and time deposits with original maturity of 90 days or less are included within cash and cash equivalents in the consolidated balance sheets and are valued at quoted market prices in active markets. |
(b) | Time deposits, commercial paper, corporate notes and bonds, and foreign currency exchange contracts are recorded at fair market values, which are determined based on the most recent observable inputs for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable. Time deposits are generally for terms of one year or less. Commercial paper and corporate notes and bonds generally mature within three years and had a weighted average maturity of |
(c) | The fair values of our contingent consideration arrangements were determined using either the option pricing model with Monte Carlo simulation or the probability-weighted discounted cash flow method. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Payments and foreign currency translation | ( | ) | ( | ) | |||||||||||
Adjustments to fair value included in acquisition-related costs, net | ( | ) | ( | ) | |||||||||||
Balance at end of period | $ | $ | $ | $ |
June 30, 2020 | September 30, 2019 | ||||||
Compensation | $ | $ | |||||
Cost of revenue related liabilities | |||||||
Accrued interest payable | |||||||
Consulting and professional fees | |||||||
Sales and marketing incentives | |||||||
Sales and other taxes payable | |||||||
Facility-related liabilities | |||||||
Operating lease obligations | |||||||
Other | |||||||
Total | $ | $ |
Personnel | Facilities | Total | |||||||||
Balance at September 30, 2019 | $ | $ | $ | ||||||||
ASC 842 implementation (a) | |||||||||||
Restructuring charges, net | |||||||||||
Non-cash adjustment | |||||||||||
Cash payments | ( | ) | ( | ) | ( | ) | |||||
Balance at June 30, 2020 | $ | $ | $ |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Enterprise | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Enterprise | |||||||||||||||||||||||||||||||||||||||
Other | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
Corporate | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
June 30, 2020 | September 30, 2019 | ||||||
5.625% Senior Notes due 2026, net of deferred issuance costs of $4.0 million and $4.5 million, respectively. Effective interest rate 5.625%. | $ | $ | |||||
6.000% Senior Notes due 2024, net of deferred issuance costs of $1.5 million. Effective interest rate 6.000%. | |||||||
1.000% Convertible Debentures due 2035, net of unamortized discount of $71.6 million and $91.6 million, respectively, and deferred issuance costs of $3.3 million and $4.3 million, respectively. Effective interest rate 5.622%. | |||||||
2.750% Convertible Debentures due 2031. Effective interest rate 7.432%. | |||||||
1.250% Convertible Debentures due 2025, net of unamortized discount of $47.3 million and $71.6 million, respectively, and deferred issuance costs of $2.0 million and $3.1 million, respectively. Effective interest rate 5.578%. | |||||||
1.500% Convertible Debentures due 2035, net of unamortized discount of $12.8 million and $22.7 million, respectively, and deferred issuance costs of $0.4 million and $0.8 million, respectively. Effective interest rate 5.394%. | |||||||
Deferred issuance costs related to our Revolving Credit Facility | ( | ) | ( | ) | |||
Total debt | |||||||
Less: current portion (a) | ( | ) | |||||
Total long-term debt | $ | $ |
Fiscal Year | Convertible Debentures(1) | Senior Notes | Total | |||||||||
2020 | $ | $ | $ | |||||||||
2021 | ||||||||||||
2022 | ||||||||||||
2023 | ||||||||||||
2024 | ||||||||||||
Thereafter | ||||||||||||
Total before unamortized discount | ||||||||||||
Less: unamortized discount and issuance costs | ( | ) | ( | ) | ( | ) | ||||||
Total long-term debt | $ | $ | $ |
(1) | Pursuant to the terms of each convertible instrument, holders have the right to redeem the debt on specific dates prior to maturity. The repayment schedule above assumes that payment is due on the next redemption date after June 30, 2020. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator: | |||||||||||||||
Net income (loss) from continuing operations | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Net income (loss) from discontinued operations | ( | ) | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Denominator: | |||||||||||||||
Weighted average common shares outstanding — basic | |||||||||||||||
Dilutive effect of employee stock compensation plans | |||||||||||||||
Weighted average common shares outstanding — diluted | |||||||||||||||
Net income (loss) per common share - basic: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | |||||||||
Discontinued operations | ( | ) | |||||||||||||
Total net income per basic common share | $ | $ | $ | $ | |||||||||||
Net income (loss) per common share - diluted: | |||||||||||||||
Continuing operations | $ | $ | $ | $ | ( | ) | |||||||||
Discontinued operations | ( | ) | |||||||||||||
Total net income per diluted common share | $ | $ | $ | $ | |||||||||||
Anti-dilutive equity instruments excluded from the calculation | |||||||||||||||
Contingently issuable awards excluded from the calculation |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Cost of hosting and professional services | $ | $ | $ | $ | |||||||||||
Cost of product and licensing | |||||||||||||||
Cost of maintenance and support | |||||||||||||||
Research and development | |||||||||||||||
Sales and marketing | |||||||||||||||
General and administrative | |||||||||||||||
Total | $ | $ | $ | $ |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (a) | |||||||||
Outstanding at September 30, 2019 | $ | |||||||||||
Exercised | ( | ) | $ | |||||||||
Equitable Adjustment - Cerence Spin-off (b) | ||||||||||||
Outstanding at June 30, 2020 | $ | $ | million | |||||||||
Exercisable at June 30, 2020 | $ | $ | million | |||||||||
Exercisable at June 30, 2019 | $ | $ |
(a) | The aggregate intrinsic value in this table represents any excess of the closing market price of our common stock as of June 30, 2020 ($ |
(b) | Effective with the spin-off of our Automotive business on October 1, 2019, outstanding equity awards were equitably adjusted by a conversion ratio of |
Number of Shares Underlying Restricted Units — Performance-Based Awards | Number of Shares Underlying Restricted Units — Time-Based Awards | ||||
Outstanding at September 30, 2019 | |||||
Granted | |||||
Earned/released | ( | ) | ( | ) | |
Forfeited | ( | ) | ( | ) | |
Equitable Adjustment - Cerence Spin-off (b) | |||||
Outstanding at June 30, 2020 | |||||
Weighted average remaining recognition period of outstanding Restricted Units | |||||
Unrecognized stock-based compensation expense of outstanding Restricted Units | $ | $ | |||
Aggregate intrinsic value of outstanding Restricted Units (a) | $ | $ |
(a) | The aggregate intrinsic value in this table represents any excess of the closing market price of our common stock as of June 30, 2020 ($ |
(b) |
Nine Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Weighted-average grant-date fair value per share | $ | $ | |||||
Total intrinsic value of shares vested (in millions) | $ | $ |
Nine Months Ended June 30, | |||||
2020 | 2019 | ||||
Dividend yield | 0.0 | % | 0.0 | % | |
Expected volatility | 27.73% - 28.24% | 27.32% - 30.85% | |||
Risk-free interest rate | 1.40% - 1.62% | 2.23% - 3.02% | |||
Expected term (in years) | 2.72 - 3 | 1 - 3 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Domestic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Foreign | |||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ) |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Domestic | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||
Foreign | ( | ) | ( | ) | |||||||||||
(Benefit) provision for income taxes | $ | ( | ) | $ | $ | ( | ) | $ | |||||||
Effective tax rate | NA | % | ( | )% | ( | )% |
As of March 31, 2020 | |||||||||||
Previously Reported | Adjustment | As Revised | |||||||||
Deferred tax liabilities | $ | $ | $ | ||||||||
Total liabilities | $ | $ | $ | ||||||||
Accumulated deficit | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Total stockholders’ equity | $ | $ | ( | ) | $ |
For the three Months Ended March 31, 2020 | |||||||||||
Previously Reported | Adjustment | As Revised | |||||||||
Provision for income taxes | $ | $ | $ | ||||||||
Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Net loss per basic common share - Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Total net loss per basic common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Net loss per diluted common share - Continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Total net loss per diluted common share | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Fiscal Year | Operating Leases | Operating leases under restructuring | Total | |||||||||
2020 | $ | $ | $ | |||||||||
2021 | ||||||||||||
2022 | ||||||||||||
2023 | ||||||||||||
2024 | ||||||||||||
Thereafter | ||||||||||||
Total | $ | $ | $ |
• | The Healthcare segment is primarily engaged in providing clinical speech and clinical language understanding solutions that improve the clinical documentation process, from capturing the complete patient record to improving clinical documentation and quality measures for reimbursement. |
• | The Enterprise segment is primarily engaged in using speech, natural language understanding, and artificial intelligence to provide automated customer solutions and services for voice, mobile, web and messaging channels. |
• | The Other segment consists primarily of voicemail transcription services after the sale of our Mobile Operator Services and the wind-down of devices in 2019. |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Segment revenues: | |||||||||||||||
Healthcare | $ | $ | $ | $ | |||||||||||
Enterprise | |||||||||||||||
Other | |||||||||||||||
Total segment revenues | $ | $ | $ | $ | |||||||||||
Less: acquisition-related revenues adjustments | ( | ) | ( | ) | ( | ) | |||||||||
Total revenues | $ | $ | $ | $ | |||||||||||
Segment profit: | |||||||||||||||
Healthcare | $ | $ | $ | $ | |||||||||||
Enterprise | |||||||||||||||
Other | |||||||||||||||
Total segment profit | $ | $ | $ | $ | |||||||||||
Corporate expenses and other, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Acquisition-related revenues | ( | ) | ( | ) | ( | ) | |||||||||
Stock-based compensation | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Amortization of intangible assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Acquisition-related costs, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Restructuring and other charges, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ) |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
United States | $ | $ | $ | $ | |||||||||||
International | |||||||||||||||
Total revenues | $ | $ | $ | $ |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Interest paid | $ | $ | $ | $ | |||||||||||
Income taxes paid | $ | $ | $ | $ |
• | our future bookings, revenues, cost of revenues, research and development expenses, selling, general and administrative expenses, amortization of intangible assets and gross margin; |
• | our strategy relating to our segments; |
• | our programs to reduce costs and optimize processes; |
• | market trends; |
• | technological advancements; |
• | the potential of future product releases; |
• | our product development plans and the timing, amount and impact of investments in research and development; |
• | future acquisitions, divestitures and other strategic transactions, and anticipated benefits from such transactions; |
• | international operations and localized versions of our products; |
• | the impact of the COVID-19 pandemic; and |
• | the conduct, timing and outcome of legal proceedings and litigation matters. |
• | Healthcare. Our healthcare segment provides intelligent systems that support a more natural and insightful approach to clinical documentation, freeing clinicians to spend more time caring for patients and helping technicians and health organizations drive meaningful financial and clinical outcomes. Our principal solutions include Nuance® Dragon Ambient eXperience™ ("DAX"), dragon medical cloud-based solutions ("Dragon Medical One"), computer assisted physician documentation ("CAPD"), clinical documentation improvement ("CDI") and coding, diagnostic solutions, and medical transcription services. |
• | Enterprise. Our Enterprise segment is a leading provider of AI-powered intelligent customer engagement solutions and services, which enable enterprises and contact centers to enhance and automate customer service and sales engagement. Our principal solutions include interactive voice responses solutions, intelligent engagement solutions and security & biometric solutions. |
• | Other. Our Other segment currently consists primarily of voicemail transcription services following the sale of our Mobile Operator Services business and the wind-down of Devices in 2019. |
• | Discontinued Operations. On February 1, 2019, we completed the sale of our Imaging business and received approximately $ |
• | Total revenues were $1,126.0 million for the nine months ended June 30, 2020, as compared to $1,133.7 million for the nine months ended June 30, 2019; |
• | Net income from continuing operations for the nine months ended June 30, 2020 was $51.5 million, compared to a net loss from continuing operations of $15.2 million for the nine months ended June 30, 2019; |
• | Gross margins for the nine months ended June 30, 2020 were 56.9%, compared to 54.6% for the nine months ended June 30, 2019; |
• | Operating margins for the nine months ended June 30, 2020 were 8.9%, compared to 6.7% for nine months ended June 30, 2019; and |
• | Operating cash flows from continuing operations decreased by $38.3 million to $187.0 million for the nine months ended June 30, 2020, compared to $225.3 million for the nine months ended June 30, 2019. |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Hosting and professional services | $ | 225.3 | $ | 232.9 | $ | (7.6 | ) | (3.2 | )% | |||||
Product and licensing | 48.7 | 78.2 | (29.5 | ) | (37.7 | )% | ||||||||
Maintenance and support | 64.4 | 66.4 | (2.0 | ) | (3.0 | )% | ||||||||
Total revenues | $ | 338.4 | $ | 377.4 | $ | (39.0 | ) | (10.3 | )% | |||||
United States | $ | 266.2 | $ | 310.9 | $ | (44.7 | ) | (14.4 | )% | |||||
International | 72.2 | 66.5 | 5.7 | 8.5 | % | |||||||||
Total revenues | $ | 338.4 | $ | 377.4 | $ | (39.0 | ) | (10.3 | )% |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Hosting and professional services | $ | 691.3 | $ | 678.1 | $ | 13.2 | 1.9 | % | ||||||
Product and licensing | 243.5 | 252.3 | (8.8 | ) | (3.5 | )% | ||||||||
Maintenance and support | 191.2 | 203.3 | (12.1 | ) | (6.0 | )% | ||||||||
Total revenues | $ | 1,126.0 | $ | 1,133.7 | $ | (7.7 | ) | (0.7 | )% | |||||
United States | $ | 904.3 | $ | 926.9 | $ | (22.6 | ) | (2.4 | )% | |||||
International | 221.7 | 206.8 | 14.9 | 7.2 | % | |||||||||
Total revenues | $ | 1,126.0 | $ | 1,133.7 | $ | (7.7 | ) | (0.7 | )% |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Hosting revenue | $ | 191.8 | $ | 188.0 | $ | 3.8 | 2.0 | % | ||||||
Professional services revenue | 33.5 | 44.8 | (11.3 | ) | (25.3 | )% | ||||||||
Hosting and professional services revenue | $ | 225.3 | $ | 232.9 | $ | (7.6 | ) | (3.2 | )% | |||||
As a percentage of total revenue | 66.6 | % | 61.7 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Hosting revenue | $ | 584.6 | $ | 554.0 | $ | 30.6 | 5.5 | % | ||||||
Professional services revenue | 106.7 | 124.1 | (17.4 | ) | (14.0 | )% | ||||||||
Hosting and professional services revenue | $ | 691.3 | $ | 678.1 | $ | 13.2 | 1.9 | % | ||||||
As a percentage of total revenue | 61.4 | % | 59.8 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Product and licensing revenue | $ | 48.7 | $ | 78.2 | $ | (29.5 | ) | (37.7 | )% | |||||
As a percentage of total revenue | 14.4 | % | 20.7 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Product and licensing revenue | $ | 243.5 | $ | 252.3 | $ | (8.8 | ) | (3.5 | )% | |||||
As a percentage of total revenue | 21.6 | % | 22.3 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Maintenance and support revenue | $ | 64.4 | $ | 66.4 | $ | (2.0 | ) | (3.0 | )% | |||||
As a percentage of total revenue | 19.0 | % | 17.6 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Maintenance and support revenue | $ | 191.2 | $ | 203.3 | $ | (12.1 | ) | (6.0 | )% | |||||
As a percentage of total revenue | 17.0 | % | 17.9 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of hosting and professional services revenue | $ | 119.8 | $ | 138.4 | $ | (18.6 | ) | (13.4 | )% | |||||
As a percentage of professional services and hosting revenue | 53.2 | % | 59.4 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of hosting and professional services revenue | $ | 388.8 | $ | 409.3 | $ | (20.5 | ) | (5.0 | )% | |||||
As a percentage of professional services and hosting revenue | 56.2 | % | 60.4 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of product and licensing revenue | $ | 10.7 | $ | 18.7 | $ | (8.0 | ) | (42.9 | )% | |||||
As a percentage of product and licensing revenue | 21.9 | % | 23.9 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of product and licensing revenue | $ | 54.2 | $ | 60.5 | $ | (6.3 | ) | (10.4 | )% | |||||
As a percentage of product and licensing revenue | 22.2 | % | 24.0 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of maintenance and support revenue | $ | 7.3 | $ | 8.1 | $ | (0.9 | ) | (10.6 | )% | |||||
As a percentage of maintenance and support revenue | 11.3 | % | 12.3 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of maintenance and support revenue | $ | 23.0 | $ | 24.8 | $ | (1.8 | ) | (7.2 | )% | |||||
As a percentage of maintenance and support revenue | 12.1 | % | 12.2 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Research and development expense | $ | 55.2 | $ | 47.1 | $ | 8.2 | 17.3 | % | ||||||
As a percentage of total revenue | 16.3 | % | 12.5 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Research and development expense | $ | 169.7 | $ | 139.7 | $ | 30.0 | 21.5 | % | ||||||
As a percentage of total revenue | 15.1 | % | 12.3 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Sales and marketing expense | $ | 64.4 | $ | 65.3 | $ | (1.0 | ) | (1.5 | )% | |||||
As a percentage of total revenue | 19.0 | % | 17.3 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Sales and marketing expense | $ | 201.8 | $ | 200.4 | $ | 1.5 | 0.7 | % | ||||||
As a percentage of total revenue | 17.9 | % | 17.7 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
General and administrative expense | $ | 37.7 | $ | 45.8 | $ | (8.2 | ) | (17.8 | )% | |||||
As a percentage of total revenue | 11.1 | % | 12.1 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
General and administrative expense | $ | 114.4 | $ | 129.2 | $ | (14.8 | ) | (11.5 | )% | |||||
As a percentage of total revenue | 10.2 | % | 11.4 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of revenue | $ | 6.4 | $ | 6.6 | $ | (0.1 | ) | (2.0 | )% | |||||
Operating expenses | 11.8 | 13.4 | (1.5 | ) | (11.4 | )% | ||||||||
Total amortization expense | $ | 18.3 | $ | 19.9 | $ | (1.7 | ) | (8.3 | )% |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Cost of revenue | $ | 19.7 | $ | 20.6 | $ | (0.9 | ) | (4.5 | )% | |||||
Operating expenses | 36.2 | 41.0 | (4.8 | ) | (11.7 | )% | ||||||||
Total amortization expense | $ | 55.9 | $ | 61.6 | $ | (5.7 | ) | (9.3 | )% |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Transition and integration costs | $ | 0.9 | $ | 1.2 | $ | (0.4 | ) | (29.5 | )% | |||||
Professional service fees | (0.1 | ) | 0.9 | (0.9 | ) | (109.2 | )% | |||||||
Acquisition-related adjustments | — | (1.3 | ) | 1.3 | (96.8 | )% | ||||||||
Total Acquisition-related costs, net | $ | 0.8 | $ | 0.8 | $ | — | (3.8 | )% |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Transition and integration costs | $ | 3.7 | $ | 6.1 | $ | (2.4 | ) | (38.9 | )% | |||||
Professional service fees | (0.1 | ) | 1.2 | (1.2 | ) | (104.5 | )% | |||||||
Acquisition-related adjustments | — | (1.8 | ) | 1.8 | (97.6 | )% | ||||||||
Total Acquisition-related costs, net | $ | 3.6 | $ | 5.4 | $ | (1.8 | ) | (33.7 | )% |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 119 | $ | 2 | $ | 121 | $ | — | $ | 121 | $ | 222 | $ | 1 | $ | 223 | $ | — | $ | 223 | |||||||||||||||||||
Enterprise | (121 | ) | 76 | (45 | ) | — | (45 | ) | (165 | ) | — | (165 | ) | — | (165 | ) | |||||||||||||||||||||||
Other | — | 34 | 34 | — | 34 | 529 | 15 | 544 | 239 | 783 | |||||||||||||||||||||||||||||
Corporate | 445 | 9 | 454 | 1,356 | 1,810 | 730 | 354 | 1,084 | 22 | 1,106 | |||||||||||||||||||||||||||||
Total | $ | 443 | $ | 121 | $ | 564 | $ | 1,356 | $ | 1,920 | $ | 1,316 | $ | 370 | $ | 1,686 | $ | 261 | $ | 1,947 |
Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||||||||||||||||||
Personnel | Facilities | Total Restructuring | Other Charges | Total | Personnel | Facilities | Total Restructuring | Other Charges | Total | ||||||||||||||||||||||||||||||
Healthcare | $ | 1,901 | $ | 1,777 | $ | 3,678 | $ | — | $ | 3,678 | $ | 4,672 | $ | 142 | $ | 4,814 | $ | — | $ | 4,814 | |||||||||||||||||||
Enterprise | 1,416 | 794 | 2,210 | — | 2,210 | 5,086 | 13 | 5,099 | — | 5,099 | |||||||||||||||||||||||||||||
Other | — | (277 | ) | (277 | ) | — | (277 | ) | 1,443 | 15 | 1,458 | 3,306 | 4,764 | ||||||||||||||||||||||||||
Corporate | 1,461 | 360 | 1,821 | 7,500 | 9,321 | 2,680 | 676 | 3,356 | 8,413 | 11,769 | |||||||||||||||||||||||||||||
Total | $ | 4,778 | $ | 2,654 | $ | 7,432 | $ | 7,500 | $ | 14,932 | $ | 13,881 | $ | 846 | $ | 14,727 | $ | 11,719 | $ | 26,446 |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Interest income | $ | 0.6 | $ | 3.8 | $ | (3.2 | ) | (83.9 | )% | |||||
Interest expense | (23.7 | ) | (28.4 | ) | 4.7 | (16.5 | )% | |||||||
Other income, net | 0.6 | 3.3 | (2.7 | ) | (80.7 | )% | ||||||||
Total other expense, net | $ | (22.4 | ) | $ | (21.3 | ) | $ | (1.1 | ) | 5.4 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Interest income | $ | 4.3 | $ | 10.0 | $ | (5.7 | ) | (56.9 | )% | |||||
Interest expense | (71.1 | ) | (91.8 | ) | 20.7 | (22.5 | )% | |||||||
Other (expense) income, net | (13.1 | ) | 2.3 | (15.4 | ) | (663.3 | )% | |||||||
Total other expense, net | $ | (79.9 | ) | $ | (79.5 | ) | $ | (0.4 | ) | 0.6 | % |
Three Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
(Benefit) provision for income taxes | $ | (16.7 | ) | $ | 10.7 | $ | (27.4 | ) | (255.4 | )% | ||||
Effective income tax rate | NA | 106.8 | % |
Nine Months Ended June 30, | Dollar Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
(Benefit) provision for income taxes | $ | (31.8 | ) | $ | 12.1 | $ | (43.9 | ) | (362.1 | )% | ||||
Effective income tax rate | (161.1 | )% | (394.6 | )% |
Three Months Ended June 30, | Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Segment Revenues (a): | ||||||||||||||
Healthcare | $ | 199.9 | $ | 228.4 | $ | (28.5 | ) | (12.5 | )% | |||||
Enterprise | 130.4 | 137.9 | (7.5 | ) | (5.4 | )% | ||||||||
Other | 8.1 | 11.8 | (3.6 | ) | (30.9 | )% | ||||||||
Total segment revenues | $ | 338.4 | $ | 378.1 | $ | (39.7 | ) | (10.5 | )% | |||||
Less: acquisition related revenues adjustments | — | (0.6 | ) | 0.6 | (100.0 | )% | ||||||||
Total revenues | $ | 338.4 | $ | 377.4 | $ | (39.0 | ) | (10.3 | )% | |||||
Segment Profit: | ||||||||||||||
Healthcare | $ | 62.9 | $ | 79.3 | $ | (16.5 | ) | (20.7 | )% | |||||
Enterprise | 37.0 | 38.7 | (1.8 | ) | (4.5 | )% | ||||||||
Other | 5.0 | 3.0 | 2.0 | 65.7 | % | |||||||||
Total segment profit | $ | 104.9 | $ | 121.1 | $ | (16.2 | ) | (13.4 | )% | |||||
Segment Profit Margin: | ||||||||||||||
Healthcare | 31.5 | % | 34.7 | % | (3.3 | ) | ||||||||
Enterprise | 28.4 | % | 28.1 | % | 0.3 | |||||||||
Other | 62.0 | % | 25.8 | % | 36.1 | |||||||||
Total segment profit margin | 31.0 | % | 32.0 | % | (1.0 | ) |
Nine Months Ended June 30, | Change | Percent Change | ||||||||||||
2020 | 2019 | |||||||||||||
Segment Revenues (a): | ||||||||||||||
Healthcare | $ | 694.8 | $ | 704.9 | $ | (10.1 | ) | (1.4 | )% | |||||
Enterprise | 406.3 | 383.2 | 23.1 | 6.0 | % | |||||||||
Other | 25.2 | 46.9 | (21.7 | ) | (46.3 | )% | ||||||||
Total segment revenues | $ | 1,126.3 | $ | 1,135.0 | $ | (8.7 | ) | (0.8 | )% | |||||
Less: acquisition related revenues adjustments | (0.3 | ) | (1.3 | ) | 1.0 | (77.1 | )% | |||||||
Total revenues | $ | 1,126.0 | $ | 1,133.7 | $ | (7.7 | ) | (0.7 | )% | |||||
Segment Profit: | ||||||||||||||
Healthcare | $ | 227.8 | $ | 244.2 | $ | (16.4 | ) | (6.7 | )% | |||||
Enterprise | 118.3 | 101.3 | 16.9 | 16.7 | % | |||||||||
Other | 14.0 | 13.4 | 0.6 | 4.5 | % | |||||||||
Total segment profit | $ | 360.1 | $ | 359.0 | $ | 1.1 | 0.3 | % | ||||||
Segment Profit Margin: | ||||||||||||||
Healthcare | 32.8 | % | 34.6 | % | (1.9 | ) | ||||||||
Enterprise | 29.1 | % | 26.4 | % | 2.7 | |||||||||
Other | 55.7 | % | 28.6 | % | 27.1 | |||||||||
Total segment profit margin | 32.0 | % | 31.6 | % | 0.3 |
(a) | Segment revenues differ from reported revenues due to certain revenue adjustments related to acquisitions that would otherwise have been recognized but for the purchase accounting treatment of the business combinations. These revenues are included to allow for more complete comparisons to the financial results of historical operations and in evaluating management performance. |
• | Healthcare segment revenue decreased by $28.5 million, or 12.5%, primarily driven by: |
◦ | Revenue from Dragon Medical cloud-based solutions increased by $18.1 million, or 33.8%, to $71.4 million for the three months ended June 30, 2020 from $53.3 million for the three months ended June 30, 2019, primarily due to the continued market penetration and customer transition to our cloud-based solutions. |
◦ | Revenue from radiology and other decreased by $18.0 million, or 32.3%, to $37.7 million for the three months ended June 30, 2020 from $55.7 million for the three months ended June 30, 2019, primarily due to the timing of multi-year term license renewals and the negative impact of COVID-19. |
◦ | Revenue from transcription services decreased by $13.3 million, or 26.0%, to $37.9 million for the three months ended June 30, 2020 from $51.2 million for the three months ended June 30, 2019, primarily driven by customers' transition to our cloud-based solutions and lower transaction volume due to COVID-19. |
◦ | Revenue from Dragon Medical licensing and maintenance and support decreased by $4.5 million, or 20.1%, to $17.8 million for the three months ended June 30, 2020 from $22.3 million for the three months ended June 30, 2019, primarily driven by the continued transition from term licenses sold with maintenance and support to cloud-based solutions. |
◦ | Professional services revenue decreased by $12.9 million or 61.8%, to $8.0 million for the three months ended June 30, 2020 from $20.9 million for the three months ended June 30, 2019, primarily driven by lower revenue related to EHR implementation due to project deferrals during the pandemic. |
• | Enterprise segment revenue decreased by $7.5 million, or 5.4%, as the growth in digital engagement was more than offset by decreases in security biometrics and voice engagement, which was primarily due to the timing of software license transactions and the negative impact of COVID-19. |
• | Other segment revenue decreased by $3.6 million, or 30.9%, as we continue to wind down our Other segment. |
• | Healthcare segment revenue decreased by $10.1 million, or 1.4%, primarily driven by: |
◦ | Revenue from Dragon Medical cloud-based solutions increased by $61.6 million, or 43.0%, to $204.8 million for the nine months ended June 30, 2020 from $143.2 million for the nine months ended June 30, 2019, primarily due to the continued market penetration and customer transition to our cloud-based solutions. |
◦ | Revenue from radiology and other decreased by $4.7 million, or 2.5%, to $179.7 million for the nine months ended June 30, 2020 from $184.4 million for the nine months ended June 30, 2019, primarily due to the timing of multi-year term license renewals and the negative impact of COVID-19. |
◦ | Revenue from transcription services decreased by $29.8 million, or 18.3%, to $132.8 million for the nine months ended June 30, 2020 from $162.6 million for the nine months ended June 30, 2019, primarily driven by customers' transition to our cloud-based solutions and lower transaction volume due to COVID-19. |
◦ | Revenue from Dragon Medical licensing and maintenance and support decreased by $20.1 million, or 25.4%, to $58.9 million for the nine months ended June 30, 2020 from $78.9 million for the nine months ended June 30, 2019, primarily driven by the continued transition from term licenses sold with maintenance and support to cloud-based solutions. |
◦ | Professional services revenue decreased by $15.9 million or 29.1%, to $38.8 million for the nine months ended June 30, 2020 from $54.7 million for the nine months ended June 30, 2019, primarily driven by lower revenue related to EHR implementation due to project deferrals during the pandemic. |
• | Enterprise segment revenue increased by $23.1 million, or 6.0%, as the growths in digital engagement and security biometrics were offset in part by the decrease in voice engagement, which was primarily due to the timing of software license transactions and the negative impact of COVID-19. |
• | Other segment revenue decreased by $21.7 million, or 46.3%, as we continue to wind down our Other segment. |
• | Healthcare segment profit decreased by $16.5 million, or 20.7%, primarily due to lower revenue and higher R&D and sales and marketing expenses, offset in part by gross margin improvement. The increases in R&D and sales and marketing expenses were primarily due to higher spend to support the development and launch of new products and solutions. Gross margin increased primarily due to a favorable shift in mix to higher margin Dragon Medical cloud-based solution from lower margin medical transcription and EHR implementation services. As a result, segment profit margin decreased by 3.3 percentage points to 31.5%. |
• | Enterprise segment profit decreased by $1.8 million, or 4.5%, primarily due to lower revenue and higher R&D expense, offset in part by higher gross margin and lower sales and marketing expenses. Gross margin increased primarily due to the upfront recognition of certain project costs associated with digital engagement in the same period of last year. The increase in R&D expense was primarily due to higher spend on core technologies to support future growth. The decrease in sales and marketing expense was primarily driven by lower travel and entertainment expenses due to the pandemic. As a result, segment profit margin increased by 0.3 percentage points to 28.4%. |
• | Other segment profit increased by $2.0 million, or 65.7%, primarily driven by lower expense profile of the remaining business, offset in part by lower revenue as we continue to wind down our Other segment. As a result, segment profit margin increased by 36.1 percentage points to 62.0%. |
• | Healthcare segment profit decreased by $16.4 million, or 6.7%, primarily due to lower revenue and higher R&D and sales and marketing expenses, offset in part by gross margin improvement. Gross margin increased primarily due to a favorable shift in mix to higher margin Dragon Medical cloud-based solution from lower margin medical transcription and EHR implementation services. The increases in R&D and sales and marketing expenses were primarily due to higher spend to support the development and launch of new products and solutions. As a result, segment profit margin decreased by 1.9 percentage points to 32.8%. |
• | Enterprise segment profit increased by $16.9 million, or 16.7%, primarily due to higher segment revenue and gross margin, offset in part by higher R&D and sales and marketing expenses. Gross margin improvement was primarily driven by a favorable shift in revenue mix towards higher margin licensing revenue. The increase in R&D expense was primarily due to higher spend on core technologies to support future growth. The increase in sales and marketing expense was primarily driven by higher commission costs due to higher bookings, offset in part by lower travel and entertainment expenses due to the pandemic. As a result, segment profit margin increased by 2.7 percentage points to 29.1%. |
• | Other segment profit increased by $0.6 million, or 4.5%, primarily driven by lower expense profile of the remaining business, offset in part by lower revenue as we continue to wind down our Other segment. As a result, segment profit margin increased by 27.1 percentage points to 55.7%. |
• | A decrease of $78.0 million in cash provided due to unfavorable changes in working capital, primarily due to the timing of cash collections and cash payments; |
• | A decrease of $85.2 million in cash flows from discontinued operations; offset in part by, |
• | An increase of $36.5 million in cash provided due to higher income before non-cash charges; and |
• | An increase of $3.3 million in cash provided from changes in deferred revenue. Deferred revenue had a positive effect of $19.7 million on operating cash flows for the nine months ended June 30, 2020, as compared to $16.4 million for the nine months ended June 30, 2019. |
• | Net proceeds of $407.0 million, primarily from the sale of our Imaging business during the second quarter of fiscal year 2019; |
• | An increase of $13.3 million in cash used for capital expenditures; offset in part by, |
• | An increase of $126.0 million in net proceeds from the sale and purchase of marketable securities and other investments; and |
• | An increase of $4.5 million in cash used in other investing activities. |
• | An increase of $213.6 million in cash used for the repayment and redemption of debt; and |
• | An increase of $48.3 million in cash used for share repurchases; offset in part by, |
• | A net contribution of $139.1 million from Cerence in connection with the spin-off of our Automotive business during the first quarter of fiscal year 2020. |
• | Upon the spin-off on October 1, 2019, we received an approximately $139.1 million distribution from Cerence. We used the proceeds from the distribution and existing cash to redeem all the $300.0 million outstanding principal amount of the 2024 Senior Notes for $313.5 million, plus accrued and unpaid interest of $4.5 million. |
• | During the second quarter of fiscal year 2020, we repurchased $87.3 million notional amount of our 1.25% 2025 Debentures for $112.3 million and $36.5 million notional amount of 1.5% 2035 Debentures for $41.3 million. |
• | In March 2020, we redeemed the remaining outstanding $46.6 million of our 2.75% 2031 Debentures at par. |
• | On March 24, 2020, we borrowed $230.0 million under our revolving credit facility at an effective interest rate of 2.68% per annum, which was fully repaid on June 26, 2020. |
Contractual Payments Due in Fiscal Year | ||||||||||||||||||||
Contractual Obligations | Total | 2020 | 2021 and 2022 | 2023 and 2024 | Thereafter | |||||||||||||||
Convertible debentures (1) | $ | 1,166.6 | $ | — | $ | 227.4 | $ | 676.5 | $ | 262.7 | ||||||||||
Senior notes (2) | 500.0 | — | — | — | 500.0 | |||||||||||||||
Interest payable on long-term debt (3) | 217.5 | 10.4 | 80.0 | 64.5 | 62.6 | |||||||||||||||
Letters of credit (4) | 2.5 | 2.5 | — | — | — | |||||||||||||||
Lease obligations and other liabilities: | ||||||||||||||||||||
Operating leases (5) | 139.4 | 7.3 | 48.1 | 30.9 | 53.1 | |||||||||||||||
Operating leases under restructuring | 16.1 | 1.2 | 7.1 | 4.6 | 3.2 | |||||||||||||||
Purchase commitments for inventory, property and equipment (6) | 160.0 | 17.5 | 99.1 | 43.4 | — | |||||||||||||||
Total contractual cash obligations | $ | 2,202.1 | $ | 38.9 | $ | 461.7 | $ | 819.9 | $ | 881.6 |
(1) | Pursuant to the terms of each convertible instrument, holders have the right to redeem the debt on specific dates prior to maturity. The repayment schedule above assumes that payment is due on the next redemption date after June 30, 2020. |
(2) | The repayment schedule reflects all the senior notes outstanding as of June 30, 2020. |
(3) | Interest per annum is due and payable semi-annually and is determined based on the outstanding principal as of June 30, 2020, the stated interest rate of each debt instrument and the assumed redemption dates discussed above. |
(4) | Letters of credit are in place primarily to secure future operating lease payments. |
(5) | Obligations include contractual lease commitments related to facilities that have subsequently been subleased. As of June 30, 2020, we have subleased certain facilities with total sublease income of $13.1 million through fiscal year 2027. |
(6) | These amounts include non-cancelable purchase commitments for property and equipment as well as inventory in the normal course of business to fulfill customer backlog. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
June 30, 2020 | |||||||||||||||
Fair value | Conversion value | Increase to fair value | Increase to conversion value | ||||||||||||
1.5% 2035 Debentures | $ | 293.9 | $ | 279.2 | $ | 23.8 | $ | 27.9 | |||||||
1.0% 2035 Debentures | $ | 789.4 | $ | 709.7 | $ | 46.4 | $ | 71.0 | |||||||
1.25% 2025 Debentures | $ | 367.9 | $ | 337.6 | $ | 25.4 | $ | 33.8 |
Item 4. | Controls and Procedures |
• | the duration and scope of the pandemic; |
• | governmental, business and individual actions taken in response to the pandemic and the impact of those actions on global economic activity; |
• | the actions taken in response to economic disruption; |
• | the impact of business disruptions on our customers and partners and the resulting impact on their demand for our products and services; |
• | our customers’ and partners’ ability to pay for our products and services; and |
• | our ability to provide our products and services, including as a result of our employees working remotely and/or closures of offices and facilities. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1) | |||||||
April 1, 2020 - April 30, 2020 | — | — | — | $261.2 Million | |||||||
May 1, 2020 - May 31, 2020 | — | — | — | $261.2 Million | |||||||
June 1, 2020 - June 30, 2020 | — | — | — | $261.2 Million | |||||||
Total | — | — |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Incorporated by Reference | ||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | ||||||
3.1 | 10-Q | 000-27038 | 3.2 | 5/11/2001 | ||||||||
3.2 | 10-Q | 000-27038 | 3.1 | 8/9/2004 | ||||||||
3.3 | 8-K | 000-27038 | 3.1 | 10/19/2005 | ||||||||
3.4 | S-3 | 333-142182 | 3.3 | 4/18/2007 | ||||||||
3.5 | 10-K | 001-36056 | 3.4 | 11/7/2019 | ||||||||
10.1 | 8-K | 001-36056 | 10.1 | 8/5/2020 | ||||||||
31.1 | X | |||||||||||
31.2 | X | |||||||||||
32.1 | X | |||||||||||
101 | The following materials from Nuance Communications, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Loss, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements. | X | ||||||||||
104 | The cover page of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 formatted in Inline XBRL (included in Exhibit 101) |
Nuance Communications, Inc. | |||
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer | |||
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Mark Benjamin | ||
Mark Benjamin | |||
Chief Executive Officer |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer |
By: | /s/ Mark Benjamin | ||
Mark Benjamin | |||
Chief Executive Officer |
By: | /s/ Daniel D. Tempesta | ||
Daniel D. Tempesta | |||
Executive Vice President and Chief Financial Officer |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Net income | $ 16,662 | $ 9,259 | $ 45,341 | $ 105,681 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 6,909 | 3,541 | (4,205) | 494 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax | 0 | 0 | 12,331 | 0 |
Pension Adjustments | 0 | 32 | 2,007 | (282) |
Unrealized (loss) gain on marketable securities | 486 | 78 | (42) | 234 |
Other Comprehensive Income (Loss), Net of Tax | 7,395 | 3,651 | 10,091 | 446 |
Comprehensive income | $ 24,057 | $ 12,910 | $ 55,432 | $ 106,127 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Accounts receivable, allowances for doubtful accounts | $ 12,283 | $ 9,797 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 560,000 | 560,000 |
Common stock, shares issued | 285,125 | 289,680 |
Common stock, shares outstanding | 281,375 | 285,930 |
Treasury stock, shares | 3,751 | 3,751 |
Organization and Presentation |
9 Months Ended |
---|---|
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Presentation | Nuance Communications, Inc. ("we", "Nuance", "our", "us", or the "Company") is a pioneer and leader in conversational and cognitive artificial intelligence ("AI") innovations that bring intelligence to everyday work and life. Our solutions and technologies can understand, analyze and respond to human language to increase productivity and amplify human intelligence. Our solutions are used by businesses in the healthcare, financial services, telecommunications and travel industries, among others. We had three reportable segments as of June 30, 2020: Healthcare, Enterprise, and Other. See Note 17 for a description of each of these segments. As more fully described in Note 4, on October 1, 2019, we completed the spin-off of our Automotive business as an independent public company, Cerence Inc. ("Cerence"). The historical results of our Automotive business are included within discontinued operations for all the historical periods presented. Although we believe the disclosures included herein are adequate to ensure that the condensed consolidated financial statements are fairly presented, certain information and footnote disclosures to the financial statements have been condensed or omitted in accordance with the rules and regulations of the SEC. Accordingly, the condensed consolidated financial statements and the footnotes included herein should be read in conjunction with the audited financial statements and the footnotes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year or any future period. As more fully described in Note 14, our financial results for the three months ended March 31, 2020 have been revised for a tax adjustment resulting from implementation of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, "Leases" ("ASC 842"), which became effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. ASC 842 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard initially required the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. We adopted ASC 842 in the first quarter of fiscal year 2020. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11, "Leases Topic 842 Targeted Improvements", which provide an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. Additionally, in March 2019, the FASB issued ASU 2019-01, "Codification Improvements to Topic 842", which provides guidance in the following areas: (1) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers and (2) clarification of interim disclosure requirements during transition. We adopted ASC 842, as amended, as of October 1, 2019 under the optional transition method and elected the package of practical expedients under the transition guidance. As a result of the adoption, we recognized $120 million of operating lease right-of-use assets, and approximately $140 million of operating lease obligations. Approximately $20 million of deferred rent balances were reclassified against the costs of the right-of-use assets. The cumulative-effect adjustment to retained earnings as of October 1, 2019 was immaterial. The adoption of the guidance did not have a material impact on our condensed consolidated statement of operations or consolidated statement of cash flows. Income Taxes In January 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("AOCI"), which became effective for fiscal years beginning after December 15, 2018 and interim periods therein. The guidance gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Cuts and Jobs Act ("TCJA") related to items in AOCI. The guidance may be applied retrospectively to each period in which the effect of the TCJA is recognized in the period of adoption. The adoption of the guidance did not have a material impact on our condensed consolidated financial statements. Issued Accounting Standards Not Yet Adopted Internal-Use Software In August 2018, the FASB issued ASU 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", which is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance requires that implementation costs related to a hosting arrangement that is a service contract be capitalized and amortized over the term of the hosting arrangement, starting when the module or component of the hosting arrangement is ready for its intended use. The guidance will be applied retrospectively to each period presented. We do not expect the implementation to have a material impact on our condensed consolidated financial statements.
|
Revenue Recognition Revenue Recognition (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | We derive revenue from the following sources: (1) hosting services, (2) software licenses, including royalties, (3) maintenance and support ("M&S"), (4) professional services, and (5) sale of hardware. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction including mandatory government charges that are passed through to our customers. We account for a contract when both parties have approved and committed to the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectibility of the consideration is probable. The majority of our arrangements with customers typically contain multiple products and services. We account for individual products and services separately if they are distinct--that is, if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer. We recognize revenue after applying the following five steps:
We allocate the transaction price of the arrangement based on the relative estimated standalone selling price ("SSP") of each distinct performance obligation. In determining SSP, we maximize observable inputs and consider a number of data points, including:
We only include estimated amounts of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. We reduce transaction prices for estimated returns and other allowances that represent variable consideration under ASU No. 2014-09, "Revenue from Contracts with Customers: Topic 606" ("ASC 606"), which we estimate based on historical return experience and other relevant factors and record a reduction to revenue and accounts receivable. Other forms of contingent revenue or variable consideration are infrequent. Revenue is recognized when control of these products and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We assess the timing of the transfer of products or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. In accordance with the practical expedient in ASC 606-10-32-18, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of financing to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set-up fees nor other upfront fees paid by our customers to represent a financing component. Certain products are sold through distributors or resellers. Certain distributors and resellers have been granted right of return and selling incentives which are accounted for as variable consideration when estimating the amount of revenue to be recognized. Returns and credits are estimated at the contract inception and updated at the end of each reporting period as additional information becomes available. In accordance with the practical expedient in ASC 606-10-10-4, we apply a portfolio approach to estimate the variable consideration associated with this group of customers. Reimbursements for out-of-pocket costs generally include, but are not limited to, costs related to transportation, lodging and meals. Revenue from reimbursed out-of-pocket costs is accounted for as variable consideration. Shipping and handling activities are not considered a contract performance obligation. We record shipping and handling costs billed to customers as revenue with offsetting costs recorded as cost of revenue. Performance Obligations Hosting Hosting services, which allow our customers to use the hosted software over the contract period without taking possession of the software, are provided on a usage basis as consumed or on a fixed fee subscription basis. Our hosting contract terms generally range from one to five years. As each day of providing services is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, we have determined that our hosting services arrangements are a single performance obligation comprised of a series of distinct services. These services include variable consideration, which is typically a function of usage. We recognize revenue as each distinct service period is performed (i.e., recognized as incurred). Subscription-based revenue represents a single promise to stand-ready to provide access to our hosting services. Revenue is recognized over time on a ratable basis over the hosting contract term, which generally ranges from one to five years. Software Licenses On-premise software licenses sold with non-distinct professional services to customize and/or integrate the underlying software are accounted for as a combined performance obligation. Revenue from the combined performance obligation is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours. Revenue from distinct on-premise software licenses, which do not require professional services to customize and/or integrate the software license, is recognized at the point in time when the software is made available to the customer and control is transferred. Revenue from software licenses sold on a royalty basis, where the license of intellectual property is the predominant item to which the royalty relates, is recognized in the period the usage occurs in accordance with the practical expedient in ASC 606-10-55-65(A). Maintenance and Support Our M&S contracts generally include telephone support and the right to receive unspecified upgrades and updates on a when-and-if available basis. M&S revenue is recognized over time on a ratable basis over the contract period because we transfer control evenly by providing a stand-ready service. Professional Services Revenue from distinct professional services, including training, is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours. Hardware Hardware revenue is recognized at the point in time when control is transferred to the customer, which is typically upon delivery. Significant Judgments Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Our license contracts often include professional services to customize and/or integrate the licenses into the customer’s environment. Judgment is required to determine whether the license is considered distinct and accounted for separately, or not distinct and accounted for together with professional services. Judgments are required to determine the SSP for each distinct performance obligation. When SSP is directly observable, we estimate SSP based upon the historical transaction prices, adjusted for geographic considerations, customer classes, and customer relationship profiles. In instances where SSP is not directly observable, we determine SSP using information that may include market conditions and other observable inputs. We may have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining SSP. Determining SSP for performance obligations which we never sell separately also requires significant judgment. In estimating the SSP for such performance obligations, we consider the likely price that would have resulted from established pricing practices had the deliverable been offered separately and the prices a customer would likely be willing to pay. From time to time, we may enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we are the principal (i.e. report revenues on a gross basis) or agent (i.e. report revenues on a net basis). In doing so, we first evaluate whether we control the good or service before it is transferred to the customer. If we control the good or service before it is transferred to the customer, we are the principal; if not, we are the agent. Generally, we control a promised good or service before transferring that good or service to the customer and act as the principal to the transaction. Determining whether we control the good or service before it is transferred to the customer may require judgment. Disaggregated Revenue We disaggregate revenue from contracts with customers by reportable segment and products and services as this presentation depicts the timing, risks and uncertainty of our revenue streams, which is also in line with how we manage our businesses, assess performance, and determine management compensation. Our disaggregated revenue from continuing operations is as follows (dollars in thousands):
Hardware revenue comprised approximately $5.7 million and $20.5 million of total product and license revenue for the three and nine months ended June 30, 2020, and $6.4 million and $21.5 million of total product and license revenue for the three and nine months ended June 30, 2019. Contract Acquisition Costs We are required to capitalize certain contract acquisition costs under ASC 606. The capitalized costs primarily relate to paid commissions and other direct, incremental costs to acquire customer contracts. In accordance with the practical expedient in ASC 606-10-10-4, we apply a portfolio approach to estimate contract acquisition costs for groups of customer contracts. We elect to apply the practical expedient in ASC 340-40-25-4 and will expense contract acquisition costs as incurred where the expected period of benefit is one year or less. Sales commissions paid on renewal maintenance and support are not commensurate with sales commissions paid on the initial maintenance and support contract. Contract acquisition costs are deferred and amortized on a straight-line basis over the period of benefit, which we have estimated to be between one and five years. The period of benefit was determined based on an average customer contract term, expected contract renewals, changes in technology and our ability to retain customers including canceled contracts. Contract acquisition costs are classified as current or noncurrent assets based on when the expense will be recognized. The current and noncurrent portions of contract acquisition costs are included in Prepaid expenses and other current assets, and Other assets, respectively. As of June 30, 2020, we had $18.9 million of current contract acquisition costs and $44.1 million of noncurrent contract acquisition costs. As of September 30, 2019, we had $19.9 million of current contract acquisition costs and $30.1 million of noncurrent contract acquisition costs. Commission expense is primarily included in sales and marketing expense on the consolidated statements of operations. We had amortization expense related to contract acquisition costs of $4.7 million and $13.3 million for the three and nine months ended June 30, 2020, and $4.3 million and $11.3 million for the three and nine months ended June 30, 2019. There was no impairment related to commission costs capitalized. Capitalized Contract Costs We capitalize incremental costs incurred to fulfill our contracts that (1) relate directly to the contract, (2) are expected to generate resources that will be used to satisfy our performance obligation under the contract, and (3) are expected to be recovered through revenue generated under the contract. Our capitalized costs consist primarily of setup costs, such as costs to standup, customize, and develop applications for each customer. These costs are incurred to satisfy our stand-ready obligation to provide access to our connected offerings. The contract costs are expensed to cost of revenue as we satisfy our stand-ready obligation over the contract term, which we estimate to be between one and five years. The contract term estimation was determined based on an average customer contract term, expected contract renewals, changes in technology, and our ability to retain customers including canceled contracts. We classify capitalized contract costs as current or noncurrent based on the timing of when we expect to recognize the expense. The current and noncurrent portions of capitalized contract fulfillment costs are included in Prepaid expenses and other current assets, and Other assets, respectively. At June 30, 2020, we had $18.6 million of short-term contract costs included with Prepaid expenses and other current assets and $32.7 million of long-term costs included within Other assets. As of September 30, 2019, we had $17.2 million of short-term contract costs included with Prepaid expenses and other current assets and $38.5 million of long-term costs included within Other assets. Trade Accounts Receivable and Contract Balances We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). We present such receivables in Accounts receivable, net in our consolidated balance sheets at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other applicable factors. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets include unbilled amounts from long-term contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not solely subject to the passage of time. The current and noncurrent portions of contract assets are included in Prepaid expenses and other current assets, and Other assets. As of June 30, 2020, we had $39.8 million of current contract assets and $124.7 million of noncurrent contract assets. As of September 30, 2019, we had $58.7 million of current contract assets and $108.7 million of noncurrent contract assets. The table below shows significant changes in contract assets of continuing operations (dollars in thousands):
Our contract liabilities, or Deferred revenue, consist of advance payments and billings in excess of revenues recognized. We classify Deferred revenue as current or noncurrent based on when we expect to recognize the revenues. At June 30, 2020, we had $367.0 million of Deferred revenue. The table below shows significant changes in Deferred revenue of continuing operations (dollars in thousands):
Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2020 (dollars in thousands):
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Disposition of Business (Notes) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Spin-off of Automotive On October 1, 2019, we completed the spin-off of our Automotive business as an independent public company, Cerence, and a pro rata and tax-free distribution to our stockholders of all of the outstanding shares of Cerence owned by Nuance on October 1, 2019. The distribution was made in the amount of one share of Cerence common stock for every eight shares of Nuance common stock owned by Nuance’s stockholders of record as of 5:00 p.m. Eastern Time on September 17, 2019. In connection with the spin-off, on September 30, 2019, we sold 1.8% of our equity interest in Cerence to a non-affiliated third party for a total cash consideration of $9.8 million. The difference between the consideration received and the carrying amount of the non-controlling interest was recognized in additional paid-in capital, which was subsequently derecognized as part of the spin-off transaction. Effective as of October 1, 2019, for all periods presented, the results of operations of our former Automotive business have been included within discontinued operations. For the nine months ended June 30, 2020, we incurred cash payments of $13.3 million related to the separation and spin-off of our Automotive business, which have been presented as operating cash flows from discontinued operations. Sale of Imaging On February 1, 2019, we completed the sale of our Imaging business and received approximately $404.0 million in cash, after estimated transaction expenses. As a result, we recorded a gain of approximately $102.4 million, which has been included within Net income from discontinued operations. The historical results of operations for Imaging and Automotive have been included within discontinued operations in our condensed consolidated financial statements. The following table summarizes the results of the discontinued operations (dollars in thousands):
The following table summarizes the assets and liabilities included within discontinued operations (dollars in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | The changes in the carrying amount of goodwill by reportable segment for the nine months ended June 30, 2020 are as follows (dollars in thousands): Goodwill
Other Intangible Assets The changes in the carrying amount of intangible assets for the nine months ended June 30, 2020 are as follows (dollars in thousands):
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Financial Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Hedging Activities | Derivatives Not Designated as Hedges Forward Currency Contracts We have operations in a number of international locations where currency exchange rates can be volatile. We utilize foreign currency forward contracts to mitigate the risks associated with changes in foreign currency exchange rates so that our exposure to foreign currencies will be mitigated or offset by the gains or losses on the foreign currency forward contracts. Generally, we enter into such contracts for less than 90 days and have no cash requirements until maturity. As of June 30, 2020 and September 30, 2019, we had outstanding contracts with a total notional value of $41.4 million and $189.6 million, respectively. We did not designate any forward contracts as hedging instruments for the nine months ended June 30, 2020 or 2019. Therefore, changes in fair value of foreign currency forward contracts were recognized within Other income (expense), net in our condensed consolidated statements of operations. The cash flows related to the settlement of forward contracts not designated as hedging instruments are included in cash flows from investing activities within our condensed consolidated statement of cash flows. A summary of the derivative instruments is as follows (dollars in thousands):
A summary of income (loss) related to foreign currency forward contracts for the three and nine months ended June 30, 2020 and 2019 is as follows (dollars in thousands):
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Fair Value Measures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measures | Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques must maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the lowest level of inputs that are significant to the fair value measurement as of the measurement date as follows:
Assets and liabilities measured at fair value on a recurring basis at June 30, 2020 and September 30, 2019 consisted of the following (dollars in thousands):
The estimated fair value of our long-term debt was approximately $1,972.7 million (face value $1,666.5 million) as of June 30, 2020 and $2,143.4 million (face value $2,137.0 million) as of September 30, 2019 based on Level 2 measurements. The fair value of each borrowing was estimated using the average of the bid and ask trading quotes at each respective reporting date. There was no balance outstanding under our revolving credit agreement as of June 30, 2020 or September 30, 2019. Additionally, contingent acquisition payments are recorded at fair values upon the acquisition and are remeasured in subsequent reporting periods with the changes in fair values recorded within acquisition-related costs, net. Such payments are contingent upon the achievement of specified performance targets and are valued using the option pricing model with Monte Carlo simulation or the probability-weighted discounted cash flow model (Level 3 measurement). The following table provides a summary of changes in the aggregate fair value of the contingent acquisition payments for all periods presented (dollars in thousands):
Contingent acquisition payments are to be made in periods through fiscal year 2021. As of June 30, 2020, the maximum amount payable based on the agreements was $4.8 million if the specified performance targets are achieved.
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Accrued Expenses and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (dollars in thousands):
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Restructuring and Other Charges, net |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | Restructuring and other charges, net include restructuring expenses together with other charges that are unusual in nature, are the result of unplanned events, and arise outside of the ordinary course of our business. The following table represents the roll forward of restructuring liabilities for the nine months ended June 30, 2020 (dollars in thousands):
(a) The amount represents a reclassification of estimated sublease income from restructuring accrual to reduce the costs of right-of-use assets upon the adoption of ASC 842 on October 1, 2019. The table below presents the Restructuring and other charges, net associated with each segment, but excluded from calculation of each segment's profit (dollars in thousands):
Fiscal Year 2020 For the nine months ended June 30, 2020, we recorded restructuring charges of $7.4 million, which included $4.8 million related to the termination of approximately 186 employees and $2.7 million related to the shutdown of certain facilities. Of these amounts, $0.6 million was recorded for the three months ended June 30, 2020, which included $0.4 million related to the termination of approximately 111 employees and $0.1 million related to the shutdown of facilities. These actions were part of our strategic initiatives focused on investment rationalization, process optimization and cost reduction as we continue to evaluate the footprint of our offices and facilities. We expect the remaining outstanding severance of $1.2 million to be substantially paid during fiscal year 2020, and the remaining balance of $14.1 million related to facilities to be paid through fiscal year 2027, in accordance with the terms of the applicable leases. Additionally, for the nine months ended June 30, 2020, we recorded $4.6 million expenses related to the separation of our Automotive business, a $2.0 million impairment charge a right-of-use asset due to the COVID-19 pandemic, and a $0.9 million expense related to a malware incident that occurred in the third quarter of fiscal year 2017 (the "2017 Malware Incident"). Of these amounts, we recorded $0.4 million related to the separation of our Automotive business and $0.9 million related to the 2017 Malware Incident for the three months ended June 30, 2020. Fiscal Year 2019 For the nine months ended June 30, 2019, we recorded restructuring charges of $14.7 million, which included $13.9 million related to the termination of approximately 305 employees and $0.8 million related to the shutdown of certain facilities. Of these amounts, $1.7 million was recorded for the three months ended June 30, 2019, which included $1.3 million related to the termination of approximately 31 employees and $0.4 million related to the shutdown of facilities. These actions were part of our strategic initiatives focused on investment rationalization, process optimization and cost reduction. Additionally, for the nine months ended June 30, 2019, we recorded $9.2 million of professional services fees related to the execution of our corporate transformational efforts and $3.3 million of accelerated depreciation related to our Mobile Operator Services business, offset in part by a $0.7 million cash receipt from insurance claims related to the 2017 Malware Incident. Of these amounts, we recorded $0.4 million of professional services fees related to the execution of our corporate transformational efforts and $0.2 million of accelerated depreciation related to our Mobile Operator Services business, offset in part by a $0.4 million cash receipt related to the 2017 Malware Incident for the three months ended June 30, 2019.
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Debt and Credit Facilities |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | As of June 30, 2020 and September 30, 2019, we had the following borrowing obligations (dollars in thousands):
(a) As of September 30, 2019, in connection with the anticipated Cerence spin-off, the holders had the right to convert all or any portion of their debentures until the close of business on October 1, 2019. As a result, the net carrying amounts of our convertible notes were included in current liabilities as of September 30, 2019. Upon the conclusion of the conversion period on October 1, 2019, none of the holders exercised their right to convert. As a result, the net carrying amounts of the convertible notes were reclassified back to long-term debt in the first quarter of fiscal year 2020. The following table summarizes the maturities of our borrowing obligations as of June 30, 2020 (dollars in thousands):
5.625% Senior Notes due 2026 In December 2016, we issued $500.0 million aggregate principal amount of 5.625% Senior Notes due on December 15, 2026 (the "2026 Senior Notes") in a private placement. The proceeds from the 2026 Senior Notes were approximately $495.0 million, net of issuance costs, and we used the proceeds to repurchase a portion of our then outstanding 5.375% Senior Notes due 2020. The 2026 Senior Notes bear interest at 5.625% per year, payable in cash semi-annually in arrears. The 2026 Senior Notes are unsecured senior obligations and are guaranteed on an unsecured senior basis by certain of our domestic subsidiaries ("Subsidiary Guarantors"). The 2026 Senior Notes and the guarantees rank equally in right of payment with all of our and the Subsidiary Guarantors’ existing and future unsecured senior debt and rank senior in right of payment to all of our and the Subsidiary Guarantors’ future unsecured subordinated debt. The 2026 Senior Notes and guarantees effectively rank junior to all our secured debt and that of the Subsidiary Guarantors to the extent of the value of the collateral securing such debt and to all liabilities, including trade payables, of our subsidiaries that have not guaranteed the 2026 Senior Notes. At any time before December 15, 2021, we may redeem all or a portion of the 2026 Senior Notes at a redemption price equal to 100% of the aggregate principal amount of the 2026 Senior Notes to be redeemed, plus a "make-whole" premium and accrued and unpaid interest to, but excluding, the redemption date. At any time on or after December 15, 2021, we may redeem all or a portion of the 2026 Senior Notes at certain redemption prices expressed as percentages of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date. At any time and from time to time before December 15, 2021, we may redeem up to 35% of the aggregate outstanding principal amount of the 2026 Senior Notes with the net cash proceeds received by us from certain equity offerings at a price equal to 105.625% of the aggregate principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided that the redemption occurs no later than 120 days after the closing of the related equity offering, and at least 50% of the original aggregate principal amount of the 2026 Senior Notes remains outstanding immediately thereafter. Upon the occurrence of a change in control or sale of substantially all assets, we must offer to repurchase the 2026 Senior Notes at a price equal to 100% in the case of an asset sale, or 101% in the case of a change of control, of the principal amount plus accrued and unpaid interest to, but excluding, the repurchase date. 6.0% Senior Notes due 2024 In June 2016, we issued $300.0 million aggregate principal amount of 6.0% Senior Notes due on July 1, 2024 (the "2024 Senior Notes") in a private placement. The proceeds from the 2024 Senior Notes were approximately $297.5 million, net of issuance costs. The 2024 Senior Notes bear interest at 6.0% per year, payable in cash semi-annually in arrears. On October 1, 2019, we redeemed all the $300.0 million outstanding principal amount of the 2024 Senior Notes for $313.5 million, plus accrued and unpaid interest of $4.5 million. As a result of the redemption, we recorded a $15.0 million loss on extinguishment of debt for the first quarter of fiscal year 2020, including a $13.5 million redemption premium and a $1.5 million write-off of unamortized debt issuance costs. 1.0% Convertible Debentures due 2035 In December 2015, we issued $676.5 million in aggregate principal amount of 1.0% Senior Convertible Debentures due in 2035 (the "1.0% 2035 Debentures") in a private placement. Total proceeds were $663.8 million, net of issuance costs, and we used a portion to repurchase $38.3 million in aggregate principal on our 2.75% Senior Convertible Debentures due in 2031 (the “2.75% 2031 Debentures”) and to repay the aggregate principal balance of $472.5 million on our term loan under the amended and restated credit agreement. The 1.0% 2035 Debentures bear interest at 1.0% per year, payable in cash semi-annually in arrears. In addition to ordinary interest and default additional interest, beginning with the semi-annual interest period commencing on December 15, 2022, contingent interest will accrue during any regular semi-annual interest period where the average trading price of our 1.0% 2035 Debentures for the ten trading day period immediately preceding the first day of such semi-annual period is greater than or equal to $1,200 per $1,000 principal amount of our 1.0% 2035 Debentures, in which case, contingent interest will accrue at a rate of 0.50% per annum of such average trading price. The 1.0% 2035 Debentures mature on December 15, 2035, subject to the right of the holders to require us to redeem the 1.0% 2035 Debentures on December 15, 2022, 2027, or 2032. The 1.0% 2035 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.0% 2035 Debentures. The 1.0% 2035 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. We account separately for the liability and equity components of the 1.0% 2035 Debentures in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature and record the remainder in stockholders’ equity. At issuance, we allocated $495.4 million to long-term debt, and $181.1 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through December 2022. If converted, the principal amount of the 1.0% 2035 Debentures is payable in cash and any amounts payable in excess of the principal amount will (based on an initial conversion rate, which represents a conversion price of approximately $24.12 per share, subject to adjustment) be paid in cash or shares of our common stock, at our election. Conversion is only allowed in the following circumstances and to the following extent: (i) prior to June 15, 2035, on any date during any fiscal quarter (and only during such fiscal quarter) if the closing sale price of our common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter; (ii) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price for $1,000 principal amount of the 1.0% 2035 Debentures for each day during such five trading-day period was less than 98% of the closing sale price of our common stock multiplied by the then current conversion rate; (iii) upon the occurrence of specified corporate transactions, as described in the indenture for the 1.0% 2035 Debentures; or (iv) at the option of the holder at any time on or after June 15, 2035. Additionally, we may redeem the 1.0% 2035 Debentures, in whole or in part, on or after December 20, 2022 for cash at a price equal to 100% of the principal amount of the 1.0% 2035 Debentures to be purchased plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. Each holder shall have the right, at such holder’s option, to require us to repurchase all or any portion of the 1.0% 2035 Debentures held by such holder on December 15, 2022, December 15, 2027, or December 15, 2032 at par plus accrued and unpaid interest. If we undergo a fundamental change or non-stock change of control (as described in the indenture for the 1.0% 2035 Debentures) prior to maturity, holders will have the option to require us to repurchase all or any portion of their debentures for cash at a price equal to 100% of the principal amount of the 1.0% 2035 Debentures to be purchased plus any accrued and unpaid interest. In accordance with the terms of the indentures governing the debentures and due to the completion of the spin-off of our Automotive business, the conversion ratio of the 1.0% 2035 Debentures has been adjusted from 36.7360 to 41.4576 shares per $1,000 principal amount. As of June 30, 2020, none of the conversion criteria were met for the 1.0% 2035 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. 2.75% Convertible Debentures due 2031 On October 24, 2011, we sold $690.0 million of our 2.75% 2031 Debentures in a private placement. Total proceeds, net of issuance costs, were $676.1 million. The 2.75% 2031 Debentures bear interest at 2.75% per year, payable in cash semi-annually in arrears. The 2.75% 2031 Debentures mature on November 1, 2031, subject to the right of the holders to require us to redeem the 2.75% 2031 Debentures on November 1, 2021 and 2026. The 2.75% 2031 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 2.75% 2031 Debentures. The 2.75% 2031 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. At issuance, we allocated $533.6 million to long-term debt, and $156.4 million has been recorded as additional paid-in capital, which was amortized to interest expense using the effective interest rate method through November 2017. In June 2015, we entered into separate privately negotiated agreements with certain holders of our 2.75% 2031 Debentures to exchange, in a private placement, $256.2 million in aggregate principal amount of our 2031 Debentures for approximately $263.9 million in aggregate principal amount of our 1.5% Senior Convertible Debentures due in 2035 (the"1.5% 2035 Debenture"). In December 2015, we entered into separate privately negotiated agreements with certain holders of our 2.75% 2031 Debentures to repurchase $38.3 million in aggregate principal with proceeds received from the issuance of our 1.0% 2035 Debentures. Following this activity, $395.5 million in aggregate principal amount of our 2.75% 2031 Debentures remained outstanding. The aggregate debt discount was amortized to interest expense using the effective interest rate method through November 2017. In November 2017, holders of approximately $331.2 million in aggregate principal amount of the outstanding 2.75% 2031 Debentures exercised their right to require us to repurchase such debentures. Following the repurchase, $46.6 million in aggregate principal amount of the 2.75% 2031 Debentures remained outstanding and we had the right to call for redemption of some or all of the remaining outstanding 2.75% 2031 Debentures. In March 2020, we redeemed the remaining $46.6 million outstanding amount of the 2.75% Convertible Debentures at par. The issuance costs and discount had been fully amortized. No gain or loss was recognized for the redemption. 1.25% Convertible Debentures due 2025 In March 2017, we issued $350.0 million in aggregate principal amount of 1.25% Senior Convertible Debentures due in 2025 (the "1.25% 2025 Debentures") in a private placement. The proceeds were approximately $343.6 million, net of issuance costs. We used a portion of the proceeds to repurchase 5.8 million shares of our common stock for $99.1 million and $17.8 million in aggregate principal on our 2.75% 2031 Debentures. The 1.25% 2025 Debentures bear interest at 1.25% per year, payable in cash semi-annually in arrears, beginning on October 1, 2017. The 1.25% 2025 Debentures mature on April 1, 2025. The 1.25% 2025 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.25% 2025 Debentures. The 1.25% 2025 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. We account separately for the liability and equity components of the 1.25% 2025 Debentures in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. The guidance requires the carrying amount of the liability component to be estimated by measuring the fair value of a similar liability that does not have an associated conversion feature and record the remainder in stockholders’ equity. At issuance, we allocated $252.1 million to long-term debt, and $97.9 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through April 1, 2025. If converted, the principal amount of the 1.25% 2025 Debentures is payable in cash and any amounts payable in excess of the principal amount will (based on an initial conversion rate, which represents a conversion price of approximately $19.69 per share subject to adjustment under certain circumstances) be paid in cash or shares of our common stock, at our election. Conversion is only allowed in the following circumstances and to the following extent: (i) prior to October 1, 2024, on any date during any fiscal quarter (and only during such fiscal quarter) if the closing sale price of our common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter; (ii) at any time on or after October 1, 2024; (iii) during the five consecutive business-day period immediately following any five consecutive trading-day period in which the trading price for $1,000 principal amount of the 1.25% 2025 Debentures for each day during such five trading-day period was less than 98% of the closing sale price of our common stock multiplied by the then current conversion rate; or (iv) upon the occurrence of specified corporate transactions, as described in the indenture for the 1.25% 2025 Debentures. We may not redeem the 1.25% 2025 Debentures prior to the maturity date. If we undergo a fundamental change or non-stock change of control (as described in the indenture for the 1.25% 2025 Debentures) prior to maturity, holders will have the option to require us to repurchase all or any portion of their debentures for cash at a price equal to 100% of the principal amount of the 1.25% 2025 Debentures to be purchased plus any accrued and unpaid interest. In accordance with the terms of the indentures governing the debentures and due to the completion of the spin-off of our Automotive business, the conversion ratio of the 1.25% 2025 Debentures has been adjusted to from 45.0106 to 50.7957 shares per $1,000 principal amount. During the second quarter of fiscal year 2020, we repurchased $87.3 million notional amount of our 1.25% 2025 Debentures for $112.3 million, of which we allocated $72.8 million to debt and $39.5 million to equity based upon ASC 470-20. Also, in connection with the repurchases, we wrote off $16.7 million unamortized discount and $0.7 million unamortized costs. As a result, we recorded a $2.8 million loss associated with the repurchases. Following the repurchases, $262.7 million in aggregate principal amount of the 1.25% 2025 Debentures remain outstanding. As of June 30, 2020, none of the conversion criteria were met for the 1.25% 2025 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. 1.50% Convertible Debentures due 2035 In June 2015, we issued $263.9 million in aggregate principal amount of 1.5% Senior Convertible Debentures due in 2035 in exchange for $256.2 million in aggregate principal amount of our 2.75% 2031 Debentures. Total proceeds, net of issuance costs, were $253.2 million. The 1.5% 2035 Debentures were issued at 97.09% of the principal amount, which resulted in a discount of $7.7 million. The 1.5% 2035 Debentures bear interest at 1.5% per year, payable in cash semi-annually in arrears. In addition to ordinary interest and default additional interest, beginning with the semi-annual interest period commencing on November 1, 2021, contingent interest will accrue during any regular semi-annual interest period where the average trading price of our 1.5% 2035 Debentures for the ten trading day period immediately preceding the first day of such semi-annual period is greater than or equal to $1,200 per $1,000 principal amount of our 1.5% 2035 Debentures, in which case, contingent interest will accrue at a rate of 0.50% per annum of such average trading price. The 1.5% 2035 Debentures mature on November 1, 2035, subject to the right of the holders to require us to redeem the 1.5% 2035 Debentures on November 1, 2021, 2026, or 2031. The 1.5% 2035 Debentures are general senior unsecured obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated indebtedness and senior in right of payment to any indebtedness that is contractually subordinated to the 1.5% 2035 Debentures. The 1.5% 2035 Debentures will be effectively subordinated to indebtedness and other liabilities of our subsidiaries. We account separately for the liability and equity components of the 1.5% 2035 Debentures in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. At issuance, we allocated $208.6 million to long-term debt, and $55.3 million has been recorded as additional paid-in capital, which is being amortized to interest expense using the effective interest rate method through November 2021. If converted, the principal amount of the 1.5% 2035 Debentures is payable in cash and any amounts payable in excess of the principal amount, will (based on an initial conversion rate, which represents an initial conversion price of approximately $20.61 per share subject to adjustment) be paid in cash or shares of our common stock, at our election. Conversion is only allowed in the following circumstances and to the following extent: (i) prior to May 1, 2035, on any date during any fiscal quarter beginning after September 30, 2015 (and only during such fiscal quarter) if the closing sale price of our common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the previous fiscal quarter; (ii) during the five consecutive business-day period following any five consecutive trading-day period in which the trading price for $1,000 principal amount of the 1.5% 2035 Debentures for each day during such five trading-day period was less than 98% of the closing sale price of our common stock multiplied by the then current conversion rate; (iii) upon the occurrence of specified corporate transactions, as described in the indenture for the 1.5% 2035 Debentures; or (iv) at the option of the holder at any time on or after May 1, 2035. Additionally, we may redeem the 1.5% 2035 Debentures, in whole or in part, on or after November 5, 2021 for cash at a price equal to 100% of the principal amount of the 1.5% 2035 Debentures to be purchased plus any accrued and unpaid interest, including any additional interest to, but excluding, the repurchase date. Each holder shall have the right, at such holder’s option, to require us to repurchase all or any portion of the 1.5% 2035 Debentures held by such holder on November 1, 2021, November 1, 2026, or November 1, 2031 at par plus accrued and unpaid interest. If we undergo a fundamental change (as described in the indenture for the 1.5% 2035 Debentures) prior to maturity, holders will have the option to require us to repurchase all or any portion of their debentures for cash at a price equal to 100% of the principal amount of the 1.5% 2035 Debentures to be purchased plus any accrued and unpaid interest. In accordance with the terms of the indentures governing the debentures and due to the completion of the spin-off of our Automotive business, the conversion ratio of the 1.5% 2035 Debentures has been adjusted from 42.9978 to 48.5216 shares per $1,000 principal amount. During the second quarter of fiscal year 2020, we repurchased $36.5 million notional amount of 1.5% 2035 Debentures for $41.3 million, of which we allocated $34.7 million to debt and $6.6 million to equity based upon ASC 470-20. Also, in connection with the repurchases, we wrote off $2.5 million unamortized discount and $0.1 million unamortized costs. As a result, we recorded a $0.8 million loss associated with the repurchases. Following the repurchases, $227.4 million in aggregate principal amount of the 1.5% 2035 Debentures remain outstanding. As of June 30, 2020, none of the conversion criteria were met for the 1.5% 2035 Debentures. If the conversion criteria were met, we could be required to repay all or some of the aggregate principal amount in cash prior to the maturity date. Revolving Credit Facility Our revolving credit agreement (the “Revolving Credit Agreement"), which expires on April 15, 2021. On July 31, 2020, we amended the Revolving Credit Agreement to, among other things, extend the expiration from April 15, 2021 to April 15, 2022, and allow the administrative agent and Nuance to agree on a new benchmark rate in lieu of LIBOR. The Revolving Credit Agreement provides for aggregate borrowing commitments of $242.5 million (the "Revolving Credit Facility"), including the revolving facility loans, the swingline loans and issuance of letters of credit. The borrowing outstanding under the Revolving Credit Facility bears interest at either (i) LIBOR plus an applicable margin of 1.50% or 1.75%, or (ii) the alternative base rate plus an applicable margin of 0.50% or 0.75%. The Revolving Credit Facility is secured by substantially all our assets. The Revolving Credit Agreement contains customary affirmative and negative covenants and conditions to borrowing, as well as customary events of default. At any time that there are any outstanding borrowings (excluding up to $25,000,000 of issued and undrawn Letters of Credit) under the Revolving Credit Facility, we are required to maintain a Consolidated Senior Secured Leverage Ratio (as defined in the Revolving Credit Agreement) not exceeding 4.00 to 1.00. We were in compliance with all the debt covenants as of June 30, 2020. On March 24, 2020, we borrowed $230.0 million under our revolving credit facility at an effective interest rate of 2.68% per annum
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Stockholders' Equity Stockholders' Equity (Notes) |
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Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Share Repurchases On April 29, 2013, our Board of Directors approved a share repurchase program for up to $500.0 million, which was increased by $500.0 million on April 29, 2015. On August 1, 2018, our Board of Directors approved an additional $500.0 million under our share repurchase program. Under the terms of the share repurchase program, we have the ability to repurchase shares from time to time through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated stock repurchase transactions, or any combination of such methods. The share repurchase program does not require us to acquire any specific number of shares and may be modified, suspended, extended or terminated by us at any time without prior notice. The timing and the amount of any purchases are subject to our assessment of the prevailing market conditions, general economic conditions, capital allocation alternatives, and other factors. We did not repurchase any shares of our common stock for the three months ended June 30, 2020 and repurchased 9.5 million shares of our common stock for $169.2 million for the nine months ended June 30, 2020. We repurchased 1.7 million shares of our common stock for $29.6 million for the three months ended June 30, 2019, and repurchased 7.8 million shares of our common stock for $120.9 million for the nine months ended June 30, 2019 under the program. The amount paid in excess of par value is recognized in additional paid in capital and these shares were retired upon repurchase. Since the commencement of the program, we have repurchased an aggregate of 73.8 million shares for $1,238.8 million. As of June 30, 2020, approximately $261.2 million remained available for future repurchases under the program.
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Net Income (Loss) Per Share |
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Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Per Share | The following table sets forth the computation for basic and diluted net income (loss) per share (in thousands, except per share amounts):
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Stock-Based Compensation |
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Share-based Payment Arrangement, Noncash Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | On January 22, 2020, our shareholders adopted our 2020 Stock Plan (the "2020 Stock Plan"). The 2020 Stock Plan (i) grants the Company's compensation committee the discretionary authority over the plan; (ii) makes employees, directors, consultants, and advisors of the Company and its subsidiaries eligible to receive awards; (iii) sets the number of shares of common stock that may be issued in satisfaction of awards to be 9,000,000 shares, plus the number of shares available for issuance under the amended and restated 2000 Stock Plan (the "Amended and Restated 2000 Stock Plan"); and (iv) identifies the annual limits on shares granted to each individual and the types of awards permissible. As of June 30, 2020, we had 13.8 million shares available for future grants under the 2020 Stock Plan. We recognize stock-based compensation expenses over the requisite service periods. Our share-based awards are classified within equity upon issuance. The amounts included in the consolidated statements of operations related to stock-based compensation are as follows (dollars in thousands):
Modifications of Equity Awards In connection with the spin-off of our Automotive business (the "Distribution") on October 1, 2019, under the provisions of our Amended and Restated 2000 Stock Plan and our Amended and Restated Directors Stock Plan, we adjusted our then outstanding equity awards in accordance with the terms of the Employee Matters Agreement that Nuance entered into in connection with the Distribution. Effective upon the Distribution, Nuance stock options, Nuance restricted stock units ("RSUs"), and Nuance performance-based restricted stock units ("PSUs") held by employees and other service providers continuing with Nuance following the Distribution, were adjusted based on a conversion ratio of 1.16667 to 1, as outlined in the Employee Matters Agreement. Effective upon the Distribution, RSUs held by employees continuing with Cerence following the Distribution that were scheduled to vest on or before November 30, 2019 vested in full as of immediately prior to the Distribution, PSUs held by such employees that were eligible to vest based on Nuance's relative total shareholder return ("TSR") as of November 6, 2019 were cancelled in exchange for a cash payment based on the portion of the PSUs that were then earned, and all other RSUs and PSUs held by such employees were forfeited for no consideration upon their termination of employment with Nuance. As of the Distribution (or an applicable employee's later transfer date), all employees continuing with Cerence following the Distribution ceased to be eligible to participate in Nuance's Employee Stock Purchase Plan ("ESPP"). As of December 31, 2019, the employees participating in the Company's ESPP were all Nuance employees. There were no changes to the plan terms of any of the foregoing plans except as described above. The incremental expense as a result of these modifications was immaterial to the condensed consolidated financial statements. Stock Options The table below summarizes activities related to stock options for the nine months ended June 30, 2020:
The aggregate intrinsic values of stock options exercised during the nine months ended June 30, 2020 and 2019 were de minimis. Restricted Units Restricted units are not included in issued and outstanding common stock until the units are vested and underlying shares are released. The purchase price for vested restricted units is $0.001 per share. The table below summarizes activities relating to restricted units for the nine months ended June 30, 2020:
A summary of the weighted-average grant-date fair value of restricted units granted, and the aggregate intrinsic value of restricted units vested during the periods noted is as follows:
Performance-based restricted units outstanding as of June 30, 2020 and issued in fiscal years 2020 and 2019 include performance goals based on total shareholder return relative to our peers during the performance period. The awards actually earned will be up to one-hundred and fifty percent and two hundred percent of the target number of the performance-based restricted units. Compensation expense is recorded ratably over the performance period of the award based on the grant date fair value determined using a Monte Carlo simulation model, which included the following assumptions:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | The components of income (loss) from continuing operations before income taxes are as follows (dollars in thousands):
The components of (benefit) provision for income taxes from continuing operations are as follows (dollars in thousands):
The effective income tax rate is based upon the income for the year, the composition of the income in different countries, changes relating to valuation allowances for certain countries if and as necessary, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits or other tax contingencies. Our effective income tax rate may be adversely affected by earnings being lower than anticipated in countries where we have lower statutory tax rates and higher than anticipated in countries where we have higher statutory tax rates. We recorded a $16.7 million tax benefit on near-zero income (loss) before income taxes for the three months ended June 30, 2020, primarily due to the valuation allowance on deferred tax assets in the United States and a foreign tax benefit of $14.7 million related to prior-year intangible property transfers. The effective tax rate for the three months ended June 30, 2019 differed from the U.S. federal statutory rate of 21.0% primarily due to the valuation allowance on deferred tax assets in the United States. The effective tax rate for the nine months ended June 30, 2020 differed from the U.S. federal statutory rate of 21.0% due to a net $29.9 million deferred tax benefit from an adjustment to domestic valuation allowance, primarily related to the Cerence spin-off, and a foreign tax benefit of $14.7 million related to prior-year intangible property transfers. The effective tax rate for the nine months ended June 30, 2019 differed from the U.S. federal statutory rate of 21.0% primarily due to the valuation allowance on deferred tax assets in the United States. Valuation Allowances As of June 30, 2020 and September 30, 2019, we had a full valuation allowance against net domestic deferred tax assets and certain foreign deferred tax assets. We intend to continue maintaining valuation allowances on these deferred tax assets until there is sufficient evidence to support the release of all or some portion of these allowances. A significant portion of our domestic deferred tax assets relate to U.S. net operating losses. Cumulative pretax losses have historically represented significant negative evidence of our ability to realize our domestic deferred tax assets. We continue to evaluate all sources of domestic taxable income including both the reversal of existing deferred tax liabilities and the likelihood that we could sustain pretax profitability in the future. As of June 30, 2020, we believe that there is a reasonable possibility that within the next twelve months these sources of taxable income may become sufficient positive evidence to support a conclusion that a substantial portion of the domestic valuation allowance, excluding capital losses, could be released. Automotive Deferred Taxes We have made a policy election to classify the deferred tax assets and liabilities associated with assets and liabilities held for sale or spun off within our consolidated balance sheets of continuing operations. As a result, approximately $92.6 million of deferred tax assets related to Cerence's intellectual property was included within Other assets as of September 30, 2019, which was spun off on October 1, 2019 and was recorded against equity. Tax Adjustment Related to the CARES Act On March 27, 2020, the CARES Act was enacted, which provided a technical correction to a provision in the TCJA related to the characterization of federal net operating losses ("NOLs") generated during fiscal year 2018. Under the TCJA, NOLs generated in fiscal years that straddled December 31, 2017 were designated as indefinite-lived NOLs. The CARES Act amended this legislation to designate these NOLs as definite-lived NOLs. This recharacterization resulted in an increase of $6.5 million in deferred tax assets related to our definite lived NOLs, thus requiring additional valuation allowance of the same amount. The adjustment should have been recorded during the three months ended March 31, 2020. We determined that these amounts are not material to our previously issued condensed consolidated financial statements for the three months ended March 31, 2020. The line items of our previously issued financial statements that are impacted by the adjustment are as follows (dollars in thousands, except per share):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Litigation and Other Claims Similar to many companies in the software industry, we are involved in a variety of claims, demands, suits, investigations and proceedings that arise from time to time relating to matters incidental to the ordinary course of our business, including actions with respect to contracts, intellectual property, employment, benefits and securities matters. At each balance sheet date, we evaluate contingent liabilities associated with these matters in accordance with ASC 450 "Contingencies". If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgments are required for the determination of probability and the range of the outcomes, and the estimates are based only on the information available at the time. Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from our estimates. Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods which may have a material impact on our results of operations and financial position. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. As of June 30, 2020, accrued losses were not material to our condensed consolidated financial statements, and we do not expect any pending matter to have a material impact on our condensed consolidated financial statements. Guarantees and Other We include indemnification provisions in the contracts we enter into with customers and business partners. Generally, these provisions require us to defend claims arising out of our products’ infringement of third-party intellectual property rights, breach of contractual obligations and/or unlawful or otherwise culpable conduct. The indemnity obligations generally cover damages, costs and attorneys’ fees arising out of such claims. In most, but not all cases, our total liability under such provisions is limited to either the value of the contract or a specified, agreed upon amount. In some cases, our total liability under such provisions is unlimited. In many, but not all cases, the term of the indemnity provision is perpetual. While the maximum potential amount of future payments we could be required to make under all the indemnification provisions is unlimited, we believe the estimated fair value of these provisions is minimal due to the low frequency with which these provisions have been triggered. We indemnify our directors and officers to the fullest extent permitted by Delaware law, which provides among other things, indemnification to directors and officers for expenses, judgments, fines, penalties and settlement amounts incurred by such persons in their capacity as a director or officer of the company, regardless of whether the individual is serving in any such capacity at the time the liability or expense is incurred. Additionally, in connection with certain acquisitions, we agreed to indemnify the former officers and members of the boards of directors of those companies, on similar terms as described above, for a period of six years from the acquisition date. In certain cases, we purchase director and officer insurance policies related to these obligations, which fully cover the six-year period. To the extent that we do not purchase a director and officer insurance policy for the full period of any contractual indemnification, and such directors and officers do not have coverage under separate insurance policies, we would be required to pay for costs incurred, if any, as described above.
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Leases (Notes) |
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Leases of Lessee Disclosure [Text Block] | Operating Leases Operating Leases We have various operating leases for office space, data centers, office equipment and automobiles around the world with lease terms expiring between 2021 and 2030. We determine if an arrangement is a lease at inception. The current portion of our operating lease liabilities is included in accrued expenses and other current liabilities and the long-term portion is included in operating lease liabilities. Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate. Due to the interest rate implicit in most of our leases not being readily determinable, our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Operating lease assets also include any prepaid lease payments and lease incentives. Our lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We combine fixed payments for non-lease components with our lease payments and account for them together as a single lease component which increases the amount of our lease assets and liabilities. Payments under our lease arrangements are primarily fixed. Variable rents, if any, are expensed as incurred. As of June 30, 2020, our operating leases had a weighted average remaining lease term of 4.6 years and a weighted average discount rate of 3.8%. Future lease payments under operating leases as of June 30, 2020 were as follows (dollars in thousands):
As of June 30, 2020, we have subleased certain office space that is included in the above table to third parties. As of June 30, 2020, the aggregate sublease income to be recognized during the remaining lease terms is $13.1 million, with approximately an average of $2.0 million annually for each of the next five fiscal years and approximately $3.0 million thereafter. Our operating lease cost was approximately $8.0 million for the three months ended June 30, 2020 and $24.2 million for the nine months ended June 30, 2020. Operating lease payments included within operating cash flows were $9.5 million for the three months ended June 30, 2020 and $27.4 million for the nine months ended June 30, 2020.
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Segment and Geographic Information and Significant Customers |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information and Significant Customers | Our Chief Operating Decision Maker ("CODM") regularly reviews segment revenues and segment profits for performance evaluation and resources allocation. Segment revenues include certain acquisition-related adjustments for revenues that would otherwise have been recognized without the acquisition. Segment profits reflect controllable costs directly related to each segment and the allocation of certain corporate expenses such as corporate sales and marketing expenses and research and development project costs that benefit multiple segments. Certain items such as stock-based compensation, amortization of intangible assets, acquisition-related costs, net, restructuring and other charges, net, other expenses, net and certain unallocated corporate expenses are excluded from segment profits, which allow for more meaningful comparisons to the financial results of the historical operations for performance evaluation and resources allocation by our CODM.
As more fully described in Note 4, on October 1, 2019, we completed the spin-off of our Automotive business as an independent publicly traded company. Effective the first quarter of fiscal year 2020, our Automotive business's historical results of operations have been included within discontinued operations. For the three months ended June 30, 2019, $4.0 million of stranded costs previously allocated to our Automotive segment have been re-allocated to Healthcare, Enterprise, and Other; for the nine months ended June 30, 2019, $12.9 million of stranded costs previously allocated to our Automotive segment have been re-allocated to Healthcare, Enterprise, and Other. We do not track our assets by segment. Consequently, it is not practical to show assets or depreciation by segment. The following table presents segment results along with a reconciliation of segment profit to Income (loss) before income taxes (dollars in thousands):
No country outside of the United States provided greater than 10% of our total revenues. Revenues, classified by the major geographic areas in which our customers are located, were as follows (dollars in thousands):
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Supplemental Cash Flow (Notes) |
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Cash Flow, Supplemental Disclosures [Text Block] | . Supplemental Cash Flow Information Cash paid for Interest and Income Taxes:
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subsequent event (Notes) |
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Jun. 30, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | COVID-19 Pandemic The novel coronavirus ("COVID-19") pandemic has disrupted economic markets, and the future economic impact, duration and spread of COVID-19 is uncertain at this time. Through June 30, 2020, our liquidity and operations had been adversely impacted by the pandemic. Our revenue for the third quarter was negatively impacted by reduced volume in medical transcription and radiology, as well as delays in professional services and software license transactions. Our operating cash flows were also negatively impacted by delayed collections. Nevertheless, the negative effects of the pandemic were partially mitigated by our proactive expense containment and reduction efforts. As multiple states commenced a phased reopening towards the end of June, our transaction volumes in medical transcription and radiology solutions have mostly recovered from the lows in April. However, we expect the negative impact of COVID-19 to continue into the fourth quarter as the healthcare industry and many of our customers are still coping with the operational and financial disruptions caused by the pandemic. While we expect revenue to partially recover in the fourth quarter, we expect ongoing delayed cash collections as we continue to support our customers under our customer payment relief program. The ultimate impact of the COVID-19 pandemic and the effects of the operational changes we have made in response cannot be accurately predicted at this time. As the pandemic situation develops, we may revise our assessment, and the actual amounts may differ materially from our estimates.
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Revenue Recognition Revenue Recognition (Policies) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Policy Text Block] | We derive revenue from the following sources: (1) hosting services, (2) software licenses, including royalties, (3) maintenance and support ("M&S"), (4) professional services, and (5) sale of hardware. Revenue is reported net of applicable sales and use tax, value-added tax and other transaction taxes imposed on the related transaction including mandatory government charges that are passed through to our customers. We account for a contract when both parties have approved and committed to the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectibility of the consideration is probable. The majority of our arrangements with customers typically contain multiple products and services. We account for individual products and services separately if they are distinct--that is, if a product or service is separately identifiable from other items in the contract and if a customer can benefit from it on its own or with other resources that are readily available to the customer. We recognize revenue after applying the following five steps:
We allocate the transaction price of the arrangement based on the relative estimated standalone selling price ("SSP") of each distinct performance obligation. In determining SSP, we maximize observable inputs and consider a number of data points, including:
We only include estimated amounts of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. We reduce transaction prices for estimated returns and other allowances that represent variable consideration under ASU No. 2014-09, "Revenue from Contracts with Customers: Topic 606" ("ASC 606"), which we estimate based on historical return experience and other relevant factors and record a reduction to revenue and accounts receivable. Other forms of contingent revenue or variable consideration are infrequent. Revenue is recognized when control of these products and services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. We assess the timing of the transfer of products or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. In accordance with the practical expedient in ASC 606-10-32-18, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of financing to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set-up fees nor other upfront fees paid by our customers to represent a financing component. Certain products are sold through distributors or resellers. Certain distributors and resellers have been granted right of return and selling incentives which are accounted for as variable consideration when estimating the amount of revenue to be recognized. Returns and credits are estimated at the contract inception and updated at the end of each reporting period as additional information becomes available. In accordance with the practical expedient in ASC 606-10-10-4, we apply a portfolio approach to estimate the variable consideration associated with this group of customers. Reimbursements for out-of-pocket costs generally include, but are not limited to, costs related to transportation, lodging and meals. Revenue from reimbursed out-of-pocket costs is accounted for as variable consideration. Shipping and handling activities are not considered a contract performance obligation. We record shipping and handling costs billed to customers as revenue with offsetting costs recorded as cost of revenue. Performance Obligations Hosting Hosting services, which allow our customers to use the hosted software over the contract period without taking possession of the software, are provided on a usage basis as consumed or on a fixed fee subscription basis. Our hosting contract terms generally range from one to five years. As each day of providing services is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, we have determined that our hosting services arrangements are a single performance obligation comprised of a series of distinct services. These services include variable consideration, which is typically a function of usage. We recognize revenue as each distinct service period is performed (i.e., recognized as incurred). Subscription-based revenue represents a single promise to stand-ready to provide access to our hosting services. Revenue is recognized over time on a ratable basis over the hosting contract term, which generally ranges from one to five years. Software Licenses On-premise software licenses sold with non-distinct professional services to customize and/or integrate the underlying software are accounted for as a combined performance obligation. Revenue from the combined performance obligation is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours. Revenue from distinct on-premise software licenses, which do not require professional services to customize and/or integrate the software license, is recognized at the point in time when the software is made available to the customer and control is transferred. Revenue from software licenses sold on a royalty basis, where the license of intellectual property is the predominant item to which the royalty relates, is recognized in the period the usage occurs in accordance with the practical expedient in ASC 606-10-55-65(A). Maintenance and Support Our M&S contracts generally include telephone support and the right to receive unspecified upgrades and updates on a when-and-if available basis. M&S revenue is recognized over time on a ratable basis over the contract period because we transfer control evenly by providing a stand-ready service. Professional Services Revenue from distinct professional services, including training, is recognized over time based upon the progress towards completion of the project, which is measured based on the labor hours already incurred to date as compared to the total estimated labor hours. Hardware Hardware revenue is recognized at the point in time when control is transferred to the customer, which is typically upon delivery. Significant Judgments Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Our license contracts often include professional services to customize and/or integrate the licenses into the customer’s environment. Judgment is required to determine whether the license is considered distinct and accounted for separately, or not distinct and accounted for together with professional services. Judgments are required to determine the SSP for each distinct performance obligation. When SSP is directly observable, we estimate SSP based upon the historical transaction prices, adjusted for geographic considerations, customer classes, and customer relationship profiles. In instances where SSP is not directly observable, we determine SSP using information that may include market conditions and other observable inputs. We may have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining SSP. Determining SSP for performance obligations which we never sell separately also requires significant judgment. In estimating the SSP for such performance obligations, we consider the likely price that would have resulted from established pricing practices had the deliverable been offered separately and the prices a customer would likely be willing to pay. From time to time, we may enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we are the principal (i.e. report revenues on a gross basis) or agent (i.e. report revenues on a net basis). In doing so, we first evaluate whether we control the good or service before it is transferred to the customer. If we control the good or service before it is transferred to the customer, we are the principal; if not, we are the agent. Generally, we control a promised good or service before transferring that good or service to the customer and act as the principal to the transaction. Determining whether we control the good or service before it is transferred to the customer may require judgment. Disaggregated Revenue We disaggregate revenue from contracts with customers by reportable segment and products and services as this presentation depicts the timing, risks and uncertainty of our revenue streams, which is also in line with how we manage our businesses, assess performance, and determine management compensation. Our disaggregated revenue from continuing operations is as follows (dollars in thousands):
Hardware revenue comprised approximately $5.7 million and $20.5 million of total product and license revenue for the three and nine months ended June 30, 2020, and $6.4 million and $21.5 million of total product and license revenue for the three and nine months ended June 30, 2019. Contract Acquisition Costs We are required to capitalize certain contract acquisition costs under ASC 606. The capitalized costs primarily relate to paid commissions and other direct, incremental costs to acquire customer contracts. In accordance with the practical expedient in ASC 606-10-10-4, we apply a portfolio approach to estimate contract acquisition costs for groups of customer contracts. We elect to apply the practical expedient in ASC 340-40-25-4 and will expense contract acquisition costs as incurred where the expected period of benefit is one year or less. Sales commissions paid on renewal maintenance and support are not commensurate with sales commissions paid on the initial maintenance and support contract. Contract acquisition costs are deferred and amortized on a straight-line basis over the period of benefit, which we have estimated to be between one and five years. The period of benefit was determined based on an average customer contract term, expected contract renewals, changes in technology and our ability to retain customers including canceled contracts. Contract acquisition costs are classified as current or noncurrent assets based on when the expense will be recognized. The current and noncurrent portions of contract acquisition costs are included in Prepaid expenses and other current assets, and Other assets, respectively. As of June 30, 2020, we had $18.9 million of current contract acquisition costs and $44.1 million of noncurrent contract acquisition costs. As of September 30, 2019, we had $19.9 million of current contract acquisition costs and $30.1 million of noncurrent contract acquisition costs. Commission expense is primarily included in sales and marketing expense on the consolidated statements of operations. We had amortization expense related to contract acquisition costs of $4.7 million and $13.3 million for the three and nine months ended June 30, 2020, and $4.3 million and $11.3 million for the three and nine months ended June 30, 2019. There was no impairment related to commission costs capitalized. Capitalized Contract Costs We capitalize incremental costs incurred to fulfill our contracts that (1) relate directly to the contract, (2) are expected to generate resources that will be used to satisfy our performance obligation under the contract, and (3) are expected to be recovered through revenue generated under the contract. Our capitalized costs consist primarily of setup costs, such as costs to standup, customize, and develop applications for each customer. These costs are incurred to satisfy our stand-ready obligation to provide access to our connected offerings. The contract costs are expensed to cost of revenue as we satisfy our stand-ready obligation over the contract term, which we estimate to be between one and five years. The contract term estimation was determined based on an average customer contract term, expected contract renewals, changes in technology, and our ability to retain customers including canceled contracts. We classify capitalized contract costs as current or noncurrent based on the timing of when we expect to recognize the expense. The current and noncurrent portions of capitalized contract fulfillment costs are included in Prepaid expenses and other current assets, and Other assets, respectively. At June 30, 2020, we had $18.6 million of short-term contract costs included with Prepaid expenses and other current assets and $32.7 million of long-term costs included within Other assets. As of September 30, 2019, we had $17.2 million of short-term contract costs included with Prepaid expenses and other current assets and $38.5 million of long-term costs included within Other assets. Trade Accounts Receivable and Contract Balances We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). We present such receivables in Accounts receivable, net in our consolidated balance sheets at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that may not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other applicable factors. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets include unbilled amounts from long-term contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not solely subject to the passage of time. The current and noncurrent portions of contract assets are included in Prepaid expenses and other current assets, and Other assets. As of June 30, 2020, we had $39.8 million of current contract assets and $124.7 million of noncurrent contract assets. As of September 30, 2019, we had $58.7 million of current contract assets and $108.7 million of noncurrent contract assets. The table below shows significant changes in contract assets of continuing operations (dollars in thousands):
Our contract liabilities, or Deferred revenue, consist of advance payments and billings in excess of revenues recognized. We classify Deferred revenue as current or noncurrent based on when we expect to recognize the revenues. At June 30, 2020, we had $367.0 million of Deferred revenue. The table below shows significant changes in Deferred revenue of continuing operations (dollars in thousands):
Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2020 (dollars in thousands):
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Summary of Significant Accounting Policies Recently Issued Accounting Pronouncements (Tables) |
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Recently Issued Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, "Leases" ("ASC 842"), which became effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. ASC 842 requires lessees to recognize on the balance sheet a right-of-use asset, representing its right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. The standard initially required the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. We adopted ASC 842 in the first quarter of fiscal year 2020. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases" and ASU 2018-11, "Leases Topic 842 Targeted Improvements", which provide an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. Additionally, in March 2019, the FASB issued ASU 2019-01, "Codification Improvements to Topic 842", which provides guidance in the following areas: (1) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers and (2) clarification of interim disclosure requirements during transition. We adopted ASC 842, as amended, as of October 1, 2019 under the optional transition method and elected the package of practical expedients under the transition guidance. As a result of the adoption, we recognized $120 million of operating lease right-of-use assets, and approximately $140 million of operating lease obligations. Approximately $20 million of deferred rent balances were reclassified against the costs of the right-of-use assets. The cumulative-effect adjustment to retained earnings as of October 1, 2019 was immaterial. The adoption of the guidance did not have a material impact on our condensed consolidated statement of operations or consolidated statement of cash flows. Income Taxes In January 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("AOCI"), which became effective for fiscal years beginning after December 15, 2018 and interim periods therein. The guidance gives entities the option to reclassify to retained earnings the tax effects resulting from the Tax Cuts and Jobs Act ("TCJA") related to items in AOCI. The guidance may be applied retrospectively to each period in which the effect of the TCJA is recognized in the period of adoption. The adoption of the guidance did not have a material impact on our condensed consolidated financial statements. Issued Accounting Standards Not Yet Adopted Internal-Use Software In August 2018, the FASB issued ASU 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", which is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The guidance requires that implementation costs related to a hosting arrangement that is a service contract be capitalized and amortized over the term of the hosting arrangement, starting when the module or component of the hosting arrangement is ready for its intended use. The guidance will be applied retrospectively to each period presented. We do not expect the implementation to have a material impact on our condensed consolidated financial statements.
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Revenue Recognition Disaggregation of Revenue (Tables) |
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Disaggregation of Revenue [Table Text Block] |
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Revenue Recognition Contract Assets (Tables) |
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Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | The table below shows significant changes in contract assets of continuing operations (dollars in thousands):
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Revenue Recognition Contract Liability (Tables) |
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Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | The table below shows significant changes in contract assets of continuing operations (dollars in thousands):
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Revenue Recognition Remaining Performance Obligations (Tables) |
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | Remaining Performance Obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at June 30, 2020 (dollars in thousands):
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Disposition of Business (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table summarizes the results of the discontinued operations (dollars in thousands):
The following table summarizes the assets and liabilities included within discontinued operations (dollars in thousands):
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Amount of Goodwill and Intangible Assets | The changes in the carrying amount of goodwill by reportable segment for the nine months ended June 30, 2020 are as follows (dollars in thousands): Goodwill
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Goodwill and Intangible Assets Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The changes in the carrying amount of intangible assets for the nine months ended June 30, 2020 are as follows (dollars in thousands):
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Financial Instruments and Hedging Activities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Summary of Fair Value of Derivative Instruments | A summary of the derivative instruments is as follows (dollars in thousands):
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Summarized Activity of Derivative Instruments | A summary of income (loss) related to foreign currency forward contracts for the three and nine months ended June 30, 2020 and 2019 is as follows (dollars in thousands):
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Fair Value Measures (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis at June 30, 2020 and September 30, 2019 consisted of the following (dollars in thousands):
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Changes in Fair Value of Contingent Earn-Out Liabilities | The following table provides a summary of changes in the aggregate fair value of the contingent acquisition payments for all periods presented (dollars in thousands):
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Accrued Expenses and Other Current Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (dollars in thousands):
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Restructuring and Other Charges, net (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrual Activity Relating to Restructuring and Other Charges | The following table represents the roll forward of restructuring liabilities for the nine months ended June 30, 2020 (dollars in thousands):
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Debt and Credit Facilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt [Table Text Block] | (a) As of September 30, 2019, in connection with the anticipated Cerence spin-off, the holders had the right to convert all or any portion of their debentures until the close of business on October 1, 2019. As a result, the net carrying amounts of our convertible notes were included in current liabilities as of September 30, 2019. Upon the conclusion of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowing Obligations and Applicable Margin for Borrowings | As of June 30, 2020 and September 30, 2019, we had the following borrowing obligations (dollars in thousands):
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Net Income (Loss) Per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation for basic and diluted net income (loss) per share (in thousands, except per share amounts):
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation Included in Consolidated Statements of Operations | The amounts included in the consolidated statements of operations related to stock-based compensation are as follows (dollars in thousands):
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Summary of Stock Options Activity | The table below summarizes activities related to stock options for the nine months ended June 30, 2020:
(a) The aggregate intrinsic value in this table represents any excess of the closing market price of our common stock as of June 30, 2020 ($25.31) over the exercise price of the underlying options.
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Summary of Activity Relating to Restricted Units and Restricted Stock Awards | he table below summarizes activities relating to restricted units for the nine months ended June 30, 2020:
(b) Effective with the spin-off of our Automotive business on October 1, 2019, outstanding equity awards were equitably adjusted by a conversion ratio of 1.16667 per one Nuance share then hel
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Summary of Weighted-Average Grant-Date Fair Value and Intrinsic Value of Restricted Units and Restricted Stock Awards Vested | A summary of the weighted-average grant-date fair value of restricted units granted, and the aggregate intrinsic value of restricted units vested during the periods noted is as follows:
Performance-based restricted units outstanding as of June 30, 2020 and issued in fiscal years 2020 and 2019 include performance goals based on total shareholder return relative to our peers during the performance period. The awards actually earned will be up to one-hundred and fifty percent and two hundred percent of the target number of the performance-based restricted units. Compensation expense is recorded ratably over the performance period of the award based on the grant date fair value determined using a Monte Carlo simulation model, which included the following assumptions:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | Tax Adjustment Related to the CARES Act On March 27, 2020, the CARES Act was enacted, which provided a technical correction to a provision in the TCJA related to the characterization of federal net operating losses ("NOLs") generated during fiscal year 2018. Under the TCJA, NOLs generated in fiscal years that straddled December 31, 2017 were designated as indefinite-lived NOLs. The CARES Act amended this legislation to designate these NOLs as definite-lived NOLs. This recharacterization resulted in an increase of $6.5 million in deferred tax assets related to our definite lived NOLs, thus requiring additional valuation allowance of the same amount. The adjustment should have been recorded during the three months ended March 31, 2020. We determined that these amounts are not material to our previously issued condensed consolidated financial statements for the three months ended March 31, 2020. The line items of our previously issued financial statements that are impacted by the adjustment are as follows (dollars in thousands, except per share):
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Components of Benefit from Income Taxes | The components of income (loss) from continuing operations before income taxes are as follows (dollars in thousands):
The components of (benefit) provision for income taxes from continuing operations are as follows (dollars in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future lease payments under operating leases as of June 30, 2020 were as follows (dollars in thousands):
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Segment and Geographic Information and Significant Customers (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Results Along with Reconciliation of Segment Profit to Income Before Income Taxes | The following table presents segment results along with a reconciliation of segment profit to Income (loss) before income taxes (dollars in thousands):
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Classification of Revenue By Major Geographic Areas | Revenues, classified by the major geographic areas in which our customers are located, were as follows (dollars in thousands):
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Supplemental Cash Flow (Tables) |
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Supplemental Cash Flow [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Cash paid for Interest and Income Taxes:
|
Summary of Significant Accounting Policies ASC 842 effect (Details) $ in Millions |
Oct. 01, 2019
USD ($)
|
---|---|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Deferred Rent Credit, Noncurrent | $ 20 |
Minimum [Member] | Assets [Member] | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets (Deprecated 2020-01-31) | $ 140 |
Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Hardware revenue | $ 5,700 | $ 6,400 | $ 20,500 | $ 21,500 |
Document Period End Date | Jun. 30, 2020 | |||
Hosting Revenue | 225,304 | 232,860 | $ 691,295 | 678,104 |
Product and licensing | 48,722 | 78,184 | 243,501 | 252,299 |
Revenue, Maintenance and Support | 64,372 | 66,393 | 191,172 | 203,293 |
Revenues | 338,398 | 377,437 | 1,125,968 | 1,133,696 |
Health Care Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Hosting Revenue | 134,870 | 142,502 | 426,866 | 401,884 |
Product and licensing | 30,421 | 48,302 | 165,680 | 183,039 |
Revenue, Maintenance and Support | 34,572 | 37,062 | 102,246 | 119,212 |
Revenues | 199,863 | 227,866 | 694,792 | 704,135 |
Enterprise Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Hosting Revenue | 83,858 | 80,346 | 242,334 | 235,562 |
Product and licensing | 16,746 | 28,232 | 74,741 | 63,285 |
Revenue, Maintenance and Support | 29,788 | 29,204 | 88,933 | 83,829 |
Revenues | 130,392 | 137,782 | 406,008 | 382,676 |
Other Segments [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Hosting Revenue | 6,576 | 10,012 | 22,095 | 40,658 |
Product and licensing | 1,555 | 1,650 | 3,080 | 5,975 |
Revenue, Maintenance and Support | 12 | 127 | (7) | 252 |
Revenues | $ 8,143 | $ 11,789 | $ 25,168 | $ 46,885 |
Revenue Recognition Contract Assets (Details) $ in Thousands |
9 Months Ended |
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Jun. 30, 2020
USD ($)
| |
Contract Assets [Abstract] | |
Revenues recognized but not billed | $ 217,622 |
Amounts reclassified to accounts receivable | (220,398) |
Balance at June 30, 2020 | $ 164,548 |
Revenue Recognition Contract Liability (Details) $ in Thousands |
9 Months Ended |
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Jun. 30, 2020
USD ($)
| |
Contract Liability [Abstract] | |
Amounts bill but not recognized | $ 625,732 |
Revenue recognized | (606,700) |
Balance at June 30, 2020 | $ 367,038 |
Revenue Recognition Remaining Performance Obligations (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue | $ 367,000 | |
Contract with Customer, Asset, after Allowance for Credit Loss, Noncurrent | 124,700 | $ 108,700 |
Revenue, Remaining Performance Obligation, Amount | 1,752,111 | |
Within One Year [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | 728,221 | |
Two to Five Years [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | 946,026 | |
Greater than Five Years [Member] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 77,864 |
Revenue Recognition Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Oct. 01, 2019 |
Sep. 30, 2019 |
|
Revenue Recognition [Abstract] | ||||||
Contract with Customer, Asset, after Allowance for Credit Loss, Current | $ 39,800 | $ 39,800 | $ 58,700 | |||
Deferred Costs, Current | 18,600 | 18,600 | 17,200 | |||
Contract with Customer, Liability | 367,038 | 367,038 | $ 348,006 | |||
Capitalized Contract Cost, Net | 18,900 | 18,900 | 19,900 | |||
Hardware revenue | 5,700 | $ 6,400 | 20,500 | $ 21,500 | ||
Capitalized Contract Cost, Net, Noncurrent | 44,100 | 44,100 | 30,100 | |||
Capitalized Contract Cost, Amortization | 4,700 | $ 4,300 | 13,300 | $ 11,300 | ||
Deferred Costs, Noncurrent | 32,700 | 32,700 | 38,500 | |||
Contract with Customer, Asset, after Allowance for Credit Loss, Noncurrent | $ 124,700 | $ 124,700 | $ 108,700 |
Business Acquisitions (Components of Acquisition-Related Costs, Net) (Detail) |
9 Months Ended |
---|---|
Jun. 30, 2020 | |
Business Acquisition [Line Items] | |
Document Period End Date | Jun. 30, 2020 |
Goodwill and Intangible Assets Goodwill, Changes in Carrying values (Details) $ in Thousands |
9 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Goodwill [Line Items] | |
Balance as of September 30, 2019 | $ 2,127,896 |
Purchase accounting adjustments | (31) |
Effect of foreign currency translation | 1,871 |
Balance at June 30, 2020 | 2,129,736 |
Healthcare | |
Goodwill [Line Items] | |
Balance as of September 30, 2019 | 1,435,144 |
Purchase accounting adjustments | (31) |
Effect of foreign currency translation | 639 |
Balance at June 30, 2020 | 1,435,752 |
Enterprise | |
Goodwill [Line Items] | |
Balance as of September 30, 2019 | 679,903 |
Purchase accounting adjustments | 0 |
Effect of foreign currency translation | 1,193 |
Balance at June 30, 2020 | 681,096 |
Other | |
Goodwill [Line Items] | |
Balance as of September 30, 2019 | 12,849 |
Purchase accounting adjustments | 0 |
Effect of foreign currency translation | 39 |
Balance at June 30, 2020 | $ 12,888 |
Goodwill and Intangible Assets Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Balance at September 30, 2019 | $ 291,371 | |
Amortization | (55,893) | $ (61,636) |
Effect of foreign currency translation | 225 | |
Balance at June 30, 2020 | $ 235,703 |
Goodwill and Intangible Assets Goodwill Impairment Assessment (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Goodwill | $ 2,129,736 | $ 2,127,896 |
Financial Instruments and Hedging Activities (Additional Information) (Detail) - Derivatives Not Designated as Hedges - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Sep. 30, 2019 |
|
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Derivative, Notional Amount | $ 41.4 | $ 189.6 |
Maximum | ||
Derivative Instruments and Hedging Activities Disclosure [Line Items] | ||
Term of foreign currency forward contracts | 90 days |
Financial Instruments and Hedging Activities (Quantitative Summary of Fair Value of Derivative Instruments) (Detail) - Foreign currency forward contracts - USD ($) $ in Thousands |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 122 | $ 597 |
Accrued Expenses And Other Current Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 247 | $ 327 |
Financial Instruments and Hedging Activities (Summarized Activity of Derivative Instruments) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Sep. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Document Period End Date | Jun. 30, 2020 | ||||
Derivatives Not Designated as Hedges | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative, Notional Amount | $ 41,400 | $ 41,400 | $ 189,600 | ||
Derivatives Not Designated as Hedges | Foreign currency forward contracts | Other income (expense), net | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Recognized in Income | $ 9 | $ (799) | $ 451 | $ (359) |
Fair Value Measures (Changes in Fair Value of Contingent Earn-Out Liabilities) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Document Period End Date | Jun. 30, 2020 | |||
Balance at beginning of period | $ 2,493 | $ 1,450 | $ 2,550 | $ 4,000 |
Payments and foreign currency translation | 13 | 0 | 44 | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Settlements | 2,550 | |||
Adjustments to fair value included in acquisition-related costs, net | 0 | (561) | 0 | (561) |
Balance at end of period | 2,506 | $ 889 | 2,506 | $ 889 |
Contingent Consideration Payment, Higher End | $ 4,800 | $ 4,800 |
Fair Value Measures Fair Value Measures - Additional Debt Details (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | $ 1,972.7 | $ 2,143.4 |
Debt Instrument, Face Amount | $ 1,666.5 | $ 2,137.0 |
Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Compensation | $ 97,344 | $ 119,412 |
Cost of revenue related liabilities | 27,218 | 58,012 |
Sales and marketing incentives | 9,708 | 20,401 |
Consulting and professional fees | 3,260 | 19,302 |
Facility-related liabilities | 0 | 2,503 |
Operating Lease, Liability, Current | 26,450 | |
Operating Lease, Liability, Noncurrent | 105,333 | 0 |
Operating lease obligations | 1,590 | 2,692 |
Sales and marketing incentives | 7,023 | 8,089 |
Other | 7,251 | 19,159 |
Total | $ 179,844 | $ 249,570 |
Debt and Credit Facilities Borrowing Obligations Detail (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Borrowing Obligations Detail [Abstract] | ||
Long-term Debt, Fair Value | $ 1,972.7 | $ 2,143.4 |
Debt Instrument, Face Amount | $ 1,666.5 | $ 2,137.0 |
Debt and Credit Facilities 5.375% Senior Notes due 2020 (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Sep. 30, 2019 |
Dec. 22, 2016 |
|
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | $ 1,666,500 | $ 2,137,000 | ||
Repayment of Long-term Debt, Long-term Lease Obligation, and Capital Security | 513,642 | $ 300,000 | ||
Loss on extinguishment of debt | $ 18,656 | $ 910 | ||
5.375% Senior Notes due August 15, 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.375% |
Stockholders' Equity Stockholders' Equity (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | 86 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Aug. 01, 2018 |
Apr. 29, 2015 |
Apr. 29, 2013 |
|
Stockholders Equity Note [Line Items] | |||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased, Value | $ 500.0 | $ 500.0 | $ 500.0 | ||||
Stock Repurchased and Retired During Period, Shares | 1.7 | 9.5 | 7.8 | 73.8 | |||
Stock Repurchased During Period, Value | $ 29.6 | $ 169.2 | $ 120.9 | $ 1,238.8 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 261.2 | $ 261.2 |
Stock-Based Compensation (Summary of Weighted-Average Grant-Date Fair Value and Intrinsic Value of Restricted Units Vested) (Detail) $ / shares in Units, $ in Millions |
9 Months Ended | ||
---|---|---|---|
Oct. 01, 2019 |
Jun. 30, 2020
USD ($)
$ / shares
|
Jun. 30, 2019
USD ($)
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 1.16667 | ||
Document Period End Date | Jun. 30, 2020 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant-date fair value per share | $ / shares | $ 17.71 | $ 17.30 | |
Total intrinsic value of shares vested (in millions) | $ | $ 115.6 | $ 106.1 |
Income Taxes Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Components of Income (Loss) before Income Taxes [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 106.80% | (161.10%) | (394.60%) | |
Deferred tax benefit | $ (55,626) | $ (5,126) | ||
Document Period End Date | Jun. 30, 2020 | |||
Domestic | $ (11,060) | $ (6,469) | $ (13,740) | (16,500) |
Foreign | 11,062 | 16,502 | 33,479 | 13,426 |
Income (loss) before income taxes | $ 2 | $ 10,033 | $ 19,739 | $ (3,074) |
Income Taxes (Components of Benefit from Income Taxes) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | |||||
Domestic | $ (4,557) | $ 425 | $ (31,595) | $ (1,704) | |
Foreign | (12,103) | 10,295 | (199) | 13,833 | |
(Benefit) provision for income taxes | $ (16,660) | $ 21,306 | $ 10,720 | $ (31,794) | $ 12,129 |
Effective tax rate | 106.80% | (161.10%) | (394.60%) |
Income Taxes (Additional Information) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Sep. 30, 2019 |
|
Business Acquisition [Line Items] | ||||||
Other Tax Expense (Benefit) | $ 16,700 | |||||
Operating Loss Carryforwards, Valuation Allowance | $ 6,500 | |||||
(Benefit) provision for income taxes | 16,660 | $ (21,306) | $ (10,720) | $ 31,794 | $ (12,129) | |
Deferred Foreign Income Tax Expense (Benefit) | $ 14,700 | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | |||
Deferred Income Tax Expense (Benefit) | $ 29,900 | |||||
Effective Income Tax Rate Reconciliation, Percent | 106.80% | (161.10%) | (394.60%) | |||
Deferred Tax Assets, Net | $ 92,600 |
Commitments and Contingencies (Details) |
9 Months Ended |
---|---|
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Indemnification term for former officers and directors | 6 years |
Leases (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
|
Lessee, Lease, Description [Line Items] | ||
Sublease Income | $ 13.1 | $ 13.1 |
Operating Lease, Weighted Average Remaining Lease Term | 4 years 7 months 6 days | 4 years 7 months 6 days |
Operating Lease, Weighted Average Discount Rate, Percent | 3.80% | 3.80% |
Operating Leases, Rent Expense | $ 8.0 | $ 24.2 |
Operating Lease, Payments | $ 9.5 | $ 27.4 |
Segment and Geographic Information and Significant Customers (Segment Results Along with Reconciliation of Segment Profit to Income Before Income Taxes) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Stranded Costs | $ 4,000 | $ 12,900 | ||
Segment Revenues | $ 338,398 | 377,437 | $ 1,125,968 | 1,133,696 |
Segment profit | 104,922 | 121,131 | 360,123 | 358,986 |
Corporate expenses and other, net | (28,389) | (36,328) | (87,711) | (103,279) |
Acquisition-related revenues | 0 | (625) | (301) | (1,317) |
Stock-based compensation | (33,135) | (30,181) | (98,030) | (84,476) |
Amortization of intangible assets | (18,280) | (19,933) | (55,893) | (61,636) |
Business Combination, Acquisition Related Costs | (758) | (788) | (3,605) | (5,440) |
Restructuring and other charges, net | (1,920) | (1,947) | (14,932) | (26,446) |
Other expenses, net | (22,438) | (21,296) | (79,912) | (79,466) |
Income (loss) before income taxes | 2 | 10,033 | 19,739 | (3,074) |
Segment Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 0 | (625) | (301) | (1,317) |
Health Care Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 199,863 | 227,866 | 694,792 | 704,135 |
segment revenue | 199,863 | 228,384 | 694,792 | 704,911 |
Segment profit | 62,885 | 79,343 | 227,838 | 244,239 |
Enterprise Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 130,392 | 137,782 | 406,008 | 382,676 |
segment revenue | 130,392 | 137,888 | 406,310 | 383,217 |
Segment profit | 36,992 | 38,743 | 118,265 | 101,331 |
Other Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Segment Revenues | 8,143 | 11,789 | 25,168 | 46,885 |
segment revenue | 8,143 | 11,790 | 25,167 | 46,885 |
Segment profit | 5,045 | 3,045 | 14,020 | 13,416 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
segment revenue | $ 338,398 | $ 378,062 | $ 1,126,269 | $ 1,135,013 |
Segment and Geographic Information and Significant Customers (Classification of Revenue by Major Geographic Areas) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Segment Revenues | $ 338,398 | $ 377,437 | $ 1,125,968 | $ 1,133,696 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Segment Revenues | 266,182 | 310,902 | 904,283 | 926,870 |
International [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Segment Revenues | $ 72,216 | $ 66,535 | $ 221,685 | $ 206,826 |
Supplemental Cash Flow Supplemental Cash Flow (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Supplemental Cash Flow Elements [Abstract] | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 22,068 | $ 22,657 | $ 49,897 | $ 63,411 |
Income Taxes Paid | $ 13,456 | $ 6,231 | $ 26,632 | $ 12,182 |
subsequent event (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
borrowing from revolving credit facility [Abstract] | |
Other Borrowings | $ 230.0 |
Label | Element | Value |
---|---|---|
Contract with Customer, Asset, after Allowance for Credit Loss | us-gaap_ContractWithCustomerAssetNet | $ 167,324,000 |
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