QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||||||||
(Nasdaq Global Select Market) |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page No. | ||||||||
(in thousands, except share and per share data) | June 30, 2020 | December 31, 2019 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, less allowance for doubtful accounts of $13,400 and $8,700, respectively | |||||||||||
Other receivables and current assets | |||||||||||
Total current assets | |||||||||||
Long-term assets: | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Other long-term assets | |||||||||||
Deferred income taxes | |||||||||||
Total long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued bonuses and commissions | |||||||||||
Accrued income taxes | |||||||||||
Current portion of long-term debt | |||||||||||
Other accrued expenses and liabilities | |||||||||||
Deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities: | |||||||||||
Deferred income taxes | |||||||||||
Long-term operating lease liabilities | |||||||||||
Long-term debt | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $0.01 par value; 2,000,000 shares authorized; zero shares issued or outstanding | |||||||||||
Common stock, $0.01 par value; 300,000,000 shares authorized; 94,627,585 shares issued | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost: 8,889,945 and 8,893,177 shares, respectively | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except per share data) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Software licenses | $ | $ | $ | $ | |||||||||||||||||||
Maintenance and service | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Software licenses | |||||||||||||||||||||||
Amortization | |||||||||||||||||||||||
Maintenance and service | |||||||||||||||||||||||
Total cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Amortization | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
Income before income tax provision | |||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share – basic: | |||||||||||||||||||||||
Earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares | |||||||||||||||||||||||
Earnings per share – diluted: | |||||||||||||||||||||||
Earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Six Months Ended | |||||||||||
(in thousands) | June 30, 2020 | June 30, 2019 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and intangible assets amortization | |||||||||||
Operating lease right-of-use assets expense | |||||||||||
Deferred income tax benefit | ( | ( | |||||||||
Provision for bad debts | |||||||||||
Stock-based compensation expense | |||||||||||
Other | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Other receivables and current assets | |||||||||||
Other long-term assets | ( | ( | |||||||||
Accounts payable, accrued expenses and current liabilities | ( | ( | |||||||||
Accrued income taxes | ( | ||||||||||
Deferred revenue | ( | ( | |||||||||
Other long-term liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||
Capital expenditures | ( | ( | |||||||||
Other investing activities | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Principal payments on long-term debt | ( | ||||||||||
Purchase of treasury stock | ( | ( | |||||||||
Restricted stock withholding taxes paid in lieu of issued shares | ( | ( | |||||||||
Proceeds from shares issued for stock-based compensation | |||||||||||
Other financing activities | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Effect of exchange rate fluctuations on cash and cash equivalents | ( | ||||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive (Loss)/Income | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Treasury shares acquired | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation activity | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Acquisition of Livermore Software Technology, LLC | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation activity | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive (Loss)/ Income | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Treasury shares acquired | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation activity | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Treasury shares acquired | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation activity | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
(in thousands) | Six Months Ended June 30, 2020 | ||||
Beginning balance – January 1 | $ | ||||
Additions: Charges to costs and expenses | |||||
Deductions: Returns and write-offs | ( | ||||
Ending balance – June 30 | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
(in thousands, except percentages) | Amount | % of Total | Amount | % of Total | |||||||||||||||||||
Cash accounts | $ | $ | |||||||||||||||||||||
Money market funds | |||||||||||||||||||||||
Total | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except percentages) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Lease licenses | $ | $ | $ | $ | |||||||||||||||||||
Perpetual licenses | |||||||||||||||||||||||
Software licenses | |||||||||||||||||||||||
Maintenance | |||||||||||||||||||||||
Service | |||||||||||||||||||||||
Maintenance and service | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Direct revenue, as a percentage of total revenue | % | % | % | % | |||||||||||||||||||
Indirect revenue, as a percentage of total revenue | % | % | % | % |
(in thousands) | 2020 | 2019 | |||||||||
Beginning balance – January 1 | $ | $ | |||||||||
Acquired deferred revenue | |||||||||||
Deferral of revenue | |||||||||||
Recognition of revenue | ( | ( | |||||||||
Currency translation | ( | ( | |||||||||
Ending balance – June 30 | $ | $ |
(in thousands) | |||||
Next 12 months | $ | ||||
Months 13-24 | |||||
Months 25-36 | |||||
Thereafter | |||||
Total revenue allocated to remaining performance obligations | $ |
(in thousands) | |||||
Cash | $ |
(in thousands) | |||||
Cash | $ | ||||
Accounts receivable and other tangible assets | |||||
Developed software and core technologies | |||||
Customer lists | |||||
Trade names | |||||
Accounts payable and other liabilities | ( | ||||
Deferred revenue | ( | ||||
Net deferred tax liabilities | ( | ||||
Total identifiable net assets | $ | ||||
Goodwill | $ |
Intangible Asset | Useful Life | Valuation Method | Assumptions | |||||||||||||||||
Developed software and core technologies | 10 years | Multi-period excess earnings | Discount rate: 16.5% | |||||||||||||||||
Trade names | 6 years | Relief-from-royalty | Royalty rate: 2.0% Discount rate: 16.5% | |||||||||||||||||
Customer lists | 10 years | Multi-period excess earnings | Attrition rate: 10.0% Discount rate: 12.5% |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||||||
Receivables related to unrecognized revenue | $ | $ | |||||||||
Income taxes receivable, including overpayments and refunds | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total other receivables and current assets | $ | $ | |||||||||
Accrued vacation | |||||||||||
Consumption, VAT and sales tax liabilities | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total other accrued expenses and liabilities | $ | $ | |||||||||
Uncertain tax positions | $ | $ | |||||||||
Other long-term liabilities | |||||||||||
Total other long-term liabilities | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except per share data) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding – basic | |||||||||||||||||||||||
Dilutive effect of stock plans | |||||||||||||||||||||||
Weighted average shares outstanding – diluted | |||||||||||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive shares |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||
Developed software and core technologies | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Customer lists and contract backlog | ( | ( | |||||||||||||||||||||
Trade names | ( | ( | |||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Indefinite-lived intangible asset: | |||||||||||||||||||||||
Trade name | $ | $ |
(in thousands) | |||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total intangible assets subject to amortization | |||||
Indefinite-lived trade name | |||||
Other intangible assets, net | $ |
(in thousands) | 2020 | 2019 | |||||||||
Beginning balance – January 1 | $ | $ | |||||||||
Acquisitions and adjustments(1) | |||||||||||
Currency translation | ( | ( | |||||||||
Ending balance – June 30 | $ | $ |
Fair Value Measurements at Reporting Date Using: | |||||||||||||||||||||||
(in thousands) | June 30, 2020 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan investments | $ | $ | $ | $ |
Fair Value Measurements at Reporting Date Using: | |||||||||||||||||||||||
(in thousands) | December 31, 2019 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan investments | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Lease liability cost | $ | $ | $ | $ | |||||||||||||||||||
Variable lease cost not included in the lease liability(1) | |||||||||||||||||||||||
Total lease cost |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Cash paid for amounts included in the measurement of the lease liability: | |||||||||||||||||||||||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities |
As of June 30, | |||||||||||
2020 | 2019 | ||||||||||
Weighted-average remaining lease term of operating leases | |||||||||||
Weighted-average discount rate of operating leases | % | % |
(in thousands) | |||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total future lease payments | |||||
Less: Present value adjustment | ( | ||||
Present value of future lease payments(1) | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except percentages) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Income before income tax provision | $ | $ | $ | $ | |||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Effective tax rate | % | % | % | % |
Six Months Ended | |||||||||||
(in thousands, except per share data) | June 30, 2020 | June 30, 2019 | |||||||||
Number of shares repurchased | |||||||||||
Average price paid per share | $ | $ | |||||||||
Total cost | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands, except per share data) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Maintenance and service | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Stock-based compensation expense before taxes | |||||||||||||||||||||||
Related income tax benefits | ( | ( | ( | ( | |||||||||||||||||||
Stock-based compensation expense, net of taxes | $ | $ | $ | $ | |||||||||||||||||||
Net impact on earnings per share: | |||||||||||||||||||||||
Basic earnings per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted earnings per share | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(in thousands) | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Japan | |||||||||||||||||||||||
Germany | |||||||||||||||||||||||
South Korea | |||||||||||||||||||||||
Other Europe, Middle East and Africa (EMEA) | |||||||||||||||||||||||
Other international | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
(in thousands) | June 30, 2020 | December 31, 2019 | |||||||||
United States | $ | $ | |||||||||
France | |||||||||||
India | |||||||||||
Germany | |||||||||||
United Kingdom | |||||||||||
Other EMEA | |||||||||||
Other international | |||||||||||
Total property and equipment, net | $ | $ |
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||
Revenue | 4.6 | % | 5.2 | % | 0.7 | % | 1.2 | % | |||||||||||||||
Operating income | (12.3) | % | (1.1) | % | (34.5) | % | (15.9) | % | |||||||||||||||
Diluted earnings per share | (13.3) | % | (3.7) | % | (28.4) | % | (18.6) | % |
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||||||||||||||
(in thousands) | GAAP | Non-GAAP | GAAP | Non-GAAP | |||||||||||||||||||
Revenue | $ | (1,542) | $ | (1,615) | $ | (4,132) | $ | (4,211) | |||||||||||||||
Operating income | $ | 477 | $ | 320 | $ | 216 | $ | (51) |
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||
Revenue | 5.0 | % | 5.6 | % | 1.3 | % | 1.8 | % | |||||||||||||||
Operating income | (12.7) | % | (1.3) | % | (34.6) | % | (15.8) | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||
(in thousands, except percentages) | 2020 | 2019 | Amount | % | Constant Currency % | ||||||||||||||||||||||||
ACV | $ | 344,406 | $ | 326,145 | $ | 18,261 | 5.6 | 5.9 |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||
(in thousands, except percentages) | 2020 | 2019 | Amount | % | Constant Currency % | ||||||||||||||||||||||||
ACV | $ | 645,456 | $ | 629,635 | $ | 15,821 | 2.5 | 3.2 |
Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | ||||||||||
Americas | 32.7 | % | 11.1 | % | |||||||
EMEA | (4.6) | % | (1.7) | % | |||||||
Asia-Pacific | (18.6) | % | (9.6) | % | |||||||
Total | 5.0 | % | 1.3 | % |
Three Months Ended June 30, | Change | ||||||||||||||||||||||||||||
(in thousands, except percentages) | 2020 | 2019 | Amount | % | Constant Currency % | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Lease licenses | $ | 113,209 | $ | 100,004 | $ | 13,205 | 13.2 | 13.0 | |||||||||||||||||||||
Perpetual licenses | 56,132 | 70,495 | (14,363) | (20.4) | (20.0) | ||||||||||||||||||||||||
Software licenses | 169,341 | 170,499 | (1,158) | (0.7) | (0.6) | ||||||||||||||||||||||||
Maintenance | 203,179 | 185,118 | 18,061 | 9.8 | 10.5 | ||||||||||||||||||||||||
Service | 13,141 | 13,018 | 123 | 0.9 | 1.9 | ||||||||||||||||||||||||
Maintenance and service | 216,320 | 198,136 | 18,184 | 9.2 | 9.9 | ||||||||||||||||||||||||
Total revenue | $ | 385,661 | $ | 368,635 | $ | 17,026 | 4.6 | 5.0 |
(in thousands) | Three Months Ended June 30, 2020 | ||||
Euro | $ | (1,247) | |||
South Korean Won | (705) | ||||
Indian Rupee | (489) | ||||
British Pound | (322) | ||||
Canadian Dollar | (192) | ||||
Japanese Yen | 1,120 | ||||
Taiwan Dollar | 253 | ||||
Other | 40 | ||||
Total | $ | (1,542) |
Three Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
International | 52.3 | % | 62.6 | % | |||||||
Domestic | 47.7 | % | 37.4 | % | |||||||
Direct | 78.1 | % | 79.7 | % | |||||||
Indirect | 21.9 | % | 20.3 | % |
Balance at June 30, 2020 | |||||||||||||||||
(in thousands) | Total | Current | Long-Term | ||||||||||||||
Deferred revenue | $ | 336,188 | $ | 325,098 | $ | 11,090 | |||||||||||
Backlog | 510,282 | 226,995 | 283,287 | ||||||||||||||
Total | $ | 846,470 | $ | 552,093 | $ | 294,377 |
Balance at December 31, 2019 | |||||||||||||||||
(in thousands) | Total | Current | Long-Term | ||||||||||||||
Deferred revenue | $ | 365,274 | $ | 351,353 | $ | 13,921 | |||||||||||
Backlog | 505,469 | 218,398 | 287,071 | ||||||||||||||
Total | $ | 870,743 | $ | 569,751 | $ | 300,992 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | Amount | % | |||||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Software licenses | $ | 8,511 | 2.2 | $ | 6,204 | 1.7 | $ | 2,307 | 37.2 | ||||||||||||||||||||||||||
Amortization | 9,764 | 2.5 | 4,755 | 1.3 | 5,009 | 105.3 | |||||||||||||||||||||||||||||
Maintenance and service | 35,585 | 9.2 | 29,538 | 8.0 | 6,047 | 20.5 | |||||||||||||||||||||||||||||
Total cost of sales | 53,860 | 14.0 | 40,497 | 11.0 | 13,363 | 33.0 | |||||||||||||||||||||||||||||
Gross profit | $ | 331,801 | 86.0 | $ | 328,138 | 89.0 | $ | 3,663 | 1.1 |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | Amount | % | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Selling, general and administrative | $ | 128,698 | 33.4 | $ | 120,412 | 32.7 | $ | 8,286 | 6.9 | ||||||||||||||||||||||||||
Research and development | 86,133 | 22.3 | 75,302 | 20.4 | 10,831 | 14.4 | |||||||||||||||||||||||||||||
Amortization | 4,163 | 1.1 | 3,796 | 1.0 | 367 | 9.7 | |||||||||||||||||||||||||||||
Total operating expenses | $ | 218,994 | 56.8 | $ | 199,510 | 54.1 | $ | 19,484 | 9.8 |
Three Months Ended June 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Investment gains, net | $ | 3,689 | $ | 48 | |||||||
Foreign currency losses, net | (1,804) | (1,869) | |||||||||
Other | (1) | 385 | |||||||||
Total other income (expense), net | $ | 1,884 | $ | (1,436) |
Three Months Ended June 30, | |||||||||||
(in thousands, except percentages) | 2020 | 2019 | |||||||||
Income before income tax provision | $ | 112,585 | $ | 129,941 | |||||||
Income tax provision | $ | 16,021 | $ | 20,191 | |||||||
Effective tax rate | 14.2 | % | 15.5 | % |
Three Months Ended June 30, | |||||||||||
(in thousands, except per share data) | 2020 | 2019 | |||||||||
Net income | $ | 96,564 | $ | 109,750 | |||||||
Diluted earnings per share | $ | 1.11 | $ | 1.28 | |||||||
Weighted average shares outstanding - diluted | 86,934 | 85,483 |
Six Months Ended June 30, | Change | ||||||||||||||||||||||||||||
(in thousands, except percentages) | 2020 | 2019 | Amount | % | Constant Currency % | ||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Lease licenses | $ | 158,083 | $ | 169,260 | $ | (11,177) | (6.6) | (6.6) | |||||||||||||||||||||
Perpetual licenses | 99,088 | 124,283 | (25,195) | (20.3) | (19.8) | ||||||||||||||||||||||||
Software licenses | 257,171 | 293,543 | (36,372) | (12.4) | (12.2) | ||||||||||||||||||||||||
Maintenance | 403,667 | 366,579 | 37,088 | 10.1 | 11.0 | ||||||||||||||||||||||||
Service | 29,808 | 25,643 | 4,165 | 16.2 | 17.2 | ||||||||||||||||||||||||
Maintenance and service | 433,475 | 392,222 | 41,253 | 10.5 | 11.4 | ||||||||||||||||||||||||
Total revenue | $ | 690,646 | $ | 685,765 | $ | 4,881 | 0.7 | 1.3 |
(in thousands) | Six Months Ended June 30, 2020 | ||||
Euro | $ | (3,250) | |||
South Korean Won | (1,615) | ||||
Indian Rupee | (717) | ||||
British Pound | (504) | ||||
Canadian Dollar | (213) | ||||
Japanese Yen | 1,652 | ||||
Taiwan Dollar | 421 | ||||
Other | 94 | ||||
Total | $ | (4,132) |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
International | 55.2 | % | 59.4 | % | |||||||
Domestic | 44.8 | % | 40.6 | % | |||||||
Direct | 76.2 | % | 75.4 | % | |||||||
Indirect | 23.8 | % | 24.6 | % |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | Amount | % | |||||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Software licenses | $ | 13,437 | 1.9 | $ | 10,912 | 1.6 | $ | 2,525 | 23.1 | ||||||||||||||||||||||||||
Amortization | 19,316 | 2.8 | 9,302 | 1.4 | 10,014 | 107.7 | |||||||||||||||||||||||||||||
Maintenance and service | 71,223 | 10.3 | 55,098 | 8.0 | 16,125 | 29.3 | |||||||||||||||||||||||||||||
Total cost of sales | 103,976 | 15.1 | 75,312 | 11.0 | 28,664 | 38.1 | |||||||||||||||||||||||||||||
Gross profit | $ | 586,670 | 84.9 | $ | 610,453 | 89.0 | $ | (23,783) | (3.9) |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
(in thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | Amount | % | |||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Selling, general and administrative | $ | 259,220 | 37.5 | $ | 232,581 | 33.9 | $ | 26,639 | 11.5 | ||||||||||||||||||||||||||
Research and development | 172,245 | 24.9 | 146,040 | 21.3 | 26,205 | 17.9 | |||||||||||||||||||||||||||||
Amortization | 8,325 | 1.2 | 7,555 | 1.1 | 770 | 10.2 | |||||||||||||||||||||||||||||
Total operating expenses | $ | 439,790 | 63.7 | $ | 386,176 | 56.3 | $ | 53,614 | 13.9 |
Six Months Ended June 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Investment gains, net | $ | 3,682 | $ | 230 | |||||||
Foreign currency losses, net | (1,658) | (2,382) | |||||||||
Other | (13) | 382 | |||||||||
Total other income (expense), net | $ | 2,011 | $ | (1,770) |
Six Months Ended June 30, | |||||||||||
(in thousands, except percentages) | 2020 | 2019 | |||||||||
Income before income tax provision | $ | 145,909 | $ | 228,607 | |||||||
Income tax provision | $ | 3,281 | $ | 32,627 | |||||||
Effective tax rate | 2.2 | % | 14.3 | % |
Six Months Ended June 30, | |||||||||||
(in thousands, except per share data) | 2020 | 2019 | |||||||||
Net income | $ | 142,628 | $ | 195,980 | |||||||
Diluted earnings per share | $ | 1.64 | $ | 2.29 | |||||||
Weighted average shares outstanding - diluted | 87,152 | 85,488 |
ANSYS, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) | Revenue | Gross Profit | % | Operating Income | % | Net Income | EPS - Diluted1 | ||||||||||||||||||||||||||||||||||
Total GAAP | $ | 385,661 | $ | 331,801 | 86.0 | % | $ | 112,807 | 29.3 | % | $ | 96,564 | $ | 1.11 | |||||||||||||||||||||||||||
Acquisition accounting for deferred revenue | 4,040 | 4,040 | 0.2 | % | 4,040 | 0.7 | % | 4,040 | 0.05 | ||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 3,464 | 0.8 | % | 34,130 | 8.9 | % | 34,130 | 0.40 | ||||||||||||||||||||||||||||||||
Excess payroll taxes related to stock-based awards | — | 166 | 0.1 | % | 1,876 | 0.4 | % | 1,876 | 0.02 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets from acquisitions | — | 9,764 | 2.5 | % | 13,927 | 3.6 | % | 13,927 | 0.16 | ||||||||||||||||||||||||||||||||
Transaction expenses related to business combinations | — | — | — | % | 309 | — | % | 309 | — | ||||||||||||||||||||||||||||||||
Rabbi trust (income) / expense | — | — | — | % | — | — | % | (1) | — | ||||||||||||||||||||||||||||||||
Adjustment for income tax effect | — | — | — | % | — | — | % | (16,518) | (0.19) | ||||||||||||||||||||||||||||||||
Total non-GAAP | $ | 389,701 | $ | 349,235 | 89.6 | % | $ | 167,089 | 42.9 | % | $ | 134,327 | $ | 1.55 |
Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) | Revenue | Gross Profit | % | Operating Income | % | Net Income | EPS - Diluted1 | ||||||||||||||||||||||||||||||||||
Total GAAP | $ | 368,635 | $ | 328,138 | 89.0 | % | $ | 128,628 | 34.9 | % | $ | 109,750 | $ | 1.28 | |||||||||||||||||||||||||||
Acquisition accounting for deferred revenue | 1,873 | 1,873 | 0.1 | % | 1,873 | 0.3 | % | 1,873 | 0.02 | ||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 2,374 | 0.7 | % | 29,122 | 7.9 | % | 29,122 | 0.35 | ||||||||||||||||||||||||||||||||
Excess payroll taxes related to stock-based awards | — | 11 | — | % | 389 | 0.1 | % | 389 | — | ||||||||||||||||||||||||||||||||
Amortization of intangible assets from acquisitions | — | 4,755 | 1.2 | % | 8,551 | 2.3 | % | 8,551 | 0.10 | ||||||||||||||||||||||||||||||||
Transaction expenses related to business combinations | — | — | — | % | 450 | 0.1 | % | 450 | 0.01 | ||||||||||||||||||||||||||||||||
Rabbi trust (income) / expense | — | — | — | % | — | — | % | (58) | — | ||||||||||||||||||||||||||||||||
Adjustment related to the Tax Cuts and Jobs Act | — | — | — | % | — | — | % | (498) | (0.01) | ||||||||||||||||||||||||||||||||
Adjustment for income tax effect | — | — | — | % | — | — | % | (11,673) | (0.14) | ||||||||||||||||||||||||||||||||
Total non-GAAP | $ | 370,508 | $ | 337,151 | 91.0 | % | $ | 169,013 | 45.6 | % | $ | 137,906 | $ | 1.61 |
ANSYS, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Measures | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) | Revenue | Gross Profit | % | Operating Income | % | Net Income | EPS - Diluted1 | ||||||||||||||||||||||||||||||||||
Total GAAP | $ | 690,646 | $ | 586,670 | 84.9 | % | $ | 146,880 | 21.3 | % | $ | 142,628 | $ | 1.64 | |||||||||||||||||||||||||||
Acquisition accounting for deferred revenue | 7,952 | 7,952 | 0.2 | % | 7,952 | 0.9 | % | 7,952 | 0.09 | ||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 6,330 | 1.0 | % | 65,071 | 9.4 | % | 65,071 | 0.75 | ||||||||||||||||||||||||||||||||
Excess payroll taxes related to stock-based awards | — | 689 | 0.1 | % | 8,859 | 1.2 | % | 8,859 | 0.10 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets from acquisitions | — | 19,316 | 2.7 | % | 27,641 | 4.0 | % | 27,641 | 0.32 | ||||||||||||||||||||||||||||||||
Transaction expenses related to business combinations | — | — | — | % | 1,259 | 0.1 | % | 1,259 | 0.01 | ||||||||||||||||||||||||||||||||
Rabbi trust (income) / expense | — | — | — | % | — | — | % | (5) | — | ||||||||||||||||||||||||||||||||
Adjustment for income tax effect | — | — | — | % | — | — | % | (46,773) | (0.54) | ||||||||||||||||||||||||||||||||
Total non-GAAP | $ | 698,598 | $ | 620,957 | 88.9 | % | $ | 257,662 | 36.9 | % | $ | 206,632 | $ | 2.37 |
Six Months Ended | |||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) | Revenue | Gross Profit | % | Operating Income | % | Net Income | EPS - Diluted1 | ||||||||||||||||||||||||||||||||||
Total GAAP | $ | 685,765 | $ | 610,453 | 89.0 | % | $ | 224,277 | 32.7 | % | $ | 195,980 | $ | 2.29 | |||||||||||||||||||||||||||
Acquisition accounting for deferred revenue | 4,653 | 4,653 | 0.1 | % | 4,653 | 0.5 | % | 4,653 | 0.05 | ||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | 3,602 | 0.5 | % | 52,922 | 7.5 | % | 52,922 | 0.62 | ||||||||||||||||||||||||||||||||
Excess payroll taxes related to stock-based awards | — | 476 | 0.1 | % | 4,379 | 0.6 | % | 4,379 | 0.05 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets from acquisitions | — | 9,302 | 1.3 | % | 16,857 | 2.5 | % | 16,857 | 0.20 | ||||||||||||||||||||||||||||||||
Transaction expenses related to business combinations | — | — | — | % | 3,111 | 0.5 | % | 3,111 | 0.04 | ||||||||||||||||||||||||||||||||
Rabbi trust (income) / expense | — | — | — | % | — | — | % | (223) | — | ||||||||||||||||||||||||||||||||
Adjustment related to the Tax Cuts and Jobs Act | — | — | — | % | — | — | % | (1,834) | (0.02) | ||||||||||||||||||||||||||||||||
Adjustment for income tax effect | — | — | — | % | — | — | % | (27,269) | (0.32) | ||||||||||||||||||||||||||||||||
Total non-GAAP | $ | 690,418 | $ | 628,486 | 91.0 | % | $ | 306,199 | 44.3 | % | $ | 248,576 | $ | 2.91 |
GAAP Reporting Measure | Non-GAAP Reporting Measure | ||||
Revenue | Non-GAAP Revenue | ||||
Operating Income | Non-GAAP Operating Income | ||||
Operating Profit Margin | Non-GAAP Operating Profit Margin | ||||
Net Income | Non-GAAP Net Income | ||||
Diluted Earnings Per Share | Non-GAAP Diluted Earnings Per Share |
(in thousands) | June 30, 2020 | December 31, 2019 | Change | ||||||||||||||
Cash, cash equivalents and short-term investments | $ | 744,979 | $ | 872,382 | $ | (127,403) | |||||||||||
Working capital | $ | 750,458 | $ | 860,340 | $ | (109,882) |
(in thousands, except percentages) | June 30, 2020 | % of Total | December 31, 2019 | % of Total | |||||||||||||||||||
Domestic | $ | 405,278 | 54.4 | $ | 626,433 | 71.8 | |||||||||||||||||
Foreign | 339,701 | 45.6 | 245,949 | 28.2 | |||||||||||||||||||
Total | $ | 744,979 | $ | 872,382 |
Six Months Ended June 30, | |||||||||||||||||
(in thousands) | 2020 | 2019 | Change | ||||||||||||||
Net cash provided by operating activities | $ | 279,004 | $ | 240,117 | $ | 38,887 |
Six Months Ended June 30, | |||||||||||||||||
(in thousands) | 2020 | 2019 | Change | ||||||||||||||
Net cash used in investing activities | $ | (119,566) | $ | (311,277) | $ | 191,711 |
Six Months Ended June 30, | |||||||||||||||||
(in thousands) | 2020 | 2019 | Change | ||||||||||||||
Net cash used in financing activities | $ | (285,551) | $ | (75,558) | $ | (209,993) |
Six Months Ended | |||||||||||
(in thousands, except per share data) | June 30, 2020 | June 30, 2019 | |||||||||
Number of shares repurchased | 690 | 330 | |||||||||
Average price paid per share | $ | 233.48 | $ | 179.41 | |||||||
Total cost | $ | 161,029 | $ | 59,116 |
(in thousands) | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | |||||||||
Euro | $ | (1,247) | $ | (3,250) | |||||||
South Korean Won | (705) | (1,615) | |||||||||
Indian Rupee | (489) | (717) | |||||||||
British Pound | (322) | (504) | |||||||||
Canadian Dollar | (192) | (213) | |||||||||
Japanese Yen | 1,120 | 1,652 | |||||||||
Taiwan Dollar | 253 | 421 | |||||||||
Other | 40 | 94 | |||||||||
Total | $ | (1,542) | $ | (4,132) |
Period-End Exchange Rates | |||||||||||||||||||||||
As of | GBP/USD | EUR/USD | USD/JPY | USD/KRW | |||||||||||||||||||
June 30, 2019 | 1.269 | 1.137 | 107.910 | 1,157.407 | |||||||||||||||||||
December 31, 2019 | 1.326 | 1.121 | 108.637 | 1,156.069 | |||||||||||||||||||
June 30, 2020 | 1.240 | 1.123 | 107.945 | 1,199.616 |
Average Exchange Rates | |||||||||||||||||||||||
Three Months Ended | GBP/USD | EUR/USD | USD/JPY | USD/KRW | |||||||||||||||||||
June 30, 2019 | 1.285 | 1.124 | 109.905 | 1,166.680 | |||||||||||||||||||
June 30, 2020 | 1.241 | 1.101 | 107.552 | 1,219.909 |
Average Exchange Rates | |||||||||||||||||||||||
Six Months Ended | GBP/USD | EUR/USD | USD/JPY | USD/KRW | |||||||||||||||||||
June 30, 2019 | 1.294 | 1.130 | 110.052 | 1,146.110 | |||||||||||||||||||
June 30, 2020 | 1.260 | 1.102 | 108.266 | 1,206.442 |
Exhibit No. | Exhibit | |||||||
15 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* | Indicates management contract or compensatory plan, contract or arrangement. |
ANSYS, Inc. | |||||||||||
Date: | August 5, 2020 | By: | /s/ Ajei S. Gopal | ||||||||
Ajei S. Gopal | |||||||||||
President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Date: | August 5, 2020 | By: | /s/ Maria T. Shields | ||||||||
Maria T. Shields | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer and Principal Accounting Officer) |
Date: | August 5, 2020 | /s/ Ajei S. Gopal | ||||||
Ajei S. Gopal | ||||||||
President and Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: | August 5, 2020 | /s/ Maria T. Shields | ||||||
Maria T. Shields | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer and Principal Accounting Officer) |
/s/ Ajei S. Gopal | ||
Ajei S. Gopal | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
August 5, 2020 |
/s/ Maria T. Shields | ||
Maria T. Shields | ||
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
August 5, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Allowance for doubtful accounts | $ 13,400 | $ 8,700 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 94,627,585 | 94,627,585 |
Treasury stock, shares | 8,889,945 | 8,893,177 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue: | ||||
Total revenue | $ 385,661 | $ 368,635 | $ 690,646 | $ 685,765 |
Cost of sales: | ||||
Amortization | 9,764 | 4,755 | 19,316 | 9,302 |
Total cost of sales | 53,860 | 40,497 | 103,976 | 75,312 |
Gross profit | 331,801 | 328,138 | 586,670 | 610,453 |
Operating expenses: | ||||
Selling, general and administrative | 128,698 | 120,412 | 259,220 | 232,581 |
Research and development | 86,133 | 75,302 | 172,245 | 146,040 |
Amortization | 4,163 | 3,796 | 8,325 | 7,555 |
Total operating expenses | 218,994 | 199,510 | 439,790 | 386,176 |
Operating income | 112,807 | 128,628 | 146,880 | 224,277 |
Interest income | 934 | 2,980 | 3,709 | 6,422 |
Interest expense | (3,040) | (231) | (6,691) | (322) |
Other income (expense), net | 1,884 | (1,436) | 2,011 | (1,770) |
Income before income tax provision | 112,585 | 129,941 | 145,909 | 228,607 |
Income tax provision | 16,021 | 20,191 | 3,281 | 32,627 |
Net income | $ 96,564 | $ 109,750 | $ 142,628 | $ 195,980 |
Earnings per share - basic: | ||||
Earnings per share | $ 1.13 | $ 1.31 | $ 1.66 | $ 2.34 |
Weighted average shares | 85,651 | 83,978 | 85,724 | 83,871 |
Earnings per share - diluted: | ||||
Earnings per share | $ 1.11 | $ 1.28 | $ 1.64 | $ 2.29 |
Weighted average shares | 86,934 | 85,483 | 87,152 | 85,488 |
Software licenses | ||||
Revenue: | ||||
Total revenue | $ 169,341 | $ 170,499 | $ 257,171 | $ 293,543 |
Cost of sales: | ||||
Total cost of sales | 8,511 | 6,204 | 13,437 | 10,912 |
Maintenance and service | ||||
Revenue: | ||||
Total revenue | 216,320 | 198,136 | 433,475 | 392,222 |
Cost of sales: | ||||
Total cost of sales | $ 35,585 | $ 29,538 | $ 71,223 | $ 55,098 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
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Jun. 30, 2020 |
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Jun. 30, 2019 |
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Net income | $ 96,564 | $ 109,750 | $ 142,628 | $ 195,980 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 10,288 | 558 | (14,004) | (7,000) |
Comprehensive income | $ 106,852 | $ 110,308 | $ 128,624 | $ 188,980 |
Organization |
6 Months Ended |
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Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization ANSYS, Inc. (Ansys, we, us, our) develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including aerospace and defense, automotive, electronics, semiconductors, energy, materials and chemical processing, turbomachinery, consumer products, healthcare, and sports. As defined by the accounting guidance for segment reporting, we operate as one segment. Given the integrated approach to the multi-discipline problem-solving needs of our customers, a single sale of software may contain components from multiple product areas and include combined technologies. We also have a multi-year product and integration strategy that will result in new, combined products or changes to the historical product offerings. As a result, it is impracticable for us to provide accurate historical or current reporting among our various product lines. We are closely monitoring the spread of COVID-19 and continually assessing its potential effects on our business. The COVID-19 pandemic has had, and is expected to continue to have, an adverse impact on our business, employees, liquidity, financial condition, results of operations and cash flows.
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Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies | Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information for commercial and industrial companies, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Form 10-K). The condensed consolidated December 31, 2019 balance sheet presented is derived from the audited December 31, 2019 balance sheet included in the 2019 Form 10-K. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. Certain items in the condensed consolidated financial statements of prior years have been reclassified to conform to the current year's presentation. These reclassifications had no effect on reported net income, comprehensive income, cash flows, total assets or total liabilities and stockholders' equity. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any future period. Changes in Accounting Policies Our accounting policies are described in Note 2, “Accounting Policies,” in the 2019 Form 10-K. Summarized below is the accounting guidance adopted subsequent to December 31, 2019. Credit losses: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which modifies the measurement of expected credit losses of certain financial instruments. We adopted ASU 2016-13 on January 1, 2020 with no material impact to our condensed consolidated financial statements. Previous guidance required the allowance for doubtful accounts to be estimated based on an incurred loss model, which considered past and current conditions. ASU 2016-13 requires us to use an expected loss model that also considers reasonable and supportable forecasts of future conditions, referred to as the current expected credit loss (CECL) methodology. Under ASU 2016-13, we make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables over the lifetime of the receivables. Provisions are made based upon a specific review of all significant outstanding invoices from both value and delinquency perspectives. For those invoices not specifically reviewed, provisions are estimated at differing rates based upon the age of the receivable. In determining these percentages, we consider our historical loss experience, current economic trends and future conditions. The changes in the allowance for doubtful accounts during the six months ended June 30, 2020 were as follows:
The increase in the allowance for doubtful accounts was driven by expected losses related to COVID-19. Accounting Guidance Issued and Not Yet Adopted Income taxes: In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations. Cash and Cash Equivalents Cash and cash equivalents consist primarily of highly liquid investments such as deposits held at major banks and money market funds. Cash equivalents are carried at cost, which approximates fair value. Our cash and cash equivalents balances comprise the following:
Our money market fund balances are held in various funds of two issuers. The decrease in money market funds during the six months ended June 30, 2020 was a result of redemptions for share repurchases and the Lumerical Inc. (Lumerical) acquisition. See Note 4, "Acquisitions", for additional disclosures regarding the Lumerical acquisition.
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Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The following table summarizes revenue:
Our software licenses revenue is recognized up front, while maintenance and service revenue is generally recognized over the term of the contract. Deferred Revenue Deferred revenue consists of billings made or payments received in advance of revenue recognition from customer agreements. The timing of revenue recognition may differ from the timing of billings to customers. Payment terms vary by the type and location of customer and the products or services offered. The time between invoicing and when payment is due is not significant. The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the six months ended June 30, 2020 and 2019 were as follows:
Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes both deferred revenue and backlog. Our backlog represents installment billings for periods beyond the current quarterly billing cycle. Revenue recognized during the six months ended June 30, 2020 and 2019 included amounts in deferred revenue and backlog at the beginning of the period of $343.9 million and $305.3 million, respectively. Total revenue allocated to remaining performance obligations as of June 30, 2020 will be recognized as revenue as follows:
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Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions On April 1, 2020, we acquired 100% of the shares of Lumerical, a leading developer of photonic design and simulation tools, for a purchase price of approximately $107.5 million, paid in cash. The acquisition adds best-in-class photonic products to our multiphysics portfolio, providing customers with a full set of solutions to solve their next-generation product challenges. The assets and liabilities of Lumerical have been recorded based upon management's estimates of their fair market values as of the acquisition date. The following tables summarize the fair value of consideration transferred and the fair values of identified assets acquired and liabilities assumed at the acquisition date: Fair Value of Consideration Transferred:
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
The goodwill, which is not tax-deductible, is attributed to intangible assets that do not qualify for separate recognition, including the assembled workforce of the acquired business and the synergies expected to arise as a result of the acquisition of Lumerical. The fair values of the assets acquired and liabilities assumed are based on preliminary calculations. The estimates and assumptions for these items are subject to change as additional information about what was known and knowable at the acquisition date is obtained during the measurement period (up to one year from the acquisition date). We determined the fair value of our intangible assets using various valuation techniques, including the relief-from-royalty method and the multi-period excess earnings method. These models utilize certain unobservable inputs classified as Level 3 measurements as defined by ASC 820, Fair Value Measurements and Disclosures. The determination of fair value requires considerable judgment and is sensitive to changes in underlying assumptions, estimates and market factors. Estimating fair value requires us to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include, but are not limited to: royalty rate, discount rate and attrition rate. The valuation method and assumptions used to determine the fair value of the intangible assets acquired with the Lumerical acquisition are as follows:
The operating results of Lumerical have been included in our condensed consolidated financial statements since the date of acquisition. The effects of the business combination were not material to our consolidated results of operations. On November 1, 2019, we completed the acquisition of 100% of the shares of Livermore Software Technology (LST), the premier provider of explicit dynamics and other advanced finite element analysis technology, for a purchase price of $781.5 million, inclusive of final net working capital adjustments. The acquisition empowers our customers to solve a new class of engineering challenges, including developing safer automobiles, aircraft and trains while reducing or even eliminating the need for costly physical testing. The purchase price was paid with $472.8 million in cash and 1.4 million shares of our common stock valued at $308.7 million. We issued $307.2 million of common stock in an unregistered offering to the prior owners of LST and the remaining $1.5 million was issued from shares held in treasury. On February 1, 2019, we completed the acquisition of 100% of the shares of Granta Design Limited (Granta Design) for a purchase price of $208.7 million, paid in cash and inclusive of final net working capital adjustments. The acquisition of Granta Design, the premier provider of materials information technology, expands our portfolio into this important area, giving customers access to materials intelligence, including data that is critical to successful simulations. Additionally, during the year ended December 31, 2019, we acquired DYNARDO GmbH, Helic, Inc. (Helic) and DfR Solutions to combine the acquired technologies with our existing comprehensive multiphysics portfolio. These acquisitions were not individually significant. The combined purchase price of these other acquisitions was $138.6 million, paid in cash and inclusive of final net working capital adjustments. The operating results of each 2019 acquisition have been included in our condensed consolidated financial statements since each respective date of acquisition.
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Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities |
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Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities | Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities Our other receivables and current assets, other accrued expenses and liabilities, and other long-term liabilities comprise the following balances:
Receivables related to unrecognized revenue represent the current portion of billings made for customer contracts that have not yet been recognized as revenue.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per share (EPS) amounts are computed by dividing earnings by the weighted average number of common shares outstanding during the period. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive equivalents outstanding. To the extent stock awards are anti-dilutive, they are excluded from the calculation of diluted EPS. The details of basic and diluted EPS are as follows:
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets are classified as follows:
Finite-lived intangible assets are amortized over their estimated useful lives of two years to seventeen years. Amortization expense for the intangible assets reflected above was $13.9 million and $8.6 million for the three months ended June 30, 2020 and 2019, respectively. Amortization expense for the intangible assets reflected above was $27.6 million and $16.9 million for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, estimated future amortization expense for the intangible assets reflected above was as follows:
The changes in goodwill during the six months ended June 30, 2020 and 2019 were as follows:
(1) In accordance with the accounting for business combinations, we recorded adjustments to goodwill for the effect of changes in the provisional fair values of the assets acquired and liabilities assumed during the measurement period (up to one year from the acquisition date) as we obtained new information about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Such adjustments are not material to our consolidated financial statements. During the first quarter of 2020, we completed the annual impairment test for goodwill and the indefinite-lived intangible asset and determined that these assets had not been impaired as of the test date, January 1, 2020. Given the adverse economic and market conditions caused by COVID-19, we considered a variety of qualitative factors to determine if an additional quantitative impairment test was required subsequent to our annual impairment test. Based on a variety of factors, including the excess of the fair values over the carrying amounts in the most recent impairment test, we determined it was not more likely than not that an impairment existed as of March 31, 2020. No other events or circumstances changed during the six months ended June 30, 2020 that would indicate that the fair values of our reporting unit and indefinite-lived intangible asset are below their carrying amounts.
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Fair Value Measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Fair Value Measurement The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels: •Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; •Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or •Level 3: unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following tables provide the assets carried at fair value and measured on a recurring basis:
The cash equivalents in the preceding tables represent money market funds, valued at net asset value, with carrying values which approximate their fair values because of their short-term nature. The short-term investments in the preceding tables represent deposits held by certain foreign subsidiaries. The deposits have fixed interest rates with original maturities ranging from three months to one year. The deferred compensation plan investments in the preceding tables represent trading securities held in a rabbi trust for the benefit of non-employee directors who elected to diversify their vested deferred stock awards. These securities consist of mutual funds traded in an active market with quoted prices. As a result, the plan assets are classified as Level 1 in the fair value hierarchy. The plan assets are recorded within other long-term assets on our condensed consolidated balance sheets.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LeasesWe primarily have operating leases for office space and leased cars included in our right-of-use (ROU) assets and lease liabilities. Our executive offices and those related to certain domestic product development, marketing, production and administration are located in a 186,000 square foot office facility in Canonsburg, Pennsylvania. The term of the lease is 183 months, which began on October 1, 2014 and expires on December 31, 2029. The lease agreement includes options to renew the contract through August 2044, an option to lease additional space in January 2025 and an option to terminate the lease in December 2025. No options are included in the lease liability as renewal is not reasonably certain. In addition, we are reasonably certain we will not terminate the lease agreement. Absent the exercise of options in the lease, our remaining base rent (inclusive of property taxes and certain operating costs) is $4.5 million per annum through 2024 and $4.7 million per annum for 2025 - 2029. The components of our global lease cost reflected in the condensed consolidated statements of income are as follows:
(1) Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate. Other information related to operating leases is as follows:
The maturity schedule of the operating lease liabilities as of June 30, 2020 is as follows:
(1) Includes the current portion of operating lease liabilities of $19.1 million, which is reflected in other accrued expenses and liabilities in the condensed consolidated balance sheets. There were no material leases that have been signed but not yet commenced as of June 30, 2020.
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Debt |
6 Months Ended |
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Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt In February 2019, we entered into a credit agreement for a $500.0 million unsecured revolving credit facility, which includes a $50.0 million sublimit for the issuance of letters of credit (Revolving Credit Facility), with Bank of America, N.A. as the Administrative Agent. The Revolving Credit Facility becomes payable in full on February 22, 2024 and is available for general corporate purposes, including, among others, to finance acquisitions and capital expenditures. In connection with the acquisition of LST, we amended our credit agreement (Amended Credit Agreement) on October 16, 2019. The amendment provided for a new $500.0 million unsecured term loan facility to finance the acquisition. The term loan was funded on November 1, 2019 and matures on November 1, 2024. Principal on the term loan will be payable on the last business day of each fiscal quarter commencing with the ninth full fiscal quarter after the funding date at a rate of 1.25% per quarter, increasing to 2.50% per quarter after the next four fiscal quarters. We repaid $75.0 million of the unsecured term loan balance in January 2020 prior to the scheduled maturity dates in 2022 ($25.0 million) and 2023 ($50.0 million). Borrowings under the Amended Credit Agreement accrue interest at the Eurodollar rate plus an applicable margin or at the base rate, at our election. For the quarter ended June 30, 2020, we elected to apply the Eurodollar rate. The base rate is the applicable margin plus the highest of (i) the federal funds rate plus 0.500%, (ii) the Bank of America prime rate and (iii) the Eurodollar rate plus 1.000%. The applicable margin for these borrowings is a percentage per annum based on the lower of (1) a pricing level determined by our then-current consolidated leverage ratio and (2) a pricing level determined by our debt ratings (if such debt ratings exist). This results in a margin ranging from 1.125% to 1.750% and 0.125% to 0.750% for the Eurodollar rate and base rate, respectively. The weighted-average interest rates in effect during the three and six months ended June 30, 2020 were 2.575% and 2.793%, respectively. As of June 30, 2020, the rate in effect was 1.433%. The Amended Credit Agreement contains language in the event the Eurodollar rate is not available due to LIBOR changes. If this occurs, the base rate will be used for borrowings. However, we may work with the Administrative Agent to amend the agreement to replace the Eurodollar rate with (i) one or more rates based on the Secured Overnight Financing Rate (SOFR); or (ii) another alternative benchmark rate, subject to the lenders' approval. The Amended Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The Amended Credit Agreement also contains a financial covenant requiring us to maintain a consolidated leverage ratio of indebtedness to earnings before interest, taxes, depreciation and amortization not exceeding 3.50 to 1.00 as of the end of any fiscal quarter (for the four-quarter period ending on such date) with an opportunity for a temporary increase in such consolidated leverage ratio to 4.00 to 1.00 upon the consummation of certain qualified acquisitions for which the aggregate consideration is at least $250.0 million. As of June 30, 2020 and December 31, 2019, there were no outstanding borrowings under the unsecured Revolving Credit Facility, and the carrying value of the term loan was $423.7 million, which is net of $1.3 million of unamortized debt issuance costs, and $498.5 million, which is net of $1.5 million of unamortized debt issuance costs, respectively. The next principal payment on the term loan is not required until 2024. We were in compliance with all covenants as of June 30, 2020 and December 31, 2019.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Our income before income tax provision, income tax provision and effective tax rates were as follows:
Tax expense for the first half of 2020 benefited due to increased stock compensation benefits, many of which were recognized discretely in the first quarter.
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Stock Repurchase Program |
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Stock Repurchase Program | Stock Repurchase Program Under our stock repurchase program, we repurchased shares as follows:
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense and its net impact on basic and diluted earnings per share are as follows:
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Geographic Information |
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Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographic Information | Geographic Information Revenue to external customers is attributed to individual countries based upon the location of the customer. Revenue by geographic area is as follows:
Property and equipment by geographic area is as follows:
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Contingencies and Commitments |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments We are subject to various investigations, claims and legal proceedings that arise in the ordinary course of business, including commercial disputes, labor and employment matters, tax audits, alleged infringement of intellectual property rights and other matters. In our opinion, the resolution of pending matters is not expected to have a material adverse effect on our condensed consolidated results of operations, cash flows or financial position. However, each of these matters is subject to various uncertainties and it is possible that an unfavorable resolution of one or more of these proceedings could materially affect our results of operations, cash flows or financial position. Our Indian subsidiary has several service tax audits pending that have resulted in formal inquiries being received on transactions through mid-2012. We could incur tax charges and related liabilities of approximately $7.0 million. As such charges are not probable at this time, a reserve has not been recorded on the condensed consolidated balance sheet as of June 30, 2020. The service tax issues raised in our notices and inquiries are very similar to the case, M/s Microsoft Corporation (I) (P) Ltd. Vs. Commissioner of Service Tax, New Delhi, wherein the Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) issued a favorable ruling to Microsoft. The Microsoft ruling was subsequently challenged in the Supreme Court by the Indian tax authority and a decision is still pending. We can provide no assurances on the impact that the present Microsoft case’s decision will have on our cases. We are uncertain as to when these service tax matters will be concluded. We sell software licenses and services to our customers under contractual agreements. Such agreements generally include certain provisions indemnifying the customer against claims of intellectual property infringement by third parties arising from such customer’s usage of our products or services. To date, payments related to these indemnification provisions have been immaterial. For several reasons, including the lack of prior material indemnification claims, we cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.
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Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information for commercial and industrial companies, the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Form 10-K). The condensed consolidated December 31, 2019 balance sheet presented is derived from the audited December 31, 2019 balance sheet included in the 2019 Form 10-K. In our opinion, all adjustments considered necessary for a fair presentation of the financial statements have been included, and all adjustments are of a normal and recurring nature. Certain items in the condensed consolidated financial statements of prior years have been reclassified to conform to the current year's presentation. These reclassifications had no effect on reported net income, comprehensive income, cash flows, total assets or total liabilities and stockholders' equity. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any future period.
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Changes in Accounting Policies | Changes in Accounting Policies Our accounting policies are described in Note 2, “Accounting Policies,” in the 2019 Form 10-K. Summarized below is the accounting guidance adopted subsequent to December 31, 2019. Credit losses: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which modifies the measurement of expected credit losses of certain financial instruments. We adopted ASU 2016-13 on January 1, 2020 with no material impact to our condensed consolidated financial statements. Previous guidance required the allowance for doubtful accounts to be estimated based on an incurred loss model, which considered past and current conditions. ASU 2016-13 requires us to use an expected loss model that also considers reasonable and supportable forecasts of future conditions, referred to as the current expected credit loss (CECL) methodology. Under ASU 2016-13, we make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables over the lifetime of the receivables. Provisions are made based upon a specific review of all significant outstanding invoices from both value and delinquency perspectives. For those invoices not specifically reviewed, provisions are estimated at differing rates based upon the age of the receivable. In determining these percentages, we consider our historical loss experience, current economic trends and future conditions. The changes in the allowance for doubtful accounts during the six months ended June 30, 2020 were as follows:
The increase in the allowance for doubtful accounts was driven by expected losses related to COVID-19.
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Accounting Guidance Issued and Not Yet Adopted | Accounting Guidance Issued and Not Yet Adopted Income taxes: In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (ASU 2019-12), as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. We do not expect the adoption of this guidance to have a material impact on our financial position or results of operations.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist primarily of highly liquid investments such as deposits held at major banks and money market funds. Cash equivalents are carried at cost, which approximates fair value. Our cash and cash equivalents balances comprise the following:
Our money market fund balances are held in various funds of two issuers. The decrease in money market funds during the six months ended June 30, 2020 was a result of redemptions for share repurchases and the Lumerical Inc. (Lumerical) acquisition. See Note 4, "Acquisitions", for additional disclosures regarding the Lumerical acquisition.
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Accounting Policies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Doubtful Accounts Rollforward | The changes in the allowance for doubtful accounts during the six months ended June 30, 2020 were as follows:
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Cash and Cash Equivalents | Our cash and cash equivalents balances comprise the following:
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Revenue from Contracts with Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table summarizes revenue:
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Changes in Deferred Revenue | The changes in deferred revenue, inclusive of both current and long-term deferred revenue, during the six months ended June 30, 2020 and 2019 were as follows:
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Remaining Performance Obligations, Expected Timing of Satisfaction | Total revenue allocated to remaining performance obligations as of June 30, 2020 will be recognized as revenue as follows:
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Acquisitions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Consideration Transferred | Fair Value of Consideration Transferred:
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Schedule of Recognized Amounts of Identified Assets Acquired and Liabilities Assumed | Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
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Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities | Our other receivables and current assets, other accrued expenses and liabilities, and other long-term liabilities comprise the following balances:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Basic and Diluted EPS | The details of basic and diluted EPS are as follows:
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets (Indefinite-Lived) | Intangible assets are classified as follows:
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Intangible Assets (Finite-Lived) | Intangible assets are classified as follows:
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Estimated Future Amortization Expense for Intangible Assets | As of June 30, 2020, estimated future amortization expense for the intangible assets reflected above was as follows:
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Changes in Goodwill | The changes in goodwill during the six months ended June 30, 2020 and 2019 were as follows:
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Fair Value Measurement (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities Measured on Recurring Basis | The following tables provide the assets carried at fair value and measured on a recurring basis:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost | The components of our global lease cost reflected in the condensed consolidated statements of income are as follows:
(1) Variable lease cost includes common area maintenance, property taxes, utilities and fluctuations in rent due to a change in an index or rate.
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Lessee, Operating Lease Other Information | Other information related to operating leases is as follows:
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Schedule of Maturity of Operating Lease Liabilities | The maturity schedule of the operating lease liabilities as of June 30, 2020 is as follows:
(1) Includes the current portion of operating lease liabilities of $19.1 million, which is reflected in other accrued expenses and liabilities in the condensed consolidated balance sheets.
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Provision | Our income before income tax provision, income tax provision and effective tax rates were as follows:
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Stock Repurchase Program (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class of Stock Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Repurchase Program | Under our stock repurchase program, we repurchased shares as follows:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense and Its Net Impact on Basic and Diluted Earnings Per Share | Total stock-based compensation expense and its net impact on basic and diluted earnings per share are as follows:
|
Geographic Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geographic Area | Revenue by geographic area is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment by Geographic Area | Property and equipment by geographic area is as follows:
|
Organization (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
Accounting Policies - Allowance for Doubtful Accounts Rollforward (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Allowance for Doubtful Accounts Rollforward [Line Items] | ||
Additions: charges to costs and expenses | $ 5,672 | $ 2,010 |
Allowance for doubtful accounts rollforward | ||
Allowance for Doubtful Accounts Rollforward [Line Items] | ||
Beginning balance - January 1 | 8,700 | |
Additions: charges to costs and expenses | 5,672 | |
Deductions: returns and write-offs | (972) | |
Ending balance - June 30 | $ 13,400 |
Accounting Policies - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Cash accounts, Amount | $ 518,734 | $ 549,639 |
Money market funds, Amount | 225,812 | 322,455 |
Total | $ 744,546 | $ 872,094 |
Cash | ||
Percent Of Cash And Cash Equivalents | 69.70% | 63.00% |
Money Market Funds | ||
Percent Of Cash And Cash Equivalents | 30.30% | 37.00% |
Accounting Policies - Cash and Cash Equivalents - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Money Market Funds | |
Cash and Cash Equivalents [Line Items] | |
Concentration risk, % of money market funds with two issuers | 100.00% |
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||
Amount of revenue recognized from beginning deferred revenue and backlog | $ 343.9 | $ 305.3 |
Revenue from Contracts with Customers - Changes in Deferred Revenue (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Movement in Deferred Revenue [Roll Forward] | ||
Beginning balance | $ 365,274 | $ 343,174 |
Acquired deferred revenue | 1,405 | 3,266 |
Deferral of revenue | 661,790 | 675,209 |
Recognition of revenue | (690,646) | (685,765) |
Currency translation | (1,635) | (500) |
Ending balance | $ 336,188 | $ 335,384 |
Fair Value of Consideration Transferred (Details) $ in Thousands |
Apr. 01, 2020
USD ($)
|
---|---|
Lumerical | |
Cash | $ 107,545 |
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed (Details) - Lumerical $ in Thousands |
Apr. 01, 2020
USD ($)
|
---|---|
Cash | $ 11,844 |
Accounts receivable and other tangible assets | 3,385 |
Accounts payable and other liabilities | (1,108) |
Deferred revenue | (1,405) |
Net deferred tax liabilities | (6,305) |
Total identifiable net assets | 41,397 |
Goodwill | 66,148 |
Developed Software and Core Technologies | |
Finite-lived intangible assets | 31,614 |
Customer Lists | |
Finite-lived intangible assets | 1,616 |
Trade Names | |
Finite-lived intangible assets | $ 1,756 |
Useful Life and Valuation Assumptions (Details) - Lumerical |
Apr. 01, 2020 |
---|---|
Developed Software and Core Technologies | |
Finite-lived intangible asset, useful life | 10 years |
Discount Rate | 16.50% |
Trade Names | |
Finite-lived intangible asset, useful life | 6 years |
Royalty Rate | 2.00% |
Discount Rate | 16.50% |
Customer Lists | |
Finite-lived intangible asset, useful life | 10 years |
Attrition Rate | 10.00% |
Discount Rate | 12.50% |
Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Receivables and Current Assets, Other Accrued Expenses and Liabilities, and Other Long-Term Liabilities [Abstract] | ||
Receivables related to unrecognized revenue | $ 112,187 | $ 177,679 |
Income taxes receivable, including overpayments and refunds | 47,859 | 26,672 |
Prepaid expenses and other current assets | 45,992 | 45,268 |
Total other receivables and current assets | 206,038 | 249,619 |
Accrued vacation | 34,478 | 24,336 |
Consumption, VAT and sales tax liabilities | 18,377 | 36,398 |
Accrued expenses and other current liabilities | 89,415 | 82,213 |
Total other accrued expenses and liabilities | 142,270 | 142,947 |
Uncertain tax positions | 67,341 | 64,375 |
Other long-term liabilities | 28,742 | 32,051 |
Total other long-term liabilities | $ 96,083 | $ 96,426 |
Earnings Per Share - Details of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||||
Net income | $ 96,564 | $ 46,064 | $ 109,750 | $ 86,230 | $ 142,628 | $ 195,980 |
Weighted average shares outstanding - basic | 85,651 | 83,978 | 85,724 | 83,871 | ||
Dilutive effect of stock plans | 1,283 | 1,505 | 1,428 | 1,617 | ||
Weighted average shares outstanding - diluted | 86,934 | 85,483 | 87,152 | 85,488 | ||
Basic earnings per share | $ 1.13 | $ 1.31 | $ 1.66 | $ 2.34 | ||
Diluted earnings per share | $ 1.11 | $ 1.28 | $ 1.64 | $ 2.29 | ||
Anti-dilutive shares | 26 | 0 | 27 | 0 |
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Amortization of intangible assets | $ 13.9 | $ 8.6 | $ 27.6 | $ 16.9 |
Minimum | ||||
Finite-lived Intangible asset, useful life | 2 years | |||
Maximum | ||||
Finite-lived Intangible asset, useful life | 17 years |
Goodwill and Intangible Assets - Estimated Future Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 27,679 | |
2021 | 55,045 | |
2022 | 56,038 | |
2023 | 55,690 | |
2024 | 54,226 | |
2025 | 50,507 | |
Thereafter | 182,152 | |
Total intangible assets subject to amortization | 481,337 | |
Indefinite-lived trade name | 357 | |
Other intangible assets, net | $ 481,694 | $ 476,711 |
Goodwill and Intangible Assets - Changes in Goodwill (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 2,413,280 | $ 1,572,455 |
Acquisitions and adjustments | 69,330 | 209,093 |
Currency translation | (8,311) | (5,814) |
Ending balance | $ 2,474,299 | $ 1,775,734 |
Fair Value Measurement - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term investments maturity | 3 months |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term investments maturity | 1 year |
Leases - Additional Information (Detail) $ in Millions |
Jun. 30, 2020
USD ($)
ft²
|
---|---|
Lessee, Lease, Description [Line Items] | |
Current portion of operating lease liabilities | $ 19.1 |
Canonsburg Office, New Company Headquarters | |
Lessee, Lease, Description [Line Items] | |
Area of real estate property | ft² | 186,000 |
Period of leased property | 183 months |
Base rent through 2024 | $ 4.5 |
Base rent 2025-2029 | $ 4.7 |
Leases - Schedule of Lease Cost (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Lease liability cost | $ 6,280 | $ 5,610 | $ 12,498 | $ 10,895 |
Variable lease cost not included in the lease liability | 1,224 | 924 | 2,321 | 1,721 |
Total lease cost | $ 7,504 | $ 6,534 | $ 14,819 | $ 12,616 |
Leases - Lessee, Operating Lease Other Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Operating cash flows from operating leases | $ (5,668) | $ (4,977) | $ (11,401) | $ (9,309) |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 642 | $ 9,272 | $ 20,243 | $ 23,107 |
Weighted-average remaining lease term of operating leases | 7 years 8 months 12 days | 7 years 9 months 18 days | 7 years 8 months 12 days | 7 years 9 months 18 days |
Weighted-average discount rate of operating leases | 3.30% | 3.30% | 3.30% | 3.30% |
Leases - Schedule of Maturity of Operating Lease Liabilities (Detail) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
Remainder of 2020 | $ 11,395 |
2021 | 22,531 |
2022 | 19,549 |
2023 | 14,962 |
2024 | 14,245 |
Thereafter | 57,847 |
Total future lease payments | 140,529 |
Present value adjustment | (17,810) |
Present value of future lease payments | $ 122,719 |
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income before income tax provision | $ 112,585 | $ 129,941 | $ 145,909 | $ 228,607 |
Income tax provision | $ 16,021 | $ 20,191 | $ 3,281 | $ 32,627 |
Effective tax rate | 14.20% | 15.50% | 2.20% | 14.30% |
Stock Repurchase Program (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Class of Stock Disclosures [Abstract] | |||||
Number of shares repurchased | 690 | 330 | |||
Average price paid per share | $ 233.48 | $ 179.41 | |||
Total cost | $ 161,029 | $ 14,260 | $ 44,856 | $ 161,029 | $ 59,116 |
Stock Repurchase Program - Additional Information (Detail) shares in Millions |
Jun. 30, 2020
shares
|
---|---|
Class of Stock Disclosures [Abstract] | |
Stock repurchase program, remaining number of shares authorized to be repurchased | 2.8 |
Contingencies and Commitments (Detail) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
India Service Tax Audit | |
Loss Contingencies [Line Items] | |
Loss contingency, estimate of possible loss | $ 7.0 |
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