INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax Expense

Income (loss) before income tax expense (benefit) consisted of the following (in thousands):

	Year Ended March 31,
	2020		2019		2018
Domestic	$	(1,502)	$	(107,088)	$	(35,032)
Foreign	3,426		14,176		16,373
	$	1,924	$	(92,912)	$	(18,659)

Summary of Components of Income Tax Expense

The components of the income tax expense (benefit) are as follows (in thousands):

	Year Ended March 31,
	2020		2019		2018
Current income tax expense:
Federal	$	2,817	$	3,902	$	14,191
State	1,850		(136)		1,925
Foreign	9,712		10,618		12,249
	14,379		14,384		28,365
Deferred income tax benefit:
Federal	(5,287)		(25,347)		(113,122)
State	(2,897)		(3,845)		(10,037)
Foreign	(1,517)		(4,780)		(3,677)
	(9,701)		(33,972)		(126,836)
	$	4,678	$	(19,588)	$	(98,471)

Schedule of Federal Statutory Income Tax Rate to Effective Tax Rate

The income tax expense (benefit) computed using the federal statutory income tax rate differs from NetScout's effective tax rate primarily due to the following:

	Year Ended March 31,
	2020		2019		2018
Statutory U.S. federal tax rate	21.0	%	21.0	%	31.6	%
State taxes, net of federal tax effect	(47.8)		3.4		6.9
Research and development tax credits	(245.9)		7.1		39.5
Effect of foreign operations	(66.9)		(0.1)		14.0
Meals and entertainment	43.7		(1.0)		(6.7)
Domestic production activities deduction	—		—		13.8
Change in valuation allowance	250.0		2.2		(0.2)
Internal restructuring charges	196.5		—		—
Stock compensation	172.1		(2.6)		(2.5)
Divestiture	—		(1.0)		—
GILTI/FDII	(174.3)		2.9		—
BEAT	—		(7.0)		—
2017 Tax Act (transition tax and re-measurement of deferreds)	—		0.4		454.1
Foreign withholding	220.6		(3.1)		(21.0)
Provision to return	(152.8)		(1.0)		0.8
Other permanent differences	26.9		(0.1)		(2.6)
	243.1	%	21.1	%	527.7	%

Summary of Components of Net Deferred Tax Assets

The components of net deferred tax assets and liabilities are as follows (in thousands):

	Year Ended March 31,
	2020		2019
Deferred tax assets:
Accrued expenses	$	5,060	$	4,359
Deferred revenue	14,420		11,278
Reserves	3,216		5,463
Pension and other retiree benefits	5,078		5,960
Net operating loss carryforwards	12,443		14,992
Tax credit carryforwards	14,138		9,043
Share-based compensation	4,534		5,505
Operating lease liability	18,213		—
Other	20		166
Total gross deferred tax assets	77,122		56,766
Valuation allowance	(5,641)		(835)
Net deferred tax assets	71,481		55,931
Deferred tax liabilities:
Intangible assets	(146,950)		(164,199)
Other deferred liabilities	(8,061)		(1,609)
Operating lease right-of-use asset	(15,152)		—
Depreciation	(9,492)		(7,134)
Total deferred tax liability	$	(108,174)	$	(117,011)

Schedule of Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years ended March 31, 2020, 2019 and 2018 is as follows (in thousands):

	Year Ended March 31,
	2020		2019		2018
Balance at April 1,	$	1,314	$	2,215	$	2,926
Additions based on tax positions related to the current year	49		28		126
Release of tax positions of prior years	(212)		(194)		(481)
Decrease relating to settlements with taxing authorities	—		(735)		(356)
Balance at March 31,	$	1,151	$	1,314	$	2,215