GOODWILL & INTANGIBLE ASSETS

12 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company has one reporting unit. Goodwill is tested for impairment at a reporting unit level at least annually, as of January 31, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of the reporting unit below its carrying value. At March 31, 2021 and 2020, the carrying amount of goodwill was $1.7 billion.

During fiscal years 2021 and 2020, the Company's annual impairment tests indicated that goodwill was not impaired. In the fourth quarter of fiscal year 2021, the Company completed its annual goodwill impairment test at January 31, 2021, using the qualitative Step 0 assessment as the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying value.

The change in the carrying amount of goodwill for the fiscal year ended March 31, 2021 is due to the impact of foreign currency translation adjustments related to asset balances that are recorded in currencies other than the U.S. Dollar.

The changes in the carrying amount of goodwill for the fiscal years ended March 31, 2021 and 2020 are as follows (in thousands):





















Balance at March 31, 2019	$	1,715,485
Goodwill attributed to the Eastwind acquisition	1,003
Goodwill attributed to the Gigavation acquisition	3,816
Foreign currency translation impact	5,376
Balance at March 31, 2020	$	1,725,680


Foreign currency translation impact	(8,126)
Balance at March 31, 2021	$	1,717,554

Intangible Assets

The net carrying amounts of intangible assets were $511.9 million and $582.2 million at March 31, 2021 and 2020, respectively. Intangible assets acquired in a business combination are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition. The Company amortizes intangible assets over their estimated useful lives, except for the acquired trade name which resulted from the Network General acquisition, which has an indefinite life and thus is not amortized. The carrying value of the indefinite lived trade name is evaluated for potential impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

During fiscal year 2019, the Company performed a quantitative analysis on certain intangible assets related to the HNT tools business, which has since been divested. The fair value for the intangible assets related to the HNT tools business was calculated considering a range of potential transaction prices which the Company considers to be a Level 3 measurement. The fair value of these intangible assets was determined to be less than the carrying value, and as a result, the Company recognized an impairment charge of $35.9 million in the twelve months ended March 31, 2019. The impairment charge was recorded within a separate operating expense line item in the Company's consolidated statements of operations during the twelve months ended March 31, 2019.

During fiscal year 2021 and 2020, the Company's annual impairment tests indicated that the acquired trade name was not impaired. In the fourth quarter of fiscal year 2021, the Company completed its annual impairment test of the indefinite lived intangible at January 31, 2021 using the qualitative Step 0 assessment as the Company concluded that it was more likely than not that the fair value of the indefinite-lived asset exceeded its carrying value.

During the fiscal year ended March 31, 2021, the Company acquired $4.5 million of technology licenses. These amounts are included within distributor relationships and are being amortizing using the economic benefit method over useful lives of between three and four years. The Company did not acquire any technology licenses during the fiscal year ended March 31, 2020.

Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2021 (in thousands):


	Cost		Accumulated Amortization		Net
Developed technology	$	252,071	$	(212,688)	$	39,383
Customer relationships	775,898		(333,903)		441,995
Distributor relationships and technology licenses	11,469		(7,829)		3,640
Definite-lived trademark and trade name	39,434		(31,467)		7,967
Core technology	7,192		(7,192)		—
Net beneficial leases	336		(336)		—
Non-compete agreements	292		(292)		—


Capitalized software	3,317		(3,281)		36
Other	1,208		(963)		245
	$	1,091,217	$	(597,951)	$	493,266

Intangible assets include the indefinite lived trade name with a carrying value of $18.6 million and the following amortizable intangible assets at March 31, 2020 (in thousands):


	Cost		Accumulated Amortization		Net
Developed technology	$	249,675	$	(191,876)	$	57,799
Customer relationships	767,366		(275,361)		492,005
Distributor relationships and technology licenses	6,785		(6,321)		464
Definite-lived trademark and trade name	39,059		(26,246)		12,813
Core technology	7,192		(7,074)		118
Net beneficial leases	336		(336)		—
Non-compete agreements	292		(292)		—
Leasehold interest	500		(500)		—
Backlog	16,223		(16,223)		—
Capitalized software	3,317		(3,202)		115
Other	1,208		(943)		265
	$	1,091,953	$	(528,374)	$	563,579

Amortization included as cost of product revenue consists of amortization of developed technology, distributor relationships and technology licenses, core technology and software. Amortization included as operating expense consists of all other intangible assets. The following table provides a summary of amortization expense during the fiscal years ended March 31, 2021, 2020, and 2019 (in thousands).


	Years Ended March 31,
	2021		2020		2019
Amortization of intangible assets included as:

Cost of product revenue	20,457		26,664		34,039
Operating expense	61,151		64,525		74,325
	$	81,608	$	91,189	$	108,364

The following is the expected future amortization expense at March 31, 2021 for the fiscal years ended March 31 (in thousands):


2022	$	71,540
2023	63,799
2024	55,547
2025	48,476
2026	44,386
Thereafter	209,518
Total	$	493,266

The weighted average amortization period of developed technology and core technology is 11.2 years. The weighted average amortization period for customer and distributor relationships is 15.9 years. The weighted average amortization period for trademarks and trade names is 8.6 years. The weighted average amortization period for capitalized software is 3.0 years. The weighted average amortization period for all amortizing intangible assets is 14.6 years.