GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company has one reporting unit. The Company assesses goodwill for impairment at the reporting unit level at least annually, 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. The Company completed its annual impairment test on 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.

At December 31, 2021 and March 31, 2021, the carrying amount of goodwill was $1.7 billion. The change in the carrying amount of goodwill for the nine months ended December 31, 2021 was 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 following table summarizes the changes in the carrying amount of goodwill for the nine months ended December 31, 2021 as follows (in thousands):


Balance at March 31, 2021	$	1,717,554








Foreign currency translation impact	3,159
Balance at December 31, 2021	$	1,720,713

Intangible Assets

The net carrying amounts of intangible assets were $453.7 million and $511.9 million at December 31, 2021 and March 31, 2021, 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 acquired intangible assets over their estimated useful lives. During the first quarter of fiscal year 2022, in conjunction with the renewal process of the Company's acquired indefinite-lived trade name and the Company's focus on advancing new product lines, the Company reassessed the estimated economic life of the acquired indefinite-lived trade name. As a result, the Company began amortizing the acquired trade name over 8 years. Prior to reclassifying the acquired trade name to a finite-lived intangible asset, the Company tested the acquired trade name for impairment and determined the fair value of the asset exceeded the carrying value. This change in estimate does not materially impact the Company's income statement.

Intangible assets include the following amortizable intangible assets at December 31, 2021 (in thousands):


	Cost		Accumulated Amortization		Net
Developed technology	$	251,072	$	(221,842)	$	29,230
Customer relationships	772,339		(372,349)		399,990
Distributor relationships and technology licenses	11,408		(8,639)		2,769
Definite-lived trademark and trade name (a)	57,877		(36,380)		21,497
Core technology	7,192		(7,192)		—

Non-compete agreements	292		(292)		—


Capitalized software	3,317		(3,314)		3

Other	1,208		(978)		230
	$	1,104,705	$	(650,986)	$	453,719

(a) The Company's $18.6 million acquired trade name changed from indefinite-lived during the first quarter of fiscal year 2022.

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

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 for the three and nine months ended December 31, 2021 and 2020, respectively (in thousands):


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Amortization of intangible assets included as:

Cost of product revenue	$	3,643	$	5,177	$	10,959	$	15,510
Operating expense	14,924		15,278		44,910		45,912
	$	18,567	$	20,455	$	55,869	$	61,422

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


2022 (remaining three months)	$	18,491
2023	66,446
2024	58,225
2025	51,025
2026	46,687
Thereafter	212,845
	$	453,719

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 8.4 years. The weighted-average amortization period for capitalized software is 3.0 years. The weighted-average amortization period for amortizing all intangible assets is 14.6 years.