GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

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. The Company completed its annual goodwill impairment test at January 31, 2023, using the qualitative (Step 0) assessment, and the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying value.

At June 30, 2023 and March 31, 2023, the carrying amount of goodwill was $1.7 billion. The change in the carrying amount of goodwill for the three months ended June 30, 2023 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 three months ended June 30, 2023 as follows (in thousands):

Balance at March 31, 2023	$	1,724,404
Foreign currency translation impact	(868)
Balance at June 30, 2023	$	1,723,536

Intangible Assets

The net carrying amounts of intangible assets were $352.5 million and $366.6 million at June 30, 2023 and March 31, 2023, 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.

Intangible assets include the following amortizable intangible assets at June 30, 2023 (in thousands):

	Estimated Useful Life in Years	Cost		Accumulated Amortization		Net
Developed technology	3 - 13 years	$	250,180	$	(235,344)	$	14,836
Customer relationships	8 - 18 years	769,166		(445,968)		323,198
Distributor relationships and technology licenses	1 - 6 years	11,565		(10,429)		1,136
Definite-lived trademark and trade name	2 - 9 years	57,737		(44,611)		13,126
Core technology	10 years	7,192		(7,192)		—
Non-compete agreements	3 years	292		(292)		—
Capitalized software	3 years	3,317		(3,317)		—
Other	1 - 20 years	1,208		(1,007)		201
		$	1,100,657	$	(748,160)	$	352,497

Intangible assets include the following amortizable intangible assets at March 31, 2023 (in thousands):

	Estimated Useful Life in Years	Cost		Accumulated Amortization		Net
Developed technology	3 - 13 years	$	249,903	$	(233,440)	$	16,463
Customer relationships	8 - 18 years	768,179		(433,876)		334,303
Distributor relationships and technology licenses	1 - 6 years	11,547		(10,133)		1,414
Definite-lived trademark and trade name	2 - 9 years	57,694		(43,489)		14,205
Core technology	10 years	7,192		(7,192)		—
Non-compete agreements	3 years	292		(292)		—
Capitalized software	3 years	3,317		(3,317)		—
Other	1 - 20 years	1,208		(1,002)		206
		$	1,099,332	$	(732,741)	$	366,591

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 months ended June 30, 2023 and 2022, respectively (in thousands):

	Three Months Ended
	June 30,
	2023		2022
Amortization of intangible assets included as:
Cost of product revenue	$	1,917	$	2,653
Operating expense	12,712		13,886
	$	14,629	$	16,539

The following is the expected future amortization expense at June 30, 2023 for the fiscal years ending March 31 (in thousands):

2024 (remaining nine months)	$	43,419
2025	50,871
2026	46,504
2027	43,621
2028	40,661
Thereafter	127,421
	$	352,497