GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Sep. 30, 2023

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. 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. During the six months ended September 30, 2023, and through the date of this quarterly report, the Company considered a variety of factors including the impact of the macroeconomic environment on the Company's long-term forecast and stock price. Based upon those assessments, the Company concluded that there were no events or circumstances that had occurred that would more likely than not reduce the fair value of the reporting unit below its carrying value at September 30, 2023. The Company will continue to monitor these factors and plans to perform its annual goodwill assessment during the fourth quarter of fiscal year 2024, further the Company will perform additional interim impairment tests, if necessary.

At September 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 six months ended September 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 and the divestiture of the TO business.

The following table summarizes the changes in the carrying amount of goodwill for the six months ended September 30, 2023 as follows (in thousands):


Balance at March 31, 2023	$	1,724,404








Foreign currency translation impact	1,859
Divestiture of a business	(4,259)
Balance at September 30, 2023	$	1,722,004

Intangible Assets

The net carrying amounts of intangible assets were $336.4 million and $366.6 million at September 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 September 30, 2023 (in thousands):


	Estimated Useful Life in Years	Cost		Accumulated Amortization		Net
Developed technology	3 - 13 years	$	247,769	$	(234,598)	$	13,171
Customer relationships	8 - 18 years	761,750		(451,580)		310,170
Distributor relationships and technology licenses	1 - 6 years	7,747		(6,883)		864
Definite-lived trademark and trade name	2 - 9 years	57,603		(45,559)		12,044
Core technology	10 years	7,192		(7,192)		—




Capitalized software	3 years	3,317		(3,317)		—

Other	1 - 20 years	1,208		(1,012)		196
		$	1,086,586	$	(750,141)	$	336,445

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


	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Amortization of intangible assets included as:

Cost of product revenue	$	1,909	$	2,628	$	3,826	$	5,281
Operating expense	12,555		13,806		25,267		27,692
	$	14,464	$	16,434	$	29,093	$	32,973

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


2024 (remaining six months)	$	28,838
2025	50,679
2026	46,326
2027	43,450
2028	40,495
Thereafter	126,657
	$	336,445