GOODWILL & INTANGIBLE ASSETS

12 Months Ended

Mar. 31, 2024

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, and on an interim basis if an event occurs or circumstances change (a "triggering event") that would indicate that the fair value of the reporting unit is below its carrying value.

During the year ended March 31, 2024, the Company recorded $217.3 million in goodwill impairment charges. As a result of a sustained decline in the Company’s stock price and overall market capitalization during the third quarter of fiscal year 2024, along with other qualitative considerations including the continued impact from the conditions in the macroeconomic environment, the Company determined a triggering event occurred, indicating goodwill may be impaired. Accordingly, the Company performed a quantitative impairment test of goodwill at December 31, 2023. The Company estimated the implied fair value of the reporting unit using a market approach. As a result of the quantitative impairment test, the Company determined goodwill was impaired and recorded a goodwill impairment charge of $167.1 million during the third quarter of fiscal year 2024. During the fourth quarter of fiscal year 2024, the Company performed its annual goodwill impairment test as of January 31, 2024, again using a quantitative assessment and estimated the implied fair value of its reporting unit using a market approach. As a result of the quantitative impairment test, the Company determined goodwill was further impaired and recorded an impairment charge of $50.2 million during the fourth quarter of fiscal year 2024. The additional impairment charge recorded in the fourth quarter of fiscal year 2024 was primarily due to a decrease in the Company’s stock price from December 31, 2023 to January 31, 2024 and an increase in the forecasted interest rate yield curve, which impacted the Company’s weighted-average cost of capital. At March 31, 2024, the Company performed a triggering event assessment and concluded no events or circumstances occurred that indicated goodwill was further impaired.

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

The Company will continue to monitor relevant facts and circumstances, including future changes in its stock price. The Company may be required to record additional goodwill impairment charges. While management cannot predict if or when additional goodwill impairments may occur, future goodwill impairments could have material adverse effects on the Company's results of operations and financial condition.

At March 31, 2024 and 2023, the carrying amounts of goodwill were $1.5 billion and $1.7 billion, respectively. The change in the carrying amount of goodwill for the fiscal year ended March 31, 2024 was due to the impairment of goodwill, the divestiture of the TO business, and 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 fiscal years ended March 31, 2024 and 2023 as follows (in thousands):


Balance at March 31, 2022	$	1,723,156
Foreign currency translation impact	1,248
Balance at March 31, 2023	$	1,724,404
Goodwill impairment	(217,260)
Divestiture of a business	(4,259)
Foreign currency translation impact	(65)
Balance at March 31, 2024	$	1,502,820

Intangible Assets

The net carrying amounts of intangible assets were $308.7 million and $366.6 million at March 31, 2024 and 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 intangible assets over their estimated useful lives.

The Company reviews definite-lived intangible assets for impairment when an event occurs that may indicate potential impairment. In conjunction with the goodwill impairment analysis performed at December 31, 2023 and January 31, 2024, the Company conducted an impairment test of its definite-lived intangible assets. Based on these assessments, the Company concluded that the carrying values of the Company's definite-lived intangible assets were recoverable as of December 31, 2023 and January 31, 2024. However, if future events occur or if business conditions deteriorate, the Company may be required to record an impairment loss, and or accelerate the amortization of definite-live intangible assets in the future, which could be material to its results of operations and financial condition.

Intangible assets include the following amortizable intangible assets at March 31, 2024 (in thousands):


	Estimated Useful Life in Years	Cost		Accumulated Amortization		Net
Developed technology	3 - 13 years	$	248,385	$	(238,470)	$	9,915
Customer relationships	8 - 18 years	763,943		(475,592)		288,351
Distributor relationships and technology licenses	1 - 6 years	7,785		(7,463)		322
Definite-lived trademark and trade name	2 - 9 years	57,699		(47,814)		9,885
Core technology	10 years	7,192		(7,192)		—




Capitalized software	3 years	3,317		(3,317)		—
Other	1 - 20 years	1,208		(1,022)		186
		$	1,089,529	$	(780,870)	$	308,659

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, and distributor relationships and technology licenses. 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, 2024, 2023, and 2022 (in thousands).


	Years Ended March 31,
	2024		2023		2022
Amortization of intangible assets included as:

Cost of product revenue	7,642		10,542		14,600
Operating expense	50,357		55,410		59,761
	$	57,999	$	65,952	$	74,361

The following is the expected future amortization expense at March 31, 2024 for the fiscal years ended March 31 (in thousands):


2025	$	50,816
2026	46,453
2027	43,572
2028	40,614
2029	31,410
Thereafter	95,794
Total	$	308,659