10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission file number 001-09585

ABIOMED, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-2743260
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

22 CHERRY HILL DRIVE

DANVERS, MASSACHUSETTS 01923

(Address of principal executive offices, including zip code)

(978) 646-1400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of January 31, 2019, 45,085,806 shares of the registrant’s common stock, $.01 par value, were outstanding.

ABIOMED, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION:
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018	3
	Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and 2017	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2018 and 2017	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2018 and 2017	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II - OTHER INFORMATION:
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
SIGNATURES		34

NOTE REGARDING COMPANY REFERENCES

Throughout this report on Form 10-Q (the “Report”), “ABIOMED, Inc.,” the “Company,” “we,” “us” and “our” refer to ABIOMED, Inc. and its consolidated subsidiaries.

NOTE REGARDING TRADEMARKS

ABIOMED, IMPELLA, IMPELLA 2.5, IMPELLA 5.0, IMPELLA LD, IMPELLA CP and IMPELLA RP, are trademarks of ABIOMED, Inc., and are registered in the U.S. and certain foreign countries. IMPELLA BTR, IMPELLA 5.5, IMPELLA ECP and cVAD REGISTRY are trademarks of ABIOMED, Inc. 

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PART 1. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)

	December 31, 2018			March 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	84,181		$	42,975
Short-term marketable securities		373,975			319,274
Accounts receivable, net		88,215			70,010
Inventories		71,808			50,204
Prepaid expenses and other current assets		10,549			11,808
Total current assets		628,728			494,271
Long-term marketable securities		—			37,502
Property and equipment, net		138,455			117,167
Goodwill		33,260			35,808
In-process research and development		15,516			16,705
Long-term deferred tax assets, net		96,450			70,746
Other assets		44,707			14,176
Total assets	$	957,116		$	786,375
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	26,179		$	23,565
Accrued expenses		51,721			46,147
Deferred revenue		15,080			14,970
Total current liabilities		92,980			84,682
Other long-term liabilities		1,185			776
Contingent consideration		10,583			10,490
Long-term deferred tax liabilities		838			903
Total liabilities		105,586			96,851
Commitments and contingencies (Note 11)
Stockholders' equity:
Class B Preferred Stock, $.01 par value		—			—
Authorized - 1,000,000 shares; Issued and outstanding - none
Common stock, $.01 par value		451			444
Authorized - 100,000,000 shares; Issued - 46,959,653 shares at December 31, 2018 and 46,100,649 shares at March 31, 2018
Outstanding - 45,058,049 shares at December 31, 2018 and 44,375,337 shares at March 31, 2018
Additional paid in capital		676,171			619,905
Retained earnings		325,513			140,457
Treasury stock at cost - 1,901,604 shares at December 31, 2018 and 1,725,312 shares at March 31, 2018		(138,289	)		(67,078	)
Accumulated other comprehensive loss		(12,316	)		(4,204	)
Total stockholders' equity		851,530			689,524
Total liabilities and stockholders' equity	$	957,116		$	786,375

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2018			2017			2018			2017
Revenue	$	200,563		$	154,022		$	562,351		$	419,313
Costs and expenses:
Cost of revenue		34,023			24,994			94,718			68,483
Research and development		23,965			17,706			67,955			54,027
Selling, general and administrative		80,220			66,556			240,254			187,233
		138,208			109,256			402,927			309,743
Income from operations		62,355			44,766			159,424			109,570
Other income:
Investment income, net		2,175			969			5,397			2,385
Other (expense) income, net		(20	)		(81	)		10			(25	)
		2,155			888			5,407			2,360
Income before income taxes		64,510			45,654			164,831			111,930
Income tax provision (benefit)		19,648			32,208			(20,225	)		36,607
Net income	$	44,862		$	13,446		$	185,056		$	75,323
Basic net income per share	$	1.00		$	0.30		$	4.13		$	1.71
Basic weighted average shares outstanding		45,046			44,247			44,852			44,095
Diluted net income per share	$	0.97		$	0.29		$	4.01		$	1.65
Diluted weighted average shares outstanding		46,136			45,869			46,147			45,731

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2018			2017			2018			2017
Net income	$	44,862		$	13,446		$	185,056		$	75,323
Other comprehensive (loss) gain:
Foreign currency translation (losses) gains		(1,015	)		1,557			(8,468	)		10,406
Net unrealized gains (losses) on marketable securities		234			(401	)		356			(446	)
Other comprehensive (loss) gain		(781	)		1,156			(8,112	)		9,960
Comprehensive income	$	44,081		$	14,602		$	176,944		$	85,283

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the Nine Months Ended December 31,
	2018			2017
Operating activities:
Net income	$	185,056		$	75,323
Adjustments required to reconcile net income to net cash provided by    operating activities:
Depreciation and amortization expense		9,936			8,100
Bad debt expense (recovery)		578			(8	)
Stock-based compensation		43,757			29,170
Write-down of inventory and other		3,152			3,212
Accretion on marketable securities		(1,644	)		—
Deferred tax provision		(25,992	)		34,740
Change in fair value of contingent consideration		93			1,270
Changes in assets and liabilities:
Accounts receivable		(19,268	)		(10,342	)
Inventories		(26,522	)		(11,974	)
Prepaid expenses and other assets		678			(1,033	)
Accounts payable		4,909			2,595
Accrued expenses and other liabilities		6,909			3,874
Deferred revenue		164			1,220
Net cash provided by operating activities		181,806			136,147
Investing activities:
Purchases of marketable securities		(241,745	)		(209,834	)
Proceeds from the sale and maturity of marketable securities		226,949			148,095
Purchase of other assets		(30,436	)		(6,400	)
Purchases of property and equipment		(35,469	)		(44,168	)
Net cash used for investing activities		(80,701	)		(112,307	)
Financing activities:
Proceeds from the exercise of stock options		11,043			7,626
Taxes paid related to net share settlement of vesting of stock awards		(71,213	)		(19,860	)
Proceeds from the issuance of stock under employee stock purchase plan		1,376			1,063
Principal payments on capital lease obligation		—			(517	)
Net cash used for financing activities		(58,794	)		(11,688	)
Effect of exchange rate changes on cash		(1,105	)		(690	)
Net increase in cash and cash equivalents		41,206			11,462
Cash and cash equivalents at beginning of period		42,975			39,040
Cash and cash equivalents at end of period	$	84,181		$	50,502
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	4,500		$	845
Cash paid for interest on capital lease obligation		—			302
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses		1,670			3,836

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data)

Note 1. Nature of Business

ABIOMED, Inc. (the “Company” or “Abiomed”) is a provider of mechanical circulatory support devices and offers a continuum of care to heart failure patients. The Company develops, manufactures and markets proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by cardiac surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures.

Note 2. Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting and in accordance with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 that has been filed with the Securities and Exchange Commission (“SEC”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments that are necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period may not be indicative of results for the full fiscal year or any other subsequent period.

There have been no changes in the Company’s significant accounting policies for the three and nine months ended December 31, 2018 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 that has been filed with the SEC.

New Accounting Pronouncements Adopted

Effective April 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2014-09, “Revenue from Contracts with Customers,” (“Topic 606”) which provides a principles-based, five-step approach to measure and recognize revenue from contracts with customers. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 4. Revenue Recognition,” to the Company’s consolidated financial statements.

Effective April 1, 2018, the Company adopted the FASB standard update ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 5. Cash Equivalents, Marketable Securities, and Fair Value Measurements,” to the Company’s consolidated financial statements.

On June 20, 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU 2018-07 eliminated the previous guidance for accounting for share-based payments to nonemployees and expanded Topic 718 to include share-based payments transactions to nonemployees. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of ASU 2018-07 requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year. The Company early adopted ASU 2018-07 on June 20, 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018.

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Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases.” The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The lease obligation amount recorded on the balance sheet at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lease arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements as well as updating processes and controls in order to adopt the new standard. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities. In addition, the evaluation includes a review of the Company’s existing contracts with its suppliers and vendors to determine if these agreements contain an embedded lease. The Company currently expects that its lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption, which will increase total assets and total liabilities that the Company reports on its consolidated balance sheet. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company on April 1, 2019.

Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2018 and 2017 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Basic Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Basic net income per share	$	1.00	$	0.30	$	4.13	$	1.71

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Diluted Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Effect of dilutive securities		1,090		1,622		1,295		1,636
Diluted weighted average shares outstanding		46,136		45,869		46,147		45,731
Diluted net income per share	$	0.97	$	0.29	$	4.01	$	1.65

For the three and nine months ended December 31, 2018, approximately 73,700 and 60,700 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 104,000 restricted shares in each of the three and nine months ended December 31, 2018, respectively, related to performance-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and nine months ended December 31, 2017, approximately 2,600 and 4,800 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 185,000 restricted shares in each of the three and nine months ended December 31, 2017, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

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Note 4. Revenue Recognition

Adoption of Topic 606, Revenue from Contracts with Customers

The Company adopted Topic 606 on April 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2019 reflect the application of Topic 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, “Revenue Recognition.” The adoption of Topic 606 did not have a material impact on the timing or amount of revenue recognized upon adoption and there was no cumulative prior period adjustment recorded to the opening balance of retained earnings upon adoption. Accordingly, the adoption of Topic 606 did not have a material impact on the Company’s consolidated balance sheet, statement of operations, stockholders’ equity or cash flows as of the adoption date or for the three or nine months ended December 31, 2018.

The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying Topic 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs are recorded as selling, general and administrative expenses; (5) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; and (6) the Company does not disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less.

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligation in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligation in the contract

• Recognition of revenue when, or as, a performance obligation is satisfied

Contracts and Performance Obligations

The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts, purchase orders or invoices. For each contract, the Company considers the obligation to transfer products and services to the customer, each of which are distinct, to be performance obligations.

Transaction price and allocation to performance obligations

Transaction prices of products or services are typically based on contracted rates with customers. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method or the most likely amount, depending on the circumstances, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.  Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.  Sales and other taxes collected on behalf of third parties are excluded from revenue.

The Company does not provide for rights of return to customers on product sales and, therefore, does not record a provision for returns. Customers typically have a limited time frame to notify the Company of any defective or non-conforming products. The Company’s limited warranty provision is accounted for using the cost accrual method and is recognized as expense when products are sold and is not considered a separate performance obligation.

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If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately.  

Revenue Recognition

Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers.  Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer.

Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Service revenue is generally recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Revenue generated from preventative maintenance calls is recognized at a point in time when the services are provided to the customer.

Revenue from the sale of products and services are evidenced by either a contract with the customer or a valid purchase order and an invoice which includes all relevant terms of sale. The Company performs a review of each specific customer's credit worthiness and ability to pay prior to acceptance as a customer. Further, the Company performs periodic reviews of its customers' creditworthiness prospectively.

Disaggregation of Revenue

The Company generally sells its Impella products and services through a direct sales force in the U.S. and Germany and through direct sales and distribution agreements in other international markets outside (e.g., in Europe, Japan, Canada, Latin America, Asia-Pacific). Revenue is disaggregated from contracts between product revenue and service and other revenue and by geography, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors.

The following table disaggregates the Company’s revenue by products and services:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Impella product revenue	$	193,253	$	147,989	$	542,198	$	402,583
Service and other revenue		7,310		6,033		20,153		16,730
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

The following table disaggregates the Company’s revenue by geographical location:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
U.S. revenue	$	172,548	$	136,363	$	488,386	$	374,697
International revenue		28,015		17,659		73,965		44,616
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

Reserves for Variable Consideration

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts or rebates that are offered within contracts between the Company and its customers relating to the Company’s sales of its products.  These reserves are based on the amounts earned or are expected to be claimed on the related sales and are classified as reductions of accounts receivable.  Where appropriate, these estimates take into consideration relevant factors such as the Company’s historical experience, current contractual and statutory requirements,

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specific known market events and trends, industry data and forecasted customer buying and payment patterns.  These reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract.  Actual amounts of consideration ultimately received may differ from the Company’s estimates.  If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect revenue and earnings in the period such variances become known.

Rebates and Discounts  

The Company provides certain customers with rebates and discounts that are defined in the Company’s contract arrangements with customers and are recorded as a reduction of revenue in the period the related product revenue is recognized, resulting in a reduction to revenue and the establishment of a liability, which are all included in accrued expenses in the accompanying consolidated balance sheets. Rebates normally result from performance-based offers that are primarily based on attaining contractually specified sales volumes as well as product usage.  Discounts are normally from early payment incentives. The Company estimates the amount of rebates and discounts based on an estimate of the third party’s sales and the respective rebate or discount defined in the customer contractual arrangement.

The following table summarizes product revenue rebates and discounts for the nine months ended December 31, 2018 (in thousands):

	Rebates and Discounts
Balance at March 31, 2018	$	1,405
Provision related to current period revenue		1,526
Credits and adjustments made during the period		(1,446	)
Balance at December 31, 2018	$	1,485

Contract Balances

The timing of revenue recognition, billings and cash collections results in accounts receivables and deferred revenue on the consolidated balance sheet. A receivable is recognized in the period the Company’s right to the consideration from the customer is unconditional. The change in the accounts receivable balances relate to the timing of revenue recognition, billings and cash collections. The Company generally does not have any performance obligations with a term of more than one year.

Payment terms vary by contract type and type of customer and generally range from 30 to 60 days for direct sales customers. Payment terms with certain international distributors can be up to 90 days. The Company’s contracts with customers do not typically include extended payment terms.

Deferred Revenue

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, deferred revenue is recorded. Deferred revenue is recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

The Company’s deferred revenue balance was $15.1 million and $15.0 million as of December 31, 2018 and March 31, 2018, respectively. The change relates to the timing of product shipment and completion of recognizing revenue when the customer obtains control of the product and additional preventative maintenance service contracts and the subsequent recognition of the contract ratably over the term of the service contract. During the three and nine months ended December 31, 2018, the Company recognized $2.0 million and $14.4 million of revenue that was included in the deferred revenue balance as of March 31, 2018, respectively.  

Costs to Obtain or Fulfill a Customer Contract

The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included in selling, general, and administrative expenses.

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Note 5. Cash Equivalents, Marketable Securities and Fair Value Measurements

The Company classifies any marketable security with a maturity date of 90 days or less at the time of purchase as a cash equivalent. Cash equivalents are carried on the balance sheet at fair market value. The Company’s marketable securities, consisting of U.S. Treasuries, U.S. Government Agency, corporate debt securities, and commercial paper, are classified as available-for-sale securities and, accordingly, are recorded at fair value. The difference between amortized cost and fair value is included in stockholders’ equity. At December 31, 2018 and March 31, 2018, the Company’s financial instruments consisted primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these investments.

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are classified on the balance sheet as follows:

	December 31, 2018		March 31, 2018
	(in $000's)
Cash equivalents	$	42,146	$	22,595
Short-term marketable securities		373,975		319,274
Long-term marketable securities		—		37,502
	$	416,121	$	379,371

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2018:
Money market funds	$	36,146	$	—	$	—		$	36,146
Repurchase agreements		6,000		—		—			6,000
Short-term U.S. Treasury mutual fund securities		43,710		1		(37	)		43,674
Short-term government-backed securities		183,531		13		(152	)		183,392
Short-term corporate debt securities		114,193		46		(70	)		114,169
Short-term commercial paper		32,792		—		(52	)		32,740
	$	416,372	$	60	$	(311	)	$	416,121

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2018:
Money market funds	$	5,845	$	—	$	—		$	5,845
Repurchase agreements		16,750		—		—			16,750
Short-term U.S. Treasury mutual fund securities		18,132		—		(29	)		18,103
Short-term government-backed securities		212,255		3		(538	)		211,720
Short-term corporate debt securities		52,737		—		(161	)		52,576
Short-term commercial paper		36,936		2		(63	)		36,875
Long-term U.S. Treasury mutual fund securities		10,953		—		(16	)		10,937
Long-term government-backed securities		24,798		1		(12	)		24,787
Long-term corporate debt securities		1,777		1		—			1,778
	$	380,183	$	7	$	(819	)	$	379,371

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Fair Value Hierarchy

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Level 1 primarily consists of financial instruments whose values are based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flows, or similar techniques, and at least one significant model assumption or input is unobservable.

The following table presents the Company’s financial instruments recorded at fair value in the consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2018:	(in $000's)
Assets
Money market funds	$	36,146	$	—	$	—	$	36,146
Repurchase agreements		—		6,000		—		6,000
Short-term U.S. Treasury mutual fund securities		—		43,674		—		43,674
Short-term government-backed securities		—		183,392		—		183,392
Short-term corporate debt securities		—		114,169		—		114,169
Short-term commercial paper		—		32,740		—		32,740
Liabilities
Contingent consideration		—		—		10,583		10,583

	Level 1		Level 2		Level 3		Total
March 31, 2018:	(in $000's)
Assets
Money market funds	$	5,845	$	—	$	—	$	5,845
Repurchase agreements		—		16,750		—		16,750
Short-term U.S. Treasury mutual fund securities		—		18,103		—		18,103
Short-term government-backed securities		—		211,720		—		211,720
Short-term corporate debt securities		—		52,576		—		52,576
Short-term commercial paper		—		36,875		—		36,875
Long-term U.S. Treasury mutual fund securities		—		10,937		—		10,937
Long-term government-backed securities		—		24,787		—		24,787
Long-term corporate debt securities		—		1,778		—		1,778
Liabilities
Contingent consideration		—		—		10,490		10,490

The Company has determined that the estimated fair value of its money market funds are reported as Level 1 financial assets as they are valued at quoted market prices in active markets.

The Company has determined that the estimated fair value of its investments in U.S. Treasury mutual fund securities, government-backed securities, corporate debt securities, repurchase agreements and commercial paper are reported as Level 2 financial assets as they are not exchange-traded instruments.

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The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH, (“ECP”) and AIS GmbH Aachen Innovative Solutions, (“AIS’), in July 2014. The Company acquired ECP and AIS for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of CE Mark approval in the European Union and a revenue-based milestone related to the development of the future Impella ECP^TM expandable catheter pump technology. These potential milestone payments may be made, at the Company’s option, by a combination of cash or ABIOMED common stock. The calculation of contingent consideration payable was determined using a combination of an income approach, based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn out itself, the related projections, and the overall business. The revenue-based milestone was valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues are based on the Company’s best estimates of revenues expected to be earned from future Impella ECP technology.

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Potential Milestone Payment		Fair Value at December 31, 2018		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
	(in $000's)
Clinical and regulatory milestone	$	7,000	$	5,797	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
						Discount rate	4.4% to 4.5%
						Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 10% to 40% for various upside and downside scenarios
Revenue-based milestone		8,000		4,786	Monte Carlo simulation model	Projected fiscal year of milestone payments	2024 to 2035
						Discount rate	15%
						Expected volatility for forecasted revenues	50%
						Probability of payment	80%
	$	15,000	$	10,583

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Level 3 liabilities, beginning balance	$	10,331	$	9,835	$	10,490	$	9,153
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		252		588		93		1,270
Level 3 liabilities, ending balance	$	10,583	$	10,423	$	10,583	$	10,423

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The change in fair value of the contingent consideration was primarily due to the impact of changes in interest rates, passage of time on the fair value measurement and the status of development of the underlying technology related to the ECP acquisition. Adjustments associated with the change in fair value of contingent consideration are included in research and development expenses in the Company’s consolidated statements of operations. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value in the Company’s consolidated statement of operations. There is no assurance that any of the conditions for the milestone payments will be met.

Note 6. Property and Equipment

The components of property and equipment are as follows:

	December 31, 2018			March 31, 2018
	(in $000's)
Land	$	7,348		$	7,680
Building and building improvements		85,875			63,700
Leasehold improvements		2,182			2,905
Machinery and equipment		51,980			42,787
Furniture and fixtures		10,153			8,104
Construction in progress		17,092			19,850
Total cost		174,630			145,026
Less accumulated depreciation		(36,175	)		(27,859	)
	$	138,455		$	117,167

Note 7. Goodwill, In-Process Research and Development, and Other Assets

Goodwill

The carrying amount of goodwill at December 31, 2018 and March 31, 2018 was $33.3 million and $35.8 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005 and ECP and AIS in July 2014. The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2018	$	35,808
Foreign currency translation impact		(2,548	)
Balance at December 31, 2018	$	33,260

In-Process Research & Development

The Company evaluates goodwill and in-process research and development (“IPR&D”) assets at least annually at October 31, as well as whenever events or changes in circumstances suggest that the carrying amount may not be recoverable.  The Company has no accumulated impairment losses on goodwill or IPR&D assets.

The carrying amount of IPR&D assets at December 31, 2018 and March 31, 2018 was $15.5 million and $16.7 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014. The estimated fair value of IPR&D assets at the acquisition date was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flow estimates for the future Impella ECP^TM expandable catheter pump technology were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used an original discount rate of 21% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

15

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2018 are as follows:

	(in $000's)
Balance at March 31, 2018	$	16,705
Foreign currency translation impact		(1,189	)
Balance at December 31, 2018	$	15,516

Other Assets

Other Investments

The Company periodically makes investments in private medical device companies that focus on heart failure, heart pump and other medical device technologies. The aggregate carrying amount of the Company’s other investments was $40.8 million and $12.6 million at December 31, 2018 and March 31, 2018, respectively, and is classified within other assets on the consolidated balance sheets. During the nine months ended December 31, 2018, the Company made additional investments of $28.1 million in private medical device companies.

On April 1, 2018, the Company adopted ASU 2016-01. This guidance requires equity investments to be measured at fair value with changes in fair value recognized in net income.  Since these investments do not have readily determinable market values, the Company has elected to measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment.  No adjustments have been made to the value of the Company’s investments in these private medical device companies for the three and nine months ended December 31, 2018 either due to impairment or based on observable price changes. The Company monitors any events or changes in circumstances that may have a significant adverse effect on the fair value of this investment and makes any necessary adjustments.

Other Intangible Assets

In September 2018, the Company made a milestone payment to a third party for approximately $1.8 million for the transfer to the Company of manufacturing rights and knowledge for optical sensor technology that is approved for use in the Impella CP products.  In October 2018, the Company made a payment to a third party for approximately $0.6 million to license certain manufacturing technology related to introducer sheaths. These intangible assets are classified with other assets in the Company’s consolidated balance sheet and are amortized over their useful life of 15 years.

Note 8. Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2018		March 31, 2018
	(in $000's)
Employee compensation	$	31,930	$	30,330
Sales and income taxes		7,312		4,562
Research & development		3,371		3,162
Marketing		3,082		2,305
Professional, legal, and accounting fees		1,994		1,870
Warranty		1,300		1,081
Accrued capital expenditures		—		250
Other		2,732		2,587
	$	51,721	$	46,147

Employee compensation consists primarily of accrued bonuses, accrued commissions, accrued employee benefits, and accrued payroll taxes at December 31, 2018 and March 31, 2018.

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Note 9. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s consolidated statements of operations for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Cost of product revenue	$	773	$	489	$	2,122	$	1,221
Research and development		2,638		1,673		7,222		4,217
Selling, general and administrative		12,167		9,070		34,413		23,732
	$	15,578	$	11,232	$	43,757	$	29,170

Stock Options

The following table summarizes the stock option activity for the nine months ended December 31, 2018:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,282		$	46.18		5.31
Granted		78			381.62
Exercised		(435	)		25.36
Cancelled and expired		(19	)		145.89
Outstanding at end of period		906		$	83.90		5.74	$	222,852
Exercisable at end of period		668		$	39.86		4.78	$	190,646
Options vested and expected to vest at end of period		896		$	83.73		5.72	$	220,460

Stock options generally vest and become exercisable annually over three years. The remaining unrecognized stock-based compensation expense for unvested stock option awards at December 31, 2018 was approximately $14.0 million and the estimated weighted-average period over which this cost will be recognized is 2.1 years.

The aggregate intrinsic value of options exercised was $158.6 million for the nine months ended December 31, 2018. The total cash received as a result of employee stock options exercised during the nine months ended December 31, 2018 was approximately $11.0 million.

The Company estimates the fair value of stock options granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of stock options granted during the three and nine months ended December 31, 2018 and 2017 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2018			2017			2018			2017
Weighted average grant-date fair value	$	117.50		$	70.14		$	142.08		$	51.20
Valuation assumptions:
Risk-free interest rate		2.81	%		2.13	%		2.93	%		1.86	%
Expected option life (years)		4.04			4.08			4.04			4.07
Expected volatility		45.2	%		42.2	%		42.8	%		43.6	%

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Restricted Stock Units

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2018:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		880		$	109.01
Granted		193		$	379.30
Vested		(418	)	$	103.66
Forfeited		(25	)	$	187.05
Restricted stock units at end of period		630		$	192.16

Restricted stock units generally vest annually over three years. The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of December 31, 2018 was $60.9 million and the estimated weighted-average period over which this cost will be recognized is 2.1 years.

The weighted average grant-date fair value for restricted stock units granted during the nine months ended December 31, 2018 was $379.30. The total fair value of restricted stock units vested during the nine months ended December 31, 2018 was $168.1 million.

Performance-Based Awards

In May 2018, performance-based awards of restricted stock units for the potential issuance of approximately 114,000 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of December 31, 2018, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.

Note 10. Income Taxes

In December 2017, the Tax Cuts and Jobs Act, (“Tax Reform Act”) was signed into law. The Tax Reform Act included significant changes to existing law, including among other items, a reduction to the U.S. federal statutory corporate tax rate from 35% to 21% effective January 1, 2018. ASC 740, Income Taxes (Topic 740) requires that the effects of changes in tax laws or rates be recognized in the period in which the law is enacted. Those effects, both current and deferred, are reported as part of the tax provision, regardless of income in which the underlying pretax income (expense) or asset (liability) was or will be reported.

As a result of the Tax Reform Act, the Company’s U.S. federal statutory corporate income tax rate of 21% was applied in the computation of the income tax provision for the three and nine months ended December 31, 2018.

The Company’s income tax provision was $19.6 million for the three months ended December 31, 2018. The Company’s income tax benefit was $20.2 million for the nine months ended December 31, 2018. The Company’s income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively. The Company’s effective tax rate was 30.5% and (12.3)% for the three and nine months ended December 31, 2018, respectively, and 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively.

Consistent with guidance issued by the SEC, which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Reform Act, the Company provisionally remeasured its net deferred tax assets due to the lower U.S. federal statutory corporate tax rate during the year ended March 31, 2018. The Company’s provisional estimate reflected estimable impacts of the Tax Reform Act on the Company’s estimated annual effective tax rate and discrete items resulting directly from the enactment of the Tax Reform Act based on the information available, prepared, or analyzed (including computations) in reasonable detail. Any adjustments to this provisional estimate would be recorded as adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized, if necessary. No adjustments were made to the Company’s provisional estimate of the impacts of the Tax Reform Act during the three and nine months ended December 31, 2018. This measurement period ended the quarter ended December 31, 2018.

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The Company recognizes excess tax benefits and shortfalls in the income tax provision as discrete items in the period in which restricted stock units vest or stock option exercises occur. The Company recognized excess tax benefits associated with stock-based awards of $1.7million and $68.5million as an income tax benefit for thethree and nine months ended December 31, 2018, respectively, and $3.2 million and $24.5 million as an income tax benefit for the three and nine months ended December 31, 2017, respectively. The amount of future excess tax benefits or shortfalls will likely fluctuate from period to period based on the price of the Company’s stock, the number of restricted stock units that vest or stock options that are exercised, and the fair value assigned to such stock-based awards under U.S. GAAP.

The significant differences between the statutory and effective income tax rate for the three and nine months ended December 31, 2018 and 2017 consist of the following items:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2018			2017				2018			2017
Statutory income tax rate		21.0		%	31.5		%		21.0		%	31.5		%
Increase resulting from:
Excess tax benefits from stock-based awards		(2.6	)		(7.0	)			(41.5	)		(21.9	)
Credits		(1.7	)		(2.1	)			(1.7	)		(2.1	)
State taxes, net		4.3			3.7				4.3			3.7
Permanent differences		1.8			1.7				1.8			1.7
Effect of the Tax Reform Act on net deferred tax assets		—			42.1				—			19.6
Excess foreign tax credits		7.9			—				3.7			—
Other		(0.2	)		0.7				0.1			0.2
Effective tax rate		30.5		%	70.6		%		(12.3	)	%	32.7		%

The recently enacted Tax Reform Act allows for a 100% deduction for the potential repatriation of foreign subsidiary earnings with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. Since most of the Company’s cash and cash equivalents held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of such funds to the U.S. would likely have a nominal tax impact.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. During the nine months ended December 31, 2018, the Company closed an income tax audit in Germany which covered fiscal years 2012 through 2015. The audit resulted in an immaterial adjustment to our financial statements. Fiscal years 2016 through 2018 remain open to examination in Germany. The Company also closed an Internal Revenue Service (“IRS”) audit relating to its fiscal year 2016 tax return.  The audit resulted in an immaterial adjustment to our financial statements. All other tax years remain subject to examination by the IRS, state and foreign tax authorities.

Note 11. Commitments and Contingencies

Commitments

Leases

In February 2017, the Company entered into a lease agreement for 21,603 square feet of office space in Danvers, Massachusetts expiring on July 31, 2022. In December 2017, the Company entered into an amendment to this lease to extend the term through August 31, 2025 and to add an additional 6,607 square feet of space for which rent began on June 1, 2018. In March 2018, the Company entered into a second amendment to the lease to add an additional 11,269 square feet of space.  In July 2018, the Company entered into an amendment to lease an additional 23,864 square feet of space from October 1, 2018 through September 30, 2027. With this most recent amendment, the Company has leased 63,343 square feet in total at this location as of October 1, 2018.  The Company also has a right of first offer to purchase the property from January 1, 2018 through August 31, 2035, if the lessor decides to sell the building.  The annual rent expense for this lease is estimated to be $0.9 million.

In September 2016, the Company entered into a lease agreement for an office in Berlin, Germany which commenced in May 2017 and expires in May 2024. The annual rent expense for this lease is estimated to be $0.3 million.

In October 2016, the Company entered into a lease agreement for an office in Tokyo, Japan which expires in September 2021. The office houses administrative, regulatory, and training personnel in connection with the Company’s commercial launch in Japan. The annual rent expense for this lease is estimated to be $0.9 million.

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Contingencies

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements.

Thoratec Matters

Thoratec Corporation, or Thoratec, a subsidiary of Abbott Laboratories, has challenged a number of Company-owned patents in Europe in connection with the launch of its HeartMate PHP medical device, or PHP, in Europe. These actions relate to Thoratec’s ability to manufacture and sell its PHP product in Europe. These actions do not relate to the Company’s ability to manufacture or sell its Impella line of devices.

In December 2014, Thoratec filed a nullity suit in the German Federal Patent Court against a German “pigtail” patent owned by the Company with a flexible extension feature, and auxiliary pigtail, basket and funnel features. The validity hearing was held in November 2016 and the Federal Patent Court found the patent invalid. The Company appealed the decision to the German Supreme Court and, in November 2018, successfully obtained a patent with amended claims covering a pump with the flexible extension and the basket with a funnel.

In August 2015, Thoratec filed a nullity action in the German Federal Patent Court against two Company-owned patents covering a “magnetic clutch” feature. These magnetic clutch patents were acquired by the Company in July 2014, in connection with its acquisition of ECP and AIS. The validity hearing for the magnetic clutch patents was held in June 2017. The Company’s patents were upheld in an amended form to focus on the structure and interaction of the magnets in the clutch. The Federal Patent Court found certain unamended claims to be invalid.  The Company is appealing the decision with respect to the unamended claims.

In September 2015, the Company filed counterclaims in the magnetic clutch action in Germany asserting that the PHP product infringes the two magnetic clutch patents, a European pigtail patent and the German pigtail patent. The infringement trial has been stayed, pending resolution of the German nullity actions.  

In February 2017, Thoratec filed an opposition in the European Patent Office (“EPO”), against a Company-owned patent acquired in connection with the acquisition of ECP and AIS relating to a housing structure for an expandable pump. The Company filed an initial response to the opposition in July 2017. Oral proceedings were held on October 26, 2018, at which time the EPO revoked the patent. A written decision documenting the reasons for the revocation is expected to issue within a few months, after which the Company may file an appeal.  In December 2017, Thoratec filed an opposition in the EPO against a Company-owned patent acquired in connection with the acquisition of ECP and AIS relating to a pump having a shaft cap with an atraumatic ball. The Company responded to the opposition on May 27, 2018. On January 24, 2019 the EPO Opposition Division upheld patent claims related to a pump design with an atraumatic ball. A written decision summarizing that finding is expected later this calendar year.    

Maquet Matters

In December 2015, the Company received a letter from Maquet Cardiovascular LLC, or Maquet, a subsidiary of the Getinge Group, asserting that the Company’s Impella devices infringe certain claims having guidewire, lumen and sensor features, which were in two Maquet patents and one pending patent application in the U.S. and elsewhere, and attached a draft litigation complaint and encouraged the Company to take a license from Maquet.  In January 2016, the Company responded to Maquet stating that it believed that the cited claims were invalid and that its Impella devices did not infringe the cited patents.  In May 2016, Maquet notified the Company that its pending U.S. patent application had been issued as a U.S. patent, repeated their earlier assertion and encouraged the Company to discuss taking a license from Maquet. The three patents expire September 2020, December 2020 and October 2021. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts (“D. Mass.”) against Maquet seeking a declaratory judgment that the Company’s Impella devices do not infringe Maquet’s cited patent rights.  

In August 2016, Maquet sent a letter to the Company identifying four new U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. Of the four U.S. continuation applications, one issued as a patent on January 17, 2017, one issued as a patent on February 7, 2017, one issued as a patent on March 21, 2017, and one issued as a patent on October 17, 2017.  These four issued patents will expire in September 2020.

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In September 2016, Maquet filed a response to the Company’s suit in D. Mass., including various counterclaims alleging that the Company’s Impella 2.5, Impella CP, Impella 5.0, and Impella RP heart pumps infringe certain claims of the three original issued U.S. patents (“2016 action”). On June 15, 2017, Maquet filed a motion for leave to amend its infringement counterclaims to add the first three additional U.S. continuation patents mentioned above and to file various false advertising, unfair competition claims under state law and under the Lanham Act, and a trademark cancellation in the pending case.  Maquet’s amended complaint and counterclaim, like those it originally filed, seek injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. The amended complaint admits that Maquet’s current commercially available products do not embody the claims of the asserted patents. On July 21, 2017, the Court granted the motion in part, allowing the three additional continuation patents to be added to the case, but denying addition of the false advertising claims, Lanham Act claims, and the trademark cancellation claims.  On April 24 and 25, 2018, the Court conducted a Markman hearing on claim interpretation. On September 7, 2018, the judge issued a Memorandum and Order on Claim Construction, where he interpreted the disputed claim terms in the case.  A hearing was held on November 2, 2018 to re-hear arguments on one of the terms.   Discovery remains ongoing.  No schedule has yet been set for the remainder of the case.With regard to the first six Maquet patents mentioned above, in March and April 2017, the Company filed requests for inter partes review, (“IPR”), at the U.S. Patent & Trademark Office’s Patent Trial and Appeals Board (“PTAB”) asserting that the claims are invalid in view of prior art blood pump technology. In September and October 2017, the PTAB denied institution on these IPR requests filed by the Company.  In September 2017, the Company filed additional IPRs and in March and April 2018, the PTAB denied institution of these IPR petitions.

On November 22, 2017, Maquet filed a second lawsuit in D. Mass alleging that the Company’s Impella 2.5, Impella CP, and Impella 5.0 heart pumps infringe certain claims of the fourth additional U.S. continuation patent mentioned above (the seventh patent overall).   In the complaint, Maquet seeks injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement.  In its answer to ABIOMED’s counterclaim, Maquet admits that its current commercially available products do not embody the claims of the asserted patents.  This second action is in its early stages.    

The Company is unable to estimate the potential liability with respect to the legal matters noted above. There are numerous factors that make it difficult to meaningfully estimate possible loss or range of loss at this stage of the legal proceedings, including the significant number of legal and factual issues still to be resolved in the Marquet and Thoratec patent disputes.

Note 12. Segment and Enterprise Wide Disclosures

The Company operates in one business segment—the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. International sales (sales outside the U.S., primarily in Germany and Japan) accounted for 14% and 13% of total revenue for the three and nine months ended December 31, 2018, respectively, and 11% of total revenue in each of the three and nine months ended December 31, 2017, respectively. The Company’s long-lived assets are located in the U.S. except for $41.7 million and $35.5 million at December 31, 2018 and March 31, 2018, respectively, which are located primarily in Germany.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements other than one conveying solely historical facts is a forward-looking statement. These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “will” and other words and terms of similar meaning. These forward-looking statements address various matters including, among others, future actions related to ongoing investigations and litigation and expenditures related thereto; the development and commercialization of new and existing products and anticipated costs, including research and development, sales and marketing and training costs associated with product development and commercialization; the anticipated launch dates of technological improvements in existing products and studies in pipeline products; expected capital expenditures for the fiscal year ending March 31, 2019; commercial plans for our products into new markets such as Japan; expected enrollment in our prospective feasibility study; demand and expected shipments of our products; anticipated shifts in the revenue mix associated with our products; our ability to increase revenue from our Impella® line of products and the sufficiency of revenue to fund future operations; the impact of market factors such as changes in interest rates, currency exchange rates on our securities and the fair value of our financial instruments; awards of performance and market-based restricted stock units; and the impact of ASU 2016-02 on our consolidated financial statements and disclosures. Each forward-looking statement in this Report is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement, including, among others: our inability to predict the outcome of investigations and litigation and associated expenses; possible delays in our research and development programs; our ability to obtain regulatory approvals and market our products, and uncertainties related to regulatory processes; greater government scrutiny and regulation of the medical device industry and our ability to respond to changing laws and regulations affecting our industry, including any reforms to the regulatory approval process administered by the U.S Food and Drug Administration, or FDA, and changing enforcement practices related thereto; the inability to manufacture products in commercial quantities at an acceptable cost; the acceptance by physicians and hospitals of our products; the impact of competitive products and pricing; uncertainties associated with future capital needs and the risks identified under Item 1A of Part I of our Annual Report on Form 10-K, for the year ended March 31, 2018, as well as the other information we file with the Securities and Exchange Commission. Readers are cautioned not to place considerable reliance on any forward-looking statements contained in this Report, which speak only as of the date of this Report. We undertake no obligation to update or revise these forward-looking statements whether as a result of new information, future events or otherwise, unless required by law. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

Overview

We are a leading provider of temporary mechanical circulatory support devices, and we offer a continuum of care to heart failure patients. We develop, manufacture and market proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily assisting the pumping function of the heart. Our products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by cardiac surgeons. A physician may use our devices for patients who are in need of hemodynamic support prophylactically, urgently or emergently before, during or after angioplasty or heart surgery procedures. We believe that heart recovery is the optimal clinical outcome for a patient experiencing heart failure because it enhances the potential for the patient to go home with their own heart, facilitating the restoration of quality of life. In addition, we believe that, for the care of such patients, heart recovery is often the most cost-effective solution for the healthcare system.

Our strategic focus and the driver of our revenue growth is the market penetration of our family of Impella® heart pumps. The Impella device portfolio, which includes the Impella 2.5®, Impella CP®, Impella RP®, Impella LD® and Impella 5.0® devices, has supported numerous patients worldwide. All of our product and service revenue in the near future will be from our Impella devices.

In March 2015, we received a PMA from the FDA for use of the Impella 2.5 device during elective and urgent high-risk percutaneous coronary intervention, or PCI, procedures. In December 2016, the FDA expanded this PMA in the U.S. to include the Impella CP device. With these approved indications, the Impella 2.5 and Impella CP devices provide the only minimally invasive treatment options indicated for use during high-risk PCI procedures in the U.S. In April 2016, the FDA approved a PMA supplement for our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock that occurs following a heart attack or open heart surgery. The intent of our Impella system therapy is to reduce ventricular work and to provide the circulatory support necessary to allow heart recovery and early assessment of residual myocardial function.

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In September 2017, we received a PMA from the FDA for the Impella RP heart pump. The Impella RP heart pump is indicated for providing temporary right ventricular support for up to 14 days in patients with a body surface area ≥1.5 m², who develop acute right heart failure or decompensation following left ventricular assist device implantation, myocardial infarction, heart transplant, or open-heart surgery. With this approval, the Impella RP heart pump is the only percutaneous temporary ventricular support device that is FDA-approved as safe and effective for right heart failure as stated in the indication.

In February 2018, we received two expanded PMAs from the FDA for our Impella heart pumps. The first expanded approval is for use of Impella 2.5, Impella CP, Impella 5.0 and Impella LD heart pumps on patients with cardiogenic shock associated with cardiomyopathy, including peripartum and postpartum cardiomyopathy.  The second expanded PMA is for use of the Impella 2.5 and Impella CP heart pumps during elective and high-risk PCI procedures.  This expanded PMA confirms Impella support as appropriate in patients with severe coronary artery disease, complex anatomy and extensive comorbidities, with or without depressed ejection fraction.  

In April 2018, we received FDA approval for Impella CP SMARTASSIST^TM and Optical Sensor technology which is intended to provide enhanced monitoring capability, reduce setup time and improve ease of use for physicians. The optical sensor technology is also approved under CE Mark in the European Union and other countries that require a CE Mark approval.  We have begun selling Impella CP pumps with this optical sensor technology at certain sites.

In September 2016, we received Pharmaceuticals and Medical Devices Agency, or PMDA, approval from the Japanese Ministry of Health, Labour & Welfare, or MHLW, for our Impella 2.5 and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. In July 2017, we received approval from the MHLW for reimbursement for the Impella 2.5 and 5.0 heart pumps. We continue to focus on our controlled commercial launch of Impella devices in Japan.

Our Impella 2.5, Impella 5.0, Impella LD, Impella CP and Impella RP devices also have CE Mark approval and Health Canada approval, which allows us to market these devices in the European Union and Canada.

In May 2017, we began enrollment in an FDA approved prospective multi-center feasibility study, STEMI Door to Unloading with Impella CP system in acute myocardial infarction. This study focuses on the feasibility and safety of unloading the left ventricle using the Impella CP heart pump prior to primary PCI in patients presenting with ST segment elevation myocardial infarction, or STEMI, without cardiogenic shock with the hypothesis that this will potentially reduce infarct size. The study, which received FDA approval in October 2016, enrolled up to 50 patients at 10 sites. We completed enrollment in the study during the quarter ended June 30, 2018.  In November 2018, we announced the results presented data on this feasibility study. We are working with the FDA to move forward with a pivotal, multi-center, prospective randomized controlled clinical trial comparing unloading with Impella with delayed reperfusion compared to the current standard of care of immediate reperfusion without Impella.  We expect to begin this trial in calendar year 2019.

We expect to continue to make additional PMA supplement submissions for our Impella portfolio of devices for additional indications.

Our Existing Products

Impella 2.5®

The Impella 2.5 device is a percutaneous micro heart pump with an integrated motor and sensors. The device is designed primarily for use by interventional cardiologists to support patients in the cath lab who may require assistance to maintain circulation. The Impella 2.5 heart pump can be quickly inserted via the femoral artery to reach the left ventricle of the heart, where it is directly deployed to draw blood out of the ventricle and deliver it to the circulatory system. This function is intended to reduce ventricular work and provide blood flow to vital organs. The Impella 2.5 heart pump is introduced with normal interventional cardiology procedures and can pump up to 2.5 liters of blood per minute.

In March 2015, we received a PMA from the FDA for the use of the Impella 2.5 device during elective and urgent high-risk PCI procedures. With this PMA, the Impella 2.5 device became the first FDA approved hemodynamic support device for use during high-risk PCI procedures. Under this first PMA, the Impella 2.5 is a temporary (up to six hours) ventricular support device indicated for use during high-risk PCI performed in elective or urgent hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction, when a heart team, including a cardiac surgeon, has determined high-risk PCI is the appropriate therapeutic option. Use of the Impella 2.5 device in these patients may prevent hemodynamic instability that may occur during planned temporary coronary occlusions and may reduce periprocedural and post-procedural adverse events. The product labeling allows for the clinical decision by physicians to leave the Impella 2.5 device in place beyond the intended duration of up to six hours should unforeseen circumstances arise.

In April 2016, the FDA approved a supplement to our March 2015 PMA for the use of our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock. This PMA supplement covers a set of indications related

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to the use of the Impella devices in patients suffering cardiogenic shock following acute myocardial infarction or cardiac surgery and allows for a longer duration of support.

Pursuant to the April 2016 PMA, the Impella 2.5, Impella CP, Impella 5.0 and Impella LD catheters, in conjunction with the Automated Impella Controller, or AIC, were approved as temporary ventricular support devices intended for short term use (≤ 4 days for the Impella 2.5 and Impella CP, and ≤ 6 days for the Impella 5.0 and LD) and indicated for the treatment of ongoing cardiogenic shock that occurs immediately (< 48 hours) following acute myocardial infarction or open heart surgery as a result of isolated left ventricular failure that is not responsive to optimal medical management and conventional treatment measures. The intent of the Impella system therapy is to reduce ventricular work and to provide the circulatory support necessary to allow heart recovery and early assessment of residual myocardial function.  Optimal medical management and convention treatment measures include volume loading and use of pressors and inotropes, with or without an intraortic balloon pump, or IABP.

The Impella 2.5 device has CE Mark approval in the European Union for up to five days of use and is approved for use in up to 40 countries. The Impella 2.5 device also has Health Canada approval which allows us to market the device in Canada.

In September 2016, we received PMDA approval from the Japanese MHLW for our Impella 2.5 and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. In July 2017, we received approval from the MHLW for reimbursement of the Impella 2.5 and 5.0 heart pumps. Reimbursement in Japan for the Impella 2.5 and 5.0 is equivalent to our average Impella sales price in the U.S. We continue to focus on our controlled commercial launch of Impella devices in Japan.

In February 2018, we received two expanded PMAs from the FDA for our Impella heart pumps. The first expanded PMA is for use of Impella 2.5, Impella CP, Impella 5.0 and Impella LD heart pumps on patients with cardiogenic shock associated with cardiomyopathy, including peripartum and postpartum cardiomyopathy.  The second expanded PMA was for use of the Impella 2.5 and Impella CP heart pumps during elective and high-risk PCI procedures.  This expanded PMA confirms Impella support as appropriate in patients with severe coronary artery disease, complex anatomy and extensive comorbidities, with or without depressed ejection fraction.  

Impella CP®

The Impella CP device provides blood flow of approximately one liter more per minute than the Impella 2.5 device and is primarily used by either interventional cardiologists to support patients in the cath lab or by cardiac surgeons in the heart surgery suite.

In April 2016, the FDA approved the PMA supplement for certain of our devices, including our Impella CP device to provide treatment for ongoing cardiogenic shock.

In February 2018, we received two expanded PMAs from the FDA for our Impella heart pumps. The first expanded PMA is for use of Impella 2.5, CP, 5.0 and LD heart pumps on patients with cardiogenic shock associated with cardiomyopathy, including peripartum and postpartum cardiomyopathy.  The second expanded PMA is for use of the Impella 2.5 and Impella CP heart pumps during elective and high-risk PCI procedures.  This expanded PMA confirms Impella support as appropriate in patients with severe coronary artery disease, complex anatomy and extensive comorbidities, with or without depressed ejection fraction.  

These PMAs allow the Impella CP to be used as a temporary (≤ 6 hours) ventricular support system indicated for use during high risk PCI procedures performed in elective or urgent hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction, when a heart team, including a cardiac surgeon, has determined that high-risk PCI is the appropriate therapeutic option. The product labeling allows for the clinical decision by physicians to leave the Impella CP device in place beyond the intended duration of up to six hours should unforeseen circumstances arise.

The Impella CP device has CE Mark approval in the European Union and other countries that require a CE Mark approval for up to five days of use.

In April 2018, we received FDA approval for Impella CP SMARTASSIST^TM and Optical Sensor technology which is intended to provide enhanced monitoring capability, reduce setup time and improve ease of use for physicians.  We have begun selling Impella CP pumps with this optical sensor technology at certain sites. The optical sensor technology is also approved under CE Mark in the European Union and other countries that require a CE Mark approval.

In May 2017, we began enrollment in an FDA approved prospective multi-center feasibility study, STEMI Door to Unloading with Impella CP system in acute myocardial infarction. The trial focuses on the feasibility and safety of unloading the left ventricle using the Impella CP heart pump prior to primary PCI in patients presenting with ST segment elevation myocardial infarction, or STEMI, without cardiogenic shock with the hypothesis that this will potentially reduce infarct size. The study, which received FDA investigational device approval to proceed in October 2016, enrolled up to 50 patients at 10 sites. We completed enrollment in the study during the quarter ended June 30, 2018.

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The primary endpoints of the feasibility study will focuses on safety, including major adverse cardiovascular and cerebrovascular events, or MACCE, at 30 days. All patients will undergo cardiac magnetic resonance imaging to assess infarct size as a percent of left ventricular mass at 30 days post-PCI. Patients are randomized to Impella CP placement with immediate primary PCI, or to Impella CP placement with 30 minutes of unloading prior to primary PCI. The hypothesis of this novel approach to treating STEMI patients, based on extensive mechanistic research, is that unloading the left ventricle prior to PCI reduces myocardial work load, oxygen demand and also initiates a cardio-protective effect at the myocardial cell level, which may alleviate myocardial damage caused by reperfusion injury at the time of revascularization. The intent of this study is to help refine the protocol and lay the groundwork for a future pivotal study with more sites and patients and will be designed for statistical significance.

In November 2018, we announced the results presented data on this feasibility study. We are working with the FDA to move forward with a pivotal, multi-center, prospective randomized controlled clinical trial comparing unloading with Impella with delayed reperfusion compared to the current standard of care of immediate reperfusion without Impella.  We expect to begin this trial in calendar year 2019.

Impella 5.0® and Impella LD®

The Impella 5.0 and Impella LD devices are percutaneous micro heart pumps with integrated motors and sensors for use primarily in the heart surgery suite. These devices are designed to support patients who require higher levels of circulatory support as compared to the Impella 2.5.

The Impella 5.0 device can be inserted into the left ventricle via femoral cut down or through the axillary artery. The Impella 5.0 device is passed into the ascending aorta, across the valve and into the left ventricle. The Impella LD device is similar to the Impella 5.0 device, but it is implanted directly into the ascending aorta through an aortic graft.  Both of these procedures are normally performed by cardiac surgeons in the surgery suite. The Impella 5.0 and Impella LD devices can pump up to five liters of blood per minute, potentially providing full circulatory support.

In April 2016, the FDA approved the PMA supplement for certain of our devices, including the Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock following a heart attack or open heart surgery. In February 2018, we received an expanded PMA from the FDA for use of Impella 2.5, Impella CP, Impella 5.0, and Impella LD heart pumps to provide treatment for heart failure associated with cardiomyopathy leading to cardiogenic shock.  This approval expands the previous indication for acute myocardial infarction, or AMI, cardiogenic shock and post-cardiotomy shock, or PCCS, received in April 2016.  

The Impella 5.0 and Impella LD devices have CE Mark approval in the European Union for up to ten days’ duration and are approved for use in over 40 countries.

In July 2017, we received approval from the Japanese MHLW for reimbursement for the Impella 2.5 and 5.0 heart pumps. We continue to focus on our controlled commercial launch of Impella devices in Japan.

Impella RP®

The Impella RP is a percutaneous catheter-based axial flow pump that is designed to allow greater than four liters of blood flow per minute and is intended to provide the flow and pressure needed to compensate for right side heart failure. The Impella RP is the first percutaneous single access heart pump designed for right heart support to receive FDA approval. The Impella RP device is approved to provide support of the right heart during times of acute failure for certain patients who have received a left ventricle assist device or have suffered heart failure due to AMI, a failed heart transplant, or following open heart surgery.

In September 2017, we received a PMA from the FDA for the Impella RP heart pump. This latest approval follows the prior FDA HDE received in January 2015 and adds the Impella RP heart pump to our platform of devices with PMAs. The Impella RP heart pump is indicated for providing temporary right ventricular support for up to 14 days in patients with a body surface area ≥1.5 m² who develop acute right heart failure or decompensation following left ventricular assist device implantation, myocardial infarction, heart transplant, or open-heart surgery. With this approval, the Impella RP heart pump is the only percutaneous temporary ventricular support device that is FDA-approved as safe and effective for right heart failure as stated in the indication.

The Impella RP device has CE Mark approval for commercial sale in the European Union and other countries that require a CE Mark approval from commercial sales.

Our Product Pipeline

Impella 5.5™

The Impella 5.5 device is designed to be a percutaneous micro heart pump with integrated motors and sensors. The Impella 5.5 device is designed to be smaller, provide months of hemodynamic support and is expected to allow for greater than five liters of blood flow per minute.

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In April 2018, we announced that we received CE mark approval in the European Union for the Impella 5.5 heart pump and the first patient was treated at University Heart Center in Hamburg, Germany. The Impella 5.5 pump has not been approved for commercial use or sale in the U.S. We anticipate regulatory approval of the Impella 5.5 in the U.S. in calendar 2019.

Impella ECP™

The Impella ECP pump is designed for blood flow of greater than three liters per minute. It is intended to be delivered on a standard sized catheter and will include an expandable inflow in the left ventricle. We expect to conduct a first-in-human trial outside of the U.S. in calendar 2019. The Impella ECP pump is still in development and has not been approved for commercial use or sale.

Impella BTR™

The Impella BTR device is designed to be a percutaneous micro heart pump with integrated motors and sensors. The Impella BTR device is designed to be smaller, provide up to one year of hemodynamic support and is expected to allow for greater than five liters of blood flow per minute.  The Impella BTR device also includes a wearable driver designed for hospital discharge.  The Impella BTR pump is still in development and has not been approved for commercial use or sale. 

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies during the three and nine months ended December 31, 2018, as compared to the critical accounting policies disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is included in “Note 2. Basis of Preparation and Summary of Significant Accounting Policies” to our consolidated financial statements and is incorporated herein by reference.

Results of Operations

The following table sets forth certain consolidated statements of operations data for the periods indicated as a percentage of total revenue:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2018			2017			2018				2017
Revenue		100.0	%		100.0	%		100.0		%		100.0	%
Costs and expenses as a % of total revenue:
Cost of revenue		17.0			16.2			16.8				16.3
Research and development		11.9			11.5			12.1				12.9
Selling, general and administrative		40.0			43.2			42.8				44.7
Total costs and expenses		68.9			70.9			71.7				73.9
Income from operations		31.1			29.1			28.3				26.1
Income tax provision (benefit) and other, net		8.7			20.4			(4.6	)			8.1
Net income as a % of total revenue		22.4	%		8.7	%		32.9		%		18.0	%

Three and Nine Months Ended December 31, 2018 compared with the Three and Nine Months Ended December 31, 2017

Revenue

Our revenues are comprised of the following:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Impella product revenue	$	193,253	$	147,989	$	542,198	$	402,583
Service and other revenue		7,310		6,033		20,153		16,730
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

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Our revenues are disaggregated by the following geographical locations:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
U.S. revenue	$	172,548	$	136,363	$	488,386	$	374,697
International revenue		28,015		17,659		73,965		44,616
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

Impella product revenue encompasses Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC console sales. Service and other revenue represents revenue earned on service maintenance contracts and preventative maintenance calls.

Total revenue for the three months ended December 31, 2018 increased by $46.6 million, or 30%, to $200.6 million from $154.0 million for the three months ended December 31, 2017. Total revenue for the nine months ended December 31, 2018 increased $143.1 million, or 34%, to $562.4 million from $419.3 million for the nine months ended December 31, 2017. The increase in total revenue was primarily due to higher Impella product revenue from increased utilization in the U.S and Europe and our continued controlled commercial launch of Impella 2.5 and Impella 5.0 in Japan.

Impella product revenue for the three months ended December 31, 2018 increased by $45.3 million, or 31%, to $193.3 million from $148.0 million for the three months ended December 31, 2017. Impella product revenue for the nine months ended December 31, 2018 increased $139.6 million, or 35%, to $542.2 million from $402.6 million for the nine months ended December 31, 2017. Most of the increase in Impella product revenue was from increased device sales in the U.S., as we focus on increasing utilization of our disposable catheter products through continued investment in our field organization and physician training programs. Impella product revenue outside of the U.S. also increased primarily due to increased utilization in Germany and our continued controlled launch of Impella 2.5 and Impella 5.0 in Japan.

Service and other revenue for the three months ended December 31, 2018 increased by $1.3 million, or 22%, to $7.3 million from $6.0 million for the three months ended December 31, 2017. Service and other revenue for the nine months ended December 31, 2018 increased $3.5 million, or 21%, to $20.2 million from $16.7 million for the nine months ended December 31, 2017. The increase in service and other revenue was primarily due to an increase in preventative maintenance service contracts. We have expanded the number of Impella AIC consoles at many of our existing higher volume customer sites and continue to sell additional consoles to new customer sites. We expect growth for service and other revenue to be slower than our Impella product revenue in the future as most of these using sites in the U.S. have service contracts with three year terms.

Costs and Expenses

Cost of Revenue

Cost of revenue for the three months ended December 31, 2018 increased by $9.0 million, or 36%, to $34.0 million from $25.0 million for the three months ended December 31, 2017. Gross margin was 83.0% for the three months ended December 31, 2018 and 83.8% for the three months ended December 31, 2017.

Cost of revenue for the nine months ended December 31, 2018 increased by $26.2 million, or 38%, to $94.7 million from $68.5 million for the nine months ended December 31, 2017.  Gross margin was 83.2% for the nine months ended December 31, 2018 and 83.7% for the nine months ended December 31, 2017.

The increase in cost of product revenue was related to higher demand for our Impella devices and higher production volume and costs to support growing demand for our Impella devices. The decrease in gross margin for the three and nine months ended December 31, 2018 was due to higher volume offset by increased investment in direct labor and overhead as we expand our manufacturing capacity to support expected growth in our Impella business.

Research and Development Expenses

Research and development expenses for the three months ended December 31, 2018 increased by $6.3 million, or 36%, to $24.0 million from $17.7 million for three months ended December 31, 2017. Research and development expense for the nine months ended December 31, 2018 increased $14.0 million, or 26%, to $68.0 million from $54.0 million for the nine months ended December 31, 2017. The increase in research and development expenses was primarily due to product development initiatives relating to our existing products, such as optical sensor technology, on the development of Impella 5.5^TM, Impella BTR^TM and Impella ECP^TM devices, the expansion of our engineering organization, increased clinical spending primarily related to our cVAD registry and STEMI trial and our continued focus on quality initiatives for our Impella devices.

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We expect research and development expenses to increase for the remainder of fiscal 2019 as we continue to increase clinical spending related to our cVAD Registry, launch the pivotal STEMI trial and other clinical trials.  We also expect to incur additional costs as we continue to focus on engineering initiatives to improve our existing products and develop new technologies.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended December 31, 2018 increased by $13.6 million, or 20%, to $80.2 million from $66.6 million for the three months ended December 31, 2017. Selling, general, and administrative expenses for the nine months ended December 31, 2018 increased $53.1 million, or 28%, to $240.3 million from $187.2 million for the nine months ended December 31, 2017. The increase in selling, general and administrative expenses was primarily due to the hiring of additional field sales and clinical personnel in the U.S. and Germany, our continued commercial launch in Japan, increased spending on marketing initiatives as we continue to educate U.S. physicians on the benefits to patients of hemodynamic support with our Impella products following PMAs, stock-based compensation expense, higher payroll taxes associated with stock option exercises and restricted stock unit vestings and legal expenses related to ongoing patent litigation and other legal matters discussed in “Note 11. Commitments and Contingencies—Litigation” to our consolidated financial statements.

We expect to continue to increase our expenditures on sales and marketing activities, with particular investments in field sales and clinical personnel with cath lab expertise to drive recovery awareness for acute heart failure patients. We also plan to increase our marketing, service and training investments as a result of recent PMAs in the U.S. for our Impella devices and as we continue our expansion in Japan and other new markets outside of the U.S. We expect to have higher stock-based compensation expense due to the grant of recent equity awards at a higher stock price. We also expect to continue to incur significant legal expenses for the foreseeable future related to ongoing patent litigation and other legal matters discussed in “Note 11. Commitment and Contingencies – Litigation,” to our consolidated financial statements.  

Income Tax Provision

Our income tax provision was $19.6 million for the three months ended December 31, 2018 and our income tax benefit was $20.2 million for the nine months ended December 31, 2018.  Our income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively. Our effective tax rate was 30.5% and (12.3)% for the three and nine months ended December 31, 2018, respectively, and 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively. The decrease in the effective income tax rate for the three months ended December 31, 2018 was due primarily to the writeoff of $22.0 million in deferred tax assets with lower U.S. income tax rate with the enactment of the Tax Reform Act in December 2017.  The decrease in the effective income tax rate for the nine months ended December 31, 2018 was primarily due to excess tax benefits recognized associated with stock-based awards of $68.5 million during the nine months ended December 31, 2018 compared with $24.5 million for the nine months ended December 31, 2017.  In addition, effective January 1, 2018, the Tax Reform Act, among other changes, reduced the U.S. federal statutory corporate income tax rate from 35% to 21%.

Net Income

For the three months ended December 31, 2018, net income was $44.9 million, or $1.00 per basic share and $0.97 per diluted share, compared to $13.4 million, or $0.30 per basic share and $0.29 per diluted share for three months ended December 31, 2017. For the nine months ended December 31, 2018, net income was $185.1 million, or $4.13 per basic share and $4.01 per diluted share, compared to $75.3 million, or $1.71 per basic share and $1.65 per diluted share for the nine months ended December 31, 2017. As discussed above, the enactment of the Tax Reform Act resulted in a decrease in net income of $22.0 million, or $0.50 per basic and $0.48 per diluted share for the three and nine months ended December 31, 2017.  Our net income included excess tax benefits of $0.04 per basic and diluted share for the three months ended December 31, 2018 compared to $0.07 per basic and diluted share for the three months ended December 31, 2017.  Our net income included excess tax benefits of $1.53 per basic share and $1.48 per diluted share for the nine months ended December 31, 2018 compared to $0.56 per basic share and $0.54 per diluted share for the nine months ended December 31, 2017.

Our net income for fiscal 2019 was also driven by higher product revenue due to greater utilization of our Impella devices in the U.S., Germany and Japan.

Liquidity and Capital Resources

At December 31, 2018, our total cash, cash equivalents and marketable securities totaled $458.2 million, an increase of $58.4 million compared to $399.8 million at March 31, 2018. The increase in our cash, cash equivalents and marketable securities during the nine months ended December 31, 2018 was primarily due to positive cash flows from operations.

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Following is a summary of our cash flow activities:

	For the Nine Months Ended December 31,
	2018			2017
Net cash provided by operating activities	$	181,806		$	136,147
Net cash used for investing activities		(80,701	)		(112,307	)
Net cash used for financing activities		(58,794	)		(11,688	)
Effect of exchange rate changes on cash		(1,105	)		(690	)
Net increase in cash and cash equivalents	$	41,206		$	11,462

Cash Provided by Operating Activities

For the nine months ended December 31, 2018, cash provided by operating activities consisted of net income of $185.1 million, adjustments for non-cash items of $29.8 million and cash used in working capital of $33.1 million. The increase in net income was primarily due to higher revenue from increased utilization of our Impella devices. Adjustments for non-cash items consisted primarily of $43.8 million of stock-based compensation expense, a $26.0 million change in deferred tax provision, $9.9 million of depreciation and amortization expense, $3.2 million in inventory and other write-downs, and $1.6 million in accretion on marketable securities. Cash used in working capital consisted of a $19.3 million increase in accounts receivable due to increased sales and a $26.5 million increase in inventory to support growing demand for our Impella devices, offset by an $11.8 million increase in accounts payable and accrued expenses primarily due to increased expenditures.

For the nine months ended December 31, 2017, cash provided by operating activities consisted of net income of $75.3 million, adjustments for non-cash items of $76.5 million and cash used in working capital of $15.7 million. The increase in net income was primarily due to higher revenue from increased utilization of our Impella devices. Adjustments for non-cash items consisted primarily of $29.2 million of stock-based compensation expense, a $34.7 million change in deferred tax provision due to the revaluation of our net deferred tax assets related to the Tax Reform Act, $8.1 million of depreciation expense on property and equipment and $3.2 million in inventory and other asset write-downs. The change in cash from working capital included a $10.3 million increase in accounts receivable associated with higher revenue, $12.0 million increase in inventory to support growing demand for our Impella devices, a $6.5 million increase in accounts payable and accrued expenses and a $1.2 million increase in deferred revenue.

Cash Used for Investing Activities

For the nine months ended December 31, 2018, net cash used for investing activities primarily consisted of $14.8 million in purchases (net of maturities) of marketable securities and $35.5 million for the purchase of property and equipment primarily related to continued expansion of manufacturing capacity, office space and research and development facilities in Danvers, Massachusetts and Aachen, Germany. We also made $30.4 million of investments in other assets and intangible assets.

For the nine months ended December 31, 2017, net cash used for investing activities primarily consisted of $61.7 million in purchases (net of maturities) of marketable securities and $44.2 million for the purchase of property and equipment primarily related to the purchase of our corporate headquarters building in Danvers, Massachusetts during the three months ended December 31, 2017 and the continued expansion of manufacturing capacity, office space and research and development facilities in Danvers and Aachen, Germany.  We also have made $6.4 million of investments in private medical technology companies during fiscal 2018.

Capital expenditures for fiscal 2019 are estimated to range from $45 million to $50 million, including additional capital expenditures for manufacturing capacity expansions in our Danvers, Massachusetts and Aachen, Germany facilities, additional office space, building and leasehold improvements and information systems development projects.  

Cash Used for Financing Activities

For the nine months ended December 31, 2018, net cash used for financing activities included $71.2 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards. This amount was offset by $11.0 million in proceeds from the exercise of stock options and $1.4 million in proceeds from the issuance of stock under the employee stock purchase plan.  

For the nine months ended December 31, 2017, net cash used for financing activities included $19.9 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and $0.5 million in principal payments on capital lease obligation. The capital lease obligation previously recorded was removed as a result of the acquisition of our headquarters in October 2017. These amounts were offset by $7.6 million in proceeds from the exercise of stock options and $1.1 million in proceeds from the issuance of stock under the employee stock purchase plan.  

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Operating Capital and Liquidity Requirements

We believe that our revenue from product sales together with existing resources will be sufficient to fund our operations for at least the next twelve months, exclusive of activities involving any future acquisitions of products or companies that complement or augment our existing line of products.

Our primary liquidity requirements are to fund the expansion of our commercial and operational infrastructure, increase our manufacturing capacity, increase our inventory levels in order to meet growing customer demand for our Impella devices, fund new product development initiatives, continue our controlled commercial launch of Impella devices in Japan and expand to potential new markets, increase clinical spending, legal expenses related to ongoing patent litigation, payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and to provide for general working capital needs. To date, we have primarily funded our operations through product sales and the sale of equity securities.

Our liquidity is influenced by our ability to sell our products in a competitive industry and our customers’ ability to pay for our products. Factors that may affect liquidity include our ability to penetrate the market for our products, maintain or reduce the length of the selling cycle for our products, capital expenditures, investments in collaborative arrangements with other partners, and our ability to collect cash from customers after our products are sold. We also expect to continue to incur legal expenses for the foreseeable future related to ongoing patent litigation and other legal matters. We continue to review our short-term and long-term cash needs on a regular basis. At December 31, 2018 we had no long-term debt outstanding.

Marketable securities at December 31, 2018 and March 31, 2018 consisted of $374.0 million and $356.8 million, respectively, held in investment funds that invest in U.S. Treasury, government-backed and corporate debt securities, and commercial paper. We are not a party to any interest rate swaps, currency hedges or derivative contracts of any type and have no exposure to auction rate securities markets.

Cash and cash equivalents held by our foreign subsidiaries totaled $22.6 million and $13.3 million at December 31, 2018 and March 31, 2018, respectively. Our operating income outside the U.S. is deemed to be permanently reinvested in foreign jurisdictions. Since most of our cash and cash equivalents held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of foreign subsidiary earnings to the U.S. would likely have a nominal tax impact.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Primary Market Risk Exposures

Our cash, cash equivalents and marketable securities are subject to interest rate risk and will fall in value if market interest rates increase. If market interest rates were to increase immediately and uniformly by 10% from levels at December 31, 2018, we believe the decline in fair market value of our investment portfolio would be immaterial.

Currency Exchange Rates

We have foreign currency exposure to exchange rate fluctuations and particularly with respect to the Euro, British pound sterling, Japanese yen and Singapore dollar. Therefore, our investment in our subsidiaries is sensitive to fluctuations in currency exchange rates. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive (loss) income component of stockholders’ equity. If rates of exchange for these currencies noted above were to have depreciated by 10% relative to the U.S. dollar from levels at December 31, 2018, the result would have been a reduction of stockholders’ equity of approximately $11.8 million.

Fair Value of Financial Instruments

At December 31, 2018, our financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these instruments. The estimated fair values of the financial instruments have been determined by us using available market information and appropriate valuation techniques. Considerable judgment is required, however, to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of December 31, 2018. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2018, these disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by us, including our consolidated subsidiaries, in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Changes in Internal Control over Financial Reporting

During the third quarter of our fiscal year ending March 31, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time involved in various legal actions, the outcomes of which are not within our complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures and could impair our business and results of operations. Material legal proceedings are discussed in “Note 11. Commitments and Contingencies—Contingencies” to our consolidated financial statements and such information is incorporated herein by reference.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2018, which could materially affect our business, financial condition or future results. As of the date of this Report there has been no material change in any of the risk factors described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Effective February 5, 2019, the Company’s Board of Directors adopted Amendment No. 1 to the Company’s Amended and Restated By-Laws. The sole purpose of Amendment No. 1 is to update Section 1.1 of the By-Laws to provide the Board of Directors flexibility to fix the date of the Company’s annual meeting of stockholders, which the By-Laws previously fixed as the second Wednesday of August in each year.  The full text of Section 1.1, as amended, reads as follows:

Annual Meeting.  An annual meeting of the stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting shall be held at the place, if any, within or without the State of Delaware, on the date and at the time that the board of directors shall each year fix.  Unless stated otherwise in the notice of the annual meeting of the stockholders of the corporation, such annual meeting shall be at the principal office of the corporation.

A copy of Amendment No. 1 is filed with Exhibit 3.2 to this Report and is incorporated into this Item 5 by reference.

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Item 6. Exhibits

Exhibit No.	Description	Filed with This Form 10-Q	Incorporated by Reference
			Form	Filing Date	Exhibit No.
2.1	Agreement on the Sale and Transfer of all shares in ECP Entwicklungsgellschaft mbH		8-K	July 7, 2014 (File No. 001-09585)	2.1
2.2	Agreement on the Sale and Transfer of all shares in AIS GmbH Aachen Innovation Solutions		8-K	July 7, 2014 (File No. 001-09585)	2.2
3.1	Restated Certificate of Incorporation.		S-3	September 29, 1997	3.1
3.2	Amended and Restated By-Laws, as amended.	X
3.3	Certificate of Designations of Series A Junior Participating Preferred Stock.		S-3	September 29, 1997	3.3
3.4	Amendment to the Company’s Restated Certificate of Incorporation to increase the authorized shares of common stock from 25,000,000 to 100,000,000.		8-K	March 21, 2007 (File No. 001-09585)	3.4
10.1	Lease agreement amendment for additional space in Danvers, Massachusetts dated July 23, 2018		10-Q	August 2, 2018 (File No. 001-09585)	10.1
31.1	Principal Financial Officer Certification pursuant to Securities Exchange Act Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
31.2	Principal Financial Officer Certification pursuant to Securities Exchange Act Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
32.1	Principal Executive Officer and Principal Financial Officer Certifications pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
101	The following financial information from the ABIOMED, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of December 31, 2018 and March 31, 2018; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2018 and 2017; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2018 and 2017; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2018 and 2017; and (v) Notes to Condensed Consolidated Financial Statements.	X

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ABIOMED, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	ABIOMED, Inc.
Date: February 5, 2019	/s/    TODD A. TRAPP
	Todd A. Trapp
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-3.2

Exhibit 3.2

AMENDMENT NO. 1 TO THE

AMENDED AND RESTATED BY-LAWS

OF

ABIOMED, INC.

This Amendment No. 1 to the Amended and Restated By-Laws of ABIOMED, Inc. (the “By-Laws”) hereby amends and restates ARTICLE I, Section 1.1. of the By-Laws in its entirety as follows, effective as of February 5, 2019:

“1.1 Annual Meeting.  An annual meeting of the stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting shall be held at the place, if any, within or without the State of Delaware, on the date and at the time that the board of directors shall each year fix.  Unless stated otherwise in the notice of the annual meeting of the stockholders of the corporation, such annual meeting shall be at the principal office of the corporation.”

The By-Laws, as amended hereby, shall continue in full force and effect, in accordance with their terms.

Approved by the Board of Directors of ABIOMED, Inc. on February 5, 2019.

 

Amended And Restated By-Laws

Of ABIOMED, Inc.

A Delaware Corporation

 

TABLE OF CONTENTS

ARTICLEI.STOCKHOLDERS1

SECTION 1.1.ANNUALMEETING1

SECTION 1.2.SPECIALMEETINGS1

SECTION 1.3. NOTICEOFMEETING1

SECTION1.4.QUORUM2

SECTION 1.5. VOTINGANDPROXIES2

SECTION 1.6. ACTIONATMEETING2

SECTION 1.7. ACTIONWITHOUTMEETING2

SECTION 1.8. VOTING OF SHARES OFCERTAINHOLDERS2

SECTION 1.9.STOCKHOLDERLISTS3

ARTICLE II. BOARDOFDIRECTORS3

SECTION 2.1.POWERS3

SECTION 2.2. NUMBER OF DIRECTORS:QUALIFICATIONS3

SECTION 2.5.VACANCIES4

SECTION 2.6. ENLARGEMENT OFTHEBOARD4

SECTION 2.7.RESIGNATION4

SECTION2.8.REMOVAL5

SECTION 2.9.MEETINGS5

SECTION 2.10. NOTICEOFMEETING5

SECTION 2.11.AGENDA5

SECTION2.12.QUORUM5

SECTION 2.13. ACTIONATMEETING5

SECTION 2.14. ACTIONWITHOUTMEETING5

SECTION 2.15.COMMITTEES6

ARTICLEIII.OFFICERS6

SECTION3.1.ENUMERATION6

SECTION 3.2.ELECTION6

SECTION3.3.QUALIFICATION6

SECTION 3.4.TENURE6

SECTION3.5.REMOVAL6

SECTION 3.6.RESIGNATION6

SECTION 3.7.VACANCIES7

SECTION 3.8. CHAIRMAN OFTHEBOARD7

SECTION 3.9. CHIEFEXECUTIVEOFFICER7

SECTION 3.10.PRESIDENT7

SECTION 3.11. EXECUTIVEVICE-PRESIDENT;VICE-PRESIDENT(S)7

SECTION 3.12. TREASURER ANDASSISTANTTREASURERS7

SECTION 3.13. SECRETARY ANDASSISTANTSECRETARIES7

SECTION 3.14. OTHER POWERSANDDUTIES8

ARTICLE IV.CAPITAL STOCK8

SECTION 4.1.STOCKCERTIFICATES8

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SECTION 4.2. TRANSFEROFSHARES8

SECTION 4.3.RECORDHOLDERS9

SECTION 4.4.RECORDDATE9

SECTION 4.5. TRANSFER AGENT AND REGISTRAR FOR SHARESOFCORPORATION9

SECTION 4.6. LOSSOFCERTIFICATES10

SECTION 4.7. RESTRICTIONSONTRANSFER10

SECTION 4.8. MULTIPLE CLASSESOFSTOCK10

ARTICLEV.DIVIDENDS10

SECTION 5.1. DECLARATIONOFDIVIDENDS10

SECTION 5.2.RESERVES10

ARTICLE VI. POWERS OF OFFICERS TO CONTRACT WITH THECORPORATION

.................................................................................................................................................    11

ARTICLEVII.INDEMNIFICATION11

SECTION 7.1.DEFINITIONS11

SECTION 7.3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE

CORPORATION13

SECTION 7.6. INDEMNIFICATION FOR EXPENSES OFAWITNESS14

SECTION 7.7. ADVANCEMENTOFEXPENSES14

SECTION 7.8. NOTIFICATION AND DEFENSEOFCLAIM14

SECTION 7.9. METHODOFDETERMINATION15

SECTION 7.11.NON-EXCLUSIVITY16

SECTION7.12.INSURANCE16

SECTION 7.13. NODUPLICATIVEPAYMENT16

SECTION 7.14.SEVERABILITY16

ARTICLE VIII.MISCELLANEOUSPROVISIONS17

SECTION 8.1. CERTIFICATEOFINCORPORATION17

SECTION 8.2.FISCALYEAR17

SECTION 8.3.CORPORATESEAL17

SECTION 8.4. EXECUTIONOFINSTRUMENTS17

SECTION 8.5. VOTINGOFSECURITIES17

SECTION 8.6. EVIDENCEOFAUTHORITY17

SECTION 8.7.CORPORATERECORDS17

SECTION 8.8.CHARITABLECONTRIBUTIONS18

ARTICLEIX.AMENDMENTS18

SECTION 9.1. AMENDMENTBYSTOCKHOLDERS18

SECTION 9.2. AMENDMENT BY BOARDOFDIRECTORS18

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By-Laws Of

ABIOMED, Inc.

(A Delaware Corporation)

ARTICLE I.

Stockholders

Section 1.1. Annual Meeting.  The annual meeting of the stockholders of the corporation shall be held on the second Wednesday of August in each year, at such time and place within or without the State of Delaware as may be designated in the notice of meeting. If the day fixed for the annual meeting shall fall on a legal holiday, the meeting shall be held on the next succeeding day not a legal holiday. If the annual meeting is omitted on the day herein provided, a special meeting may be held in place thereof, and any business transacted at such special meeting in lieu of annual meeting shall have the same effect as if transacted or held at the annualmeeting.

Section 1.2. Special Meetings. Special meetings of the stockholders may be called at any time by the chairman of the board of directors, the president or by the board of directors. Special meetings of the stockholders shall be held at such time, date and place within or outside of the State of Delaware as may be designated in the notice of such meeting.

Section 1.3. Notice of Meeting. A written notice stating the place, date, and hour of each meeting of the stockholders, and, in the case of a special meeting, the purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting, and to each stockholder who, under the Certificate of Incorporation or these By-laws, is entitled to such notice, by delivering such notice to such person or leaving it at their residence or usual place of business, or by mailing it, postage prepaid, and addressed to such stockholder at his address as it appears upon the books of the corporation, at least ten (10) days and not more than sixty (60) before the meeting. Such notice shall be given by the secretary, an assistant secretary, or any other officer or person designated either by the secretary or by the person or persons calling the meeting.

The requirement of notice to any stockholder may be waived by a written waiver of notice, executed before or after the meeting by the stockholder or his attorney thereunto duly authorized, and filed with the records of the meeting, or if communication with such stockholder is unlawful, or by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice. A waiver of notice of any regular or special meeting of the stockholders need not specify the purposes of the meeting.

If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place are announced at the meeting at which the adjournment is taken, except that if the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 1.4. Quorum. The holders of a majority in interest of all stock issued, outstanding and entitled to vote at a meeting shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present.

Section 1.5. Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the books of the corporation, unless otherwise provided by law or by the Certificate of Incorporation. Stockholders may vote either in person or by written proxy, but no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies shall be filed with the secretary of the meeting, or of any adjournment thereof. Except as otherwise limited therein, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting. A proxy purporting to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall rest on the challenger. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one ofthem.

Section 1.6. Action at Meeting. When a quorum is present at any meeting, a plurality of the votes properly cast for election to any office shall elect to such office, and a majority of the votes properly cast upon any question other than election to an office shall decide such question, except where a larger vote is required by law, the Certificate of Incorporation or these by- laws. No ballot shall be required for any election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election.

Section 1.7. Action Without Meeting. No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken by stockholders without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.

Section 1.8. Voting of Shares of Certain Holders. Shares of stock of the corporation standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such corporation may determine.

Shares of stock of the corporation standing in the name of a deceased person, a minor ward or an incompetent person, may be voted by his administrator, executor, court-appointed guardian or conservator without a transfer of such shares into the name of such administrator, executor, court appointed guardian or conservator. Shares of capital stock of the corporation standing in the name of a trustee may be voted by him.

Shares of stock of the corporation standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed.

A stockholder whose shares are pledged shall be entitled to vote such shares until the

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shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.

Shares of its own stock belonging to this corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by the corporation in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares.

Section 1.9. Stockholder Lists.  The secretary (or the corporation's transfer agent or other person authorized by these By-laws or by law) shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who ispresent.

ARTICLE II.

Board of Directors

Section 2.1. Powers. Except as reserved to the stockholders by law, by the Certificate of Incorporation or by these By-laws, the business of the corporation shall be managed under the direction of the board of directors, who shall have and may exercise all of the powers of the corporation. In particular, and without limiting the foregoing, the board of directors shall have the power to issue or reserve for issuance from time to time the whole or any part of the capital stock of the corporation which may be authorized from time to time to such person, for such consideration and upon such terms and conditions as they shall determine, including the granting of options, warrants or conversion or other rights to stock.

Section 2.2. Number of Directors: Qualifications. The board of directors shall consist of such number of directors, not less than 3 nor more than 12, as shall be fixed initially by the incorporator(s) and thereafter by the board of directors. No director need be a stockholder.

Section 2.3. Nomination of Directors.

(a) Nominations for the election of directors may be made by the board of directors or by any stockholder entitled to vote for the election of directors. Nominations by stockholders shall be made by notice in writing, delivered or mailed by first class United States mail, postage prepaid, to the secretary of the corporation not less than 45 days nor more than 60 days prior to any meeting of the stockholders called for the election ofdirectors.

(b) Each notice under subsection (a) shall set forth (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, and (iii) the number of sharesof

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stock of the corporation which are beneficially owned by each such nominee.

(c) The chairman of the meeting of stockholders may, if the facts warrant,determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall bedisregarded.

Section 2.4. Election and Term of Office.

(a) Commencing at the annual meeting of the stockholders in 1995, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one third of the number of directors constituting the entire Board of Directors. At the annual meeting of the stockholders held in 1995, Class I directors shall be elected for a one year term, Class II directors shall be elected for a two year term, and Class III directors shall be elected for a three year term, and in each case until their successors are duly elected and qualified. Commencing in 1996, at each annual meeting of the stockholders, successors to the class of directors whose terms expire at that annual meeting of stockholders shall be elected by stockholders for a three year term and until their successors are duly elected and qualified. If the number of directors constituting the entire Board of Directors shall be changed, the increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal aspossible.

(b) Any director elected to fill a vacancy resulting from an increase in any class or from the removal from office, death, disability, resignation or disqualification of a director or other cause shall hold office for the remaining term ofthe class to which such director is elected. No decrease in the size of the Board of Directors shall have the effect of removing or shortening the term of any incumbentdirector.

(c) Whenever the holders of any series of Preferred Stock issued pursuant to the provisions of the Certificate of Incorporation of the Corporation shall have the right, voting as a separate class, to elect directors, the election, term of office, filling of vacancies and other terms of such directorships shall be governed by the terms of the Certificate of Incorporation applicable to such series, as the case may be, and such directorships shall not be divided into classes unless expressly so providedtherein.

Section 2.5. Vacancies. Any vacancy in the board of directors, however occurring, including a vacancy resulting from the enlargement of the board of directors, may be filled in the manner provided in the Certificate of Incorporation of thecorporation.

Section 2.6. Enlargement of the Board. The board of directors may be enlarged in the manner provided in the Certificate of Incorporation of thecorporation.

Section 2.7. Resignation. Any director may resign by delivering or mailing postage prepaid a written resignation to the corporation at its principal office or to the chairman of the board of directors, president, secretary or assistant secretary, if any. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

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Section 2.8. Removal. A director, whether elected by the stockholders or directors, may be removed from office in the manner provided in the Certificate of Incorporation of the corporation.

Section 2.9. Meetings. Regular meetings of the board of directors may be held without call or notice at such times and such places within or without the State of Delaware as the Board may, from time to time, determine, provided that notice of the first regular meeting following any such determination shall be given to directors absent from such determination. A regular meeting of the board of directors shall be held without notice immediately after, and at the same place as, the annual meeting of the stockholders or the special meeting of the stockholders held in place of such annual meeting, unless a quorum of the directors is not then present. Special meetings of the board of directors may be held at any time and at any place designated in the call of the meeting when called by the president, treasurer, or one or more directors. Members of the board of directors or any committee elected thereby may participate in a meeting of such board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at themeeting.

Section 2.10. Notice of Meeting. It shall be sufficient notice to a director to send notice by mail at least seventy-two (72) hours before the meeting addressed to such person at his usual or last known business or residence address or to give notice to such person in person or by telephone at least twenty-four (24) hours before the meeting. Notice shall be given by the secretary, assistant secretary, if any, or by the officer or directors calling the meeting. The requirement of notice to any director may be waived by a written waiver of notice, executed by such person before or after the meeting or meetings, and filed with the records of the meeting, or by attendance at the meeting without protesting prior thereto or at its commencement the lack of notice. A notice or waiver of notice of a directors' meeting need not specify the purposes of the meeting.

Section 2.11. Agenda. Any lawful business may be transacted at a meeting of the board of directors, notwithstanding the fact that the nature of the business may not have been specified in the notice or waiver of notice of the meeting.

Section 2.12. Quorum. At any meeting of the board of directors, a majority of the directors then in office shall constitute a quorum for the transaction of business. Any meeting may be adjourned by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice.

Section 2.13. Action at Meeting. Any motion adopted by vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, except where a different vote is required by law, by the Certificate of Incorporation or by these By-laws. The assent in writing of any director to any vote or action of the directors taken at any meeting, whether or not a quorum was present and whether or not the director had or waived notice of the meeting, shall have the same effect as if the director so assenting was present at such meeting and voted in favor of such vote or action.

Section 2.14. Action Without Meeting. Any action by the directors may be taken

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without a meeting if all of the directors consent to the action in writing and the consents are filed with the records of the directors' meetings. Such consent shall be treated for all purposes as a vote of the directors at a meeting.

Section 2.15. Committees. The board of directors may, by the affirmative vote of a majority of the directors then in office, appoint an executive committee or other committees consisting of one or more directors and may by vote delegate to any such committee some or all of their powers except those which by law, the Certificate of Incorporation or these By-laws they may not delegate. Unless the board of directors shall otherwise provide, any such committee may make rules for the conduct of its business, but unless otherwise provided by the board of directors or such rules, its meetings shall be called, notice given or waived, its business conducted or its action taken as nearly as may be in the same manner as is provided in these By- laws with respect to meetings or for the conduct of business or the taking of actions by the board of directors. The board of directors shall have power at any time to fill vacancies in, change the membership of, or discharge any such committee at any time. The board of directors shall have power to rescind any action of any committee, but no such rescission shall have retroactive effect.

ARTICLE III.

Officers

Section 3.1. Enumeration. The officers shall consist of a chairman of the board of directors, president, executive vice-president, a treasurer, a secretary and such other officers and agents (including one or more additional vice-presidents, assistant treasurers and assistant secretaries), as the board of directors may, in their discretion, determine.

Section 3.2. Election. The chairman of the board of directors, president, executive vice- president, treasurer and secretary shall be elected annually by the directors at their first meeting following the annual meeting of the stockholders or any special meeting held in lieu of the annual meeting. Other officers may be chosen by the directors at such meeting or at any other meeting.

Section 3.3. Qualification. An officer may, but need not, be a director or stockholder. Any two or more offices may be held by the same person. Any officer may be required by the directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the directors may determine. The premiums for such bonds may be paid by the corporation.

Section 3.4. Tenure. Except as otherwise provided by the Certificate of Incorporation or these By-laws, the term of office of each officer shall be for one year or until his successor is elected and qualified or until his earlier resignation or removal.

Section 3.5. Removal. Any officer may be removed from office, with or without cause, by the affirmative vote of a majority of the directors then in office; provided, however, that an officer may be removed for cause only after reasonable notice and opportunity to be heard by the board of directors prior to action thereon.

Section 3.6. Resignation. Any officer may resign by delivering or mailing postage

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prepaid a written resignation to the corporation at its principal office or to the chairman of the board of directors, president, secretary, or assistant secretary, if any, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some event.

Section 3.7. Vacancies. A vacancy in any office arising from any cause may be filled for the unexpired portion of the term by the board of directors.

Section 3.8. Chairman of the Board. The chairman of the board of directors shall have such duties and powers as are commonly incident to such office and such other duties and powers as the board of directors may from time to time determine. He shall preside, when present, at all meetings of the board of directors. If so elected by the board of directors, the chairman of the board of directors may also serve as chief executive officer of the corporation.

Section 3.9. Chief Executive Officer. The chief executive officer shall, subject to the direction of the board of directors, have general supervision and control of the corporation’s business and shall have such powers and duties as are commonly incident to such office.

Section 3.10. President The president shall have such powers and shall perform such duties as the board of directors may from time to time designate. The president shall serve as the chief executive officer of the corporation if he shall be so elected by the board of directors.

Except as otherwise voted by the board of directors, the president shall preside at all meetings of the stockholders, and shall preside at meetings of the board of directors if the chairman of the board is not present at such meetings.

Section 3.11. Executive Vice-President; Vice-President(s). In the absence of either the chairman of the board of directors or the president, the executive vice-president shall have and may exercise all of the powers of the officer who is absent. The executive vice-president and any additional vice-presidents, shall have such other powers and perform such duties as the board of directors may from time to time determine.

Section 3.12. Treasurer and Assistant Treasurers. The treasurer, subject to the direction and under the supervision and control of the board of directors, shall have general charge of the financial affairs of the corporation. The treasurer shall have custody of all funds, securities and valuable papers of the corporation, except as the board of directors may otherwise provide. The treasurer shall keep or cause to be kept full and accurate records of account which shall be the property of the corporation, and which shall be always open to the inspection of each elected officer and director of the corporation. The treasurer shall deposit or cause to be deposited all funds of the corporation in such depository or depositories as may be authorized by the board of directors. The treasurer shall have the power to endorse for deposit or collection all notes, checks, drafts, and other negotiable instruments payable to the corporation. The treasurer shall perform such other duties as are incidental to the office, and such other duties as may be assigned by the board of directors.

Assistant treasurers, if any, shall have such powers and perform such duties as the board of directors may from time to time determine.

Section 3.13. Secretary and Assistant Secretaries. The secretary shall record, or cause

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to be recorded, all proceedings of the meetings of the stockholders and directors (including committees thereof) in the book of records of this corporation. The record books shall be open at reasonable times to the inspection of any stockholder, director, or officer. The secretary shall notify the stockholders and directors, when required by law or by these By-laws, of their respective meetings, and shall perform such other duties as the directors and stockholders may from time to time prescribe. The secretary shall have the custody and charge of the corporate seal, and shall affix the seal of the corporation to all instruments requiring such seal, and shall certify under the corporate seal the proceedings of the directors and of the stockholders, when required. In the absence of the secretary at any such meeting, a temporary secretary shall be chosen who shall record the proceedings of the meeting in the aforesaid books.

Assistant secretaries, if any, shall have such powers and perform such duties as the board of directors may from time to time designate.

Section 3.14. Other Powers and Duties. Subject to these By-laws and to such limitations as the board of directors may from time to time prescribe, the officers of the corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the board of directors.

ARTICLEIV.

CapitalStock

Section 4.1. Stock Certificates. Each stockholder shall be entitled to a certificate representing the number of shares of the capital stock of the corporation owned by such personin such form as shall, in conformity to law, be prescribed from time to time by the board of directors. Each certificate shall be signed by the chairman of the board of directors, the president or any vice-president and by the secretary, assistant secretary or treasurer or assistant treasurer, or such other officers designated by the board of directors from time to time as permitted by law, shallbearthesealofthecorporation,andshallexpressonitsfaceitsnumber, dateofissue, class, the number of shares for which, and the name of the person to whom, it is issued. The corporate seal and any or all of the signatures of corporation officers may be facsimile if the stock certificate is manually counter-signed by an authorized person on behalf of a transfer agent or registrar other than the corporation or itsemployee.

If an officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed on, a certificate shall have ceased to be such before the certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the time of its issue.

Section 4.2. Transfer of Shares. Title to a certificate of stock and to the shares represented thereby shall be transferred only on the books of the corporation by delivery to the corporation or its transfer agent of the certificate properly endorsed, or by delivery of the certificate accompanied by a written assignment of the same, or a properly executed written power of attorney to sell, assign or transfer the same or the shares represented thereby. Upon surrender of a certificate for the shares being transferred, a new certificate or certificates shall be issued according to the interests of the parties.

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Section 4.3. Record Holders. Except as otherwise may be required by law, by the Certificate of Incorporation or by these By-laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-laws.

It shall be the duty of each stockholder to notify the corporation of his post office address.

Section 4.4. Record Date. In order that the corporation may determine the stockholders entitled to receive notice of or to vote at any meeting of stockholders or any adjournments thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty days prior to any other action. In such case only stockholders of record on such record date shall be so entitled notwithstanding any transfer of stock on the books of the corporation after the record date.

If no record date is fixed: (i) the record date for determining stockholders entitled to receive notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

Section 4.5. Transfer Agent and Registrar for Shares of Corporation. The board of directors may appoint a transfer agent and a registrar of the certificates of stock of the corporation. Any transfer agent so appointed shall maintain, among other records, a stockholders' ledger, setting forth the names and addresses of the holders of all issued shares of stock of the corporation, the number of shares held by each, the certificate numbers representing such shares, and the date of issue of the certificates representing such shares. Any registrar so appointed shall maintain, among other records, a share register, setting forth the total number of shares of each class of shares which the corporation is authorized to issue and the total number of shares actually issued. The stockholders' ledger and the share register are hereby identified as the stock transfer books of the corporation; but as between the stockholders' ledger and the share register, the names and addresses of stockholders, as they appear on the stockholders' ledger maintained by the transfer agent shall be the official list of stockholders of record of the corporation. The name and address of each stockholder of record, as they appear upon the stockholders' ledger, shall be conclusive evidence of who are the stockholders entitled to receive notice of the meetings of stockholders, to vote at such meetings, to examine a complete list of the stockholders entitled to vote at meetings, and to own, enjoy and exercise any other property or rights deriving from such shares against the corporation. Stockholders, but not thecorporation,

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its directors, officers, agents or attorneys, shall be responsible for notifying the transfer agent, in writing, of any changes in their names or addresses from time to time, and failure to do so will relieve the corporation, its other stockholders, directors, officers, agents and attorneys, and its transfer agent and registrar, of liability for failure to direct notices or other documents, or pay over or transfer dividends or other property or rights, to a name or address other than the name and address appearing in the stockholders' ledger maintained by the transfer agent.

Section 4.6. Loss of Certificates. In case of the loss, destruction or mutilation of a certificate of stock, a replacement certificate may be issued in place thereof upon such terms as the board of directors may prescribe, including, in the discretion of the board of directors, a requirement of bond and indemnity to the corporation.

Section 4.7. Restrictions on Transfer. Every certificate for shares of stock which are subject to any restriction on transfer, whether pursuant to the Certificate of Incorporation, the By- laws or any agreement to which the corporation is a party, shall have the fact of the restriction noted conspicuously on the certificate and shall also set forth on the face or back either the full text of the restriction or a statement that the corporation will furnish a copy to the holder of such certificate upon written request and without charge.

Section 4.8. Multiple Classes of Stock. The amount and classes of the capital stock and the par value, if any, of the shares, shall be as fixed in the Certificate of Incorporation. At all times when there are two or more classes of stock, the several classes of stock shall conform to the description and the terms and have the respective preferences, voting powers, restrictions and qualifications set forth in the Certificate of Incorporation and these By-laws. Every certificate issued when the corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either (i) the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued, or

(ii)a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and withoutcharge.

ARTICLE V.

Dividends

Section 5.1. Declaration of Dividends. Except as otherwise required by law or by the Certificate of Incorporation, the board of directors may, in its discretion, declare what, if any, dividends shall be paid from the surplus or from the net profits of the corporation upon the stock of the corporation; provided, however, that no dividend shall be declared or paid the payment of which would diminish the amount of the paid-in capital of the corporation. Dividends may be paid in cash, in property, in shares of the corporation's stock, or in any combination thereof.

Dividends shall be payable upon such dates as the board of directors may designate.

Section 5.2. Reserves. Before the payment of any dividend and before making any distribution of profits, the board of directors, from time to time and in its absolute discretion, shall have power to set aside out of the surplus or net profits of the corporation such sum or sums as the board of directors deems proper and sufficient as a reserve fund to meet contingencies or for such other purpose as the board of directors shall deem to be in the best interests of the

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corporation, and the board of directors may modify or abolish any such reserve.

ARTICLE VI.

Powers of Officers to Contract With the Corporation

Any and all of the directors and officers of the corporation, notwithstanding their official relations to it, may enter into and perform any contract or agreement of any nature between the corporation and themselves, or any and all of the individuals from time to time constituting the board of directors of the corporation, or any firm or corporation in which any such director may be interested, directly or indirectly, whether such individual, firm or corporation thus contracting with the corporation shall thereby derive personal or corporate profits or benefits or otherwise; provided, that (i) the material facts of such interest are disclosed or are known to the board of directors or committee thereof which authorizes such contract or agreement; (ii) if the material facts as to such person's relationship or interest are disclosed or are known to the stockholders entitled to vote thereon, and the contract is specifically approved in good faith by a vote or the stockholders; or (iii) the contract or agreement is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof, or the stockholders. Any director of the corporation who is interested in any transaction as aforesaid may nevertheless be counted in determining the existence of a quorum at any meeting of the board of directors which shall authorize or ratify any such transaction. This Article shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common or statutory law applicable thereto.

ARTICLE VII.

Indemnification

Section 7.1. Definitions. For purposes of this Article VII the following terms shall have the meanings indicated:

(a) “Code of Conduct” means the corporation's Code of Conduct forDirectors, Officers and Employees as in effect from time totime.

(b) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent, trustee or fiduciary of the Corporation or of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which such person is or was serving at the express written request of thecorporation.

(c) “Court” means tile Court of Chancery of the State of Delaware, the court in which the Proceeding in respect of which indemnification is sought by a Covered Person shall have been brought or is pending, or another court having subject jurisdiction and personal jurisdiction over theparties.

(d) “Covered Person” means a person who is a present or former director or officer of the corporation and shall include such person's legal representatives, heirs, executors and administrators.

(e) “Disinterested Director” means a director of the corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by a CoveredPerson.

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(f) “Enterprise” shall mean the corporation and any other corporation,partnership, joint venture, trust, employee benefit plan or other enterprise of which a Covered Person is or was serving at the express written request of the corporation as a director, officer, employee, agent, trustee orfiduciary.

(g) “Expenses” shall include, without limitation, all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and allother disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating or being or preparing to be a witness in aProceeding.

(h) “Good Faith” shall mean a Covered Person having acted in good faith and in a manner such Covered Person reasonably believed to be in or not opposed to the best interests of the corporation or, in the case of an Enterprise which is an employee benefit plan, the best interests of the participants or beneficiaries of said plan, as the case may be, and, with respect to any Proceeding which is criminal in nature, having had no reasonable cause to believe such Covered Person's conduct wasunlawful.

(i) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and may include law firms or members thereof that are regularly retained by the corporation but not any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the standards of professional conduct then prevailing and applicable to such counsel, would have a conflict of interest in representing either the corporation or Covered Person in an action to determine Covered Person's rights under this Article.

(j) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation (including any internal corporate investigation), administrative hearing or any other actual, threatened or completed proceeding whether civil, criminal, administrativeor investigative, other than one initiated by the Covered Person. For purposes of the foregoing sentence, a “Proceeding” shall not be deemed to have been initiated by the Covered Person where such Covered Person seeks to enforce such Covered Person's rights under thisArticle.

Section 7.2. Right to Indemnification in General.

(a) Covered Persons. In connection with any Proceeding, the corporation shall indemnify, and advance Expenses, to each Covered Person as provided in this Article and to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may hereafter from time to time permit. The indemnification provisions in this Article shall be deemed to be a contract between the corporation and each Covered Person who serves in any such Corporate Status at any time while these provisions as well as the relevant provisions of the Delaware General Corporation Law are in effect and any repeat or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any Proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a “contract right” may not bemodified

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retroactively without the consent of such Covered Person.

(b) Employees and Agents.  The corporation may, to the extent authorized from time to time by the board of directors, grant indemnification and the advancement of Expensesto any employee or agent of the corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of Expenses of CoveredPerson.

Section 7.3. Proceedings Other Than Proceedings by or in the Right of the Corporation.

(a) Each Covered Person shall be entitled to the rights of indemnification provided in this Section 7.3 if, by reason of such Covered Person's Corporate Status, such Covered Person is, or is threatened to be made, a party to or is otherwise involved in any Proceeding, other than a Proceeding by or in the right of the corporation. Each Covered Person shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in settlements, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding or any claim, issue or matter therein, if such Covered Person did not violate the corporation's Code of Conduct and acted in Good Faith. Notwithstanding the foregoing, if such Covered Person shall have been found to have violated the corporation's Code of Conduct then in effect, the corporation may, to the extent authorized by the board of directors, indemnify such Covered Person against Expenses, judgments, penalties, fines and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person'sbehalf.

Section 7.4. Proceedings by or in the Right of the Corporation.

(a) Each Covered Person shall be entitled to the rights of indemnification provided in this Section 7.4 if, by reason of such Covered Person's Corporate Status, such Covered Person is, or is threatened to be made, a party to or is otherwise involved in any Proceeding brought by or in the right of the corporation to procure a judgment in its favor. Such Covered Person shall be indemnified against Expenses, judgments, penalties, and amounts paid in settlement, actuallyand reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with such Proceeding if such Covered Person acted in Good Faith. Notwithstanding the foregoing, no such indemnification shall be made in respect of any claim, issue or matter in such Proceeding as to which such Covered Person shall have been adjudged to be liable to the corporation if applicable law prohibits such indemnification; provided, however, that, if applicable law so permits, indemnification shall nevertheless be made by the corporation in such event if and only to the extent that the Court which is considering the matter shalldetermine.

(b) Notwithstanding any provision to the contrary in this Section, if the board of directors, Independent Counsel or the stockholders, as the case may be, making the determination with respect to indemnification as provided under Section 7.9 hereof, or the Court considering the matter determines that the act or omission which forms the basis for the claim which is the subject of the Proceeding violated the corporation's Code of Conduct then in effect, then, notwithstanding that fact, the corporation may, to the extent authorized by the board of directors, indemnify such Covered Person against all Expenses, judgments, penalties and amounts paid in settlement, actually and reasonably incurred by such Covered Person or onsuch

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Covered Person's behalf in connection with such proceeding if such Covered Person acted in Good Faith.

Section 7.5. Indemnification of a Party Who is Wholly or Partly Successful.

Notwithstanding any other provision of this Article, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a party to or is otherwise involved in and is successful, on the merits or otherwise, in any Proceeding, such Covered Person shall be indemnified to the maximum extent permitted by law, against allExpenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection therewith. If such Covered Person is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the corporation shall indemnify such Covered Person to the maximum extent permitted by law, against all Expenses, judgments, penalties, fines, and amounts paid in settlement, actually and reasonably incurred by such Covered Person or on such Covered Person's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 7.5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue ormatter.

Section 7.6. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Article, to the extent that a Covered Person is, by reason of such Covered Person's Corporate Status, a witness in any Proceeding, such Covered Person shall be indemnified against all Expenses actually and reasonably incurred by such Covered Person or on such Covered Persons behalf in connection therewith.

Section 7.7. Advancement of Expenses. Notwithstanding any provision to the contrary in this Article, the corporation (acting through the chairman of the board, president, executive vice president or any vice president of the corporation) shall advance all reasonable Expenses which, by reason of a Covered Persons Corporate Status, were incurred by or on behalf of such Covered Person in connection with any Proceeding, within twenty (20) days after the receipt by the corporation of a statement or statements from such Covered Person requesting such advance or advances, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by the Covered Person and shall include or be preceded or accompanied by an undertaking by or on behalf of the Covered Person to repay any Expenses if it shall ultimately be determined that such Covered Person is not entitled to be indemnified against such Expenses. Any advance and undertakings to repay pursuant to this Section 7.7 shall be unsecured and interest free. Advancement of Expenses pursuant to this Section 7.7 shall not require approval of the board of directors or the stockholders of the corporation, or of any other person or body. The Secretary of the corporation shall promptly advise the Board in writing of the request for advancement of Expenses, of the amount and other details of the advance and of the undertaking to make repayment pursuant to this Section 7.7.

Section 7.8. Notification and Defense of Claim. Promptly after receipt by a Covered Person of notice of the commencement of any Proceeding, such Covered Person shall, if a claim is to be made against the corporation under this Article, notify the corporation of the commencement of the Proceeding. The omission so to notify the corporation will not relieve it

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from any liability which it may have to such Covered Person otherwise than under this Article. With respect to any such Proceedings to which such Covered Person notifies the corporation:

(a) The corporation will be entitled to participate in the defense at its ownexpense.

(b) Except as otherwise provided below, the corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense with counsel reasonably satisfactory to the Covered Person. After notice from the corporation to the Covered Person of its election to assume the defense of a suit, the corporation will not be liable to the Covered Person under this Article for any legal or other expenses subsequently incurred by the Covered Person in connection with the defense of the Proceeding other than reasonable costs of investigation or as otherwise provided below. The Covered Person shall have the right to employ his own counsel in such Proceeding but the fees and expenses of such counsel incurred after notice from the corporation of its assumption of the defense shall be at the expense of the Covered Person unless (i) the employment of counsel by the Covered Person has beenauthorized by the corporation, (ii) the Covered Person shall have concluded reasonably that there may be a conflict of interest between the corporation and the Covered Person in the conduct of the defense of such action and such conclusion is confirmed in writing by the corporation's outside counsel regularly employed by it in connection with corporate matters, or (iii) the corporation shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel shall be at the expense of the corporation. The corporation shall not be entitled to assume the defense of any Proceeding brought by or in the right of the corporation or as to which the Covered Person shall have made the conclusion provided forin

(ii) above and such conclusion shall have been so confirmed by the corporation's said outside counsel.

(c) Notwithstanding any provision of this Article to the contrary, the corporation shall not be liable to indemnify the Covered Person under this Article for any amounts paid in settlementofanyProceedingorclaimeffectedwithoutitswrittenconsent.Thecorporationshall not settle any Proceeding or claim in any manner which would impose any penalty, limitation or disqualification of the Covered Person for any purpose without such Covered Person's written consent. Neither the corporation nor the Covered Person will unreasonably withhold their consent to any proposedsettlement.

(d) If it is determined that the Covered Person is entitled to indemnification not covered by defense of the claim afforded under subparagraph (b) above, payment to theCovered Person of the additional amounts to be indemnified shall be made within ten (10) days after determination.

Section 7.9. Method of Determination. A determination (if required by applicable law in the specific case) with respect to a Covered Person's entitlement to indemnification shall be made (a) by the board of directors by a majority vote of a quorum consisting of Disinterested Directors, or (b) in the event that a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the board of directors, a copy of which shall be delivered to the Covered Person seeking indemnification, or (c) by the holders of a majority of the votes of the outstanding stock at the time entitled to vote on matters other than the election or

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removal of directors, voting as a single class, including the stock of the Covered Person seeking indemnification.

Section 7.10. Presumptions and Effect of Certain Proceedings.

(a) Burden of Proof. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that the Covered Person is entitled to indemnification under this Article if such Covered Person has submitted a request for indemnification including such documentation and information as is reasonably available to such Covered Person and is reasonably necessary to determine whether and to what extent such Covered Person is entitled to indemnification and the corporation shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to thatpresumption.

(b) Effect of Other Proceedings. The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty or of nolo contendere or its equivalent, shall not (except as otherwise expresslyprovided in this Article) of itself adversely affect the right of an Covered Person to indemnification or create a presumption that an Covered Person violated the corporation's Code of Conduct or did not act in Good Faith.

(c) Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, employee, agent, trustee or fiduciary of the Enterprise shall not be imputed to a Covered Person for purposes of determining the right to indemnification under thisArticle.

Section 7.11. Non-Exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Article shall not be deemed exclusive of any other rights to which a Covered Person may at any time be entitled under applicable law, the Certificate of Incorporation, these By-Laws, any agreement, a vote of stockholders or a resolution of the board of directors, or otherwise. No amendment, alteration, rescission or replacement of this Article or any provision hereof shall be effective as to a Covered Person with respect to any action taken or omitted by such Covered Person in such Covered Person's Corporate Status prior to such amendment, alteration, rescission or replacement.

Section 7.12. Insurance. The corporation may maintain, at its expense, an insurance policy or policies to protect itself and any Covered Person, officer, employee or agent of the corporation or another Enterprise against liability arising out of this Article or otherwise, whether or not the corporation would have the power to indemnify any such person against such liability under the Delaware General Corporation Law.

Section 7.13. No Duplicative Payment. The corporation shall not be liable under this Article to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that a Covered Person has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 7.14. Severability. If any provision or provisions of this Article shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

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(a) thevalidity,legalityandenforceabilityoftheremainingprovisionsofthisArticle (including without limitation, each portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby;and

(b) to the fullest extent possible, the provisions of this Article (including, without limitation, each portion of any Section of this Article containing any such provision held tobe invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

ARTICLE VIII.

Miscellaneous Provisions

Section 8.1. Certificate of Incorporation. All references in these By-laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

Section 8.2. Fiscal Year. Except as from time to time otherwise provided by the board of directors, the fiscal year of the corporation shall end on the 31st day of March of each year.

Section 8.3. Corporate Seal. The board of directors shall have the power to adopt and alter the seal of the corporation.

Section 8.4. Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes, and other obligations authorized to be executed by an officer of the corporation on its behalf shall be signed by the chairman of the board of directors, the president or the treasurer except as the board of directors may generally or in particular cases otherwise determine.

Section 8.5. Voting of Securities. Unless the board of directors otherwise provides, the chairman of the board of directors, the president or the treasurer may waive notice of and act on behalf of this corporation, or appoint another person or persons to act as proxy or attorney in fact for this corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by this corporation.

Section 8.6. Evidence of Authority. A certificate by the secretary or any assistant secretary as to any action taken by the stockholders, directors or any officer or representative of the corporation shall, as to all persons who rely thereon in good faith, be conclusive evidence of such action. The exercise of any power which by law, by the Certificate of Incorporation, or by these By-laws, or under any vote of the stockholders or the board of directors, may be exercised by an officer of the corporation only in the event of absence of another officer or any other contingency shall bind the corporation in favor of anyone relying thereon in good faith, whether or not such absence or contingency existed.

Section 8.7. Corporate Records. The original, or attested copies, of the Certificate of Incorporation, By-laws, records of all meetings of the incorporators and stockholders, and the stock transfer books (which shall contain the names of all stockholders and the record address

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and the amount of stock held by each) shall be kept in Delaware at the principal office of the corporation, or at an office of the corporation, or at an office of its transfer agent or of the secretary or of the assistant secretary, if any. Said copies and records need not all be kept in the same office. They shall be available at all reasonable times to inspection of any stockholder for any purpose but not to secure a list of stockholders for the purpose of selling said list or copies thereof or for using the same for a purpose other than in the interest of the applicant, as a stockholder, relative to the affairs of the corporation.

Section 8.8. Charitable Contributions. The board of directors from time to time may authorize contributions to be made by the corporation in such amounts as it may determine to be reasonable to corporations, trusts, funds or foundations organized and operated exclusively for charitable, scientific or educational purposes, no part of the net earning of which inures to the private benefit of any stockholder or individual.

ARTICLEIX.

Amendments

Section 9.1. Amendment by Stockholders. Prior to the issuance of stock, these By-laws may be amended, altered or repealed by the incorporator(s) by majority vote. After stock has been issued, these By-laws may be amended altered or repeated by the stockholders at any annual or special meeting by vote of a majority of all shares outstanding and entitled to vote, except that where the effect of the amendment would be to reduce any voting requirement otherwise required by law, the Certificate of Incorporation or these By-laws, such amendment shall require the vote that would have been required by such provision. Notice and a copy of any proposal to amend these By-laws must be included in the notice of meeting of stockholders at which action is taken upon suchamendment.

Section 9.2. Amendment by Board of Directors. These By-laws may be amended or altered by the board of directors at a meeting duly called for the purpose by majority vote of the directors then in office, except that directors shall not amend the By-laws in a manner which:

(a) changes the stockholder voting requirements for anyaction;

(b) alters or abolishes any preferential right or right of redemption applicable to a class or series of stock with shares alreadyoutstanding;

(c) alters the provisions of this Article IX hereof;or

(d) permits the board of directors to take any action which under law, the Certificate of Incorporation, or these By-laws is required to be taken by thestockholders.

Any amendment of these By-laws by the board of directors may be altered or repealed by the stockholders at any annual or special meeting of stockholders.

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael R. Minogue, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ABIOMED, Inc.

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2019	/s/ Michael R. Minogue
	Michael R. Minogue
	Chairman, President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Todd A. Trapp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ABIOMED, Inc.

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 5, 2019	/s/ TODD A. TRAPP
	Todd A. Trapp
	Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ABIOMED, Inc., (the “Company”) for the quarter ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned President and Chief Executive Officer, and Vice President and Chief Financial Officer, of the Company, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL R. MINOGUE	/s/ TODD A. TRAPP
Michael R. Minogue Chairman, President and Chief Executive Officer	Todd A. Trapp Vice President and Chief Financial Officer
Date: February 5, 2019	Date: February 5, 2019

XML

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2018	Jan. 31, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Trading Symbol	ABMD
Entity Registrant Name	ABIOMED INC
Entity Central Index Key	0000815094
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		45,085,806

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Current assets:
Cash and cash equivalents	$ 84,181	$ 42,975
Short-term marketable securities	373,975	319,274
Accounts receivable, net	88,215	70,010
Inventories	71,808	50,204
Prepaid expenses and other current assets	10,549	11,808
Total current assets	628,728	494,271
Long-term marketable securities		37,502
Property and equipment, net	138,455	117,167
Goodwill	33,260	35,808
In-process research and development	15,516	16,705
Long-term deferred tax assets, net	96,450	70,746
Other assets	44,707	14,176
Total assets	957,116	786,375
Current liabilities:
Accounts payable	26,179	23,565
Accrued expenses	51,721	46,147
Deferred revenue	15,080	14,970
Total current liabilities	92,980	84,682
Other long-term liabilities	1,185	776
Contingent consideration	10,583	10,490
Long-term deferred tax liabilities	838	903
Total liabilities	105,586	96,851
Commitments and contingencies (Note 11)
Stockholders' equity:
Class B Preferred Stock, $.01 par value Authorized - 1,000,000 shares; Issued and outstanding - none
Common stock, $.01 par value Authorized - 100,000,000 shares; Issued - 46,959,653 shares at December 31, 2018 and 46,100,649 shares at March 31, 2018 Outstanding - 45,058,049 shares at December 31, 2018 and 44,375,337 shares at March 31, 2018	451	444
Additional paid in capital	676,171	619,905
Retained earnings	325,513	140,457
Treasury stock at cost - 1,901,604 shares at December 31, 2018 and 1,725,312 shares at March 31, 2018	(138,289)	(67,078)
Accumulated other comprehensive loss	(12,316)	(4,204)
Total stockholders' equity	851,530	689,524
Total liabilities and stockholders' equity	$ 957,116	$ 786,375

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2018	Mar. 31, 2018
Statement Of Financial Position [Abstract]
Class B Preferred Stock, par value	$ 0.01	$ 0.01
Class B Preferred Stock, Authorized	1,000,000	1,000,000
Class B Preferred Stock, Issued	0	0
Class B Preferred Stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, Authorized	100,000,000	100,000,000
Common stock, Issued	46,959,653	46,100,649
Common stock, Outstanding	45,058,049	44,375,337
Treasury stock, shares	1,901,604	1,725,312

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenue	$ 200,563	$ 154,022	$ 562,351	$ 419,313
Costs and expenses:
Cost of revenue	34,023	24,994	94,718	68,483
Research and development	23,965	17,706	67,955	54,027
Selling, general and administrative	80,220	66,556	240,254	187,233
Costs and Expenses, Total	138,208	109,256	402,927	309,743
Income from operations	62,355	44,766	159,424	109,570
Other income:
Investment income, net	2,175	969	5,397	2,385
Other (expense) income, net	(20)	(81)	10	(25)
Nonoperating Income (Expense), Total	2,155	888	5,407	2,360
Income before income taxes	64,510	45,654	164,831	111,930
Income tax provision (benefit)	19,648	32,208	(20,225)	36,607
Net income	$ 44,862	$ 13,446	$ 185,056	$ 75,323
Basic net income per share	$ 1.00	$ 0.30	$ 4.13	$ 1.71
Basic weighted average shares outstanding	45,046	44,247	44,852	44,095
Diluted net income per share	$ 0.97	$ 0.29	$ 4.01	$ 1.65
Diluted weighted average shares outstanding	46,136	45,869	46,147	45,731

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 44,862	$ 13,446	$ 185,056	$ 75,323
Other comprehensive (loss) gain:
Foreign currency translation (losses) gains	(1,015)	1,557	(8,468)	10,406
Net unrealized gains (losses) on marketable securities	234	(401)	356	(446)
Other comprehensive (loss) gain	(781)	1,156	(8,112)	9,960
Comprehensive income	$ 44,081	$ 14,602	$ 176,944	$ 85,283

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income	$ 185,056	$ 75,323
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	9,936	8,100
Bad debt expense (recovery)	578	(8)
Stock-based compensation	43,757	29,170
Write-down of inventory and other	3,152	3,212
Accretion on marketable securities	(1,644)
Deferred tax provision	(25,992)	34,740
Change in fair value of contingent consideration	93	1,270
Changes in assets and liabilities:
Accounts receivable	(19,268)	(10,342)
Inventories	(26,522)	(11,974)
Prepaid expenses and other assets	678	(1,033)
Accounts payable	4,909	2,595
Accrued expenses and other liabilities	6,909	3,874
Deferred revenue	164	1,220
Net cash provided by operating activities	181,806	136,147
Investing activities:
Purchases of marketable securities	(241,745)	(209,834)
Proceeds from the sale and maturity of marketable securities	226,949	148,095
Purchase of other assets	(30,436)	(6,400)
Purchases of property and equipment	(35,469)	(44,168)
Net cash used for investing activities	(80,701)	(112,307)
Financing activities:
Proceeds from the exercise of stock options	11,043	7,626
Taxes paid related to net share settlement of vesting of stock awards	(71,213)	(19,860)
Proceeds from the issuance of stock under employee stock purchase plan	1,376	1,063
Principal payments on capital lease obligation		(517)
Net cash used for financing activities	(58,794)	(11,688)
Effect of exchange rate changes on cash	(1,105)	(690)
Net increase in cash and cash equivalents	41,206	11,462
Cash and cash equivalents at beginning of period	42,975	39,040
Cash and cash equivalents at end of period	84,181	50,502
Supplemental disclosure of cash flow information:
Cash paid for income taxes	4,500	845
Cash paid for interest on capital lease obligation		302
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable and accrued expenses	$ 1,670	$ 3,836

XML

Nature of Business

9 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Nature of Business

Note 1. Nature of Business

ABIOMED, Inc. (the “Company” or “Abiomed”) is a provider of mechanical circulatory support devices and offers a continuum of care to heart failure patients. The Company develops, manufactures and markets proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by cardiac surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures.

XML

Basis of Preparation and Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Preparation and Summary of Significant Accounting Policies

Note 2. Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting and in accordance with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 that has been filed with the Securities and Exchange Commission (“SEC”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments that are necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period may not be indicative of results for the full fiscal year or any other subsequent period.

There have been no changes in the Company’s significant accounting policies for the three and nine months ended December 31, 2018 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2018 that has been filed with the SEC.

New Accounting Pronouncements Adopted

Effective April 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2014-09, “Revenue from Contracts with Customers,” (“Topic 606”) which provides a principles-based, five-step approach to measure and recognize revenue from contracts with customers. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 4. Revenue Recognition,” to the Company’s consolidated financial statements.

Effective April 1, 2018, the Company adopted the FASB standard update ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 5. Cash Equivalents, Marketable Securities, and Fair Value Measurements,” to the Company’s consolidated financial statements.

On June 20, 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU 2018-07 eliminated the previous guidance for accounting for share-based payments to nonemployees and expanded Topic 718 to include share-based payments transactions to nonemployees. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of ASU 2018-07 requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year. The Company early adopted ASU 2018-07 on June 20, 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases.” The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The lease obligation amount recorded on the balance sheet at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lease arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements as well as updating processes and controls in order to adopt the new standard. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities. In addition, the evaluation includes a review of the Company’s existing contracts with its suppliers and vendors to determine if these agreements contain an embedded lease. The Company currently expects that its lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption, which will increase total assets and total liabilities that the Company reports on its consolidated balance sheet. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company on April 1, 2019.

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Net Income Per Share

9 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Net Income Per Share

Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2018 and 2017 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Basic Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Basic net income per share	$	1.00	$	0.30	$	4.13	$	1.71

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Diluted Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Effect of dilutive securities		1,090		1,622		1,295		1,636
Diluted weighted average shares outstanding		46,136		45,869		46,147		45,731
Diluted net income per share	$	0.97	$	0.29	$	4.01	$	1.65

For the three and nine months ended December 31, 2018, approximately 73,700 and 60,700 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 104,000 restricted shares in each of the three and nine months ended December 31, 2018, respectively, related to performance-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and nine months ended December 31, 2017, approximately 2,600 and 4,800 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 185,000 restricted shares in each of the three and nine months ended December 31, 2017, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

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Revenue Recognition

9 Months Ended

Dec. 31, 2018

Revenue Recognition And Deferred Revenue [Abstract]

Revenue Recognition

Note 4. Revenue Recognition

Adoption of Topic 606, Revenue from Contracts with Customers

The Company adopted Topic 606 on April 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2019 reflect the application of Topic 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, “Revenue Recognition.” The adoption of Topic 606 did not have a material impact on the timing or amount of revenue recognized upon adoption and there was no cumulative prior period adjustment recorded to the opening balance of retained earnings upon adoption. Accordingly, the adoption of Topic 606 did not have a material impact on the Company’s consolidated balance sheet, statement of operations, stockholders’ equity or cash flows as of the adoption date or for the three or nine months ended December 31, 2018.

The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying Topic 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs are recorded as selling, general and administrative expenses; (5) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; and (6) the Company does not disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less.

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligation in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligation in the contract

• Recognition of revenue when, or as, a performance obligation is satisfied

Contracts and Performance Obligations

The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company's performance obligations consist mainly of transferring control of products and services identified in the contracts, purchase orders or invoices. For each contract, the Company considers the obligation to transfer products and services to the customer, each of which are distinct, to be performance obligations.

Transaction price and allocation to performance obligations

Transaction prices of products or services are typically based on contracted rates with customers. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the expected value method or the most likely amount, depending on the circumstances, to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.  Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available.  Sales and other taxes collected on behalf of third parties are excluded from revenue.

The Company does not provide for rights of return to customers on product sales and, therefore, does not record a provision for returns. Customers typically have a limited time frame to notify the Company of any defective or non-conforming products. The Company’s limited warranty provision is accounted for using the cost accrual method and is recognized as expense when products are sold and is not considered a separate performance obligation.

If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately.  

Revenue Recognition

Revenue is recognized when, or as, obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers.  Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer.

Product revenue is generally recognized when the customer obtains control of the Company’s product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Service revenue is generally recognized over time as the services are rendered to the customer based on the extent of progress towards completion of the performance obligation. The Company recognizes service revenue over the term of the service contract. Services are expected to be transferred to the customer throughout the term of the contract and the Company believes recognizing revenue ratably over the term of the contract best depicts the transfer of value to the customer. Revenue generated from preventative maintenance calls is recognized at a point in time when the services are provided to the customer.

Revenue from the sale of products and services are evidenced by either a contract with the customer or a valid purchase order and an invoice which includes all relevant terms of sale. The Company performs a review of each specific customer's credit worthiness and ability to pay prior to acceptance as a customer. Further, the Company performs periodic reviews of its customers' creditworthiness prospectively.

Disaggregation of Revenue

The Company generally sells its Impella products and services through a direct sales force in the U.S. and Germany and through direct sales and distribution agreements in other international markets outside (e.g., in Europe, Japan, Canada, Latin America, Asia-Pacific). Revenue is disaggregated from contracts between product revenue and service and other revenue and by geography, which the Company believes best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors.

The following table disaggregates the Company’s revenue by products and services:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Impella product revenue	$	193,253	$	147,989	$	542,198	$	402,583
Service and other revenue		7,310		6,033		20,153		16,730
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

The following table disaggregates the Company’s revenue by geographical location:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
U.S. revenue	$	172,548	$	136,363	$	488,386	$	374,697
International revenue		28,015		17,659		73,965		44,616
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

Reserves for Variable Consideration

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts or rebates that are offered within contracts between the Company and its customers relating to the Company’s sales of its products.  These reserves are based on the amounts earned or are expected to be claimed on the related sales and are classified as reductions of accounts receivable.  Where appropriate, these estimates take into consideration relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.  These reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract.  Actual amounts of consideration ultimately received may differ from the Company’s estimates.  If actual results in the future vary from the Company’s estimates, the Company adjusts these estimates, which would affect revenue and earnings in the period such variances become known.

Rebates and Discounts  

The Company provides certain customers with rebates and discounts that are defined in the Company’s contract arrangements with customers and are recorded as a reduction of revenue in the period the related product revenue is recognized, resulting in a reduction to revenue and the establishment of a liability, which are all included in accrued expenses in the accompanying consolidated balance sheets. Rebates normally result from performance-based offers that are primarily based on attaining contractually specified sales volumes as well as product usage.  Discounts are normally from early payment incentives. The Company estimates the amount of rebates and discounts based on an estimate of the third party’s sales and the respective rebate or discount defined in the customer contractual arrangement.

The following table summarizes product revenue rebates and discounts for the nine months ended December 31, 2018 (in thousands):

	Rebates and Discounts
Balance at March 31, 2018	$	1,405
Provision related to current period revenue		1,526
Credits and adjustments made during the period		(1,446	)
Balance at December 31, 2018	$	1,485

Contract Balances

The timing of revenue recognition, billings and cash collections results in accounts receivables and deferred revenue on the consolidated balance sheet. A receivable is recognized in the period the Company’s right to the consideration from the customer is unconditional. The change in the accounts receivable balances relate to the timing of revenue recognition, billings and cash collections. The Company generally does not have any performance obligations with a term of more than one year.

Payment terms vary by contract type and type of customer and generally range from 30 to 60 days for direct sales customers. Payment terms with certain international distributors can be up to 90 days. The Company’s contracts with customers do not typically include extended payment terms.

Deferred Revenue

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, deferred revenue is recorded. Deferred revenue is recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

The Company’s deferred revenue balance was $15.1 million and $15.0 million as of December 31, 2018 and March 31, 2018, respectively. The change relates to the timing of product shipment and completion of recognizing revenue when the customer obtains control of the product and additional preventative maintenance service contracts and the subsequent recognition of the contract ratably over the term of the service contract. During the three and nine months ended December 31, 2018, the Company recognized $2.0 million and $14.4 million of revenue that was included in the deferred revenue balance as of March 31, 2018, respectively.  

Costs to Obtain or Fulfill a Customer Contract

The Company has certain costs to obtain and fulfill a customer contract, such as commissions and shipping costs. The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. These costs are included in selling, general, and administrative expenses.

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Cash Equivalents Marketable Securities and Fair Value Measurements

9 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Cash Equivalents, Marketable Securities and Fair Value Measurements

Note 5. Cash Equivalents, Marketable Securities and Fair Value Measurements

The Company classifies any marketable security with a maturity date of 90 days or less at the time of purchase as a cash equivalent. Cash equivalents are carried on the balance sheet at fair market value. The Company’s marketable securities, consisting of U.S. Treasuries, U.S. Government Agency, corporate debt securities, and commercial paper, are classified as available-for-sale securities and, accordingly, are recorded at fair value. The difference between amortized cost and fair value is included in stockholders’ equity. At December 31, 2018 and March 31, 2018, the Company’s financial instruments consisted primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these investments.

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are classified on the balance sheet as follows:

	December 31, 2018		March 31, 2018
	(in $000's)
Cash equivalents	$	42,146	$	22,595
Short-term marketable securities		373,975		319,274
Long-term marketable securities		—		37,502
	$	416,121	$	379,371

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2018:
Money market funds	$	36,146	$	—	$	—		$	36,146
Repurchase agreements		6,000		—		—			6,000
Short-term U.S. Treasury mutual fund securities		43,710		1		(37	)		43,674
Short-term government-backed securities		183,531		13		(152	)		183,392
Short-term corporate debt securities		114,193		46		(70	)		114,169
Short-term commercial paper		32,792		—		(52	)		32,740
	$	416,372	$	60	$	(311	)	$	416,121

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2018:
Money market funds	$	5,845	$	—	$	—		$	5,845
Repurchase agreements		16,750		—		—			16,750
Short-term U.S. Treasury mutual fund securities		18,132		—		(29	)		18,103
Short-term government-backed securities		212,255		3		(538	)		211,720
Short-term corporate debt securities		52,737		—		(161	)		52,576
Short-term commercial paper		36,936		2		(63	)		36,875
Long-term U.S. Treasury mutual fund securities		10,953		—		(16	)		10,937
Long-term government-backed securities		24,798		1		(12	)		24,787
Long-term corporate debt securities		1,777		1		—			1,778
	$	380,183	$	7	$	(819	)	$	379,371

Fair Value Hierarchy

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Level 1 primarily consists of financial instruments whose values are based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flows, or similar techniques, and at least one significant model assumption or input is unobservable.

The following table presents the Company’s financial instruments recorded at fair value in the consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2018:	(in $000's)
Assets
Money market funds	$	36,146	$	—	$	—	$	36,146
Repurchase agreements		—		6,000		—		6,000
Short-term U.S. Treasury mutual fund securities		—		43,674		—		43,674
Short-term government-backed securities		—		183,392		—		183,392
Short-term corporate debt securities		—		114,169		—		114,169
Short-term commercial paper		—		32,740		—		32,740
Liabilities
Contingent consideration		—		—		10,583		10,583

	Level 1		Level 2		Level 3		Total
March 31, 2018:	(in $000's)
Assets
Money market funds	$	5,845	$	—	$	—	$	5,845
Repurchase agreements		—		16,750		—		16,750
Short-term U.S. Treasury mutual fund securities		—		18,103		—		18,103
Short-term government-backed securities		—		211,720		—		211,720
Short-term corporate debt securities		—		52,576		—		52,576
Short-term commercial paper		—		36,875		—		36,875
Long-term U.S. Treasury mutual fund securities		—		10,937		—		10,937
Long-term government-backed securities		—		24,787		—		24,787
Long-term corporate debt securities		—		1,778		—		1,778
Liabilities
Contingent consideration		—		—		10,490		10,490

The Company has determined that the estimated fair value of its money market funds are reported as Level 1 financial assets as they are valued at quoted market prices in active markets.

The Company has determined that the estimated fair value of its investments in U.S. Treasury mutual fund securities, government-backed securities, corporate debt securities, repurchase agreements and commercial paper are reported as Level 2 financial assets as they are not exchange-traded instruments.

The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH, (“ECP”) and AIS GmbH Aachen Innovative Solutions, (“AIS’), in July 2014. The Company acquired ECP and AIS for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of CE Mark approval in the European Union and a revenue-based milestone related to the development of the future Impella ECP^TM expandable catheter pump technology. These potential milestone payments may be made, at the Company’s option, by a combination of cash or ABIOMED common stock. The calculation of contingent consideration payable was determined using a combination of an income approach, based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn out itself, the related projections, and the overall business. The revenue-based milestone was valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues are based on the Company’s best estimates of revenues expected to be earned from future Impella ECP technology.

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Potential Milestone Payment		Fair Value at December 31, 2018		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
	(in $000's)
Clinical and regulatory milestone	$	7,000	$	5,797	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
						Discount rate	4.4% to 4.5%
						Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 10% to 40% for various upside and downside scenarios
Revenue-based milestone		8,000		4,786	Monte Carlo simulation model	Projected fiscal year of milestone payments	2024 to 2035
						Discount rate	15%
						Expected volatility for forecasted revenues	50%
						Probability of payment	80%
	$	15,000	$	10,583

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Level 3 liabilities, beginning balance	$	10,331	$	9,835	$	10,490	$	9,153
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		252		588		93		1,270
Level 3 liabilities, ending balance	$	10,583	$	10,423	$	10,583	$	10,423

The change in fair value of the contingent consideration was primarily due to the impact of changes in interest rates, passage of time on the fair value measurement and the status of development of the underlying technology related to the ECP acquisition. Adjustments associated with the change in fair value of contingent consideration are included in research and development expenses in the Company’s consolidated statements of operations. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value in the Company’s consolidated statement of operations. There is no assurance that any of the conditions for the milestone payments will be met.

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Property and Equipment

9 Months Ended

Dec. 31, 2018

Property Plant And Equipment [Abstract]

Property and Equipment

Note 6. Property and Equipment

The components of property and equipment are as follows:

	December 31, 2018			March 31, 2018
	(in $000's)
Land	$	7,348		$	7,680
Building and building improvements		85,875			63,700
Leasehold improvements		2,182			2,905
Machinery and equipment		51,980			42,787
Furniture and fixtures		10,153			8,104
Construction in progress		17,092			19,850
Total cost		174,630			145,026
Less accumulated depreciation		(36,175	)		(27,859	)
	$	138,455		$	117,167

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Goodwill In-Process Research and Development and Other Assets

9 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill In-Process Research and Development and Other Assets

Note 7. Goodwill, In-Process Research and Development, and Other Assets

Goodwill

The carrying amount of goodwill at December 31, 2018 and March 31, 2018 was $33.3 million and $35.8 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005 and ECP and AIS in July 2014. The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2018	$	35,808
Foreign currency translation impact		(2,548	)
Balance at December 31, 2018	$	33,260

In-Process Research & Development

The Company evaluates goodwill and in-process research and development (“IPR&D”) assets at least annually at October 31, as well as whenever events or changes in circumstances suggest that the carrying amount may not be recoverable.  The Company has no accumulated impairment losses on goodwill or IPR&D assets.

The carrying amount of IPR&D assets at December 31, 2018 and March 31, 2018 was $15.5 million and $16.7 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014. The estimated fair value of IPR&D assets at the acquisition date was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flow estimates for the future Impella ECP^TM expandable catheter pump technology were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used an original discount rate of 21% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2018 are as follows:

	(in $000's)
Balance at March 31, 2018	$	16,705
Foreign currency translation impact		(1,189	)
Balance at December 31, 2018	$	15,516

Other Assets

Other Investments

The Company periodically makes investments in private medical device companies that focus on heart failure, heart pump and other medical device technologies. The aggregate carrying amount of the Company’s other investments was $40.8 million and $12.6 million at December 31, 2018 and March 31, 2018, respectively, and is classified within other assets on the consolidated balance sheets. During the nine months ended December 31, 2018, the Company made additional investments of $28.1 million in private medical device companies.

On April 1, 2018, the Company adopted ASU 2016-01. This guidance requires equity investments to be measured at fair value with changes in fair value recognized in net income.  Since these investments do not have readily determinable market values, the Company has elected to measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment.  No adjustments have been made to the value of the Company’s investments in these private medical device companies for the three and nine months ended December 31, 2018 either due to impairment or based on observable price changes. The Company monitors any events or changes in circumstances that may have a significant adverse effect on the fair value of this investment and makes any necessary adjustments.

Other Intangible Assets

In September 2018, the Company made a milestone payment to a third party for approximately $1.8 million for the transfer to the Company of manufacturing rights and knowledge for optical sensor technology that is approved for use in the Impella CP products.  In October 2018, the Company made a payment to a third party for approximately $0.6 million to license certain manufacturing technology related to introducer sheaths. These intangible assets are classified with other assets in the Company’s consolidated balance sheet and are amortized over their useful life of 15 years.

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Accrued Expenses

9 Months Ended

Dec. 31, 2018

Payables And Accruals [Abstract]

Accrued Expenses

Note 8. Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2018		March 31, 2018
	(in $000's)
Employee compensation	$	31,930	$	30,330
Sales and income taxes		7,312		4,562
Research & development		3,371		3,162
Marketing		3,082		2,305
Professional, legal, and accounting fees		1,994		1,870
Warranty		1,300		1,081
Accrued capital expenditures		—		250
Other		2,732		2,587
	$	51,721	$	46,147

Employee compensation consists primarily of accrued bonuses, accrued commissions, accrued employee benefits, and accrued payroll taxes at December 31, 2018 and March 31, 2018.

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Stock-Based Compensation

9 Months Ended

Dec. 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 9. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s consolidated statements of operations for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Cost of product revenue	$	773	$	489	$	2,122	$	1,221
Research and development		2,638		1,673		7,222		4,217
Selling, general and administrative		12,167		9,070		34,413		23,732
	$	15,578	$	11,232	$	43,757	$	29,170

Stock Options

The following table summarizes the stock option activity for the nine months ended December 31, 2018:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,282		$	46.18		5.31
Granted		78			381.62
Exercised		(435	)		25.36
Cancelled and expired		(19	)		145.89
Outstanding at end of period		906		$	83.90		5.74	$	222,852
Exercisable at end of period		668		$	39.86		4.78	$	190,646
Options vested and expected to vest at end of period		896		$	83.73		5.72	$	220,460

Stock options generally vest and become exercisable annually over three years. The remaining unrecognized stock-based compensation expense for unvested stock option awards at December 31, 2018 was approximately $14.0 million and the estimated weighted-average period over which this cost will be recognized is 2.1 years.

The aggregate intrinsic value of options exercised was $158.6 million for the nine months ended December 31, 2018. The total cash received as a result of employee stock options exercised during the nine months ended December 31, 2018 was approximately $11.0 million.

The Company estimates the fair value of stock options granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of stock options granted during the three and nine months ended December 31, 2018 and 2017 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2018			2017			2018			2017
Weighted average grant-date fair value	$	117.50		$	70.14		$	142.08		$	51.20
Valuation assumptions:
Risk-free interest rate		2.81	%		2.13	%		2.93	%		1.86	%
Expected option life (years)		4.04			4.08			4.04			4.07
Expected volatility		45.2	%		42.2	%		42.8	%		43.6	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2018:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		880		$	109.01
Granted		193		$	379.30
Vested		(418	)	$	103.66
Forfeited		(25	)	$	187.05
Restricted stock units at end of period		630		$	192.16

Restricted stock units generally vest annually over three years. The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of December 31, 2018 was $60.9 million and the estimated weighted-average period over which this cost will be recognized is 2.1 years.

The weighted average grant-date fair value for restricted stock units granted during the nine months ended December 31, 2018 was $379.30. The total fair value of restricted stock units vested during the nine months ended December 31, 2018 was $168.1 million.

Performance-Based Awards

In May 2018, performance-based awards of restricted stock units for the potential issuance of approximately 114,000 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of December 31, 2018, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.

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Income Taxes

9 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

In December 2017, the Tax Cuts and Jobs Act, (“Tax Reform Act”) was signed into law. The Tax Reform Act included significant changes to existing law, including among other items, a reduction to the U.S. federal statutory corporate tax rate from 35% to 21% effective January 1, 2018. ASC 740, Income Taxes (Topic 740) requires that the effects of changes in tax laws or rates be recognized in the period in which the law is enacted. Those effects, both current and deferred, are reported as part of the tax provision, regardless of income in which the underlying pretax income (expense) or asset (liability) was or will be reported.

As a result of the Tax Reform Act, the Company’s U.S. federal statutory corporate income tax rate of 21% was applied in the computation of the income tax provision for the three and nine months ended December 31, 2018.

The Company’s income tax provision was $19.6 million for the three months ended December 31, 2018. The Company’s income tax benefit was $20.2 million for the nine months ended December 31, 2018. The Company’s income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively. The Company’s effective tax rate was 30.5% and (12.3)% for the three and nine months ended December 31, 2018, respectively, and 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively.

Consistent with guidance issued by the SEC, which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Reform Act, the Company provisionally remeasured its net deferred tax assets due to the lower U.S. federal statutory corporate tax rate during the year ended March 31, 2018. The Company’s provisional estimate reflected estimable impacts of the Tax Reform Act on the Company’s estimated annual effective tax rate and discrete items resulting directly from the enactment of the Tax Reform Act based on the information available, prepared, or analyzed (including computations) in reasonable detail. Any adjustments to this provisional estimate would be recorded as adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized, if necessary. No adjustments were made to the Company’s provisional estimate of the impacts of the Tax Reform Act during the three and nine months ended December 31, 2018. This measurement period ended the quarter ended December 31, 2018.

The Company recognizes excess tax benefits and shortfalls in the income tax provision as discrete items in the period in which restricted stock units vest or stock option exercises occur. The Company recognized excess tax benefits associated with stock-based awards of $1.7 million and $68.5 million as an income tax benefit for the three and nine months ended December 31, 2018, respectively, and $3.2 million and $24.5 million as an income tax benefit for the three and nine months ended December 31, 2017, respectively. The amount of future excess tax benefits or shortfalls will likely fluctuate from period to period based on the price of the Company’s stock, the number of restricted stock units that vest or stock options that are exercised, and the fair value assigned to such stock-based awards under U.S. GAAP.

The significant differences between the statutory and effective income tax rate for the three and nine months ended December 31, 2018 and 2017 consist of the following items:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2018			2017				2018			2017
Statutory income tax rate		21.0		%	31.5		%		21.0		%	31.5		%
Increase resulting from:
Excess tax benefits from stock-based awards		(2.6	)		(7.0	)			(41.5	)		(21.9	)
Credits		(1.7	)		(2.1	)			(1.7	)		(2.1	)
State taxes, net		4.3			3.7				4.3			3.7
Permanent differences		1.8			1.7				1.8			1.7
Effect of the Tax Reform Act on net deferred tax assets		—			42.1				—			19.6
Excess foreign tax credits		7.9			—				3.7			—
Other		(0.2	)		0.7				0.1			0.2
Effective tax rate		30.5		%	70.6		%		(12.3	)	%	32.7		%

The recently enacted Tax Reform Act allows for a 100% deduction for the potential repatriation of foreign subsidiary earnings with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. Since most of the Company’s cash and cash equivalents held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of such funds to the U.S. would likely have a nominal tax impact.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. During the nine months ended December 31, 2018, the Company closed an income tax audit in Germany which covered fiscal years 2012 through 2015. The audit resulted in an immaterial adjustment to our financial statements. Fiscal years 2016 through 2018 remain open to examination in Germany. The Company also closed an Internal Revenue Service (“IRS”) audit relating to its fiscal year 2016 tax return.  The audit resulted in an immaterial adjustment to our financial statements. All other tax years remain subject to examination by the IRS, state and foreign tax authorities.

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Commitments and Contingencies

9 Months Ended

Dec. 31, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 11. Commitments and Contingencies

Commitments

Leases

In February 2017, the Company entered into a lease agreement for 21,603 square feet of office space in Danvers, Massachusetts expiring on July 31, 2022. In December 2017, the Company entered into an amendment to this lease to extend the term through August 31, 2025 and to add an additional 6,607 square feet of space for which rent began on June 1, 2018. In March 2018, the Company entered into a second amendment to the lease to add an additional 11,269 square feet of space.  In July 2018, the Company entered into an amendment to lease an additional 23,864 square feet of space from October 1, 2018 through September 30, 2027. With this most recent amendment, the Company has leased 63,343 square feet in total at this location as of October 1, 2018.  The Company also has a right of first offer to purchase the property from January 1, 2018 through August 31, 2035, if the lessor decides to sell the building.  The annual rent expense for this lease is estimated to be $0.9 million.

In September 2016, the Company entered into a lease agreement for an office in Berlin, Germany which commenced in May 2017 and expires in May 2024. The annual rent expense for this lease is estimated to be $0.3 million.

In October 2016, the Company entered into a lease agreement for an office in Tokyo, Japan which expires in September 2021. The office houses administrative, regulatory, and training personnel in connection with the Company’s commercial launch in Japan. The annual rent expense for this lease is estimated to be $0.9 million.

Contingencies

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements.

Thoratec Matters

Thoratec Corporation, or Thoratec, a subsidiary of Abbott Laboratories, has challenged a number of Company-owned patents in Europe in connection with the launch of its HeartMate PHP medical device, or PHP, in Europe. These actions relate to Thoratec’s ability to manufacture and sell its PHP product in Europe. These actions do not relate to the Company’s ability to manufacture or sell its Impella line of devices.

In December 2014, Thoratec filed a nullity suit in the German Federal Patent Court against a German “pigtail” patent owned by the Company with a flexible extension feature, and auxiliary pigtail, basket and funnel features. The validity hearing was held in November 2016 and the Federal Patent Court found the patent invalid. The Company appealed the decision to the German Supreme Court and, in November 2018, successfully obtained a patent with amended claims covering a pump with the flexible extension and the basket with a funnel.

In August 2015, Thoratec filed a nullity action in the German Federal Patent Court against two Company-owned patents covering a “magnetic clutch” feature. These magnetic clutch patents were acquired by the Company in July 2014, in connection with its acquisition of ECP and AIS. The validity hearing for the magnetic clutch patents was held in June 2017. The Company’s patents were upheld in an amended form to focus on the structure and interaction of the magnets in the clutch. The Federal Patent Court found certain unamended claims to be invalid.  The Company is appealing the decision with respect to the unamended claims.

In September 2015, the Company filed counterclaims in the magnetic clutch action in Germany asserting that the PHP product infringes the two magnetic clutch patents, a European pigtail patent and the German pigtail patent. The infringement trial has been stayed, pending resolution of the German nullity actions.  

In February 2017, Thoratec filed an opposition in the European Patent Office (“EPO”), against a Company-owned patent acquired in connection with the acquisition of ECP and AIS relating to a housing structure for an expandable pump. The Company filed an initial response to the opposition in July 2017. Oral proceedings were held on October 26, 2018, at which time the EPO revoked the patent. A written decision documenting the reasons for the revocation is expected to issue within a few months, after which the Company may file an appeal.  In December 2017, Thoratec filed an opposition in the EPO against a Company-owned patent acquired in connection with the acquisition of ECP and AIS relating to a pump having a shaft cap with an atraumatic ball. The Company responded to the opposition on May 27, 2018. On January 24, 2019 the EPO Opposition Division upheld patent claims related to a pump design with an atraumatic ball. A written decision summarizing that finding is expected later this calendar year.    

Maquet Matters

In December 2015, the Company received a letter from Maquet Cardiovascular LLC, or Maquet, a subsidiary of the Getinge Group, asserting that the Company’s Impella devices infringe certain claims having guidewire, lumen and sensor features, which were in two Maquet patents and one pending patent application in the U.S. and elsewhere, and attached a draft litigation complaint and encouraged the Company to take a license from Maquet.  In January 2016, the Company responded to Maquet stating that it believed that the cited claims were invalid and that its Impella devices did not infringe the cited patents.  In May 2016, Maquet notified the Company that its pending U.S. patent application had been issued as a U.S. patent, repeated their earlier assertion and encouraged the Company to discuss taking a license from Maquet. The three patents expire September 2020, December 2020 and October 2021. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts (“D. Mass.”) against Maquet seeking a declaratory judgment that the Company’s Impella devices do not infringe Maquet’s cited patent rights.  

In August 2016, Maquet sent a letter to the Company identifying four new U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. Of the four U.S. continuation applications, one issued as a patent on January 17, 2017, one issued as a patent on February 7, 2017, one issued as a patent on March 21, 2017, and one issued as a patent on October 17, 2017.  These four issued patents will expire in September 2020.

In September 2016, Maquet filed a response to the Company’s suit in D. Mass., including various counterclaims alleging that the Company’s Impella 2.5, Impella CP, Impella 5.0, and Impella RP heart pumps infringe certain claims of the three original issued U.S. patents (“2016 action”). On June 15, 2017, Maquet filed a motion for leave to amend its infringement counterclaims to add the first three additional U.S. continuation patents mentioned above and to file various false advertising, unfair competition claims under state law and under the Lanham Act, and a trademark cancellation in the pending case.  Maquet’s amended complaint and counterclaim, like those it originally filed, seek injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. The amended complaint admits that Maquet’s current commercially available products do not embody the claims of the asserted patents. On July 21, 2017, the Court granted the motion in part, allowing the three additional continuation patents to be added to the case, but denying addition of the false advertising claims, Lanham Act claims, and the trademark cancellation claims.  On April 24 and 25, 2018, the Court conducted a Markman hearing on claim interpretation. On September 7, 2018, the judge issued a Memorandum and Order on Claim Construction, where he interpreted the disputed claim terms in the case.  A hearing was held on November 2, 2018 to re-hear arguments on one of the terms.   Discovery remains ongoing.  No schedule has yet been set for the remainder of the case. With regard to the first six Maquet patents mentioned above, in March and April 2017, the Company filed requests for inter partes review, (“IPR”), at the U.S. Patent & Trademark Office’s Patent Trial and Appeals Board (“PTAB”) asserting that the claims are invalid in view of prior art blood pump technology. In September and October 2017, the PTAB denied institution on these IPR requests filed by the Company.  In September 2017, the Company filed additional IPRs and in March and April 2018, the PTAB denied institution of these IPR petitions.

On November 22, 2017, Maquet filed a second lawsuit in D. Mass alleging that the Company’s Impella 2.5, Impella CP, and Impella 5.0 heart pumps infringe certain claims of the fourth additional U.S. continuation patent mentioned above (the seventh patent overall).   In the complaint, Maquet seeks injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement.  In its answer to ABIOMED’s counterclaim, Maquet admits that its current commercially available products do not embody the claims of the asserted patents.  This second action is in its early stages.    

The Company is unable to estimate the potential liability with respect to the legal matters noted above. There are numerous factors that make it difficult to meaningfully estimate possible loss or range of loss at this stage of the legal proceedings, including the significant number of legal and factual issues still to be resolved in the Marquet and Thoratec patent disputes.

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Segment and Enterprise Wide Disclosures

9 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment and Enterprise Wide Disclosures

Note 12. Segment and Enterprise Wide Disclosures

The Company operates in one business segment—the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. International sales (sales outside the U.S., primarily in Germany and Japan) accounted for 14% and 13% of total revenue for the three and nine months ended December 31, 2018, respectively, and 11% of total revenue in each of the three and nine months ended December 31, 2017, respectively. The Company’s long-lived assets are located in the U.S. except for $41.7 million and $35.5 million at December 31, 2018 and March 31, 2018, respectively, which are located primarily in Germany.

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Basis of Preparation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

New Accounting Pronouncements Adopted

New Accounting Pronouncements Adopted

Effective April 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2014-09, “Revenue from Contracts with Customers,” (“Topic 606”) which provides a principles-based, five-step approach to measure and recognize revenue from contracts with customers. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 4. Revenue Recognition,” to the Company’s consolidated financial statements.

Effective April 1, 2018, the Company adopted the FASB standard update ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. The adoption of this guidance did not have a material impact on the Company’s consolidated statement of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018. Additional information and disclosures required by this new standard are contained in “Note 5. Cash Equivalents, Marketable Securities, and Fair Value Measurements,” to the Company’s consolidated financial statements.

On June 20, 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (“Topic 718”): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services. ASU 2018-07 eliminated the previous guidance for accounting for share-based payments to nonemployees and expanded Topic 718 to include share-based payments transactions to nonemployees. ASU 2018-07 is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The adoption of ASU 2018-07 requires a modified retrospective transition approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year. The Company early adopted ASU 2018-07 on June 20, 2018. The adoption of this guidance did not have a material impact on the Company’s consolidated statements of operations, cash flows, and balance sheet as of the adoption date or for the three or nine months ended December 31, 2018.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases.” The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The lease obligation amount recorded on the balance sheet at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lease arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements as well as updating processes and controls in order to adopt the new standard. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities. In addition, the evaluation includes a review of the Company’s existing contracts with its suppliers and vendors to determine if these agreements contain an embedded lease. The Company currently expects that its lease commitments will be recognized as operating lease liabilities and right-of-use assets upon adoption, which will increase total assets and total liabilities that the Company reports on its consolidated balance sheet. ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company on April 1, 2019.

Adoption of Topic 606, Revenue from Contracts with Customers

Adoption of Topic 606, Revenue from Contracts with Customers

The Company adopted Topic 606 on April 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal year 2019 reflect the application of Topic 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of ASC 605, “Revenue Recognition.” The adoption of Topic 606 did not have a material impact on the timing or amount of revenue recognized upon adoption and there was no cumulative prior period adjustment recorded to the opening balance of retained earnings upon adoption. Accordingly, the adoption of Topic 606 did not have a material impact on the Company’s consolidated balance sheet, statement of operations, stockholders’ equity or cash flows as of the adoption date or for the three or nine months ended December 31, 2018.

The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying Topic 606: (1) the Company accounts for amounts collected from customers for sales and other taxes, net of related amounts remitted to tax authorities; (2) the Company does not adjust the promised amount of consideration for the effects of a significant financing component because, at contract inception, the Company expects the period between the time when the Company transfers a promised good or service to the customer and the time when the customer pays for that good or service will be one year or less; (3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; (4) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs are recorded as selling, general and administrative expenses; (5) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; and (6) the Company does not disclose the transaction price allocated to unsatisfied performance obligations when the original expected contract duration is one year or less.

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligation in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligation in the contract

• Recognition of revenue when, or as, a performance obligation is satisfied

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Net Income Per Share (Tables)

9 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2018 and 2017 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Basic Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Basic net income per share	$	1.00	$	0.30	$	4.13	$	1.71

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2018		2017		2018		2017
Diluted Net Income Per Share
Net income	$	44,862	$	13,446	$	185,056	$	75,323
Basic weighted average shares outstanding		45,046		44,247		44,852		44,095
Effect of dilutive securities		1,090		1,622		1,295		1,636
Diluted weighted average shares outstanding		46,136		45,869		46,147		45,731
Diluted net income per share	$	0.97	$	0.29	$	4.01	$	1.65

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Revenue Recognition (Tables)

9 Months Ended

Dec. 31, 2018

Revenue Recognition And Deferred Revenue [Abstract]

Schedule of Disaggregated Revenue by Major Business Line and Geographical Location

The following table disaggregates the Company’s revenue by products and services:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Impella product revenue	$	193,253	$	147,989	$	542,198	$	402,583
Service and other revenue		7,310		6,033		20,153		16,730
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

The following table disaggregates the Company’s revenue by geographical location:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
U.S. revenue	$	172,548	$	136,363	$	488,386	$	374,697
International revenue		28,015		17,659		73,965		44,616
Total revenue	$	200,563	$	154,022	$	562,351	$	419,313

Summary of Activity in Each of Product Revenue and Discounts Categories

The following table summarizes product revenue rebates and discounts for the nine months ended December 31, 2018 (in thousands):

	Rebates and Discounts
Balance at March 31, 2018	$	1,405
Provision related to current period revenue		1,526
Credits and adjustments made during the period		(1,446	)
Balance at December 31, 2018	$	1,485

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Cash Equivalents, Marketable Securities and Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Cash Equivalents and Marketable Securities by Balance Sheet Classification

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are classified on the balance sheet as follows:

	December 31, 2018		March 31, 2018
	(in $000's)
Cash equivalents	$	42,146	$	22,595
Short-term marketable securities		373,975		319,274
Long-term marketable securities		—		37,502
	$	416,121	$	379,371

Cash Equivalents and Marketable Securities

The Company’s cash equivalents and marketable securities at December 31, 2018 and March 31, 2018 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2018:
Money market funds	$	36,146	$	—	$	—		$	36,146
Repurchase agreements		6,000		—		—			6,000
Short-term U.S. Treasury mutual fund securities		43,710		1		(37	)		43,674
Short-term government-backed securities		183,531		13		(152	)		183,392
Short-term corporate debt securities		114,193		46		(70	)		114,169
Short-term commercial paper		32,792		—		(52	)		32,740
	$	416,372	$	60	$	(311	)	$	416,121

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2018:
Money market funds	$	5,845	$	—	$	—		$	5,845
Repurchase agreements		16,750		—		—			16,750
Short-term U.S. Treasury mutual fund securities		18,132		—		(29	)		18,103
Short-term government-backed securities		212,255		3		(538	)		211,720
Short-term corporate debt securities		52,737		—		(161	)		52,576
Short-term commercial paper		36,936		2		(63	)		36,875
Long-term U.S. Treasury mutual fund securities		10,953		—		(16	)		10,937
Long-term government-backed securities		24,798		1		(12	)		24,787
Long-term corporate debt securities		1,777		1		—			1,778
	$	380,183	$	7	$	(819	)	$	379,371

Financial Instruments Recorded at Fair Value

The following table presents the Company’s financial instruments recorded at fair value in the consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2018:	(in $000's)
Assets
Money market funds	$	36,146	$	—	$	—	$	36,146
Repurchase agreements		—		6,000		—		6,000
Short-term U.S. Treasury mutual fund securities		—		43,674		—		43,674
Short-term government-backed securities		—		183,392		—		183,392
Short-term corporate debt securities		—		114,169		—		114,169
Short-term commercial paper		—		32,740		—		32,740
Liabilities
Contingent consideration		—		—		10,583		10,583

	Level 1		Level 2		Level 3		Total
March 31, 2018:	(in $000's)
Assets
Money market funds	$	5,845	$	—	$	—	$	5,845
Repurchase agreements		—		16,750		—		16,750
Short-term U.S. Treasury mutual fund securities		—		18,103		—		18,103
Short-term government-backed securities		—		211,720		—		211,720
Short-term corporate debt securities		—		52,576		—		52,576
Short-term commercial paper		—		36,875		—		36,875
Long-term U.S. Treasury mutual fund securities		—		10,937		—		10,937
Long-term government-backed securities		—		24,787		—		24,787
Long-term corporate debt securities		—		1,778		—		1,778
Liabilities
Contingent consideration		—		—		10,490		10,490

Valuation Method Used to Calculate Level 3 Liabilities Measured at Estimated Fair Value of Contingent Consideration Related to Acquisition

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Potential Milestone Payment		Fair Value at December 31, 2018		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
	(in $000's)
Clinical and regulatory milestone	$	7,000	$	5,797	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
						Discount rate	4.4% to 4.5%
						Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 10% to 40% for various upside and downside scenarios
Revenue-based milestone		8,000		4,786	Monte Carlo simulation model	Projected fiscal year of milestone payments	2024 to 2035
						Discount rate	15%
						Expected volatility for forecasted revenues	50%
						Probability of payment	80%
	$	15,000	$	10,583

Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Level 3 liabilities, beginning balance	$	10,331	$	9,835	$	10,490	$	9,153
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		252		588		93		1,270
Level 3 liabilities, ending balance	$	10,583	$	10,423	$	10,583	$	10,423

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Property and Equipment (Tables)

9 Months Ended

Dec. 31, 2018

Property Plant And Equipment [Abstract]

Components of Property and Equipment

The components of property and equipment are as follows:

	December 31, 2018			March 31, 2018
	(in $000's)
Land	$	7,348		$	7,680
Building and building improvements		85,875			63,700
Leasehold improvements		2,182			2,905
Machinery and equipment		51,980			42,787
Furniture and fixtures		10,153			8,104
Construction in progress		17,092			19,850
Total cost		174,630			145,026
Less accumulated depreciation		(36,175	)		(27,859	)
	$	138,455		$	117,167

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Goodwill In-Process Research and Development and Other Assets (Tables)

9 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill Activity

The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2018	$	35,808
Foreign currency translation impact		(2,548	)
Balance at December 31, 2018	$	33,260

Carrying value of In-Process Research and Development

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2018 are as follows:

	(in $000's)
Balance at March 31, 2018	$	16,705
Foreign currency translation impact		(1,189	)
Balance at December 31, 2018	$	15,516

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Accrued Expenses (Tables)

9 Months Ended

Dec. 31, 2018

Payables And Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2018		March 31, 2018
	(in $000's)
Employee compensation	$	31,930	$	30,330
Sales and income taxes		7,312		4,562
Research & development		3,371		3,162
Marketing		3,082		2,305
Professional, legal, and accounting fees		1,994		1,870
Warranty		1,300		1,081
Accrued capital expenditures		—		250
Other		2,732		2,587
	$	51,721	$	46,147

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Stock-Based Compensation (Tables)

9 Months Ended

Dec. 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation Recognized

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s consolidated statements of operations for the three and nine months ended December 31, 2018 and 2017:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2018		2017		2018		2017
	(in $000's)
Cost of product revenue	$	773	$	489	$	2,122	$	1,221
Research and development		2,638		1,673		7,222		4,217
Selling, general and administrative		12,167		9,070		34,413		23,732
	$	15,578	$	11,232	$	43,757	$	29,170

Summary of Stock Option Activity

The following table summarizes the stock option activity for the nine months ended December 31, 2018:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,282		$	46.18		5.31
Granted		78			381.62
Exercised		(435	)		25.36
Cancelled and expired		(19	)		145.89
Outstanding at end of period		906		$	83.90		5.74	$	222,852
Exercisable at end of period		668		$	39.86		4.78	$	190,646
Options vested and expected to vest at end of period		896		$	83.73		5.72	$	220,460

Summary of Weighted Average Grant-Date Fair Values And Weighted Average Assumptions Used to Calculate Fair Value of Stock Options Granted

The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of stock options granted during the three and nine months ended December 31, 2018 and 2017 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2018			2017			2018			2017
Weighted average grant-date fair value	$	117.50		$	70.14		$	142.08		$	51.20
Valuation assumptions:
Risk-free interest rate		2.81	%		2.13	%		2.93	%		1.86	%
Expected option life (years)		4.04			4.08			4.04			4.07
Expected volatility		45.2	%		42.2	%		42.8	%		43.6	%

Summary of Restricted Stock Units Activity

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2018:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		880		$	109.01
Granted		193		$	379.30
Vested		(418	)	$	103.66
Forfeited		(25	)	$	187.05
Restricted stock units at end of period		630		$	192.16

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Income Taxes (Tables)

9 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Differences Between Statutory and Effective Income Tax Rate

The significant differences between the statutory and effective income tax rate for the three and nine months ended December 31, 2018 and 2017 consist of the following items:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2018			2017				2018			2017
Statutory income tax rate		21.0		%	31.5		%		21.0		%	31.5		%
Increase resulting from:
Excess tax benefits from stock-based awards		(2.6	)		(7.0	)			(41.5	)		(21.9	)
Credits		(1.7	)		(2.1	)			(1.7	)		(2.1	)
State taxes, net		4.3			3.7				4.3			3.7
Permanent differences		1.8			1.7				1.8			1.7
Effect of the Tax Reform Act on net deferred tax assets		—			42.1				—			19.6
Excess foreign tax credits		7.9			—				3.7			—
Other		(0.2	)		0.7				0.1			0.2
Effective tax rate		30.5		%	70.6		%		(12.3	)	%	32.7		%

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Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Basic Net Income Per Share
Net income	$ 44,862	$ 13,446	$ 185,056	$ 75,323
Basic weighted average shares outstanding	45,046	44,247	44,852	44,095
Basic net income per share	$ 1.00	$ 0.30	$ 4.13	$ 1.71
Diluted Net Income Per Share
Net income	$ 44,862	$ 13,446	$ 185,056	$ 75,323
Basic weighted average shares outstanding	45,046	44,247	44,852	44,095
Effect of dilutive securities	1,090	1,622	1,295	1,636
Diluted weighted average shares outstanding	46,136	45,869	46,147	45,731
Diluted net income per share	$ 0.97	$ 0.29	$ 4.01	$ 1.65

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Net Income Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted weighted average shares outstanding	73,700	2,600	60,700	4,800
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted weighted average shares outstanding	104,000	185,000	104,000	185,000

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Revenue Recognition - Additional Information (Detail) - USD ($)		3 Months Ended	9 Months Ended
	Apr. 01, 2018	Dec. 31, 2018	Dec. 31, 2018	Mar. 31, 2018
Disaggregation Of Revenue [Line Items]
Contract with customer payment terms, description			Payment terms vary by contract type and type of customer and generally range from 30 to 60 days for direct sales customers. Payment terms with certain international distributors can be up to 90 days. The Company’s contracts with customers do not typically include extended payment terms.
Deferred revenue		$ 15,080,000	$ 15,080,000	$ 14,970,000
Deferred Revenue, Revenue Recognized		$ 2,000,000	$ 14,400,000
Minimum
Disaggregation Of Revenue [Line Items]
Revenue from contracts with customers, performance obligation term			1 year
Minimum | Direct Sales Customers
Disaggregation Of Revenue [Line Items]
Contract with customer payment terms, period			30 days
Maximum | Direct Sales Customers
Disaggregation Of Revenue [Line Items]
Contract with customer payment terms, period			60 days
Maximum | International Distributors
Disaggregation Of Revenue [Line Items]
Contract with customer payment terms, period			90 days
Accounting Standards Update 2014-09
Disaggregation Of Revenue [Line Items]
Cumulative prior period adjustment recorded to opening balance of retained earnings	$ 0

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Revenue Recognition - Schedule of Disaggregated Revenue by Major Business Line (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Disaggregation Of Revenue [Line Items]
Total revenue	$ 200,563	$ 154,022	$ 562,351	$ 419,313
Impella Product
Disaggregation Of Revenue [Line Items]
Total revenue	193,253	147,989	542,198	402,583
Service and Other
Disaggregation Of Revenue [Line Items]
Total revenue	$ 7,310	$ 6,033	$ 20,153	$ 16,730

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Revenue Recognition - Schedule of Disaggregated Revenue by Major Geographical Location (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Disaggregation Of Revenue [Line Items]
Total revenue	$ 200,563	$ 154,022	$ 562,351	$ 419,313
U.S.
Disaggregation Of Revenue [Line Items]
Total revenue	172,548	136,363	488,386	374,697
International
Disaggregation Of Revenue [Line Items]
Total revenue	$ 28,015	$ 17,659	$ 73,965	$ 44,616

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Revenue Recognition - Summary of Activity in Each of Product Revenue and Discounts Categories (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2018 USD ($)
Revenue Recognition And Deferred Revenue [Abstract]
Balance at March 31, 2018	$ 1,405
Provision related to current period revenue	1,526
Credits and adjustments made during the period	(1,446)
Balance at December 31, 2018	$ 1,485

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Cash Equivalents and Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Cash equivalents	$ 42,146	$ 22,595
Short-term marketable securities	373,975	319,274
Long-term marketable securities		37,502
Available-for-sale securities, fair value disclosure	$ 416,121	$ 379,371

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Investable Cash Equivalents and Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	$ 416,372	$ 380,183
Gross Unrealized Gains	60	7
Gross Unrealized Losses	(311)	(819)
Fair Market Value	416,121	379,371
Repurchase Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	6,000	16,750
Fair Market Value	6,000	16,750
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	36,146	5,845
Fair Market Value	36,146	5,845
Commercial Paper | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	32,792	36,936
Gross Unrealized Gains		2
Gross Unrealized Losses	(52)	(63)
Fair Market Value	32,740	36,875
U.S. Treasury mutual fund securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	43,710	18,132
Gross Unrealized Gains	1
Gross Unrealized Losses	(37)	(29)
Fair Market Value	43,674	18,103
U.S. Treasury mutual fund securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost		10,953
Gross Unrealized Losses		(16)
Fair Market Value		10,937
Government-backed securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	183,531	212,255
Gross Unrealized Gains	13	3
Gross Unrealized Losses	(152)	(538)
Fair Market Value	183,392	211,720
Government-backed securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost		24,798
Gross Unrealized Gains		1
Gross Unrealized Losses		(12)
Fair Market Value		24,787
Corporate Debt Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	114,193	52,737
Gross Unrealized Gains	46
Gross Unrealized Losses	(70)	(161)
Fair Market Value	$ 114,169	52,576
Corporate Debt Securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost		1,777
Gross Unrealized Gains		1
Fair Market Value		$ 1,778

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Financial Instruments Recorded at Fair Value (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 416,121	$ 379,371
Contingent consideration	10,583	10,490
Repurchase Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	6,000	16,750
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	36,146	5,845
Commercial Paper | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	32,740	36,875
Level 1 | Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	36,146	5,845
Level 2 | Repurchase Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	6,000	16,750
Level 2 | Commercial Paper | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	32,740	36,875
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	10,583	10,490
U.S. Treasury mutual fund securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	43,674	18,103
U.S. Treasury mutual fund securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		10,937
U.S. Treasury mutual fund securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	43,674	18,103
U.S. Treasury mutual fund securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		10,937
Government-backed securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	183,392	211,720
Government-backed securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		24,787
Government-backed securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	183,392	211,720
Government-backed securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		24,787
Corporate Debt Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	114,169	52,576
Corporate Debt Securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		1,778
Corporate Debt Securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 114,169	52,576
Corporate Debt Securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		$ 1,778

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Cash Equivalents, Marketable Securities and Fair Value Measurements - Additional Information (Detail) - ECP Entwicklungsgesellschaft mbH and AIS GmbH Aachen Innovative Solutions $ in Millions	1 Months Ended
	Jul. 31, 2014 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments to acquire businesses, cash paid	$ 13.0
Potential payouts payments	$ 15.0

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Valuation Method Used to Calculate Level 3 Liabilities Measured at Estimated Fair Value of Contingent Consideration Related to Acquisition (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration	$ 10,583	$ 10,490
ECP Entwicklungsgesellschaft mbH | Discount Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Alternative investment, measurement input	21
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration	$ 10,583	$ 10,490
Level 3 | ECP Entwicklungsgesellschaft mbH
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Potential Milestone Payment	15,000
Contingent consideration	10,583
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Potential Milestone Payment	7,000
Contingent consideration	$ 5,797
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Base Case Scenario | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Probability of occurrence	40.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Minimum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Projected fiscal year of milestone payments	2019
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Minimum | Various Upside and Downside Scenarios | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Probability of occurrence	10.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Maximum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Projected fiscal year of milestone payments	2022
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Maximum | Various Upside and Downside Scenarios | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Probability of occurrence	40.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Discount Rate | Minimum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Alternative investment, measurement input	4.4
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Discount Rate | Maximum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Alternative investment, measurement input	4.5
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Potential Milestone Payment	$ 8,000
Contingent consideration	$ 4,786
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Probability of payment	80.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Minimum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Projected fiscal year of milestone payments	2024
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Maximum | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Projected fiscal year of milestone payments	2035
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Discount Rate | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Alternative investment, measurement input	15
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Expected Volatility for Forecasted Revenues | Contingent Consideration
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Alternative investment, measurement input	50

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Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs (Detail) - Contingent Consideration - ECP Entwicklungsgesellschaft mbH - Level 3 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3 liabilities, beginning balance	$ 10,331	$ 9,835	$ 10,490	$ 9,153
Additions	0	0	0	0
Payments	0	0	0	0
Change in fair value	252	588	93	1,270
Level 3 liabilities, ending balance	$ 10,583	$ 10,423	$ 10,583	$ 10,423

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Components of Property and Equipment (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Property Plant And Equipment [Abstract]
Land	$ 7,348	$ 7,680
Building and building improvements	85,875	63,700
Leasehold improvements	2,182	2,905
Machinery and equipment	51,980	42,787
Furniture and fixtures	10,153	8,104
Construction in progress	17,092	19,850
Total cost	174,630	145,026
Less accumulated depreciation	(36,175)	(27,859)
Property and equipment, net	$ 138,455	$ 117,167

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Goodwill In-Process Research and Development and Other Assets - Additional Information (Detail)	1 Months Ended		9 Months Ended
	Oct. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Goodwill [Line Items]
Goodwill			$ 33,260,000	$ 35,808,000
Accumulated impairment loss, goodwill			0
In-process research and development			15,516,000	16,705,000
Aggregate carrying amount of other investments			40,800,000	12,600,000
Other additional Investments in private medical device company			$ 28,100,000
Manufacturing Rights and Knowledge
Goodwill [Line Items]
Milestone payment		$ 1,800,000
Manufacturing Technology License Related to Introducer Sheaths
Goodwill [Line Items]
Payments to third party	$ 600,000
Other Intangible Assets
Goodwill [Line Items]
Intangible asset, amortized useful life			15 years
ECP Entwicklungsgesellschaft mbH
Goodwill [Line Items]
In-process research and development			$ 15,500,000	$ 16,700,000
ECP Entwicklungsgesellschaft mbH | Discount Rate
Goodwill [Line Items]
Fair value measurement inputs			21

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Goodwill Activity (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 35,808
Foreign currency translation impact	(2,548)
Ending balance	$ 33,260

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Carrying value of In-Process Research and Development (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 16,705
Foreign currency translation impact	(1,189)
Ending balance	$ 15,516

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Accrued Expenses (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Mar. 31, 2018
Payables and Accruals [Abstract]
Employee compensation	$ 31,930	$ 30,330
Sales and income taxes	7,312	4,562
Research & development	3,371	3,162
Marketing	3,082	2,305
Professional, legal, and accounting fees	1,994	1,870
Warranty	1,300	1,081
Accrued capital expenditures		250
Other	2,732	2,587
Accrued expenses	$ 51,721	$ 46,147

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Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 15,578	$ 11,232	$ 43,757	$ 29,170
Cost of product revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	773	489	2,122	1,221
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	2,638	1,673	7,222	4,217
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 12,167	$ 9,070	$ 34,413	$ 23,732

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Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2018
Options
Outstanding at beginning of period	1,282
Granted	78
Exercised	(435)
Cancelled and expired	(19)
Outstanding at end of period	906	1,282
Exercisable at end of period	668
Options vested and expected to vest at end of period	896
Weighted Average Exercise Price
Outstanding at beginning of period	$ 46.18
Granted	381.62
Exercised	25.36
Cancelled and expired	145.89
Outstanding at end of period	83.90	$ 46.18
Exercisable at end of period	39.86
Options vested and expected to vest at end of period	$ 83.73
Weighted Average Remaining Contractual Term (years)
Outstanding	5 years 8 months 26 days	5 years 3 months 21 days
Exercisable at end of period	4 years 9 months 10 days
Options vested and expected to vest at end of period	5 years 8 months 19 days
Aggregate Intrinsic Value
Outstanding at end of period	$ 222,852
Exercisable at end of period	190,646
Options vested and expected to vest at end of period	$ 220,460

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	9 Months Ended
	May 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Aggregate intrinsic value of options exercised in period		$ 158,600
Proceeds from the exercise of stock options		11,043	$ 7,626
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense		$ 14,000
Unrecognized stock-based compensation expense, estimated weighted-average recognition period		2 years 1 month 6 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Unrecognized stock-based compensation expense		$ 60,900
Unrecognized stock-based compensation expense, estimated weighted-average recognition period		2 years 1 month 6 days
Weighted average grant-date fair value		$ 379.30
Fair value of units vested		$ 168,100
Restricted share unit issued		193,000
Performance Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted share unit issued	114,000

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Summary of Weighted Average Grant-Date Fair Values And Weighted Average Assumptions Used to Calculate Fair Value of Stock Options Granted (Detail) - Stock Options - $ / shares	3 Months Ended		9 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value	$ 117.50	$ 70.14	$ 142.08	$ 51.20
Valuation assumptions:
Risk-free interest rate	2.81%	2.13%	2.93%	1.86%
Expected option life (years)	4 years 14 days	4 years 29 days	4 years 14 days	4 years 25 days
Expected volatility	45.20%	42.20%	42.80%	43.60%

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Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units shares in Thousands	9 Months Ended
	Dec. 31, 2018 $ / shares shares
Number of Shares
Beginning Balance | shares	880
Granted | shares	193
Vested | shares	(418)
Forfeited | shares	(25)
Ending Balance | shares	630
Weighted Average Grant Date Fair Value
Beginning Balance | $ / shares	$ 109.01
Granted | $ / shares	379.30
Vested | $ / shares	103.66
Forfeited | $ / shares	187.05
Ending Balance | $ / shares	$ 192.16

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Income Taxes - Additional Information (Detail) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Dec. 22, 2017	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
U.S. federal statutory corporate tax rate		35.00%	21.00%	31.50%	21.00%	31.50%
Income tax provision (benefit)			$ 19,648,000	$ 32,208,000	$ (20,225,000)	$ 36,607,000
Effective income tax rate			30.50%	70.60%	(12.30%)	32.70%
Measurement period	1 year
Income tax expense			$ 0		$ 0
Excess tax benefits from stock-based awards			$ 1,700,000	$ 3,200,000	$ 68,500,000	$ 24,500,000
Potential repatriation of foreign subsidiary earnings					100.00%

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Differences Between Statutory and Effective Income Tax Rate (Detail)	1 Months Ended	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Statutory income tax rate	35.00%	21.00%	31.50%	21.00%	31.50%
Excess tax benefits from stock-based awards		(2.60%)	(7.00%)	(41.50%)	(21.90%)
Credits		(1.70%)	(2.10%)	(1.70%)	(2.10%)
State taxes, net		4.30%	3.70%	4.30%	3.70%
Permanent differences		1.80%	1.70%	1.80%	1.70%
Effect of the Tax Reform Act on net deferred tax assets			42.10%		19.60%
Excess foreign tax credits		7.90%		3.70%
Other		(0.20%)	0.70%	0.10%	0.20%
Effective tax rate		30.50%	70.60%	(12.30%)	32.70%

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Commitments and Contingencies - Additional Information (Detail) $ in Millions			1 Months Ended						9 Months Ended
	Oct. 01, 2018 ft²	Dec. 31, 2017 ft²	Jul. 31, 2018 ft²	Feb. 28, 2017 ft²	Oct. 31, 2016	Sep. 30, 2016	May 31, 2016	Sep. 30, 2015 Patent	Dec. 31, 2018 USD ($)	Mar. 31, 2018 ft²
Magnetic Clutch Patents
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent								2
European Pigtail Patent
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent								1
German Pigtail Patent
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent								1
Patent One
Commitments and Contingencies [Line Items]
Patent expiration period							2020-09
Patent Two
Commitments and Contingencies [Line Items]
Patent expiration period							2020-12
Patent Three
Commitments and Contingencies [Line Items]
Patent expiration period							2021-10
Lease Agreements | Massachusetts
Commitments and Contingencies [Line Items]
Annual rent expense | $									$ 0.9
Lease expiration date		Aug. 31, 2025	Sep. 30, 2027	Jul. 31, 2022
Additional office space | ft²		6,607	23,864	21,603						11,269
Total office space | ft²	63,343
Lease Agreements | Germany
Commitments and Contingencies [Line Items]
Annual rent expense | $									0.3
Lease commencement period						2017-05
Lease expiration period						2024-05
Lease Agreements | Japan
Commitments and Contingencies [Line Items]
Annual rent expense | $									$ 0.9
Lease expiration period					2021-09

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Segment and Enterprise Wide Disclosures - Additional Information (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017	Dec. 31, 2018 USD ($) Segment	Dec. 31, 2017	Mar. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of business segments | Segment			1
International
Segment Reporting Information [Line Items]
Long-lived assets | $	$ 41.7		$ 41.7		$ 35.5
Customer Concentration Risk | Total Revenues | International
Segment Reporting Information [Line Items]
Percentage of revenue accounted	14.00%	11.00%	13.00%	11.00%