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 September 30, 2020

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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	ABMD	The NASDAQ Stock Market LLC

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 October 22, 2020, 45,189,883 shares of the registrant’s common stock, $.01 par value, were outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION:			Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2020 and March 31, 2020	3
	Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2020 and 2019	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended September 30, 2020 and 2019	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended September 30, 2020 and 2019	6
	Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2020 and 2019	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II - OTHER INFORMATION:
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

EXPLANATORY NOTES

Pending Trademarks and Registered Marks

Throughout this quarterly report on Form 10-Q (“this Report”), we refer to various trademarks, service marks and trade names that we use in our business. Abiomed, Impella, Impella 2.5, Impella 5.0, Impella LD, Impella CP, Impella RP, Impella 5.5, Impella Connect, and SmartAssist are registered trademarks of Abiomed, Inc., and are registered in the U.S. and certain foreign countries. Impella ECP, Impella XR Sheath, Impella BTR, CVAD, STEMI DTU, Automated Impella Controller and Abiomed Breethe OXY-1 System are pending trademarks of Abiomed, Inc. Other trademarks and service marks appearing in this Report are the property of their respective holders.

Company References

Throughout this Report, “ABIOMED, Inc.,” the “Company,” “we,” “us” and “our” refer to ABIOMED, Inc. and its consolidated subsidiaries.

Where You Can Find More Information

We make available, free of charge on our website located at www.abiomed.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after filing such reports with or furnishing such reports to the U.S. Securities and Exchange Commission (“SEC”). We also use our website for the distribution of Company information. The information we post on our website may be deemed to be material information. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website are not incorporated by reference into this Report.  

2

PART I. FINANCIAL INFORMATION

ITEM 1: Condensed Consolidated Financial Statements

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

	September 30, 2020			March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	202,241		$	192,341
Short-term marketable securities		330,843			250,775
Accounts receivable, net		80,909			84,650
Inventories		83,209			90,088
Prepaid expenses and other current assets		19,419			18,009
Total current assets		716,621			635,863
Long-term marketable securities		202,613			207,795
Property and equipment, net		175,582			164,931
Goodwill		78,122			31,969
In-process research and development		42,895			14,913
Deferred tax assets		29,547			43,336
Other assets		82,594			117,655
Total assets	$	1,327,974		$	1,216,462
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,734		$	32,774
Accrued expenses		57,227			75,107
Deferred revenue		21,314			19,147
Other current liabilities		4,938			4,857
Total current liabilities		105,213			131,885
Contingent consideration		24,417			9,000
Deferred tax liabilities		4,251			806
Other long-term liabilities		11,684			9,305
Total liabilities		145,565			150,996
Commitments and contingencies (Note 14)
Stockholders' equity:
Class B Preferred Stock, $.01 par value		—			—
Authorized - 1,000,000 shares; Issued and outstanding - none
Common stock, $.01 par value		452			451
Authorized - 100,000,000 shares; Issued - 47,847,023 shares at September 30, 2020 and 47,542,061 shares at March 31, 2020
Outstanding - 45,189,883 shares at September 30, 2020 and 45,008,687 shares at March 31, 2020
Additional paid in capital		767,527			739,133
Retained earnings		709,283			602,482
Treasury stock at cost - 2,657,140 shares at September 30, 2020 and 2,533,374 shares at March 31, 2020		(287,654	)		(265,411	)
Accumulated other comprehensive loss		(7,199	)		(11,189	)
Total stockholders' equity		1,182,409			1,065,466
Total liabilities and stockholders' equity	$	1,327,974		$	1,216,462

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

3

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

	For the Three Months Ended September 30,					For the Six Months Ended September 30,
	2020		2019			2020		2019
Revenue	$	209,764	$	204,974		$	374,614	$	412,640
Costs and expenses:
Cost of revenue		38,736		34,867			74,719		71,940
Research and development		30,525		23,969			56,882		47,759
Selling, general and administrative		79,167		85,956			147,611		172,034
		148,428		144,792			279,212		291,733
Income from operations		61,336		60,182			95,402		120,907
Other income (expense):
Investment income, net		1,822		2,932			4,219		5,981
Other income (expense), net		9,757		(45,756	)		34,370		(6,392	)
		11,579		(42,824	)		38,589		(411	)
Income before income taxes		72,915		17,358			133,991		120,496
Income tax provision		10,702		4,287			27,190		18,502
Net income	$	62,213	$	13,071		$	106,801	$	101,994
Basic net income per share	$	1.38	$	0.29		$	2.37	$	2.25
Basic weighted average shares outstanding		45,104		45,319			45,057		45,267
Diluted net income per share	$	1.36	$	0.28		$	2.34	$	2.22
Diluted weighted average shares outstanding		45,661		45,912			45,609		46,031

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

4

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2020			2019			2020			2019
Net income	$	62,213		$	13,071		$	106,801		$	101,994
Other comprehensive income (loss):
Foreign currency translation gains (losses)		2,416			(5,716	)		3,776			(3,382	)
Unrealized losses on derivative instrument		(266	)		—			(726	)		—
Net unrealized (losses) gains on marketable securities		(814	)		(85	)		940			515
Other comprehensive income		1,336			(5,801	)		3,990			(2,867	)
Comprehensive income	$	63,549		$	7,270		$	110,791		$	99,127

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

5

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands, except share data)

	Common Stock						Treasury Stock					Additional Paid			Retained		Accumulated Other			Total Stockholders'
	Shares			Par value			Shares		Amount			in Capital			Earnings		Comprehensive Loss			Equity
Balance, April 1, 2020		45,008,687		$	451			2,533,374	$	(265,411	)	$	739,133		$	602,482	$	(11,189	)	$	1,065,466
Restricted stock units issued		124,749			1			—		—			(1	)		—		—			—
Stock options exercised		31,488			—			—		—			1,010			—		—			1,010
Return of common stock to pay withholding taxes on restricted stock		(52,515	)		—			52,515		(9,857	)		—			—		—			(9,857	)
Stock compensation expense		—			—			—		—			9,298			—		—			9,298
Stock repurchase program		(67,649	)		(1	)		67,649		(11,309	)		—			—		—			(11,310	)
Other comprehensive income		—			—			—		—			—			—		2,654			2,654
Net income		—			—			—		—			—			44,588		—			44,588
Balance, June 30, 2020		45,044,760		$	450			2,653,538	$	(286,577	)	$	749,440		$	647,070	$	(8,535	)	$	1,101,848
Restricted stock units issued		11,554			—			—		—			—			—		—			—
Stock options exercised		121,066			1			—		—			4,544			—		—			4,545
Return of common stock to pay withholding taxes on restricted stock		(3,602	)		—			3,602		(1,077	)		—			—		—			(1,077	)
Stock issued under employee stock purchase plan		16,105			1			—		—			1,978			—		—			1,979
Stock compensation expense		—			—			—		—			11,565			—		—			11,565
Other comprehensive income		—			—			—		—			—			—		1,336			1,336
Net income		—			—			—		—			—			62,213		—			62,213
Balance, September 30, 2020		45,189,883		$	452			2,657,140	$	(287,654	)	$	767,527		$	709,283	$	(7,199	)	$	1,182,409

	Common Stock						Treasury Stock					Additional Paid			Retained		Accumulated Other			Total Stockholders'
	Shares			Par value			Shares		Amount			in Capital			Earnings		Comprehensive Loss			Equity
Balance, April 1, 2019		45,122,985		$	451			1,903,241	$	(138,852	)	$	690,507		$	399,473	$	(14,689	)	$	936,890
Restricted stock units issued		373,430			4			—		—			(4	)		—		—			—
Stock options exercised		36,289			1			—		—			1,260			—		—			1,261
Return of common stock to pay withholding taxes on restricted stock		(158,426	)		(2	)		158,426		(40,534	)		—			—		—			(40,536	)
Stock compensation expense		—			—			—		—			13,121			—		—			13,121
Other comprehensive income		—			—			—		—			—			—		2,934			2,934
Net income		—			—			—		—			—			88,923		—			88,923
Balance, June 30, 2019		45,374,278		$	454			2,061,667	$	(179,386	)	$	704,884		$	488,396	$	(11,755	)	$	1,002,593
Restricted stock units issued		12,039			—			—		—			—			—		—			—
Stock options exercised		21,268			—			—		—			1,445			—		—			1,445
Return of common stock to pay withholding taxes on restricted stock		(3,363	)		—			3,363		(668	)		—			—		—			(668	)
Stock issued under employee stock purchase plan		15,659			—			—		—			2,368			—		—			2,368
Stock compensation expense		—			—			—		—			13,323			—		—			13,323
Stock repurchase program		(180,929	)		(2	)		180,929		(34,872	)		—			—		—			(34,874	)
Other comprehensive loss		—			—			—		—			—			—		(5,801	)		(5,801	)
Net income		—			—			—		—			—			13,071		—			13,071
Balance, September 30, 2019		45,238,952		$	452			2,245,959	$	(214,926	)	$	722,020		$	501,467	$	(17,556	)	$	991,457

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

6

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	For the Six Months Ended September 30,
	2020			2019
Operating activities:
Net income	$	106,801		$	101,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,137			9,052
Bad debt (recoveries) expense		(373	)		152
Stock-based compensation		20,863			26,445
Write-down of inventory and other		3,122			2,157
Accretion on marketable securities		473			(2,276	)
Change in fair value of other investments		(33,872	)		5,943
Deferred tax provision		14,187			10,195
Change in fair value of contingent consideration		2,117			661
Other non-cash operating activities		2,008			2,177
Changes in assets and liabilities:
Accounts receivable		4,767			(3,828	)
Inventories		6,071			(12,204	)
Prepaid expenses and other assets		1,744			(4,077	)
Accounts payable		(10,128	)		781
Accrued expenses and other liabilities		(21,988	)		(1,268	)
Deferred revenue		2,039			2,983
Net cash provided by operating activities		108,968			138,887
Investing activities:
Purchases of marketable securities		(294,558	)		(268,485	)
Proceeds from the sale and maturity of marketable securities and other		220,197			262,881
Purchases of other investments and intangible assets		(3,100	)		(7,800	)
Acquisition of Breethe Inc., net of cash acquired		(52,183	)		—
Proceeds from sales of Shockwave Medical securities		67,882			—
Purchases of property and equipment		(19,552	)		(24,607	)
Net cash used for investing activities		(81,314	)		(38,011	)
Financing activities:
Proceeds from the exercise of stock options		5,555			2,706
Taxes paid related to net share settlement upon vesting of stock awards		(10,934	)		(41,206	)
Repurchase of common stock		(11,310	)		(34,873	)
Proceeds from the issuance of stock under employee stock purchase plan		1,978			2,368
Net cash used for financing activities		(14,711	)		(71,005	)
Effect of exchange rate changes on cash and cash equivalents		(3,043	)		(613	)
Net increase in cash and cash equivalents		9,900			29,258
Cash and cash equivalents at beginning of period		192,341			121,021
Cash and cash equivalents at end of period	$	202,241		$	150,279
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	25,254		$	6,349
Supplemental disclosure of non-cash activities:
Contingent consideration related to the acquisition of Breethe, Inc.		13,300			—
Property and equipment in accounts payable and accrued expenses		1,244			3,825
Right-of-use assets obtained in exchange for lease liabilities		193			14,513

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

7

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, 2020 that has been filed with the 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. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from these estimates.

There have been no changes in the Company’s significant accounting policies for the three and six months ended September 30, 2020 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, 2020 that has been filed with the SEC.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from these estimates.

COVID-19 Pandemic

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. Considerable uncertainty still surrounds the COVID-19 virus and its potential effects, and the extent of and effectiveness of responses taken on international, national and local levels. Measures taken to limit the impact of COVID-19, including shelter-in-place orders, social distancing measures, travel bans and restrictions, and business and government shutdowns, continue to create significant negative economic impacts on a global basis. The extent of the impact of the COVID-19 pandemic on the Company's business remains uncertain and difficult to predict, as the response to the pandemic continues to evolve.

Beginning in mid-March 2020 and continuing into the first quarter of fiscal 2021, the Company experienced a significant decline in patient utilization in the U.S., Europe and Japan as healthcare systems diverted resources to meet the increasing demands of managing COVID-19. The Company’s business was most impacted in April 2020, in terms of the decline in patients and revenue from the shelter-in-place restrictions in a majority of countries and limitations on procedures in hospitals. The Company experienced sequential quarterly improvement globally through the second quarter of fiscal 2021 as restrictions were lifted and limitations eased. In the second quarter of fiscal 2021, patient procedure volume trends have improved gradually as both demand for procedures and availability of healthcare resources improved during the summer months.

While the Company currently expects to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. The Company believes it is likely to continue to experience variable impacts on its business based on some of the resurgence that is now occurring in cities across the globe.

8

The Company is closely monitoring the impact of COVID-19 on all aspects of its business and geographies, including the impact on its customers, employees, suppliers, vendors, business partners and distribution channels. The extent to which the COVID-19 global pandemic impacts the Company’s business, results of operations, and financial condition will depend on future developments, which are highly uncertain and are difficult to predict; these developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or address its impact, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impacts on its financial condition and results of operations. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326).” This new standard requires financial instruments to be measured at amortized cost, and accounts receivables to be presented at the net amount expected to be collected. The new model requires an entity to estimate credit losses based on historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350).” This new standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which required companies to estimate the implied fair value of goodwill and recognize an impairment charge by the amount in which the carrying value exceeds the implied fair value. Under the new guidance, if the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded, even if the difference is attributable to the fair value of other assets in the reporting unit. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820).” This new standard modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain disclosure requirements related to Level 3 fair value measurements. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740).” This amendment to the guidance on income taxes is intended to simplify the accounting for income taxes. The amendment eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The amendment also clarifies existing guidance related to the evaluation of a step up in the tax basis of goodwill and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. ASU 2019-12 will become effective for the Company in fiscal 2022.

In January 2020, the FASB issued ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),” an amendment clarifying the interaction between accounting standards related to equity securities, equity method investments, and certain derivative instruments. The guidance is effective for fiscal years beginning after December 15, 2020. ASU 2020-01 will become effective for the Company in fiscal 2022.

Note 3. Acquisition

Acquisition of Breethe, Inc.

The Company acquired Breethe, Inc. (“Breethe”), a Maryland corporation on April 24, 2020. Breethe is engaged in research and development of a novel extracorporeal membrane oxygenation (“ECMO”) system that will complement and expand its product portfolio to more comprehensively serve the needs of patients whose lungs can no longer provide sufficient oxygenation, including patients suffering from cardiogenic shock, or respiratory failure, such as ARDS, H1N1, or COVID-19. The Company acquired Breethe for $55.0 million in cash, with additional potential payouts up to a maximum of $55.0 million payable based on the achievement of certain technical, regulatory and commercial milestones.

Preliminary Purchase Price Allocation

The acquisition was accounted for as a business combination. The purchase price for the acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values. The purchase price allocation presented herein is

9

preliminary. The final purchase price allocation will be determined after completion of an analysis to determine the fair value of all assets acquired and liabilities assumed, but in no event later than one year following completion of the acquisition. Accordingly, the final acquisition accounting adjustments could differ materially from the preliminary amounts presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of purchase price allocated to goodwill and could impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.

The acquisition-date fair value of the consideration transferred is as follows:

	Total Acquisition Date Fair Value (in thousands)
Cash and other considerations	$	57,850
Contingent consideration		13,300
Total consideration transferred	$	71,150

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the date of acquisition (in thousands):

Acquired assets:
Cash and cash equivalents	$	3,404
Property and equipment		744
Goodwill		44,048
In-process research and development		27,000
Other assets acquired		895
Total assets acquired		76,091
Liabilities assumed:
Accounts payable and other liabilities		1,562
Deferred tax liabilities		3,379
Net assets acquired	$	71,150

Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill is not expected to be deductible for income tax purposes.

In process research and development (“IPR&D”) is the estimated fair value of the Breethe ECMO technology which had not reached commercial technological feasibility nor had alternative future use at the time of the acquisition and is therefore considered IPR&D.  The assigned values are allocated among the various IPR&D assets acquired.

10

Transaction costs such as legal, insurance and other costs related to the acquisition, aggregating approximately $0.9 million, have been expensed as incurred and are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

Note 4. 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 six months ended September 30, 2020 and 2019 were as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Basic Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213	$	13,071	$	106,801	$	101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Net income per share – basic	$	1.38	$	0.29	$	2.37	$	2.25

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Diluted Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213		13,071		106,801		101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Effect of dilutive securities		557		593		552		764
Weighted average shares – diluted		45,661		45,912		45,609		46,031
Net income per share – diluted	$	1.36	$	0.28	$	2.34	$	2.22

Share-based compensation awards of approximately 0.1 million and 0.3 million shares for the three months ended September 30, 2020, and 2019, respectively, and approximately 0.2 million and 0.3 million for the six months ended September 30, 2020, and 2019, respectively, were outstanding but were not included in the computation of diluted net income per share because the effect of including such shares would have been anti-dilutive or are contingently issuable upon meeting performance criteria in the periods presented.

Note 5. Revenue Recognition

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP, Impella 5.5 and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

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.

11

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 and shipment of product or service provided has been incurred. 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.

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.  

Disaggregation of Revenue

The Company generally sells most of its products and services through a direct sales force in the U.S., Germany and Japan and through direct sales or distributors in other international markets (e.g., certain other European markets, Canada, Latin America, and 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 September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
Impella product revenue	$	199,676	$	196,939	$	355,093	$	396,804
Service and other revenue		10,088		8,035		19,521		15,836
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

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

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
U.S. revenue	$	172,147	$	172,015	$	306,872	$	347,500
International revenue		37,617		32,959		67,742		65,140
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

Variable Consideration

Returns Reserve

The Company estimates an allowance for future sales returns based on historical return experience, which requires judgment. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.  The Company estimates product return liabilities using the expected value method based on its historical sales information and other factors that it believes could significantly impact its expected returns, including product discontinuations, product recalls and expirations, of which it becomes aware. The Company’s cost of replacing defective products has not been material and is accounted for at the time of replacement. The Company’s returns reserve during the three and six months ended September 30, 2020 and 2019, were not material.

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 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 sheet. 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. Revenue adjustments that relate to performance obligations satisfied in prior periods during the three and six months ended September 30, 2020 and 2019, were not material.

12

Contract Balances

Deferred Revenue

The Company’s deferred revenue balance was $21.3 million and $19.1 million as of September 30, 2020 and March 31, 2020 respectively. The deferred revenue balance is due 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 six months ended September 30, 2020, the Company recognized $5.4 million and $14.6 million of revenue that was included in the deferred revenue balance as of March 31, 2020, respectively. During the three and six months ended September 30, 2019, the Company recognized $4.0 million and $12.5 million of revenue that was included in the deferred revenue balance as of March 31, 2019, respectively.

Note 6. Cash Equivalents, Marketable Securities and Fair Value Measurements

The Company’s cash equivalents and marketable securities at September 30, 2020 and March 31, 2020 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
September 30, 2020	(in $000's)
Money market funds	$	104,305	$	—	$	—		$	104,305
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		124,305		—		—			124,305
Short-term U.S. Treasury mutual fund securities		75,505		85		(1	)		75,589
Short-term government-backed securities		85,360		105		(9	)		85,456
Short-term corporate debt securities		128,738		1,043		—			129,781
Short-term commercial paper		39,991		31		(5	)		40,017
Total short-term marketable securities		329,594		1,264		(15	)		330,843
Long-term U.S. Treasury mutual fund securities		10,246		2		—			10,248
Long-term government-backed securities		141,378		164		(6	)		141,536
Long-term corporate debt securities		49,627		1,202		—			50,829
Total long-term marketable securities		201,251		1,368		(6	)		202,613
	$	655,150	$	2,632	$	(21	)	$	657,761

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
March 31, 2020:	(in $000's)
Money market funds	$	115,019	$	—	$	—		$	115,019
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		135,019		—		—			135,019
Short-term U.S. Treasury securities		42,236		412		—			42,648
Short-term government-backed securities		67,594		401		—			67,995
Short-term corporate debt securities		107,290		94		(83	)		107,301
Short-term commercial paper		32,757		74		—			32,831
Total short-term marketable securities		249,877		981		(83	)		250,775
Long-term government-backed securities		90,911		153		—			91,064
Long-term corporate debt securities		116,110		851		(230	)		116,731
Total long-term marketable securities		207,021		1,004		(230	)		207,795
	$	591,917	$	1,985	$	(313	)	$	593,589

13

Derivative Instruments

In October 2019, the Company entered into an intercompany agreement in which it loaned 85.0 million Euro to Abiomed Europe GMBH, its German subsidiary.  In conjunction with this intercompany loan agreement, the Company entered into a cross-currency swap agreement to convert a notional amount of 85.0 million Euro equivalent to $93.5 million denominated intercompany loan into U.S. dollars. The objective of this cross-currency swap is to hedge the variability of cash flows related to the forecasted interest and principal payments on the Euro denominated fixed rate loan against changes in the exchange rate between the U.S. dollar and the Euro. Under the terms of this cross-currency swap contract, which has been designated as a cash flow hedge, the Company will make interest payments in Euro and receive interest in U.S. dollars. Upon the maturity of this contract, the Company will pay the principal amount of the loan in Euro and receive U.S. dollars from the counterparty. The cross-currency swap is carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in accumulated other comprehensive income (loss).

The Company uses a foreign-exchange-related derivative instrument to manage its exposure related to changes in the exchange rate on its intercompany loan. The Company does not enter into derivative instruments for any purpose other than cash flow hedging.

The following table summarizes the terms of the cross-currency swap agreement as of September 30, 2020 (dollar amounts in thousands):

	Effective Date	Maturity	Fixed Rate	Aggregate Notional Amount (in $000's)
Pay EUR	October 15,	October 15,	2.75%		EUR 85,000
Receive U.S.$	2019	2024	4.64%		USD 93,457

The following table presents the fair value of the Company’s derivative instrument as of September 30, 2020:

Derivatives designated as hedging instruments under ASC 815	Balance Sheet classification	Fair Value
Cross-currency swap	Other assets (long-term liabilities)	$	(2,860	)

The Company has structured its cross-currency swap agreement to be 100% effective and, as a result, there was no net impact to earnings resulting from hedge ineffectiveness. Changes in the fair value of the cross-currency swap are designated as a hedging instrument that effectively offsets the variability of cash flows are reported in accumulated other comprehensive income (loss). These amounts subsequently are reclassified into the consolidated income statement in the same period in which the related hedged item affects earnings. The change of fair value of the cross-currency swap during the second quarter for fiscal year 2021 was mainly due to the appreciation of the Euro against the U.S. dollar.

For both the three and six months ended September 30, 2020, the Company recorded income of $0.7 million, in other income, net, included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

Contingent Consideration

Contingent consideration represents potential milestones that the Company may pay as additional consideration related to acquired businesses. The Company has contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH (“ECP”) in July 2014 and the acquisition of Breethe, Inc. in April 2020. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value reflected within research and development expenses in the Company’s consolidated statement of operations. Significant increases or decreases in any valuation assumptions, including 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 contingent consideration liability. There is no assurance that any of the conditions for the milestone payments will be met.

The components of contingent consideration liability are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	10,117	$	9,000
Breethe, Inc.		14,300		—
	$	24,417	$	9,000

14

ECP

In July 2014, the Company acquired ECP and AIS GmbH Aachen Innovative Solutions (“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 Company used 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, both of which consider significant unobservable inputs. 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 is valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management’s best estimates.

Key unobservable inputs include the discount rate used to present value the projected revenues and cash flows (ranging from 2% to 16%), the probability of achieving the various technical, regulatory and commercial milestones (estimated to be 65%) and projected revenues, which are based on the Company’s most recent internal operational budgets and long-range strategic plans.

Breethe, Inc.

In April 2020, the Company acquired Breethe, Inc. for $55.0 million in cash, with additional potential payouts up to a maximum of $55.0 million payable based on the achievement of certain technical, regulatory and commercial milestones.

The Company used 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, both of which consider significant unobservable inputs. For the regulatory milestones, 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 commercial milestones are valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management’s best estimates.

Key unobservable inputs include the discount rates used to present value the projected revenues and cash flows (ranging from 2% to 16%), the probability of achieving the various technical, regulatory and commercial milestones (estimated to range from 25% to 99%) and projected revenues, which are based on the Company’s most recent internal operational budgets and long-range strategic plans.

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.

15

The following tables present the Company’s fair value hierarchy for its financial instruments measured at fair value as of September 30, 2020 and March 31, 2020:

	Level 1		Level 2		Level 3		Total
September 30, 2020	(in $000's)
Assets
Money market funds	$	104,305	$	—	$	—	$	104,305
Repurchase agreements		—		20,000		—		20,000
Short-term government-backed securities		—		85,456		—		85,456
Short-term corporate debt securities		—		129,781		—		129,781
Short-term commercial paper		—		40,017		—		40,017
Short-term U.S. Treasury mutual fund securities		—		75,589		—		75,589
Long-term U.S. Treasury mutual fund securities		—		10,248		—		10,248
Long-term government-backed securities		—		141,536		—		141,536
Long-term corporate debt securities		—		50,829		—		50,829
Investment in Shockwave Medical		22,494		—		—		22,494
Liabilities
Contingent consideration		—		—		24,417		24,417
Cross-currency swap agreement		—		2,860		—		2,860

	Level 1		Level 2		Level 3		Total
March 31, 2020	(in $000's)
Assets
Money market funds	$	115,019	$	—	$	—	$	115,019
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury securities		—		42,648		—		42,648
Short-term government-backed securities		—		67,995		—		67,995
Short-term corporate debt securities		—		107,301		—		107,301
Short-term commercial paper		—		32,831		—		32,831
Long-term government-backed securities		—		91,064		—		91,064
Long-term corporate debt securities		—		116,731		—		116,731
Cross currency swap agreement		—		3,786		—		3,786
Investment in Shockwave Medical		55,704		—		—		55,704
Liabilities
Contingent consideration		—		—		9,000		9,000

16

The Company has determined that the estimated fair value of its money market funds and its investment in Shockwave Medical, Inc. (“Shockwave Medical”) a publicly traded medical device company, are reported as Level 1 financial assets as they are valued at quoted market prices in active markets. The investment in Shockwave Medical is classified within other assets in the consolidated balance sheet.

The Company has determined that the estimated fair value of its repurchase agreements, U.S. Treasury mutual fund securities, government-backed securities, corporate debt securities and commercial paper and cross-currency swap agreement are reported as Level 2 financial assets as they are based on model-driven valuations in which all significant inputs are observable, or can be derived from or corroborated by observable market data for substantially the full term of the asset.

This contingent consideration liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisitions of ECP and Breethe, Inc. require significant management judgment or estimation and is calculated as described above.

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Beginning balance	$	23,701	$	9,931	$	9,000	$	9,575
Additions		—		—		13,300		—
Change in fair value		716		305		2,117		661
Ending balance	$	24,417	$	10,236	$	24,417	$	10,236

The change in fair value of the contingent consideration was primarily due to the addition of contingent consideration related to the Breethe acquisition and the passage of time impact on fair value measurements.

Note 7. Property and Equipment

The components of property and equipment are as follows:

	September 30, 2020			March 31, 2020
	(in $000's)
Land	$	7,454		$	7,179
Building and building improvements		102,644			100,176
Leasehold improvements		15,183			14,546
Machinery and equipment		78,343			71,636
Furniture and fixtures		15,166			14,600
Construction in progress		26,277			15,075
Total cost		245,067			223,212
Accumulated depreciation		(69,485	)		(58,281	)
Property and equipment, net	$	175,582		$	164,931

Note 8. Goodwill, In-Process Research and Development and Other Assets

Goodwill

The carrying amount of goodwill at September 30, 2020 and March 31, 2020 was $78.1 million and $32.0 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005, ECP in July 2014 and Breethe, Inc. in April 2020. The carrying value of goodwill and the change in the balance for the six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	31,969
Breethe, Inc. acquisition		44,048
Foreign currency translation impact		2,105
Balance, September 30, 2020	$	78,122

17

The Company evaluates goodwill 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.

In-Process Research & Development

The carrying amount of IPR&D assets at September 30, 2020 and March 31, 2020 was $42.9 million and $14.9 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014 and Breethe, Inc, in April 2020.

The components of IPR&D are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	15,895	$	14,913
Breethe, Inc.		27,000		—
	$	42,895	$	14,913

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 and the future Abiomed Breethe OXY-1 System 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 discount rates ranging from  15% to 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 six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	14,913
Breethe, Inc. acquisition		27,000
Foreign currency translation impact		982
Balance, September 30, 2020	$	42,895

The Company evaluates 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 IPR&D assets.

Other Assets

The components of other assets are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
Investment in Shockwave Medical	$	22,494	$	55,704
Other investments		39,041		38,741
Operating lease right of use asset (Note 8)		11,021		11,760
Cross currency swap (Note 6)		—		3,786
Other intangible assets and other assets		10,038		7,664
Total other assets	$	82,594	$	117,655

18

Investment in Shockwave Medical

The fair value of the Company’s investment in Shockwave Medical, a publicly-traded medical device company, was $22.5 million and $55.7 million as of September 30, 2020 and March 31, 2020, respectively. During the three and six months ended September 30, 2020, amounts recorded in other income (expense), net of tax, were gains of $8.2 million and $26.2 million, respectively. During the three and six months ended September 30, 2019, amounts recorded in other income (expense), net of tax, were losses of $34.5 million and $4.5 million, respectively. During the quarter ended September 30, 2020, the Company sold approximately 1.4 million of its shares for cash proceeds of $67.9 million and total realized gain of $47.3 million. The Company held 0.3 million shares of Shockwave Medical at September 30, 2020.

Other Investments  

The carrying value of the Company’s portfolio of other investments and the change in the balance for the three and six months ended September 30, 2020 and 2019 are as follows:

	For the Three Months Ended September 30,					For the Six Months Ended September 30,
		2020			2019		2020			2019
	(in $000's)
Beginning balance	$	38,741		$	26,584		38,741			24,584
Additions		1,100			5,000		3,100			7,000
Reclassification		—			—		(2,000	)		—
Impairment		(800	)		—		(800	)		—
Ending balance	$	39,041		$	31,584	$	39,041		$	31,584

During the three and six months ended September 30, 2020, the Company recorded an impairment loss of $0.8 million in other (expense) income relating to certain of the Company’s investment in other private medical device companies.

Other Intangible Assets and Other

Included within other intangible assets and other is $4.1 million related to license manufacturing rights to certain technology from third parties. 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 9. Leases

The following table presents supplemental balance sheet information related to our operating leases:

	September 30, 2020		March 31, 2020
	(in $000's)
Assets
Operating lease right-of-use assets in other assets	$	11,021	$	11,760
Liabilities
Operating lease liabilities in other current liabilities		3,683		3,671
Operating lease liabilities in other long-term liabilities		7,807		8,549
Total operating lease liabilities	$	11,490	$	12,220

Expense charged to operations under operating leases were $1.1 million and $2.2 million during each of the three and six months ended September 30, 2020 and 2019, respectively.

19

Maturities of lease liabilities as of September 30, 2020 are as follows:

(in thousands, except lease term and discount rate)
Fiscal Years Ended March 31,
2021	$	2,153
2022		3,088
2023		1,925
2024		1,782
2025		1,578
Thereafter		2,033
Total minimum lease payments		12,559
Less: imputed interest		(1,069	)
Present value of operating lease liabilities	$	11,490
Weighted average remaining lease term	4.99
Weighted average discount rate		3.14	%

Note 10. Accrued Expenses

Accrued expenses consist of the following:

	September 30, 2020		March 31, 2020
	(in $000's)
Employee compensation	$	29,081	$	32,273
Sales and income taxes		11,239		21,641
Research and development		5,481		5,749
Professional, legal, and accounting fees		3,320		6,880
Warranty		1,739		1,818
Marketing		1,092		1,705
Other		5,275		5,041
	$	57,227	$	75,107

The accrual for employee compensation consists primarily of accrued bonuses, commissions, employee benefits and payroll taxes at September 30, 2020 and March 31, 2020.

Note 11. Stockholders’ Equity

Class B Preferred Stock

The Company has authorized 1,000,000 shares of Class B Preferred Stock, $.01 par value, of which the board of directors can set the designation, rights and privileges. No shares of Class B Preferred Stock have been issued or are outstanding.

Stock Repurchase Program

In August 2019, the Company’s Board of Directors authorized a stock repurchase program for up to $200.0 million of shares of its common stock. Under this stock repurchase program, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The stock repurchase program has no time limit and may be suspended for periods or discontinued at any time. The Company is funding the stock repurchase program with its available cash and marketable securities. The Company did not make any repurchases during the three months ended September 30, 2020. The remaining authorization under the stock repurchase program was $103.8 million as September 30, 2020.

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The following table provides shares bought through stock repurchase program during the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2020		2019		2020		2019
Shares repurchased		—		180,929		67,649		180,929
Average price per share		—	$	192.75	$	167.19	$	192.75
Value of shares repurchased (in millions)		—	$	34.9	$	11.3	$	34.9

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), are as follows (in thousands):

	Six Months Ended September 30, 2020
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments			Total
Balance, April 1, 2020		(16,860	)		1,672			3,999			(11,189	)
Other comprehensive income (loss)		1,360			1,755			(461	)		2,654
Balance, June 30, 2020		(15,500	)		3,427			3,538			(8,535	)
Other comprehensive income (loss)		2,416			(814	)		(266	)		1,336
Balance, September 30, 2020		(13,084	)		2,613			3,272			(7,199	)

	Six Months Ended September 30, 2019
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments		Total
Balance, April 1, 2019		(15,028	)		339			—		(14,689	)
Other comprehensive income		2,334			600			—		2,934
Balance, June 30, 2019		(12,694	)		939			—		(11,755	)
Other comprehensive income		(5,716	)		(85	)		—		(5,801	)
Balance, September 30, 2019		(18,410	)		854			—		(17,556	)

Note 12. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Cost of  revenue	$	923	$	881	$	1,627	$	1,722
Research and development		1,705		1,823		3,147		3,706
Selling, general and administrative		8,937		10,619		16,089		21,017
	$	11,565	$	13,323	$	20,863	$	26,445

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Stock Options

The following table summarizes the stock option activity for the six months ended September 30, 2020:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		869		$	112.03		5.30
Granted		65			221.12
Exercised		(153	)		36.41
Cancelled and expired		(8	)		227.25
Outstanding at end of period		774		$	134.90		5.77	$	117,144
Exercisable at end of period		592		$	98.68		4.84	$	110,352
Options vested and expected to vest at end of period		773		$	134.92		5.77	$	117,040

Stock options generally vest and become exercisable annually over three years. The remaining unrecognized stock-based compensation expense for unvested stock option awards at September 30, 2020, was approximately $13.0 million and the estimated weighted-average period over which this cost will be recognized is 1.9 years.

The aggregate intrinsic value of stock options exercised was $37.8 million for the six months ended September 30, 2020. The total cash received as a result of employee stock option exercises for the six months ended September 30, 2020, was approximately $5.6 million.

The Company estimates the fair value of each stock option 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 options granted during the three and six months ended September 30, 2020 and 2019 was as follows:

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2020			2019			2020			2019
Weighted average grant-date fair value	$	100.51		$	70.40		$	76.10		$	95.62
Valuation assumptions:
Risk-free interest rate		0.30	%		1.54	%		0.31	%		2.02	%
Expected option life (years)		4.17			4.13			4.22			4.14
Expected volatility		43.5	%		44.2	%		42.82	%		42.3	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the six months ended September 30, 2020:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		320		$	263.92
Granted		194			254.55
Vested		(136	)		226.71
Forfeited		(101	)		267.28
Restricted stock units at end of period		277		$	274.31

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 September 30, 2020 was $59.3 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 six months ended September 30, 2020 was $254.55. The total fair value of restricted stock units vested during the six months ended September 30, 2020 was $26.8 million.

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Performance-Based Awards

In May 2020, performance-based awards of restricted stock units for the potential issuance of up to 61,674 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 the achievement of prescribed performance milestones by the Company. As of September 30, 2020, the Company is recognizing compensation expense based on the probable outcomes related to the prescribed performance targets on the outstanding awards.

Market-Based Awards

In May 2020, the Company awarded certain executive officers and employees a total of up to 61,562 market-based restricted stock units. These restricted stock units will vest and result in the issuance of shares of common stock based on continuing employment and the relative ranking of the total shareholder return (“TSR”) of the Company’s common stock in relation to the TSR of twenty peer companies over a two-year and three-year performance period based on a comparison of average closing stock prices during the 20 trading days prior to the first day of the performance period, reinstated dividends during each performance period and the average closing stock prices during the final 20 trading days of each performance period. The actual number of market-based restricted stock units that may be earned can range from 0% to 200% of the target number of shares. Additionally, the payout percentage is further adjusted based on the Company’s performance relative to the constituents of the S&P 500 Index on the first day of the performance period that are still actively trading on the last day of each performance period.  The restricted stock units will vest following the end of the two-year and three-year performance period, respectively.

The Company used a Monte-Carlo simulation model to estimate the grant-date fair value of the TSR restricted stock units. The fair value related to these awards are recorded as compensation expense over the period from date of grant to May 2022 and May 2023, respectively, regardless of the actual TSR outcome reached.

The table below sets forth the assumptions used to value the awards and the estimated grant-date fair value:

Risk-free interest rate		0.2%
Expected volatility		35.5%
Dividend yield		—
Remaining performance period (years)	1.9 - 2.9
Estimated fair value per share	$347.05 - $349.28
Target performance (number of shares)		30,781

Note 13. Income Taxes

The Company’s income tax provision was $10.7 million and $4.3 million for the three months ended September 30, 2020 and 2019, respectively. The Company’s income tax provision was $27.2 million and $18.5 million for the six months ended September 30, 2020 and 2019, respectively. The Company’s effective tax rate was 14.7% and 24.7% for the three months ended September 30, 2020 and 2019, respectively. The Company’s effective tax rate was 20.3% and 15.4% for the six months ended September 30, 2020 and 2019, respectively. 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 six months ended September 30, 2020 and 2019.

The significant differences between the statutory income tax rate and effective income tax rate for the three and six months ended September 30, 2020 and 2019 were as follows:

	For the Three Months Ended September 30,							For the Six Months Ended September 30,
		2020			2019				2020			2019
Statutory income tax rate		21.0		%	21.0		%		21.0		%	21.0		%
Increase (decrease) resulting from:												—
Excess tax benefits from stock-based awards		(10.9	)		(2.7	)			(6.3	)		(11.0	)
Credits		(1.7	)		(2.1	)			(1.7	)		(1.7	)
State taxes, net		4.1			3.3				4.1			3.4
Permanent differences		2.6			1.7				3.4			1.9
Excess foreign tax credit		0.4			—				0.4			—
Other		(0.8	)		3.5				(0.6	)		1.7
Effective tax rate		14.7		%	24.7		%		20.3		%	15.4		%

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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 $7.9 million and $0.5 million as an income tax benefit for the three months ended September 30, 2020 and 2019, respectively. The Company recognized excess tax benefits associated with stock-based awards of $8.5 million and $13.3 million for the six months ended September 30, 2020 and 2019. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during each period. 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 Company is subject to the examination of its income tax returns by the Internal Revenue Service (“IRS”) and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The Company’s most recent completed income tax audits were in the U.S. relating to fiscal year 2016 and in Germany, which covered fiscal years 2012 through 2015. These tax audits did not materially impact our financial statements. On October 29, 2020, the Company was notified by the German tax authorities that they will be conducting an income tax audit on Abiomed Europe GMBH and ECP for fiscal years 2016 through 2019 beginning in January 2021. All other tax years remain subject to examination by the federal, state and foreign tax authorities.

Note 14. Commitments and 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 (“Thoratec”), a subsidiary of Abbott Laboratories (“Abbott”), has challenged a number of Company-owned patents in Europe in connection with the launch of Thoratec’s HeartMate PHP™ medical device (“PHP”) in Europe and the Company has counterclaimed for infringement in the District Court in Düsseldorf. The litigation was stayed pending the highest Court’s ruling on the validity and scope of the litigated patents. In September 2019, the Federal Court of Justice in Germany upheld the Company’s patents that are the subject of the patent infringement action for the sales and marketing of Thoratec’s PHP pump in Germany. Subsequently, the District Court in Düsseldorf lifted the stay, re-opened the litigation proceedings, and ruled in favor of Abiomed.  The Court acknowledged that Thoratec’s PHP product infringes two of Abiomed patents related to the key features of Impella® intravascular pump and future expandable heart pump, known as Impella ECP®.  Abbott appealed and the oral hearing is set for August 21, 2021. If upheld, the verdict is provisionally enforceable, which means that Abiomed will be able to seek a court ordered injunction preventing the sale and marketing of PHP, should Thoratec attempt to launch HeartMate PHP in Germany.

These actions relate solely to Thoratec’s ability to manufacture and sell its PHP product in Europe and have no impact on the Company's ability to manufacture or sell its Impella® line of medical devices.  The actions do not expose the Company to liability risk, except under local German law that requires a losing party in a proceeding to pay a portion of the other party’s legal fees.

Maquet Matters

In December 2015, the Company received a letter from Maquet Cardiovascular LLC (“Maquet”), a subsidiary of Getinge AB, asserting that the Company’s Impella^® devices infringe certain claims with guidewire, lumen, rotor, purge and sensor features, which were in two Maquet patents and one pending patent application (which has since issued as a third patent) in the U.S. and elsewhere, and attaching a draft litigation complaint.  The letter encouraged the Company to take a license from Maquet. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts (“D. Mass.” or “the Court”) 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 Maquet U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. The four U.S. continuation applications have been issued as patents of Maquet but expired on September 1, 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”). In July 2017, the Court granted a motion to add three of the four additional continuation patents to the 2016 Action.  In April 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.  Maquet then filed a motion for reconsideration of the Court’s construction of one of the disputed claim terms. The motion was denied on May 22, 2019. As a result of the Court’s denial, only one of the six originally asserted patents is in dispute. The Company filed a motion for summary judgement (MSJ) for the remaining patent on September 18, 2019 (non-infringement) and April 13, 2020 (invalidity). The parties argued the MSJ for non-infringement on November 19, 2019, the MSJ for invalidity on August 20, 2020 and are waiting for Court’s resolution.  The Court has not set a date for trial.  The only remaining patent asserted in this case expired on September 1, 2020.  

In November 2017, Maquet filed a second action in D. Mass (“2017 Action”) 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).  Discovery in the 2017 Action is ongoing.

In a series of letters during January and February 2019, Maquet informed the Company of seven new patent applications filed from the patents in the 2016 Action and 2017 Action with claims Maquet alleges would be infringed by the Impella® products if the new applications were to issue as patents. One of the newly issued patents has been added to the 2017 Action. A Markman hearing for the newly-added patent was held on November 18, 2019.  A Markman order has not been issued yet. The asserted patent in this case expired on September 1, 2020. Discovery remains ongoing.

In the 2016 Action and 2017 Action, 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 responses to the Company’s counterclaims, Maquet admits that its current commercially available products do not embody the claims of the asserted patents.

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 Maquet and Thoratec patent disputes.

Securities Class Action Litigation

On or about August 6, 2019, the Company received a securities class action complaint filed on behalf of a single shareholder in the U.S. District Court for the Southern District of New York (“SDNY”), on behalf of himself and persons or entities that purchased or acquired the Company’s securities between January 31, 2019 through July 31, 2019. On October 7, 2019, a similar purported class action complaint was filed by a different shareholder on behalf of himself and persons or entities that purchased or acquired the Company’s securities between November 1, 2018 and July 31, 2019.  Also, on October 7, 2019, four shareholders filed applications to be appointed lead plaintiff and for their counsel to be appointed lead counsel for the class. Two of those shareholders also filed motions to consolidate the two cases and two of the shareholders have withdrawn their applications to be lead plaintiff.

The complaints allege that the Company violated Sections 10(b) and 20(a) of and Rule 10b-5 under the Exchange Act, in connection with allegedly misleading disclosures made by the Company regarding its financial condition and results of operations. The Company has reviewed and not yet responded to the complaints. The Company believes that the allegations are without merit and plans to defend itself vigorously.

On June 28, 2020, the Court issued an order consolidating the two cases and appointed Local 705 International Brotherhood of Teamsters Pension Fund as the lead plaintiff and the Labaton Sucharow firm as lead counsel.  On September 17, 2020, the lead plaintiff filed an amended complaint in which they proposed a new class period of May 3, 2018 to July 31, 2019.  As prescribed by a scheduling order, the Company may file a motion to dismiss on or before November 16, 2020.  The Company intends to do so but does not expect a decision on that motion until at least the second quarter of calendar year 2021.                      

Shareholder Derivative Litigation

On November 6 and 7, 2019, two shareholders filed derivative actions in SDNY that were subsequently consolidated.  On November 8, 2019, another shareholder filed a derivative action in Massachusetts Suffolk County Superior Court.  On January 7, 2020, another shareholder derivative action was filed in the U.S. District Court for the District of Delaware.  The complaints in these actions rely on many of the same allegations as in the securities class actions, and assert that, between November 1, 2018 and July 31, 2019, the directors of the Company made or allowed to be made misleading public statements regarding the Company’s growth, ultimately harming the Company.  

The Company has agreed with the plaintiffs in all three actions to stay the cases pending resolution of a motion to dismiss in the securities class actions. As a result of the stay, the Delaware action has been administratively closed.

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Litigation Demand

On March 3, 2020, a shareholder sent a letter to the Board of Directors asserting that the directors of the Company made or allowed to be made misleading public statements regarding the Company’s growth. The letter relies on many of the same allegations as the securities class actions and derivative actions, and demands that the Board (i) undertake an independent investigation of the directors, (ii) bring suit against the directors on behalf of the Company, and (iii) take a number of additional affirmative actions to redress the purported wrongs. On March 30, 2020, the Company, after discussions with the Board of Directors, sent a written response to the shareholder’s counsel which they responded to on June 1, 2020.  The Company then sent a further response to the shareholder’s counsel on June 15, 2020, affirming the decision to defer consideration of the litigation demand pending further developments in the securities class action suit. Following the filing of the amended complaint in the securities class action, described above, the same shareholder renewed their demand on September 29, 2020.  The Company responded on October 9, 2020 and once again affirmed that it will defer consideration of the demand pending further substantive developments in the securities class action suit.  

The Company is unable to estimate the potential liability with respect to the various legal matters noted above. There are numerous factors that make it difficult to estimate reasonably 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 securities class action litigation, as well as in the shareholder derivative litigations.

Note 15. 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 (meaning sales outside the U.S., primarily in Europe and Japan) accounted for 18% and 16% of total revenue for each of the three and six months ended September 30, 2020 and 2019, respectively. The Company’s long-lived assets are located in the U.S., except for $52.9 million and $46.7 million at September 30, 2020 and March 31, 2020, 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, including the documents incorporated by reference in this Report, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. These forward-looking statements may be accompanied by such words as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “should,” “likely,”  “will” and other words and terms of similar meaning. 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. Factors that could cause actual results or conditions to differ from those anticipated by these and other forward-looking statements include: the impact of the COVID-19 pandemic, efforts to contain the pandemic and resulting economic downturn on our operations and financial condition; our dependence on Impella® products for all of our revenues; our ability to successfully compete against our existing or potential competitors; the acceptance of our products by cardiac surgeons and interventional cardiologists, especially those with significant influence over medical device selection and purchasing decisions; long sales and training cycles associated with expansion into new hospital cardiac centers; reduced market acceptance of our products due to lengthy clinician training process; our ability to effectively manage our growth; our ability to successfully commercialize our products; our ability to obtain regulatory approvals and market and sell our products in certain jurisdictions; enforcement actions and product liability suits relating to off-label uses of our products; unsuccessful clinical trials or procedures relating to products under development; our ability to maintain compliance with regulatory requirements; mandatory or voluntary product recalls; shutdowns of the U.S. federal government; third-party payers’ failure to provide reimbursement of our products; changes in healthcare reimbursement systems in the U.S. and other foreign jurisdictions; our failure to comply with healthcare “fraud and abuse” laws; our failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations; uncertainties associated with our product development efforts; our ability to increase manufacturing capacity to support continued demand for our products; our or our vendors’ failure to achieve and maintain high manufacturing standards; our ability to attract and retain key personnel; our suppliers’ failure to provide the components we require; our ability to expand our direct sales activities into international markets; the economic effects of “Brexit”; poor performance of our distributors in the international markets; our ability to sustain profitability; our potential “ownership change” for U.S. federal income tax purposes and our limited utilization of net operating losses from prior tax years; impact of changes in tax laws, including recently enacted U.S. Tax Reform; our ability to develop and commercialize new products or acquire desirable companies, products or technologies; our failure to protect our intellectual property or develop or acquire additional intellectual property; increased risk of material product liability claims; inventory write-downs and other costs due to product quality problems; liabilities due to failure to protect the confidentiality of patient health information; disruptions of critical information systems or material breaches in the security of our systems; risks and liabilities associated with acquisitions of other companies or businesses; changes in accounting standards, tax laws and financial reporting requirements; liabilities, expenses and restrictions associated with environmental and health safety laws; changes in methods, estimates and judgments we use in applying our accounting policies; fluctuations in foreign currency exchange rates; the outcome of ongoing securities class action litigation relating to our public disclosures; and other factors discussed in Part I, Item 1A. Risk Factors of our Form 10-K for the year ended March 31, 2020 and the filings subsequently filed with or furnished to the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Report. Unless otherwise required by law, we undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this Report or to reflect the occurrence of unanticipated events.

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.

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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 5.0®, Impella LD®, Impella 5.5® and Impella RP® devices, has supported thousands of patients worldwide. We expect that most of our product and service revenue in the near future will be from our Impella devices. Our Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella 5.5 and Impella RP devices have U.S Food and Drug Administration or FDA and CE Mark approval which allows us to market these devices in the U.S. and European Union. We expect to continue to make additional pre-market approval, or PMA supplement submissions for our Impella portfolio of devices for additional indications. Our Impella 2.5, Impella CP and Impella 5.0 devices have regulatory approval from the Ministry of Health, Labor and Welfare, or MHLW, in Japan.

COVID-19 Pandemic

In March 2020, the World Health Organization categorized the novel Coronavirus disease 2019, or (COVID-19) as a pandemic. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. The global pandemic has adversely impacted and is likely to further adversely impact our business and markets, including our workforce and operations and the operations of our customers, suppliers, and business partners. Considerable uncertainty still surrounds the COVID-19 virus and its potential effects, and the extent of and effectiveness of responses taken on international, national and local levels. Measures taken to limit the impact of COVID-19, including shelter-in-place orders, social distancing measures, travel bans and restrictions, and business and government shutdowns, have already created significant negative economic impacts on a global basis.

Beginning in mid-March 2020 and continuing into the first quarter of fiscal 2021, the Company experienced a significant decline in patient utilization in the U.S., Europe and Japan as healthcare systems diverted resources to meet the increasing demands of managing COVID-19. The Company’s business was most impacted in April 2020, in terms of the decline in patients and revenue from the shelter-in-place restrictions in a majority of countries and limitations on procedures in hospitals. The Company experienced sequential quarterly improvement globally through the second quarter of fiscal 2021 as restrictions were lifted and limitations eased. In the second quarter of fiscal 2021, patient procedure volume trends have improved gradually as both demand for procedures and availability of healthcare resources improved during the summer months.

While we currently expect to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. We believe we are likely to continue to experience variable impacts on our business based on some of the resurgence that is now occurring in cities across the globe.

During these challenging times, our priorities have been to support our clinician partners, protect the well-being of our employees, and maintain continuous access to our life-saving technologies while offering front-line in-hospital support. We have also taken proactive actions to mitigate the business impact of COVID-19 on our financial operations. These actions taken to date include temporary salary reductions and furloughs for certain employees, a hold on most hiring, eliminating non-critical consultants, contractors, and temporary workers, reducing discretionary spending, travel restrictions and implementing alternate work schedules for the Aachen and Danvers production teams. These actions are designed to preserve full-time jobs, preserve cash and retain the ability to ramp up quickly when demand returns, while at the same time continuing to invest in innovation.

We are closely monitoring the impact of COVID-19 on all aspects of our business and geographies, including its impact on our customers, employees, suppliers, vendors, business partners and distribution channels. The extent to which the COVID-19 global pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and are difficult to predict these developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or address its impact, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, we may continue to experience materially adverse impacts on our financial condition and results of operations.

Acquisition of Breethe, Inc.

We acquired Breethe, Inc. (“Breethe”), a Maryland corporation, on April 24, 2020. Breethe is engaged in research and development of a novel extracorporeal membrane oxygenation (“ECMO”) system that will complement and expand our product portfolio to more comprehensively serve the needs of patients whose lungs can no longer provide sufficient oxygenation, including some patients suffering from cardiogenic shock or respiratory failure, such as ARDS, H1N1, SARS, or COVID-19. We acquired Breethe for $55.0 million in cash, with additional potential payouts up to a maximum of $55.0 million payable based on the achievement of certain technical, regulatory and commercial milestones. In October 2020, the Abiomed Breethe OXY-1 System received a 510(k) clearance from the FDA for an all-in-one, compact cardiopulmonary bypass system. Abiomed plans to have a controlled launch of the Breethe system at a limited number hospitals in the U.S, with full U.S. commercial availability expected in fiscal year 2022.

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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.

Our Impella 2.5 device has FDA and CE Mark approval which allows us to market these devices in the U.S. and European Union. We expect to continue to make additional pre-market approval, or PMA supplement submissions for our Impella portfolio of devices for additional indications. Our Impella 2.5, Impella CP and Impella 5.0 devices have regulatory approval from the Ministry of Health, Labor and Welfare, or MHLW, in Japan. The Impella 2.5 device also has Health Canada approval which allows us to market the device in Canada.

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.

Our Impella CP devices has FDA and CE Mark approval which allows us to market this device in the U.S. and European Union. We expect to continue to make additional pre-market approval, or PMA supplement submissions for our Impella portfolio of devices for additional indications. In March 2019, we received PMDA approval from MHLW for our Impella CP heart pump in Japan.  We began selling the Impella CP heart pump in Japan in fiscal 2020.

In April 2019, the FDA approved the initiation of the STEMI DTU Pivotal Randomized Controlled Trial. The prospective, multi-center, two-arm trial plans to enroll 668 patients undergoing treatment for a STEMI heart attack at up to 60 sites. Half the patients will be randomized to receive delayed reperfusion after 30 minutes of left ventricular unloading with the Impella CP. The other half will receive immediate reperfusion, the current standard of care. The trial will test the hypothesis that unloading the left ventricle for 30 minutes prior to reperfusion will reduce myocardial damage from a heart attack and lead to a reduction in future heart failure related events. The trial allows for an adaptive design, which permits adjustments to the study sample size after an interim analysis. We began the trial in fiscal 2020 and we estimate that it will take three to four years to complete enrollment.

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.

Our Impella 5.0 and Impella LD devices have FDA and CE Mark approval which allows us to market these devices in the U.S. and European Union. We expect to continue to make additional pre-market approvals, or PMA supplement submissions for our Impella portfolio of devices for additional indications. Our Impella 5.0 devices have regulatory approval from the Ministry of Health, Labor and Welfare, or MHLW, in Japan.

Impella 5.5®

The Impella 5.5 device is designed to be a percutaneous micro heart pump with integrated motors and sensors. Impella 5.5 delivers peak flows of greater than six liters per minute. The Impella 5.5 has a motor housing that is thinner and 45% shorter than the Impella 5.0 and it improves ease of pump insertion through the vasculature.

In September 2019, the Impella 5.5 device received a PMA from the FDA for safety and efficacy in the therapy of cardiogenic shock for up to 14 days in the U.S. The Impella 5.5 pump was introduced in the U.S. through a controlled rollout at hospitals with established heart recovery protocols beginning in fiscal 2020. Impella 5.5 received CE marking approval in Europe in April 2018 and was introduced in Europe through a similar controlled rollout. We are also targeting a submission to the PMDA in Japan in fiscal 2021. The adoption of the Impella 5.5 device may lessen the utilization of Impella 5.0 and Impella LD at certain sites.

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. Our Impella RP device has FDA and CE Mark approval which allows us to market these devices in the U.S. and European Union. The Impella RP is the first

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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. We expect to continue to make additional pre-market approval, or PMA supplement submissions for our Impella portfolio of devices for additional indications.

Impella SmartAssist®

The Impella SmartAssist platform includes optical sensor technology for improved pump positioning and the use of algorithms that enable improved native heart assessment during the weaning process.  The Impella SmartAssist platform currently developed for the Impella CP SmartAssist and Impella 5.5 SmartAssist heart pumps. The Impella SmartAssist platform is also approved under CE Mark in the European Union and other countries that require a CE Mark approval.  

Impella Connect®

Impella Connect is a cloud-based technology that enables secure, cloud-based, remote viewing of the Automated Impella Controller, or AIC, for physicians and hospital staff from anywhere with internet connectivity. The Impella Connect is intended to provide enhanced monitoring capability, reduce setup time and improve ease of use for physicians. We began a controlled roll-out of Impella Connect at certain hospital sites during fiscal 2020 and plan to transition the majority of our significant customers in fiscal 2021.

Our Product Pipeline

Abiomed Breethe OXY-1 System

The Abiomed Breethe OXY-1 System (“OXY-1 System”) is a portable external respiratory assistance device that we acquired as part of the Breethe, Inc. acquisition. The OXY-1 System takes venous blood from the patient, removes carbon dioxide and adds oxygen much like a human lung, and returns the oxygenated blood safely back to the patient. In October 2020, the OXY-1 System received a 510(k) clearance from the FDA for an all-in-one, compact cardiopulmonary bypass system. We plan to have a controlled launch of the Breethe system at a limited number hospitals in the U.S., with full U.S. commercial availability expected in fiscal year 2022.

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 began patient enrollment in October 2020. The Impella ECP pump is still in development and has not been approved for commercial use or sale.

Impella XR Sheath™

The Impella XR Sheath is a sheath designed to expand and recoil to all for ease of use upon insertion of an Impella heart pump and minimize the size of the arteriotomy. The Impella XR Sheath device is still in development and has not been approved for commercial use or sale. We submitted an application for FDA 510(k) clearance for our Impella 2.5 pump in August 2020 and we also continue to work on development of an Impella XR Sheath on our Impella CP device for an FDA submission in fiscal 2022.

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

Other than the accounting policy changes discussed in “Note 2. Basis of Preparation and Summary of Significant Accounting Policies” to our consolidated financial statements, which is incorporated herein by reference, there have been no significant changes in our critical accounting policies during the three and six months ended September 30, 2020, 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, 2020.

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Recently Issued Accounting Pronouncements Not Yet Effective

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 for the Three and Six Months Ended September 30, 2020 compared with the Three and Six Months Ended September 30, 2019

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

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2020			2019			2020			2019
Revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses as a percentage of total revenue:
Cost of revenue		18.5			17.0			19.9			17.4
Research and development		14.6			11.7			15.2			11.6
Selling, general and administrative		37.7			41.9			39.4			41.7
Total costs and expenses		70.8			70.6			74.5			70.7
Income from operations		29.2			29.4			25.5			29.3
Other income and income tax provision, net		0.5			23.0			3.0			4.4
Net income as a percentage of total revenue		29.7	%		6.4	%		28.5	%		24.9	%

Revenue

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

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
Impella product revenue	$	199,676	$	196,939	$	355,093	$	396,804
Service and other revenue		10,088		8,035		19,521		15,836
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

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

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
U.S. revenue	$	172,147	$	172,015	$	306,872	$	347,500
International revenue		37,617		32,959		67,742		65,140
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

Impella product revenue encompasses Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella 5.5, Impella RP and Impella AIC product sales and related accessories. Service and other revenue represents revenue earned on service maintenance contracts and preventative maintenance calls.

Total Revenue

Total revenue for the three months ended September 30, 2020 increased by $4.8 million, or 2%, to $209.8 million from $205.0 million for the three months ended September 30, 2019. Total revenue for the six months ended September 30, 2020 decreased $38.0 million, or 9%, to $374.6 million from $412.6 million for the six months ended September 30, 2019. The increase in total revenue in the second quarter of fiscal 2021 was driven by both Impella product revenue and our service and other revenue, as further described below.

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Impella Product Revenue

Impella product revenue for the three months ended September 30, 2020 increased by $2.8 million, or 1%, to $199.7 million from $196.9 million for the three months ended September 30, 2019. Impella product revenue for the six months ended September 30, 2020 decreased by $41.7 million, or 11%, to $355.1 million from $396.8 million for the six months ended September 30, 2019. Most of the increase in Impella product revenue during the three months ended September 30, 2020 was related to sales growth outside of the U.S. with product sales being relatively flat in the U.S. Impella product revenue outside of the U.S. increased primarily due to higher utilization in Germany and Japan.

Impella procedure volumes have varied greatly since the end of March 2020 by geography, and even by hospital, as patients and their physicians manage through the COVID-19 pandemic.

Through the second quarter of fiscal 2021, patient procedure volume trends have improved gradually both demand for procedures and availability of healthcare resources have improved. We experienced sequential quarterly improvement during the second quarter of fiscal 2021 as restrictions were somewhat lifted and limitations eased.

While we currently expect to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. We believe we are likely to continue to experience variable impacts on our business based on some of the resurgence that is now occurring in cities across the globe. While we cannot reliably estimate the extent to which the COVID-19 pandemic may continue to impact patient utilization and revenues of our products, we expect revenue from our Impella devices to increase sequentially each quarter during fiscal 2021 with our focus on growing key using U.S. sites, our controlled launch of Impella 5.5, primarily in the U.S., and our focus on growing our business internationally, with a continued focus on Germany and Japan.

Service and Other Revenue

Service and other revenue for the three months ended September 30, 2020 increased by $2.1 million, or 26%, to $10.1 million from $8.0 million for the three months ended September 30, 2019. Service and other revenue for the six months ended September 30, 2020 increased $3.7 million, or 23%, to $19.5 million from $15.8 million for the six months ended September 30, 2019. The increase in service 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 revenue growth for service revenue to be consistent with recent history as most of these using sites in the U.S. have service contracts that normally have three-year terms.

Costs and Expenses

Cost of Revenue

Cost of revenue for the three months ended September 30, 2020 increased by $3.8 million, or 11%, to $38.7 million from $34.9 million for the three months ended September 30, 2019. Gross margin was 81.5% for the three months ended September 30, 2020 and 83.0% for the three months ended September 30, 2019.

Cost of revenue for the six months ended September 30, 2020 increased by $2.8 million, or 4%, to $74.7 million from $71.9 million for the six months ended September 30, 2019.  Gross margin was 80.1% for the six months ended September 30, 2020 and 82.6% for the six months ended September 30, 2019.

The increase in cost of product revenue and decrease in gross margin during the three and six months ended September 30, 2020 was related to lower production volume of our Impella devices and costs associated with our initial launch of our Impella CP SmartAssist and Impella Connect products.

We expect that our ongoing investment in manufacturing capacity and the expansion of our Impella CP SmartAssist and Impella Connect platform may decrease gross margin slightly in the near future.

Research and Development Expenses

Research and development expenses for the three months ended September 30, 2020 increased by $6.5 million, or 27%, to $30.5 million from $24.0 million for three months ended September 30, 2019. Research and development expense for the six months ended September 30, 2020 increased $9.1 million, or 19%, to $56.9 million from $47.8 million for the six months ended September 30, 2019. The increase in research and development expenses was primarily due to product development initiatives relating to our existing and pipeline products, the development of the OXY-1 System, Impella XR Sheath™ and Impella ECP™ devices, the expansion of our engineering organization, investment in our clinical trials and studies, most notably the DTU-STEMI study and our continued focus on clinical and quality initiatives for our Impella products.

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We expect research and development expenses to continue to increase as we continue to increase engineering, product development and clinical spending related to our initiatives to improve our existing products and develop new technologies and conduct clinical studies. Research and development expenses can fluctuate with project timing.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2020 decreased by $6.8 million, or 8%, to $79.2 million from $86.0 million for the three months ended September 30, 2019. Selling, general, and administrative expenses for the six months ended September 30, 2020 decreased $24.4 million, or 14%, to $147.6 million from $172.0 million for the six months ended September 30, 2019. The decrease in selling, general and administrative expenses was primarily due to the proactive cost actions to mitigate the business impact of COVID-19 on our financial operations, including reducing discretionary spending primarily related to travel and marketing expenses, decreases in hiring, eliminating certain non-critical consultants and contractors. In addition, stock compensation expense was lower due to a lower number of restricted stock units granted and earned.

Despite the ongoing challenges posed by COVID-19, we expect to continue to invest on sales and marketing activities, with a particular focus on training and education initiatives to drive utilization of our Impella devices and recovery awareness for acute heart failure patients. We also expect to continue to incur legal expenses for the foreseeable future related to ongoing patent litigation, securities class action litigation and other legal matters discussed in “Note 14. Commitment and Contingencies” to our consolidated financial statements. For the impact of COVID-19 on our business, see “COVID-19 Pandemic.”

Operating Income

Operating income for the three months ended September 30, 2020 increased by $1.1 million, to $61.3 million, compared to $60.2 million for the three months ended September 30, 2019. Operating margin was 29.2% for the three months ended September 30, 2020 compared to 29.4% for the three months ended September 30, 2019. Operating income for the six months ended September 30, 2020 decreased by $25.5 million, to $95.4 million, compared to $120.9 million for the six months ended September 30, 2019. Operating margin was 25.5% for the six months ended September 30, 2020 compared to 29.3% for the six months ended September 30, 2019.

Other Income (Expense), net

Other income (expense), net increased by $54.4 million, to other income of $11.6 million for three months ended September 30, 2020, compared to other expense of $42.8 million for three months ended September 30, 2019. Other income (expense), net increased by $39.0 million, to other income of $38.6 million for the six months ended September 30, 2020 compared to other expense of $0.4 million for the six months ended September 30, 2019. This increase was primarily due to a gain of $10.8 million and $34.7 million from our investment in Shockwave Medical during the three and six months ended September 30, 2020, respectively, compared to a loss of $45.6 million and $5.9 million on the same investment for the three and six months ended September 30, 2019, respectively.

Income Tax Provision

Our income tax provision was $10.7 million and $4.3 million for the three months ended September 30, 2020 and 2019, respectively, and our income tax provision was $27.2 million and $18.5 million for the six months ended September 30, 2020 and 2019, respectively. Our effective income tax rate was 14.7% and 24.7% for the three months ended September 30, 2020 and 2019, respectively, and 20.3% and 15.4% for the six months ended September 30, 2020 and 2019, respectively. The decrease in the effective income tax rate was due primarily to higher excess tax benefits recognized associated with stock-based awards of $7.9 million and $0.5 million as an income tax benefit for three months ended September 30, 2020 and 2019 respectively, and of $8.5 million and $13.3 million for the six months ended September 30, 2020 and 2019. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three months ended September 30, 2020 and 2019, respectively.

Net Income

For the three months ended September 30, 2020, net income was $62.2 million, or $1.38 per basic share and $1.36 per diluted share, compared to $13.1 million, or $0.29 per basic share and $0.28 per diluted share, for three months ended September 30, 2019. For the six months ended September 30, 2020, net income was $106.8 million, or $2.37 per basic share and $2.34 per diluted share, compared to $102.0 million, or $2.25 per basic share and $2.22 per diluted share for the six months ended September 30, 2019.

Net income for the three months ended September 30, 2020 included excess tax benefits related to stock-based awards of $7.9 million, or $0.18 per basic share and $0.17 per diluted share, and a total $8.2 million gain, net of tax, or $0.18 per basic and diluted share, related to our investment in Shockwave Medical. Net income for the three months ended September 30, 2019 included excess

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tax benefits related to stock-based awards of $0.5 million, or $0.01 per basic and diluted share, and a $34.5 million unrealized loss, net of tax, or $0.76 per basic share and $0.75 per diluted share, related to our investment in Shockwave Medical.

Net income for the six months ended September 30, 2020 included excess tax benefits related to stock-based awards of $8.5 million, or $0.19 per basic and diluted share, and a $26.1 million gain, net of tax, or $0.58 per basic and $0.57 per diluted share, related to our investment in Shockwave Medical. Net income for the six months ended September 30, 2019 included excess tax benefits related to stock-based awards of $13.3 million, or $0.29 per basic and diluted share, and a $4.5 million unrealized loss, net of tax, or $0.10 per basic and diluted share, related to our investment in Shockwave Medical.

Liquidity and Capital Resources

At September 30, 2020, our total cash, cash equivalents and marketable securities totaled $735.7 million, an increase of $84.8 million compared to $650.9 million at March 31, 2020. The increase in our cash, cash equivalents and marketable securities during the six months ended September 30, 2020 was primarily due to cash flows provided by operating activities offset by cash used to fund our annual bonuses and proceeds from the sale of shares in Shockwave Medical. These amounts were offset by taxes paid related to net settlement of vesting of stock awards during the period and purchases of property and equipment.

Following is a summary of our cash flow activities:

	For the Six Months Ended September 30,
	2020			2019
Net cash provided by operating activities	$	108,968		$	138,887
Net cash used for investing activities		(81,314	)		(38,011	)
Net cash used for financing activities		(14,711	)		(71,005	)
Effect of exchange rate changes on cash		(3,043	)		(613	)
Net increase in cash and cash equivalents	$	9,900		$	29,258

Cash Provided by Operating Activities

For the six months ended September 30, 2020, cash provided by operating activities consisted of net income of $106.8 million, adjustments for non-cash items of $19.7 million and cash used in working capital of $17.5 million. As discussed above, the change in net income was primarily due to modest increases in Impella revenue, lower selling, general and administrative expenses to reduced discretionary spending and hiring and gains from our investment in Shockwave Medical, partially offset by increases in research and development expenses due to product development and clinical initiatives relating to our existing and pipeline products and lower excess tax benefits. Adjustments for non-cash items consisted primarily of $20.9 million of stock-based compensation expense, $14.2 million in deferred tax provision, $11.1 million of depreciation and amortization expense, $3.1 million in inventory and other write-downs, and $0.5 million in accretion on marketable securities. The change in cash from working capital included a $4.8 million decrease in accounts receivable due to timing of collections, a $6.1 million decrease in inventory due to lower production volumes, a $32.1 million decrease in accounts payable and accrued expenses primarily due to payment of annual bonuses during the quarter ended September 30, 2020, and a $2.0 million increase in deferred revenue.

For the six months ended September 30, 2019, cash provided by operating activities consisted of net income of $102.0 million, adjustments for non-cash items of $54.5 million and cash used in working capital of $17.6 million. As discussed above, the change in net income was primarily due to lower excess tax benefits partially offset by higher revenue from increased utilization of our Impella devices and an unrealized loss related to our investment in Shockwave Medical. Adjustments for non-cash items consisted primarily of $26.4 million of stock-based compensation expense, $10.2 million in deferred tax provision, $9.1 million of depreciation and amortization expense, $2.3 million in accretion on marketable securities, and $2.2 million in inventory and other write-downs. The change in cash from working capital included a $12.2 million increase in inventory to support demand for our Impella devices, $3.8 million increase in accounts receivable due to timing of collections, a $3.0 million increase in deferred revenue, and a $0.5 million decrease in accounts payable and accrued expenses.

Cash Used for Investing Activities

For the six months ended September 30, 2020, net cash used for investing activities primarily consisted of $74.4 million in purchases from the sale of marketable securities (net of maturities), $52.2 million in net cash for our acquisition of Breethe and $19.6 million used in the purchase of property and equipment primarily related to continued expansion of manufacturing capacity, office space and research development facilities in Danvers and Aachen, Germany. We also made an additional $3.1 million investment in a private medical technology companies during fiscal 2021. These amounts were partially offset by $67.9 million in proceeds from the sale of Shockwave Medical securities.

For the six months ended September 30, 2019, net cash used for investing activities primarily consisted of $5.6 million in maturities (net of purchases) of marketable securities and $24.6 million used in the purchase of property and equipment primarily

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related to continued expansion of manufacturing capacity, office space and research development facilities in Danvers and Aachen, Germany.  We invested an additional $7.8 million in private medical technology companies during fiscal 2019.

Capital expenditures for fiscal 2021 are estimated to range from $30.0 million to $50.0 million, including additional capital expenditures for manufacturing capacity expansions in our Danvers and Aachen facilities, additional office space, building and leasehold improvements and information systems development projects.

Cash Used for Financing Activities

For the six months ended September 30, 2020, net cash used for financing activities included $11.3 million for the repurchase of our common stock and $10.9 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards. These amounts were offset by $5.6 million in proceeds from the exercise of stock options and $2.0 million in proceeds from the issuance of stock under the employee stock purchase plan.

For the six months ended September 30, 2019, net cash used for financing activities included $41.2 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and $34.9 million used in the repurchase of our common stock. These amounts were offset by $2.7 million in proceeds from the exercise of stock options and $2.4 million in proceeds from the issuance of stock under the employee stock purchase plan.

Operating Capital and Liquidity Requirements

Our sources of cash liquidity are primarily from existing cash and cash equivalents, marketable securities and cash flows from operations. On September 30, 2020, our total cash, cash equivalents, and short and long-term marketable securities totaled $735.7 million, a decrease of $84.8 million compared to $650.9 million at March 31, 2020. Marketable securities at September 30, 2020 consisted of $533.5 million held in funds that invest in U.S. Treasury securities, government-backed securities, corporate debt securities and commercial paper. We generated operating cash flows of $109.0 million and $138.9 million for the six months ended September 30, 2020 and 2019, respectively. At September 30, 2020, we had no debt outstanding. We believe that our sources of liquidity are sufficient to fund the current requirements of working capital, capital expenditures, and other financial commitments for at least the next twelve months.

Our primary liquidity requirements are to fund the following: expansion of our commercial and operational infrastructures; expansion of our manufacturing capacity and office space; the procurement and production of inventory to meet customer demand for our Impella devices; funding of new product and business development initiatives, such as the recent acquisition of Breethe; ongoing commercial launch in Japan and expansion into potential new markets; increased clinical spending; legal expenses related to ongoing patent litigation and other legal matters; stock repurchases and payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and 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 primarily include our ability to penetrate the market for our products, our ability to maintain or reduce the length of the selling cycle for our products, our capital expenditures, and our ability to collect cash from customers after our products are sold. We continue to review our short-term and long-term cash needs on a regular basis.

As discussed in “COVID-19 Pandemic,” we have taken proactive actions to mitigate the business impact of COVID-19 on our financial operations. While we currently expect to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. We believe we are likely to continue to experience variable impacts on our business based on some of the resurgence that occurring in cities across the globe.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements or guarantees of third-party obligations during the periods presented. An “off-balance sheet arrangement” generally entails a transaction, agreement or other contractual arrangement to which an entity unconsolidated with us, is a party under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Contractual Obligations and Commercial Commitments 

We have various contractual obligations, which are recorded as liabilities in our consolidated condensed financial statements. Other items are not recognized as liabilities in our consolidated condensed financial statements but are required to be disclosed. There have been no material changes, outside of the ordinary course of business, to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

There have been no material changes to our quantitative and qualitative disclosures about market risk as compared to the quantitative and qualitative disclosures about market risk described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

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 September 30, 2020. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2020, these disclosure controls and procedures were 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 SEC 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.

Changes in Internal Control over Financial Reporting

During the second quarter of our fiscal year ending March 31, 2021, 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. We have not experienced any material impact to our internal control over financial reporting despite the fact that certain of our employees have been working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the potential impact of COVID-19 on our internal controls to minimize the impact on their design and operating effectiveness.

36

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 14. Commitments and Contingencies” to our condensed 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, 2020, 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, 2020.

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

None.

ITEM 5. OTHER INFORMATION

5.02(e) Compensatory Arrangements of Certain Officers.

On November 5, 2020, the Company made a one-time grant of performance-based restricted stock units (“PSUs”) to the following named executive officers (“NEOs”) listed in its definitive proxy statement on Schedule 14A filed with the SEC on June 30, 2020: Chairman, President and Chief Executive Officer Michael R. Minogue; Vice President and Chief Financial Officer Todd A. Trapp; Vice President and Chief Commercial Officer Andrew J. Greenfield; and Senior Vice President and Chief Operating Officer David M. Weber. The Compensation Committee of the Board of Directors determined to grant these awards in order to align management around a strategic COVID-19 recovery plan developed to create value for shareholders. The Company also considered the performance of its NEOs during the COVID-19 pandemic to date, market data and the input of the Committee’s independent compensation consultant. The target number of PSUs granted was 12,000 for Mr. Minogue and 4,500 for each of the other NEOs. The PSUs may be earned based on certain performance milestones after a one-year performance period, and, to the extent earned, will time-vest 50% shortly after the end of the one-year performance period and 50% on the second anniversary of the grant date, in each case, subject to the NEO’s continued employment on the vesting date and settlement date. Payouts under the PSUs are capped at 200% of target, and are based on a revenue growth metric, representing 30% weight of total payout, and certain other quantitative business metrics focusing on new product development, human capital, and operations during the pandemic, representing 70% weight of total payout. Additionally, in recognition of his focused leadership of the Company during the pandemic, Mr. Minogue’s earned PSU amount may be multiplied by an additional 125% if the Company achieves certain other strategic business metrics not included in the other NEOs’ PSU grants, for a potential maximum payout of 250% of target.

37

ITEM 6. EXHIBITS

Exhibit No.	Description	Filed with This Form 10-Q	Incorporated by Reference
			Form	Filing Date	Exhibit No.
3.1	Restated Certificate of Incorporation		S-3	September 29, 1997	3.1
3.2	Amended & Restated By-Laws, as Amended and Restated February 4, 2020		10-K	May 21, 2020 (File No. 001-09585)	3.2
3.3	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	Form of Executive Officer Time-Based RSU Agreement under the Second Amended and Restated 2015 Omnibus Incentive Plan	X
10.2	Form of Executive Officer Time-Based Stock Option Agreement under the Second Amended and Restated 2015 Omnibus Incentive Plan	X
10.3	Form of Executive Officer Performance-Based PSU Agreement under the Second Amended and Restated 2015 Omnibus Incentive Plan	X
31.1	Rule 13a—14(a)/15d—14(a) certification of principal executive officer	X
31.2	Rule 13a—14(a)/15d—14(a) certification of principal accounting officer	X
32.1	Section 1350 certification	X
101	The following financial information from the ABIOMED, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in inline Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of  and March 31, 2020; (ii) Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2020 and 2019; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended September 30, 2020 and 2019; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2020 and 2019; and (v) Notes to Condensed Consolidated Financial Statements.	X
104	Cover page from the ABIOMED, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 formatted in iXBRL and contained in Exhibit 101	X

38

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: November 6, 2020	/s/    TODD A. TRAPP
	Todd A. Trapp
	Vice President and Chief Financial Officer
	(Authorized Signatory)

39

EX-10.1

Exhibit 10.1

Name:

Number of Restricted Stock Units:

Date of Grant:

ABIOMED, Inc.
Second Amended and Restated 2015 Omnibus Incentive Plan

Restricted Stock Unit Agreement (Executive Officer)

This agreement (this “Agreement”) evidences the grant of restricted stock units (the “Restricted Stock Units”) by ABIOMED, Inc. (the “Company”) to the individual named above (the “Grantee”) pursuant to and subject to the terms of the ABIOMED, Inc. Second Amended and Restated 2015 Omnibus Incentive Plan (as amended from time to time, the “Plan”), which is incorporated herein by reference.

1. Grant of Restricted Stock Units.  On the date of grant set forth above (the “Date of Grant”) the Company granted to the Grantee an award (the “Award”) consisting of the right to receive, on the terms provided herein and in the Plan, one share of Stock with respect to each Restricted Stock Unit forming part of the Award, in each case, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.

2. Meaning of Certain Terms.  Each initially capitalized term used but not separately defined herein has the meaning assigned to such term in the Plan.

3. Vesting.  The term “vest” as used herein with respect to any Restricted Stock Unit means the lapsing of the restrictions described herein with respect to such Restricted Stock Unit (each such occurrence, a “Vesting Date”).

(a) Unless earlier terminated, forfeited, relinquished or expired, thirty-three and one-third percent (33-1/3%) of the Restricted Stock Units shall vest on each anniversary of the Date of Grant, with the number of Restricted Stock Units that vest on any such date being rounded down to the nearest whole share and the Restricted Stock Units becoming 100% vested on the third anniversary of the Date of Grant, provided in each case that the Grantee has remained in continuous Employment from the Date of Grant through the applicable Vesting Date.  Automatically and immediately upon the cessation of the Grantee’s Employment for any reason the unvested portion of this Award shall terminate and be forfeited for no consideration.

(b)     Notwithstanding anything in this Agreement to the contrary, if (i) a Change of Control occurs and (ii) on or after the Change of Control and on or before the first anniversary of the Change of Control either (1) Grantee’s employment is terminated without Cause or (2) Grantee terminates his or her employment with for Good Reason, then any unvested and unearned Restricted Stock Units shall become immediately vested and earned as of the date of such termination of employment and shall be settled in accordance with Section 4 of this Agreement. For purposes of this Agreement, “Good Reason” means “Good Reason” as defined in the written employment or service agreement with the Company or any subsidiary, to which the Grantee is a party, or (ii) if clause (i) does not apply, then “Good Reason” shall mean the occurrence of any of the following conditions without the Grantee’s express consent: (A) a material diminution in the scope of the Grantee’s duties and authority; or (B) a relocation of the Grantee’s principal place of work to a location more than fifty (50) miles from Grantee’s current principal location of employment (unless such new location is closer to the primary residence of the Grantee). Notwithstanding the foregoing, the Grantee’s resignation shall not be deemed to have occurred for “Good Reason” unless the Grantee provides the Company with a written notice of Good Reason termination within sixty (60) days after the occurrence of an event giving rise to a claim of Good Reason, and the Company shall have thirty (30) days thereafter in which to cure or resolve the behavior otherwise constituting Good Reason, or to dispute such resignation for Good Reason and the Grantee resigns his or her employment as a result at the end of such thirty (30)-day period.    

4. Delivery of Stock.  The Company shall deliver to the Grantee as soon as practicable upon the vesting of the Restricted Stock Units (or any portion thereof), but in all events no later than thirty (30) days following the date on which such Restricted Stock Units vest, one share of Stock with respect to each such vested Restricted Stock Unit, subject to the terms of the Plan and this Agreement.

5. Dividends, etc.  The Grantee shall have the rights of a shareholder with respect to a share of Stock subject to the Award only at such time, if any, as such share is actually delivered under the Award.  Without limiting the generality of the foregoing and for the avoidance of doubt, the Grantee shall not be entitled to vote any share of Stock subject to the Award or to receive or be credited with any dividend or other distribution declared and payable on any such share unless and until such share has been actually delivered hereunder and is held by the Grantee on the record date for such vote or dividend (or other distribution), as the case may be.

6. Certain Tax Matters.  

(a) The Grantee expressly acknowledges and agrees that the Grantee’s rights hereunder, including the right to be issued shares of Stock upon the vesting of the Restricted Stock Units (or any portion thereof), are subject to the Grantee’s promptly paying, or in respect of any later requirement of withholding being liable promptly to pay at such time as such withholdings are due, to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld, if any (the “Withholding Obligation”).  

(b) By accepting this Award, the Grantee hereby acknowledges that the Company will hold back whole shares of Stock otherwise deliverable pursuant to this Agreement, as applicable, having a Fair Market Value sufficient to satisfy the Withholding Obligation (but not in excess of the applicable minimum statutory withholding obligations or such greater amount that would not result in adverse accounting consequences to the Company).

7. Forfeiture/Recovery of Compensation.  By accepting the Award, the Grantee expressly acknowledges and agrees that his or her rights, and those of any permitted transferee, under the Award or to any Stock acquired under the Award or proceeds from the disposition thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision).  (Nothing in the preceding sentence shall be construed as limiting the general application of Section 10 of this Agreement.)  

In furtherance of the foregoing and as a condition of eligibility for the Award granted hereunder, and participation in the Plan, the Grantee understands and agrees that if his/her employment with the Company terminates for any reason (whether voluntary or involuntary), and the Grantee engages in any Prohibited Activity (as defined below) within two years after such termination, the Grantee will repay to the Company the economic value of the Award, which results or resulted from the Grantee’s exercise at any time after the date which is twelve months prior to the date of the Grantee’s termination of employment.  For purposes hereof, the economic value to be repaid is the market price per share at the time of exercise or vesting over the exercise price (if any) per share, multiplied by the number of shares so exercised or vested, without regard to any subsequent market price decrease or increase, reduced by any statutory income taxes paid by the Grantee with respect to income recognized in connection with any exercise or vesting.  For purposes hereof, the economic value with respect to any Award exercised or vested during a period in which the Grantee is an employee of the Company shall be presumed to be the amount reported as employment income by the Company.  For any period after the Grantee has ceased to be an employee of the Company, the economic value shall be calculated by using the high and low price on the date of exercise and vesting, unless there is actual price information available.    

A.       The Grantee engages in a Prohibited Activity if he/she:

(i) directly, for his/her own account or for any other person, as agent, employee, officer, director, trustee, consultant, owner, partner, or shareholder, or any other capacity:

(ii)  hires or attempts to hire or assist any other person in hiring or attempting to hire any employee of the Company; or

(iii) encourages or assists any other person in encouraging any director, officer, employee, agent, consultant or any other person affiliated with the Company to terminate or alter his/her or its relationship with the Company; or

(iv) encourages or assists any other person in encouraging any customer or supplier of the Company to terminate or alter its relationship with the Company; or

(v) sells or markets or assists any other person in selling or marketing any product or service that competes, directly or indirectly with any product or service manufactured, sold or under development by the Company at the time the Grantee's employment with the Company is

terminated (to include the Company’s service of providing specialized clinical education and training to healthcare professionals in the interventional cardiology space); or

(vi) researches, develops or manufactures or assists any other person in researching, developing or manufacturing any product or service that competes with any product or service conceived, manufactured, sold or under development by the Company at the time the Grantee's employment with the Company is terminated.

B. In order to assure that the Grantee does not breach any of the foregoing provisions, the Grantee agrees that for a period of two (2) years following the termination of his/her employment with the Company, he/she will not accept employment with, advise, provide consulting services to or acquire any interest in (other than an investment interest of less than 5% of the total outstanding shares of a publicly traded company) any business that directly or indirectly competes with any product or service manufactured, sold or under development by the Company or that utilizes or benefits from the same type of training provided by the Company without first obtaining the Company’s written consent.  Such businesses include, but are not necessarily limited to, MAQUET Cardiovascular, LLC (The Getinge Group),  Abbott Laboratories, Edwards Life Sciences, Cardiovascular Systems, Inc. (CSI), Procyrion, Inc., The Terumo Group, Fresenius Medical Care, Zoll Medical Corp., Boston Scientific, Medtronic PLC, LivaNova PLC (Cardiac Assist, Inc.), Magenta Medical Ltd., Hemovent GmbH and ALung Technologies, Inc., and any group, division or subsidiary of any of the foregoing.  The Company shall be permitted to withhold such consent in its sole discretion, unless the Grantee and the prospective employer are able to provide the Company with assurances reasonably satisfactory to the Company in its sole discretion that the Grantee will not be assisting the prospective employer in any of the prohibited endeavors listed in paragraph A. above.

8. Transfer of Award.  Neither the Award nor the Restricted Stock Units may be transferred except at death in accordance with Section 6(a)(3) of the Plan.

9. Form S-8 Prospectus.  The Grantee acknowledges that he or she has received and reviewed a copy of the prospectus required by Part I of Form S-8 relating to shares of Stock that may be issued pursuant to the Award under the Plan.  

10. Acknowledgments.  By accepting the Award, the Grantee agrees to be bound by, and agrees that the Award is, and the Restricted Stock Units are, subject in all respects to, the terms of the Plan.  In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall control.  The Grantee further acknowledges and agrees that (a) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder and (b) such electronic signature will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Grantee.

[The remainder of this page is intentionally left blank]

Executed as of the ___ day of [MONTH], [YEAR].

Company: ABIOMED, INC.

 By: ______________________________

Name:

Title:

Grantee: /$ParticipantName$/__________________

Name:

Address:

[Signature Page to Restricted Stock Unit Agreement]

EX-10.2

Exhibit 10.2

Name:

Number of Shares of Stock Subject to Stock Option:

Exercise Price Per Share:

Date of Grant:

ABIOMED, Inc.

SEcond AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN

Non-statutory Stock Option Agreement (Executive Officer)

This agreement (this “Agreement”) evidences the grant of a stock option by ABIOMED, Inc. (the “Company”) to the individual named above (the “Optionee”) pursuant to and subject to the terms of the ABIOMED, Inc. 2015 Amended and Restated Omnibus Incentive Plan (as amended from time to time, the “Plan”), which is incorporated herein by reference.

1.Grant of Stock Option. On the date of grant set forth above (the “Date of Grant”) the Company granted to the Optionee an option (the “Stock Option”) to purchase, on the terms provided herein and in the Plan, up to the number of shares of Stock set forth above (each, a “Share,” and collectively, the “Shares”) at the exercise price per Share set forth above, in each case, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.

The Stock Option evidenced by this Agreement is a non-statutory option (that is, an option that is not to be treated as a stock option described in subsection (b) of Section 422 of the Code).  The Optionee is an employee of the Company and/or of one or more subsidiaries of the Company with respect to which the Company has a “controlling interest” as described in Treas. Regs. §1.409A-1(b)(5)(iii)(E)(1).

2.Meaning of Certain Terms.  Each initially capitalized term used but not separately defined herein has the meaning assigned to such term in the Plan.

3.Vesting; Method of Exercise.

(a)Unless earlier terminated, forfeited, relinquished or expired, thirty-three and one-third percent (33-1/3%) of the Stock Option shall vest on each anniversary of the Date of Grant, with the number of Shares that vest on any date being rounded down to the nearest whole Share and the Stock Option becoming vested as to 100% of the Shares on the third anniversary of the Date of Grant, provided in each case that the Optionee has remained in continuous Employment from the Date of Grant through the applicable vesting date.

(b)Notwithstanding anything in this Agreement to the contrary, if (i) a Change of Control occurs and (ii) on or after the Change of Control and on or before the first anniversary of the Change of Control either (1) Optionee’s employment is terminated without Cause or (2) Optionee terminates his or her Employment with for Good Reason, then any unvested portion of the Stock Option shall become immediately vested as of the date of such termination of Employment. “Good Reason” means “Good Reason” as defined in the written employment or service agreement with the Company or any subsidiary, to which the Optionee is a party, or (ii) if clause (i) does not apply, then “Good Reason” shall mean the occurrence of any of the following conditions without the Optionee’s express consent: (A) a material diminution in the scope of the Optionee’s duties and authority; or (B) a relocation of the Optionee’s principal place of work to a location more than fifty (50) miles from Optionee’s current principal location of employment (unless such new location is closer to the primary residence of the Optionee). Notwithstanding the foregoing, the Optionee’s resignation shall not be deemed to have occurred for “Good

AMERICAS 103302230

Reason” unless the Optionee provides the Company with a written notice of Good Reason termination within sixty (60) days after the occurrence of an event giving rise to a claim of Good Reason, and the Company shall have thirty (30) days thereafter in which to cure or resolve the behavior otherwise constituting Good Reason, or to dispute such resignation for Good Reason and the Optionee resigns his or her Employment as a result at the end of such thirty (30)-day period.

(c)No portion of the Stock Option may be exercised until it vests.  Each election to exercise any vested portion of the Stock Option will be subject to the terms and conditions of the Plan and shall be in a form acceptable to the Administrator signed by the Optionee (or legally appointed representative, in the event of the Optionee’s disability) or the person or persons to whom the Stock Option is transferred by will or the applicable laws of descent and distribution.  Each such election must be received by the Company at its principal office or by such other party as the Administrator may prescribe and be accompanied by payment in full as provided in the Plan.  The exercise price may be paid by cash or check acceptable to the Administrator or by such other means provided for in the Plan, to the extent permitted by the Administrator.  In the event that the Stock Option is exercised by a person other than the Optionee, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of such individual to exercise the Stock Option and compliance with applicable securities laws.  Subject to Section 6(a)(4) of the Plan, the latest date on which the Stock Option or any portion thereof may be exercised will be the 10th anniversary of the Date of Grant (the “Final Exercise Date”).  Any portion of the Stock Option that remains outstanding and has not been exercised by the Final Exercise Date will thereupon immediately terminate.  Upon any earlier termination of Employment, the provisions of Section 6(a)(4) of the Plan shall apply.

4.Forfeiture; Recovery of Compensation.  By accepting the Stock Option, the Optionee expressly acknowledges and agrees that his or her rights, and those of any permitted transferee, under the Stock Option or to any Stock acquired under the Stock Option or proceeds from the disposition thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision).  (Nothing in the preceding sentence shall be construed as limiting the general application of Section 8 of this Agreement.)

In furtherance of the foregoing and as a condition of eligibility for the Stock Option granted hereunder, and participation in the Plan, the Optionee understands and agrees that if his/her Employment with the Company terminates for any reason (whether voluntary or involuntary), and the Optionee engages in any Prohibited Activity (as defined below) within two years after such termination, the Optionee will repay to the Company the economic value of the Stock Option, which results or resulted from the Optionee’s exercise at any time after the date which is twelve months prior to the date of the Optionee’s termination of Employment.  For purposes hereof, the economic value to be repaid is the market price per share at the time of exercise or vesting over the exercise price (if any) per share, multiplied by the number of shares so exercised or vested, without regard to any subsequent market price decrease or increase, reduced by any statutory income taxes paid by the Optionee with respect to income recognized in connection with any exercise or vesting.  For purposes hereof, the economic value with respect to any Stock Option exercised or vested during a period in which the Optionee is an employee of the Company shall be presumed to be the amount reported as employment income by the Company.  For any period after the Optionee has ceased to be an employee of the Company, the economic value shall be calculated by using the high and low price on the date of exercise and vesting, unless there is actual price information available.

A.The Optionee engages in a Prohibited Activity if he/she:

(i)directly, for his/her own account or for any other person, as agent, employee, officer, director, trustee, consultant, owner, partner, or shareholder, or any other capacity:

(ii)hires or attempts to hire or assist any other person in hiring or attempting to hire any employee of the Company; or

AMERICAS 103302230 2

(iii)encourages or assists any other person in encouraging any director, officer, employee, agent, consultant or any other person affiliated with the Company to terminate or alter his/her or its relationship with the Company; or

(iv)encourages or assists any other person in encouraging any customer or supplier of the Company to terminate or alter its relationship with the Company; or

(v)sells or markets or assists any other person in selling or marketing any product or service that competes, directly or indirectly with any product or service manufactured, sold or under development by the Company at the time the Optionee’s Employment with the Company is terminated (to include the Company’s service of providing specialized clinical education and training to healthcare professionals in the interventional cardiology space); or

(vi)researches, develops or manufactures or assists any other person in researching, developing or manufacturing any product or service that competes with any product or service conceived, manufactured, sold or under development by the Company at the time the Optionee’s Employment with the Company is terminated.

B.In order to assure that the Optionee does not breach any of the foregoing provisions, the Optionee agrees that for a period of two (2) years following the termination of his/her Employment with the Company, he/she will not accept Employment with, advise, provide consulting services to or acquire any interest in (other than an investment interest of less than 5% of the total outstanding shares of a publicly traded company) any business that directly or indirectly competes with any product or service manufactured, sold or under development by the Company or that utilizes or benefits from the same type of training provided by the Company without first obtaining the Company’s written consent.  Such businesses include, but are not necessarily limited to MAQUET Cardiovascular, LLC (The Getinge Group),  Abbott Laboratories, Edwards Life Sciences, Cardiovascular Systems, Inc. (CSI), Procyrion, Inc., The Terumo Group, Fresenius Medical Care, Zoll Medical Corp., Boston Scientific, Medtronic PLC, LivaNova PLC (Cardiac Assist, Inc.), Magenta Medical Ltd., Hemovent GmbH and ALung Technologies, Inc. and any group, division or subsidiary of any of the foregoing. The Company shall be permitted to withhold such consent in its sole discretion, unless the Optionee and the prospective employer are able to provide the Company with assurances reasonably satisfactory to the Company in its sole discretion that the Optionee will not be assisting the prospective employer in any of the prohibited endeavors listed in paragraph A. above.

5.Transfer of Stock Option.  The Stock Option may not be transferred except at death in accordance with Section 6(a)(3) of the Plan.

6.Taxes.  

(a)The exercise of the Stock Option will give rise to “wages” subject to withholding. The Optionee expressly acknowledges and agrees that the Optionee’s rights hereunder, including the right to be issued shares of Stock upon the exercise of the Stock Option (or any portion thereof), are subject to the Optionee promptly paying, or in respect of any later requirement of withholding being liable promptly to pay at such time as such withholdings are due, to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld, if any (the “Withholding Obligation”).  

(b)By accepting this Award, the Optionee hereby acknowledges that the Company will hold back whole shares of Stock otherwise deliverable pursuant to this Agreement, as applicable, having a Fair Market Value sufficient to satisfy the Withholding Obligation (but not in excess of the applicable minimum statutory withholding obligations or such greater amount that would not result in adverse accounting consequences to the Company).

AMERICAS 103302230 3

7.Form S-8 Prospectus.  The Optionee acknowledges that he or she has received and reviewed a copy of the prospectus required by Part I of Form S-8 relating to shares of Stock that may be issued pursuant to the exercise of the Stock Option under the Plan.

8.Acknowledgments.  By accepting the Stock Option, the Optionee agrees to be bound by, and agrees that the Stock Option is subject in all respects to, the terms of the Plan.  In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall control.  The Optionee further acknowledges and agrees that (a) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder and (b) such electronic signature will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Optionee.

[The remainder of this page is intentionally left blank]

AMERICAS 103302230 4

Executed as of the [●] day of [MONTH], [YEAR].

Company:	ABIOMED, INC. By: Name: Title:
Optionee:	Name: Address

AMERICAS 103302230

EX-10.3

Exhibit 10.3

Grantee:

Target Number of Restricted Stock Units:

Date of Grant:

ABIOMED, Inc.
SECOND AMENDED & RESTATED 2015 OMNIBUS INCENTIVE PLAN

Restricted Stock Unit Agreement (Executive Officer)

This agreement (this “Agreement”) evidences the grant of restricted stock units (the “Restricted Stock Units”) by ABIOMED, Inc. (the “Company”) to the individual named above (the “Grantee”), pursuant to and subject to the terms of the ABIOMED, Inc. Second Amended and Restated 2015 Omnibus Incentive Plan (as amended from time to time, the “Plan”), which is incorporated herein by reference.

1.Grant of Restricted Stock Units.  On the Date of Grant, the Company granted to the Grantee an award (the “Award”) consisting of the right to receive, on the terms provided herein and in the Plan, one share of Stock with respect to each Restricted Stock Unit forming part of the Award, in each case, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.  The number of Restricted Stock Units set forth above reflects the target number of shares of Stock (the “Target Number”) that the Grantee is eligible to receive under the Award if the performance-vesting conditions described below are satisfied at the achievement level of 100% of the Target Number and the time-vesting condition is also satisfied.  The maximum number of shares of Stock the Grantee is eligible to receive under the Award is equal to two (2) times the number of Restricted Stock Units set forth above.

2.Meaning of Certain Terms.  Each initially capitalized term used but not separately defined herein has the meaning assigned to such term in the Plan. In addition, the following terms shall have the meanings set forth below:

(a)“Good Reason” means “Good Reason” as defined in the written employment or service agreement with the Company or any subsidiary, to which the Grantee is a party, or (ii) if clause (i) does not apply, then “Good Reason” shall mean the occurrence of any of the following conditions without the Grantee’s express consent: (A) a material diminution in the scope of the Grantee’s duties and authority; or (B) a relocation of the Grantee’s principal place of work to a location more than fifty (50) miles from Grantee’s current principal location of employment (unless such new location is closer to the primary residence of the Grantee). Notwithstanding the foregoing, the Grantee’s resignation shall not be deemed to have occurred for “Good Reason” unless the Grantee provides the Company with a written notice of Good Reason termination within sixty (60) days after the occurrence of an event giving rise to a

claim of Good Reason, and the Company shall have thirty (30) days thereafter in which to cure or resolve the behavior otherwise constituting Good Reason, or to dispute such resignation for Good Reason and the Grantee resigns his or her Employment as a result at the end of such thirty (30)-day period.

(b)“Peer Group” means Edwards Lifesciences Corporation, Hologic, Inc., ResMed Inc., Teleflex, Incorporated, Avanos Medical, Inc., Align Technology, Inc., Integra LifeSciences Holdings Corporation, NuVasive, Inc., Haemonetics Corporation, CONMED Corporation, ICU Medical, Inc., Cantel Medical Corp., Masimo Corporation, Merit Medical Systems, Inc., DexCom, Inc., Globus Medical, Inc., Natus Medical Incorporated, Penumbra, Inc., Nevro Corp., and Inogen, Inc., provided, however, the Peer Group may be adjusted or changed by the Compensation Committee as circumstances warrant, including, without limitation, the following: (i) if a Peer Group company is acquired by another company, including through a management buy-out or going-private transaction, the acquired company will be removed from the Peer Group for the entire relevant period of measurement, (ii) if a Peer Group company becomes bankrupt, the bankrupt company will remain in the Peer Group, with such bankrupt companies being deemed to have a total shareholder return of negative 100%; (iii) if the Company’s or any Peer Group company’s stock splits (or if there are other similar subdivisions, consolidations or changes in such company’s stock or capitalization), such company’s stock price will be adjusted for the stock split so as not to give an advantage or disadvantage to such company by comparison to the other Peer Group companies; or (iv)  if a Peer Group company ceases to be publicly traded during the Company’s 2020 fiscal year, it will not be treated as part of the Peer Group.

(c)“TSR” is the total shareholder return measured by dividing (A) the sum of (1) the dividends paid (regardless of whether paid in cash or property) on shares of Stock during each of the First Measurement Period (May 29, 2020 through May 29, 2022) and Second Measurement Period (May 29, 2020 through May 29, 2023), assuming reinvestment of such dividends in such stock (based on the closing price of such stock on the ex dividend date), plus (2) the difference between the average closing price of a share of Stock on the principal United States exchange on which such stock trades for the twenty (20) trading days occurring immediately prior to the first day of the Performance Period (the “Beginning Average Value”) and the average closing price of a share of such stock on the principal United States exchange on which such stock trades for the twenty (20) trading days immediately prior to and including the last day of the First Measurement Period and the Second Measurement Period, as applicable (appropriately adjusted for any stock dividend, stock split, spin-off,

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AMERICAS 102971285

merger or other similar corporate events affecting such stock), by (B) the Beginning Average Value.

3.Vesting.  The term “vest” as used herein with respect to any Restricted Stock Unit means the lapsing of the restrictions described herein with respect to such Restricted Stock Unit.  Restricted Stock Units shall only vest, and shares of Stock shall only be issued to the Grantee in respect of such Restricted Stock Units, to the extent that both the performance-based vesting conditions and time-based vesting condition set forth below are satisfied.

(a)Performance Goals. The performance goals for the Performance Period are based on (i) Company’s “Relative TSR”, which is the rank (by percentile) of the TSR of the Company relative to the TSR of the companies in the Peer Group during the First Measurement Period and the Second Measurement Period, respectively, as set forth in Section 3(b) below, equal to the product of (x) the quotient of (A) the numeric rank of Company’s TSR relative to the Peer Group, where the lowest TSR in the Peer Group is ranked number 1, and (B) the total number of companies in the Peer Group plus 1, rounded to the nearest hundredth, and (y) 100; and (ii) achievement of certain non-financial milestones, as set forth in Section 3(b) below (the “Milestone Metrics”), and as determined in the good faith discretion of the Compensation Committee during the Performance Period. All determinations under this Section 3 shall be made by the Compensation Committee.

(b)Earned Percentage. Except as provided in Section 3(e) hereof, the Restricted Stock Units shall be earned based on the Company’s Relative TSR Earned Percentage and Milestone Metrics Earned Percentage, weighted equally (collectively, the “Earned Percentage”), each as determined from the relevant tables below (with any Relative TSR Earned Percentage between the levels set forth in the Relative TSR schedule determined by linear interpolation). If the Company’s Relative TSR relative to the TSR of the companies in the S&P 500 Index for the twenty (20) trading days occurring immediately prior to the first day of the Performance Period through the twenty (20) trading days immediately prior to and including the last day of the relevant period of measurement is at or above the 75^th percentile, then the Relative TSR Earned Percentage shall be guaranteed to be achieved at threshold level performance, despite the Company having achieved a below threshold level of performance relative to the Peer Group.

RELATIVE TSR

[Redacted]

MILESTONE METRICS

[Redacted]

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AMERICAS 102971285

(c)Earned Restricted Stock Units. The number of Restricted Stock Units earned (the “Earned Restricted Stock Units”) shall be the product of the Target Number multiplied by the Earned Percentage. Notwithstanding the foregoing, if the Company’s absolute TSR for the First Measurement Period or Second Measurement Period, as applicable, is negative, in no event shall the Relative TSR Earned Percentage be more than one hundred percent (100%). To the extent that the Restricted Stock Units do not become Earned Restricted Stock Units pursuant to this Section 3, such Restricted Stock Units shall be automatically forfeited.

(d)Time-Vesting Requirement. Vesting of each portion of the Earned Restricted Stock Units shall be subject to the Grantee’s continuous Employment on the date (each a “Vesting Date”) that the Compensation Committee certifies that the applicable Relative TSR and Milestone Metric performance goals have been satisfied following the completion of each applicable Performance Period (i.e., Restricted Stock Units subject to Relative TSR (First Measurement Period) will cliff vest after two (2) years and Restricted Stock Units subject to Relative TSR (Second Measurement Period) and Milestone Metrics will cliff vest after three (3) years). The Compensation Committee will certify the Company’s Relative TSR and Milestone Metrics over the applicable Performance Period as promptly as is reasonably possible following the completion of the Performance Period.

(e)Change of Control. In the event of a Change of Control, and provided that the Restricted Stock Units have not been forfeited prior to the date of such Change of Control, then:

(i)Restricted Stock Units are not Assumed or Replaced. If upon the occurrence of a Change of Control, the Restricted Stock Units are not converted, assumed, or replaced by a successor with an economically equivalent award, then the time-vesting requirement set forth in Section 3(d) hereof shall become immediately and fully vested upon the closing of the Change of Control and to the extent then outstanding and unvested, 100% of the Target Number of Restricted Stock Units shall be immediately and fully vested upon the closing of the Change of Control, provided, however, the Compensation Committee (as constituted immediately prior to the applicable Change of Control) may elect to provide that between 100% and 200% of the Target Number of Restricted Stock Units shall be immediately and fully vested upon the closing of the Change of Control.  Any accelerated vesting pursuant to this Section 3(e) upon a Change of Control is subject to the Grantee having remained in continuous Employment from the Date of Grant

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AMERICAS 102971285

through the closing of such Change of Control. The Restricted Stock Units shall be settled within fifteen (15) days following the consummation of the Change of Control.

(ii)Restricted Stock Units are Assumed or Replaced. If upon the occurrence of a Change of Control, the Restricted Stock Units are converted, assumed, or replaced by a successor with an economically equivalent award, then any unvested and unearned Restricted Stock Units shall become immediately earned and vested upon the Grantee’s termination of Employment by the Company without Cause or resignation for Good Reason, in each case, on or before the first anniversary of the Change of Control, assuming achievement of the performance goals at 100% of the Target Number, provided, however, the Compensation Committee may elect to provide that between 100% and 200% of the Target Number of Restricted Stock Units shall be immediately and fully vested upon such termination of Employment. The Restricted Stock Units will be settled within thirty (30) days following such termination of Employment.

4.Forfeiture Risk.  Automatically and immediately upon the cessation of the Grantee’s Employment for any reason, the unvested portion of the Award shall terminate and be forfeited for no consideration.

5.Delivery of Stock.  Except as otherwise provided in Section 3(e) of this Agreement, the Company shall deliver to the Grantee as soon as practicable upon the vesting of the Restricted Stock Units (or any portion thereof), but in all events no later than thirty (30) days following the applicable Vesting Date, one share of Stock with respect to each such vested Restricted Stock Unit, subject to the Grantee remaining in continuous Employment on such payment date, the terms of the Plan and this Agreement, and satisfaction of applicable tax withholding obligations with respect thereto in accordance with Section 7 of this Agreement. Notwithstanding the foregoing provisions of this Section 5 to the contrary, if at the time of the Grantee’s separation from service within the meaning of Code Section 409A, the Grantee is a “specified employee” within the meaning of Code Section 409A, any payment hereunder that constitutes a “deferral of compensation” under Code Section 409A and that would otherwise become due on account of such separation from service shall be delayed, and payment shall be made in full upon the earlier to occur of (i) a date during the 31-day period commencing six months and one day following such separation from service and (ii) the date of the Grantee’s death.

6.Dividends, etc.  The Grantee shall have the rights of a shareholder with respect to a share of Stock subject to the Award only at such time, if any, as such share is actually delivered under the Award.  Without limiting the generality of the foregoing and for the avoidance of doubt, the Grantee shall not be entitled to vote any share of Stock subject to the Award or to receive or be credited with any dividend or other distribution declared and payable on any such share unless and until such share has been actually

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AMERICAS 102971285

delivered hereunder and is held by the Grantee on the record date for such vote or dividend (or other distribution), as the case may be.

7.Certain Tax Matters.  

(a)The Grantee expressly acknowledges and agrees that the Grantee’s rights hereunder, including the right to be issued shares of Stock upon the vesting of the Restricted Stock Units (or any portion thereof), are subject to the Grantee’s promptly paying, or in respect of any later requirement of withholding being liable promptly to pay at such time as such withholdings are due, to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld, if any (the “Withholding Obligation”).  

(b)By accepting this Award, the Grantee hereby acknowledges that the Company will hold back whole shares of Stock otherwise deliverable pursuant to this Agreement, as applicable, having a Fair Market Value sufficient to satisfy the Withholding Obligation (but not in excess of the applicable minimum statutory withholding obligations or such greater amount that would not result in adverse accounting consequences to the Company).

(c)The Grantee expressly acknowledges that because the Award consists of an unfunded and unsecured promise by the Company to deliver Stock in the future, subject to the terms hereof, it is not possible to make a so-called “83(b) election” with respect to the Award.

8.Forfeiture; Recovery of Compensation.

(a)By accepting the Award, the Grantee expressly acknowledges and agrees that his or her rights, and those of any permitted transferee, under the Award or to any Stock acquired under the Award or proceeds from the disposition thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision). Nothing in the preceding sentence shall be construed as limiting the general application of Section 11 of this Agreement.

(b)In furtherance of the foregoing and as a condition of eligibility for the Award granted hereunder, and participation in the Plan, the Grantee understands and agrees that if his/her Employment with the Company terminates for any reason (whether voluntary or involuntary), and the Grantee engages in any Prohibited Activity (as defined below) within two years after such termination, the Grantee will repay to the Company the economic value of the Award, which results or resulted from the Grantee’s exercise at any time after the date which is twelve months prior to the date of the Grantee’s termination of Employment.  For purposes hereof, the economic value to be repaid is the market price per share at the time of exercise or vesting over the exercise price (if any) per share, multiplied by the number of shares so exercised or vested, without regard to any subsequent market price decrease or increase, reduced by any statutory income taxes paid by the Grantee with respect to income recognized in connection with any exercise or vesting.  For purposes

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AMERICAS 102971285

hereof, the economic value with respect to any Award exercised or vested during a period in which the Grantee is an employee of the Company shall be presumed to be the amount reported as employment income by the Company.  For any period after the Grantee has ceased to be an employee of the Company, the economic value shall be calculated by using the high and low price on the date of exercise and vesting, unless there is actual price information available.    

(c)The Grantee engages in a Prohibited Activity if he/she:

(i)directly, for his/her own account or for any other person, as agent, employee, officer, director, trustee, consultant, owner, partner, or shareholder, or any other capacity:

(ii)  hires or attempts to hire or assist any other person in hiring or attempting to hire any employee of the Company; or

(iii) encourages or assists any other person in encouraging any director, officer, employee, agent, consultant or any other person affiliated with the Company to terminate or alter his/her or its relationship with the Company; or

(iv)encourages or assists any other person in encouraging any customer or supplier of the Company to terminate or alter its relationship with the Company; or

(v)sells or markets or assists any other person in selling or marketing any product or service that competes, directly or indirectly with any product or service manufactured, sold or under development by the Company at the time the Grantee’s Employment with the Company is terminated (to include the Company’s service of providing specialized clinical education and training to healthcare professionals in the interventional cardiology space); or

(vi)researches, develops or manufactures or assists any other person in researching, developing or manufacturing any product or service that competes with any product or service conceived, manufactured, sold or under development by the Company at the time the Grantee’s Employment with the Company is terminated.

(d)In order to assure that the Grantee does not breach any of the foregoing provisions, the Grantee agrees that for a period of two (2) years following the termination of his/her Employment with the Company, he/she will not accept Employment with, advise, provide consulting services to or acquire any interest in (other than an investment interest of less than 5% of the total outstanding shares of a publicly traded company) any business that directly or indirectly competes with any product or service manufactured, sold or under development by the Company or that utilizes or benefits from the same type of training provided by the Company without first obtaining the Company’s written consent.  Such businesses include, but are not necessarily limited to, MAQUET Cardiovascular, LLC (The Getinge Group),  Abbott Laboratories, Edwards Life Sciences, Cardiovascular Systems, Inc. (CSI), Procyrion, Inc., The Terumo Group, Fresenius

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AMERICAS 102971285

Medical Care, Zoll Medical Corp., Boston Scientific, Medtronic PLC, LivaNova PLC (Cardiac Assist, Inc.), Magenta Medical Ltd., Hemovent GmbH and ALung Technologies, Inc. and any group, division or subsidiary of any of the foregoing.  The Company shall be permitted to withhold such consent in its sole discretion, unless the Grantee and the prospective employer are able to provide the Company with assurances reasonably satisfactory to the Company in its sole discretion that the Grantee will not be assisting the prospective employer in any of the prohibited endeavors listed in Section 8(c) above.

9.Transfer of Award.  Neither the Award nor the Restricted Stock Units may be transferred except at death in accordance with Section 6(a)(3) of the Plan.

10.Form S-8 Prospectus.  The Grantee acknowledges that he or she has received and reviewed a copy of the prospectus required by Part I of Form S-8 relating to shares of Stock that may be issued pursuant to the Award under the Plan.  

11.Acknowledgments.  By accepting the Award, the Grantee agrees to be bound by, and agrees that the Award is, and the Restricted Stock Units are, subject in all respects to, the terms of the Plan.  In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall control. The Grantee acknowledges that Restricted Stock Units covered by a grant are not intended nor shall deemed to constitute a wage under any state or federal wage and hour law. The Grantee further acknowledges and agrees that (a) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder and (b) such electronic signature will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Grantee.

[The remainder of this page is intentionally left blank]

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AMERICAS 102971285

Executed as of the ___ day of [MONTH], 2020.

Company: ABIOMED, INC.

By: ______________________________

Name:

Title:

Grantee: __________________________________

Name:

Address:

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULE 13A-14(A)/15D-14(A), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael R. Minogue, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 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: November 6, 2020	/s/ Michael R. Minogue
	Michael R. Minogue
	Chairman, President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULE 13A-14(A)/15D-14(A), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Todd A. Trapp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2020 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: November 6, 2020	/s/ TODD A. TRAPP
	Todd A. Trapp
	Vice President and Chief Financial Officer (Principal Financial 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 September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned Chairman, President and Chief Executive Officer and Vice President and Chief Financial Officer of the Company, certifies, to the best knowledge and belief of said 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 (Principal Executive Officer)	Todd A. Trapp Vice President and Chief Financial Officer (Principal Financial Officer)
Date: November 6, 2020	Date: November 6, 2020

XML

Document and Entity Information - shares	6 Months Ended
	Sep. 30, 2020	Oct. 22, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Trading Symbol	ABMD
Entity Registrant Name	ABIOMED, INC.
Entity Central Index Key	0000815094
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--03-31
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		45,189,883
Entity File Number	001-09585
Entity Tax Identification Number	04-2743260
Title of 12(b) Security	Common Stock, $0.01 par value
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false
Entity Address, Address Line One	22 CHERRY HILL DRIVE
Entity Address, City or Town	Danvers
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01923
City Area Code	978
Local Phone Number	646-1400

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 202,241	$ 192,341
Short-term marketable securities	330,843	250,775
Accounts receivable, net	80,909	84,650
Inventories	83,209	90,088
Prepaid expenses and other current assets	19,419	18,009
Total current assets	716,621	635,863
Long-term marketable securities	202,613	207,795
Property and equipment, net	175,582	164,931
Goodwill	78,122	31,969
In-process research and development	42,895	14,913
Deferred tax assets	29,547	43,336
Other assets	82,594	117,655
Total assets	1,327,974	1,216,462
Current liabilities:
Accounts payable	21,734	32,774
Accrued expenses	57,227	75,107
Deferred revenue	21,314	19,147
Other current liabilities	4,938	4,857
Total current liabilities	105,213	131,885
Contingent consideration	24,417	9,000
Deferred tax liabilities	4,251	806
Other long-term liabilities	11,684	9,305
Total liabilities	145,565	150,996
Commitments and contingencies (Note 14)
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 - 47,435,945 shares at June 30, 2019 and 47,026,226 shares at March 31, 2019 Outstanding - 45,374,278 shares at June 30, 2019 and 45,122,985 shares at March 31, 2019	452	451
Additional paid in capital	767,527	739,133
Retained earnings	709,283	602,482
Treasury stock at cost - 2,657,140 shares at September 30, 2020 and 2,533,374 shares at March 31, 2020	(287,654)	(265,411)
Accumulated other comprehensive loss	(7,199)	(11,189)
Total stockholders' equity	1,182,409	1,065,466
Total liabilities and stockholders' equity	$ 1,327,974	$ 1,216,462

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Mar. 31, 2020
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	47,847,023	47,542,061
Common stock, Outstanding	45,189,883	45,008,687
Treasury stock, shares	2,657,140	2,533,374

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue	$ 209,764	$ 204,974	$ 374,614	$ 412,640
Costs and expenses:
Cost of revenue	38,736	34,867	74,719	71,940
Research and development	30,525	23,969	56,882	47,759
Selling, general and administrative	79,167	85,956	147,611	172,034
Costs and Expenses, Total	148,428	144,792	279,212	291,733
Income from operations	61,336	60,182	95,402	120,907
Other income (expense):
Investment income, net	1,822	2,932	4,219	5,981
Other income (expense), net	9,757	(45,756)	34,370	(6,392)
Nonoperating Income (Expense), Total	11,579	(42,824)	38,589	(411)
Income before income taxes	72,915	17,358	133,991	120,496
Income tax provision	10,702	4,287	27,190	18,502
Net income	$ 62,213	$ 13,071	$ 106,801	$ 101,994
Basic net income per share	$ 1.38	$ 0.29	$ 2.37	$ 2.25
Basic weighted average shares outstanding	45,104	45,319	45,057	45,267
Diluted net income per share	$ 1.36	$ 0.28	$ 2.34	$ 2.22
Diluted weighted average shares outstanding	45,661	45,912	45,609	46,031

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 62,213	$ 13,071	$ 106,801	$ 101,994
Other comprehensive income (loss):
Foreign currency translation gains (losses)	2,416	(5,716)	3,776	(3,382)
Unrealized losses on derivative instrument	(266)		(726)
Net unrealized (losses) gains on marketable securities	(814)	(85)	940	515
Other comprehensive income	1,336	(5,801)	3,990	(2,867)
Comprehensive income	$ 63,549	$ 7,270	$ 110,791	$ 99,127

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Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance at Mar. 31, 2019	$ 936,890	$ 451	$ (138,852)	$ 690,507	$ 399,473	$ (14,689)
Beginning Balance (in shares) at Mar. 31, 2019		45,122,985	1,903,241
Restricted stock units issued		$ 4		(4)
Restricted stock units issued (in shares)		373,430
Stock options exercised	1,261	$ 1		1,260
Stock options exercised (in shares)		36,289
Return of common stock to pay withholding taxes on restricted stock	(40,536)	$ (2)	$ (40,534)
Return of common stock to pay withholding taxes on restricted stock (in shares)		(158,426)	158,426
Stock compensation expense	13,121			13,121
Other comprehensive income (loss)	2,934					2,934
Net income	88,923				88,923
Ending Balance at Jun. 30, 2019	1,002,593	$ 454	$ (179,386)	704,884	488,396	(11,755)
Ending Balance (in shares) at Jun. 30, 2019		45,374,278	2,061,667
Beginning Balance at Mar. 31, 2019	936,890	$ 451	$ (138,852)	690,507	399,473	(14,689)
Beginning Balance (in shares) at Mar. 31, 2019		45,122,985	1,903,241
Stock repurchase program	$ (34,900)
Stock repurchase program, Shares	(180,929)
Other comprehensive income (loss)	$ (2,867)
Net income	101,994
Ending Balance at Sep. 30, 2019	991,457	$ 452	$ (214,926)	722,020	501,467	(17,556)
Ending Balance (in shares) at Sep. 30, 2019		45,238,952	2,245,959
Beginning Balance at Jun. 30, 2019	1,002,593	$ 454	$ (179,386)	704,884	488,396	(11,755)
Beginning Balance (in shares) at Jun. 30, 2019		45,374,278	2,061,667
Restricted stock units issued (in shares)		12,039
Stock options exercised	1,445			1,445
Stock options exercised (in shares)		21,268
Return of common stock to pay withholding taxes on restricted stock	(668)		$ (668)
Return of common stock to pay withholding taxes on restricted stock (in shares)		(3,363)	3,363
Stock issued under employee stock purchase plan	2,368			2,368
Stock issued under employee stock purchase plan (in shares)		15,659
Stock compensation expense	13,323			13,323
Stock repurchase program	$ (34,874)	$ (2)	$ (34,872)
Stock repurchase program, Shares	(180,929)	(180,929)	180,929
Other comprehensive income (loss)	$ (5,801)					(5,801)
Net income	13,071				13,071
Ending Balance at Sep. 30, 2019	991,457	$ 452	$ (214,926)	722,020	501,467	(17,556)
Ending Balance (in shares) at Sep. 30, 2019		45,238,952	2,245,959
Beginning Balance at Mar. 31, 2020	$ 1,065,466	$ 451	$ (265,411)	739,133	602,482	(11,189)
Beginning Balance (in shares) at Mar. 31, 2020	45,008,687	45,008,687	2,533,374
Restricted stock units issued		$ 1		(1)
Restricted stock units issued (in shares)		124,749
Stock options exercised	$ 1,010			1,010
Stock options exercised (in shares)		31,488
Return of common stock to pay withholding taxes on restricted stock	(9,857)		$ (9,857)
Return of common stock to pay withholding taxes on restricted stock (in shares)		(52,515)	52,515
Stock compensation expense	9,298			9,298
Stock repurchase program	(11,310)	$ (1)	$ (11,309)
Stock repurchase program, Shares		(67,649)	67,649
Other comprehensive income (loss)	2,654					2,654
Net income	44,588				44,588
Ending Balance at Jun. 30, 2020	1,101,848	$ 450	$ (286,577)	749,440	647,070	(8,535)
Ending Balance (in shares) at Jun. 30, 2020		45,044,760	2,653,538
Beginning Balance at Mar. 31, 2020	$ 1,065,466	$ 451	$ (265,411)	739,133	602,482	(11,189)
Beginning Balance (in shares) at Mar. 31, 2020	45,008,687	45,008,687	2,533,374
Stock options exercised (in shares)	153,000
Stock repurchase program	$ (11,300)
Stock repurchase program, Shares	(67,649)
Other comprehensive income (loss)	$ 3,990
Net income	106,801
Ending Balance at Sep. 30, 2020	$ 1,182,409	$ 452	$ (287,654)	767,527	709,283	(7,199)
Ending Balance (in shares) at Sep. 30, 2020	45,189,883	45,189,883	2,657,140
Beginning Balance at Jun. 30, 2020	$ 1,101,848	$ 450	$ (286,577)	749,440	647,070	(8,535)
Beginning Balance (in shares) at Jun. 30, 2020		45,044,760	2,653,538
Restricted stock units issued (in shares)		11,554
Stock options exercised	4,545	$ 1		4,544
Stock options exercised (in shares)		121,066
Return of common stock to pay withholding taxes on restricted stock	(1,077)		$ (1,077)
Return of common stock to pay withholding taxes on restricted stock (in shares)		(3,602)	3,602
Stock issued under employee stock purchase plan	1,979	$ 1		1,978
Stock issued under employee stock purchase plan (in shares)		16,105
Stock compensation expense	11,565			11,565
Other comprehensive income (loss)	1,336					1,336
Net income	62,213				62,213
Ending Balance at Sep. 30, 2020	$ 1,182,409	$ 452	$ (287,654)	$ 767,527	$ 709,283	$ (7,199)
Ending Balance (in shares) at Sep. 30, 2020	45,189,883	45,189,883	2,657,140

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating activities:
Net income	$ 106,801	$ 101,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,137	9,052
Bad debt (recoveries) expense	(373)	152
Stock-based compensation	20,863	26,445
Write-down of inventory and other	3,122	2,157
Accretion on marketable securities	473	(2,276)
Change in fair value of other investments	(33,872)	5,943
Deferred tax provision	14,187	10,195
Change in fair value of contingent consideration	2,117	661
Other non-cash operating activities	2,008	2,177
Changes in assets and liabilities:
Accounts receivable	4,767	(3,828)
Inventories	6,071	(12,204)
Prepaid expenses and other assets	1,744	(4,077)
Accounts payable	(10,128)	781
Accrued expenses and other liabilities	(21,988)	(1,268)
Deferred revenue	2,039	2,983
Net cash provided by operating activities	108,968	138,887
Investing activities:
Purchases of marketable securities	(294,558)	(268,485)
Proceeds from the sale and maturity of marketable securities and other	220,197	262,881
Purchases of other investments and intangible assets	(3,100)	(7,800)
Acquisition of Breethe Inc., net of cash acquired	(52,183)
Proceeds from sales of Shockwave Medical securities	67,882
Purchases of property and equipment	(19,552)	(24,607)
Net cash used for investing activities	(81,314)	(38,011)
Financing activities:
Proceeds from the exercise of stock options	5,555	2,706
Taxes paid related to net share settlement upon vesting of stock awards	(10,934)	(41,206)
Repurchase of common stock	(11,310)	(34,873)
Proceeds from the issuance of stock under employee stock purchase plan	1,978	2,368
Net cash used for financing activities	(14,711)	(71,005)
Effect of exchange rate changes on cash and cash equivalents	(3,043)	(613)
Net increase in cash and cash equivalents	9,900	29,258
Cash and cash equivalents at beginning of period	192,341	121,021
Cash and cash equivalents at end of period	202,241	150,279
Supplemental disclosure of cash flow information:
Cash paid for income taxes	25,254	6,349
Supplemental disclosure of non-cash activities:
Contingent consideration related to the acquisition of Breethe, Inc.	13,300
Property and equipment in accounts payable and accrued expenses	1,244	3,825
Right-of-use assets obtained in exchange for lease liabilities	$ 193	$ 14,513

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Nature of Business

6 Months Ended

Sep. 30, 2020

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.

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Basis of Preparation and Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2020

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, 2020 that has been filed with the 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. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from these estimates.

There have been no changes in the Company’s significant accounting policies for the three and six months ended September 30, 2020 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, 2020 that has been filed with the SEC.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from these estimates.

COVID-19 Pandemic

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. Considerable uncertainty still surrounds the COVID-19 virus and its potential effects, and the extent of and effectiveness of responses taken on international, national and local levels. Measures taken to limit the impact of COVID-19, including shelter-in-place orders, social distancing measures, travel bans and restrictions, and business and government shutdowns, continue to create significant negative economic impacts on a global basis. The extent of the impact of the COVID-19 pandemic on the Company's business remains uncertain and difficult to predict, as the response to the pandemic continues to evolve.

Beginning in mid-March 2020 and continuing into the first quarter of fiscal 2021, the Company experienced a significant decline in patient utilization in the U.S., Europe and Japan as healthcare systems diverted resources to meet the increasing demands of managing COVID-19. The Company’s business was most impacted in April 2020, in terms of the decline in patients and revenue from the shelter-in-place restrictions in a majority of countries and limitations on procedures in hospitals. The Company experienced sequential quarterly improvement globally through the second quarter of fiscal 2021 as restrictions were lifted and limitations eased. In the second quarter of fiscal 2021, patient procedure volume trends have improved gradually as both demand for procedures and availability of healthcare resources improved during the summer months.

While the Company currently expects to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. The Company believes it is likely to continue to experience variable impacts on its business based on some of the resurgence that is now occurring in cities across the globe.

The Company is closely monitoring the impact of COVID-19 on all aspects of its business and geographies, including the impact on its customers, employees, suppliers, vendors, business partners and distribution channels. The extent to which the COVID-19 global pandemic impacts the Company’s business, results of operations, and financial condition will depend on future developments, which are highly uncertain and are difficult to predict; these developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or address its impact, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impacts on its financial condition and results of operations. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326).” This new standard requires financial instruments to be measured at amortized cost, and accounts receivables to be presented at the net amount expected to be collected. The new model requires an entity to estimate credit losses based on historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350).” This new standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which required companies to estimate the implied fair value of goodwill and recognize an impairment charge by the amount in which the carrying value exceeds the implied fair value. Under the new guidance, if the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded, even if the difference is attributable to the fair value of other assets in the reporting unit. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820).” This new standard modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain disclosure requirements related to Level 3 fair value measurements. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740).” This amendment to the guidance on income taxes is intended to simplify the accounting for income taxes. The amendment eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The amendment also clarifies existing guidance related to the evaluation of a step up in the tax basis of goodwill and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. ASU 2019-12 will become effective for the Company in fiscal 2022.

In January 2020, the FASB issued ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),” an amendment clarifying the interaction between accounting standards related to equity securities, equity method investments, and certain derivative instruments. The guidance is effective for fiscal years beginning after December 15, 2020. ASU 2020-01 will become effective for the Company in fiscal 2022.

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Acquisition

6 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisition

Note 3. Acquisition

Acquisition of Breethe, Inc.

The Company acquired Breethe, Inc. (“Breethe”), a Maryland corporation on April 24, 2020. Breethe is engaged in research and development of a novel extracorporeal membrane oxygenation (“ECMO”) system that will complement and expand its product portfolio to more comprehensively serve the needs of patients whose lungs can no longer provide sufficient oxygenation, including patients suffering from cardiogenic shock, or respiratory failure, such as ARDS, H1N1, or COVID-19. The Company acquired Breethe for $55.0 million in cash, with additional potential payouts up to a maximum of $55.0 million payable based on the achievement of certain technical, regulatory and commercial milestones.

Preliminary Purchase Price Allocation

The acquisition was accounted for as a business combination. The purchase price for the acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values. The purchase price allocation presented herein is

preliminary. The final purchase price allocation will be determined after completion of an analysis to determine the fair value of all assets acquired and liabilities assumed, but in no event later than one year following completion of the acquisition. Accordingly, the final acquisition accounting adjustments could differ materially from the preliminary amounts presented herein. Any increase or decrease in the fair value of the assets acquired and liabilities assumed, as compared to the information shown herein, could also change the portion of purchase price allocated to goodwill and could impact the operating results of the Company following the acquisition due to differences in purchase price allocation, depreciation and amortization related to some of these assets and liabilities.

The acquisition-date fair value of the consideration transferred is as follows:

	Total Acquisition Date Fair Value (in thousands)
Cash and other considerations	$	57,850
Contingent consideration		13,300
Total consideration transferred	$	71,150

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the date of acquisition (in thousands):

Acquired assets:
Cash and cash equivalents	$	3,404
Property and equipment		744
Goodwill		44,048
In-process research and development		27,000
Other assets acquired		895
Total assets acquired		76,091
Liabilities assumed:
Accounts payable and other liabilities		1,562
Deferred tax liabilities		3,379
Net assets acquired	$	71,150

Goodwill is calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill is not expected to be deductible for income tax purposes.

In process research and development (“IPR&D”) is the estimated fair value of the Breethe ECMO technology which had not reached commercial technological feasibility nor had alternative future use at the time of the acquisition and is therefore considered IPR&D.  The assigned values are allocated among the various IPR&D assets acquired.

Transaction costs such as legal, insurance and other costs related to the acquisition, aggregating approximately $0.9 million, have been expensed as incurred and are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

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Net Income Per Share

6 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Net Income Per Share

Note 4. 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 six months ended September 30, 2020 and 2019 were as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Basic Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213	$	13,071	$	106,801	$	101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Net income per share – basic	$	1.38	$	0.29	$	2.37	$	2.25

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Diluted Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213		13,071		106,801		101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Effect of dilutive securities		557		593		552		764
Weighted average shares – diluted		45,661		45,912		45,609		46,031
Net income per share – diluted	$	1.36	$	0.28	$	2.34	$	2.22

Share-based compensation awards of approximately 0.1 million and 0.3 million shares for the three months ended September 30, 2020, and 2019, respectively, and approximately 0.2 million and 0.3 million for the six months ended September 30, 2020, and 2019, respectively, were outstanding but were not included in the computation of diluted net income per share because the effect of including such shares would have been anti-dilutive or are contingently issuable upon meeting performance criteria in the periods presented.

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Revenue Recognition

6 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

Note 5. Revenue Recognition

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP, Impella 5.5 and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

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 and shipment of product or service provided has been incurred. 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.

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.  

Disaggregation of Revenue

The Company generally sells most of its products and services through a direct sales force in the U.S., Germany and Japan and through direct sales or distributors in other international markets (e.g., certain other European markets, Canada, Latin America, and 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 September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
Impella product revenue	$	199,676	$	196,939	$	355,093	$	396,804
Service and other revenue		10,088		8,035		19,521		15,836
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

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

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
U.S. revenue	$	172,147	$	172,015	$	306,872	$	347,500
International revenue		37,617		32,959		67,742		65,140
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

Variable Consideration

Returns Reserve

The Company estimates an allowance for future sales returns based on historical return experience, which requires judgment. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.  The Company estimates product return liabilities using the expected value method based on its historical sales information and other factors that it believes could significantly impact its expected returns, including product discontinuations, product recalls and expirations, of which it becomes aware. The Company’s cost of replacing defective products has not been material and is accounted for at the time of replacement. The Company’s returns reserve during the three and six months ended September 30, 2020 and 2019, were not material.

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 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 sheet. 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. Revenue adjustments that relate to performance obligations satisfied in prior periods during the three and six months ended September 30, 2020 and 2019, were not material.

Contract Balances

Deferred Revenue

The Company’s deferred revenue balance was $21.3 million and $19.1 million as of September 30, 2020 and March 31, 2020 respectively. The deferred revenue balance is due 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 six months ended September 30, 2020, the Company recognized $5.4 million and $14.6 million of revenue that was included in the deferred revenue balance as of March 31, 2020, respectively. During the three and six months ended September 30, 2019, the Company recognized $4.0 million and $12.5 million of revenue that was included in the deferred revenue balance as of March 31, 2019, respectively.

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Cash Equivalents, Marketable Securities and Fair Value Measurements

6 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Cash Equivalents, Marketable Securities and Fair Value Measurements

Note 6. Cash Equivalents, Marketable Securities and Fair Value Measurements

The Company’s cash equivalents and marketable securities at September 30, 2020 and March 31, 2020 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
September 30, 2020	(in $000's)
Money market funds	$	104,305	$	—	$	—		$	104,305
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		124,305		—		—			124,305
Short-term U.S. Treasury mutual fund securities		75,505		85		(1	)		75,589
Short-term government-backed securities		85,360		105		(9	)		85,456
Short-term corporate debt securities		128,738		1,043		—			129,781
Short-term commercial paper		39,991		31		(5	)		40,017
Total short-term marketable securities		329,594		1,264		(15	)		330,843
Long-term U.S. Treasury mutual fund securities		10,246		2		—			10,248
Long-term government-backed securities		141,378		164		(6	)		141,536
Long-term corporate debt securities		49,627		1,202		—			50,829
Total long-term marketable securities		201,251		1,368		(6	)		202,613
	$	655,150	$	2,632	$	(21	)	$	657,761

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
March 31, 2020:	(in $000's)
Money market funds	$	115,019	$	—	$	—		$	115,019
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		135,019		—		—			135,019
Short-term U.S. Treasury securities		42,236		412		—			42,648
Short-term government-backed securities		67,594		401		—			67,995
Short-term corporate debt securities		107,290		94		(83	)		107,301
Short-term commercial paper		32,757		74		—			32,831
Total short-term marketable securities		249,877		981		(83	)		250,775
Long-term government-backed securities		90,911		153		—			91,064
Long-term corporate debt securities		116,110		851		(230	)		116,731
Total long-term marketable securities		207,021		1,004		(230	)		207,795
	$	591,917	$	1,985	$	(313	)	$	593,589

Derivative Instruments

In October 2019, the Company entered into an intercompany agreement in which it loaned 85.0 million Euro to Abiomed Europe GMBH, its German subsidiary.  In conjunction with this intercompany loan agreement, the Company entered into a cross-currency swap agreement to convert a notional amount of 85.0 million Euro equivalent to $93.5 million denominated intercompany loan into U.S. dollars. The objective of this cross-currency swap is to hedge the variability of cash flows related to the forecasted interest and principal payments on the Euro denominated fixed rate loan against changes in the exchange rate between the U.S. dollar and the Euro. Under the terms of this cross-currency swap contract, which has been designated as a cash flow hedge, the Company will make interest payments in Euro and receive interest in U.S. dollars. Upon the maturity of this contract, the Company will pay the principal amount of the loan in Euro and receive U.S. dollars from the counterparty. The cross-currency swap is carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in accumulated other comprehensive income (loss).

The Company uses a foreign-exchange-related derivative instrument to manage its exposure related to changes in the exchange rate on its intercompany loan. The Company does not enter into derivative instruments for any purpose other than cash flow hedging.

The following table summarizes the terms of the cross-currency swap agreement as of September 30, 2020 (dollar amounts in thousands):

	Effective Date	Maturity	Fixed Rate	Aggregate Notional Amount (in $000's)
Pay EUR	October 15,	October 15,	2.75%		EUR 85,000
Receive U.S.$	2019	2024	4.64%		USD 93,457

The following table presents the fair value of the Company’s derivative instrument as of September 30, 2020:

Derivatives designated as hedging instruments under ASC 815	Balance Sheet classification	Fair Value
Cross-currency swap	Other assets (long-term liabilities)	$	(2,860	)

The Company has structured its cross-currency swap agreement to be 100% effective and, as a result, there was no net impact to earnings resulting from hedge ineffectiveness. Changes in the fair value of the cross-currency swap are designated as a hedging instrument that effectively offsets the variability of cash flows are reported in accumulated other comprehensive income (loss). These amounts subsequently are reclassified into the consolidated income statement in the same period in which the related hedged item affects earnings. The change of fair value of the cross-currency swap during the second quarter for fiscal year 2021 was mainly due to the appreciation of the Euro against the U.S. dollar.

For both the three and six months ended September 30, 2020, the Company recorded income of $0.7 million, in other income, net, included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

Contingent Consideration

Contingent consideration represents potential milestones that the Company may pay as additional consideration related to acquired businesses. The Company has contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH (“ECP”) in July 2014 and the acquisition of Breethe, Inc. in April 2020. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value reflected within research and development expenses in the Company’s consolidated statement of operations. Significant increases or decreases in any valuation assumptions, including 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 contingent consideration liability. There is no assurance that any of the conditions for the milestone payments will be met.

The components of contingent consideration liability are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	10,117	$	9,000
Breethe, Inc.		14,300		—
	$	24,417	$	9,000

ECP

In July 2014, the Company acquired ECP and AIS GmbH Aachen Innovative Solutions (“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 Company used 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, both of which consider significant unobservable inputs. 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 is valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management’s best estimates.

Key unobservable inputs include the discount rate used to present value the projected revenues and cash flows (ranging from 2% to 16%), the probability of achieving the various technical, regulatory and commercial milestones (estimated to be 65%) and projected revenues, which are based on the Company’s most recent internal operational budgets and long-range strategic plans.

Breethe, Inc.

In April 2020, the Company acquired Breethe, Inc. for $55.0 million in cash, with additional potential payouts up to a maximum of $55.0 million payable based on the achievement of certain technical, regulatory and commercial milestones.

The Company used 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, both of which consider significant unobservable inputs. For the regulatory milestones, 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 commercial milestones are valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management’s best estimates.

Key unobservable inputs include the discount rates used to present value the projected revenues and cash flows (ranging from 2% to 16%), the probability of achieving the various technical, regulatory and commercial milestones (estimated to range from 25% to 99%) and projected revenues, which are based on the Company’s most recent internal operational budgets and long-range strategic plans.

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 tables present the Company’s fair value hierarchy for its financial instruments measured at fair value as of September 30, 2020 and March 31, 2020:

	Level 1		Level 2		Level 3		Total
September 30, 2020	(in $000's)
Assets
Money market funds	$	104,305	$	—	$	—	$	104,305
Repurchase agreements		—		20,000		—		20,000
Short-term government-backed securities		—		85,456		—		85,456
Short-term corporate debt securities		—		129,781		—		129,781
Short-term commercial paper		—		40,017		—		40,017
Short-term U.S. Treasury mutual fund securities		—		75,589		—		75,589
Long-term U.S. Treasury mutual fund securities		—		10,248		—		10,248
Long-term government-backed securities		—		141,536		—		141,536
Long-term corporate debt securities		—		50,829		—		50,829
Investment in Shockwave Medical		22,494		—		—		22,494
Liabilities
Contingent consideration		—		—		24,417		24,417
Cross-currency swap agreement		—		2,860		—		2,860

	Level 1		Level 2		Level 3		Total
March 31, 2020	(in $000's)
Assets
Money market funds	$	115,019	$	—	$	—	$	115,019
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury securities		—		42,648		—		42,648
Short-term government-backed securities		—		67,995		—		67,995
Short-term corporate debt securities		—		107,301		—		107,301
Short-term commercial paper		—		32,831		—		32,831
Long-term government-backed securities		—		91,064		—		91,064
Long-term corporate debt securities		—		116,731		—		116,731
Cross currency swap agreement		—		3,786		—		3,786
Investment in Shockwave Medical		55,704		—		—		55,704
Liabilities
Contingent consideration		—		—		9,000		9,000

The Company has determined that the estimated fair value of its money market funds and its investment in Shockwave Medical, Inc. (“Shockwave Medical”) a publicly traded medical device company, are reported as Level 1 financial assets as they are valued at quoted market prices in active markets. The investment in Shockwave Medical is classified within other assets in the consolidated balance sheet.

The Company has determined that the estimated fair value of its repurchase agreements, U.S. Treasury mutual fund securities, government-backed securities, corporate debt securities and commercial paper and cross-currency swap agreement are reported as Level 2 financial assets as they are based on model-driven valuations in which all significant inputs are observable, or can be derived from or corroborated by observable market data for substantially the full term of the asset.

This contingent consideration liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisitions of ECP and Breethe, Inc. require significant management judgment or estimation and is calculated as described above.

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Beginning balance	$	23,701	$	9,931	$	9,000	$	9,575
Additions		—		—		13,300		—
Change in fair value		716		305		2,117		661
Ending balance	$	24,417	$	10,236	$	24,417	$	10,236

The change in fair value of the contingent consideration was primarily due to the addition of contingent consideration related to the Breethe acquisition and the passage of time impact on fair value measurements.

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Property and Equipment

6 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Property and Equipment

Note 7. Property and Equipment

The components of property and equipment are as follows:

	September 30, 2020			March 31, 2020
	(in $000's)
Land	$	7,454		$	7,179
Building and building improvements		102,644			100,176
Leasehold improvements		15,183			14,546
Machinery and equipment		78,343			71,636
Furniture and fixtures		15,166			14,600
Construction in progress		26,277			15,075
Total cost		245,067			223,212
Accumulated depreciation		(69,485	)		(58,281	)
Property and equipment, net	$	175,582		$	164,931

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Goodwill, In-Process Research and Development and Other Assets

6 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill, In-Process Research and Development and Other Assets

Note 8. Goodwill, In-Process Research and Development and Other Assets

Goodwill

The carrying amount of goodwill at September 30, 2020 and March 31, 2020 was $78.1 million and $32.0 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005, ECP in July 2014 and Breethe, Inc. in April 2020. The carrying value of goodwill and the change in the balance for the six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	31,969
Breethe, Inc. acquisition		44,048
Foreign currency translation impact		2,105
Balance, September 30, 2020	$	78,122

The Company evaluates goodwill 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.

In-Process Research & Development

The carrying amount of IPR&D assets at September 30, 2020 and March 31, 2020 was $42.9 million and $14.9 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014 and Breethe, Inc, in April 2020.

The components of IPR&D are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	15,895	$	14,913
Breethe, Inc.		27,000		—
	$	42,895	$	14,913

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 and the future Abiomed Breethe OXY-1 System 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 discount rates ranging from  15% to 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 six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	14,913
Breethe, Inc. acquisition		27,000
Foreign currency translation impact		982
Balance, September 30, 2020	$	42,895

The Company evaluates 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 IPR&D assets.

Other Assets

The components of other assets are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
Investment in Shockwave Medical	$	22,494	$	55,704
Other investments		39,041		38,741
Operating lease right of use asset (Note 8)		11,021		11,760
Cross currency swap (Note 6)		—		3,786
Other intangible assets and other assets		10,038		7,664
Total other assets	$	82,594	$	117,655

Investment in Shockwave Medical

The fair value of the Company’s investment in Shockwave Medical, a publicly-traded medical device company, was $22.5 million and $55.7 million as of September 30, 2020 and March 31, 2020, respectively. During the three and six months ended September 30, 2020, amounts recorded in other income (expense), net of tax, were gains of $8.2 million and $26.2 million, respectively. During the three and six months ended September 30, 2019, amounts recorded in other income (expense), net of tax, were losses of $34.5 million and $4.5 million, respectively. During the quarter ended September 30, 2020, the Company sold approximately 1.4 million of its shares for cash proceeds of $67.9 million and total realized gain of $47.3 million. The Company held 0.3 million shares of Shockwave Medical at September 30, 2020.

Other Investments  

The carrying value of the Company’s portfolio of other investments and the change in the balance for the three and six months ended September 30, 2020 and 2019 are as follows:

	For the Three Months Ended September 30,					For the Six Months Ended September 30,
		2020			2019		2020			2019
	(in $000's)
Beginning balance	$	38,741		$	26,584		38,741			24,584
Additions		1,100			5,000		3,100			7,000
Reclassification		—			—		(2,000	)		—
Impairment		(800	)		—		(800	)		—
Ending balance	$	39,041		$	31,584	$	39,041		$	31,584

During the three and six months ended September 30, 2020, the Company recorded an impairment loss of $0.8 million in other (expense) income relating to certain of the Company’s investment in other private medical device companies.

Other Intangible Assets and Other

Included within other intangible assets and other is $4.1 million related to license manufacturing rights to certain technology from third parties. 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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Leases

6 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Note 9. Leases

The following table presents supplemental balance sheet information related to our operating leases:

	September 30, 2020		March 31, 2020
	(in $000's)
Assets
Operating lease right-of-use assets in other assets	$	11,021	$	11,760
Liabilities
Operating lease liabilities in other current liabilities		3,683		3,671
Operating lease liabilities in other long-term liabilities		7,807		8,549
Total operating lease liabilities	$	11,490	$	12,220

Expense charged to operations under operating leases were $1.1 million and $2.2 million during each of the three and six months ended September 30, 2020 and 2019, respectively.

Maturities of lease liabilities as of September 30, 2020 are as follows:

(in thousands, except lease term and discount rate)
Fiscal Years Ended March 31,
2021	$	2,153
2022		3,088
2023		1,925
2024		1,782
2025		1,578
Thereafter		2,033
Total minimum lease payments		12,559
Less: imputed interest		(1,069	)
Present value of operating lease liabilities	$	11,490
Weighted average remaining lease term	4.99
Weighted average discount rate		3.14	%

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Accrued Expenses

6 Months Ended

Sep. 30, 2020

Payables And Accruals [Abstract]

Accrued Expenses

Note 10. Accrued Expenses

Accrued expenses consist of the following:

	September 30, 2020		March 31, 2020
	(in $000's)
Employee compensation	$	29,081	$	32,273
Sales and income taxes		11,239		21,641
Research and development		5,481		5,749
Professional, legal, and accounting fees		3,320		6,880
Warranty		1,739		1,818
Marketing		1,092		1,705
Other		5,275		5,041
	$	57,227	$	75,107

The accrual for employee compensation consists primarily of accrued bonuses, commissions, employee benefits and payroll taxes at September 30, 2020 and March 31, 2020.

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Stockholders' Equity

6 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' Equity

Note 11. Stockholders’ Equity

Class B Preferred Stock

The Company has authorized 1,000,000 shares of Class B Preferred Stock, $.01 par value, of which the board of directors can set the designation, rights and privileges. No shares of Class B Preferred Stock have been issued or are outstanding.

Stock Repurchase Program

In August 2019, the Company’s Board of Directors authorized a stock repurchase program for up to $200.0 million of shares of its common stock. Under this stock repurchase program, the Company is authorized to repurchase shares through open market purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The stock repurchase program has no time limit and may be suspended for periods or discontinued at any time. The Company is funding the stock repurchase program with its available cash and marketable securities. The Company did not make any repurchases during the three months ended September 30, 2020. The remaining authorization under the stock repurchase program was $103.8 million as September 30, 2020.

The following table provides shares bought through stock repurchase program during the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2020		2019		2020		2019
Shares repurchased		—		180,929		67,649		180,929
Average price per share		—	$	192.75	$	167.19	$	192.75
Value of shares repurchased (in millions)		—	$	34.9	$	11.3	$	34.9

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), are as follows (in thousands):

	Six Months Ended September 30, 2020
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments			Total
Balance, April 1, 2020		(16,860	)		1,672			3,999			(11,189	)
Other comprehensive income (loss)		1,360			1,755			(461	)		2,654
Balance, June 30, 2020		(15,500	)		3,427			3,538			(8,535	)
Other comprehensive income (loss)		2,416			(814	)		(266	)		1,336
Balance, September 30, 2020		(13,084	)		2,613			3,272			(7,199	)

	Six Months Ended September 30, 2019
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments		Total
Balance, April 1, 2019		(15,028	)		339			—		(14,689	)
Other comprehensive income		2,334			600			—		2,934
Balance, June 30, 2019		(12,694	)		939			—		(11,755	)
Other comprehensive income		(5,716	)		(85	)		—		(5,801	)
Balance, September 30, 2019		(18,410	)		854			—		(17,556	)

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Stock-Based Compensation

6 Months Ended

Sep. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 12. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Cost of  revenue	$	923	$	881	$	1,627	$	1,722
Research and development		1,705		1,823		3,147		3,706
Selling, general and administrative		8,937		10,619		16,089		21,017
	$	11,565	$	13,323	$	20,863	$	26,445

Stock Options

The following table summarizes the stock option activity for the six months ended September 30, 2020:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		869		$	112.03		5.30
Granted		65			221.12
Exercised		(153	)		36.41
Cancelled and expired		(8	)		227.25
Outstanding at end of period		774		$	134.90		5.77	$	117,144
Exercisable at end of period		592		$	98.68		4.84	$	110,352
Options vested and expected to vest at end of period		773		$	134.92		5.77	$	117,040

Stock options generally vest and become exercisable annually over three years. The remaining unrecognized stock-based compensation expense for unvested stock option awards at September 30, 2020, was approximately $13.0 million and the estimated weighted-average period over which this cost will be recognized is 1.9 years.

The aggregate intrinsic value of stock options exercised was $37.8 million for the six months ended September 30, 2020. The total cash received as a result of employee stock option exercises for the six months ended September 30, 2020, was approximately $5.6 million.

The Company estimates the fair value of each stock option 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 options granted during the three and six months ended September 30, 2020 and 2019 was as follows:

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2020			2019			2020			2019
Weighted average grant-date fair value	$	100.51		$	70.40		$	76.10		$	95.62
Valuation assumptions:
Risk-free interest rate		0.30	%		1.54	%		0.31	%		2.02	%
Expected option life (years)		4.17			4.13			4.22			4.14
Expected volatility		43.5	%		44.2	%		42.82	%		42.3	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the six months ended September 30, 2020:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		320		$	263.92
Granted		194			254.55
Vested		(136	)		226.71
Forfeited		(101	)		267.28
Restricted stock units at end of period		277		$	274.31

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 September 30, 2020 was $59.3 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 six months ended September 30, 2020 was $254.55. The total fair value of restricted stock units vested during the six months ended September 30, 2020 was $26.8 million.

Performance-Based Awards

In May 2020, performance-based awards of restricted stock units for the potential issuance of up to 61,674 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 the achievement of prescribed performance milestones by the Company. As of September 30, 2020, the Company is recognizing compensation expense based on the probable outcomes related to the prescribed performance targets on the outstanding awards.

Market-Based Awards

In May 2020, the Company awarded certain executive officers and employees a total of up to 61,562 market-based restricted stock units. These restricted stock units will vest and result in the issuance of shares of common stock based on continuing employment and the relative ranking of the total shareholder return (“TSR”) of the Company’s common stock in relation to the TSR of twenty peer companies over a two-year and three-year performance period based on a comparison of average closing stock prices during the 20 trading days prior to the first day of the performance period, reinstated dividends during each performance period and the average closing stock prices during the final 20 trading days of each performance period. The actual number of market-based restricted stock units that may be earned can range from 0% to 200% of the target number of shares. Additionally, the payout percentage is further adjusted based on the Company’s performance relative to the constituents of the S&P 500 Index on the first day of the performance period that are still actively trading on the last day of each performance period.  The restricted stock units will vest following the end of the two-year and three-year performance period, respectively.

The Company used a Monte-Carlo simulation model to estimate the grant-date fair value of the TSR restricted stock units. The fair value related to these awards are recorded as compensation expense over the period from date of grant to May 2022 and May 2023, respectively, regardless of the actual TSR outcome reached.

The table below sets forth the assumptions used to value the awards and the estimated grant-date fair value:

Risk-free interest rate		0.2%
Expected volatility		35.5%
Dividend yield		—
Remaining performance period (years)	1.9 - 2.9
Estimated fair value per share	$347.05 - $349.28
Target performance (number of shares)		30,781

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Income Taxes

6 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 13. Income Taxes

The Company’s income tax provision was $10.7 million and $4.3 million for the three months ended September 30, 2020 and 2019, respectively. The Company’s income tax provision was $27.2 million and $18.5 million for the six months ended September 30, 2020 and 2019, respectively. The Company’s effective tax rate was 14.7% and 24.7% for the three months ended September 30, 2020 and 2019, respectively. The Company’s effective tax rate was 20.3% and 15.4% for the six months ended September 30, 2020 and 2019, respectively. 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 six months ended September 30, 2020 and 2019.

The significant differences between the statutory income tax rate and effective income tax rate for the three and six months ended September 30, 2020 and 2019 were as follows:

	For the Three Months Ended September 30,							For the Six Months Ended September 30,
		2020			2019				2020			2019
Statutory income tax rate		21.0		%	21.0		%		21.0		%	21.0		%
Increase (decrease) resulting from:												—
Excess tax benefits from stock-based awards		(10.9	)		(2.7	)			(6.3	)		(11.0	)
Credits		(1.7	)		(2.1	)			(1.7	)		(1.7	)
State taxes, net		4.1			3.3				4.1			3.4
Permanent differences		2.6			1.7				3.4			1.9
Excess foreign tax credit		0.4			—				0.4			—
Other		(0.8	)		3.5				(0.6	)		1.7
Effective tax rate		14.7		%	24.7		%		20.3		%	15.4		%

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 $7.9 million and $0.5 million as an income tax benefit for the three months ended September 30, 2020 and 2019, respectively. The Company recognized excess tax benefits associated with stock-based awards of $8.5 million and $13.3 million for the six months ended September 30, 2020 and 2019. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during each period. 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 Company is subject to the examination of its income tax returns by the Internal Revenue Service (“IRS”) and other tax authorities. The outcome of these audits cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The Company’s most recent completed income tax audits were in the U.S. relating to fiscal year 2016 and in Germany, which covered fiscal years 2012 through 2015. These tax audits did not materially impact our financial statements. On October 29, 2020, the Company was notified by the German tax authorities that they will be conducting an income tax audit on Abiomed Europe GMBH and ECP for fiscal years 2016 through 2019 beginning in January 2021. All other tax years remain subject to examination by the federal, state and foreign tax authorities.

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 14. Commitments and 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 (“Thoratec”), a subsidiary of Abbott Laboratories (“Abbott”), has challenged a number of Company-owned patents in Europe in connection with the launch of Thoratec’s HeartMate PHP™ medical device (“PHP”) in Europe and the Company has counterclaimed for infringement in the District Court in Düsseldorf. The litigation was stayed pending the highest Court’s ruling on the validity and scope of the litigated patents. In September 2019, the Federal Court of Justice in Germany upheld the Company’s patents that are the subject of the patent infringement action for the sales and marketing of Thoratec’s PHP pump in Germany. Subsequently, the District Court in Düsseldorf lifted the stay, re-opened the litigation proceedings, and ruled in favor of Abiomed.  The Court acknowledged that Thoratec’s PHP product infringes two of Abiomed patents related to the key features of Impella® intravascular pump and future expandable heart pump, known as Impella ECP®.  Abbott appealed and the oral hearing is set for August 21, 2021. If upheld, the verdict is provisionally enforceable, which means that Abiomed will be able to seek a court ordered injunction preventing the sale and marketing of PHP, should Thoratec attempt to launch HeartMate PHP in Germany.

These actions relate solely to Thoratec’s ability to manufacture and sell its PHP product in Europe and have no impact on the Company's ability to manufacture or sell its Impella® line of medical devices.  The actions do not expose the Company to liability risk, except under local German law that requires a losing party in a proceeding to pay a portion of the other party’s legal fees.

Maquet Matters

In December 2015, the Company received a letter from Maquet Cardiovascular LLC (“Maquet”), a subsidiary of Getinge AB, asserting that the Company’s Impella^® devices infringe certain claims with guidewire, lumen, rotor, purge and sensor features, which were in two Maquet patents and one pending patent application (which has since issued as a third patent) in the U.S. and elsewhere, and attaching a draft litigation complaint.  The letter encouraged the Company to take a license from Maquet. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts (“D. Mass.” or “the Court”) 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 Maquet U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. The four U.S. continuation applications have been issued as patents of Maquet but expired on September 1, 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”). In July 2017, the Court granted a motion to add three of the four additional continuation patents to the 2016 Action.  In April 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.  Maquet then filed a motion for reconsideration of the Court’s construction of one of the disputed claim terms. The motion was denied on May 22, 2019. As a result of the Court’s denial, only one of the six originally asserted patents is in dispute. The Company filed a motion for summary judgement (MSJ) for the remaining patent on September 18, 2019 (non-infringement) and April 13, 2020 (invalidity). The parties argued the MSJ for non-infringement on November 19, 2019, the MSJ for invalidity on August 20, 2020 and are waiting for Court’s resolution.  The Court has not set a date for trial.  The only remaining patent asserted in this case expired on September 1, 2020.  

In November 2017, Maquet filed a second action in D. Mass (“2017 Action”) 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).  Discovery in the 2017 Action is ongoing.

In a series of letters during January and February 2019, Maquet informed the Company of seven new patent applications filed from the patents in the 2016 Action and 2017 Action with claims Maquet alleges would be infringed by the Impella® products if the new applications were to issue as patents. One of the newly issued patents has been added to the 2017 Action. A Markman hearing for the newly-added patent was held on November 18, 2019.  A Markman order has not been issued yet. The asserted patent in this case expired on September 1, 2020. Discovery remains ongoing.

In the 2016 Action and 2017 Action, 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 responses to the Company’s counterclaims, Maquet admits that its current commercially available products do not embody the claims of the asserted patents.

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 Maquet and Thoratec patent disputes.

Securities Class Action Litigation

On or about August 6, 2019, the Company received a securities class action complaint filed on behalf of a single shareholder in the U.S. District Court for the Southern District of New York (“SDNY”), on behalf of himself and persons or entities that purchased or acquired the Company’s securities between January 31, 2019 through July 31, 2019. On October 7, 2019, a similar purported class action complaint was filed by a different shareholder on behalf of himself and persons or entities that purchased or acquired the Company’s securities between November 1, 2018 and July 31, 2019.  Also, on October 7, 2019, four shareholders filed applications to be appointed lead plaintiff and for their counsel to be appointed lead counsel for the class. Two of those shareholders also filed motions to consolidate the two cases and two of the shareholders have withdrawn their applications to be lead plaintiff.

The complaints allege that the Company violated Sections 10(b) and 20(a) of and Rule 10b-5 under the Exchange Act, in connection with allegedly misleading disclosures made by the Company regarding its financial condition and results of operations. The Company has reviewed and not yet responded to the complaints. The Company believes that the allegations are without merit and plans to defend itself vigorously.

On June 28, 2020, the Court issued an order consolidating the two cases and appointed Local 705 International Brotherhood of Teamsters Pension Fund as the lead plaintiff and the Labaton Sucharow firm as lead counsel.  On September 17, 2020, the lead plaintiff filed an amended complaint in which they proposed a new class period of May 3, 2018 to July 31, 2019.  As prescribed by a scheduling order, the Company may file a motion to dismiss on or before November 16, 2020.  The Company intends to do so but does not expect a decision on that motion until at least the second quarter of calendar year 2021.                      

Shareholder Derivative Litigation

On November 6 and 7, 2019, two shareholders filed derivative actions in SDNY that were subsequently consolidated.  On November 8, 2019, another shareholder filed a derivative action in Massachusetts Suffolk County Superior Court.  On January 7, 2020, another shareholder derivative action was filed in the U.S. District Court for the District of Delaware.  The complaints in these actions rely on many of the same allegations as in the securities class actions, and assert that, between November 1, 2018 and July 31, 2019, the directors of the Company made or allowed to be made misleading public statements regarding the Company’s growth, ultimately harming the Company.  

The Company has agreed with the plaintiffs in all three actions to stay the cases pending resolution of a motion to dismiss in the securities class actions. As a result of the stay, the Delaware action has been administratively closed.

Litigation Demand

On March 3, 2020, a shareholder sent a letter to the Board of Directors asserting that the directors of the Company made or allowed to be made misleading public statements regarding the Company’s growth. The letter relies on many of the same allegations as the securities class actions and derivative actions, and demands that the Board (i) undertake an independent investigation of the directors, (ii) bring suit against the directors on behalf of the Company, and (iii) take a number of additional affirmative actions to redress the purported wrongs. On March 30, 2020, the Company, after discussions with the Board of Directors, sent a written response to the shareholder’s counsel which they responded to on June 1, 2020.  The Company then sent a further response to the shareholder’s counsel on June 15, 2020, affirming the decision to defer consideration of the litigation demand pending further developments in the securities class action suit. Following the filing of the amended complaint in the securities class action, described above, the same shareholder renewed their demand on September 29, 2020.  The Company responded on October 9, 2020 and once again affirmed that it will defer consideration of the demand pending further substantive developments in the securities class action suit.  

The Company is unable to estimate the potential liability with respect to the various legal matters noted above. There are numerous factors that make it difficult to estimate reasonably 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 securities class action litigation, as well as in the shareholder derivative litigations.

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Segment and Enterprise Wide Disclosures

6 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment and Enterprise Wide Disclosures

Note 15. 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 (meaning sales outside the U.S., primarily in Europe and Japan) accounted for 18% and 16% of total revenue for each of the three and six months ended September 30, 2020 and 2019, respectively. The Company’s long-lived assets are located in the U.S., except for $52.9 million and $46.7 million at September 30, 2020 and March 31, 2020, respectively, which are located primarily in Germany.

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

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

COVID-19 Pandemic

COVID-19 Pandemic

The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. Considerable uncertainty still surrounds the COVID-19 virus and its potential effects, and the extent of and effectiveness of responses taken on international, national and local levels. Measures taken to limit the impact of COVID-19, including shelter-in-place orders, social distancing measures, travel bans and restrictions, and business and government shutdowns, continue to create significant negative economic impacts on a global basis. The extent of the impact of the COVID-19 pandemic on the Company's business remains uncertain and difficult to predict, as the response to the pandemic continues to evolve.

Beginning in mid-March 2020 and continuing into the first quarter of fiscal 2021, the Company experienced a significant decline in patient utilization in the U.S., Europe and Japan as healthcare systems diverted resources to meet the increasing demands of managing COVID-19. The Company’s business was most impacted in April 2020, in terms of the decline in patients and revenue from the shelter-in-place restrictions in a majority of countries and limitations on procedures in hospitals. The Company experienced sequential quarterly improvement globally through the second quarter of fiscal 2021 as restrictions were lifted and limitations eased. In the second quarter of fiscal 2021, patient procedure volume trends have improved gradually as both demand for procedures and availability of healthcare resources improved during the summer months.

While the Company currently expects to see sequential quarterly improvement in the remainder of fiscal 2021, the COVID-19 pandemic remains fluid and continues to evolve differently across various geographies. The Company believes it is likely to continue to experience variable impacts on its business based on some of the resurgence that is now occurring in cities across the globe.

The Company is closely monitoring the impact of COVID-19 on all aspects of its business and geographies, including the impact on its customers, employees, suppliers, vendors, business partners and distribution channels. The extent to which the COVID-19 global pandemic impacts the Company’s business, results of operations, and financial condition will depend on future developments, which are highly uncertain and are difficult to predict; these developments include, but are not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or address its impact, U.S. and foreign government actions to respond to the reduction in global economic activity, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 outbreak has subsided, the Company may continue to experience materially adverse impacts on its financial condition and results of operations. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations is uncertain.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326).” This new standard requires financial instruments to be measured at amortized cost, and accounts receivables to be presented at the net amount expected to be collected. The new model requires an entity to estimate credit losses based on historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350).” This new standard simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which required companies to estimate the implied fair value of goodwill and recognize an impairment charge by the amount in which the carrying value exceeds the implied fair value. Under the new guidance, if the carrying value of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded, even if the difference is attributable to the fair value of other assets in the reporting unit. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820).” This new standard modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain disclosure requirements related to Level 3 fair value measurements. The Company adopted this standard in the first quarter of fiscal 2021 and it did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Effective

Recently Issued Accounting Pronouncements Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740).” This amendment to the guidance on income taxes is intended to simplify the accounting for income taxes. The amendment eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The amendment also clarifies existing guidance related to the evaluation of a step up in the tax basis of goodwill and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. ASU 2019-12 will become effective for the Company in fiscal 2022.

In January 2020, the FASB issued ASU 2020-01, “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815),” an amendment clarifying the interaction between accounting standards related to equity securities, equity method investments, and certain derivative instruments. The guidance is effective for fiscal years beginning after December 15, 2020. ASU 2020-01 will become effective for the Company in fiscal 2022.

Leases

The following table presents supplemental balance sheet information related to our operating leases:

	September 30, 2020		March 31, 2020
	(in $000's)
Assets
Operating lease right-of-use assets in other assets	$	11,021	$	11,760
Liabilities
Operating lease liabilities in other current liabilities		3,683		3,671
Operating lease liabilities in other long-term liabilities		7,807		8,549
Total operating lease liabilities	$	11,490	$	12,220

Expense charged to operations under operating leases were $1.1 million and $2.2 million during each of the three and six months ended September 30, 2020 and 2019, respectively.

Maturities of lease liabilities as of September 30, 2020 are as follows:

(in thousands, except lease term and discount rate)
Fiscal Years Ended March 31,
2021	$	2,153
2022		3,088
2023		1,925
2024		1,782
2025		1,578
Thereafter		2,033
Total minimum lease payments		12,559
Less: imputed interest		(1,069	)
Present value of operating lease liabilities	$	11,490
Weighted average remaining lease term	4.99
Weighted average discount rate		3.14	%

Adoption of Topic 606, Revenue from Contracts with Customers

The Company generates revenue primarily from the sale of Impella 2.5, Impella CP, Impella 5.0, Impella LD, Impella RP, Impella 5.5 and Impella AIC products. The Company also earns revenue from preventative maintenance service contracts and maintenance calls.

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Acquisition (Tables)

6 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Business Acquisitions Date Fair Value of Consideration Transferred

The acquisition-date fair value of the consideration transferred is as follows:

	Total Acquisition Date Fair Value (in thousands)
Cash and other considerations	$	57,850
Contingent consideration		13,300
Total consideration transferred	$	71,150

Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the date of acquisition (in thousands):

Acquired assets:
Cash and cash equivalents	$	3,404
Property and equipment		744
Goodwill		44,048
In-process research and development		27,000
Other assets acquired		895
Total assets acquired		76,091
Liabilities assumed:
Accounts payable and other liabilities		1,562
Deferred tax liabilities		3,379
Net assets acquired	$	71,150

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Net Income Per Share (Tables)

6 Months Ended

Sep. 30, 2020

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 six months ended September 30, 2020 and 2019 were as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Basic Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213	$	13,071	$	106,801	$	101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Net income per share – basic	$	1.38	$	0.29	$	2.37	$	2.25

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
Diluted Net Income Per Share		2020		2019		2020		2019
Net income	$	62,213		13,071		106,801		101,994
Weighted average shares – basic		45,104		45,319		45,057		45,267
Effect of dilutive securities		557		593		552		764
Weighted average shares – diluted		45,661		45,912		45,609		46,031
Net income per share – diluted	$	1.36	$	0.28	$	2.34	$	2.22

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Revenue Recognition (Tables)

6 Months Ended

Sep. 30, 2020

Revenue From Contract With Customer [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 September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
Impella product revenue	$	199,676	$	196,939	$	355,093	$	396,804
Service and other revenue		10,088		8,035		19,521		15,836
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

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

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)				(in $000's)
U.S. revenue	$	172,147	$	172,015	$	306,872	$	347,500
International revenue		37,617		32,959		67,742		65,140
Total revenue	$	209,764	$	204,974	$	374,614	$	412,640

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

6 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Cash Equivalents and Marketable Securities

The Company’s cash equivalents and marketable securities at September 30, 2020 and March 31, 2020 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
September 30, 2020	(in $000's)
Money market funds	$	104,305	$	—	$	—		$	104,305
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		124,305		—		—			124,305
Short-term U.S. Treasury mutual fund securities		75,505		85		(1	)		75,589
Short-term government-backed securities		85,360		105		(9	)		85,456
Short-term corporate debt securities		128,738		1,043		—			129,781
Short-term commercial paper		39,991		31		(5	)		40,017
Total short-term marketable securities		329,594		1,264		(15	)		330,843
Long-term U.S. Treasury mutual fund securities		10,246		2		—			10,248
Long-term government-backed securities		141,378		164		(6	)		141,536
Long-term corporate debt securities		49,627		1,202		—			50,829
Total long-term marketable securities		201,251		1,368		(6	)		202,613
	$	655,150	$	2,632	$	(21	)	$	657,761

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
March 31, 2020:	(in $000's)
Money market funds	$	115,019	$	—	$	—		$	115,019
Repurchase agreements		20,000		—		—			20,000
Total cash equivalents		135,019		—		—			135,019
Short-term U.S. Treasury securities		42,236		412		—			42,648
Short-term government-backed securities		67,594		401		—			67,995
Short-term corporate debt securities		107,290		94		(83	)		107,301
Short-term commercial paper		32,757		74		—			32,831
Total short-term marketable securities		249,877		981		(83	)		250,775
Long-term government-backed securities		90,911		153		—			91,064
Long-term corporate debt securities		116,110		851		(230	)		116,731
Total long-term marketable securities		207,021		1,004		(230	)		207,795
	$	591,917	$	1,985	$	(313	)	$	593,589

Schedule of Cross-Currency Rate Swap Derivatives Agreement

The following table summarizes the terms of the cross-currency swap agreement as of September 30, 2020 (dollar amounts in thousands):

	Effective Date	Maturity	Fixed Rate	Aggregate Notional Amount (in $000's)
Pay EUR	October 15,	October 15,	2.75%		EUR 85,000
Receive U.S.$	2019	2024	4.64%		USD 93,457

Schedule of Fair Value of Company's Derivative Instrument

The following table presents the fair value of the Company’s derivative instrument as of September 30, 2020:

Derivatives designated as hedging instruments under ASC 815	Balance Sheet classification	Fair Value
Cross-currency swap	Other assets (long-term liabilities)	$	(2,860	)

Components of Contingent Consideration Liabilities

The components of contingent consideration liability are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	10,117	$	9,000
Breethe, Inc.		14,300		—
	$	24,417	$	9,000

Financial Instruments Measured at Fair Value

The following tables present the Company’s fair value hierarchy for its financial instruments measured at fair value as of September 30, 2020 and March 31, 2020:

	Level 1		Level 2		Level 3		Total
September 30, 2020	(in $000's)
Assets
Money market funds	$	104,305	$	—	$	—	$	104,305
Repurchase agreements		—		20,000		—		20,000
Short-term government-backed securities		—		85,456		—		85,456
Short-term corporate debt securities		—		129,781		—		129,781
Short-term commercial paper		—		40,017		—		40,017
Short-term U.S. Treasury mutual fund securities		—		75,589		—		75,589
Long-term U.S. Treasury mutual fund securities		—		10,248		—		10,248
Long-term government-backed securities		—		141,536		—		141,536
Long-term corporate debt securities		—		50,829		—		50,829
Investment in Shockwave Medical		22,494		—		—		22,494
Liabilities
Contingent consideration		—		—		24,417		24,417
Cross-currency swap agreement		—		2,860		—		2,860

	Level 1		Level 2		Level 3		Total
March 31, 2020	(in $000's)
Assets
Money market funds	$	115,019	$	—	$	—	$	115,019
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury securities		—		42,648		—		42,648
Short-term government-backed securities		—		67,995		—		67,995
Short-term corporate debt securities		—		107,301		—		107,301
Short-term commercial paper		—		32,831		—		32,831
Long-term government-backed securities		—		91,064		—		91,064
Long-term corporate debt securities		—		116,731		—		116,731
Cross currency swap agreement		—		3,786		—		3,786
Investment in Shockwave Medical		55,704		—		—		55,704
Liabilities
Contingent consideration		—		—		9,000		9,000

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 six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Beginning balance	$	23,701	$	9,931	$	9,000	$	9,575
Additions		—		—		13,300		—
Change in fair value		716		305		2,117		661
Ending balance	$	24,417	$	10,236	$	24,417	$	10,236

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Property and Equipment (Tables)

6 Months Ended

Sep. 30, 2020

Property Plant And Equipment [Abstract]

Components of Property and Equipment

The components of property and equipment are as follows:

	September 30, 2020			March 31, 2020
	(in $000's)
Land	$	7,454		$	7,179
Building and building improvements		102,644			100,176
Leasehold improvements		15,183			14,546
Machinery and equipment		78,343			71,636
Furniture and fixtures		15,166			14,600
Construction in progress		26,277			15,075
Total cost		245,067			223,212
Accumulated depreciation		(69,485	)		(58,281	)
Property and equipment, net	$	175,582		$	164,931

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

6 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Carrying Value of Goodwill and Change in Balance

The carrying value of goodwill and the change in the balance for the six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	31,969
Breethe, Inc. acquisition		44,048
Foreign currency translation impact		2,105
Balance, September 30, 2020	$	78,122

Summary of Components of In-Process Research & Development

The components of IPR&D are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
ECP	$	15,895	$	14,913
Breethe, Inc.		27,000		—
	$	42,895	$	14,913

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 six months ended September 30, 2020 are as follows:

	(in $000's)
Balance, March 31, 2020	$	14,913
Breethe, Inc. acquisition		27,000
Foreign currency translation impact		982
Balance, September 30, 2020	$	42,895

Summary of Components of Other Assets

The components of other assets are as follows:

	September 30, 2020		March 31, 2020
	(in $000's)
Investment in Shockwave Medical	$	22,494	$	55,704
Other investments		39,041		38,741
Operating lease right of use asset (Note 8)		11,021		11,760
Cross currency swap (Note 6)		—		3,786
Other intangible assets and other assets		10,038		7,664
Total other assets	$	82,594	$	117,655

Carrying value of Other Investments

The carrying value of the Company’s portfolio of other investments and the change in the balance for the three and six months ended September 30, 2020 and 2019 are as follows:

	For the Three Months Ended September 30,					For the Six Months Ended September 30,
		2020			2019		2020			2019
	(in $000's)
Beginning balance	$	38,741		$	26,584		38,741			24,584
Additions		1,100			5,000		3,100			7,000
Reclassification		—			—		(2,000	)		—
Impairment		(800	)		—		(800	)		—
Ending balance	$	39,041		$	31,584	$	39,041		$	31,584

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Leases (Tables)

6 Months Ended

Sep. 30, 2020

Leases [Abstract]

Supplemental Balance Sheet Information Related to Operating Leases

The following table presents supplemental balance sheet information related to our operating leases:

	September 30, 2020		March 31, 2020
	(in $000's)
Assets
Operating lease right-of-use assets in other assets	$	11,021	$	11,760
Liabilities
Operating lease liabilities in other current liabilities		3,683		3,671
Operating lease liabilities in other long-term liabilities		7,807		8,549
Total operating lease liabilities	$	11,490	$	12,220

Maturities of Lease Liabilities

Maturities of lease liabilities as of September 30, 2020 are as follows:

(in thousands, except lease term and discount rate)
Fiscal Years Ended March 31,
2021	$	2,153
2022		3,088
2023		1,925
2024		1,782
2025		1,578
Thereafter		2,033
Total minimum lease payments		12,559
Less: imputed interest		(1,069	)
Present value of operating lease liabilities	$	11,490
Weighted average remaining lease term	4.99
Weighted average discount rate		3.14	%

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Accrued Expenses (Tables)

6 Months Ended

Sep. 30, 2020

Payables And Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following:

	September 30, 2020		March 31, 2020
	(in $000's)
Employee compensation	$	29,081	$	32,273
Sales and income taxes		11,239		21,641
Research and development		5,481		5,749
Professional, legal, and accounting fees		3,320		6,880
Warranty		1,739		1,818
Marketing		1,092		1,705
Other		5,275		5,041
	$	57,227	$	75,107

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Stockholders' Equity (Tables)

6 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Stock Repurchase Activity

The following table provides shares bought through stock repurchase program during the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2020		2019		2020		2019
Shares repurchased		—		180,929		67,649		180,929
Average price per share		—	$	192.75	$	167.19	$	192.75
Value of shares repurchased (in millions)		—	$	34.9	$	11.3	$	34.9

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), are as follows (in thousands):

	Six Months Ended September 30, 2020
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments			Total
Balance, April 1, 2020		(16,860	)		1,672			3,999			(11,189	)
Other comprehensive income (loss)		1,360			1,755			(461	)		2,654
Balance, June 30, 2020		(15,500	)		3,427			3,538			(8,535	)
Other comprehensive income (loss)		2,416			(814	)		(266	)		1,336
Balance, September 30, 2020		(13,084	)		2,613			3,272			(7,199	)

	Six Months Ended September 30, 2019
	Foreign Currency Translation Gains (Losses)			Unrealized Gains on Investments			Gains (Losses) on Derivative Instruments		Total
Balance, April 1, 2019		(15,028	)		339			—		(14,689	)
Other comprehensive income		2,334			600			—		2,934
Balance, June 30, 2019		(12,694	)		939			—		(11,755	)
Other comprehensive income		(5,716	)		(85	)		—		(5,801	)
Balance, September 30, 2019		(18,410	)		854			—		(17,556	)

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2020

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 condensed consolidated statements of operations for the three and six months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2020		2019		2020		2019
	(in $000's)
Cost of  revenue	$	923	$	881	$	1,627	$	1,722
Research and development		1,705		1,823		3,147		3,706
Selling, general and administrative		8,937		10,619		16,089		21,017
	$	11,565	$	13,323	$	20,863	$	26,445

Summary of Stock Option Activity

The following table summarizes the stock option activity for the six months ended September 30, 2020:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		869		$	112.03		5.30
Granted		65			221.12
Exercised		(153	)		36.41
Cancelled and expired		(8	)		227.25
Outstanding at end of period		774		$	134.90		5.77	$	117,144
Exercisable at end of period		592		$	98.68		4.84	$	110,352
Options vested and expected to vest at end of period		773		$	134.92		5.77	$	117,040

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

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
		2020			2019			2020			2019
Weighted average grant-date fair value	$	100.51		$	70.40		$	76.10		$	95.62
Valuation assumptions:
Risk-free interest rate		0.30	%		1.54	%		0.31	%		2.02	%
Expected option life (years)		4.17			4.13			4.22			4.14
Expected volatility		43.5	%		44.2	%		42.82	%		42.3	%

Restricted Stock Units

Summary of Restricted Stock Units Activity

The following table summarizes activity of restricted stock units for the six months ended September 30, 2020:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		320		$	263.92
Granted		194			254.55
Vested		(136	)		226.71
Forfeited		(101	)		267.28
Restricted stock units at end of period		277		$	274.31

Summary of Assumptions Used To Value Awards And Estimated Grant-Date Fair Value

The table below sets forth the assumptions used to value the awards and the estimated grant-date fair value:

Risk-free interest rate		0.2%
Expected volatility		35.5%
Dividend yield		—
Remaining performance period (years)	1.9 - 2.9
Estimated fair value per share	$347.05 - $349.28
Target performance (number of shares)		30,781

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Income Taxes (Tables)

6 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Differences Between Statutory Income Tax Rate and Effective Income Tax Rate

The significant differences between the statutory income tax rate and effective income tax rate for the three and six months ended September 30, 2020 and 2019 were as follows:

	For the Three Months Ended September 30,							For the Six Months Ended September 30,
		2020			2019				2020			2019
Statutory income tax rate		21.0		%	21.0		%		21.0		%	21.0		%
Increase (decrease) resulting from:												—
Excess tax benefits from stock-based awards		(10.9	)		(2.7	)			(6.3	)		(11.0	)
Credits		(1.7	)		(2.1	)			(1.7	)		(1.7	)
State taxes, net		4.1			3.3				4.1			3.4
Permanent differences		2.6			1.7				3.4			1.9
Excess foreign tax credit		0.4			—				0.4			—
Other		(0.8	)		3.5				(0.6	)		1.7
Effective tax rate		14.7		%	24.7		%		20.3		%	15.4		%

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Acquisition - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended
	Apr. 30, 2020	Sep. 30, 2020
Restructuring Cost And Reserve [Line Items]
Business acquisition, transaction costs		$ 0.9
Breethe, Inc
Restructuring Cost And Reserve [Line Items]
Payments to acquire businesses, cash paid	$ 55.0
Breethe, Inc | Maximum
Restructuring Cost And Reserve [Line Items]
Potential payouts payments	$ 55.0

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Schedule of Business Acquisitions Date Fair Value of Consideration Transferred (Detail) $ in Thousands	Apr. 24, 2020 USD ($)
Business Combinations [Abstract]
Cash and other considerations	$ 57,850
Contingent consideration	13,300
Total consideration transferred	$ 71,150

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Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed (Detail) $ in Thousands	Apr. 24, 2020 USD ($)
Business Combinations [Abstract]
Cash and cash equivalents	$ 3,404
Property and equipment	744
Goodwill	44,048
In-process research and development	27,000
Other assets acquired	895
Total assets acquired	76,091
Accounts payable and other liabilities	1,562
Deferred tax liabilities	3,379
Net assets acquired	$ 71,150

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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				6 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Basic Net Income Per Share
Net income	$ 62,213	$ 44,588	$ 13,071	$ 88,923	$ 106,801	$ 101,994
Weighted average shares – basic	45,104		45,319		45,057	45,267
Net income per share – basic	$ 1.38		$ 0.29		$ 2.37	$ 2.25
Diluted Net Income Per Share
Net income	$ 62,213	$ 44,588	$ 13,071	$ 88,923	$ 106,801	$ 101,994
Weighted average shares – basic	45,104		45,319		45,057	45,267
Effect of dilutive securities	557		593		552	764
Weighted average shares – diluted	45,661		45,912		45,609	46,031
Net income per share – diluted	$ 1.36		$ 0.28		$ 2.34	$ 2.22

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Net Income Per Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Shares excluded from the calculation of diluted weighted average shares outstanding	0.1	0.3	0.2	0.3

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Revenue Recognition - Schedule of Disaggregated Revenue by Major Business Line (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation Of Revenue [Table]
Total revenue	$ 209,764	$ 204,974	$ 374,614	$ 412,640
U.S.
Disaggregation Of Revenue [Table]
Total revenue	172,147	172,015	306,872	347,500
International
Disaggregation Of Revenue [Table]
Total revenue	37,617	32,959	67,742	65,140
Impella Product
Disaggregation Of Revenue [Table]
Total revenue	199,676	196,939	355,093	396,804
Service and Other
Disaggregation Of Revenue [Table]
Total revenue	$ 10,088	$ 8,035	$ 19,521	$ 15,836

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Revenue Recognition - Deferred Revenue - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2020
Revenue From Contract With Customer [Abstract]
Deferred revenue	$ 21,314		$ 21,314		$ 19,147
Deferred Revenue, Revenue Recognized	$ 5,400	$ 4,000	$ 14,600	$ 12,500

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Investable Cash Equivalents and Marketable Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	$ 655,150	$ 591,917
Gross Unrealized Gains	2,632	1,985
Gross Unrealized Losses	(21)	(313)
Fair Market Value	657,761	593,589
Cash Equivalents
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	124,305	135,019
Fair Market Value	124,305	135,019
Repurchase Agreement
Total Cash Equivalents and Marketable Securities [Line Items]
Fair Market Value	20,000	20,000
Repurchase Agreement | Cash Equivalents
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	20,000	20,000
Fair Market Value	20,000	20,000
Short-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	329,594	249,877
Gross Unrealized Gains	1,264	981
Gross Unrealized Losses	(15)	(83)
Fair Market Value	330,843	250,775
Long-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	201,251	207,021
Gross Unrealized Gains	1,368	1,004
Gross Unrealized Losses	(6)	(230)
Fair Market Value	202,613	207,795
Money Market Funds
Total Cash Equivalents and Marketable Securities [Line Items]
Fair Market Value	104,305	115,019
Money Market Funds | Cash Equivalents
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	104,305	115,019
Fair Market Value	104,305	115,019
Commercial Paper | Short-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	39,991	32,757
Gross Unrealized Gains	31	74
Gross Unrealized Losses	(5)
Fair Market Value	40,017	32,831
U.S. Treasury mutual fund securities | Short-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	75,505	42,236
Gross Unrealized Gains	85	412
Gross Unrealized Losses	(1)
Fair Market Value	75,589	42,648
U.S. Treasury mutual fund securities | Long-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	10,246
Gross Unrealized Gains	2
Fair Market Value	10,248
Government-backed securities | Short-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	85,360	67,594
Gross Unrealized Gains	105	401
Gross Unrealized Losses	(9)
Fair Market Value	85,456	67,995
Government-backed securities | Long-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	141,378	90,911
Gross Unrealized Gains	164	153
Gross Unrealized Losses	(6)
Fair Market Value	141,536	91,064
Corporate Debt Securities | Short-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	128,738	107,290
Gross Unrealized Gains	1,043	94
Gross Unrealized Losses		(83)
Fair Market Value	129,781	107,301
Corporate Debt Securities | Long-term Investments
Total Cash Equivalents and Marketable Securities [Line Items]
Amortized Cost	49,627	116,110
Gross Unrealized Gains	1,202	851
Gross Unrealized Losses		(230)
Fair Market Value	$ 50,829	$ 116,731

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Cash Equivalents, Marketable Securities and Fair Value Measurements - Additional Information (Detail) € in Millions, $ in Millions	1 Months Ended		3 Months Ended	6 Months Ended
	Apr. 30, 2020 USD ($)	Jul. 31, 2014 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 EUR (€)	Oct. 31, 2019 EUR (€)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other income, net			$ 0.7	$ 0.7
ECP and AIS
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
Commercial milestones				65.00%
ECP and AIS | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate			2.00%	2.00%	2.00%
ECP and AIS | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate			16.00%	16.00%	16.00%
Breethe, Inc
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments to acquire businesses, cash paid	$ 55.0
Breethe, Inc | Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate			2.00%	2.00%	2.00%
Commercial milestones				25.00%
Breethe, Inc | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Potential payouts payments	$ 55.0
Discount rate			16.00%	16.00%	16.00%
Commercial milestones				99.00%
Intercompany Agreement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans to subsidiaries | €						€ 85.0
Cross Currency Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative notional amount			$ 93.5	$ 93.5	€ 85.0

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Schedule of Cross-Currency Rate Swap Derivatives (Detail) € in Thousands, $ in Thousands	6 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 EUR (€)
Pay EUR
Effective Date	Oct. 15, 2019
Maturity	Oct. 15, 2024
Fixed Rate	2.75%	2.75%
Derivative notional amount | €		€ 85,000
Receive U.S $
Effective Date	Oct. 15, 2019
Maturity	Oct. 15, 2024
Fixed Rate	4.64%	4.64%
Derivative notional amount | $	$ 93,457

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Schedule of Fair Value of Company's Derivative Instrument (Detail) $ in Thousands	Sep. 30, 2020 USD ($)
Cross Currency Interest Rate Contract | Other assets (long term liabilities)
Fair Value	$ (2,860)

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Schedule of Components of Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Contingent consideration liabilities	$ 24,417	$ 9,000
ECP
Contingent consideration liabilities	10,117	$ 9,000
Breethe, Inc
Contingent consideration liabilities	$ 14,300

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Financial Instruments Measured at Fair Value (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 657,761	$ 593,589
Contingent consideration	24,417	9,000
Cross Currency Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative fair value	2,860	3,786
Repurchase Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	20,000	20,000
Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	330,843	250,775
Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	202,613	207,795
Shockwave Medical
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	22,494	55,704
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	104,305	115,019
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	40,017	32,831
Level 1 | Shockwave Medical
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	22,494	55,704
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	104,305	115,019
Level 2 | Cross Currency Interest Rate Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative fair value	2,860	3,786
Level 2 | Repurchase Agreement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	20,000	20,000
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	40,017	32,831
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	24,417	9,000
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	75,589	42,648
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	10,248
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	75,589	42,648
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	85,456	67,995
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	141,536	91,064
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	85,456	67,995
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	141,536	91,064
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	129,781	107,301
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	50,829	116,731
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	129,781	107,301
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	50,829	$ 116,731
Long Term U.S. Treasury Mutual Fund Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	10,248
Long Term U.S. Treasury Mutual Fund Securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 10,248

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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		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 23,701	$ 9,931	$ 9,000	$ 9,575
Additions	0	0	13,300	0
Change in fair value	716	305	2,117	661
Ending balance	$ 24,417	$ 10,236	$ 24,417	$ 10,236

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Components of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Property Plant And Equipment [Abstract]
Land	$ 7,454	$ 7,179
Building and building improvements	102,644	100,176
Leasehold improvements	15,183	14,546
Machinery and equipment	78,343	71,636
Furniture and fixtures	15,166	14,600
Construction in progress	26,277	15,075
Total cost	245,067	223,212
Accumulated depreciation	(69,485)	(58,281)
Property and equipment, net	$ 175,582	$ 164,931

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Goodwill, In-Process Research and Development and Other Assets - Additional Information (Detail) shares in Millions	3 Months Ended		6 Months Ended
	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Mar. 31, 2020 USD ($)
Goodwill [Line Items]
Goodwill	$ 78,122,000		$ 78,122,000		$ 31,969,000
Accumulated impairment loss, goodwill	0		0
In-process research and development	42,895,000		42,895,000		14,913,000
Accumulated impairment losses on IPR&D assets	0		0
License Manufacturing Rghts to Technology
Goodwill [Line Items]
Payments to third party			$ 4,100,000
Other Intangible Assets
Goodwill [Line Items]
Intangible asset, amortized useful life			15 years
Other Income (Expense)
Goodwill [Line Items]
Impairment loss in other investment	800,000		$ 800,000
Shockwave Medical
Goodwill [Line Items]
Investment in Shockwave Medical	22,494,000		$ 22,494,000		55,704,000
Cash proceeds	$ 67,900,000
Shares sold | shares	1.4		1.4
Shares held by the company | shares	0.3		0.3
Shockwave Medical | Other Income (Expense)
Goodwill [Line Items]
Realized gain on the sale of investment recorded in other income	$ 47,300,000
Unrealized gain (loss) recorded in other income	8,200,000	$ (34,500,000)	$ 26,200,000	$ (4,500,000)
ECP Entwicklungsgesellschaft mbH
Goodwill [Line Items]
In-process research and development	$ 42,900,000		$ 42,900,000		$ 14,900,000
ECP Entwicklungsgesellschaft mbH | Measurement Input, Discount Rate | Maximum
Goodwill [Line Items]
Fair value inputs, discount rate	0.21		0.21
ECP Entwicklungsgesellschaft mbH | Measurement Input, Discount Rate | Minimum [Member]
Goodwill [Line Items]
Fair value inputs, discount rate	0.15		0.15

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Carrying Value of Goodwill and Change in Balance (Detail) $ in Thousands	6 Months Ended
	Sep. 30, 2020 USD ($)
Goodwill [Line Items]
Beginning balance	$ 31,969
Foreign currency translation impact	2,105
Ending balance	78,122
Breethe, Inc
Goodwill [Line Items]
Breethe, Inc. acquisition	$ 44,048

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Summary of Components of In-Process Research & Development (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Goodwill [Line Items]
In-process research and development	$ 42,895	$ 14,913
ECP
Goodwill [Line Items]
In-process research and development	15,895	$ 14,913
Breethe, Inc.
Goodwill [Line Items]
In-process research and development	$ 27,000

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Carrying value of In-Process Research and Development (Detail) $ in Thousands	6 Months Ended
	Sep. 30, 2020 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 14,913
Breethe, Inc. acquisition	27,000
Foreign currency translation impact	982
Ending balance	$ 42,895

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Summary of Components of Other Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Goodwill [Line Items]
Fair value of investment	$ 39,041	$ 38,741	$ 38,741	$ 31,584	$ 26,584	$ 24,584
Operating lease right of use asset (Note 8)	11,021		11,760
Cross currency swap (Note 6)			3,786
Other intangible assets and other assets	10,038		7,664
Total other assets	82,594		117,655
Shockwave Medical
Goodwill [Line Items]
Investment in Shockwave Medical	$ 22,494		$ 55,704

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Carrying value of Other Investments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 38,741	$ 26,584	$ 38,741	$ 24,584
Additions	1,100	5,000	3,100	7,000
Reclassification			(2,000)
Impairment	(800)		(800)
Ending balance	$ 39,041	$ 31,584	$ 39,041	$ 31,584

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Supplemental Balance Sheet Information Related to Operating Leases (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Leases [Abstract]
Operating lease right-of-use assets in other assets	$ 11,021	$ 11,760
Operating lease liabilities in other current liabilities	3,683	3,671
Operating lease liabilities in other long-term liabilities	7,807	8,549
Total operating lease liabilities	$ 11,490	$ 12,220

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Leases - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Operating lease expense	$ 1,100	$ 2,200	$ 1,100	$ 2,200

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Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Leases [Abstract]
2021	$ 2,153
2022	3,088
2023	1,925
2024	1,782
2025	1,578
Thereafter	2,033
Total minimum lease payments	12,559
Less: imputed interest	(1,069)
Present value of operating lease liabilities	$ 11,490		$ 12,220
Weighted average remaining lease term	4 years 11 months 26 days
Weighted average discount rate		3.14%

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Accrued Expenses (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020
Payables and Accruals [Abstract]
Employee compensation	$ 29,081	$ 32,273
Sales and income taxes	11,239	21,641
Research and development	5,481	5,749
Professional, legal, and accounting fees	3,320	6,880
Warranty	1,739	1,818
Marketing	1,092	1,705
Other	5,275	5,041
Accrued expenses	$ 57,227	$ 75,107

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Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	Sep. 30, 2020	Mar. 31, 2020	Aug. 31, 2019
Stockholders Equity Note [Abstract]
Class B Preferred Stock, Authorized	1,000,000	1,000,000
Class B Preferred Stock, par value	$ 0.01	$ 0.01
Class B Preferred Stock, Issued	0	0
Class B Preferred Stock, outstanding	0	0
Stock repurchase program, authorized amount			$ 200.0
Stock repurchase program, remaining authorized repurchase amount	$ 103.8

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Stockholders' Equity - Schedule of Stock Repurchase Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stockholders Equity Note [Abstract]
Shares repurchased		180,929	67,649	180,929
Average price per share		$ 192.75	$ 167.19	$ 192.75
Value of shares repurchased (in millions)	$ 11,310	$ 34,874	$ 11,300	$ 34,900

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Stockholders' Equity - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2019
Shareholders Equity [Line Items]
Beginning Balance	$ 1,101,848	$ 1,065,466	$ 1,002,593	$ 936,890
Ending Balance	1,182,409	1,101,848	991,457	1,002,593
Foreign Currency Translation Gains (Losses)
Shareholders Equity [Line Items]
Beginning Balance	(15,500)	(16,860)	(12,694)	(15,028)
Other comprehensive income (loss)	2,416	1,360	(5,716)	2,334
Ending Balance	(13,084)	(15,500)	(18,410)	(12,694)
Unrealized Gains on Investments
Shareholders Equity [Line Items]
Beginning Balance	3,427	1,672	939	339
Other comprehensive income (loss)	(814)	1,755	(85)	600
Ending Balance	2,613	3,427	854	939
Gains (Losses) on Derivative Instruments
Shareholders Equity [Line Items]
Beginning Balance	3,538	3,999
Other comprehensive income (loss)	(266)	(461)
Ending Balance	3,272	3,538
Accumulated Other Comprehensive Loss
Shareholders Equity [Line Items]
Beginning Balance	(8,535)	(11,189)	(11,755)	(14,689)
Other comprehensive income (loss)	1,336	2,654	(5,801)	2,934
Ending Balance	$ (7,199)	$ (8,535)	$ (17,556)	$ (11,755)

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Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 11,565	$ 13,323	$ 20,863	$ 26,445
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	923	881	1,627	1,722
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,705	1,823	3,147	3,706
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 8,937	$ 10,619	$ 16,089	$ 21,017

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Summary of Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares	Mar. 31, 2019
Options
Outstanding at beginning of period | shares	869
Granted | shares	65
Exercised | shares	(153)
Cancelled and expired | shares	(8)
Outstanding at end of period | shares	774
Exercisable at end of period | shares	592
Options vested and expected to vest at end of period | shares	773
Weighted Average Exercise Price
Outstanding at beginning of period | $ / shares	$ 112.03
Granted | $ / shares	221.12
Exercised | $ / shares	36.41
Cancelled and expired | $ / shares	227.25
Outstanding at end of period | $ / shares	134.90
Exercisable at end of period | $ / shares	98.68
Options vested and expected to vest at end of period | $ / shares	$ 134.92
Weighted Average Remaining Contractual Term (years)
Outstanding	5 years 9 months 7 days	5 years 3 months 18 days
Exercisable at end of period	4 years 10 months 2 days
Options vested and expected to vest at end of period	5 years 9 months 7 days
Aggregate Intrinsic Value
Outstanding at end of period | $	$ 117,144
Exercisable at end of period | $	110,352
Options vested and expected to vest at end of period | $	$ 117,040

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	6 Months Ended
	May 31, 2020	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options exercised in period		$ 37,800
Proceeds from the exercise of stock options		$ 5,555	$ 2,706
Granted		30,781,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Unrecognized stock-based compensation expense		$ 13,000
Unrecognized stock-based compensation expense, weighted-average recognition period		1 year 10 months 24 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Unrecognized stock-based compensation expense		$ 59,300
Unrecognized stock-based compensation expense, weighted-average recognition period		2 years 1 month 6 days
Weighted average grant-date fair value		$ 254.55
Fair value of units vested		$ 26,800
Granted		194,000
Performance Based Restricted Stock Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	61,674
Market-Based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	61,562
Stock units minimum range percent	0.00%
Stock units maximum range percent	200.00%
Compensation expense period description	The fair value related to these awards are recorded as compensation expense over the period from date of grant to May 2022 and May 2023, respectively
Market-Based Awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense, weighted-average recognition period	3 years
Market-Based Awards | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense, weighted-average recognition period	2 years

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Summary of Weighted Average Grant-Date Fair Values And Weighted Average Assumptions Used to Calculate Fair Value of Options Granted (Detail) - $ / shares	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Valuation assumptions:
Risk-free interest rate			0.20%
Expected volatility			35.50%
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value	$ 100.51	$ 70.40	$ 76.10	$ 95.62
Valuation assumptions:
Risk-free interest rate	0.30%	1.54%	0.31%	2.02%
Expected option life (years)	4 years 2 months 1 day	4 years 1 month 17 days	4 years 2 months 19 days	4 years 1 month 20 days
Expected volatility	43.50%	44.20%	42.82%	42.30%

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Summary of Restricted Stock Units Activity (Detail) shares in Thousands	6 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Shares
Granted	30,781
Restricted Stock Units
Number of Shares
Beginning Balance	320
Granted	194
Vested	(136)
Forfeited	(101)
Ending Balance	277
Weighted Average Grant Date Fair Value
Beginning Balance | $ / shares	$ 263.92
Granted | $ / shares	254.55
Vested | $ / shares	226.71
Forfeited | $ / shares	267.28
Ending Balance | $ / shares	$ 274.31

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Summary of Assumptions Used To Value Awards And Estimated Grant-Date Fair Value (Detail) shares in Thousands	6 Months Ended
	Sep. 30, 2020 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.20%
Expected volatility	35.50%
Target performance (number of shares) | shares	30,781
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining performance period (years)	1 year 10 months 24 days
Estimated fair value per share	$ 347.05
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining performance period (years)	2 years 10 months 24 days
Estimated fair value per share	$ 349.28

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income tax provision	$ 10,702	$ 4,287	$ 27,190	$ 18,502
Effective income tax rate	14.70%	24.70%	20.30%	15.40%
U.S. federal statutory corporate tax rate	21.00%	21.00%	21.00%	21.00%
Excess tax benefits from stock-based awards	$ 7,900	$ 500	$ 8,500	$ 13,300

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Differences Between Statutory Income Tax Rate and Effective Income Tax Rate (Detail)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Statutory income tax rate	21.00%	21.00%	21.00%	21.00%
Excess tax benefits from stock-based awards	(10.90%)	(2.70%)	(6.30%)	(11.00%)
Credits	(1.70%)	(2.10%)	(1.70%)	(1.70%)
State taxes, net	4.10%	3.30%	4.10%	3.40%
Permanent differences	2.60%	1.70%	3.40%	1.90%
Excess foreign tax credit	0.40%		0.40%
Other	(0.80%)	3.50%	(0.60%)	1.70%
Effective tax rate	14.70%	24.70%	20.30%	15.40%

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Segment and Enterprise Wide Disclosures - Additional Information (Detail) $ in Millions	3 Months Ended
	Sep. 30, 2020 USD ($) Segment	Sep. 30, 2019	Mar. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of business segments | Segment	1
International
Segment Reporting Information [Line Items]
Long-lived assets | $	$ 52.9		$ 46.7
Customer Concentration Risk | Revenue | International
Segment Reporting Information [Line Items]
Percentage of revenue accounted	18.00%	16.00%