Revenue from Contracts with Customers (Tables)

3 Months Ended

Dec. 29, 2018

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]



	December 29, 2018		October 1, 2018, as adjusted
	(in thousands)
Contract asset	$	14,513	$	26,265
Deferred revenue	$	335,119	$	357,490

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue



	Three months ended

	As Reported ASC 606		ASC 605		As Reported ASC 605
	December 29, 2018		December 29, 2018		December 30, 2017
Revenue	December 29, 2018		December 29, 2018		December 30, 2017
	(in thousands)
Subscription license	$	63,517
Subscription support & cloud services	77,424
Total Subscription	140,941		$	148,413	$	100,008
Perpetual support	110,497		109,225		131,197
Total recurring revenue	251,438		257,638		231,205
Perpetual license	41,805		41,750		33,985
Total software revenue	293,243		299,388		265,190
Professional services	41,446		39,369		41,454
Total revenue	$	334,689	$	338,757	$	306,644

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The following tables present our Balance Sheets and Statements of Operations as reported under ASC 606 for the current period with comparative periods reported under ASC 605:



	As Reported ASC 606			ASC 605			As Reported ASC 605
	December 29, 2018			December 29, 2018			September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	276,990		$	276,990		$	259,946
Short-term marketable securities	25,598			25,598			25,836
Accounts receivable⁽¹⁾	385,670			138,989			129,297
Prepaid expenses	63,045			63,045			48,997
Other current assets ⁽²⁾	48,682			143,104			169,708
Total current assets	799,985			647,726			633,784
Property and equipment, net	107,359			107,359			80,613
Goodwill	1,230,901			1,230,901			1,182,457
Acquired intangible assets, net	205,084			205,084			200,202
Long-term marketable securities	30,054			30,054			30,115
Deferred tax assets⁽³⁾	201,149			234,558			165,566
Other assets ⁽⁴⁾	178,437			34,328			36,285
Total assets	$	2,752,969		$	2,490,010		$	2,329,022
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	57,249		$	57,249		$	53,473
Accrued expenses and other current liabilities⁽⁵⁾	83,721			56,897			74,388
Accrued compensation and benefits	74,483			74,483			101,784
Accrued income taxes⁽³⁾	405			4,958			18,044
Deferred revenue⁽⁶⁾	325,111			484,613			487,590
Total current liabilities	540,969			678,200			735,279
Long-term debt	778,484			778,484			643,268
Deferred tax liabilities⁽³⁾	36,261			5,731			5,589
Deferred revenue⁽⁶⁾	10,197			8,324			11,852
Other liabilities	65,889			65,889			58,445
Total liabilities	1,431,800			1,536,628			1,454,433

Stockholders’ equity:
Preferred stock	—			—			—
Common stock	1,187			1,187			1,180
Additional paid-in capital	1,553,875			1,553,875			1,558,403
Accumulated deficit	(138,785		)	(507,900		)	(599,409		)
Accumulated other comprehensive loss	(95,108		)	(93,780		)	(85,585		)
Total stockholders’ equity	1,321,169			953,382			874,589
Total liabilities and stockholders’ equity	$	2,752,969		$	2,490,010		$	2,329,022

The changes in balance sheet accounts due to the adoption of 606 are due primarily to the following:


(1)	Up front license recognition under our subscription contracts and billed but uncollected support and subscription receivables that had corresponding deferred revenue, which were included in other current assets prior to our adoption of 606.

(2) Contract assets and capitalized commission costs.


(3)	The tax effect of the accumulated deficit impact related to the acceleration of revenue and deferral of costs (primarily commissions).

(4) The long-term portion of unbilled receivables due to the acceleration of license revenue on multi-year subscription contracts and the long-term portion of capitalized commission costs.

(5) Refund liability, primarily associated with the annual right to exchange on-premise subscription software described above in Judgments and Estimates.

(6) The decrease in deferred revenue recorded to accumulated deficit upon adoption of ASC 606 primarily related to on-premise subscription software licenses.



	Three months ended
	As Reported ASC 606			ASC 605			As Reported ASC 605
	December 29, 2018			December 29, 2018			December 30, 2017
Revenue:
License⁽¹⁾	$	105,322		$	173,905		$	119,518
Support and cloud services⁽¹⁾	187,921			125,483			145,672
Total software revenue	293,243			299,388			265,190
Professional services	41,446			39,369			41,454
Total revenue	334,689			338,757			306,644
Cost of revenue:
Cost of license revenue	12,563			12,347			12,114
Cost of support and cloud services revenue	31,197			30,630			34,502
Total cost of software revenue	43,760			42,977			46,616
Cost of professional services revenue	33,592			32,219			36,419
Total cost of revenue⁽²⁾	77,352			75,196			83,035
Gross margin	257,337			263,561			223,609
Operating expenses:
Sales and marketing⁽³⁾	104,218			107,304			99,375
Research and development	60,782			60,782			63,972
General and administrative	37,864			37,864			35,020
Amortization of acquired intangible assets	5,936			5,936			7,821
Restructuring and other charges, net	18,493			18,493			105
Total operating expenses	227,293			230,379			206,293
Operating income	30,044			33,182			17,316
Interest expense	(10,276		)	(10,276		)	(10,047		)
Other income (expense), net	655			548			(798		)
Income before income taxes	20,423			23,454			6,471
Provision (benefit) for income taxes⁽⁴⁾	(562		)	4,206			(7,406		)
Net income	$	20,985		$	19,248		$	13,877

(1)

The reduction in license revenue and increase in support revenue is a result of the support component of subscription licenses which is included in license revenue under ASC 605. Additionally, license revenue decreased by approximately $65 million as a result of the revenue recorded to accumulated deficit, which would have been recognized during the quarter, partially offset by approximately $59 million of upfront license revenue recognition on new and renewal bookings.

(2) Cost of revenue under ASC 606 is higher under ASC 606 due to the treatment of deferred professional services costs under the new accounting guidance, partially offset by the timing of revenue recognition under ASC 606 resulting in lower associated royalty costs.

(3) Sales and marketing costs are lower under ASC 606 due to the amortization of commissions costs capitalized upon adoption of ASC 606, offset by the deferral of ongoing commission expenses under the new accounting guidance.

(4) The benefit for income taxes under ASC 606 includes indirect effects of the adoption.