Revenue from Contracts with Customers (Tables)

6 Months Ended

Mar. 30, 2019

Revenue from Contract with Customer [Abstract]

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

Contract Assets and Contract Liabilities



	March 30, 2019		October 1, 2018, as adjusted
	(in thousands)
Contract asset	$	19,628	$	26,265
Deferred revenue	$	391,807	$	357,490

Disaggregation of Revenue [Table Text Block]

Disaggregation of Revenue



	Three months ended						Six months ended
	As Reported ASC 606		ASC 605		As Reported ASC 605		As Reported ASC 606		ASC 605		As Reported ASC 605
	March 30, 2019		March 30, 2019		March 31, 2018		March 30, 2019		March 30, 2019		March 31, 2018
Revenue	March 30, 2019		March 30, 2019		March 31, 2018		March 30, 2019		March 30, 2019		March 31, 2018
	(in thousands)
Subscription license	$	51,540					$	115,057
Subscription support & cloud services	83,228						160,652
Total Subscription	134,768		$	162,070	$	112,931	275,709		$	310,483	$	212,939
Perpetual support	104,417		103,564		126,683		214,914		212,789		257,880
Total recurring revenue	239,185		265,634		239,614		490,623		523,272		470,819
Perpetual license	10,336		11,267		22,839		52,141		53,017		56,824
Total software revenue	249,521		276,901		262,453		542,764		576,289		527,643
Professional services	40,930		38,598		45,430		82,376		77,967		86,884
Total revenue	$	290,451	$	315,499	$	307,883	$	625,140	$	654,256	$	614,527

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
	March 30, 2019			March 30, 2019			September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	294,299		$	294,299		$	259,946
Short-term marketable securities	25,428			25,428			25,836
Accounts receivable⁽¹⁾	352,217			110,510			129,297
Prepaid expenses	66,210			66,509			48,997
Other current assets ⁽²⁾	52,448			153,687			169,708
Total current assets	790,602			650,433			633,784
Property and equipment, net	106,837			106,837			80,613
Goodwill	1,229,541			1,229,541			1,182,457
Acquired intangible assets, net	192,372			192,372			200,202
Long-term marketable securities	30,987			30,987			30,115
Deferred tax assets⁽³⁾	195,884			228,776			165,566
Other assets ⁽⁴⁾	169,596			41,750			36,285
Total assets	$	2,715,819		$	2,480,696		$	2,329,022
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	36,685		$	36,685		$	53,473
Accrued expenses and other current liabilities⁽⁵⁾	100,319			73,719			74,388
Accrued compensation and benefits	73,408			73,408			101,784
Accrued income taxes⁽³⁾	6,579			1,181			18,044
Deferred revenue⁽⁶⁾	381,392			545,168			487,590
Total current liabilities	598,383			730,161			735,279
Long-term debt	738,700			738,700			643,268
Deferred tax liabilities⁽³⁾	36,326			6,079			5,589
Deferred revenue⁽⁶⁾	10,415			8,541			11,852
Other liabilities	84,287			84,287			58,445
Total liabilities	1,468,111			1,567,768			1,454,433

Stockholders’ equity:
Preferred stock	—			—			—
Common stock	1,181			1,181			1,180
Additional paid-in capital	1,523,949			1,523,949			1,558,403
Accumulated deficit	(182,298		)	(519,930		)	(599,409		)
Accumulated other comprehensive loss	(95,124		)	(92,272		)	(85,585		)
Total stockholders’ equity	1,247,708			912,928			874,589
Total liabilities and stockholders’ equity	$	2,715,819		$	2,480,696		$	2,329,022

The changes in balance sheet accounts due to the adoption of ASC 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 ASC 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									Six months ended
	As Reported ASC 606			ASC 605			As Reported ASC 605			As Reported ASC 606			ASC 605			As Reported ASC 605
	March 30, 2019			March 30, 2019			March 31, 2018			March 30, 2019			March 30, 2019			March 31, 2018
Revenue:
License⁽¹⁾	$	61,876		$	156,131		$	120,505		$	167,198		$	330,036		$	240,023
Support and cloud services⁽¹⁾	187,645			120,770			141,948			375,566			246,253			287,620
Total software revenue	249,521			276,901			262,453			542,764			576,289			527,643
Professional services	40,930			38,598			45,430			82,376			77,967			86,884
Total revenue	290,451			315,499			307,883			625,140			654,256			614,527
Cost of revenue:
Cost of license revenue	12,875			12,245			11,854			25,438			24,592			23,968
Cost of support and cloud services revenue	32,874			32,977			34,335			64,071			63,607			68,837
Total cost of software revenue	45,749			45,222			46,189			89,509			88,199			92,805
Cost of professional services revenue	34,155			32,745			37,519			67,747			64,964			73,938
Total cost of revenue⁽²⁾	79,904			77,967			83,708			157,256			153,163			166,743
Gross margin	210,547			237,532			224,175			467,884			501,093			447,784
Operating expenses:
Sales and marketing⁽³⁾	103,722			109,421			98,390			207,940			216,725			197,765
Research and development	61,402			61,402			62,197			122,184			122,184			126,169
General and administrative	35,371			35,371			33,369			73,235			73,235			68,389
Amortization of acquired intangible assets	5,930			5,930			7,895			11,866			11,866			15,716
Restructuring and other charges, net	26,980			26,980			114			45,473			45,473			219
Total operating expenses	233,405			239,104			201,965			460,698			469,483			408,258
Operating income	(22,858		)	(1,572		)	22,210			7,186			31,610			39,526
Interest expense	(11,383		)	(11,383		)	(10,379		)	(21,659		)	(21,659		)	(20,426		)
Other income (expense), net	821			1,065			(285		)	1,475			1,613			(1,083		)
Income (loss) before income taxes	(33,420		)	(11,890		)	11,546			(12,998		)	11,564			18,017
Provision (benefit) for income taxes⁽⁴⁾	10,093			140			3,624			9,530			4,346			(3,782		)
Net income (loss)	$	(43,513	)	$	(12,030	)	$	7,922		$	(22,528	)	$	7,218		$	21,799

(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, for the three months ended March 30, 2019, license revenue decreased by approximately $58.3 million as a result of the revenue recorded to accumulated deficit, which would have been recognized during the period and approximately $15.0 million as a result of revenue recognized during the first quarter of 2019 which would have been recognized during the period. For the six months ended March 30, 2019, license revenue decreased by approximately $123.3 million as a result of the revenue recorded to accumulated deficit which would have been recognized during the period. This was partially offset by approximately $48.5 million and $92.0 million of upfront license revenue recognition on new and renewal bookings for the three- and six-months ending March 30, 2019, respectively.

(2) Cost of revenue under ASC 606 is higher than under ASC 605 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.