Goodwill and Intangible Assets

6 Months Ended

Mar. 31, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

7. Goodwill and Intangible Assets

We have two operating and reportable segments: (1) Software Products and (2) Professional Services.

As of March 31, 2021, goodwill and acquired intangible assets in the aggregate attributable to our Software Products segment was $2,558.7 million and attributable to our Professional Services segment was $45.2 million. As of September 30, 2020, goodwill and acquired intangible assets in the aggregate

attributable to our Software Products segment was $1,818.1 million and attributable to our Professional Services segment was $45.3 million.

We completed our annual goodwill impairment review as of June 27, 2020 based on a quantitative assessment. To conduct these tests of goodwill, the fair value of a reporting unit is compared to its carrying value. If the reporting unit’s carrying value exceeds its fair value, we record an impairment loss equal to the difference between the carrying value of goodwill and its estimated fair value. We estimate the fair values of our reporting units using discounted cash flow valuation models. Those models require estimates of future revenues, profits, capital expenditures, working capital, terminal values based on revenue multiples, and discount rates for each reporting unit. We estimate these amounts by evaluating historical trends; current budgets and operating plans, including consideration of the impact of the COVID-19 pandemic on our future results; and industry data. The estimated fair value of each reporting unit exceeded its carrying value as of June 27, 2020. Through March 31, 2021, there were no events or changes in circumstances that indicated that the carrying values of goodwill or acquired intangible assets may not be recoverable.

Goodwill and acquired intangible assets consisted of the following:

(in thousands)	March 31, 2021						September 30, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Goodwill (not amortized)					$	2,193,632					$	1,625,786
Intangible assets with finite lives (amortized):
Purchased software	$	484,190	$	322,869	$	161,321	$	443,275	$	309,124	$	134,151
Capitalized software		22,877		22,877		—		22,877		22,877		—
Customer lists and relationships		575,836		337,194		238,642		418,953		322,092		96,861
Trademarks and trade names		26,959		16,612		10,347		22,687		16,129		6,558
Other		4,019		4,019		—		4,017		4,017		—
Total intangible assets with finite lives	$	1,113,881	$	703,571	$	410,310	$	911,809	$	674,239	$	237,570
Total goodwill and acquired intangible assets					$	2,603,942					$	1,863,356

Goodwill

Changes in goodwill presented by reportable segments were as follows:

(in thousands)	Software Products		Professional Services		Total
Balance, October 1, 2020	$	1,583,316	$	42,470	$	1,625,786
Arena acquisition		562,657		—		562,657
Other acquisitions		963		—		963
Foreign currency translation adjustment		4,116		110		4,226
Balance, March 31, 2021	$	2,151,052	$	42,580	$	2,193,632

Amortization of Intangible Assets

The aggregate amortization expense for intangible assets with finite lives is classified in our Consolidated Statements of Operations as follows:

(in thousands)	Three months ended				Six months ended
	March 31, 2021		March 28, 2020		March 31, 2021		March 28, 2020
Amortization of acquired intangible assets	$	7,650	$	7,288	$	14,197	$	14,065
Cost of license revenue		7,117		6,879		13,384		13,678
Total amortization expense	$	14,767	$	14,167	$	27,581	$	27,743