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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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Washington
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91-1714307
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common stock, no par value
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FFIV
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NASDAQ Global Select Market
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Large Accelerated Filer
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☑
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Accelerated Filer
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☐
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Non-accelerated Filer
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☐ (Do not check if a smaller reporting company)
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
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Business
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•
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NGINX Plus, an all-in-one load balancer, web server, content cache, and API gateway for modern applications.
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•
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NGINX Controller, which provides centralized monitoring and management for NGINX Plus.
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Name
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Age
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Position
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François Locoh-Donou
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48
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President, Chief Executive Officer, and Director
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Tom Fountain
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43
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Executive Vice President and Chief Strategy Officer
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Geng Lin
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55
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Executive Vice President and Chief Technology Officer
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Steve McMillan
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48
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Executive Vice President of Global Services
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Frank Pelzer
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49
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Executive Vice President and Chief Financial Officer
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Gus Robertson
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50
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Senior Vice President and General Manager of NGINX
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Scot Rogers
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52
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Executive Vice President and General Counsel
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Kara Sprague
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39
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Executive Vice President and General Manager, Application Services
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Chad Whalen
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48
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Executive Vice President, Worldwide Sales
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Ana White
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46
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Executive Vice President and Chief Human Resources Officer
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Mika Yamamoto
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47
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Executive Vice President and Chief Marketing and Customer Experience Officer
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Item 1A.
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Risk Factors
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•
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continuing to innovate and bring to market compelling cloud-based services that generate increasing traffic and market share;
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•
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maintaining the utility, compatibility and performance of our software on the growing array of cloud computing platforms and the enhanced interoperability requirements associated with orchestration of cloud computing environments; and
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•
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implementing the infrastructure to deliver our own cloud-based services.
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•
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Cisco, Juniper Networks, and A10 for carrier-grade firewall capabilities;
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•
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Akamai, Imperva, Citrix, and Barracuda Networks in the web application firewall market;
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•
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Cisco, Juniper, and A10 in Carrier Grade NAT;
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•
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Symantec / Blue Coat and A10 in SSL Orchestration;
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•
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Pulse Security for Access Policy Manager;
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•
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Procera, Allot, Sandvine, and other DPI vendors with our PEM offering; and
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•
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Akamai, Arbor, and Radware in DDoS protection.
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•
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rapid technological change;
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•
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evolving industry standards;
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•
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consolidation of network and application functions into existing network infrastructure products;
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•
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requirements that our products interoperate with those of other IT vendors to enable ease of management;
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•
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fluctuations in customer demand;
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•
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changes in customer requirements; and
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•
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frequent new product and service introductions and enhancements.
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•
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expenditures of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors and defects or to address and eliminate vulnerabilities;
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•
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remediation costs, such as liability for stolen assets or information, repairs or system damage;
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•
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increased cybersecurity protection costs which may include systems and technology changes, training, and engagement of third party experts and consultants;
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•
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increased insurance premiums;
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•
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loss of existing or potential customers or channel partners;
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•
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loss of proprietary information leading to lost competitive positioning and lost revenues;
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•
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negative publicity and damage to our reputation;
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•
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delayed or lost revenue;
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•
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delay or failure to attain market acceptance;
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•
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an increase in warranty claims compared with our historical experience, or an increased cost of servicing warranty claims, either of which would adversely affect our gross margins; and
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•
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litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
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•
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greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
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•
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the uncertainty of protection for intellectual property rights in some countries;
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•
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greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;
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•
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risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
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•
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greater risk of a failure of foreign employees, partners, distributors, and resellers to comply with both U.S. and foreign laws, including antitrust regulations, the U.S. Foreign Corrupt Practices Act, and any trade regulations ensuring fair trade practices;
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•
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heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
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•
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increased expenses incurred in establishing and maintaining office space and equipment for our international operations;
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•
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greater difficulty in recruiting local experienced personnel, and the costs and expenses associated with such activities;
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•
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management communication and integration problems resulting from cultural and geographic dispersion;
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•
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fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business;
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•
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economic uncertainty around the world, including continued economic uncertainty as a result of sovereign debt issues in Europe; and
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•
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general economic and political conditions in these foreign markets.
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•
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Actual or anticipated variations in operating and financial results;
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•
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Analyst reports or recommendations;
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•
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Rumors, announcements or press articles regarding our competitors’ operations, management, organization, financial condition or financial statements; and
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•
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Other events or factors, many of which are beyond our control.
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•
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fluctuations in demand for our products and services due to changing market conditions, pricing conditions, technology evolution, seasonality, or other changes in the global economic environment;
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•
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changes or fluctuations in sales and implementation cycles for our products and services;
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•
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changes in the mix of our products and services, including increases in subscription-based offerings;
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•
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changes in the growth rate of the application delivery market;
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•
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reduced visibility into our customers’ spending and implementation plans;
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•
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reductions in customers’ budgets for data center and other IT purchases or delays in these purchases;
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•
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changes in end-user customer attach rates and renewal rates for our services;
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•
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fluctuations in our gross margins, including the factors described herein, which may contribute to such fluctuations;
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•
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our ability to control costs, including operating expenses, the costs of hardware and software components, and other manufacturing costs;
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•
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our ability to develop, introduce and gain market acceptance of new products, technologies and services, and our success in new and evolving markets;
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•
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any significant changes in the competitive environment, including the entry of new competitors or the substantial discounting of products or services;
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•
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the timing and execution of product transitions or new product introductions, and related inventory costs;
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•
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variations in sales channels, product costs, or mix of products sold;
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•
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our ability to establish and manage our distribution channels, and the effectiveness of any changes we make to our distribution model;
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•
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the ability of our contract manufacturers and suppliers to provide component parts, hardware platforms and other products in a timely manner;
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•
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benefits anticipated from our investments in sales, marketing, product development, manufacturing or other activities;
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•
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impacts on our overall tax rate caused by any reorganization in our corporate structure;
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•
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changes in tax laws or regulations, or other accounting rules; and
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•
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general economic conditions, both domestically and in our foreign markets.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Fiscal Year 2019
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Fiscal Year 2018
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||||||||||||
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High
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Low
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High
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Low
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||||||||
First Quarter
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$
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195.41
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$
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149.87
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$
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136.35
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$
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114.63
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Second Quarter
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$
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173.44
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$
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148.91
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$
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153.91
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$
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131.31
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Third Quarter
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$
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168.94
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$
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131.53
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$
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183.27
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$
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138.67
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Fourth Quarter
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$
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153.99
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$
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121.36
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$
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199.71
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$
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168.77
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*
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Assumes that $100 was invested September 30, 2014 in shares of Common Stock and in each index, and that all dividends were reinvested. Shareholder returns over the indicated period should not be considered indicative of future shareholder returns.
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Item 6.
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Selected Financial Data
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Years Ended September 30,
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||||||||||||||||||
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2019 (4)
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2018
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2017
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2016
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2015
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||||||||||
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(In thousands, except per share data)
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||||||||||||||||||
Consolidated Income Statement Data
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||||||||||
Net revenues
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||||||||||
Products
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$
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985,591
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$
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960,108
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$
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964,662
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$
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944,469
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$
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991,539
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Services
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1,256,856
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1,201,299
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1,125,379
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1,050,565
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928,284
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|||||
Total
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2,242,447
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2,161,407
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2,090,041
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1,995,034
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1,919,823
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|||||
Cost of net revenues
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||||||||||
Products
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174,986
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181,061
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176,032
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166,624
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174,225
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|||||
Services
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181,591
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180,420
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177,453
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170,581
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158,036
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|||||
Total
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356,577
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361,481
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353,485
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337,205
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332,261
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|||||
Gross profit
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1,885,870
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1,799,926
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1,736,556
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1,657,829
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|
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1,587,562
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|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and marketing
|
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748,619
|
|
|
664,135
|
|
|
652,239
|
|
|
628,743
|
|
|
602,540
|
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|||||
Research and development
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408,058
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|
|
366,084
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|
|
350,365
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|
|
334,227
|
|
|
296,583
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|||||
General and administrative
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210,730
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|
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160,382
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|
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156,887
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|
|
138,431
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|
|
135,540
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|||||
Litigation expense (1)
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—
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|
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—
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|
|
391
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|
|
9,051
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|
|
—
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|||||
Restructuring charges (2)
|
|
—
|
|
|
18,426
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|
|
12,718
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|
|
—
|
|
|
—
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|
|||||
Total
|
|
1,367,407
|
|
|
1,209,027
|
|
|
1,172,600
|
|
|
1,110,452
|
|
|
1,034,663
|
|
|||||
Income from operations
|
|
518,463
|
|
|
590,899
|
|
|
563,956
|
|
|
547,377
|
|
|
552,899
|
|
|||||
Other income, net
|
|
22,648
|
|
|
12,861
|
|
|
11,561
|
|
|
2,514
|
|
|
8,445
|
|
|||||
Income before income taxes
|
|
541,111
|
|
|
603,760
|
|
|
575,517
|
|
|
549,891
|
|
|
561,344
|
|
|||||
Provision for income taxes
|
|
113,377
|
|
|
150,071
|
|
|
154,756
|
|
|
184,036
|
|
|
196,330
|
|
|||||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
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$
|
420,761
|
|
|
$
|
365,855
|
|
|
$
|
365,014
|
|
Net income per share — basic
|
|
$
|
7.12
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|
|
$
|
7.41
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|
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$
|
6.56
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|
|
$
|
5.43
|
|
|
$
|
5.07
|
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Weighted average shares — basic
|
|
60,044
|
|
|
61,262
|
|
|
64,173
|
|
|
67,433
|
|
|
71,944
|
|
|||||
Net income per share — diluted
|
|
$
|
7.08
|
|
|
$
|
7.32
|
|
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$
|
6.50
|
|
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$
|
5.38
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|
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$
|
5.03
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Weighted average shares — diluted
|
|
60,456
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|
|
62,013
|
|
|
64,775
|
|
|
67,984
|
|
|
72,547
|
|
|||||
Consolidated Balance Sheet Data
|
|
|
|
|
|
|
|
|
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|
||||||||||
Cash, cash equivalents, and short-term investments
|
|
$
|
972,282
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|
|
$
|
1,039,412
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|
|
$
|
1,016,928
|
|
|
$
|
882,395
|
|
|
$
|
774,342
|
|
Restricted cash (3)
|
|
3,035
|
|
|
1,187
|
|
|
1,224
|
|
|
1,151
|
|
|
1,149
|
|
|||||
Long-term investments
|
|
358,402
|
|
|
411,184
|
|
|
284,802
|
|
|
276,375
|
|
|
397,656
|
|
|||||
Total assets
|
|
3,390,275
|
|
|
2,605,476
|
|
|
2,476,489
|
|
|
2,306,323
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|
|
2,312,290
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|
|||||
Long-term liabilities
|
|
523,252
|
|
|
365,551
|
|
|
312,554
|
|
|
276,823
|
|
|
240,439
|
|
|||||
Total shareholders’ equity
|
|
1,761,497
|
|
|
1,285,492
|
|
|
1,229,392
|
|
|
1,185,262
|
|
|
1,316,728
|
|
|||||
|
|
|
|
|
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|
|
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(1)
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Litigation expense primarily represents a patent-related jury verdict and legal fees associated with the litigation.
|
(2)
|
Restructuring charges represent severance and other employee-related costs associated with workforce reductions that took place in the fourth quarters of fiscal 2018 and 2017.
|
(3)
|
Restricted cash represents escrow accounts established in connection with lease agreements for our facilities.
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(4)
|
Selected financial data for fiscal year 2019 contains effects from the adoption of ASC 606, and differs in comparability to previous years due to those effects. See Note 2 - Revenue from Contracts with Customers for more details.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Revenues. The majority of our revenues are derived from sales of our application delivery controller (ADC) products including our BIG-IP appliances and VIPRION chassis and related software modules and our software-only Virtual Editions; Local Traffic Manager (LTM), DNS Services (formerly Global Traffic Manager); Advanced Firewall Manager (AFM) and Policy Enforcement Manager (PEM), that leverage the unique performance characteristics of our hardware and software architecture; and products that incorporate acquired technology, including Application Security Manager (ASM) and Access Policy Manager (APM); and the WebSafe, MobileSafe, Secure Web Gateway and Silverline DDoS and Application security offerings which are sold to customers on a subscription basis. We also derive revenues from the sales of services including annual maintenance contracts, training and consulting services. We carefully monitor the sales mix of our revenues within each reporting period. We believe customer acceptance rates of our new products and feature enhancements are indicators of future trends. We also consider overall revenue concentration by customer and by geographic region as additional indicators of current and future trends.
|
•
|
Cost of revenues and gross margins. We strive to control our cost of revenues and thereby maintain our gross margins. Significant items impacting cost of revenues are hardware costs paid to our contract manufacturers, third-party software license fees, amortization of developed technology and personnel and overhead expenses. Our margins have remained relatively stable; however, factors such as sales price, product and services mix, inventory obsolescence, returns, component price increases and warranty costs could significantly impact our gross margins from quarter to quarter and represent significant indicators we monitor on a regular basis.
|
•
|
Operating expenses. Operating expenses are substantially driven by personnel and related overhead expenses. Existing headcount and future hiring plans are the predominant factors in analyzing and forecasting future operating expense trends. Other significant operating expenses that we monitor include marketing and promotions, travel, professional fees, computer costs related to the development of new products and provision of services, facilities and depreciation expenses.
|
•
|
Liquidity and cash flows. Our financial condition remains strong with significant cash and investments and no long term debt. The increase in cash and investments for fiscal year 2019 was primarily due to cash provided by operating activities of $747.8 million, partially offset by cash used to repurchase outstanding common stock under our share repurchase program of $201.0 million and capital expenditures of $103.5 million. Going forward, we believe the primary driver of cash flows will be net income from operations. Capital expenditures for fiscal year 2019 were primarily related to the expansion of our
|
•
|
Balance sheet. We view cash, short-term and long-term investments, deferred revenue, accounts receivable balances and days sales outstanding as important indicators of our financial health. Deferred revenues continued to increase in fiscal 2019 due to growth in the amount of annual maintenance contracts purchased on new products and maintenance renewal contracts related to our existing product installation base. Our days sales outstanding for the fourth quarter of fiscal year 2019 was 49.
|
•
|
Identify the contract(s) with a customer. Evidence of a contract generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement.
|
•
|
Identify the performance obligations in the contract. Performance obligations are identified in our contracts and include hardware, hardware-based software, software-only solutions, cloud-based subscription services as well as a broad range of service performance obligations including consulting, training, installation and maintenance.
|
•
|
Determine the transaction price. The purchase price stated in an agreed upon purchase order is generally representative of the transaction price. We offer several programs in which customers are eligible for certain levels of rebates if certain conditions are met. When determining the transaction price, we consider the effects of any variable consideration.
|
•
|
Allocate the transaction price to the performance obligations in the contract. The transaction price in a contract is allocated based upon the relative standalone selling price of each distinct performance obligation identified in the contract.
|
•
|
Recognize revenue when (or as) the entity satisfies a performance obligation. We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of promised products and services to a customer.
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Net Revenues
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
985,591
|
|
|
$
|
960,108
|
|
|
$
|
964,662
|
|
Services
|
|
1,256,856
|
|
|
1,201,299
|
|
|
1,125,379
|
|
|||
Total
|
|
$
|
2,242,447
|
|
|
$
|
2,161,407
|
|
|
$
|
2,090,041
|
|
Percentage of net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
44.0
|
%
|
|
44.4
|
%
|
|
46.2
|
%
|
|||
Services
|
|
56.0
|
|
|
55.6
|
|
|
53.8
|
|
|||
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Years Ended September 30,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Ingram Micro, Inc.
|
|
18.2
|
%
|
|
16.6
|
%
|
|
16.1
|
%
|
Tech Data1
|
|
10.2
|
%
|
|
11.6
|
%
|
|
12.4
|
%
|
Westcon Group, Inc.2
|
|
10.0
|
%
|
|
10.4
|
%
|
|
17.7
|
%
|
Synnex Corporation2
|
|
—
|
|
|
10.8
|
%
|
|
—
|
|
Arrow ECS
|
|
—
|
|
|
10.7
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
(1)
|
On February 27, 2017, Tech Data completed the acquisition of Avnet Technology Solutions. Revenues for the year ended September 30, 2017 represent combined revenues for Tech Data and Avnet.
|
(2)
|
On September 1, 2017, Synnex Corporation completed the acquisition of Westcon Americas.
|
|
|
September 30,
|
||||
|
|
2019
|
|
2018
|
||
Synnex Corporation
|
|
12.9
|
%
|
|
10.3
|
%
|
Ingram Micro, Inc.
|
|
12.4
|
%
|
|
16.6
|
%
|
Carahsoft Technology
|
|
11.5
|
%
|
|
—
|
|
|
|
|
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Cost of net revenues and Gross Margin
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
174,986
|
|
|
$
|
181,061
|
|
|
$
|
176,032
|
|
Services
|
|
181,591
|
|
|
180,420
|
|
|
177,453
|
|
|||
Total
|
|
356,577
|
|
|
361,481
|
|
|
353,485
|
|
|||
Gross profit
|
|
$
|
1,885,870
|
|
|
$
|
1,799,926
|
|
|
$
|
1,736,556
|
|
Percentage of net revenues and Gross Margin (as a percentage of related net revenue)
|
|
|
|
|
|
|
||||||
Products
|
|
17.8
|
%
|
|
18.9
|
%
|
|
18.2
|
%
|
|||
Services
|
|
14.4
|
|
|
15.0
|
|
|
15.8
|
|
|||
Total
|
|
15.9
|
|
|
16.7
|
|
|
16.9
|
|
|||
Gross profit
|
|
84.1
|
%
|
|
83.3
|
%
|
|
83.1
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
$
|
748,619
|
|
|
$
|
664,135
|
|
|
$
|
652,239
|
|
Research and development
|
|
408,058
|
|
|
366,084
|
|
|
350,365
|
|
|||
General and administrative
|
|
210,730
|
|
|
160,382
|
|
|
156,887
|
|
|||
Litigation expense
|
|
—
|
|
|
—
|
|
|
391
|
|
|||
Restructuring charges
|
|
—
|
|
|
18,426
|
|
|
12,718
|
|
|||
Total
|
|
$
|
1,367,407
|
|
|
$
|
1,209,027
|
|
|
$
|
1,172,600
|
|
Operating expenses (as a percentage of net revenue)
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
33.4
|
%
|
|
30.7
|
%
|
|
31.2
|
%
|
|||
Research and development
|
|
18.2
|
|
|
16.9
|
|
|
16.8
|
|
|||
General and administrative
|
|
9.4
|
|
|
7.4
|
|
|
7.5
|
|
|||
Litigation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Restructuring charges
|
|
—
|
|
|
0.9
|
|
|
0.6
|
|
|||
Total
|
|
61.0
|
%
|
|
55.9
|
%
|
|
56.1
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in thousands, except percentages)
|
||||||||||
Other income and income taxes
|
|
|
|
|
|
|
||||||
Income from operations
|
|
$
|
518,463
|
|
|
$
|
590,899
|
|
|
$
|
563,956
|
|
Other income, net
|
|
22,648
|
|
|
12,861
|
|
|
11,561
|
|
|||
Income before income taxes
|
|
541,111
|
|
|
603,760
|
|
|
575,517
|
|
|||
Provision for income taxes
|
|
113,377
|
|
|
150,071
|
|
|
154,756
|
|
|||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
|
$
|
420,761
|
|
Other income and income taxes (as percentage of net revenue)
|
|
|
|
|
|
|
||||||
Income from operations
|
|
23.1
|
%
|
|
27.3
|
%
|
|
27.0
|
%
|
|||
Other income, net
|
|
1.0
|
|
|
0.6
|
|
|
0.5
|
|
|||
Income before income taxes
|
|
24.1
|
|
|
27.9
|
|
|
27.5
|
|
|||
Provision for income taxes
|
|
5.0
|
|
|
6.9
|
|
|
7.4
|
|
|||
Net income
|
|
19.1
|
%
|
|
21.0
|
%
|
|
20.1
|
%
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in thousands)
|
||||||||||
Liquidity and Capital Resources
|
|
|
|
|
|
|
||||||
Cash and cash equivalents and investments
|
|
$
|
1,330,684
|
|
|
$
|
1,450,596
|
|
|
$
|
1,301,730
|
|
Cash provided by operating activities
|
|
747,841
|
|
|
761,068
|
|
|
740,281
|
|
|||
Cash used in investing activities
|
|
(414,634
|
)
|
|
(456,023
|
)
|
|
(32,212
|
)
|
|||
Cash used in financing activities
|
|
(155,447
|
)
|
|
(551,263
|
)
|
|
(546,032
|
)
|
|
|
Payment Obligations by Year
|
||||||||||||||||||||||||||
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||||||
Operating leases
|
|
$
|
54,046
|
|
|
$
|
50,712
|
|
|
$
|
47,550
|
|
|
$
|
36,514
|
|
|
$
|
33,971
|
|
|
$
|
242,826
|
|
|
$
|
465,619
|
|
Purchase obligations
|
|
20,801
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,801
|
|
|||||||
Total
|
|
$
|
74,847
|
|
|
$
|
50,712
|
|
|
$
|
47,550
|
|
|
$
|
36,514
|
|
|
$
|
33,971
|
|
|
$
|
242,826
|
|
|
$
|
486,420
|
|
Item 7A.
|
Quantitative and Qualitative Disclosure About Market Risk
|
|
|
Maturing in
|
||||||||||||||||||
|
|
Three Months
or Less
|
|
Three Months
to One Year
|
|
Greater Than
One Year
|
|
Total
|
|
Fair Value
|
||||||||||
|
|
(in thousands, except for percentages)
|
||||||||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
293,642
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
293,642
|
|
|
$
|
293,642
|
|
Weighted average interest rate
|
|
2.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
98,811
|
|
|
$
|
274,252
|
|
|
$
|
—
|
|
|
$
|
373,063
|
|
|
$
|
373,063
|
|
Weighted average interest rates
|
|
2.1
|
%
|
|
2.2
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
358,402
|
|
|
$
|
358,402
|
|
|
$
|
358,402
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
2.5
|
%
|
|
—
|
|
|
—
|
|
|||||
September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
54,336
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,336
|
|
|
$
|
54,336
|
|
Weighted average interest rate
|
|
1.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
146,376
|
|
|
$
|
468,329
|
|
|
$
|
—
|
|
|
$
|
614,705
|
|
|
$
|
614,705
|
|
Weighted average interest rates
|
|
1.4
|
%
|
|
1.7
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
411,184
|
|
|
$
|
411,184
|
|
|
$
|
411,184
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
1.9
|
%
|
|
—
|
|
|
—
|
|
|||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in cash and cash equivalents
|
|
$
|
16,909
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,909
|
|
|
$
|
16,909
|
|
Weighted average interest rate
|
|
0.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in short-term investments
|
|
$
|
105,713
|
|
|
$
|
237,987
|
|
|
$
|
—
|
|
|
$
|
343,700
|
|
|
$
|
343,700
|
|
Weighted average interest rates
|
|
0.9
|
%
|
|
1.1
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Included in long-term investments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
284,802
|
|
|
$
|
284,802
|
|
|
$
|
284,802
|
|
Weighted average interest rate
|
|
—
|
|
|
—
|
|
|
1.4
|
%
|
|
—
|
|
|
—
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Consolidated Financial Statements
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
||||||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
599,219
|
|
|
$
|
424,707
|
|
Short-term investments
|
|
373,063
|
|
|
614,705
|
|
||
Accounts receivable, net of allowances of $3,259 and $2,040
|
|
322,029
|
|
|
295,352
|
|
||
Inventories
|
|
34,401
|
|
|
30,568
|
|
||
Other current assets
|
|
182,874
|
|
|
52,326
|
|
||
Total current assets
|
|
1,511,586
|
|
|
1,417,658
|
|
||
Property and equipment, net
|
|
223,426
|
|
|
145,042
|
|
||
Long-term investments
|
|
358,402
|
|
|
411,184
|
|
||
Deferred tax assets
|
|
27,701
|
|
|
33,441
|
|
||
Goodwill
|
|
1,065,379
|
|
|
555,965
|
|
||
Other assets, net
|
|
203,781
|
|
|
42,186
|
|
||
Total assets
|
|
$
|
3,390,275
|
|
|
$
|
2,605,476
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
62,627
|
|
|
$
|
57,757
|
|
Accrued liabilities
|
|
235,869
|
|
|
180,979
|
|
||
Deferred revenue
|
|
807,030
|
|
|
715,697
|
|
||
Total current liabilities
|
|
1,105,526
|
|
|
954,433
|
|
||
Other long-term liabilities
|
|
131,853
|
|
|
65,892
|
|
||
Deferred revenue, long-term
|
|
391,086
|
|
|
299,624
|
|
||
Deferred tax liabilities
|
|
313
|
|
|
35
|
|
||
Total long-term liabilities
|
|
523,252
|
|
|
365,551
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
|
||||
Preferred stock, no par value; 10,000 shares authorized, no shares outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, no par value; 200,000 shares authorized, 60,367 and 60,215 shares issued and outstanding
|
|
142,597
|
|
|
20,427
|
|
||
Accumulated other comprehensive loss
|
|
(19,190
|
)
|
|
(22,178
|
)
|
||
Retained earnings
|
|
1,638,090
|
|
|
1,287,243
|
|
||
Total shareholders’ equity
|
|
1,761,497
|
|
|
1,285,492
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
3,390,275
|
|
|
$
|
2,605,476
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
985,591
|
|
|
$
|
960,108
|
|
|
$
|
964,662
|
|
Services
|
|
1,256,856
|
|
|
1,201,299
|
|
|
1,125,379
|
|
|||
Total
|
|
2,242,447
|
|
|
2,161,407
|
|
|
2,090,041
|
|
|||
Cost of net revenues
|
|
|
|
|
|
|
||||||
Products
|
|
174,986
|
|
|
181,061
|
|
|
176,032
|
|
|||
Services
|
|
181,591
|
|
|
180,420
|
|
|
177,453
|
|
|||
Total
|
|
356,577
|
|
|
361,481
|
|
|
353,485
|
|
|||
Gross profit
|
|
1,885,870
|
|
|
1,799,926
|
|
|
1,736,556
|
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Sales and marketing
|
|
748,619
|
|
|
664,135
|
|
|
652,239
|
|
|||
Research and development
|
|
408,058
|
|
|
366,084
|
|
|
350,365
|
|
|||
General and administrative
|
|
210,730
|
|
|
160,382
|
|
|
156,887
|
|
|||
Litigation expense
|
|
—
|
|
|
—
|
|
|
391
|
|
|||
Restructuring charges
|
|
—
|
|
|
18,426
|
|
|
12,718
|
|
|||
Total
|
|
1,367,407
|
|
|
1,209,027
|
|
|
1,172,600
|
|
|||
Income from operations
|
|
518,463
|
|
|
590,899
|
|
|
563,956
|
|
|||
Other income, net
|
|
22,648
|
|
|
12,861
|
|
|
11,561
|
|
|||
Income before income taxes
|
|
541,111
|
|
|
603,760
|
|
|
575,517
|
|
|||
Provision for income taxes
|
|
113,377
|
|
|
150,071
|
|
|
154,756
|
|
|||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
|
$
|
420,761
|
|
Net income per share — basic
|
|
$
|
7.12
|
|
|
$
|
7.41
|
|
|
$
|
6.56
|
|
Weighted average shares — basic
|
|
60,044
|
|
|
61,262
|
|
|
64,173
|
|
|||
Net income per share — diluted
|
|
$
|
7.08
|
|
|
$
|
7.32
|
|
|
$
|
6.50
|
|
Weighted average shares — diluted
|
|
60,456
|
|
|
62,013
|
|
|
64,775
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
|
$
|
420,761
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
(837
|
)
|
|
(1,415
|
)
|
|
(3,671
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
Unrealized gains (losses) on securities, net of taxes of $954, $(869), and $(493) for the years ended September 30, 2019, 2018, and 2017, respectively
|
|
3,715
|
|
|
(2,775
|
)
|
|
(822
|
)
|
|||
Reclassification adjustment for realized losses (gains) included in net income, net of taxes of $(35), $(4), and $186 for the years ended September 30, 2019, 2018, and 2017, respectively
|
|
110
|
|
|
9
|
|
|
(310
|
)
|
|||
Net change in unrealized gains (losses) on available-for-sale securities, net of tax
|
|
3,825
|
|
|
(2,766
|
)
|
|
(1,132
|
)
|
|||
Total other comprehensive income (loss)
|
|
2,988
|
|
|
(4,181
|
)
|
|
(4,803
|
)
|
|||
Comprehensive income
|
|
$
|
430,722
|
|
|
$
|
449,508
|
|
|
$
|
415,958
|
|
|
|
Common Stock
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||
|
|
|
|||||||||||||||||
Balance, September 30, 2016
|
|
65,315
|
|
|
$
|
13,191
|
|
|
$
|
(13,194
|
)
|
|
$
|
1,185,265
|
|
|
$
|
1,185,262
|
|
Exercise of employee stock options
|
|
9
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
469
|
|
|
46,838
|
|
|
—
|
|
|
—
|
|
|
46,838
|
|
||||
Issuance of restricted stock
|
|
1,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(4,561
|
)
|
|
(223,826
|
)
|
|
—
|
|
|
(376,264
|
)
|
|
(600,090
|
)
|
||||
Tax benefit from employee stock transactions
|
|
—
|
|
|
5,897
|
|
|
—
|
|
|
—
|
|
|
5,897
|
|
||||
Stock-based compensation
|
|
—
|
|
|
175,326
|
|
|
—
|
|
|
—
|
|
|
175,326
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
420,761
|
|
|
420,761
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(4,803
|
)
|
|
—
|
|
|
(4,803
|
)
|
||||
Balance, September 30, 2017
|
|
62,594
|
|
|
$
|
17,627
|
|
|
$
|
(17,997
|
)
|
|
$
|
1,229,762
|
|
|
$
|
1,229,392
|
|
Exercise of employee stock options
|
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
475
|
|
|
48,815
|
|
|
—
|
|
|
—
|
|
|
48,815
|
|
||||
Issuance of restricted stock
|
|
1,219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(4,074
|
)
|
|
(203,873
|
)
|
|
—
|
|
|
(396,208
|
)
|
|
(600,081
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
157,855
|
|
|
—
|
|
|
—
|
|
|
157,855
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
453,689
|
|
|
453,689
|
|
||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(4,181
|
)
|
|
—
|
|
|
(4,181
|
)
|
||||
Balance, September 30, 2018
|
|
60,215
|
|
|
$
|
20,427
|
|
|
$
|
(22,178
|
)
|
|
$
|
1,287,243
|
|
|
$
|
1,285,492
|
|
Cumulative effect adjustment from adoption of ASC 606
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,048
|
|
|
36,048
|
|
||||
Exercise of employee stock options
|
|
6
|
|
|
159
|
|
|
—
|
|
|
—
|
|
|
159
|
|
||||
Issuance of stock under employee stock purchase plan
|
|
334
|
|
|
45,439
|
|
|
—
|
|
|
—
|
|
|
45,439
|
|
||||
Issuance of restricted stock
|
|
998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Repurchase of common stock
|
|
(1,186
|
)
|
|
(88,110
|
)
|
|
—
|
|
|
(112,935
|
)
|
|
(201,045
|
)
|
||||
Stock-based compensation
|
|
—
|
|
|
164,682
|
|
|
—
|
|
|
—
|
|
|
164,682
|
|
||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
427,734
|
|
|
427,734
|
|
||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
2,988
|
|
|
—
|
|
|
2,988
|
|
||||
Balance, September 30, 2019
|
|
60,367
|
|
|
$
|
142,597
|
|
|
$
|
(19,190
|
)
|
|
$
|
1,638,090
|
|
|
$
|
1,761,497
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
|
$
|
420,761
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Realized loss (gain) on disposition of assets and investments
|
|
1,106
|
|
|
(267
|
)
|
|
(439
|
)
|
|||
Stock-based compensation
|
|
162,914
|
|
|
157,855
|
|
|
175,326
|
|
|||
Provisions for doubtful accounts and sales returns
|
|
556
|
|
|
1,461
|
|
|
366
|
|
|||
Depreciation and amortization
|
|
68,507
|
|
|
59,491
|
|
|
61,148
|
|
|||
Deferred income taxes
|
|
7,440
|
|
|
20,810
|
|
|
(4,626
|
)
|
|||
Impairment of assets
|
|
6,273
|
|
|
—
|
|
|
—
|
|
|||
Non-cash provisions for exit costs
|
|
8,211
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(18,305
|
)
|
|
(4,889
|
)
|
|
(24,115
|
)
|
|||
Inventories
|
|
(3,832
|
)
|
|
(734
|
)
|
|
4,218
|
|
|||
Other current assets
|
|
(75,449
|
)
|
|
15,607
|
|
|
(14,890
|
)
|
|||
Other assets
|
|
(22,742
|
)
|
|
446
|
|
|
(2,056
|
)
|
|||
Accounts payable and accrued liabilities
|
|
74,710
|
|
|
6,583
|
|
|
30,524
|
|
|||
Deferred revenue
|
|
110,718
|
|
|
51,016
|
|
|
94,064
|
|
|||
Net cash provided by operating activities
|
|
747,841
|
|
|
761,068
|
|
|
740,281
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Purchases of investments
|
|
(602,987
|
)
|
|
(855,424
|
)
|
|
(446,838
|
)
|
|||
Maturities of investments
|
|
625,201
|
|
|
439,130
|
|
|
390,449
|
|
|||
Sales of investments
|
|
278,244
|
|
|
12,736
|
|
|
66,858
|
|
|||
Acquisition of intangible assets
|
|
—
|
|
|
—
|
|
|
(4,000
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
|
(611,550
|
)
|
|
—
|
|
|
—
|
|
|||
Cash provided by sale of fixed asset
|
|
—
|
|
|
1,000
|
|
|
—
|
|
|||
Purchases of property and equipment
|
|
(103,542
|
)
|
|
(53,465
|
)
|
|
(38,681
|
)
|
|||
Net cash used in investing activities
|
|
(414,634
|
)
|
|
(456,023
|
)
|
|
(32,212
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Excess tax benefit from stock-based compensation
|
|
—
|
|
|
—
|
|
|
7,019
|
|
|||
Proceeds from the exercise of stock options and purchases of stock under employee stock purchase plan
|
|
45,598
|
|
|
48,818
|
|
|
47,039
|
|
|||
Repurchase of common stock
|
|
(201,045
|
)
|
|
(600,081
|
)
|
|
(600,090
|
)
|
|||
Net cash used in financing activities
|
|
(155,447
|
)
|
|
(551,263
|
)
|
|
(546,032
|
)
|
|||
Net increase (decrease) cash, cash equivalents and restricted cash
|
|
177,760
|
|
|
(246,218
|
)
|
|
162,037
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(1,400
|
)
|
|
(2,340
|
)
|
|
(3,307
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
|
425,894
|
|
|
674,452
|
|
|
515,722
|
|
|||
Cash, cash equivalents and restricted cash, end of year
|
|
$
|
602,254
|
|
|
$
|
425,894
|
|
|
$
|
674,452
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
||||||
Cash paid for taxes, net of refunds
|
|
$
|
100,569
|
|
|
$
|
104,878
|
|
|
$
|
162,944
|
|
Supplemental disclosures of non-cash activities
|
|
|
|
|
|
|
||||||
Capitalized leasehold improvements paid directly by landlord
|
|
$
|
34,948
|
|
|
$
|
9,958
|
|
|
$
|
—
|
|
•
|
Identify the contract(s) with a customer. Evidence of a contract generally consists of a purchase order issued pursuant to the terms and conditions of a distributor, reseller or end user agreement.
|
•
|
Identify the performance obligations in the contract. Performance obligations are identified in the Company's contracts and include hardware, hardware-based software, software-only solutions, cloud-based subscription services as well as a broad range of service performance obligations including consulting, training, installation and maintenance.
|
•
|
Determine the transaction price. The purchase price stated in an agreed upon purchase order is generally representative of the transaction price. The Company offers several programs in which customers are eligible for certain levels of rebates if certain conditions are met. When determining the transaction price, the Company considers the effects of any variable consideration.
|
•
|
Allocate the transaction price to the performance obligations in the contract. The transaction price in a contract is allocated based upon the relative standalone selling price of each distinct performance obligation identified in the contract.
|
•
|
Recognize revenue when (or as) the entity satisfies a performance obligation. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of promised products and services to a customer.
|
|
|
Employee Stock Purchase Plan
Years Ended September 30, |
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
|
|
1.97
|
%
|
|
2.25
|
%
|
|
1.14
|
%
|
Expected dividend
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected term
|
|
0.5 years
|
|
|
0.5 years
|
|
|
0.5 years
|
|
Expected volatility
|
|
26.32
|
%
|
|
18.14
|
%
|
|
22.03
|
%
|
(1)
|
50% of the annual equity grant vests in equal quarterly increments and 50% is subject to the Company achieving specified annual performance goals.
|
|
Ending Balance as of September 30, 2018 (ASC 605)
|
|
ASC 606 Adjustments
|
|
Beginning Balance as of October 1, 2018
(ASC 606)
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets1
|
$
|
52,326
|
|
|
$
|
50,558
|
|
|
$
|
102,884
|
|
Other assets, net1
|
$
|
42,186
|
|
|
$
|
59,676
|
|
|
$
|
101,862
|
|
Deferred tax assets
|
$
|
33,441
|
|
|
$
|
(7,902
|
)
|
|
$
|
25,539
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
||||||
Deferred revenue
|
$
|
715,697
|
|
|
$
|
35,464
|
|
|
$
|
751,161
|
|
Deferred revenue, long-term
|
$
|
299,624
|
|
|
$
|
32,614
|
|
|
$
|
332,238
|
|
Retained earnings2
|
$
|
1,287,243
|
|
|
$
|
36,048
|
|
|
$
|
1,323,291
|
|
|
|
|
|
|
|
(1)
|
Upon the adoption of ASC 606, capitalized contract acquisition costs and unbilled accounts receivable are reported as part of other current assets and other assets, net.
|
(2)
|
The net increase to retained earnings of $36.0 million was primarily related to the capitalization of contract acquisition costs of $54.6 million, partially offset by a decrease of $8.8 million due to changes in deferred revenue and a decrease of $7.9 million from the impact on deferred income taxes.
|
|
September 30, 2019
|
||||||||||||||
|
As Reported
(ASC 606)
|
|
Impacts Subsequent
to the Date of Adoption
|
|
Impacts on the
Date of Adoption
(October 1, 2018)
|
|
Without Adoption (ASC 605)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
$
|
182,874
|
|
|
$
|
50,938
|
|
|
$
|
50,558
|
|
|
$
|
81,378
|
|
Other assets, net
|
$
|
203,781
|
|
|
$
|
25,555
|
|
|
$
|
59,676
|
|
|
$
|
118,550
|
|
Deferred tax assets
|
$
|
27,701
|
|
|
$
|
(2,654
|
)
|
|
$
|
(7,902
|
)
|
|
$
|
38,257
|
|
Total assets
|
$
|
3,390,275
|
|
|
$
|
73,839
|
|
|
$
|
102,332
|
|
|
$
|
3,214,104
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|||||||||
Accrued liabilities
|
$
|
235,869
|
|
|
$
|
11,986
|
|
|
$
|
—
|
|
|
$
|
223,883
|
|
Deferred revenue
|
$
|
807,030
|
|
|
$
|
14,112
|
|
|
$
|
35,464
|
|
|
$
|
757,454
|
|
Deferred revenue, long-term
|
$
|
391,086
|
|
|
$
|
(9,284
|
)
|
|
$
|
32,614
|
|
|
$
|
367,756
|
|
Total liabilities
|
$
|
1,628,778
|
|
|
$
|
16,814
|
|
|
$
|
68,078
|
|
|
$
|
1,543,886
|
|
Retained earnings
|
$
|
1,638,090
|
|
|
$
|
55,231
|
|
|
$
|
36,048
|
|
|
$
|
1,546,811
|
|
Total liabilities and shareholders' equity
|
$
|
3,390,275
|
|
|
$
|
72,045
|
|
|
$
|
104,126
|
|
|
$
|
3,214,104
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2019
|
||||||||||
|
As Reported
(ASC 606)
|
|
Effect of Adoption of ASC 606
|
|
Without Adoption (ASC 605)
|
||||||
Total net revenues
|
$
|
2,242,447
|
|
|
$
|
72,246
|
|
|
$
|
2,170,201
|
|
Total cost of net revenues
|
$
|
356,577
|
|
|
$
|
4,004
|
|
|
$
|
352,573
|
|
Gross profit
|
$
|
1,885,870
|
|
|
$
|
68,242
|
|
|
$
|
1,817,628
|
|
Total operating expenses
|
$
|
1,367,407
|
|
|
$
|
(1,629
|
)
|
|
$
|
1,369,036
|
|
Income before income taxes
|
$
|
541,111
|
|
|
$
|
69,871
|
|
|
$
|
471,240
|
|
Provision for income taxes
|
$
|
113,377
|
|
|
$
|
14,640
|
|
|
$
|
98,737
|
|
Net income
|
$
|
427,734
|
|
|
$
|
55,231
|
|
|
$
|
372,503
|
|
|
|
|
|
|
|
||||||
Net income per share — basic
|
$
|
7.12
|
|
|
|
|
$
|
6.20
|
|
||
Net income per share — diluted
|
$
|
7.08
|
|
|
|
|
$
|
6.16
|
|
||
|
|
|
|
|
|
Balance, September 30, 2018
|
$
|
—
|
|
Impacts from adoption of ASC 606
|
$
|
54,608
|
|
Additional capitalized contract acquisition costs deferred
|
$
|
33,925
|
|
Amortization of capitalized contract acquisition costs
|
$
|
(29,087
|
)
|
Balance, September 30, 2019
|
$
|
59,446
|
|
Balance, September 30, 2018
|
$
|
—
|
|
Impacts from adoption of ASC 606
|
$
|
57,499
|
|
Revenue recognized during period but not yet billed
|
$
|
27,459
|
|
Contract asset net additions
|
$
|
88,068
|
|
Contract assets reclassified to accounts receivable
|
$
|
(40,534
|
)
|
Balance, September 30, 2019
|
$
|
132,492
|
|
Balance, September 30, 2018
|
$
|
1,015,321
|
|
Impacts from adoption of ASC 606
|
$
|
68,078
|
|
Amounts billed but not recognized as revenues
|
$
|
866,142
|
|
Revenues recognized related to the opening balance of deferred revenue
|
$
|
(751,425
|
)
|
Balance, September 30, 2019
|
$
|
1,198,116
|
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||
Revenue expected to be recognized on remaining performance obligations
|
$
|
808,980
|
|
|
$
|
237,175
|
|
|
$
|
151,961
|
|
|
$
|
1,198,116
|
|
Assets acquired
|
|
||
Cash and cash equivalents
|
$
|
29,911
|
|
Fair value of tangible assets:
|
|
||
Accounts receivable
|
7,306
|
|
|
Other current assets
|
4,214
|
|
|
Property and equipment, net
|
1,822
|
|
|
Deferred tax assets
|
10,357
|
|
|
Intangible assets
|
89,300
|
|
|
Goodwill
|
509,414
|
|
|
Total assets acquired
|
$
|
652,324
|
|
Liabilities assumed
|
|
||
Accounts payable
|
$
|
(1,081
|
)
|
Deferred revenue
|
(4,000
|
)
|
|
Other liabilities
|
(4,035
|
)
|
|
Total liabilities assumed
|
$
|
(9,116
|
)
|
Net assets acquired
|
$
|
643,208
|
|
|
|
|
Estimated
|
||
|
Amount
|
|
Useful Life
|
||
Net tangible assets
|
$
|
44,494
|
|
|
—
|
Identifiable intangible assets:
|
|
|
|
||
Developed technologies
|
62,500
|
|
|
7 years
|
|
Customer relationships
|
12,000
|
|
|
15 years
|
|
Trade name
|
14,500
|
|
|
7 years
|
|
Non-competition agreements
|
300
|
|
|
2 years
|
|
Goodwill
|
509,414
|
|
|
—
|
|
Total purchase price
|
$
|
643,208
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value at
September 30,
2019
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||
Cash equivalents
|
|
$
|
140,238
|
|
|
$
|
153,404
|
|
|
$
|
—
|
|
|
$
|
293,642
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — certificates of deposit
|
|
—
|
|
|
249
|
|
|
—
|
|
|
249
|
|
||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
259,547
|
|
|
—
|
|
|
259,547
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
12,129
|
|
|
—
|
|
|
12,129
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
78,992
|
|
|
—
|
|
|
78,992
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
22,146
|
|
|
—
|
|
|
22,146
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
298,916
|
|
|
—
|
|
|
298,916
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
2,524
|
|
|
—
|
|
|
2,524
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
5,515
|
|
|
—
|
|
|
5,515
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
51,447
|
|
|
—
|
|
|
51,447
|
|
||||
Total
|
|
$
|
140,238
|
|
|
$
|
884,869
|
|
|
$
|
—
|
|
|
$
|
1,025,107
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
|
Fair Value at
September 30,
2018
|
||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Securities
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|||||||||
Cash equivalents
|
|
$
|
41,468
|
|
|
$
|
13,118
|
|
|
$
|
—
|
|
|
$
|
54,586
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — certificates of deposit
|
|
—
|
|
|
2,970
|
|
|
—
|
|
|
2,970
|
|
||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
393,750
|
|
|
—
|
|
|
393,750
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
22,524
|
|
|
—
|
|
|
22,524
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
120,078
|
|
|
—
|
|
|
120,078
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
75,383
|
|
|
—
|
|
|
75,383
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale securities — corporate bonds and notes
|
|
—
|
|
|
367,710
|
|
|
—
|
|
|
367,710
|
|
||||
Available-for-sale securities — municipal bonds and notes
|
|
—
|
|
|
24,286
|
|
|
—
|
|
|
24,286
|
|
||||
Available-for-sale securities — U.S. government securities
|
|
—
|
|
|
12,771
|
|
|
—
|
|
|
12,771
|
|
||||
Available-for-sale securities — U.S. government agency securities
|
|
—
|
|
|
6,417
|
|
|
—
|
|
|
6,417
|
|
||||
Total
|
|
$
|
41,468
|
|
|
$
|
1,039,007
|
|
|
$
|
—
|
|
|
$
|
1,080,475
|
|
September 30, 2019
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Certificates of deposit
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
249
|
|
Corporate bonds and notes
|
|
259,242
|
|
|
402
|
|
|
(97
|
)
|
|
259,547
|
|
||||
Municipal bonds and notes
|
|
12,128
|
|
|
6
|
|
|
(5
|
)
|
|
12,129
|
|
||||
U.S. government securities
|
|
78,988
|
|
|
18
|
|
|
(14
|
)
|
|
78,992
|
|
||||
U.S. government agency securities
|
|
22,138
|
|
|
9
|
|
|
(1
|
)
|
|
22,146
|
|
||||
|
|
$
|
372,745
|
|
|
$
|
435
|
|
|
$
|
(117
|
)
|
|
$
|
373,063
|
|
September 30, 2018
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Certificates of deposit
|
|
$
|
2,970
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,970
|
|
Corporate bonds and notes
|
|
394,684
|
|
|
9
|
|
|
(943
|
)
|
|
393,750
|
|
||||
Municipal bonds and notes
|
|
22,588
|
|
|
1
|
|
|
(65
|
)
|
|
22,524
|
|
||||
U.S. government securities
|
|
120,283
|
|
|
—
|
|
|
(205
|
)
|
|
120,078
|
|
||||
U.S. government agency securities
|
|
75,587
|
|
|
—
|
|
|
(204
|
)
|
|
75,383
|
|
||||
|
|
$
|
616,112
|
|
|
$
|
10
|
|
|
$
|
(1,417
|
)
|
|
$
|
614,705
|
|
September 30, 2019
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
298,888
|
|
|
$
|
469
|
|
|
$
|
(441
|
)
|
|
$
|
298,916
|
|
Municipal bonds and notes
|
|
2,528
|
|
|
2
|
|
|
(6
|
)
|
|
2,524
|
|
||||
U.S. government securities
|
|
5,515
|
|
|
3
|
|
|
(3
|
)
|
|
5,515
|
|
||||
U.S. government agency securities
|
|
51,463
|
|
|
5
|
|
|
(21
|
)
|
|
51,447
|
|
||||
|
|
$
|
358,394
|
|
|
$
|
479
|
|
|
$
|
(471
|
)
|
|
$
|
358,402
|
|
September 30, 2018
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Corporate bonds and notes
|
|
$
|
370,377
|
|
|
$
|
25
|
|
|
$
|
(2,692
|
)
|
|
$
|
367,710
|
|
Municipal bonds and notes
|
|
24,468
|
|
|
—
|
|
|
(182
|
)
|
|
24,286
|
|
||||
U.S. government securities
|
|
12,956
|
|
|
—
|
|
|
(185
|
)
|
|
12,771
|
|
||||
U.S. government agency securities
|
|
6,500
|
|
|
—
|
|
|
(83
|
)
|
|
6,417
|
|
||||
|
|
$
|
414,301
|
|
|
$
|
25
|
|
|
$
|
(3,142
|
)
|
|
$
|
411,184
|
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
September 30, 2019
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds and notes
|
|
$
|
237,747
|
|
|
$
|
(434
|
)
|
|
$
|
109,613
|
|
|
$
|
(104
|
)
|
|
$
|
347,360
|
|
|
$
|
(538
|
)
|
Municipal bonds and notes
|
|
864
|
|
|
—
|
|
|
7,800
|
|
|
(11
|
)
|
|
8,664
|
|
|
(11
|
)
|
||||||
U.S. government securities
|
|
27,095
|
|
|
(12
|
)
|
|
9,991
|
|
|
(5
|
)
|
|
37,086
|
|
|
(17
|
)
|
||||||
U.S. government agency securities
|
|
30,946
|
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
30,946
|
|
|
(22
|
)
|
||||||
Total
|
|
$
|
296,652
|
|
|
$
|
(468
|
)
|
|
$
|
127,404
|
|
|
$
|
(120
|
)
|
|
$
|
424,056
|
|
|
$
|
(588
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
September 30, 2018
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Corporate bonds and notes
|
|
$
|
543,729
|
|
|
$
|
(1,800
|
)
|
|
$
|
152,097
|
|
|
$
|
(1,835
|
)
|
|
$
|
695,826
|
|
|
$
|
(3,635
|
)
|
Municipal bonds and notes
|
|
26,846
|
|
|
(123
|
)
|
|
14,363
|
|
|
(124
|
)
|
|
41,209
|
|
|
(247
|
)
|
||||||
U.S. government securities
|
|
103,470
|
|
|
(281
|
)
|
|
29,379
|
|
|
(109
|
)
|
|
132,849
|
|
|
(390
|
)
|
||||||
U.S. government agency securities
|
|
44,812
|
|
|
(110
|
)
|
|
36,987
|
|
|
(177
|
)
|
|
81,799
|
|
|
(287
|
)
|
||||||
Total
|
|
$
|
718,857
|
|
|
$
|
(2,314
|
)
|
|
$
|
232,826
|
|
|
$
|
(2,245
|
)
|
|
$
|
951,683
|
|
|
$
|
(4,559
|
)
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
|
$
|
599,219
|
|
|
$
|
424,707
|
|
Restricted cash included in other assets, net
|
|
3,035
|
|
|
1,187
|
|
||
Total cash, cash equivalents and restricted cash
|
|
$
|
602,254
|
|
|
$
|
425,894
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Finished goods
|
|
$
|
22,441
|
|
|
$
|
21,339
|
|
Raw materials
|
|
11,960
|
|
|
9,229
|
|
||
|
|
$
|
34,401
|
|
|
$
|
30,568
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Contract assets
|
|
$
|
79,407
|
|
|
$
|
—
|
|
Prepaid expenses
|
|
49,051
|
|
|
39,531
|
|
||
Capitalized contract acquisition costs
|
|
28,228
|
|
|
—
|
|
||
Other
|
|
26,188
|
|
|
12,795
|
|
||
|
|
$
|
182,874
|
|
|
$
|
52,326
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Computer equipment
|
|
$
|
142,372
|
|
|
$
|
135,176
|
|
Software
|
|
85,866
|
|
|
59,671
|
|
||
Office furniture and equipment
|
|
38,892
|
|
|
31,625
|
|
||
Leasehold improvements
|
|
151,055
|
|
|
107,615
|
|
||
|
|
418,185
|
|
|
334,087
|
|
||
Accumulated depreciation and amortization
|
|
(194,759
|
)
|
|
(189,045
|
)
|
||
|
|
$
|
223,426
|
|
|
$
|
145,042
|
|
Balance, September 30, 2018
|
|
$
|
555,965
|
|
Acquisition of Nginx, Inc.
|
509,414
|
|
||
Balance, September 30, 2019
|
|
$
|
1,065,379
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Intangible assets
|
|
$
|
108,903
|
|
|
$
|
31,259
|
|
Contract assets
|
|
53,085
|
|
|
—
|
|
||
Capitalized contract acquisition costs
|
|
31,218
|
|
|
—
|
|
||
Other
|
|
10,575
|
|
|
10,927
|
|
||
|
|
$
|
203,781
|
|
|
$
|
42,186
|
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||||||||
Developed technology
|
|
$
|
126,173
|
|
|
$
|
(53,213
|
)
|
|
$
|
72,960
|
|
|
$
|
63,672
|
|
|
$
|
(46,031
|
)
|
|
$
|
17,641
|
|
Customer relationships
|
|
20,242
|
|
|
(5,533
|
)
|
|
14,709
|
|
|
8,242
|
|
|
(4,376
|
)
|
|
3,866
|
|
||||||
Patents and trademarks
|
|
19,160
|
|
|
(11,800
|
)
|
|
7,360
|
|
|
18,971
|
|
|
(9,219
|
)
|
|
9,752
|
|
||||||
Trade names
|
|
15,473
|
|
|
(1,836
|
)
|
|
13,637
|
|
|
973
|
|
|
(973
|
)
|
|
—
|
|
||||||
Non-compete covenants
|
|
2,260
|
|
|
(2,023
|
)
|
|
237
|
|
|
1,960
|
|
|
(1,960
|
)
|
|
—
|
|
||||||
|
|
$
|
183,308
|
|
|
$
|
(74,405
|
)
|
|
$
|
108,903
|
|
|
$
|
93,818
|
|
|
$
|
(62,559
|
)
|
|
$
|
31,259
|
|
2020
|
$
|
18,331
|
|
|
2021
|
18,137
|
|
||
2022
|
16,844
|
|
||
2023
|
16,047
|
|
||
2024
|
14,360
|
|
||
|
$
|
83,719
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Payroll and benefits
|
|
$
|
138,453
|
|
|
$
|
104,815
|
|
Income and other tax accruals
|
|
31,801
|
|
|
27,656
|
|
||
Other
|
|
65,615
|
|
|
48,508
|
|
||
|
|
$
|
235,869
|
|
|
$
|
180,979
|
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred rent
|
|
$
|
66,103
|
|
|
$
|
31,151
|
|
Income taxes payable
|
|
42,324
|
|
|
30,864
|
|
||
Other
|
|
23,426
|
|
|
3,877
|
|
||
|
|
$
|
131,853
|
|
|
$
|
65,892
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
|
$
|
360,648
|
|
|
$
|
441,336
|
|
|
$
|
452,869
|
|
International
|
|
180,463
|
|
|
162,424
|
|
|
122,648
|
|
|||
|
|
$
|
541,111
|
|
|
$
|
603,760
|
|
|
$
|
575,517
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Income tax provision at statutory rate
|
|
$
|
113,633
|
|
|
$
|
147,921
|
|
|
$
|
201,431
|
|
State taxes, net of federal benefit
|
|
14,206
|
|
|
9,349
|
|
|
9,235
|
|
|||
Tax impact of foreign operations
|
|
(9,161
|
)
|
|
(6,696
|
)
|
|
(40,606
|
)
|
|||
Research and development and other credits
|
|
(12,760
|
)
|
|
(13,159
|
)
|
|
(12,795
|
)
|
|||
Domestic manufacturing deduction
|
|
—
|
|
|
(9,722
|
)
|
|
(15,802
|
)
|
|||
Stock-based and other compensation
|
|
6,771
|
|
|
(150
|
)
|
|
12,688
|
|
|||
Impacts of the Tax Cuts and Jobs Act
|
|
—
|
|
|
21,015
|
|
|
—
|
|
|||
Other
|
|
688
|
|
|
1,513
|
|
|
605
|
|
|||
|
|
$
|
113,377
|
|
|
$
|
150,071
|
|
|
$
|
154,756
|
|
|
|
Years Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets
|
|
|
|
|
||||
Net operating loss carry-forwards
|
|
$
|
12,269
|
|
|
$
|
11,540
|
|
Allowance for doubtful accounts
|
|
587
|
|
|
368
|
|
||
Accrued compensation and benefits
|
|
13,478
|
|
|
8,202
|
|
||
Inventories and related reserves
|
|
526
|
|
|
324
|
|
||
Stock-based compensation
|
|
7,144
|
|
|
5,570
|
|
||
Deferred revenue
|
|
35,247
|
|
|
29,290
|
|
||
Lease liabilities
|
|
17,313
|
|
|
3,662
|
|
||
Other accruals and reserves
|
|
14,673
|
|
|
10,747
|
|
||
Tax credit carryforwards
|
|
13,783
|
|
|
12,177
|
|
||
Depreciation
|
|
592
|
|
|
671
|
|
||
|
|
115,612
|
|
|
82,551
|
|
||
Valuation allowance
|
|
(23,495
|
)
|
|
(22,780
|
)
|
||
|
|
92,117
|
|
|
59,771
|
|
||
Deferred tax liabilities
|
|
|
|
|
||||
Purchased intangibles and other
|
|
(10,560
|
)
|
|
(10,678
|
)
|
||
Depreciation
|
|
(39,910
|
)
|
|
(12,277
|
)
|
||
Deferred costs
|
|
(10,656
|
)
|
|
—
|
|
||
Other accruals and reserves
|
|
(3,603
|
)
|
|
(3,410
|
)
|
||
|
|
(64,729
|
)
|
|
(26,365
|
)
|
||
|
|
|
|
|
||||
Net deferred tax assets
|
|
$
|
27,388
|
|
|
$
|
33,406
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, beginning of period
|
|
$
|
31,672
|
|
|
$
|
23,135
|
|
|
$
|
13,687
|
|
Gross increases related to prior period tax positions
|
|
5,129
|
|
|
2,715
|
|
|
2,769
|
|
|||
Gross decreases related to prior period tax positions
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|||
Gross increases related to current period tax positions
|
|
7,756
|
|
|
8,230
|
|
|
8,507
|
|
|||
Decreases relating to settlements with tax authorities
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
|||
Reductions due to lapses of statute of limitations
|
|
(1,983
|
)
|
|
(2,408
|
)
|
|
(1,588
|
)
|
|||
Balance, end of period
|
|
$
|
42,287
|
|
|
$
|
31,672
|
|
|
$
|
23,135
|
|
|
|
Performance Stock Units
|
|
Restricted Stock Units
|
||||||||||
|
|
Outstanding
Performance
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Outstanding
Restricted
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Balance, September 30, 2018
|
|
24,079
|
|
|
$
|
119.01
|
|
|
1,150,870
|
|
|
$
|
129.35
|
|
Units granted
|
|
62,154
|
|
|
173.46
|
|
|
997,309
|
|
|
173.00
|
|
||
Units vested
|
|
(25,618
|
)
|
|
165.89
|
|
|
(972,116
|
)
|
|
158.92
|
|
||
Units cancelled
|
|
(5,431
|
)
|
|
162.74
|
|
|
(134,174
|
)
|
|
150.94
|
|
||
Balance, September 30, 2019
|
|
55,184
|
|
|
$
|
165.83
|
|
|
1,041,889
|
|
|
$
|
158.10
|
|
|
|
Options Outstanding
|
|||||
|
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
per Share
|
|||
Balance, September 30, 2018
|
|
162
|
|
|
$
|
3.76
|
|
Options granted
|
|
215,767
|
|
|
24.49
|
|
|
Options exercised
|
|
(5,943
|
)
|
|
26.84
|
|
|
Options cancelled
|
|
(2,227
|
)
|
|
22.40
|
|
|
Balance, September 30, 2019
|
|
207,759
|
|
|
$
|
24.43
|
|
|
|
Number of
Shares
|
|
Weighted
Average
Remaining
Contractual
Life (in Years)
|
|
Weighted
Average
Exercise
Price
per Share
|
|
Aggregate
Intrinsic
Value(1)
|
|||||
|
|
|
|
|
|
|
|
(In thousands)
|
|||||
Stock options outstanding
|
|
207,759
|
|
|
8.13
|
|
$
|
24.43
|
|
|
$
|
24,098
|
|
Exercisable
|
|
37,512
|
|
|
7.61
|
|
$
|
22.58
|
|
|
$
|
4,420
|
|
Vested and expected to vest
|
|
191,414
|
|
|
8.10
|
|
$
|
24.33
|
|
|
$
|
22,221
|
|
(1)
|
Aggregate intrinsic value represents the difference between the fair value of the Company’s common stock underlying these options at September 30, 2019 and the related exercise prices.
|
|
|
Awards
Available for
Grant
|
|
Balance, September 30, 2018
|
2,051,687
|
|
|
Granted
|
(1,493,608
|
)
|
|
Cancelled
|
146,200
|
|
|
Additional shares reserved (terminated), net
|
2,235,695
|
|
|
Balance, September 30, 2019
|
2,939,974
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
427,734
|
|
|
$
|
453,689
|
|
|
$
|
420,761
|
|
Denominator
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding — basic
|
|
60,044
|
|
|
61,262
|
|
|
64,173
|
|
|||
Dilutive effect of common shares from stock options and restricted stock units
|
|
412
|
|
|
751
|
|
|
602
|
|
|||
Weighted average shares outstanding — diluted
|
|
60,456
|
|
|
62,013
|
|
|
64,775
|
|
|||
Basic net income per share
|
|
$
|
7.12
|
|
|
$
|
7.41
|
|
|
$
|
6.56
|
|
Diluted net income per share
|
|
$
|
7.08
|
|
|
$
|
7.32
|
|
|
$
|
6.50
|
|
|
|
Gross Lease
Payments
|
|
Sublease
Income
|
|
Net Lease
Payments
|
||||||
2020
|
|
$
|
54,046
|
|
|
$
|
683
|
|
|
$
|
53,363
|
|
2021
|
|
50,712
|
|
|
1,051
|
|
|
49,661
|
|
|||
2022
|
|
47,550
|
|
|
1,082
|
|
|
46,468
|
|
|||
2023
|
|
36,514
|
|
|
368
|
|
|
36,146
|
|
|||
2024
|
|
33,971
|
|
|
—
|
|
|
33,971
|
|
|||
Thereafter
|
|
242,826
|
|
|
—
|
|
|
242,826
|
|
|||
|
|
$
|
465,619
|
|
|
$
|
3,184
|
|
|
$
|
462,435
|
|
|
|
Years Ended September 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Americas:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,137,556
|
|
|
$
|
1,088,270
|
|
|
$
|
1,075,222
|
|
Other
|
|
108,112
|
|
|
116,073
|
|
|
110,298
|
|
|||
Total Americas
|
|
1,245,668
|
|
|
1,204,343
|
|
|
1,185,520
|
|
|||
EMEA
|
|
553,701
|
|
|
546,239
|
|
|
506,571
|
|
|||
Asia Pacific
|
|
443,078
|
|
|
410,825
|
|
|
397,950
|
|
|||
|
|
$
|
2,242,447
|
|
|
$
|
2,161,407
|
|
|
$
|
2,090,041
|
|
|
|
Years Ended September 30,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Ingram Micro, Inc.
|
|
18.2
|
%
|
|
16.6
|
%
|
|
16.1
|
%
|
Tech Data1
|
|
10.2
|
%
|
|
11.6
|
%
|
|
12.4
|
%
|
Westcon Group, Inc.2
|
|
10.0
|
%
|
|
10.4
|
%
|
|
17.7
|
%
|
Synnex Corporation2
|
|
—
|
|
|
10.8
|
%
|
|
—
|
|
Arrow ECS
|
|
—
|
|
|
10.7
|
%
|
|
10.4
|
%
|
|
|
|
|
|
|
|
(1)
|
On February 27, 2017, Tech Data completed the acquisition of Avnet Technology Solutions. Revenues for the year ended September 30, 2017 represent combined revenues for Tech Data and Avnet.
|
(2)
|
On September 1, 2017, Synnex Corporation completed the acquisition of Westcon Americas.
|
|
|
September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
United States
|
|
$
|
194,176
|
|
|
$
|
126,790
|
|
EMEA
|
|
13,451
|
|
|
12,538
|
|
||
Other countries
|
|
15,799
|
|
|
5,714
|
|
||
|
|
$
|
223,426
|
|
|
$
|
145,042
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
|
Sept. 30, 2019 (1)
|
|
June 30, 2019 (1)
|
|
March 31, 2019 (1)
|
|
Dec. 31, 2018 (1)
|
|
Sept. 30, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
|
Dec. 31, 2017
|
||||||||||||||||
|
|
(unaudited and in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Products
|
|
$
|
264,926
|
|
|
$
|
248,929
|
|
|
$
|
237,859
|
|
|
$
|
233,877
|
|
|
$
|
256,412
|
|
|
$
|
238,835
|
|
|
$
|
237,558
|
|
|
$
|
227,303
|
|
Services
|
|
325,462
|
|
|
314,465
|
|
|
307,036
|
|
|
309,893
|
|
|
306,297
|
|
|
303,368
|
|
|
295,746
|
|
|
295,888
|
|
||||||||
Total
|
|
590,388
|
|
|
563,394
|
|
|
544,895
|
|
|
543,770
|
|
|
562,709
|
|
|
542,203
|
|
|
533,304
|
|
|
523,191
|
|
||||||||
Cost of net revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Products
|
|
44,693
|
|
|
44,336
|
|
|
43,547
|
|
|
42,410
|
|
|
48,505
|
|
|
45,164
|
|
|
44,127
|
|
|
43,265
|
|
||||||||
Services
|
|
46,225
|
|
|
46,431
|
|
|
44,631
|
|
|
44,304
|
|
|
44,935
|
|
|
45,845
|
|
|
45,518
|
|
|
44,122
|
|
||||||||
Total
|
|
90,918
|
|
|
90,767
|
|
|
88,178
|
|
|
86,714
|
|
|
93,440
|
|
|
91,009
|
|
|
89,645
|
|
|
87,387
|
|
||||||||
Gross profit
|
|
499,470
|
|
|
472,627
|
|
|
456,717
|
|
|
457,056
|
|
|
469,269
|
|
|
451,194
|
|
|
443,659
|
|
|
435,804
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Sales and marketing
|
|
217,554
|
|
|
195,852
|
|
|
170,954
|
|
|
164,259
|
|
|
160,425
|
|
|
165,806
|
|
|
169,970
|
|
|
167,934
|
|
||||||||
Research and development
|
|
102,812
|
|
|
116,894
|
|
|
96,314
|
|
|
92,038
|
|
|
95,078
|
|
|
94,061
|
|
|
91,056
|
|
|
85,889
|
|
||||||||
General and administrative
|
|
64,390
|
|
|
57,141
|
|
|
46,656
|
|
|
42,543
|
|
|
41,748
|
|
|
39,374
|
|
|
39,276
|
|
|
39,984
|
|
||||||||
Restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,426
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total operating expenses
|
|
384,756
|
|
|
369,887
|
|
|
313,924
|
|
|
298,840
|
|
|
315,677
|
|
|
299,241
|
|
|
300,302
|
|
|
293,807
|
|
||||||||
Income from operations
|
|
114,714
|
|
|
102,740
|
|
|
142,793
|
|
|
158,216
|
|
|
153,592
|
|
|
151,953
|
|
|
143,357
|
|
|
141,997
|
|
||||||||
Other income, net
|
|
3,397
|
|
|
4,722
|
|
|
7,434
|
|
|
7,095
|
|
|
5,667
|
|
|
2,259
|
|
|
2,790
|
|
|
2,145
|
|
||||||||
Income before income taxes
|
|
118,111
|
|
|
107,462
|
|
|
150,227
|
|
|
165,311
|
|
|
159,259
|
|
|
154,212
|
|
|
146,147
|
|
|
144,142
|
|
||||||||
Provision for income taxes
|
|
23,274
|
|
|
21,557
|
|
|
34,140
|
|
|
34,406
|
|
|
26,378
|
|
|
31,469
|
|
|
36,511
|
|
|
55,713
|
|
||||||||
Net income
|
|
$
|
94,837
|
|
|
$
|
85,905
|
|
|
$
|
116,087
|
|
|
$
|
130,905
|
|
|
$
|
132,881
|
|
|
$
|
122,743
|
|
|
$
|
109,636
|
|
|
$
|
88,429
|
|
Net income per share — basic
|
|
$
|
1.57
|
|
|
$
|
1.43
|
|
|
$
|
1.94
|
|
|
$
|
2.17
|
|
|
$
|
2.20
|
|
|
$
|
2.01
|
|
|
$
|
1.79
|
|
|
$
|
1.42
|
|
Weighted average shares — basic
|
|
60,283
|
|
|
59,981
|
|
|
59,686
|
|
|
60,216
|
|
|
60,462
|
|
|
60,970
|
|
|
61,420
|
|
|
62,195
|
|
||||||||
Net income per share — diluted
|
|
$
|
1.57
|
|
|
$
|
1.43
|
|
|
$
|
1.93
|
|
|
$
|
2.16
|
|
|
$
|
2.18
|
|
|
$
|
1.99
|
|
|
$
|
1.77
|
|
|
$
|
1.41
|
|
Weighted average shares — diluted
|
|
60,448
|
|
|
60,196
|
|
|
60,029
|
|
|
60,645
|
|
|
61,070
|
|
|
61,633
|
|
|
62,059
|
|
|
62,550
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Quarterly results of operations for fiscal year 2019 contain effects from the adoption of ASC 606, and differ in comparability to previous years due to those effects. See Note 2 - Revenue from Contracts with Customers for more details.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
Documents filed as part of this report are as follows:
|
1.
|
Consolidated Financial Statements:
|
2.
|
Financial Statement Schedule:
|
3.
|
Exhibits:
|
Item 16.
|
Form 10-K Summary
|
Exhibit
Number
|
|
|
Exhibit Description
|
|
2.1
|
|
|
—
|
|
3.1
|
|
|
—
|
|
3.2
|
|
|
—
|
|
4.1
|
|
*
|
—
|
|
4.2
|
|
|
—
|
|
10.1
|
|
|
—
|
|
10.2
|
|
|
—
|
|
10.3
|
|
|
—
|
|
10.4
|
|
|
—
|
|
10.5
|
|
|
—
|
|
10.6
|
|
|
—
|
|
10.7
|
|
|
—
|
|
10.8
|
|
|
—
|
|
10.9
|
|
|
—
|
|
10.10
|
|
|
—
|
|
10.11
|
|
|
—
|
|
10.12
|
|
|
—
|
|
10.13
|
|
|
—
|
|
10.14
|
|
|
—
|
|
10.15
|
|
|
—
|
|
10.16
|
|
|
—
|
|
10.17
|
|
|
—
|
|
10.18
|
|
|
—
|
|
10.19
|
|
|
—
|
|
10.20
|
|
|
—
|
|
21.1
|
|
*
|
—
|
|
23.1
|
|
*
|
—
|
|
31.1
|
|
*
|
—
|
|
31.2
|
|
*
|
—
|
|
32.1
|
|
*
|
—
|
|
101.INS
|
|
*
|
—
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
|
*
|
—
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
*
|
—
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
*
|
—
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
*
|
—
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
*
|
—
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
*
|
—
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
*
|
Filed herewith.
|
§
|
Indicates a management contract or compensatory plan or arrangement.
|
(1)
|
Incorporated by reference from Current Report on Form 8-K dated March 11, 2019 and filed with the SEC on March 11, 2019.
|
(2)
|
Incorporated by reference from Current Report on Form 8-K dated March 19, 2013 and filed with the SEC on March 19, 2013.
|
(3)
|
Incorporated by reference from Current Report on Form 8-K dated January 9, 2019 and filed with the SEC on January 9, 2019.
|
(4)
|
Incorporated by reference from Exhibit 4.1 of Registration Statement on Form S-1, File No. 333-75817.
|
(5)
|
Incorporated by reference from Current Report on Form 8-K dated April 5, 2010 and filed with the SEC on April 8, 2010.
|
(6)
|
Incorporated by reference from Current Report on Form 8-K dated October 31, 2006 and filed with the SEC on November 3, 2006.
|
(7)
|
Incorporated by reference from Current Report on Form 8-K dated May 3, 2017 and filed with the SEC on May 3, 2017.
|
(8)
|
Incorporated by reference from Exhibit 10.1 of Registration Statement on Form S-1, File No. 333-75817.
|
(9)
|
Incorporated by reference from Current Report on Form 8-K dated March 14, 2019 and filed with the SEC on March 14, 2019.
|
(10)
|
Incorporated by reference from Current Report on Form 8-K dated April 29, 2009 and filed with the SEC on May 4, 2009.
|
(11)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-179794.
|
(12)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-191773.
|
(13)
|
Incorporated by reference from Current Report on Form 8-K dated March 14, 2019 and filed with the SEC on March 14, 2019.
|
(14)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-196405.
|
(15)
|
Incorporated by reference from Registration Statement on Form S-8 File No. 333-231802.
|
(16)
|
Incorporated by reference from Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.
|
(17)
|
Incorporated by reference from Annual Report on Form 10-K for the year ended September 30, 2014.
|
(18)
|
Incorporated by reference from Annual Report on Form 10-K for the year ended September 30, 2017.
|
(19)
|
Incorporated by reference from Current Report on Form 8-K dated January 27, 2017 and filed with the SEC on January 30, 2017.
|
(20)
|
Incorporated by reference from Current Report on Form 8-K dated April 20, 2018 and filed with the SEC on April 25, 2018.
|
|
F5 NETWORKS, INC.
|
||
|
|
|
|
|
By:
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
|
|
François Locoh-Donou
|
|
|
|
Chief Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ FRANÇOIS LOCOH-DONOU
|
|
Chief Executive Officer, President, and
Director (principal executive officer)
|
|
November 15, 2019
|
|
|
François Locoh-Donou
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ FRANCIS J. PELZER
|
|
Executive Vice President, Chief Financial
Officer (principal financial officer and principal accounting officer)
|
|
November 15, 2019
|
|
|
Francis J. Pelzer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ ALAN J. HIGGINSON
|
|
Director
|
|
November 15, 2019
|
|
|
Alan J. Higginson
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ A. GARY AMES
|
|
Director
|
|
November 15, 2019
|
|
|
A. Gary Ames
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ SANDRA BERGERON
|
|
Director
|
|
November 15, 2019
|
|
|
Sandra Bergeron
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ DEBORAH L. BEVIER
|
|
Director
|
|
November 15, 2019
|
|
|
Deborah L. Bevier
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ MICHEL COMBES
|
|
Director
|
|
November 15, 2019
|
|
|
Michel Combes
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ MICHAEL L. DREYER
|
|
Director
|
|
November 15, 2019
|
|
|
Michael L. Dreyer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ PETER KLEIN
|
|
Director
|
|
November 15, 2019
|
|
|
Peter Klein
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ JOHN MCADAM
|
|
Director
|
|
November 15, 2019
|
|
|
John McAdam
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ NIKHIL MEHTA
|
|
Director
|
|
November 15, 2019
|
|
|
Nikhil Mehta
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/S/ MARIE MYERS
|
|
Director
|
|
November 15, 2019
|
|
|
Marie Myers
|
|
|
|
•
|
authorize our board of directors to issue up to 10,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by the shareholders. The rights of the holders of Common Stock may be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future; and
|
•
|
limit the ability of shareholders to raise matters at a meeting of shareholders without giving advance notice.
|
Name
|
Jurisdiction of Organization
|
Traffix Communication Systems, Ltd. (Israel)
|
Israel
|
Versafe, Ltd.
|
Israel
|
F5 Networks Singapore Pte Ltd.
|
Singapore
|
F5 Networks Ltd.
|
United Kingdom
|
F5 Government Solutions LLC
|
Virginia, U.S.A.
|
|
|
* All other subsidiaries would not in the aggregate constitute a “significant subsidiary” as defined in Regulation S-X.
|
/s/ FRANÇOIS LOCOH-DONOU
|
François Locoh-Donou
Chief Executive Officer and President
|
/s/ FRANCIS J. PELZER
|
Francis J. Pelzer
Executive Vice President, Chief Financial Officer
(principal financial officer and principal accounting officer)
|
/s/ FRANÇOIS LOCOH-DONOU
|
François Locoh-Donou
Chief Executive Officer and President
|
|
/s/ FRANCIS J. PELZER
|
Francis J. Pelzer
Executive Vice President, Chief Financial Officer
(principal financial officer and principal accounting officer)
|