Annual report pursuant to Section 13 and 15(d)

Other Balance Sheet Components

v3.23.3
Other Balance Sheet Components
 12 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Other Balance Sheet Components OTHER BALANCE SHEET COMPONENTS
Accounts Receivable, Net
Table 14.1: Details of Accounts Receivable, Net
As of September 30,
2023 2022
(in thousands)
Billed and billable receivables $ 692,707  $ 723,979 
Unbilled receivables 137,885  91,404 
Allowance for credit losses (3,719) (8,273)
Accounts receivable, net $ 826,873  $ 807,110 
Table 14.2: Changes in Allowance for Credit Losses
For the Year Ended September 30,
2023 2022 2021
(in thousands)
Balance at beginning of period $ 8,273  $ 8,044  $ 6,051 
Provision for estimated credit losses 7,097  6,799  11,038 
Write-offs, net of recoveries (11,651) (6,570) (9,045)
Balance at end of period $ 3,719  $ 8,273  $ 8,044 
On September 21, 2022, we entered into a Receivables Purchase Agreement with Wells Fargo Bank N.A., under which we may sell certain US-originated accounts receivable balances up to a maximum amount of $200.0 million. In return for these sales, we receive a cash payment equal to the face value of the receivables less a financing charge.
We account for these transfers as sales. We have no retained interest in the transferred receivables other than administrative responsibilities, and Wells Fargo has no recourse for any credit risk. We estimate that the implicit servicing fees for an arrangement of this size and type would be immaterial.
For the years ended September 30, 2023 and 2022, the fair value of accounts receivables transferred to Wells Fargo and derecognized from our balance sheet was $450.4 million and $74.2 million, respectively. In exchange for these sales, we received cash of $447.7 million and $73.9 million for the same periods, respectively. The balance, representing a loss on sale from these transfers, is included within our selling, general, and administrative expenses. We have recorded these transactions within our operating cash flows.
Property and Equipment, Net
Table 14.3: Details of Property and Equipment, Net
As of September 30,
2023 2022
(in thousands)
Office furniture and equipment $ 134,910  $ 209,258 
Leasehold improvements 78,520  78,727 
Property and equipment, at cost 213,430  287,985 
Accumulated depreciation (174,599) (235,727)
Property and equipment, net $ 38,831  $ 52,258 
Depreciation expense for the years ended September 30, 2023, 2022, and 2021, was $28.4 million, $28.3 million, and $34.1 million, respectively. This expense was recorded within "cost of revenue" and "selling, general, and administrative expenses" on our consolidated statements of operations.
In August 2022, we sold the land and buildings that held our corporate headquarters, resulting in a gain on sale of $11.0 million.
Capitalized Software Costs, Net
Capitalized software is recorded at cost and includes purchased, internally-developed, and externally-developed software used in our operations. Amortization expense is provided using the straight-line method over the estimated useful lives of the software.
A summary of activities related to capitalized software costs is shown below:
Table 14.4: Details of Capitalized Software, Net
As of September 30,
2023 2022
(in thousands)
Capitalized software $ 195,813  $ 161,353 
Accumulated amortization (88,002) (102,613)
Capitalized software, net $ 107,811  $ 58,740 
Amortization expense related to capitalized software for the years ended September 30, 2023, 2022, and 2021 was $26.3 million, $14.1 million, and $12.3 million, respectively. The majority of this amortization was recorded within our "cost of revenue" and "selling, general, and administrative expenses" on our consolidated statements of operations.
Deferred Contract Costs, Net
Deferred contract costs consist of contractually recoverable costs to fulfill related to long-term service contracts. These costs include direct and incremental costs incurred prior to the commencement of providing service to our customer. These costs are expensed over the period the services are provided using the straight-line method.
A summary of activities related to deferred contract costs is shown below:
Table 14.5: Details of Deferred Contracts Costs, Net
As of September 30,
2023 2022
(in thousands)
Deferred contract costs $ 77,597  $ 76,498 
Accumulated amortization (32,225) (28,766)
Total deferred contract costs, net $ 45,372  $ 47,732 
Amortization expense related to deferred contract costs for the years ended September 30, 2023, 2022, and 2021 was $12.7 million, $8.9 million, and $13.6 million, respectively. These amounts were recorded within our "cost of revenue" on our consolidated statements of operations.
Accumulated Other Comprehensive Income
All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swap, net of tax. The following table shows changes in accumulated other comprehensive loss.
Table 14.6: Details of Changes in Accumulated Other Comprehensive Loss by Category
Foreign currency translation adjustment Net unrealized (loss)/gain on derivatives, net of tax Total
(in thousands)
Balance as of September 30, 2020 $ (42,638) $ —  $ (42,638)
Other comprehensive income/(loss) before reclassifications 3,033  (811) 2,222 
Amounts reclassified from accumulated other comprehensive income/(loss) —  508  508 
Net current period other comprehensive income/(loss) 3,033  (303) 2,730 
Balance as of September 30, 2021 (39,605) (303) (39,908)
Other comprehensive income/(loss) before reclassifications (17,504) 23,004  5,500 
Amounts reclassified from accumulated other comprehensive income/(loss) —  447  447 
Net current period other comprehensive income/(loss) (17,504) 23,451  5,947 
Balance as of September 30, 2022 (57,109) 23,148  (33,961)
Other comprehensive income/(loss) before reclassifications 6,509  8,558  15,067 
Amounts reclassified from accumulated other comprehensive income/(loss) 116  (8,837) (8,721)
Net current period other comprehensive income/(loss) 6,625  (279) 6,346 
Balance as of September 30, 2023 $ (50,484) $ 22,869  $ (27,615)