July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Accrued bonuses | $ | 24,872 | $ | 19,819 | |||
Accrued commission | 2,571 | 5,008 | |||||
Accrued vacation | 9,067 | 7,980 | |||||
Accrued salaries, payroll taxes and benefits | 4,757 | 4,428 | |||||
Total | $ | 41,267 | $ | 37,235 |
July 31, 2016 | July 31, 2015 | ||||
Exercise of stock options to purchase common stock | 1,158,572 | 1,822,062 | |||
Vesting of restricted stock units | 2,727,724 | 2,882,674 | |||
Shares available for grant under stock plans | 16,746,754 | 14,363,906 | |||
Total common stock reserved for issuance | 20,633,050 | 19,068,642 |
Computer hardware | 3 years | |
Software | 3 years | |
Furniture and fixtures | 3 years | |
Leasehold improvements | Shorter of the lease term or estimated useful life |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Assumed Liabilities, net of acquired assets | $ | (550 | ) | |||
Developed technology | 6,700 | 4 | ||||
Customer contracts and related relationships | 4,500 | 9 | ||||
Partner relationships | 200 | 9 | ||||
Order backlog | 1,100 | 3 | ||||
Deferred tax assets, net | 7,325 | |||||
Goodwill | 20,875 | |||||
Total purchase price | $ | 40,150 |
Lease Obligations | Royalty Obligations (1) | Purchase Commitments (2) | Total | ||||||||||||
Fiscal Year Ending July 31, | (in thousands) | ||||||||||||||
2017 | $ | 7,273 | $ | 997 | $ | 1,743 | $ | 10,013 | |||||||
2018 | 6,638 | 666 | 1,429 | 8,733 | |||||||||||
2019 | 6,198 | 517 | 76 | 6,791 | |||||||||||
2020 | 1,324 | 250 | — | 1,574 | |||||||||||
2021 | 1,146 | — | — | 1,146 | |||||||||||
2022 and thereafter | $ | 1,260 | $ | — | $ | — | $ | 1,260 | |||||||
Total | $ | 23,839 | $ | 2,430 | $ | 3,248 | $ | 29,517 |
(1) | Royalty obligations primarily represent our obligations under our non-cancellable agreements related to software used in certain revenue-generating agreements. |
(2) | Purchase commitments consist of agreements to purchase services, entered into in the ordinary course of business. These represent non-cancellable long term commitments for which a penalty would be imposed if the agreement was canceled for any reason other than an event of default as described by the agreement. |
Lease Obligations | Royalty Obligations (1) | Purchase Commitments (2) | Total | ||||||||||||
Fiscal Year Ending July 31, | (in thousands) | ||||||||||||||
2017 | $ | 7,273 | $ | 997 | $ | 1,743 | $ | 10,013 | |||||||
2018 | 6,638 | 666 | 1,429 | 8,733 | |||||||||||
2019 | 6,198 | 517 | 76 | 6,791 | |||||||||||
2020 | 1,324 | 250 | — | 1,574 | |||||||||||
2021 | 1,146 | — | — | 1,146 | |||||||||||
2022 and thereafter | $ | 1,260 | $ | — | $ | — | $ | 1,260 | |||||||
Total | $ | 23,839 | $ | 2,430 | $ | 3,248 | $ | 29,517 |
(1) | Royalty obligations primarily represent our obligations under our non-cancellable agreements related to software used in certain revenue-generating agreements. |
(2) | Purchase commitments consist of agreements to purchase services, entered into in the ordinary course of business. These represent non-cancellable long term commitments for which a penalty would be imposed if the agreement was canceled for any reason other than an event of default as described by the agreement. |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands, except share and per share amounts) | |||||||||||
Numerator: | |||||||||||
Net income | $ | 14,976 | $ | 9,885 | $ | 14,721 | |||||
Net income per share: | |||||||||||
Basic | $ | 0.21 | $ | 0.14 | $ | 0.22 | |||||
Diluted | $ | 0.20 | $ | 0.14 | $ | 0.21 |
Fiscal years ended July 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Denominator: | ||||||||
Weighted average shares used in computing net income per share: | ||||||||
Basic | 72,026,694 | 70,075,908 | 65,748,896 | |||||
Weighted average effect of diluted stock options | 859,855 | 1,223,106 | 1,896,766 | |||||
Weighted average effect of dilutive restricted stock units | 879,411 | 1,015,419 | 1,467,071 | |||||
Diluted | 73,765,960 | 72,314,433 | 69,112,733 |
Fiscal years ended July 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Stock options to purchase common stock | 77,737 | 290,670 | 206,136 | |||||
Restricted stock units | 22,994 | 678 | 76,840 |
July 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 66,206 | $ | — | $ | 66,206 | |||||||
Money market funds | 114,833 | — | — | 114,833 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. agency securities | — | 51,539 | — | 51,539 | |||||||||||
Commercial paper | — | 86,117 | — | 86,117 | |||||||||||
U. S. government bonds | — | 61,565 | — | 61,565 | |||||||||||
Corporate bonds | — | 205,434 | — | 205,434 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. agency securities | — | 6,549 | — | 6,549 | |||||||||||
Corporate bonds | — | 69,505 | — | 69,505 | |||||||||||
U.S. government bonds | — | 29,084 | — | 29,084 | |||||||||||
Foreign government bonds | — | 2,427 | — | 2,427 | |||||||||||
Total assets | $ | 114,833 | $ | 578,426 | $ | — | $ | 693,259 |
July 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 86,085 | $ | — | $ | 86,085 | |||||||
Money market funds | 88,319 | — | — | 88,319 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. agency securities | — | 68,212 | — | 68,212 | |||||||||||
Commercial paper | — | 56,746 | — | 56,746 | |||||||||||
U. S. government bonds | — | 19,983 | — | 19,983 | |||||||||||
Foreign government bonds | — | 8,668 | — | 8,668 | |||||||||||
Corporate bonds | — | 202,964 | — | 202,964 | |||||||||||
Certificate of deposit | — | 2,700 | — | 2,700 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. agency securities | — | 14,751 | — | 14,751 | |||||||||||
Corporate bonds | — | 78,809 | — | 78,809 | |||||||||||
U.S. government bonds | — | 12,557 | — | 12,557 | |||||||||||
Total assets | $ | 88,319 | $ | 551,475 | $ | — | $ | 639,794 |
July 31, 2016 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. agency securities | $ | 58,070 | $ | 30 | $ | (12 | ) | $ | 58,088 | ||||||
Commercial paper | 152,317 | 12 | (6 | ) | 152,323 | ||||||||||
Corporate bonds | 274,656 | 321 | (38 | ) | 274,939 | ||||||||||
U.S. government bonds | 90,593 | 58 | (2 | ) | 90,649 | ||||||||||
Foreign government bonds | 2,418 | 9 | — | 2,427 | |||||||||||
Money market funds | 114,833 | — | — | 114,833 | |||||||||||
Total | $ | 692,887 | $ | 430 | $ | (58 | ) | $ | 693,259 |
July 31, 2015 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. agency securities | $ | 82,946 | $ | 21 | $ | (4 | ) | $ | 82,963 | ||||||
Commercial paper | 142,822 | 13 | (4 | ) | 142,831 | ||||||||||
Corporate bonds | 281,942 | 47 | (216 | ) | 281,773 | ||||||||||
U.S. government bonds | 32,529 | 13 | (2 | ) | 32,540 | ||||||||||
Foreign government bonds | 8,663 | 7 | (2 | ) | 8,668 | ||||||||||
Certificate of deposit | 2,700 | — | — | 2,700 | |||||||||||
Money market funds | 88,319 | — | — | 88,319 | |||||||||||
Total | $ | 639,921 | $ | 101 | $ | (228 | ) | $ | 639,794 |
July 31, 2016 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
U.S. agency securities | $ | 7,961 | $ | (12 | ) | $ | — | $ | — | $ | 7,961 | $ | (12 | ) | |||||||||
Commercial paper | 47,484 | (6 | ) | — | — | 47,484 | (6 | ) | |||||||||||||||
Corporate bonds | 56,197 | (28 | ) | 7,755 | (10 | ) | 63,952 | (38 | ) | ||||||||||||||
U. S. government bonds | 10,029 | (2 | ) | — | — | 10,029 | (2 | ) | |||||||||||||||
Total | $ | 121,671 | $ | (48 | ) | $ | 7,755 | $ | (10 | ) | $ | 129,426 | $ | (58 | ) |
Less Than 12 Months | 12 to 24 Months | Total | |||||||||
(in thousands) | |||||||||||
U.S. agency securities | $ | 51,539 | $ | 6,549 | $ | 58,088 | |||||
Commercial paper | 152,323 | — | 152,323 | ||||||||
Corporate bonds | 205,434 | 69,505 | 274,939 | ||||||||
U.S. government bonds | 61,565 | 29,084 | 90,649 | ||||||||
Foreign government bonds | — | 2,427 | 2,427 | ||||||||
Money market funds | 114,833 | — | 114,833 | ||||||||
Total | $ | 585,694 | $ | 107,565 | $ | 693,259 |
July 31, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 66,206 | $ | — | $ | 66,206 | |||||||
Money market funds | 114,833 | — | — | 114,833 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. agency securities | — | 51,539 | — | 51,539 | |||||||||||
Commercial paper | — | 86,117 | — | 86,117 | |||||||||||
U. S. government bonds | — | 61,565 | — | 61,565 | |||||||||||
Corporate bonds | — | 205,434 | — | 205,434 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. agency securities | — | 6,549 | — | 6,549 | |||||||||||
Corporate bonds | — | 69,505 | — | 69,505 | |||||||||||
U.S. government bonds | — | 29,084 | — | 29,084 | |||||||||||
Foreign government bonds | — | 2,427 | — | 2,427 | |||||||||||
Total assets | $ | 114,833 | $ | 578,426 | $ | — | $ | 693,259 |
July 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Assets | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 86,085 | $ | — | $ | 86,085 | |||||||
Money market funds | 88,319 | — | — | 88,319 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. agency securities | — | 68,212 | — | 68,212 | |||||||||||
Commercial paper | — | 56,746 | — | 56,746 | |||||||||||
U. S. government bonds | — | 19,983 | — | 19,983 | |||||||||||
Foreign government bonds | — | 8,668 | — | 8,668 | |||||||||||
Corporate bonds | — | 202,964 | — | 202,964 | |||||||||||
Certificate of deposit | — | 2,700 | — | 2,700 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. agency securities | — | 14,751 | — | 14,751 | |||||||||||
Corporate bonds | — | 78,809 | — | 78,809 | |||||||||||
U.S. government bonds | — | 12,557 | — | 12,557 | |||||||||||
Total assets | $ | 88,319 | $ | 551,475 | $ | — | $ | 639,794 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Domestic | $ | 11,209 | $ | 11,348 | $ | 11,956 | |||||
International | 9,573 | 5,392 | 7,990 | ||||||||
Income before provision for income taxes | $ | 20,782 | $ | 16,740 | $ | 19,946 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
U.S. federal | $ | 4,936 | $ | 2,509 | $ | 5,235 | |||||
State | 1,006 | 300 | 1,326 | ||||||||
Foreign | 4,350 | 3,910 | 2,509 | ||||||||
Total current | 10,292 | 6,719 | 9,070 | ||||||||
Deferred: | |||||||||||
U.S. federal | (4,867 | ) | 983 | (4,277 | ) | ||||||
State | 631 | 169 | 78 | ||||||||
Foreign | (250 | ) | (1,016 | ) | 354 | ||||||
Total deferred | (4,486 | ) | 136 | (3,845 | ) | ||||||
Total provision for income taxes | $ | 5,806 | $ | 6,855 | $ | 5,225 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Statutory federal income tax | $ | 7,274 | $ | 5,858 | $ | 6,977 | |||||
Nondeductible items and other | 2,289 | 1,575 | 1,164 | ||||||||
State income taxes, net of federal benefit | 191 | 388 | 840 | ||||||||
Impact of state rate changes | 1,132 | — | — | ||||||||
Foreign income taxed at different rates | 945 | 816 | (207 | ) | |||||||
Tax credits | (5,963 | ) | (1,697 | ) | (3,612 | ) | |||||
Change in valuation allowance | (62 | ) | (85 | ) | 63 | ||||||
Total provision for income taxes | $ | 5,806 | $ | 6,855 | $ | 5,225 |
As of July 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Accruals and reserves | $ | 11,618 | $ | 9,974 | |||
Stock-based compensation | 6,874 | 5,534 | |||||
Deferred revenues | 1,513 | 410 | |||||
Property and equipment | 1,815 | 914 | |||||
Net operating loss carryforwards | 10,333 | 436 | |||||
Tax credits | 12,145 | 10,435 | |||||
Total deferred tax assets | 44,298 | 27,703 | |||||
Less valuation allowance | 10,505 | 6,783 | |||||
Net deferred tax assets | 33,793 | 20,920 | |||||
Less deferred tax liabilities: | |||||||
Intangible assets | 2,429 | 1,179 | |||||
Total net deferred tax assets | $ | 31,364 | $ | 19,741 |
As of July 31, 2016 | ||||
(in thousands) | ||||
U.S. federal | $ | 18,820 | ||
California | 18,529 | |||
Total R&D credit carryforwards | $ | 37,349 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Unrecognized tax benefit - beginning of period | $ | 6,109 | $ | 7,976 | $ | 6,727 | |||||
Gross increases - prior period tax positions | 177 | 1 | 140 | ||||||||
Gross decreases - prior period tax positions | (216 | ) | (2,896 | ) | (508 | ) | |||||
Gross increases - current period tax positions | 1,617 | 1,028 | 1,617 | ||||||||
Unrecognized tax benefit - end of period | $ | 7,687 | $ | 6,109 | $ | 7,976 |
Less Than 12 Months | 12 to 24 Months | Total | |||||||||
(in thousands) | |||||||||||
U.S. agency securities | $ | 51,539 | $ | 6,549 | $ | 58,088 | |||||
Commercial paper | 152,323 | — | 152,323 | ||||||||
Corporate bonds | 205,434 | 69,505 | 274,939 | ||||||||
U.S. government bonds | 61,565 | 29,084 | 90,649 | ||||||||
Foreign government bonds | — | 2,427 | 2,427 | ||||||||
Money market funds | 114,833 | — | 114,833 | ||||||||
Total | $ | 585,694 | $ | 107,565 | $ | 693,259 |
Computer hardware | 3 years | |
Software | 3 years | |
Furniture and fixtures | 3 years | |
Leasehold improvements | Shorter of the lease term or estimated useful life |
(i) | License fees, related to term (or time-based) licenses, perpetual software licenses, and other; |
(ii) | Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if available during the maintenance term; and |
(iii) | Services fees, related to professional services related to implementation of our software, reimbursable travel and training. |
• | Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period. |
• | Delivery or performance has occurred. The Company’s software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials. |
• | Fees are fixed or determinable. The Company assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Fees from term licenses are invoiced in annual or quarterly installments over the term of the agreement beginning on the effective date of the license. A significant majority are invoiced annually. Perpetual license fees are generally due between 30 and 60 days from delivery of software. In certain cases extended payment terms may be offered resulting in term and perpetual license fees to not be considered to be fixed or determinable until they become due or payment is received. |
• | Collectability is probable. Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from 30 to 90 days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied. |
Computer hardware | 3 years | |
Software | 3 years | |
Furniture and fixtures | 3 years | |
Leasehold improvements | Shorter of the lease term or estimated useful life |
July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Computer hardware | $ | 19,257 | $ | 15,099 | |||
Software | 5,066 | 4,867 | |||||
Furniture and fixtures | 3,492 | 3,065 | |||||
Leasehold improvements | 8,434 | 8,040 | |||||
Total property and equipment | 36,249 | 31,071 | |||||
Less accumulated depreciation | (23,294 | ) | (18,911 | ) | |||
Property and equipment, net | $ | 12,955 | $ | 12,160 |
(i) | License fees, related to term (or time-based) licenses, perpetual software licenses, and other; |
(ii) | Maintenance fees, related to email and phone support, bug fixes and unspecified software updates and upgrades released when, and if available during the maintenance term; and |
(iii) | Services fees, related to professional services related to implementation of our software, reimbursable travel and training. |
• | Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written contract signed by both the customer and management prior to the end of the period. |
• | Delivery or performance has occurred. The Company’s software is delivered electronically to the customer. Delivery is considered to have occurred when the Company provides the customer access to the software along with login credentials. |
• | Fees are fixed or determinable. The Company assesses whether a fee is fixed or determinable at the outset of the arrangement, primarily based on the payment terms associated with the transaction. Fees from term licenses are invoiced in annual or quarterly installments over the term of the agreement beginning on the effective date of the license. A significant majority are invoiced annually. Perpetual license fees are generally due between 30 and 60 days from delivery of software. In certain cases extended payment terms may be offered resulting in term and perpetual license fees to not be considered to be fixed or determinable until they become due or payment is received. |
• | Collectability is probable. Collectability is assessed on a customer-by-customer basis, based primarily on creditworthiness as determined by credit checks and analysis, as well as customer payment history. Payment terms generally range from 30 to 90 days from invoice date. If it is determined prior to revenue recognition that collection of an arrangement fee is not probable, revenues are deferred until collection becomes probable or cash is collected, assuming all other revenue recognition criteria are satisfied. |
Foreign Currency Items | Unrealized gain (loss) on available-for-sale securities | Total | |||||||||
(In thousands) | |||||||||||
Balance as of July 31, 2014 | $ | (1,310 | ) | $ | (57 | ) | $ | (1,367 | ) | ||
Other comprehensive income (loss) before reclassification adjustments: | (4,937 | ) | (121 | ) | (5,058 | ) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) to earnings | — | 44 | 44 | ||||||||
Tax effect | — | 38 | 38 | ||||||||
Balance as of July 31, 2015 | (6,247 | ) | (96 | ) | (6,343 | ) | |||||
Other comprehensive income (loss) before reclassification adjustments: | (562 | ) | 475 | (87 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) to earnings | — | 24 | 24 | ||||||||
Tax effect | — | (187 | ) | (187 | ) | ||||||
Balance as of July 31, 2016 | $ | (6,809 | ) | $ | 216 | $ | (6,593 | ) | |||
Fiscal years ended July 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Stock options to purchase common stock | 77,737 | 290,670 | 206,136 | |||||
Restricted stock units | 22,994 | 678 | 76,840 |
July 31, 2016 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. agency securities | $ | 58,070 | $ | 30 | $ | (12 | ) | $ | 58,088 | ||||||
Commercial paper | 152,317 | 12 | (6 | ) | 152,323 | ||||||||||
Corporate bonds | 274,656 | 321 | (38 | ) | 274,939 | ||||||||||
U.S. government bonds | 90,593 | 58 | (2 | ) | 90,649 | ||||||||||
Foreign government bonds | 2,418 | 9 | — | 2,427 | |||||||||||
Money market funds | 114,833 | — | — | 114,833 | |||||||||||
Total | $ | 692,887 | $ | 430 | $ | (58 | ) | $ | 693,259 |
July 31, 2015 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. agency securities | $ | 82,946 | $ | 21 | $ | (4 | ) | $ | 82,963 | ||||||
Commercial paper | 142,822 | 13 | (4 | ) | 142,831 | ||||||||||
Corporate bonds | 281,942 | 47 | (216 | ) | 281,773 | ||||||||||
U.S. government bonds | 32,529 | 13 | (2 | ) | 32,540 | ||||||||||
Foreign government bonds | 8,663 | 7 | (2 | ) | 8,668 | ||||||||||
Certificate of deposit | 2,700 | — | — | 2,700 | |||||||||||
Money market funds | 88,319 | — | — | 88,319 | |||||||||||
Total | $ | 639,921 | $ | 101 | $ | (228 | ) | $ | 639,794 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
U.S. federal | $ | 4,936 | $ | 2,509 | $ | 5,235 | |||||
State | 1,006 | 300 | 1,326 | ||||||||
Foreign | 4,350 | 3,910 | 2,509 | ||||||||
Total current | 10,292 | 6,719 | 9,070 | ||||||||
Deferred: | |||||||||||
U.S. federal | (4,867 | ) | 983 | (4,277 | ) | ||||||
State | 631 | 169 | 78 | ||||||||
Foreign | (250 | ) | (1,016 | ) | 354 | ||||||
Total deferred | (4,486 | ) | 136 | (3,845 | ) | ||||||
Total provision for income taxes | $ | 5,806 | $ | 6,855 | $ | 5,225 |
As of July 31, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Accruals and reserves | $ | 11,618 | $ | 9,974 | |||
Stock-based compensation | 6,874 | 5,534 | |||||
Deferred revenues | 1,513 | 410 | |||||
Property and equipment | 1,815 | 914 | |||||
Net operating loss carryforwards | 10,333 | 436 | |||||
Tax credits | 12,145 | 10,435 | |||||
Total deferred tax assets | 44,298 | 27,703 | |||||
Less valuation allowance | 10,505 | 6,783 | |||||
Net deferred tax assets | 33,793 | 20,920 | |||||
Less deferred tax liabilities: | |||||||
Intangible assets | 2,429 | 1,179 | |||||
Total net deferred tax assets | $ | 31,364 | $ | 19,741 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands, except share and per share amounts) | |||||||||||
Numerator: | |||||||||||
Net income | $ | 14,976 | $ | 9,885 | $ | 14,721 | |||||
Net income per share: | |||||||||||
Basic | $ | 0.21 | $ | 0.14 | $ | 0.22 | |||||
Diluted | $ | 0.20 | $ | 0.14 | $ | 0.21 |
Fiscal years ended July 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Denominator: | ||||||||
Weighted average shares used in computing net income per share: | ||||||||
Basic | 72,026,694 | 70,075,908 | 65,748,896 | |||||
Weighted average effect of diluted stock options | 859,855 | 1,223,106 | 1,896,766 | |||||
Weighted average effect of dilutive restricted stock units | 879,411 | 1,015,419 | 1,467,071 | |||||
Diluted | 73,765,960 | 72,314,433 | 69,112,733 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Statutory federal income tax | $ | 7,274 | $ | 5,858 | $ | 6,977 | |||||
Nondeductible items and other | 2,289 | 1,575 | 1,164 | ||||||||
State income taxes, net of federal benefit | 191 | 388 | 840 | ||||||||
Impact of state rate changes | 1,132 | — | — | ||||||||
Foreign income taxed at different rates | 945 | 816 | (207 | ) | |||||||
Tax credits | (5,963 | ) | (1,697 | ) | (3,612 | ) | |||||
Change in valuation allowance | (62 | ) | (85 | ) | 63 | ||||||
Total provision for income taxes | $ | 5,806 | $ | 6,855 | $ | 5,225 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Total cost of stock-based compensation | $ | 66,409 | $ | 51,375 | $ | 42,538 | |||||
Amount capitalized in deferred cost of services revenues during the year | $ | (278 | ) | $ | — | $ | — | ||||
Amount charged to income | $ | 66,131 | $ | 51,375 | $ | 42,538 | |||||
Stock-based compensation cost charged to the following expense categories: | |||||||||||
Cost of license revenues | $ | 433 | $ | 222 | $ | 184 | |||||
Cost of maintenance revenues | 1,491 | 1,158 | 797 | ||||||||
Cost of services revenues | 17,878 | 15,022 | 11,929 | ||||||||
Research and development | 15,555 | 10,683 | 9,008 | ||||||||
Sales and marketing | 15,090 | 12,090 | 10,744 | ||||||||
General and administrative | 15,684 | 12,200 | 9,876 | ||||||||
Total stock-based compensation expense | 66,131 | 51,375 | 42,538 | ||||||||
Tax benefit from stock-based compensation | 20,092 | 19,087 | 15,905 | ||||||||
Total stock-based compensation expense, net of tax effect | $ | 46,039 | $ | 32,288 | $ | 26,633 |
July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Americas | $ | 53,826 | $ | 22,746 | |||
EMEA | 3,085 | 2,183 | |||||
APAC | 328 | 435 | |||||
Total | $ | 57,239 | $ | 25,364 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Domestic | $ | 11,209 | $ | 11,348 | $ | 11,956 | |||||
International | 9,573 | 5,392 | 7,990 | ||||||||
Income before provision for income taxes | $ | 20,782 | $ | 16,740 | $ | 19,946 |
(in thousands) | |||
Goodwill, July 31, 2014 | $ | 9,205 | |
Changes in carrying value | — | ||
Goodwill, July 31, 2015 | $ | 9,205 | |
Addition - EagleEye acquisition | 20,875 | ||
Goodwill, July 31, 2016 | $ | 30,080 |
July 31, 2016 | July 31, 2015 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost | Accumulated Amortization | Net Book Value | Cost | Accumulated Amortization | Net Book Value | ||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||
Acquired technology | $ | 13,900 | $ | 5,199 | 8,701 | $ | 7,200 | 3,201 | $ | 3,999 | |||||||||||||
Customer contracts and related relationships | $ | 4,500 | $ | 167 | 4,333 | — | — | — | |||||||||||||||
Partner relationships | $ | 200 | $ | 8 | 192 | — | — | — | |||||||||||||||
Order backlog | $ | 1,100 | $ | 122 | 978 | — | — | — | |||||||||||||||
Total | $ | 19,700 | $ | 5,496 | $ | 14,204 | $ | 7,200 | $ | 3,201 | $ | 3,999 |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Assumed Liabilities, net of acquired assets | $ | (550 | ) | |||
Developed technology | 6,700 | 4 | ||||
Customer contracts and related relationships | 4,500 | 9 | ||||
Partner relationships | 200 | 9 | ||||
Order backlog | 1,100 | 3 | ||||
Deferred tax assets, net | 7,325 | |||||
Goodwill | 20,875 | |||||
Total purchase price | $ | 40,150 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
United States | $ | 230,935 | $ | 208,104 | $ | 203,791 | |||||
Canada | 44,717 | 37,833 | 39,100 | ||||||||
Other Americas | 18,114 | 7,162 | 8,106 | ||||||||
Total Americas | 293,766 | 253,099 | 250,997 | ||||||||
United Kingdom | 34,031 | 44,393 | 37,890 | ||||||||
Other EMEA | 41,914 | 47,449 | 35,149 | ||||||||
Total EMEA | 75,945 | 91,842 | 73,039 | ||||||||
APAC | 54,735 | 35,596 | 26,210 | ||||||||
Total revenues | $ | 424,446 | $ | 380,537 | $ | 350,246 |
Number of RSUs | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value (1) | ||||||||
(in thousands) | ||||||||||
Balance as of July 31, 2013 | 4,027,601 | $ | 19.27 | $ | 176,248 | |||||
Granted | 1,667,433 | 43.87 | ||||||||
Released | (2,007,423 | ) | 18.59 | $ | 91,300 | |||||
Canceled | (303,390 | ) | 31.48 | |||||||
Balance as of July 31, 2014 | 3,384,221 | 30.70 | $ | 137,061 | ||||||
Granted | 1,664,413 | 47.50 | ||||||||
Released | (1,819,825 | ) | 25.99 | $ | 88,648 | |||||
Canceled | (346,135 | ) | 36.72 | |||||||
Balance as of July 31, 2015 | 2,882,674 | 42.65 | $ | 170,222 | ||||||
Granted | 1,586,192 | 54.99 | ||||||||
Released | (1,408,746 | ) | 41.21 | $ | 78,763 | |||||
Canceled | (332,396 | ) | 46.71 | |||||||
Balance as of July 31, 2016 | 2,727,724 | $ | 50.08 | $ | 167,673 | |||||
Expected to vest as of July 31, 2016 | 2,553,456 | $ | 49.87 | $ | 156,961 |
(1) | Aggregate intrinsic value at each fiscal year end represents the total market value of RSUs at the Company’s closing stock price of $61.47, $59.05 and $40.50 on July 31, 2016, 2015 and 2014, respectively. Aggregate intrinsic value for released RSUs represents the total market value of released RSUs at date of release. |
Number of Stock Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value (1) | |||||||||
(in years) | (in thousands) | |||||||||||
Balance as of July 31, 2013 | 3,763,228 | $ | 6.74 | 5.7 | $ | 139,315 | ||||||
Granted | 225,930 | 46.63 | ||||||||||
Exercised | (1,580,344 | ) | 5.53 | 65,300 | ||||||||
Canceled | (8,561 | ) | 21.75 | |||||||||
Balance as of July 31, 2014 | 2,400,253 | 11.24 | 5.5 | 71,640 | ||||||||
Granted | 138,643 | 47.23 | ||||||||||
Exercised | (665,665 | ) | 9.46 | 27,263 | ||||||||
Canceled | (51,169 | ) | 23.04 | |||||||||
Balance as of July 31, 2015 | 1,822,062 | 14.29 | 4.9 | 81,548 | ||||||||
Granted | 10,000 | 54.00 | ||||||||||
Exercised | (652,832 | ) | 12.01 | 29,186 | ||||||||
Canceled | (20,658 | ) | 40.86 | |||||||||
Balance as of July 31, 2016 | 1,158,572 | $ | 15.45 | 4.0 | $ | 53,316 | ||||||
Vested and expected to vest as of July 31, 2016 | 1,153,815 | $ | 15.32 | 4.0 | $ | 53,252 | ||||||
Exercisable as of July 31, 2016 | 1,010,609 | $ | 10.95 | 3.5 | $ | 51,060 |
(1) | Aggregate intrinsic value at each fiscal year end represents the difference between the Company’s closing stock price of $61.47, $59.05 and $40.50 on July 31, 2016, 2015 and 2014 and the exercise price of the option, respectively. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price. |
Fiscal years ended July 31, | |||||
2016 | 2015 | 2014 | |||
Expected life (in years) | 4.9 | 6.0 - 6.1 | 5.0 - 6.1 | ||
Risk-free interest rate | 1.5% | 1.7% - 1.9% | 1.5% - 2.0% | ||
Expected volatility | 38.8% | 39.4% - 45.1% | 41.3% - 46.2% | ||
Expected dividend yield | —% | —% | —% | ||
Weighted average fair value of options granted | $19.18 | $20.78 | $21.06 |
July 31, 2016 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
U.S. agency securities | $ | 7,961 | $ | (12 | ) | $ | — | $ | — | $ | 7,961 | $ | (12 | ) | |||||||||
Commercial paper | 47,484 | (6 | ) | — | — | 47,484 | (6 | ) | |||||||||||||||
Corporate bonds | 56,197 | (28 | ) | 7,755 | (10 | ) | 63,952 | (38 | ) | ||||||||||||||
U. S. government bonds | 10,029 | (2 | ) | — | — | 10,029 | (2 | ) | |||||||||||||||
Total | $ | 121,671 | $ | (48 | ) | $ | 7,755 | $ | (10 | ) | $ | 129,426 | $ | (58 | ) |
As of July 31, 2016 | |||||
Unrecognized Expense | Weighted Average Expected Recognition Period | ||||
(in thousands) | (in years) | ||||
Restricted stock units | $ | 109,968 | 2.4 | ||
Stock options | 2,621 | 1.7 | |||
$ | 112,589 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Unrecognized tax benefit - beginning of period | $ | 6,109 | $ | 7,976 | $ | 6,727 | |||||
Gross increases - prior period tax positions | 177 | 1 | 140 | ||||||||
Gross decreases - prior period tax positions | (216 | ) | (2,896 | ) | (508 | ) | |||||
Gross increases - current period tax positions | 1,617 | 1,028 | 1,617 | ||||||||
Unrecognized tax benefit - end of period | $ | 7,687 | $ | 6,109 | $ | 7,976 |
Future Amortization | ||||
(in thousands) | ||||
2017 | $ | 4,004 | ||
2018 | 3,682 | |||
2019 | 2,442 | |||
2020 | 1,639 | |||
2021 | 522 | |||
Thereafter | 1,915 | |||
Total | $ | 14,204 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
United States | $ | 230,935 | $ | 208,104 | $ | 203,791 | |||||
Canada | 44,717 | 37,833 | 39,100 | ||||||||
Other Americas | 18,114 | 7,162 | 8,106 | ||||||||
Total Americas | 293,766 | 253,099 | 250,997 | ||||||||
United Kingdom | 34,031 | 44,393 | 37,890 | ||||||||
Other EMEA | 41,914 | 47,449 | 35,149 | ||||||||
Total EMEA | 75,945 | 91,842 | 73,039 | ||||||||
APAC | 54,735 | 35,596 | 26,210 | ||||||||
Total revenues | $ | 424,446 | $ | 380,537 | $ | 350,246 |
July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Americas | $ | 53,826 | $ | 22,746 | |||
EMEA | 3,085 | 2,183 | |||||
APAC | 328 | 435 | |||||
Total | $ | 57,239 | $ | 25,364 |
Fiscal years ended July 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(in thousands) | |||||||||||
Total cost of stock-based compensation | $ | 66,409 | $ | 51,375 | $ | 42,538 | |||||
Amount capitalized in deferred cost of services revenues during the year | $ | (278 | ) | $ | — | $ | — | ||||
Amount charged to income | $ | 66,131 | $ | 51,375 | $ | 42,538 | |||||
Stock-based compensation cost charged to the following expense categories: | |||||||||||
Cost of license revenues | $ | 433 | $ | 222 | $ | 184 | |||||
Cost of maintenance revenues | 1,491 | 1,158 | 797 | ||||||||
Cost of services revenues | 17,878 | 15,022 | 11,929 | ||||||||
Research and development | 15,555 | 10,683 | 9,008 | ||||||||
Sales and marketing | 15,090 | 12,090 | 10,744 | ||||||||
General and administrative | 15,684 | 12,200 | 9,876 | ||||||||
Total stock-based compensation expense | 66,131 | 51,375 | 42,538 | ||||||||
Tax benefit from stock-based compensation | 20,092 | 19,087 | 15,905 | ||||||||
Total stock-based compensation expense, net of tax effect | $ | 46,039 | $ | 32,288 | $ | 26,633 |
As of July 31, 2016 | |||||
Unrecognized Expense | Weighted Average Expected Recognition Period | ||||
(in thousands) | (in years) | ||||
Restricted stock units | $ | 109,968 | 2.4 | ||
Stock options | 2,621 | 1.7 | |||
$ | 112,589 |
Number of RSUs | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value (1) | ||||||||
(in thousands) | ||||||||||
Balance as of July 31, 2013 | 4,027,601 | $ | 19.27 | $ | 176,248 | |||||
Granted | 1,667,433 | 43.87 | ||||||||
Released | (2,007,423 | ) | 18.59 | $ | 91,300 | |||||
Canceled | (303,390 | ) | 31.48 | |||||||
Balance as of July 31, 2014 | 3,384,221 | 30.70 | $ | 137,061 | ||||||
Granted | 1,664,413 | 47.50 | ||||||||
Released | (1,819,825 | ) | 25.99 | $ | 88,648 | |||||
Canceled | (346,135 | ) | 36.72 | |||||||
Balance as of July 31, 2015 | 2,882,674 | 42.65 | $ | 170,222 | ||||||
Granted | 1,586,192 | 54.99 | ||||||||
Released | (1,408,746 | ) | 41.21 | $ | 78,763 | |||||
Canceled | (332,396 | ) | 46.71 | |||||||
Balance as of July 31, 2016 | 2,727,724 | $ | 50.08 | $ | 167,673 | |||||
Expected to vest as of July 31, 2016 | 2,553,456 | $ | 49.87 | $ | 156,961 |
(1) | Aggregate intrinsic value at each fiscal year end represents the total market value of RSUs at the Company’s closing stock price of $61.47, $59.05 and $40.50 on July 31, 2016, 2015 and 2014, respectively. Aggregate intrinsic value for released RSUs represents the total market value of released RSUs at date of release. |
Number of Stock Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value (1) | |||||||||
(in years) | (in thousands) | |||||||||||
Balance as of July 31, 2013 | 3,763,228 | $ | 6.74 | 5.7 | $ | 139,315 | ||||||
Granted | 225,930 | 46.63 | ||||||||||
Exercised | (1,580,344 | ) | 5.53 | 65,300 | ||||||||
Canceled | (8,561 | ) | 21.75 | |||||||||
Balance as of July 31, 2014 | 2,400,253 | 11.24 | 5.5 | 71,640 | ||||||||
Granted | 138,643 | 47.23 | ||||||||||
Exercised | (665,665 | ) | 9.46 | 27,263 | ||||||||
Canceled | (51,169 | ) | 23.04 | |||||||||
Balance as of July 31, 2015 | 1,822,062 | 14.29 | 4.9 | 81,548 | ||||||||
Granted | 10,000 | 54.00 | ||||||||||
Exercised | (652,832 | ) | 12.01 | 29,186 | ||||||||
Canceled | (20,658 | ) | 40.86 | |||||||||
Balance as of July 31, 2016 | 1,158,572 | $ | 15.45 | 4.0 | $ | 53,316 | ||||||
Vested and expected to vest as of July 31, 2016 | 1,153,815 | $ | 15.32 | 4.0 | $ | 53,252 | ||||||
Exercisable as of July 31, 2016 | 1,010,609 | $ | 10.95 | 3.5 | $ | 51,060 |
(1) | Aggregate intrinsic value at each fiscal year end represents the difference between the Company’s closing stock price of $61.47, $59.05 and $40.50 on July 31, 2016, 2015 and 2014 and the exercise price of the option, respectively. Aggregate intrinsic value for exercised options represents the difference between the Company’s stock price at date of exercise and the exercise price. |
Fiscal years ended July 31, | |||||
2016 | 2015 | 2014 | |||
Expected life (in years) | 4.9 | 6.0 - 6.1 | 5.0 - 6.1 | ||
Risk-free interest rate | 1.5% | 1.7% - 1.9% | 1.5% - 2.0% | ||
Expected volatility | 38.8% | 39.4% - 45.1% | 41.3% - 46.2% | ||
Expected dividend yield | —% | —% | —% | ||
Weighted average fair value of options granted | $19.18 | $20.78 | $21.06 |
July 31, 2016 | July 31, 2015 | ||||
Exercise of stock options to purchase common stock | 1,158,572 | 1,822,062 | |||
Vesting of restricted stock units | 2,727,724 | 2,882,674 | |||
Shares available for grant under stock plans | 16,746,754 | 14,363,906 | |||
Total common stock reserved for issuance | 20,633,050 | 19,068,642 |
As of July 31, 2016 | ||||
(in thousands) | ||||
U.S. federal | $ | 18,820 | ||
California | 18,529 | |||
Total R&D credit carryforwards | $ | 37,349 |
July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Computer hardware | $ | 19,257 | $ | 15,099 | |||
Software | 5,066 | 4,867 | |||||
Furniture and fixtures | 3,492 | 3,065 | |||||
Leasehold improvements | 8,434 | 8,040 | |||||
Total property and equipment | 36,249 | 31,071 | |||||
Less accumulated depreciation | (23,294 | ) | (18,911 | ) | |||
Property and equipment, net | $ | 12,955 | $ | 12,160 |
(in thousands) | |||
Goodwill, July 31, 2014 | $ | 9,205 | |
Changes in carrying value | — | ||
Goodwill, July 31, 2015 | $ | 9,205 | |
Addition - EagleEye acquisition | 20,875 | ||
Goodwill, July 31, 2016 | $ | 30,080 |
July 31, 2016 | July 31, 2015 | ||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Cost | Accumulated Amortization | Net Book Value | Cost | Accumulated Amortization | Net Book Value | ||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||
Acquired technology | $ | 13,900 | $ | 5,199 | 8,701 | $ | 7,200 | 3,201 | $ | 3,999 | |||||||||||||
Customer contracts and related relationships | $ | 4,500 | $ | 167 | 4,333 | — | — | — | |||||||||||||||
Partner relationships | $ | 200 | $ | 8 | 192 | — | — | — | |||||||||||||||
Order backlog | $ | 1,100 | $ | 122 | 978 | — | — | — | |||||||||||||||
Total | $ | 19,700 | $ | 5,496 | $ | 14,204 | $ | 7,200 | $ | 3,201 | $ | 3,999 |
Future Amortization | ||||
(in thousands) | ||||
2017 | $ | 4,004 | ||
2018 | 3,682 | |||
2019 | 2,442 | |||
2020 | 1,639 | |||
2021 | 522 | |||
Thereafter | 1,915 | |||
Total | $ | 14,204 |
July 31, 2016 | July 31, 2015 | ||||||
(in thousands) | |||||||
Accrued bonuses | $ | 24,872 | $ | 19,819 | |||
Accrued commission | 2,571 | 5,008 | |||||
Accrued vacation | 9,067 | 7,980 | |||||
Accrued salaries, payroll taxes and benefits | 4,757 | 4,428 | |||||
Total | $ | 41,267 | $ | 37,235 |
Foreign Currency Items | Unrealized gain (loss) on available-for-sale securities | Total | |||||||||
(In thousands) | |||||||||||
Balance as of July 31, 2014 | $ | (1,310 | ) | $ | (57 | ) | $ | (1,367 | ) | ||
Other comprehensive income (loss) before reclassification adjustments: | (4,937 | ) | (121 | ) | (5,058 | ) | |||||
Amounts reclassified from accumulated other comprehensive income (loss) to earnings | — | 44 | 44 | ||||||||
Tax effect | — | 38 | 38 | ||||||||
Balance as of July 31, 2015 | (6,247 | ) | (96 | ) | (6,343 | ) | |||||
Other comprehensive income (loss) before reclassification adjustments: | (562 | ) | 475 | (87 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) to earnings | — | 24 | 24 | ||||||||
Tax effect | — | (187 | ) | (187 | ) | ||||||
Balance as of July 31, 2016 | $ | (6,809 | ) | $ | 216 | $ | (6,593 | ) | |||