July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Accrued bonuses | $ | 31,273 | $ | 26,581 | |||
Accrued commission | 7,287 | 5,228 | |||||
Accrued vacation | 13,132 | 10,873 | |||||
Accrued salaries, payroll taxes and benefits | 8,443 | 6,200 | |||||
Total | $ | 60,135 | $ | 48,882 |
July 31, 2018 | July 31, 2017 | ||||
Exercise of stock options to purchase common stock | 537,064 | 555,636 | |||
Vesting of restricted stock units | 2,932,155 | 2,634,085 | |||
Shares available for grant under stock plans | 21,592,494 | 18,453,674 | |||
Total common stock reserved for issuance | 25,061,713 | 21,643,395 |
Computer hardware | 3 years | |
Purchased software | 3 years | |
Furniture and fixtures | 3 years | |
Leasehold improvements | Shorter of the lease term or estimated useful life |
Fiscal years ended July 31, | |||||
2018 | 2017 | 2016 | |||
Expected term (in years) | 2.88 | 2.66 - 2.88 | * | ||
Risk-free interest rate | 1.44% | 0.89% - 1.34% | * | ||
Expected volatility of the Company | 28% | 30.2% - 31.5% | * | ||
Average expected volatility of the peer companies in the S&P Index | 34.7% | 36.9% - 37.0% | * | ||
Expected dividend yield | —% | —% | * |
Fiscal years ended July 31, | |||||||
2018 | 2017 | ||||||
Pro forma revenue | $ | 665,999 | $ | 524,102 | |||
Pro forma net loss | $ | (22,618 | ) | $ | (9,891 | ) | |
Pro forma net loss per share -- basic and diluted | $ | (0.29 | ) | $ | (0.13 | ) |
Cash consideration paid at close | $ | 146,651 | |
Equity issued to shareholders | 102,493 | ||
Issuance of replacement awards | 11,205 | ||
Total preliminary purchase consideration | $ | 260,349 |
Preliminary Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 9,620 | ||||
Developed technology | 28,400 | 5 | ||||
Customer contracts and related relationships | 17,700 | 5 | ||||
Order backlog | 3,200 | 2 | ||||
Trademarks | 2,500 | 7 | ||||
Goodwill | 198,929 | |||||
Total preliminary purchase consideration | $ | 260,349 |
Fiscal years ended July 31, | |||||||
2018 | 2017 | ||||||
Pro forma revenue | $ | 665,999 | $ | 524,102 | |||
Pro forma net loss | $ | (22,618 | ) | $ | (9,891 | ) | |
Pro forma net loss per share -- basic and diluted | $ | (0.29 | ) | $ | (0.13 | ) |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 4,530 | ||||
Developed technology | 43,300 | 4 | ||||
Customer contracts and related relationships | 7,000 | 9 | ||||
Order backlog | 3,500 | 4 | ||||
Deferred tax assets | 171 | |||||
Goodwill | 96,431 | |||||
Total preliminary purchase price | $ | 154,932 |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 2,518 | ||||
Developed technology | 8,000 | 5 | ||||
Customer contracts and related relationships | 6,500 | 9 | ||||
Order backlog | 900 | 3 | ||||
Deferred tax assets, net | 4,406 | |||||
Goodwill | 15,434 | |||||
Total purchase price | $ | 37,758 |
Lease Obligations (1) | Royalty Obligations (2) | Purchase Commitments (3) | Long-Term Debt (4) | Total | |||||||||||||||
Fiscal Year Ending July 31, | (in thousands) | ||||||||||||||||||
2019 | $ | 10,718 | $ | 1,761 | $ | 60,298 | $ | 5,028 | $ | 77,805 | |||||||||
2020 | 10,713 | 698 | 8,181 | 5,000 | 24,592 | ||||||||||||||
2021 | 14,615 | 101 | 1,368 | 5,000 | 21,084 | ||||||||||||||
2022 | 13,295 | — | 253 | 5,000 | 18,548 | ||||||||||||||
2023 | 12,507 | — | — | 5,000 | 17,507 | ||||||||||||||
2024 and thereafter | 85,156 | — | — | 410,000 | 495,156 | ||||||||||||||
Total | $ | 147,004 | $ | 2,560 | $ | 70,100 | $ | 435,028 | $ | 654,692 |
(1) | Operating lease agreements primarily represent our obligations to make payments under our non-cancellable lease agreements for our corporate headquarters and worldwide offices through 2028. |
(2) | Royalty obligations primarily represent our obligations under our non-cancellable agreements related to software used in certain revenue-generating agreements. |
(3) | Purchase commitments consist of agreements to purchase services, entered into in the ordinary course of business. These represent commitments for which a penalty could be imposed if the agreement was canceled for any reason other than an event of default as described by the agreement. |
(4) | Long-term debt consists of principal and interest payments on the Company’s Convertible Senior Notes. The $400 million in principal will be due in March 2025. |
July 31, 2018 | July 31, 2017 | ||||||
Deferred revenue, current: | (in thousands) | ||||||
Deferred license and other revenue | $ | 42,235 | $ | 21,018 | |||
Deferred maintenance revenue | 52,010 | 46,562 | |||||
Deferred services revenue | 19,893 | 23,663 | |||||
Total deferred revenue, current | $ | 114,138 | $ | 91,243 | |||
Deferred revenue, non-current | 23,758 | 19,892 | |||||
Total | $ | 137,896 | $ | 111,135 |
Lease Obligations (1) | Royalty Obligations (2) | Purchase Commitments (3) | Long-Term Debt (4) | Total | |||||||||||||||
Fiscal Year Ending July 31, | (in thousands) | ||||||||||||||||||
2019 | $ | 10,718 | $ | 1,761 | $ | 60,298 | $ | 5,028 | $ | 77,805 | |||||||||
2020 | 10,713 | 698 | 8,181 | 5,000 | 24,592 | ||||||||||||||
2021 | 14,615 | 101 | 1,368 | 5,000 | 21,084 | ||||||||||||||
2022 | 13,295 | — | 253 | 5,000 | 18,548 | ||||||||||||||
2023 | 12,507 | — | — | 5,000 | 17,507 | ||||||||||||||
2024 and thereafter | 85,156 | — | — | 410,000 | 495,156 | ||||||||||||||
Total | $ | 147,004 | $ | 2,560 | $ | 70,100 | $ | 435,028 | $ | 654,692 |
(1) | Operating lease agreements primarily represent our obligations to make payments under our non-cancellable lease agreements for our corporate headquarters and worldwide offices through 2028. |
(2) | Royalty obligations primarily represent our obligations under our non-cancellable agreements related to software used in certain revenue-generating agreements. |
(3) | Purchase commitments consist of agreements to purchase services, entered into in the ordinary course of business. These represent commitments for which a penalty could be imposed if the agreement was canceled for any reason other than an event of default as described by the agreement |
July 31, 2018 | |||
(in thousands) | |||
Principal | $ | 400,000 | |
Less: unamortized debt discount and issuance costs | |||
Unamortized debt discount | 85,343 | ||
Debt issuance cost | 9,529 | ||
Net carrying amount | $ | 305,128 |
Fiscal Year Ended July 31, 2018 | |||
(in thousands) | |||
Contractual interest expense | $ | 1,903 | |
Amortization of debt discount | 4,134 | ||
Amortization of debt issuance costs | 378 | ||
Total | $ | 6,415 | |
Effective interest rate of the liability component | 5.53 | % |
July 31, 2018 | |||
(in thousands) | |||
Principal | $ | 400,000 | |
Less: unamortized debt discount and issuance costs | |||
Unamortized debt discount | 85,343 | ||
Debt issuance cost | 9,529 | ||
Net carrying amount | $ | 305,128 |
Fiscal Year Ended July 31, 2018 | |||
(in thousands) | |||
Contractual interest expense | $ | 1,903 | |
Amortization of debt discount | 4,134 | ||
Amortization of debt issuance costs | 378 | ||
Total | $ | 6,415 | |
Effective interest rate of the liability component | 5.53 | % |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands, except share and per share amounts) | |||||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (19,665 | ) | $ | 21,224 | $ | 14,976 | ||||
Net income (loss) per share: | |||||||||||
Basic | $ | (0.25 | ) | $ | 0.29 | $ | 0.21 | ||||
Diluted | $ | (0.25 | ) | $ | 0.28 | $ | 0.20 | ||||
Denominator: | |||||||||||
Weighted average shares used in computing net income (loss) per share: | |||||||||||
Basic | 77,709,592 | 73,994,577 | 72,026,694 | ||||||||
Weighted average effect of dilutive stock options | — | 544,520 | 859,855 | ||||||||
Weighted average effect of dilutive Stock Awards | — | 789,246 | 879,411 | ||||||||
Diluted | 77,709,592 | 75,328,343 | 73,765,960 |
Fiscal years ended July 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Stock options to purchase common stock | 597,476 | 24,128 | 77,737 | |||||
Restricted Stock Awards | 3,161,157 | 88,582 | 22,994 |
July 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 269,654 | $ | — | $ | 269,654 | |||||||
Corporate bonds | — | 3,001 | — | 3,001 | |||||||||||
Money market funds | 90,766 | — | — | 90,766 | |||||||||||
Total Cash equivalents | 90,766 | 272,655 | — | 363,421 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. Government agency securities | — | 1,999 | — | 1,999 | |||||||||||
Commercial paper | — | 195,376 | — | 195,376 | |||||||||||
U.S. Government bonds | — | 89,931 | — | 89,931 | |||||||||||
Foreign government bonds | — | 4,448 | — | 4,448 | |||||||||||
Corporate bonds | — | 277,248 | — | 277,248 | |||||||||||
Certificate of deposit | — | 61,006 | — | 61,006 | |||||||||||
Total Short-term investments | — | 630,008 | — | 630,008 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. Government agency securities | — | 6,974 | — | 6,974 | |||||||||||
Certificate of deposit | — | 21,024 | — | 21,024 | |||||||||||
Corporate bonds | — | 151,291 | — | 151,291 | |||||||||||
Commercial paper | — | 6,799 | — | 6,799 | |||||||||||
Foreign government bonds | — | 4,864 | — | 4,864 | |||||||||||
Total Long-term investments | — | 190,952 | — | 190,952 | |||||||||||
Total | $ | 90,766 | $ | 1,093,615 | $ | — | $ | 1,184,381 |
July 31, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 98,174 | $ | — | $ | 98,174 | |||||||
Money market funds | 96,313 | — | — | 96,313 | |||||||||||
Total Cash equivalents | 96,313 | 98,174 | — | 194,487 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. Government agency securities | — | 20,583 | — | 20,583 | |||||||||||
Commercial paper | — | 49,165 | — | 49,165 | |||||||||||
U. S. Government bonds | — | 47,105 | — | 47,105 | |||||||||||
Foreign government bonds | — | — | — | — | |||||||||||
Corporate bonds | — | 170,654 | — | 170,654 | |||||||||||
Certificate of deposit | — | 22,520 | — | 22,520 | |||||||||||
Total Short-term investments | — | 310,027 | — | 310,027 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. Government agency securities | — | 2,013 | — | 2,013 | |||||||||||
Certificate of deposit | — | 5,007 | — | 5,007 | |||||||||||
Corporate bonds | — | 87,691 | — | 87,691 | |||||||||||
U.S. Government bonds | — | 19,874 | — | 19,874 | |||||||||||
Foreign government bonds | — | — | — | — | |||||||||||
Total Long-term investments | — | 114,585 | — | 114,585 | |||||||||||
Total | $ | 96,313 | $ | 522,786 | $ | — | $ | 619,099 |
July 31, 2018 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. Government agency securities | $ | 9,000 | $ | — | $ | (27 | ) | $ | 8,973 | ||||||
Commercial paper | 471,966 | 4 | (141 | ) | 471,829 | ||||||||||
Corporate bonds | 432,234 | 69 | (763 | ) | 431,540 | ||||||||||
U.S. Government bonds | 89,986 | — | (55 | ) | 89,931 | ||||||||||
Foreign government bonds | 9,306 | 7 | (1 | ) | 9,312 | ||||||||||
Certificate of deposit | 81,985 | 53 | (8 | ) | 82,030 | ||||||||||
Money market funds | 90,766 | — | — | 90,766 | |||||||||||
Total | $ | 1,185,243 | $ | 133 | $ | (995 | ) | $ | 1,184,381 |
July 31, 2017 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. Government agency securities | $ | 22,662 | $ | — | $ | (66 | ) | $ | 22,596 | ||||||
Commercial paper | 147,371 | 2 | (34 | ) | 147,339 | ||||||||||
Corporate bonds | 258,334 | 157 | (146 | ) | 258,345 | ||||||||||
U.S. Government bonds | 67,164 | — | (185 | ) | 66,979 | ||||||||||
Certificate of deposit | 27,498 | 29 | — | 27,527 | |||||||||||
Money market funds | 96,313 | — | — | 96,313 | |||||||||||
Total | $ | 619,342 | $ | 188 | $ | (431 | ) | $ | 619,099 |
July 31, 2018 | |||||||||||||||||||||||
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. Government agency securities | $ | 6,974 | $ | (24 | ) | $ | 1,999 | $ | (3 | ) | $ | 8,973 | $ | (27 | ) | ||||||||
Commercial paper | 144,342 | (141 | ) | — | — | 144,342 | (141 | ) | |||||||||||||||
Corporate bonds | 307,590 | (755 | ) | 13,497 | (8 | ) | 321,087 | (763 | ) | ||||||||||||||
U. S. Government bonds | 65,013 | (11 | ) | 19,948 | (44 | ) | 84,961 | (55 | ) | ||||||||||||||
Foreign government bonds | 766 | (1 | ) | — | — | 766 | (1 | ) | |||||||||||||||
Certificate of deposit | 23,734 | (8 | ) | — | — | 23,734 | (8 | ) | |||||||||||||||
Total | $ | 548,419 | $ | (940 | ) | $ | 35,444 | $ | (55 | ) | $ | 583,863 | $ | (995 | ) |
July 31, 2018 | |||||||||||
Less Than 12 Months | 12 to 24 Months | Total | |||||||||
(in thousands) | |||||||||||
U.S. Government agency securities | $ | 1,999 | $ | 6,974 | $ | 8,973 | |||||
Commercial paper | 465,030 | 6,799 | 471,829 | ||||||||
Corporate bonds | 280,249 | 151,291 | 431,540 | ||||||||
U.S. Government bonds | 89,931 | — | 89,931 | ||||||||
Foreign government bonds | 4,448 | 4,864 | 9,312 | ||||||||
Certificate of deposit | 61,006 | 21,024 | 82,030 | ||||||||
Money market funds | 90,766 | — | 90,766 | ||||||||
Total | $ | 993,429 | $ | 190,952 | $ | 1,184,381 |
July 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 269,654 | $ | — | $ | 269,654 | |||||||
Corporate bonds | — | 3,001 | — | 3,001 | |||||||||||
Money market funds | 90,766 | — | — | 90,766 | |||||||||||
Total Cash equivalents | 90,766 | 272,655 | — | 363,421 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. Government agency securities | — | 1,999 | — | 1,999 | |||||||||||
Commercial paper | — | 195,376 | — | 195,376 | |||||||||||
U.S. Government bonds | — | 89,931 | — | 89,931 | |||||||||||
Foreign government bonds | — | 4,448 | — | 4,448 | |||||||||||
Corporate bonds | — | 277,248 | — | 277,248 | |||||||||||
Certificate of deposit | — | 61,006 | — | 61,006 | |||||||||||
Total Short-term investments | — | 630,008 | — | 630,008 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. Government agency securities | — | 6,974 | — | 6,974 | |||||||||||
Certificate of deposit | — | 21,024 | — | 21,024 | |||||||||||
Corporate bonds | — | 151,291 | — | 151,291 | |||||||||||
Commercial paper | — | 6,799 | — | 6,799 | |||||||||||
Foreign government bonds | — | 4,864 | — | 4,864 | |||||||||||
Total Long-term investments | — | 190,952 | — | 190,952 | |||||||||||
Total | $ | 90,766 | $ | 1,093,615 | $ | — | $ | 1,184,381 |
July 31, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in thousands) | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Commercial paper | $ | — | $ | 98,174 | $ | — | $ | 98,174 | |||||||
Money market funds | 96,313 | — | — | 96,313 | |||||||||||
Total Cash equivalents | 96,313 | 98,174 | — | 194,487 | |||||||||||
Short-term investments: | |||||||||||||||
U.S. Government agency securities | — | 20,583 | — | 20,583 | |||||||||||
Commercial paper | — | 49,165 | — | 49,165 | |||||||||||
U. S. Government bonds | — | 47,105 | — | 47,105 | |||||||||||
Foreign government bonds | — | — | — | — | |||||||||||
Corporate bonds | — | 170,654 | — | 170,654 | |||||||||||
Certificate of deposit | — | 22,520 | — | 22,520 | |||||||||||
Total Short-term investments | — | 310,027 | — | 310,027 | |||||||||||
Long-term investments: | |||||||||||||||
U.S. Government agency securities | — | 2,013 | — | 2,013 | |||||||||||
Certificate of deposit | — | 5,007 | — | 5,007 | |||||||||||
Corporate bonds | — | 87,691 | — | 87,691 | |||||||||||
U.S. Government bonds | — | 19,874 | — | 19,874 | |||||||||||
Foreign government bonds | — | — | — | — | |||||||||||
Total Long-term investments | — | 114,585 | — | 114,585 | |||||||||||
Total | $ | 96,313 | $ | 522,786 | $ | — | $ | 619,099 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Domestic | $ | (5,207 | ) | $ | 26,474 | $ | 11,209 | ||||
International | 5,225 | 6,803 | 9,573 | ||||||||
Income before provision for income taxes | $ | 18 | $ | 33,277 | $ | 20,782 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
U.S. Federal | $ | 2,047 | $ | 7,793 | $ | 4,936 | |||||
State | 249 | 1,974 | 1,006 | ||||||||
Foreign | 2,203 | 3,595 | 4,350 | ||||||||
Total current | 4,499 | 13,362 | 10,292 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 16,820 | (686 | ) | (4,867 | ) | ||||||
State | (1,328 | ) | (429 | ) | 631 | ||||||
Foreign | (308 | ) | (194 | ) | (250 | ) | |||||
Total deferred | 15,184 | (1,309 | ) | (4,486 | ) | ||||||
Total provision for income taxes | $ | 19,683 | $ | 12,053 | $ | 5,806 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Statutory Federal income tax | $ | 5 | $ | 11,647 | $ | 7,274 | |||||
State taxes, net of Federal benefit | (859 | ) | 900 | 1,261 | |||||||
Share-based compensation | (8,715 | ) | 2,517 | 2,670 | |||||||
Non-deductible officers' compensation | 3,229 | 959 | — | ||||||||
Foreign income taxed at different rates | 1,022 | (819 | ) | (1,190 | ) | ||||||
Research tax credits | (5,822 | ) | (2,377 | ) | (3,827 | ) | |||||
Re-measurement of U.S. deferred taxes | 34,979 | — | — | ||||||||
Non-deductible acquisition costs | 1,270 | 270 | 354 | ||||||||
Domestic production activity deduction | — | (1,514 | ) | (1,189 | ) | ||||||
Permanent differences and others | 666 | 470 | 453 | ||||||||
Change in valuation allowance | (6,092 | ) | — | — | |||||||
Total provision for income taxes | $ | 19,683 | $ | 12,053 | $ | 5,806 |
As of July 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Accruals and reserves | $ | 12,129 | $ | 11,612 | |||
Stock-based compensation | 7,658 | 8,519 | |||||
Deferred revenue | 3,688 | 3,848 | |||||
Property and equipment | 1,268 | 1,189 | |||||
Net operating loss carryforwards | 53,885 | 16,720 | |||||
Tax credits | 60,450 | 11,919 | |||||
Total deferred tax assets | 139,078 | 53,807 | |||||
Less valuation allowance | 28,310 | 12,583 | |||||
Net deferred tax assets | 110,768 | 41,224 | |||||
Less deferred tax liabilities: | |||||||
Intangible assets | 11,461 | 3,794 | |||||
Convertible debt | 11,567 | — | |||||
Unremitted foreign earnings | 258 | — | |||||
Total deferred tax liabilities | 23,286 | 3,794 | |||||
Deferred tax assets, net | 87,482 | 37,430 | |||||
Less foreign deferred revenue | 69 | — | |||||
Total net deferred tax assets | $ | 87,413 | $ | 37,430 |
U.S. Federal | $ | 33,074 | ||
California | 28,531 | |||
Total R&D credit carryforwards | $ | 61,605 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Unrecognized tax benefit - beginning of period | $ | 9,346 | $ | 7,687 | $ | 6,109 | |||||
Gross increases - prior period tax positions | 729 | 712 | 177 | ||||||||
Gross decreases - prior period tax positions | (878 | ) | (691 | ) | (216 | ) | |||||
Gross increases - current period tax positions | 1,124 | 1,638 | 1,617 | ||||||||
Unrecognized tax benefit - end of period | $ | 10,321 | $ | 9,346 | $ | 7,687 |
July 31, 2018 | |||||||||||
Less Than 12 Months | 12 to 24 Months | Total | |||||||||
(in thousands) | |||||||||||
U.S. Government agency securities | $ | 1,999 | $ | 6,974 | $ | 8,973 | |||||
Commercial paper | 465,030 | 6,799 | 471,829 | ||||||||
Corporate bonds | 280,249 | 151,291 | 431,540 | ||||||||
U.S. Government bonds | 89,931 | — | 89,931 | ||||||||
Foreign government bonds | 4,448 | 4,864 | 9,312 | ||||||||
Certificate of deposit | 61,006 | 21,024 | 82,030 | ||||||||
Money market funds | 90,766 | — | 90,766 | ||||||||
Total | $ | 993,429 | $ | 190,952 | $ | 1,184,381 |
Computer hardware | 3 years | |
Purchased 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, cloud-based subscriptions (also referred to as “subscriptions”), and perpetual software licenses; |
(ii) | Maintenance fees associated with term or perpetual licenses relate 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 from professional services relate to implementation of the Company’s software, reimbursable travel, and training provided to our customers. |
• | 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 advance in annual or quarterly installments over the term of the agreement beginning on the effective date of the license and represent extended payment terms. A significant majority are invoiced annually. As a result, term license fees are not considered to be fixed and determinable until they become due or payment is received. Perpetual license fees are generally due between 30 and 60 days from delivery of software. We offer extended payment terms in limited cases. |
• | Collectability is probable or reasonably assured. 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, revenue is deferred until collection becomes probable or reasonably assured, or cash is collected, assuming all other revenue recognition criteria are satisfied. |
Computer hardware | 3 years | |
Purchased software | 3 years | |
Furniture and fixtures | 3 years | |
Leasehold improvements | Shorter of the lease term or estimated useful life |
July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Computer hardware | $ | 24,879 | $ | 21,408 | |||
Purchased software | 4,664 | 3,855 | |||||
Capitalized software development costs | 3,978 | 1,065 | |||||
Furniture and fixtures | 4,217 | 3,253 | |||||
Leasehold improvements | 10,751 | 8,251 | |||||
Total property and equipment | 48,489 | 37,832 | |||||
Less accumulated depreciation | (29,894 | ) | (23,456 | ) | |||
Property and equipment, net | $ | 18,595 | $ | 14,376 |
(i) | License fees, related to term (or time-based) licenses, cloud-based subscriptions (also referred to as “subscriptions”), and perpetual software licenses; |
(ii) | Maintenance fees associated with term or perpetual licenses relate 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 from professional services relate to implementation of the Company’s software, reimbursable travel, and training provided to our customers. |
• | 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 advance in annual or quarterly installments over the term of the agreement beginning on the effective date of the license and represent extended payment terms. A significant majority are invoiced annually. As a result, term license fees are not considered to be fixed and determinable until they become due or payment is received. Perpetual license fees are generally due between 30 and 60 days from delivery of software. We offer extended payment terms in limited cases. |
• | Collectability is probable or reasonably assured. 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, revenue is deferred until collection becomes probable or reasonably assured, 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, 2016 | $ | (6,809 | ) | $ | 216 | $ | (6,593 | ) | |||
Foreign currency translation adjustments | 1,179 | (465 | ) | 714 | |||||||
Unrealized loss on available-for-sale securities | — | (151 | ) | (151 | ) | ||||||
Tax effect | — | 234 | 234 | ||||||||
Balance as of July 31, 2017 | (5,630 | ) | (166 | ) | (5,796 | ) | |||||
Foreign currency translation adjustments | (1,567 | ) | (596 | ) | (2,163 | ) | |||||
Unrealized loss on available-for-sale securities | — | (22 | ) | (22 | ) | ||||||
Tax effect | — | 233 | 233 | ||||||||
Balance as of July 31, 2018 | $ | (7,197 | ) | $ | (551 | ) | $ | (7,748 | ) | ||
Fiscal years ended July 31, | ||||||||
2018 | 2017 | 2016 | ||||||
Stock options to purchase common stock | 597,476 | 24,128 | 77,737 | |||||
Restricted Stock Awards | 3,161,157 | 88,582 | 22,994 |
July 31, 2018 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. Government agency securities | $ | 9,000 | $ | — | $ | (27 | ) | $ | 8,973 | ||||||
Commercial paper | 471,966 | 4 | (141 | ) | 471,829 | ||||||||||
Corporate bonds | 432,234 | 69 | (763 | ) | 431,540 | ||||||||||
U.S. Government bonds | 89,986 | — | (55 | ) | 89,931 | ||||||||||
Foreign government bonds | 9,306 | 7 | (1 | ) | 9,312 | ||||||||||
Certificate of deposit | 81,985 | 53 | (8 | ) | 82,030 | ||||||||||
Money market funds | 90,766 | — | — | 90,766 | |||||||||||
Total | $ | 1,185,243 | $ | 133 | $ | (995 | ) | $ | 1,184,381 |
July 31, 2017 | |||||||||||||||
Amortized Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
U.S. Government agency securities | $ | 22,662 | $ | — | $ | (66 | ) | $ | 22,596 | ||||||
Commercial paper | 147,371 | 2 | (34 | ) | 147,339 | ||||||||||
Corporate bonds | 258,334 | 157 | (146 | ) | 258,345 | ||||||||||
U.S. Government bonds | 67,164 | — | (185 | ) | 66,979 | ||||||||||
Certificate of deposit | 27,498 | 29 | — | 27,527 | |||||||||||
Money market funds | 96,313 | — | — | 96,313 | |||||||||||
Total | $ | 619,342 | $ | 188 | $ | (431 | ) | $ | 619,099 |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 2,518 | ||||
Developed technology | 8,000 | 5 | ||||
Customer contracts and related relationships | 6,500 | 9 | ||||
Order backlog | 900 | 3 | ||||
Deferred tax assets, net | 4,406 | |||||
Goodwill | 15,434 | |||||
Total purchase price | $ | 37,758 |
Cash consideration paid at close | $ | 146,651 | |
Equity issued to shareholders | 102,493 | ||
Issuance of replacement awards | 11,205 | ||
Total preliminary purchase consideration | $ | 260,349 |
Preliminary Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 9,620 | ||||
Developed technology | 28,400 | 5 | ||||
Customer contracts and related relationships | 17,700 | 5 | ||||
Order backlog | 3,200 | 2 | ||||
Trademarks | 2,500 | 7 | ||||
Goodwill | 198,929 | |||||
Total preliminary purchase consideration | $ | 260,349 |
Total Purchase Price Allocation | Estimated Useful Lives | |||||
(in thousands) | (in years) | |||||
Acquired assets, net of assumed liabilities | $ | 4,530 | ||||
Developed technology | 43,300 | 4 | ||||
Customer contracts and related relationships | 7,000 | 9 | ||||
Order backlog | 3,500 | 4 | ||||
Deferred tax assets | 171 | |||||
Goodwill | 96,431 | |||||
Total preliminary purchase price | $ | 154,932 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
U.S. Federal | $ | 2,047 | $ | 7,793 | $ | 4,936 | |||||
State | 249 | 1,974 | 1,006 | ||||||||
Foreign | 2,203 | 3,595 | 4,350 | ||||||||
Total current | 4,499 | 13,362 | 10,292 | ||||||||
Deferred: | |||||||||||
U.S. Federal | 16,820 | (686 | ) | (4,867 | ) | ||||||
State | (1,328 | ) | (429 | ) | 631 | ||||||
Foreign | (308 | ) | (194 | ) | (250 | ) | |||||
Total deferred | 15,184 | (1,309 | ) | (4,486 | ) | ||||||
Total provision for income taxes | $ | 19,683 | $ | 12,053 | $ | 5,806 |
Allowance for Doubtful Accounts as of July 31, 2017 | $ | — | ||
Charges to bad debt and revenue reserves | 1,062 | |||
Write-offs, net | — | |||
Allowance for Doubtful Accounts as of July 31, 2018 | $ | 1,062 |
As of July 31, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Accruals and reserves | $ | 12,129 | $ | 11,612 | |||
Stock-based compensation | 7,658 | 8,519 | |||||
Deferred revenue | 3,688 | 3,848 | |||||
Property and equipment | 1,268 | 1,189 | |||||
Net operating loss carryforwards | 53,885 | 16,720 | |||||
Tax credits | 60,450 | 11,919 | |||||
Total deferred tax assets | 139,078 | 53,807 | |||||
Less valuation allowance | 28,310 | 12,583 | |||||
Net deferred tax assets | 110,768 | 41,224 | |||||
Less deferred tax liabilities: | |||||||
Intangible assets | 11,461 | 3,794 | |||||
Convertible debt | 11,567 | — | |||||
Unremitted foreign earnings | 258 | — | |||||
Total deferred tax liabilities | 23,286 | 3,794 | |||||
Deferred tax assets, net | 87,482 | 37,430 | |||||
Less foreign deferred revenue | 69 | — | |||||
Total net deferred tax assets | $ | 87,413 | $ | 37,430 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands, except share and per share amounts) | |||||||||||
Numerator: | |||||||||||
Net income (loss) | $ | (19,665 | ) | $ | 21,224 | $ | 14,976 | ||||
Net income (loss) per share: | |||||||||||
Basic | $ | (0.25 | ) | $ | 0.29 | $ | 0.21 | ||||
Diluted | $ | (0.25 | ) | $ | 0.28 | $ | 0.20 | ||||
Denominator: | |||||||||||
Weighted average shares used in computing net income (loss) per share: | |||||||||||
Basic | 77,709,592 | 73,994,577 | 72,026,694 | ||||||||
Weighted average effect of dilutive stock options | — | 544,520 | 859,855 | ||||||||
Weighted average effect of dilutive Stock Awards | — | 789,246 | 879,411 | ||||||||
Diluted | 77,709,592 | 75,328,343 | 73,765,960 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Statutory Federal income tax | $ | 5 | $ | 11,647 | $ | 7,274 | |||||
State taxes, net of Federal benefit | (859 | ) | 900 | 1,261 | |||||||
Share-based compensation | (8,715 | ) | 2,517 | 2,670 | |||||||
Non-deductible officers' compensation | 3,229 | 959 | — | ||||||||
Foreign income taxed at different rates | 1,022 | (819 | ) | (1,190 | ) | ||||||
Research tax credits | (5,822 | ) | (2,377 | ) | (3,827 | ) | |||||
Re-measurement of U.S. deferred taxes | 34,979 | — | — | ||||||||
Non-deductible acquisition costs | 1,270 | 270 | 354 | ||||||||
Domestic production activity deduction | — | (1,514 | ) | (1,189 | ) | ||||||
Permanent differences and others | 666 | 470 | 453 | ||||||||
Change in valuation allowance | (6,092 | ) | — | — | |||||||
Total provision for income taxes | $ | 19,683 | $ | 12,053 | $ | 5,806 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Total stock-based compensation | $ | 89,176 | $ | 72,695 | $ | 66,409 | |||||
Net impact of deferred stock-based compensation | 438 | (901 | ) | (278 | ) | ||||||
Total stock-based compensation expense | $ | 89,614 | $ | 71,794 | $ | 66,131 | |||||
Stock-based compensation expense was charged to the following categories: | |||||||||||
Cost of license and other revenue | $ | 1,002 | $ | 373 | $ | 433 | |||||
Cost of maintenance revenue | 1,886 | 1,694 | 1,491 | ||||||||
Cost of services revenue | 21,856 | 18,622 | 17,878 | ||||||||
Research and development | 25,440 | 18,123 | 15,555 | ||||||||
Sales and marketing | 18,387 | 16,663 | 15,090 | ||||||||
General and administrative | 21,043 | 16,319 | 15,684 | ||||||||
Total stock-based compensation expense | 89,614 | 71,794 | 66,131 | ||||||||
Tax benefit from stock-based compensation | 24,481 | 23,014 | 20,092 | ||||||||
Total stock-based compensation expense, net of tax effect | $ | 65,133 | $ | 48,780 | $ | 46,039 |
July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Americas | $ | 449,588 | $ | 224,667 | |||
EMEA | 5,491 | 2,747 | |||||
APAC | 47 | 128 | |||||
Total | $ | 455,126 | $ | 227,542 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Domestic | $ | (5,207 | ) | $ | 26,474 | $ | 11,209 | ||||
International | 5,225 | 6,803 | 9,573 | ||||||||
Income before provision for income taxes | $ | 18 | $ | 33,277 | $ | 20,782 |
Goodwill - July 31, 2016 | $ | 30,080 | ||
FirstBest Acquisition | 15,434 | |||
ISCS Acquisition | 96,337 | |||
Goodwill - July 31, 2017 | $ | 141,851 | ||
Cyence Acquisition | 198,929 | |||
Changes in carrying value | 97 | |||
Goodwill - July 31, 2018 | $ | 340,877 |
July 31, 2018 | July 31, 2017 | ||||||||||||||||||||||
Cost | Accumulated Amortization | Net Book Value | Cost | Accumulated Amortization | Net Book Value | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Acquired technology | $ | 93,600 | $ | 34,189 | 59,411 | $ | 65,200 | $ | 14,710 | $ | 50,490 | ||||||||||||
Customer contracts and related relationships | 35,700 | 6,633 | 29,067 | 18,000 | 1,683 | 16,317 | |||||||||||||||||
Partner relationships | 200 | 52 | 148 | 200 | 30 | 170 | |||||||||||||||||
Trademarks | 2,500 | 268 | 2,232 | — | — | — | |||||||||||||||||
Order backlog | 8,700 | 3,904 | 4,796 | 5,500 | 1,162 | 4,338 | |||||||||||||||||
Total | $ | 140,700 | $ | 45,046 | $ | 95,654 | $ | 88,900 | $ | 17,585 | $ | 71,315 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
United States | $ | 416,961 | $ | 301,155 | $ | 230,935 | |||||
Canada | 45,591 | 50,981 | 44,717 | ||||||||
Other Americas | 20,571 | 19,447 | 18,114 | ||||||||
Total Americas | 483,123 | 371,583 | 293,766 | ||||||||
United Kingdom | 36,653 | 32,554 | 34,031 | ||||||||
Other EMEA | 79,197 | 48,727 | 41,914 | ||||||||
Total EMEA | 115,850 | 81,281 | 75,945 | ||||||||
Total APAC | 62,094 | 61,420 | 54,735 | ||||||||
Total revenue | $ | 661,067 | $ | 514,284 | $ | 424,446 |
Stock Awards Outstanding | ||||||||||
Number of Stock Awards | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value (1) | ||||||||
(in thousands) | ||||||||||
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 | ||||||
Granted | 1,542,235 | 61.22 | ||||||||
Released | (1,372,770 | ) | 49.38 | $ | 81,427 | |||||
Canceled | (263,104 | ) | 53.53 | |||||||
Balance as of July 31, 2017 | 2,634,085 | 56.62 | $ | 190,076 | ||||||
Granted | 1,814,084 | 79.65 | ||||||||
Released | (1,260,758 | ) | 56.92 | $ | 103,957 | |||||
Canceled | (255,256 | ) | 63.66 | |||||||
Balance as of July 31, 2018 | 2,932,155 | $ | 69.43 | $ | 252,752 | |||||
Expected to vest as of July 31, 2018 | 2,932,155 | $ | 69.43 | $ | 252,752 |
(1) | Aggregate intrinsic value at each fiscal year end represents the total market value of Stock Awards at the Company’s closing stock price of $86.20, $72.16 and $61.47 on July 31, 2018, 2017 and 2016, respectively. Aggregate intrinsic value for released Stock Awards represents the total market value of released Stock Awards 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, 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 | |||||||
Granted | — | — | ||||||||||
Exercised | (594,936 | ) | 9.35 | $ | 30,636 | |||||||
Canceled | (8,000 | ) | 2.74 | |||||||||
Balance as of July 31, 2017 | 555,636 | 22.17 | 4.0 | $ | 27,777 | |||||||
Granted(2) | 137,057 | 10.23 | ||||||||||
Exercised | (150,924 | ) | 13.32 | $ | 10,710 | |||||||
Canceled | (4,705 | ) | 40.05 | |||||||||
Balance as of July 31, 2018 | 537,064 | $ | 21.45 | 4.3 | $ | 34,774 | ||||||
Vested and expected to vest as of July 31, 2018 | 537,064 | $ | 21.45 | 4.3 | $ | 34,774 | ||||||
Exercisable as of July 31, 2018 | 443,782 | $ | 23.04 | 3.5 | $ | 28,028 |
(1) | Aggregate intrinsic value at each fiscal year end represents the difference between the Company’s closing stock price of $86.20, $72.16 and $61.47 on July 31, 2018, 2017 and 2016 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. |
(2) | Represents options assumed through the Cyence acquisition on November 1, 2017. |
Fiscal years ended July 31, | |||||
2018 | 2017 | 2016 | |||
Expected life (in years) | 1.27 | * | 4.9 | ||
Risk-free interest rate | 1.48% | * | 1.5% | ||
Expected volatility | 24.12% | * | 38.8% | ||
Expected dividend yield | —% | * | —% | ||
Weighted average fair value of options granted | $67.90 | * | $19.18 |
July 31, 2018 | |||||||||||||||||||||||
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. Government agency securities | $ | 6,974 | $ | (24 | ) | $ | 1,999 | $ | (3 | ) | $ | 8,973 | $ | (27 | ) | ||||||||
Commercial paper | 144,342 | (141 | ) | — | — | 144,342 | (141 | ) | |||||||||||||||
Corporate bonds | 307,590 | (755 | ) | 13,497 | (8 | ) | 321,087 | (763 | ) | ||||||||||||||
U. S. Government bonds | 65,013 | (11 | ) | 19,948 | (44 | ) | 84,961 | (55 | ) | ||||||||||||||
Foreign government bonds | 766 | (1 | ) | — | — | 766 | (1 | ) | |||||||||||||||
Certificate of deposit | 23,734 | (8 | ) | — | — | 23,734 | (8 | ) | |||||||||||||||
Total | $ | 548,419 | $ | (940 | ) | $ | 35,444 | $ | (55 | ) | $ | 583,863 | $ | (995 | ) |
Unrecognized Expense | Weighted Average Expected Recognition Period | ||||
(in thousands) | (in years) | ||||
Stock Options | $ | 5,832 | 2.2 | ||
Stock Awards | 152,037 | 2.2 | |||
$ | 157,869 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Unrecognized tax benefit - beginning of period | $ | 9,346 | $ | 7,687 | $ | 6,109 | |||||
Gross increases - prior period tax positions | 729 | 712 | 177 | ||||||||
Gross decreases - prior period tax positions | (878 | ) | (691 | ) | (216 | ) | |||||
Gross increases - current period tax positions | 1,124 | 1,638 | 1,617 | ||||||||
Unrecognized tax benefit - end of period | $ | 10,321 | $ | 9,346 | $ | 7,687 |
Fiscal year ending July 31, | ||||
2019 | $ | 29,112 | ||
2020 | 26,834 | |||
2021 | 19,965 | |||
2022 | 11,143 | |||
2023 | 3,799 | |||
Thereafter | 4,801 | |||
Total future amortization expense | $ | 95,654 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
United States | $ | 416,961 | $ | 301,155 | $ | 230,935 | |||||
Canada | 45,591 | 50,981 | 44,717 | ||||||||
Other Americas | 20,571 | 19,447 | 18,114 | ||||||||
Total Americas | 483,123 | 371,583 | 293,766 | ||||||||
United Kingdom | 36,653 | 32,554 | 34,031 | ||||||||
Other EMEA | 79,197 | 48,727 | 41,914 | ||||||||
Total EMEA | 115,850 | 81,281 | 75,945 | ||||||||
Total APAC | 62,094 | 61,420 | 54,735 | ||||||||
Total revenue | $ | 661,067 | $ | 514,284 | $ | 424,446 |
July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Americas | $ | 449,588 | $ | 224,667 | |||
EMEA | 5,491 | 2,747 | |||||
APAC | 47 | 128 | |||||
Total | $ | 455,126 | $ | 227,542 |
Fiscal years ended July 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in thousands) | |||||||||||
Total stock-based compensation | $ | 89,176 | $ | 72,695 | $ | 66,409 | |||||
Net impact of deferred stock-based compensation | 438 | (901 | ) | (278 | ) | ||||||
Total stock-based compensation expense | $ | 89,614 | $ | 71,794 | $ | 66,131 | |||||
Stock-based compensation expense was charged to the following categories: | |||||||||||
Cost of license and other revenue | $ | 1,002 | $ | 373 | $ | 433 | |||||
Cost of maintenance revenue | 1,886 | 1,694 | 1,491 | ||||||||
Cost of services revenue | 21,856 | 18,622 | 17,878 | ||||||||
Research and development | 25,440 | 18,123 | 15,555 | ||||||||
Sales and marketing | 18,387 | 16,663 | 15,090 | ||||||||
General and administrative | 21,043 | 16,319 | 15,684 | ||||||||
Total stock-based compensation expense | 89,614 | 71,794 | 66,131 | ||||||||
Tax benefit from stock-based compensation | 24,481 | 23,014 | 20,092 | ||||||||
Total stock-based compensation expense, net of tax effect | $ | 65,133 | $ | 48,780 | $ | 46,039 |
Unrecognized Expense | Weighted Average Expected Recognition Period | ||||
(in thousands) | (in years) | ||||
Stock Options | $ | 5,832 | 2.2 | ||
Stock Awards | 152,037 | 2.2 | |||
$ | 157,869 |
Stock Awards Outstanding | ||||||||||
Number of Stock Awards | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value (1) | ||||||||
(in thousands) | ||||||||||
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 | ||||||
Granted | 1,542,235 | 61.22 | ||||||||
Released | (1,372,770 | ) | 49.38 | $ | 81,427 | |||||
Canceled | (263,104 | ) | 53.53 | |||||||
Balance as of July 31, 2017 | 2,634,085 | 56.62 | $ | 190,076 | ||||||
Granted | 1,814,084 | 79.65 | ||||||||
Released | (1,260,758 | ) | 56.92 | $ | 103,957 | |||||
Canceled | (255,256 | ) | 63.66 | |||||||
Balance as of July 31, 2018 | 2,932,155 | $ | 69.43 | $ | 252,752 | |||||
Expected to vest as of July 31, 2018 | 2,932,155 | $ | 69.43 | $ | 252,752 |
(1) | Aggregate intrinsic value at each fiscal year end represents the total market value of Stock Awards at the Company’s closing stock price of $86.20, $72.16 and $61.47 on July 31, 2018, 2017 and 2016, respectively. Aggregate intrinsic value for released Stock Awards represents the total market value of released Stock Awards 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, 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 | |||||||
Granted | — | — | ||||||||||
Exercised | (594,936 | ) | 9.35 | $ | 30,636 | |||||||
Canceled | (8,000 | ) | 2.74 | |||||||||
Balance as of July 31, 2017 | 555,636 | 22.17 | 4.0 | $ | 27,777 | |||||||
Granted(2) | 137,057 | 10.23 | ||||||||||
Exercised | (150,924 | ) | 13.32 | $ | 10,710 | |||||||
Canceled | (4,705 | ) | 40.05 | |||||||||
Balance as of July 31, 2018 | 537,064 | $ | 21.45 | 4.3 | $ | 34,774 | ||||||
Vested and expected to vest as of July 31, 2018 | 537,064 | $ | 21.45 | 4.3 | $ | 34,774 | ||||||
Exercisable as of July 31, 2018 | 443,782 | $ | 23.04 | 3.5 | $ | 28,028 |
(1) | Aggregate intrinsic value at each fiscal year end represents the difference between the Company’s closing stock price of $86.20, $72.16 and $61.47 on July 31, 2018, 2017 and 2016 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. |
(2) | Represents options assumed through the Cyence acquisition on November 1, 2017. |
Fiscal years ended July 31, | |||||
2018 | 2017 | 2016 | |||
Expected term (in years) | 2.88 | 2.66 - 2.88 | * | ||
Risk-free interest rate | 1.44% | 0.89% - 1.34% | * | ||
Expected volatility of the Company | 28% | 30.2% - 31.5% | * | ||
Average expected volatility of the peer companies in the S&P Index | 34.7% | 36.9% - 37.0% | * | ||
Expected dividend yield | —% | —% | * |
Fiscal years ended July 31, | |||||
2018 | 2017 | 2016 | |||
Expected life (in years) | 1.27 | * | 4.9 | ||
Risk-free interest rate | 1.48% | * | 1.5% | ||
Expected volatility | 24.12% | * | 38.8% | ||
Expected dividend yield | —% | * | —% | ||
Weighted average fair value of options granted | $67.90 | * | $19.18 |
July 31, 2018 | July 31, 2017 | ||||
Exercise of stock options to purchase common stock | 537,064 | 555,636 | |||
Vesting of restricted stock units | 2,932,155 | 2,634,085 | |||
Shares available for grant under stock plans | 21,592,494 | 18,453,674 | |||
Total common stock reserved for issuance | 25,061,713 | 21,643,395 |
U.S. Federal | $ | 33,074 | ||
California | 28,531 | |||
Total R&D credit carryforwards | $ | 61,605 |
July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Computer hardware | $ | 24,879 | $ | 21,408 | |||
Purchased software | 4,664 | 3,855 | |||||
Capitalized software development costs | 3,978 | 1,065 | |||||
Furniture and fixtures | 4,217 | 3,253 | |||||
Leasehold improvements | 10,751 | 8,251 | |||||
Total property and equipment | 48,489 | 37,832 | |||||
Less accumulated depreciation | (29,894 | ) | (23,456 | ) | |||
Property and equipment, net | $ | 18,595 | $ | 14,376 |
Goodwill - July 31, 2016 | $ | 30,080 | ||
FirstBest Acquisition | 15,434 | |||
ISCS Acquisition | 96,337 | |||
Goodwill - July 31, 2017 | $ | 141,851 | ||
Cyence Acquisition | 198,929 | |||
Changes in carrying value | 97 | |||
Goodwill - July 31, 2018 | $ | 340,877 |
July 31, 2018 | July 31, 2017 | ||||||||||||||||||||||
Cost | Accumulated Amortization | Net Book Value | Cost | Accumulated Amortization | Net Book Value | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Acquired technology | $ | 93,600 | $ | 34,189 | 59,411 | $ | 65,200 | $ | 14,710 | $ | 50,490 | ||||||||||||
Customer contracts and related relationships | 35,700 | 6,633 | 29,067 | 18,000 | 1,683 | 16,317 | |||||||||||||||||
Partner relationships | 200 | 52 | 148 | 200 | 30 | 170 | |||||||||||||||||
Trademarks | 2,500 | 268 | 2,232 | — | — | — | |||||||||||||||||
Order backlog | 8,700 | 3,904 | 4,796 | 5,500 | 1,162 | 4,338 | |||||||||||||||||
Total | $ | 140,700 | $ | 45,046 | $ | 95,654 | $ | 88,900 | $ | 17,585 | $ | 71,315 |
Fiscal year ending July 31, | ||||
2019 | $ | 29,112 | ||
2020 | 26,834 | |||
2021 | 19,965 | |||
2022 | 11,143 | |||
2023 | 3,799 | |||
Thereafter | 4,801 | |||
Total future amortization expense | $ | 95,654 |
Allowance for Doubtful Accounts as of July 31, 2017 | $ | — | ||
Charges to bad debt and revenue reserves | 1,062 | |||
Write-offs, net | — | |||
Allowance for Doubtful Accounts as of July 31, 2018 | $ | 1,062 |
July 31, 2018 | July 31, 2017 | ||||||
(in thousands) | |||||||
Accrued bonuses | $ | 31,273 | $ | 26,581 | |||
Accrued commission | 7,287 | 5,228 | |||||
Accrued vacation | 13,132 | 10,873 | |||||
Accrued salaries, payroll taxes and benefits | 8,443 | 6,200 | |||||
Total | $ | 60,135 | $ | 48,882 |
July 31, 2018 | July 31, 2017 | ||||||
Deferred revenue, current: | (in thousands) | ||||||
Deferred license and other revenue | $ | 42,235 | $ | 21,018 | |||
Deferred maintenance revenue | 52,010 | 46,562 | |||||
Deferred services revenue | 19,893 | 23,663 | |||||
Total deferred revenue, current | $ | 114,138 | $ | 91,243 | |||
Deferred revenue, non-current | 23,758 | 19,892 | |||||
Total | $ | 137,896 | $ | 111,135 |
Foreign Currency Items | Unrealized gain (loss) on available-for-sale securities | Total | |||||||||
(in thousands) | |||||||||||
Balance as of July 31, 2016 | $ | (6,809 | ) | $ | 216 | $ | (6,593 | ) | |||
Foreign currency translation adjustments | 1,179 | (465 | ) | 714 | |||||||
Unrealized loss on available-for-sale securities | — | (151 | ) | (151 | ) | ||||||
Tax effect | — | 234 | 234 | ||||||||
Balance as of July 31, 2017 | (5,630 | ) | (166 | ) | (5,796 | ) | |||||
Foreign currency translation adjustments | (1,567 | ) | (596 | ) | (2,163 | ) | |||||
Unrealized loss on available-for-sale securities | — | (22 | ) | (22 | ) | ||||||
Tax effect | — | 233 | 233 | ||||||||
Balance as of July 31, 2018 | $ | (7,197 | ) | $ | (551 | ) | $ | (7,748 | ) | ||